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Exhibit 10.46
PROMISSORY NOTE
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(North Canton Term Loan)
$1,944,444.45 New York, New York
January 31, 1997
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FOR VALUE RECEIVED, LEXINGTON PRECISION CORPORATION, a corporation
organized under the laws of the State of Delaware ("LPC") and LEXINGTON
COMPONENTS, INC., a corporation organized and existing under the laws of the
State of Delaware ("LCI") (hereinafter LPC and LCI are referred to each as
Borrower singularly and referred to jointly and severally as the "Borrowers,"
which term shall mean each of the companies individually and both of them
collectively), jointly and severally promise to pay to the order of BANK ONE,
AKRON, NA (hereinafter referred to as the "Bank"), the principal amount of ONE
MILLION NINE HUNDRED FORTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR AND 45/100
DOLLARS ($1,944,444.45) on August 1, 2001 or sooner a hereinafter provided, with
interest on the unpaid balance of said principal amount from the date hereof at
a rate per annum equal to eight and thirty-seven one-hundredths percent (8.37%).
If any installment of principal, interest or other amounts due and payable
hereunder are not paid when due, or within any applicable grace periods set
forth in the Agreement, the Borrowers shall pay interest thereon at the rate of
three percent (3.0%) per annum in excess of the Base Rate, as defined in the
Agreement hereinafter referred to, as the same may from time to time be
established but not to exceed the maximum rate allowed by law. Bank shall have
the right to assess a late payment processing fee in the amount of the greater
of FIFTY AND NO/100 DOLLARS ($50.00) or five percent (5 %) of the scheduled
payment in the event of a default in payment that remains uncured for a period
of at least ten (10) days.
The Borrowers agree to pay the principal amount of this Note in
fifty-four (54) consecutive, equal monthly installments of ELEVEN THOUSAND ONE
HUNDRED ELEVEN AND 11/100 DOLLARS ($11,111.11) each, together with all accrued
interest due at the time of payment of each such installment of principal,
commencing on February 1, 1997, and continuing on the first day of each month
thereafter and a final installment of ONE MILLION THREE HUNDRED FORTY-FOUR
THOUSAND FOUR HUNDRED FORTY-FOUR AND 51/100 DOLLARS ($1,344,444.51), together
with all accrued interest due at the time of payment of such installment, on
August 1, 2001. Monthly payments hereunder shall be applied first to interest
due and the balance to reduction of the principal amount outstanding.
Payments of both principal of and interest on this Note shall be made
in lawful money of the United States of America, at 50 South Main Street, Akron,
Ohio 44308-1888, or at such other place as the Bank or any subsequent holder
hereof shall have designated to the Borrowers in writing. Interest payable on
this Note shall be computed on a three hundred sixty (360) day per year basis
counting the actual number of days elapsed. If any payment under this Note
becomes due and payable on a day which is not a Business Day (as defined in this
Agreement), payment thereof shall be made on the immediately succeeding Business
Day.
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This Note is issued pursuant to and is entitled to the benefits of a
Credit Facility and Security Agreement dated as of January 31, 1997, by and
among the Borrowers and the Bank (the "Agreement"), to which Agreement reference
is hereby made for a statement of the rights and obligations of the Bank and the
duties and obligations of the Borrowers in relation thereto; but neither this
reference to said Agreement nor any provisions thereof shall affect or impair
the absolute and unconditional obligation of the Borrowers to pay the principal
of or interest on this Note when due.
The Borrowers may prepay all or any portion of this Note at any time
and in any amount without penalty or premium, provided that all prepayments
shall be applied to installments of principal in the inverse order of their
maturities.
If an Event of Default, as defined in said Agreement, shall occur and
shall be continuing, the principal of this Note may be declared immediately due
and payable at the option, of the Bank.
In the event that the Borrowers fail to pay any regularly scheduled
principal or interest payment on this Note when due (other than as a result of
acceleration thereof based on a default or event of default other than the
failure to make any such regularly scheduled payments of principal or interest
on the Note when due) which failure is not cured within the ten (10) day cure
period provided in Section 6A of the Agreement (a "Payment Default"), or if an
Event of Default occurs and is continuing, which arises from fraudulent act(s)
or practice(s) of either Borrower which Event of Default is not cured within
three (3) Business Days after the Borrowers' receipt of written notice thereof
from the Bank (a "Fraud Default"), the Borrowers hereby authorize any
attorney-at-law to appear in any court of record in the State of Ohio, or in any
other state or territory of the United States, at any time or times after the
above sum becomes due, and waive the issuance and service of process and confess
judgment against it, in favor of any holder of this Note, for the amount then
appearing due, together with the costs of suit, and thereupon to release all
errors and waive all rights of appeal and stay of execution. The foregoing
warrant of attorney shall survive any judgment, it being understood that should
any judgment be vacated for any reason, the foregoing warrant of attorney
nevertheless may thereafter be used for obtaining an additional judgment or
judgments. To the extent that the provisions of the cognovit warning set forth
above the Borrowers signature specifically contradict the provisions of this
paragraph regarding the requirement of a Payment Default or a Fraud Default to
take a cognovit judgment, the provisions of this paragraph control.
No delay on the part of any holder hereof in exercising any power or
rights hereunder shall operate as a waiver of any power or rights. Any demand or
notice hereunder to the Borrowers shall be deemed duly given or made when sent,
if given by telecopier, when delivered, if given by personal delivery or
overnight commercial carrier, or the fifth calendar day after deposit in the
United States mail, certified mail, return receipt requested, addressed to the
address (or telecopier number) set forth in Rider A of the Agreement or such
other address or telecopier number as may be hereafter designated in writing by
the Borrowers to the Bank.
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This note is executed at New York, New York County, New York.
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT
YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR, WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR
ANOTHER CAUSE.
LEXINGTON PRECISION CORPORATION
("Borrower")
By: Dennis J. Welhouse
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Name: Dennis J. Welhouse
Title: Senior Vice President and Assistant Secretary
LEXINGTON COMPONENTS, INC.
("Borrower")
By: Dennis J. Welhouse
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Name: Dennis J. Welhouse
Title: Senior Vice President and Assistant Secretary