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EXHIBIT 10.2
FORM OF SERIES I PROMISSORY NOTE
$__________ September __, 1994
Dallas, Texas
FOR VALUE RECEIVED, the undersigned, _______________ [MANAGER]
(the "Maker"), hereby unconditionally promises to pay to the order of CHIEF
AUTO PARTS INC., or its successors and assigns (the "Payee"), on or before
______________, 2002 [EIGHTH ANNIVERSARY OF THE CLOSING DATE] at the address of
the Payee set forth herein for notices and other communications, the aggregate
principal amount of ______________________ ($_____________) in lawful money of
the United States of America and in immediately available funds. This Series I
Note shall bear interest, payable in like funds at such address, on the unpaid
principal amount hereof from the date hereof until the principal amount hereof
is paid in full at the rate of 7.05% per annum (calculated on the basis of the
actual number of days elapsed in a year of 365 days). All or a part of such
interest on the unpaid principal balance shall be payable annually on each
anniversary of this Series I Note as hereinafter set forth. Accrued and unpaid
interest shall be payable upon the maturity of this Series I Note with the
payment of principal.
This Series I Note is secured by that certain Stock Pledge
Agreement, dated as of even date herewith, between the Maker and the Payee (the
"Stock Pledge Agreement"), pursuant to which the Maker grants the Payee a
security interest in the shares of common stock of the Payee purchased by Maker
on the date hereof (the "Pledged Shares") and any dividends or distributions
thereon.
Notwithstanding any other provision to the contrary contained
herein, the Payee's sole recourse against the Maker for the payment of
principal, interest, fees, costs and other expenses in connection with this
Series I Note shall be limited to the Payee's security interest in the Pledged
Shares. The Payee shall at all times have the right to proceed against any
portion of the security held herefor in such order and in such manner as the
Payee may select, without waiving any rights with respect to any other
security. The Payee shall not seek a personal judgment against the Maker for
payment under this Series I Note and no recourse shall be had for the payment
of this Series I Note against the Maker or his or her successors or any of the
Maker's or his or her successor's properties or assets (except as to the
aforesaid security interest in the Pledged Shares), all such liability being,
by the acceptance hereof and as part of the consideration for the receipt of
the security interests provided for in the Stock Pledge Agreement, expressly
waived and released by the Payee and any of its assignees.
Within ten (10) business days of the date of payment of any
cash dividends payable or otherwise distributed in respect of the
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Pledged Shares, the Maker shall be required to make a mandatory prepayment on
this Series I Note in an amount equal to one hundred percent (100%) of such
cash dividends less any potential tax liabilities, computed at the then
applicable maximum combined federal and state rates, which the Maker may incur
in connection with the receipt of such dividends.
Until the principal and interest on this Series I Note is paid
in full, the Maker shall be required to make a mandatory prepayment on this
Series I Note in an amount equal to the lesser of (A) fifteen percent (15%) of
the pre-tax amount of any cash bonus paid by the Payee to the Maker (excluding
any amounts paid to the Maker by the Payee on or prior to the date hereof and
excluding payments made pursuant to the Company's 1994 Executive Target Bonus
Plan) (the "Bonus Prepayment")) and (B) the sum of (i) all accrued and unpaid
interest owing on this Series I Note and (ii) the unpaid principal amount
outstanding on this Series I Note; provided however, that the Maker may elect
only once while this Series I Note is outstanding to omit clause (B)(ii) from
the foregoing calculation. Such mandatory Bonus Prepayments shall be payable
within ten (10) business days of receipt by the Maker of the cash bonus
referenced in clause (A) above.
In addition to the foregoing prepayments, the Maker shall be
required to make a mandatory prepayment on this Series I Note in an amount
equal to the lesser of (A) twenty-five percent (25%) of the gross pre-tax
amount of any cash distribution made to the Maker pursuant to the 5% allocation
made to Xxxxx X. Xxxxxxxxx for distribution pursuant to Section 5(a)(i) of the
Escrow Agreement dated June 27, 1994 among General Electric Capital
Corporation, Bankers Trust Company, as escrow agent, and the Payee and (B) all
amounts, whether principal or interest, accrued and unpaid or owing under this
Series I Note. Such mandatory prepayment shall be payable within ten (10)
business days of receipt by the Maker of the distribution referenced in clause
(A) above.
The Maker shall have the right at any time and from time to
time on any business day to prepay the principal and interest due on this
Series I Note, in whole or in part, without penalty or premium, upon at least
three business days' prior written notice to the holder hereof, such notice to
specify the prepayment date and the amount to be prepaid. In the event the
Maker decides not to so prepay this Series I Note in accordance with any such
notice delivered to the holder hereof, the Maker shall so notify the holder
hereof not less than two business days before such prepayment would otherwise
have been made.
All Bonus Prepayments made by the Maker shall be applied first
to the reduction of the outstanding principal and then to the outstanding
interest accrued on this Series I Note. All other mandatory and optional
prepayments made by the Maker shall be applied first to the reduction of the
outstanding interest and then to the outstanding principal on this Series I
Note.
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(Series I Note)
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Upon each anniversary of the date of issuance of this Series I
Note, the Maker shall be required to pay to the Payee an amount equal to the
excess, if any, of the amount of interest accrued on this Series I Note during
the preceding year over the amount paid by the Maker to the Payee during the
preceding year as a result of mandatory or optional prepayments.
If the Maker elects to sell any of the Pledged Shares as
permitted under the Stock Pledge Agreement, then the Maker shall be required to
apply the proceeds of such sale as a prepayment of principal and interest due
on this Series I Note within three (3) business days of receipt of such
proceeds.
In case of the happening of any of the following events
("Events of Default"):
(a) default shall be made in the payment of the principal
of or interest on this Series I Note when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise which default shall continue
unremedied for five (5) business days after written notice thereof to
the Maker by the holder hereof;
(b) a breach of any covenant contained in this Series I
Note, other than the covenant to pay the principal of and interest on
this Series I Note, which breach shall continue unremedied for thirty
days after written notice by the holder hereof;
(c) the Maker shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code or any other Federal or state bankruptcy,
insolvency, liquidation or similar law, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii)
apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for him or for a
substantial part of his property, (iv) file an answer admitting the
material allegations of a petition filed against him in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) become unable, admit in writing his inability or fail
generally to pay his debts as they become due;
(d) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Maker, or of a
substantial part of the property of the Maker, under Title 11 of the
United States Code or any other Federal or state bankruptcy,
insolvency, receivership or similar law or
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(Series I Note)
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(ii) the appointment of a receiver, trustee, custodian, sequestrator
or similar official for the Maker or for a substantial part of the
property of the Maker; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering
any of the foregoing shall continue unstayed and in effect for 60
days;
(e) an Event of Default (as defined in the Stock Pledge
Agreement) shall have occurred under the Stock Pledge Agreement;
then, in any such event (other than an event described in paragraph (c) or (d)
above), the holder hereof may declare the principal amount of this Series I
Note then outstanding to be forthwith due and payable, whereupon the principal
hereof, together with accrued and unpaid interest thereon, shall become
forthwith due and payable both as to principal and interest, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Maker (to the extent permitted by law), anything
contained herein to the contrary notwithstanding; and, in any event described
in paragraph (c) or (d) above, the principal amount of this Series I Note,
together with accrued and unpaid interest thereon, shall automatically become
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Maker.
The nonexercise by the Payee of any of its rights hereunder or
under the Stock Pledge Agreement in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance. No delay or
omission on the part of the Payee in exercising any right hereunder or under
the Stock Pledge Agreement or other agreement shall operate as a waiver of such
right or of any other right under this Series I Note.
Maker hereby certifies and declares that all acts, conditions
and things required to be done and performed and to have happened precedent to
the creation and issuance of this Series I Note, and to constitute this Series
I Note the legal, valid and binding obligation of Maker, enforceable in
accordance with the terms hereof, have been done and performed and happened in
due and strict compliance with all applicable laws.
All payments of the principal hereof and interest hereon and
the respective dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof, or on a continuation thereof
which shall be attached hereto and made a part hereof; provided, however, that
the failure of the holder hereof to make such a notation or any error in such a
notation shall not affect the obligations of the Maker under this Series I
Note.
This Series I Note may be assigned, pledged, hypothecated or
otherwise transferred by the holder hereof.
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(Series I Note)
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The Maker hereby expressly waives presentment for payment or
for acceptance, demand, protest, notice of protest, notice of dishonor or
acceptance and any other notice of any kind.
All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, telexed or telecopied to, or, if mailed, when received
by, the other party at the following addresses (or at such other address as
shall be given in writing by any party to the others):
If to the Maker:
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If to the Payee: Chief Auto Parts Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telephone: 000-000-0000
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: 000-000-0000
If any provision hereof is invalid or unenforceable in any
jurisdiction, the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in favor of the Payee.
This Series I Note may not be changed orally.
THIS SERIES I NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS.
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[MANAGER]
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(Series I Note)
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SCHEDULE I
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Amount of Amount of Unpaid
Principal Interest Principal Notation
Date Prepaid Paid Amount Made By
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(Series I Note)
