EXHIBIT 10.20
SECURED PROMISSORY NOTE
$_____ _________,1998
FOR VALUE RECEIVED, the undersigned __________________ ("Borrower")
hereby promises to pay to the order of Advance Holding Corporation, a Virginia
corporation ("Payee"), the principal sum of ___________________________
($______) together with interest on the unpaid balance of such principal amount
from the date hereof at the rate of interest equal to the rate of interest
reported by The Wall Street Journal as the "prime rate," as it may change from
time to time. Any change in the interest rate to be paid on this Promissory
Note resulting from a change in the prime rate shall be effective as of the date
of such change. Accrued interest to be paid on this Secured Promissory Note
(this "Promissory Note") shall be payable in arrears commencing on March 1, 1999
(with respect to interest accrued through the preceding December 31) and
continuing on each succeeding March 1 thereafter with respect to interest
accrued during the previous year ending December 31 until this Note is paid in
full. The principal balance of, and all accrued and unpaid interest on, this
Promissory Note shall be payable in full by Borrower on that date which is five
(5) years from the date hereof.
Payments of principal and interest on this Promissory Note shall be
made in legal tender of the United States of America and shall be made at such
place as Payee shall have designated to Borrower (and may be made by payroll
deduction by mutual consent of Payor and Payee). 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.
As of the date hereof, Xxxxxxxx has purchased certain shares of common
stock of the Company, par value $0.01 per share (the "Shares") of the Payee
pursuant to the terms of that certain Advance Holding Corporation Stock
Subscription Agreement (the "Stock Subscription Agreement") dated on even date
herewith, by and between Payee and Borrower. 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. Any such prepayment 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 of a Transfer (as defined in the Stock Subscription
Agreement) by Borrower (or Permitted Transferees (as defined in the Stock
Subscription Agreement)) of Shares to anyone (other than to a Permitted
Transferee), Borrower shall pay the principal balance of, and accrued but unpaid
interest on, this Promissory Note in accordance with the provisions of Section 6
of the Pledge Agreement.
In the event Borrower shall (i) cease to be an employee of the Company
or its Subsidiaries, (ii) fail to make complete payment of any installment of
accrued interest under this Promissory Note on the date such installment of
accrued interest is due (but Payee shall give Borrower notice of nonpayment and
at least five (5) days to cure such nonpayment); (iii) fail to make complete
payment of principal when due under this Promissory Note; (iv) fail to make the
prepayment of principal and accrued interest on this Promissory Note upon a sale
of Shares as required by the fourth paragraph hereof; or (v) commit a material
breach of or default under the Stock Subscription Agreement or 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 Stock
Subscription Agreement or the Pledge Agreement continues.
The provisions of this Promissory Note shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia 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.
The terms and provisions of this Note shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Payee and
any assignee or transferee of this Note. In the event of such transfer or
assignment, the rights and privileges conferred upon Xxxxx shall automatically
extend to and be vested in such assignee or transferee, all subject to the terms
and conditions hereof. Xxxxxxxx's obligations, rights or any interest hereunder
may not be delegated or assigned without the written consent of Xxxxx.
All notices, requests, demands or other communications under this
Promissory Note shall be delivered in accordance with the provisions of Section
11(c) of the Stock Subscription 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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