EXHIBIT 10.39
FORM OF
SECURED PROMISSORY NOTE
$_______________ _______ , 1997
FOR VALUE RECEIVED, the undersigned ______________________________________
("Borrower") hereby promises to pay to the order of AFC Enterprises, Inc.
("Payee"), the principal sum of _______________________________________________
dollars ($______________________________) together with interest on so much of
the unpaid balance of this Note as may be outstanding from time to time as set
forth below. The principal balance of, and all accrued and unpaid interest on,
this Promissory Note shall be payable in full by Borrower to Payee
on ________________________________ (the "Maturity Date").
The unpaid principal balance of this Note shall bear interest at the rate
of six and one-quarter percent (6 1/4%) per annum and accrued interest shall be
payable on the Maturity Date. Accrued interest on this Note shall be calculated
on the basis of the actual days elapsed during a 365-day year.
Payments of principal and interest on this Promissory Note shall be made at
such place as Payee shall have designated in writing to Borrower, and shall be
made in legal tender of the United States of America; provided, however, that
(x) upon the Maturity Date or (y) within 60 days following (i) an Initial Public
Offering (as defined below) or (ii) a Change of Control (as defined below),
Borrower may, at his or her option, substitute for legal tender shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"), with a
Fair Market Value (as defined below) equal to the amount of legal tender for
which such shares of Common Stock are being substituted.
For purposes of this Note, "Initial Public Offering" shall mean the
Company's initial underwritten public offering of Common Stock registered under
the Securities Act of 1933, as amended, on Form S-1, that results in gross
proceeds to the Company in excess of $25 million from the sale of Common Stock.
"Change of Control" shall mean the acquisition by any person or group (as
defined in Section 13d of the Securities Act of 1934) of beneficial ownership of
more than fifty percent (50%) of the Company's then outstanding shares of Common
Stock. The "Fair Market Value" of a share of Common Stock shall be determined as
follows: (i) prior to an Initial Public Offering, the board of directors of the
Company (the "Board of Directors") shall act in good faith to determine the Fair
Market Value of each share of Common Stock as of the date of transfer, which
determination shall be final and binding, and (ii) upon the consummation of an
Initial Public Offering, the Fair Market Value of each share of Common Stock
shall be determined based on the average of the "Quoted Prices" (as defined
below) of a share of Common Stock for the five consecutive business days prior
to date of transfer. The "Quoted Price" of a share of Common Stock shall be the
last reported sales price of the Common Stock as reported by NASDAQ ("NASDAQ"),
or if the Common Stock is listed on a securities exchange, the last reported
sales price of the Common Stock on such exchange (which shall be for
consolidated trading if applicable to such exchange), or if the Common Stock is
not so reported or listed, the average of the last reported bid and asked price
of the Common Stock. If at any time the Common Stock is not listed on any
exchange or NASDAQ, the Board of Directors shall determine such Fair Market
Value on the basis of the best available evidence, which determination shall be
final and binding.
If the date set for any payment of principal or interest on this Promissory
Note is a Saturday, Sunday or legal holiday, then such payment shall be due on
the next succeeding business day.
Xxxxxxxx has acquired certain shares (the "Shares") of the capital stock of
Payee pursuant to the terms of that certain Stock Bonus Agreement dated as of
April 11, 1996 (the "Bonus Agreement"). Payment of this Promissory Note shall be
secured by the Shares as provided in that certain Stock Pledge Agreement of even
date herewith by and between Payee and Borrower (the "Pledge Agreement").
The principal balance of, and accrued and unpaid interest on, this
Promissory Note may be prepaid at any time, in whole or in part, without premium
or penalty. In addition, Borrower (or Permitted Transferees (as defined in the
Bonus Agreement)) may not effect a Transfer (as defined in the Bonus Agreement)
of Shares to anyone (other than a Permitted Transferee) without first paying to
Payee an amount at least equal to the Net Proceeds (as defined below) of such
Transfer. "Net Proceeds" shall mean the gross proceeds received upon a Transfer
of Shares less the tax liability of the Borrower with respect to such Transfer,
as such liability is determined by the Board of Directors, which determination
shall be final and binding. Any prepayments on this Promissory Note shall be
first applied to the payment of any accrued and unpaid interest and then to the
unpaid balance of the principal amount.
In the event Borrower shall commit a breach of or default under the Pledge
Agreement, Payee may accelerate this Promissory Note and declare the entire
unpaid principal amount of this Promissory Note and all accrued and unpaid
interest hereon to be immediately due and payable and, thereupon, the unpaid
principal amount and all such accrued and unpaid interest shall become and be
immediately due and payable, without notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind (all of which are hereby expressly waived by Borrower). The
failure of Payee to accelerate this Promissory Note shall not constitute a
waiver of any of Payee's rights under this Promissory Note as long as Borrower's
default under this Promissory Note or breach of or default under the Pledge
Agreement continues.
The provisions of this Promissory Note shall be governed by and construed
in accordance with the laws of the State of Georgia without regard to the
conflicts of law rules thereof. In the event that Payee is required to take any
action to collect or otherwise enforce payment of this Promissory Note, Xxxxxxxx
agrees to pay such reasonable attorneys' fees, court costs and other expenses as
Payee may incur as a result thereof, whether or not suit is commenced.
Time is of the essence of this Note.
In no contingency or event whatsoever shall the aggregate of all amounts
deemed interest hereunder and charged or collected pursuant to the terms of this
Note exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such a court determines that the Payee has charged or received
interest hereunder in excess of the highest applicable rate, the Payee shall
promptly refund such excess
interest to the Borrower and such rate shall automatically be reduced to the
maximum rate permitted by such law.
All notices, requests, demands or other communications under this
Promissory Note shall be delivered in accordance with the provisions of the
Pledge Agreement to the address(es) set forth therein.
IN WITNESS WHEREOF, this Promissory Note has been duly executed and
delivered by Xxxxxxxx on the date first above written.
BORROWER:
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(Name)
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