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EXHIBIT 10.26
MORTGAGE NOTE
$150,000.00 Chicago,
Illinois
June 30, 1997
Xxxxxxx X. Xxxxxxxxx, (the "Borrower"), for value received, hereby
promises to pay to the order of Elek-Tek, Inc., a Delaware corporation (the
"Lender"), at 0000 X. Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, or at such other place
as Lender may from time to time in writing designate, in lawful money of the
United States of America, the principal sum of ONE HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($150,000.00) on or before March 1, 1999 ("Mortgage Note
Termination Date"), which is the third anniversary of the Commencement Date as
defined and set forth in the Employment Agreement dated March 1, 1996, as
amended, by and between Borrower and Lender ("Employment Agreement"). The
indebtedness evidenced by this Mortgage Note shall bear no interest. This
Mortgage Note is issued in replacement of a mortgage note issued in May 1996.
Notwithstanding the foregoing, the $150,000 loan debt under this Mortgage
Note (the "Debt") shall be forgiven according to the following terms and
conditions:
(a) Fifty thousand dollars of the Debt is hereby forgiven by the
Company as of the date hereof.
(b) Provided Borrower is an employee of Lender on the forgiveness
date thereof, the Debt shall be forgiven annually in fifty thousand
dollar ($50,000) increments on each of the first day of January 1998
and 1999.
(c) If Xxxxxxxx terminates his employment with Lender for any
reason, the next fifty thousand dollar ($50,000) increment of Debt
to be forgiven shall be forgiven on a pro rata basis based on the
number of days of employment completed in the fiscal year of the
termination (calculated from January 1, 1997 if termination occurs
in 1997); provided, however, that if Borrower terminates his
employment with Lender for any reason during the second six (6)
months following a Change in Control, in addition to any pro rata
amount forgiven as of the Date of Termination a fifty thousand
dollar ($50,000) increment of the Debt shall also be immediately
forgiven. If Borrower terminates his employment with Xxxxxx (other
than by death or Disability), the remaining principal under this
Mortgage Note (following any forgiveness of Debt provided for in
this Mortgage Note) shall immediately be repaid in full by Borrower
to Lender.
(d) If Borrower is terminated by Lender for Cause, the
outstanding principal under this Mortgage Note shall immediately be
repaid in full by Borrower to Lender. If terminated for Cause,
Borrower shall not receive any pro rata loan forgiveness.
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(e) If Borrower is terminated by Lender without Cause, the next
fifty thousand dollar ($50,000) increment of Debt to be forgiven
shall be forgiven on a pro rata basis based on the number of days of
employment completed in the fiscal year of the termination
(calculated from January 1, 1997 if termination occurs in 1997).
(f) Notwithstanding the foregoing, all of the Debt shall be
immediately forgiven if during the first six (6) month period
following a Change in Control (i) Borrower is terminated by Lender
other than for Cause or (ii) Borrower terminates his employment for
Good Reason.
All capitalized terms herein, which are not defined, are to be given the
same meaning as in the Employment Agreement. The term "Junior Mortgage" shall
mean the Junior Mortgage and Security Agreement from Borrower to Lender,
covering certain real and personal property described therein situated in the
County of Lake, State of Illinois (the "Mortgaged Property").
Payment of this Mortgage Note is secured by the Junior Mortgage.
The remedies of Lender, as provided in this Mortgage Note and the Junior
Mortgage shall be cumulative and concurrent and may be pursued singly,
successively or together, at the sole discretion of Lender, and may be
exercised as often as occasion therefor shall occur; and the failure to
exercise any such right or remedy shall in no event be construed as a waiver or
release thereof. The holder of this Mortgage Note is entitled to all of the
benefits and the collateral security provided in the Junior Mortgage. The
Borrower agrees to pay all costs of collection and all attorneys fees paid or
incurred in enforcing any of the Lender's rights hereunder promptly on demand
of the Lender. Borrower waives presentment for payment, demand, notice of
demand, notice of nonpayment or dishonor, protest and notice of protest of this
Mortgage Note, and all other notices in connection with the delivery,
acceptance, performance, default, or enforcement of the payment of this
Mortgage Note.
Lender shall not be deemed, by any act of omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by Xxxxxx and, then, only to the extent specifically set forth in
the writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event.
This instrument shall be governed by and construed according to the laws
of the State of Illinois.
Whenever used, the singular number shall include the plural, the plural
shall include the singular, and the words "Lender" and "Borrower" shall be
deemed to include their respective heirs, administrators, executors, successors
and assigns.
In the event any one or more of the provisions hereof shall be invalid,
illegal or
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unenforceable in any respect, the validity of the remaining provisions
hereof shall be in no way affected, prejudiced or disturbed thereby.
This Mortgage Note may be executed in counterparts, and all said
counterparts when taken together shall constitute one and the same Mortgage
Note.
The Borrower expressly submits and consents to the jurisdiction of any
state or federal court located within Lake County, Illinois, in any action,
suit or proceeding (whether in contract or tort, at law or in equity) commenced
therein in connection with or with respect to this Mortgage Note or the Junior
Mortgage (including, without limitation, any defenses or counterclaims
therein), and Borrower waives any objection to venue in connection therewith.
XXXXXXXX AND XXXXXX EACH HEREBY ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS
A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED, AND AFTER CONSULTING WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT, WAIVE ANY RIGHT TO JURY TRIAL THAT THEY MAY NOW OR HEREAFTER HAVE
UNDER ANY APPLICABLE LAWS. The Borrower hereby waives personal services of any
and all process or papers issued or served in connection with the foregoing and
agrees that service of such process of papers may be made by registered or
certified mail, postage prepaid, return receipt requested, directed to the
Borrower.
IN WITNESS WHEREOF, Xxxxxxxx, intending to be legally bound hereby, has
duly executed this Mortgage Note the date and year first above written.
______________________________
Xxxxxxx X. Xxxxxxxxx
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