UNSECURED PROMISSORY NOTE
AND
LOAN AGREEMENT
JULY 29, 0000
XXXXXXXXX, XXXXXXXXX
FOR VALUE RECEIVED, subject to the terms and conditions set forth below,
XXXXXX X. XXXX, an individual (the "Executive"), whose address is 000 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, hereby promises to pay to the order of
MAGNETEK, INC. (the "Holder"), whose address is 00 Xxxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, the principal sum of $ 1,000,000 without interest. Payment of
principal hereunder shall be made in lawful money of the United States of
America at the address of the Holder set forth above, or at such other place as
the Holder may from time to time designate in writing to the Executive.
1. PURPOSE. The Executive, and by its acceptance of this Note, the
Holder, acknowledge and agree that the purpose of all advances to the Executive
evidenced by this Note is to enable the Executive to purchase or construct a new
principal residence in Nashville, Tennessee. The indebtedness evidenced hereby
shall be a no-interest bridge loan, as described in Treas. Reg.
Section l.7872-5T(c)(l)(ii), and shall continue until such time as the
Executive shall sell his former principal residence in Rancho Palos Verdes,
California.
2. MATURITY DATE. The Executive shall repay the outstanding principal
balance of this Note by not later than the earlier of (i) 15 days following the
closing of the sale of the Executive's former principal residence identified
above, or (ii) July 28, 1998.
3 . Prepayment. The Executive may prepay all or part of the outstanding
principal balance of this Note, without premium or penalty, at any time.
4. EVENTS OF DEFAULT; ACCELERATION. The term "Event of Default" shall
mean (i) a default in payment of principal when due, (ii) the Executive's filing
of a petition for bankruptcy relief under title 11 of the United States Code and
(iii) the cessation of the provision of substantial services (including the
cessation of employment) by Executive for the Holder. Upon and after the
occurrence of any Event of Default (whether such occurrence shall be voluntary
or involuntary or come about or be effected by operation of law or otherwise)
and at any time so long as such Event of Default shall be continuing, the Holder
may, by notice to the Executive, declare this Note to be immediately due and
payable, whereupon this Note shall become and be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Executive.
5. REPRESENTATIONS OF EXECUTIVE. The Executive represents and wan-ants
to the Holder that (i) he reasonably expects to be entitled to and will itemize
deductions for each year this Note shall be outstanding, and (ii) the aggregate
principal amount of this Note is not greater than the amount of equity of the
Executive and the Executive's spouse in the Executive's former principal
residence identified above.
6. CERTAIN COVENANTS OF EXECUTIVE. The Executive hereby covenants and
agrees that (i) the benefits of this Note, including the interest arrangements
hereunder, shall not be transferable by the Executive, (ii) the proceeds of this
Note shall only be utilized to purchase or construct a new principal residence
in Nashville, Tennessee, and (iii) he will not convert his former principal
residence identified above to business or investment use.
7. CANCELLATION. Upon payment in full of all principal payable
hereunder, this Note shall be surrendered to the Executive for cancellation.
8. AMENDMENT AND WAIVER. Any provision of this Note may be amended or
waived by a written instrument signed by the Executive and by the Holder, such
amendment or waiver to be effective but only in the specific instance and for
the specific purpose for which the amendment or waiver is made or given. No
delay on the part of the Holder in exercising any right thereunder shall operate
as a waiver of such right.
9. ATTORNEYS' FEES. The Executive shall reimburse Holder for any
reasonable attorneys' fees and expenses incurred by the Holder in connection
with the enforcement of its rights under this Note.
10. NOTICES. Any notice required or permitted hereunder shall be given in
writing and shall be deemed given upon personal delivery or five days after
deposit in the United States mail, by registered or certified man, postage
prepaid, addressed (i) if to the Executive at the address set forth above and
(ii) if to the Holder at such Holder's address set forth above, or at such other
address as the Executive or the Holder may designate by notice as provided
herein.
11. SEVERABILITY. If any provision of this Note shall be unenforceable,
the remaining provisions of this Note shall not in any way be affected or
impaired thereby and shall continue in full force and effect.
12. GOVERNING LAW. This Note and the obligations of the Executive
hereunder shall be governed by and construed in accordance with the laws of the
State of Tennessee.
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XXXXXX X. XXXX
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