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Exhibit 10.56
PROMISSORY NOTE
New York, New York
$2,618,000.00 March 19, 1997
FOR VALUE RECEIVED, LEXINGTON PRECISION CORPORATION ("Debtor") promises
to pay to the order of THE CIT GROUP/EQUIPMENT FINANCING, INC. ("CIT"), at such
address as CIT may designate, in lawful money of the United States, the
principal sum of TWO MILLION SIX HUNDRED EIGHTEEN THOUSAND and no/100 DOLLARS
($2,618,000.00) in sixty (60) consecutive monthly installments, commencing on
May 1, 1997, with the following installments on the first day of each month
thereafter until payment in full of this Note. The first fifty-nine monthly
installments shall be level payments of principal each in the amount of
$43,600.00, and the sixtieth (60th) and final payment shall be a payment of
principal in the amount of $45,600.00. Debtor shall pay interest together with
each such installment of principal, in like money, from the date hereof until
payment in full, on the unpaid principal balance hereof at an interest rate per
annum equal to two and seventy-five hundredths percent (2.75%) above the LIBOR
Rate. Each payment shall be applied first to the payment of any unpaid interest
on the principal sum and then to payment of principal. Interest shall be
calculated on the basis of a 360-day year and actual number of days elapsed. Any
amount not paid when due under this Note shall bear late charges thereon,
calculated at the Late Charge Rate, from the due date thereof until such amount
shall be paid in full. Any payment received after the maturity of any
installment of principal shall be applied first to the payment of unpaid late
charges, second to the payment of any unpaid interest on said principal, and
third to the payment of principal.
This Note is one of the Notes referred to in the Loan and Security
Agreement dated as of March 19, 1997, between Debtor and CIT (herein, as the
same may from time to time be amended, supplemented or otherwise modified,
called the "Agreement"), is secured as provided in the Agreement, and is subject
to prepayment only as provided therein, and the holder hereof is entitled to the
benefits thereof.
Terms defined in the Agreement shall have the same meaning when used in
this Note, unless the context shall otherwise require.
Except as provided in Section 6 of the Agreement, Debtor hereby waives
presentment, demand of payment, notice of dishonor, and any and all other
notices or demands in connection with the delivery, acceptance, performance,
default or enforcement of this Note and hereby consents to any extensions of
time, renewals, releases of any party to this Note, waivers or modifications
that may be granted or consented to by the holder of this Note.
Upon the occurrence and during the continuance of any one or more of
the Events of Default specified in the Agreement, the amounts then remaining
unpaid on this Note, together with any interest accrued, may be declared to be
(or, with respect to certain Events of Default, automatically shall become)
immediately due and payable as provided therein.
In the event that any holder shall institute any action for the
enforcement or the collection of this Note, there shall be immediately due and
payable, in addition to the unpaid balance hereof, all late charges and all
reasonable costs and expenses of such action, including reasonable attorneys'
fees. In accordance with the provisions of the Agreement, Debtor and CIT waive
trial by jury in any litigation relating to or in connection with this Note in
which they shall be adverse parties and Debtor hereby waives the right to
interpose any setoff counterclaim or defense of any nature or description
whatsoever, but Debtor shall have the right to assert in an independent action
against CIT any such defense, offset or counterclaim (including any compulsory
counterclaim) which it may have which has not
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otherwise been waived pursuant to the Agreement.
Debtor agrees that its liabilities hereunder are absolute and
unconditional without regard to the liability of any other party, and that no
delay on the part of the holder hereof in exercising any power or right
hereunder shall operate a waiver thereof; nor shall any single or partial
exercise of any power or right hereunder preclude other or further exercise
thereof or the exercise of any other power or right.
If at any time this transaction would be usurious under applicable law,
then regardless of any provision contained in the Agreement, in this Note or in
any other agreement made in connection with this transaction, it is agreed that
(a) the total of all consideration which constitutes interest under applicable
law that is contracted for, charged or received upon the Agreement, this Note or
any such other agreement shall under no circumstances exceed the maximum rate of
interest authorized by applicable law and any excess shall be credited to Debtor
and (b) if CIT elects to accelerate the maturity of, or if CIT permits Debtor to
prepay the indebtedness described in, this Note, any amounts which because of
such action would constitute interest may never include more than the maximum
rate of interest authorized by applicable law and any excess interest, if any,
shall be credited to Debtor automatically as of the date of acceleration or
prepayment.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
LEXINGTON PRECISION
CORPORATION
By: MICHAEL A. LUBIN
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Title: CHAIRMAN
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