Exhibit 10.01
PROMISSORY NOTE
$125,000 Phoenix, Arizona
May 14, 2002
FOR VALUE RECEIVED, the undersigned, Martin Fraser (the "Payor"), hereby
promises to pay to the order of CSK AUTO CORPORATION, a Delaware corporation, or
its successor or assign (the "Holder"), at the office of Holder at 645 E.
Missouri Avenue, Phoenix, Arizona, Attn.: Chief Executive Officer, on the
earlier of (i) December 31, 2003 (the "Maturity Date"), (ii) the last day of the
first "window period" to occur after the date hereof in which Payor, as an
executive of Holder, has the right to sell common stock of Holder pursuant to
the Statement of Policy Concerning the Disclosure of Confidential Information
and Insider Trading (and only to the extent that the Board of Directors of
Holder does not exercise its right to close the window period prior to its
commencement), and (iii) the date to which the maturity of this Note is
accelerated as provided below, the principal sum of ONE HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($125,000), together with any accrued and unpaid interest
thereon, in lawful money of the United States of America in immediately
available funds, and to pay interest from the date hereof on the principal
amount hereof from time to time outstanding, in like funds, at said office. From
the date hereof interest (i) shall accrue on the outstanding principal amount
hereof at a rate which shall be calculated for each quarter or part thereof of
the Holder's fiscal year, (ii) shall equal the average rate paid by CSK Auto,
Inc. under the revolving portion of its senior credit facility during such
period, and (iii) shall be payable in arrears on or prior to the 30th day after
the end of each such fiscal quarter.
The Payor hereby promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, on any overdue interest (other
than interest added to and constituting a part of the principal hereof in
accordance with the terms hereof), and on any overdue amount under any
instrument now or hereafter evidencing or securing the indebtedness evidenced
hereby, at a rate equal to the rate of interest payable by Holder from time to
time under its senior credit facility, calculated on the basis of the actual
number of days elapsed over 365, from the date such principal or interest was
due to the date of payment.
The Payor shall have the right at any time and from time to time on any
business day to prepay the principal amount of this Note, together with accrued
and unpaid interest thereon, 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 principal amount hereof to be
prepaid. In the event the Payor decides not to so prepay this Note in accordance
with any such notice delivered to the Holder hereof, the Payor shall so notify
the Holder hereof, not less than two business days before such prepayment would
otherwise have been made.
This Promissory Note is secured by that certain Stock Pledge Agreement,
dated as of even date herewith, between the Holder and the Payor (the "Stock
Pledge Agreement").
In case of the happening of any of the following events ("Events of
Default"):
(i) default shall be made in the payment of the principal of or
interest on this 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; provided, however, that in the case of a failure to make an
interest payment an Event of Default shall not occur until such interest
remains unpaid for 10 days following notice from the Holder to the Payor
that such interest payment is in default;
(ii) a breach of any covenant contained in this Note, other than the
covenant to pay the principal of and interest on this Note, which breach
shall continue unremedied for thirty days after written notice by the
Holder hereof;
(iii) the Payor shall (a) 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, (b) 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, (c) 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, (d) file an answer admitting the
material allegations of a petition filed against him in any such
proceeding, (e) make a general assignment for the benefit of creditors or
(f) become unable, admit in writing his inability or fail generally to pay
his debts as they become due;
(iv) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (a)
relief in respect of the Payor, or of a substantial part of the property
of the Payor, under Title 11 of the United States Code or any other
Federal or state bankruptcy, insolvency, receivership or similar law or
(b) the appointment of a receiver, trustee, custodian, sequestrator or
similar official for the Payor or for a substantial part of the property
of the Payor; 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;
(v) the Payor shall not deliver to the Secured Party (as defined in
the Pledge Agreement) within 15 days of the date hereof all certificates
or instruments representing or evidencing the Pledged Shares (as defined
in the Pledge Agreement), or not deliver to the Secured Party within 10
days of the acquisition thereof by the Payor all certificates and
instruments representing or evidencing securities acquired by the Payor
after the date hereof in substitution for or with respect to the Pledged
Shares and constituting Pledged Collateral (as defined in the Pledge
Agreement), all of which certificates or instruments shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Secured Party;
2
(vi) an Event of Default (as defined in the Stock Pledge Agreement)
shall have occurred under the Stock Pledge Agreement; or
(vii) Payor shall, for any reason, cease to be an employee of Holder
or any of its subsidiaries;
then, in any such event (other than an event described in paragraph (iii)
or (iv) above), the Holder hereof may declare the principal amount of this 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 Payor (to the extent permitted by law), anything
contained herein to the contrary notwithstanding; and, in any event described in
paragraph (iii) or (iv) above, the principal amount of this 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 Payor.
In addition, in the event that any cash dividend or distribution is paid
by the Holder with respect to the Pledged Shares, the Payor shall make a
mandatory prepayment with respect to this Note equal to the amount of such
dividend or distribution, which shall be applied first to accrued but unpaid
interest under this Note, then to principal.
If any payment under this Note is not made when due, whether at maturity
or by acceleration, Payor shall pay all costs of collection whether or not suit
is filed hereon, on the Stock Pledge Agreement or otherwise, including, but not
limited to, reasonable attorneys' fees and all expenses incurred in connection
with the protection or realization of any collateral.
Payor 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 Note, and to constitute this Note the legal, valid and
binding obligation of Payor, enforceable in accordance with the terms hereof,
have been done and performed and happened in due and strict compliance with all
applicable laws.
The Payor hereby waives (to the extent permitted by law) diligence,
presentment, demand, protest and notice of any kind whatsoever except as
expressly required herein. The nonexercise by the Holder 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. The Holder
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 Holder may select, without
waiving any rights with respect to any other security. No delay or omission on
the part of the Holder 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 Note.
All prepayment of the principal hereof and interest hereon and the
respective dates thereof shall be endorsed by the Holder hereof on the schedule
attached here to and made a part hereof, or on a continuation thereof which
shall be attached hereto and made a part hereof;
3
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 Payor
under this Note.
This Note may be assigned, pledged, hypothecated or otherwise transferred
by the Holder hereof.
Any notice to be given hereunder shall be in writing and shall be deemed
to have been given (i) when presented personally or (ii) three business days
after being deposited in a regularly maintained receptacle for the United States
Postal Service, postage prepaid, registered or certified, return receipt
requested addressed to the respective party at the address specified herein or
such other address as any party may from time to time designate by written
notice to the other as herein required.
The Payor irrevocably submits to the jurisdiction of the federal and State
courts sitting in Phoenix, Arizona, for the purposes of any suit, action or
other proceeding arising out of or relating to this Note. Payor expressly waives
any objection which he may have now or hereafter to the laying of the venue or
to the jurisdiction of any such suit, action or proceedings.
All agreements between Payor and the Holder hereof are expressly limited
so that in no contingency or event whatsoever, whether by. reason of advancement
of the proceeds of the loan evidenced hereby, acceleration of maturity of the
unpaid principal balance hereof, or otherwise, shall the interest contracted
for, charged or received by the Holder exceed the maximum amount permissible
under applicable law. If, from any circumstance whatsoever, interest would
otherwise be payable to the Holder hereof in excess of the maximum lawful
amount, then ipso facto, the interest payable to the Holder shall be reduced to
the maximum amount permitted under applicable law, and the amount of interest
for any subsequent period, to the extent less than that permitted by applicable
law, shall to that extent be increased by the amount of such reduction. If from
any circumstance the Holder hereof shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the unpaid
principal balance due hereunder and not to the payment of interest, or if such
excessive interest exceeds the unpaid principal balance due hereunder, such
excess shall be refunded to Payor. All interest paid or agreed to be paid to the
Holder hereof shall, to the extent permitted by applicable law, be amortized,
prorated, allocated or spread throughout the full period until payment in full
of the principal balance due hereunder (including the period of any renewal or
extension) so that interest thereon for such period shall not exceed the maximum
amount permitted by applicable law. The provisions of this paragraph shall
control all agreements between the Payor and the Holder hereof.
Any provision of this Note that is declared invalid, illegal or
unenforceable in any jurisdiction shall not affect in any way the remaining
provisions hereof in such jurisdiction or render that or any other provision of
this Note invalid, illegal or unenforceable in any other jurisdiction.
This Note shall be governed and construed, and all rights and obligation
hereunder shall be determined, in accordance with the laws of the State of
Delaware.
4
Executed and delivered by the undersigned this 14th day of May, 2002, in
the State of Arizona.
Payor
--------------------------------
Martin Fraser
Address for notices to the Payor:
Martin Fraser
7873 W. Kerry Lane
Glendale, Arizona 85308
5