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EXHIBIT 10.9
SECOND AMENDED AND RESTATED
REVOLVING LINE OF CREDIT
LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT
(this "Agreement") is made as of November 10, 1998 (the "Effective Date"), by
and between FRANCHISE FINANCE CORPORATION OF AMERICA, a Delaware corporation
("FFCA"), whose address is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and ▇. ▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC., a Delaware corporation ("Debtor"),
whose address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms used in this
Agreement shall have the meanings set forth in Section 1. Debtor and FFCA
entered into that certain Revolving Line of Credit Loan Agreement dated as of
October 24, 1997, as amended and restated in that certain Amended and Restated
Revolving Line of Credit Loan Agreement dated as of June 29, 1998 (collectively,
the "Original Agreement"). Subsequently, FFCA has agreed to increase the amount
of the Loan and Debtor has agreed to pledge its interest in the Collateral
pursuant to the Security Agreement in order to provide security for the Loan.
This Agreement amends and restates the Original Agreement in order to reflect
the terms and conditions associated with a further increase of the Loan and a
pledge of the Collateral.
AGREEMENT:
In consideration of the mutual covenants and provisions of this Agreement,
the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following
meanings for all purposes of this Agreement:
"Acceleration Event" means (a) a breach or default, after the passage of
all applicable notice and cure or grace periods, under any other agreement,
instrument or promissory note other than the Loan Documents between, among or by
(i) Debtor or any Affiliate of Debtor, and, or for the benefit of, (ii) FFCA
and/or any Affiliate of FFCA, (b) the consummation of a sale of shares of stock
or other ownership interests in Debtor by ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively, the "Primary Shareholders") other
than sales of such stock or ownership interests in Debtor among the Primary
Shareholders, members of the immediate family of the Primary Shareholders or
family trusts, foundations or other legal entities which are owned by and
created for the benefit of the Primary Shareholders, (c) the consummation of a
sale of stock or other ownership interests in Debtor pursuant to a public
offering or private placement pursuant to the Securities Act of 1933 or (d) at
any time that the Primary Shareholders, members of the immediate family of the
Primary Shareholders or family trusts, foundations or other legal entities which
are owned by and created for the benefit of the Primary Shareholders do not own
more than 40% of the stock or other ownership interests in Debtor.
"Action" has the meaning set forth in Section 7.
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"Advance" means any advance of the proceeds of the Loan made by FFCA
pursuant to the terms of Section 2.
"Affiliate" means any Person which directly or indirectly controls, is
under common control with, or is controlled by any other Person. For purposes of
this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities or otherwise.
"Business Day" means any day on which banks are open for general banking
business in the State of Arizona other than a Saturday, Sunday, a legal holiday
or any other day on which banks in the State of Arizona are required or
authorized by law to close.
"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et
seq., as amended.
"Collateral" means Debtor's membership or partnership interest in the
Companies as more particularly described in the Security Agreement.
"Companies" means the Arizona general partnerships and the Arizona limited
liability companies identified on Exhibit G attached hereto.
"Counsel" means ▇▇▇▇▇ and Roca LLP, licensed in the State of Arizona
(where Debtor maintains its principal place of business) or such other legal
counsel as selected by Debtor and reasonably approved by FFCA.
"Debt" means as to such Person at any time (without duplication): (a) all
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures or other similar instruments; (c)
all obligations of such Person to pay the deferred purchase price of property or
services; (d) all capital lease obligations of such Person; (e) all contingent
obligations or other obligations of others guaranteed by such Person; (f) all
obligations secured by a lien existing on property owned by such Person, whether
or not the obligations secured thereby have been assumed by such Person or are
nonrecourse to the credit of such Person; and (g) all reimbursement obligations
of such Person (whether contingent or otherwise) in respect of letters of
credit, bankers' acceptances, surety or other bonds and similar instruments.
"Effective Date" has the meaning set forth in the introductory
paragraph of this Agreement.
"Event of Default" has the meaning set forth in Section 7.
"Fee" means a draw fee equal to .5% of the amount of each Advance.
"Indemnified Parties" has the meaning set forth in Section 9.
"Joint Venture Agreements" means those Joint Venture Agreements and
Operating Agreements between Debtor and the respective Partners of each
Company.
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"Loan" means the revolving line of credit in the Maximum Loan Amount and
as described in Section 2.
"Loan Documents" means, collectively, this Agreement, the Note, the
Security Agreement, the UCC Financing Statements, the Negative Pledges and all
other documents, instruments and agreements executed in connection therewith or
contemplated thereby.
"Management Agreements" means the management agreements between Debtor and
a Company with respect to each of the Premises.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition of Debtor or the Companies, as applicable or (ii) the
ability of Debtor or the Companies, as applicable, to perform its obligations
under the Loan Documents.
"Maturity Date" shall have the meaning set forth in the Note.
"Maximum Loan Amount" means $25,000,000.00.
"Negative Pledges" means the amended and restated negative pledge
agreements dated as of the Effective Date executed by the Companies in favor of
FFCA in the form of Exhibit F attached hereto. A Negative Pledge will be
executed for each of the Premises.
"Note" means the second amended and restated promissory note dated as of
the Effective Date executed by Debtor in favor of FFCA in the form of Exhibit A
attached to this Agreement, as such Note may be amended and/or amended and
restated and/or substituted from time to time as contemplated by Section 2. The
term "Note" shall also include all additional promissory notes executed and
delivered by Debtor to FFCA from time to time as contemplated by Section 2.
"Partners" means, as applicable, the general partners (other than Debtor)
for each of the Companies that are general partnerships and the members (other
than Debtor) of the Companies that are limited liability companies.
"Person" shall mean any individual, corporation, partnership, limited
liability company, trust, unincorporated organization, governmental authority or
any other form of entity.
"Premises" means the parcels of real estate owned or leased by the Debtor
described in Exhibit D attached hereto, all rights, privileges and appurtenances
associated therewith, and all buildings, fixtures and other improvements now or
hereafter located thereon (whether or not affixed to such real estate).
"Security Agreement" means the amended and restated security agreement
dated as of the Effective Date executed by Debtor in favor of FFCA in the form
of Exhibit E attached to this Agreement, as such Security Agreement may be
amended from time to time.
"Subsidiary" means any corporation or other entity of which at least a
majority of the outstanding shares of stock or other ownership interests having
by the terms thereof ordinary voting power to elect a majority of the board of
directors (or Persons performing similar functions) of such corporation
(irrespective of whether or not at the time stock of any other class
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or classes of such corporation or entity shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by Debtor or one or more of the Subsidiaries or
by Debtor and one or more of the Subsidiaries.
"UCC Financing Statements" means those UCC financing statements required
by FFCA to be executed and delivered by Debtor that are necessary to perfect
FFCA's security interest in the Collateral.
2. REVOLVING LINE OF CREDIT. A. On the terms and subject to the
satisfaction by Debtor of the conditions set forth in this Agreement, FFCA
agrees to make the Loan to Debtor, which Loan will be in the form of Advances
made from time to time as provided in this Agreement. The outstanding aggregate
principal amount of the Loan shall not exceed the Maximum Loan Amount at any
time. So long as no event has occurred which is, or with the passage of time or
the giving of notice or both under the Loan Documents would constitute, an Event
of Default or an Acceleration Event, Debtor may borrow, prepay and reborrow,
from the Effective Date until the Maturity Date, an amount up to the Maximum
Loan Amount. Debtor shall not request an Advance in an amount less than
$500,000.00 and no more than once in a calendar month.
B. Simultaneously with the execution and delivery of this Agreement,
Debtor shall execute and deliver to FFCA the Note. The obligation of Debtor to
pay the outstanding aggregate principal amount of all Advances plus accrued
interest thereon shall be evidenced by the Note. Debtor irrevocably authorizes
FFCA to make or cause to be made, at or about the time of any Advance or at the
time of FFCA's receipt of any payment of the principal amount of the Note, an
appropriate notation in FFCA's records reflecting the amount of such Advance or
payment, as applicable. The outstanding aggregate principal amount of the Note
plus accrued interest thereon set forth in FFCA's records maintained with
respect to the Note (which may include computer records) shall, absent manifest
error, be prima facie evidence of the outstanding aggregate principal amount
plus accrued interest thereon due and owing to FFCA, but the failure to record,
or any error in so recording, any such amount on FFCA's records shall not limit
or otherwise affect the obligations of Debtor under the Note to make payments
when due. Notwithstanding the foregoing, Debtor agrees to execute such
amendments to the Note, amendments and restatements of the Note and/or
substitute and/or additional promissory notes in the form of the Note as FFCA
may reasonably request to evidence Debtor's obligations to FFCA under the Loan
Documents.
C. Debtor shall notify FFCA at least five Business Days before the
Business Day on which Debtor desires to receive an Advance; provided, however,
Debtor acknowledges that each Advance shall be made on the first Business Day of
the month immediately following the month in which Debtor notifies FFCA of its
desire to receive such Advance. Each such notice shall be in the form of Exhibit
B attached hereto (each, a "Notice"), and shall set forth the requested amount
of each Advance and such other information required by the Notice. Each Notice
shall constitute a certification by Debtor that the representations and
warranties of Debtor set forth in the Loan Documents, are true, correct and
complete in all material respects as of the date of such Notice and as of the
date of such requested Advance and that Debtor has satisfied each of the
conditions precedent set forth in this Agreement. FFCA's obligation to fund each
Advance shall
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be subject to the satisfaction of the following conditions precedent as of the
date of the requested Advance:
(i) no event shall have occurred which is, or with the passage of
time or the giving of notice or both under the Loan Documents would
constitute, an Event of Default or an Acceleration Event;
(ii) Debtor shall be in compliance with each of the covenants set
forth in Section 5;
(iii) the outstanding principal balance of the Loan, together with
the amount of the requested Advance, must not exceed the Maximum Loan
Amount; and
(iv) there shall have been no material adverse change in Debtor's
business, operations, assets or financial condition since the Effective
Date, as determined by FFCA in its reasonable discretion.
Upon Debtor's satisfaction of the foregoing conditions, FFCA will disburse the
requested Advance in immediately available funds to such account as Debtor shall
have specified in the Notice or as otherwise directed by Debtor in the Notice.
D. The Loan shall bear interest at a variable rate of interest as set
forth in the Note and shall be payable in arrears on the first day of each month
based on the then outstanding principal balance of the Note. Debtor shall have
the right to prepay (without premium or penalty) the Note in whole or in part at
any time provided that any such prepayment shall only be made on a regularly
scheduled payment date upon not less than 10 days prior written notice from
Debtor to FFCA. Debtor shall pay on the Maturity Date, and there shall become
absolutely due and payable on the Maturity Date, the outstanding principal
amount of the Loan and all accrued but unpaid interest thereon.
E. As security for the Loan, Debtor agrees to pledge its interest in
the Collateral pursuant to the Security Agreement. In addition, Debtor will
execute and deliver the Negative Pledges. A Negative Pledge will be recorded in
the real estate records of each county where each of the Premises is located.
E. All costs and expenses of the transaction described in this
Agreement shall be paid by Debtor, including, without limitation, the attorneys'
fees of Debtor and the reasonable attorneys' fees and expenses of FFCA.
F. FFCA's obligation to provide the Loan is further subject to the
delivery to FFCA of Counsel's opinion in form and substance reasonably
satisfactory to FFCA.
G. The Fee shall be paid at the time of each Advance from each Advance
and shall be deemed nonrefundable and fully earned with each Advance.
3. REPRESENTATIONS AND WARRANTIES OF FFCA. The representations and
warranties of FFCA contained in this Section are being made by FFCA as of the
Effective Date to induce Debtor to enter into this Agreement and consummate the
transactions contemplated herein, and
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Debtor has relied, and will continue to rely, upon such representations and
warranties from and after the execution of this Agreement. FFCA represents and
warrants to Debtor as follows:
A. Organization of FFCA. FFCA has been duly formed, is validly
existing and has taken all necessary action to authorize the execution,
delivery and performance by FFCA of this Agreement.
B. Authority of FFCA. The person who has executed this Agreement on
behalf of FFCA is duly authorized so to do.
C. Enforceability. Upon execution by FFCA, this Agreement shall
constitute the legal, valid and binding obligation of FFCA, enforceable
against FFCA in accordance with its terms.
All representations and warranties of FFCA made in this Agreement shall
survive the execution of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF DEBTOR. The representations and
warranties of Debtor contained in this Section are being made by Debtor as of
the Effective Date and the date of each Advance to induce FFCA to enter into
this Agreement and consummate the transactions contemplated herein, and FFCA has
relied, and will continue to rely, upon such representations and warranties from
and after the Effective Date and the date of each Advance.
Debtor represents and warrants to FFCA as follows:
A. Information and Financial Statements. Debtor has delivered to
FFCA financial statements (either audited financial statements or, if
Debtor does not have audited financial statements, certified financial
statements) and certain other information concerning itself, which
financial statements and other information are true, correct and complete
in all material respects; and no material adverse change has occurred with
respect to any such financial statements and other information provided to
FFCA since the date such financial statements and other information were
prepared or delivered to FFCA. Debtor understands that FFCA is relying
upon such financial statements and information and Debtor represents that
such reliance is reasonable. All such financial statements were prepared
in accordance with generally accepted accounting principles consistently
applied (except as otherwise noted in such financial statements) and
accurately reflect as of the Effective Date the financial condition of
each individual or entity to which they pertain.
B. Organization and Authority of Debtor. Debtor is duly organized or
formed, validly existing and in good standing under the laws of the State
of Delaware and qualified as a foreign corporation to do business in any
jurisdiction where such qualification is required. All necessary corporate
action has been taken to authorize the execution, delivery and performance
of the Loan Documents. The person(s) who have executed the Loan Documents
on behalf of Debtor are duly authorized so to do.
C. Organization and Authority of Companies. The Companies are duly
organized or formed, validly existing and in good standing under the laws
of the states where they were organized and qualified as foreign
partnerships or foreign limited liability companies to do business in any
jurisdiction where such qualification is required.
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D. Enforceability of Documents. Upon execution by Debtor, the
Loan Documents shall constitute the legal, valid and binding
obligations of Debtor, enforceable against Debtor in accordance with
their respective terms.
E. Litigation. There are no suits, actions, proceedings or
investigations pending or, to the actual knowledge of Debtor,
threatened against or involving Debtor, the Companies, the Collateral,
the Premises or any of Debtor's or any of the Companies' assets before
any court, arbitrator, or administrative or governmental body which
might reasonably result in a Material Adverse Effect.
F. Absence of Breaches or Defaults. Neither Debtor nor any of
the Companies are in default beyond any applicable grace period under
any other document, instrument or agreement to which Debtor or any of
the Companies is a party (including, without limitation, the
Partnership Agreements and the Management Agreements) or by which the
Debtor, the Companies, the Collateral, the Premises or any of the
property of Debtor or any of the Companies is subject or bound which
would have a Material Adverse Effect or would materially interfere with
or prevent Debtor's or the Companies performance under the Loan
Documents. The authorization, execution, delivery and performance of
the Loan Documents will not result in a Material Adverse Effect or
result in any breach or default under any other document, instrument or
agreement to which Debtor or any of the Companies is a party
(including, without limitation, the Partnership Agreements and the
Management Agreements) or by which Debtor, the Companies, the
Collateral, the Premises or any of the property of Debtor is subject or
bound which would materially interfere with or prevent Debtor's or the
Companies' performance under the Loan Documents. The authorization,
execution, delivery and performance of the Loan Documents will not
violate any applicable law, statute, regulation, rule, ordinance, code,
rule or order.
G. Licenses, Permits, Consents and Approvals. Debtor or the
Companies has all required licenses, permits, consents and approvals,
both governmental and private, to use and operate the Collateral, the
Premises and the rest of their assets and conduct their business in the
intended manner.
H. Insolvency; Net Worth. Debtor is not insolvent within the
meaning of the Code. Debtor has a net worth of at least $10,000,000.00,
as determined in accordance with generally accepted accounting
principles consistently applied, except that for purposes of
calculating Debtor's net worth hereunder, convertible preferred stock
issued by Debtor shall be treated as equity.
I. Taxes. Debtor and the Companies have paid, in the ordinary
course of business, all taxes, assessments, levies and other
governmental charges which have been levied or imposed upon Debtor, the
Companies, the Collateral, the Premises and/or Debtor's and properties
and would be due and payable.
J. Title to Collateral; First Priority Security Interest.
Debtor owns, and with respect to Collateral acquired after the date
hereof, Debtor will own, legally and beneficially, the Collateral, free
and clear of any lien, security interest, pledge, hypothecation, claim
or other encumbrance, or any right or option on the part of any third
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person to purchase or otherwise acquire or obtain any lien or security
interest in the Collateral or any part thereof, except for the lien and
security interest granted in the Security Agreement in favor of FFCA.
Upon the execution of the Loan Documents by the applicable parties,
Secured Party shall have a valid first priority lien upon and security
interest in the Collateral.
K. Title to Premises. Debtor holds either (i) fee title to the
Premises, (ii) a leasehold interest in the land relating to the
Premises and fee title to the buildings and improvements located
thereon or (iii) a leasehold interest in the Premises, free and clear
of all liens, encumbrances, charges and security interests of any
nature whatsoever, except as otherwise disclosed in writing to FFCA.
L. Collateral Genuine. The Collateral is genuine, free from
any restriction on transfer, duly and validly authorized and issued,
constitutes the valid and legally binding obligation of the Companies,
enforceable in accordance with its terms, is fully paid and
non-assessable, and is hereby duly and validly pledged and hypothecated
to FFCA in accordance with law. The interests listed on Schedule II
represent one hundred (100%) percent of the issued and outstanding
interests of the Companies. There are no other interests issued and
outstanding and there are no other interests in the Companies.
M. No Actions. No action has been brought or is threatened
which would in any way prohibit or restrict the execution and delivery
of any of the Loan Documents by Debtor or the performance in all
respects of Debtor thereunder.
All representations and warranties of Debtor made in this Agreement
shall survive the execution of this Agreement and each Advance.
5. COVENANTS. Debtor covenants to FFCA from and after the Effective
Date as follows:
A. Books, Records and Inspections. Debtor shall, at all
reasonable times upon prior written notice from FFCA and during normal
business hours, (i) provide FFCA and FFCA's officers, employees,
agents, advisors, attorneys and accountants with access to Debtor's
personal and real properties and books and records, and (ii) allow such
persons to make such inquires of Debtor's officers and employees and to
make copies and perform such verifications as FFCA considers reasonably
necessary; provided, however, all such inspections, copies and
verifications shall be at FFCA's sole cost and expense and FFCA shall
reasonably attempt to minimize, during any such activity, interference
with the operation of Debtor's business and FFCA shall keep any
information obtained confidential; provided, however, FFCA shall not be
required to keep confidential (1) any information which had previously
been made public, (2) information that FFCA is required to disclose by
court order, supoena or under federal or state law, or (3) information
received by FFCA from a third party.
B. Net Worth. At all times while the obligations of Debtor to
FFCA pursuant to the Loan Documents are outstanding, Debtor shall
maintain a net worth of at least $10,000,000.00, as determined in
accordance with generally accepted accounting principles
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consistently applied, except that for purposes of calculating Debtor's
net worth hereunder convertible preferred stock issued by Debtor shall
be treated as equity.
C. Reporting Obligations. Debtor will provide FFCA with each
of the following:
(i) Financial Statements. Within 45 days after the
end of each fiscal quarter and within 120 days after the end
of each fiscal year of Debtor, Debtor shall deliver to FFCA
complete financial statements of Debtor including a balance
sheet, profit and loss statement, cash flow statement and all
other related schedules for the fiscal period then ended. All
such financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied
from period to period, and shall be certified to be accurate
and complete by Debtor (or the Treasurer or other appropriate
officer of Debtor). Debtor understands that FFCA is relying
upon such financial statements and Debtor represents that such
reliance is reasonable. The financial statements delivered to
FFCA need not be audited, but Debtor shall deliver to FFCA
copies of any audited financial statements of Debtor which may
be prepared, as soon as they are available.
(ii) Event of Default or Acceleration Event.
Promptly, but in any event within five days, after Debtor
becomes aware of an Event of Default or an Acceleration Event,
written notification to an officer of FFCA specifying the
nature and period of existence thereof and what action Debtor
is taking or proposes to take with respect thereto.
(iii) Litigation. Within ten days after Debtor
becomes aware of any action, suit or proceeding pending or
threatened in writing against or involving Debtor and/or
Debtor's properties, except for those actions, suits or
proceedings (1) for which damages of less than $250,000 have
been sought, threatened or are likely to be incurred and (2)
which Debtor in good faith determines will be covered by its
insurance (including worker's compensation claims), Debtor
shall notify FFCA of such action, suit or proceeding and in
such notice specify the nature thereof, whether the alleged
liability therein is covered by insurance then in effect and,
if so covered, the monetary coverage thereof, and what action
Debtor is taking or proposes to take with respect thereto.
(iv) Certificates. At the time of each Advance, a
certificate of an officer of Debtor, substantially in the form
attached hereto as Exhibit B.
(v) Auditors' Reports. Promptly upon receipt thereof,
a copy of each report submitted to Debtor by its independent
accountants in connection with any annual, interim or special
audit made by it of the books of Debtor.
(vi) Other Information. Debtor shall deliver to FFCA
promptly after the receipt of written request therefor
information concerning Debtor requested by FFCA that is
required to satisfy all requirements applicable to FFCA
pursuant to
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the Securities Exchange Act of 1934 and all other regulatory
laws applicable to FFCA or to which FFCA is subject or bound.
D. Payment of Taxes, Etc. Unless Debtor shall contest the
amount or validity thereof in the manner described below, Debtor shall
pay all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, might become a lien upon any of its
properties. Debtor may, at its own expense, contest or cause to be
contested such taxes, assessments, governmental charges or levies or
other claims (i) in good faith, (ii) by proper proceedings, and (iii)
against which adequate reserves in accordance with generally accepted
accounting principles are being maintained.
E. Organization of Debtor. Debtor will continue to be a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction and qualified to do business in any
jurisdiction where such qualification is required.
F. Licenses, Permits, Consents and Approvals. Debtor shall
maintain in full force and effect all required licenses, permits,
consents and approvals, both governmental and private, to use and
operate its assets and conduct its business in the intended manner.
G. Use of Proceeds. Debtor shall use the proceeds of the Loan
for (i) the purchase of interests of minority owners of Debtor, (ii)
working capital and (iii) construction or renovation of ▇.▇. ▇▇▇▇▇'▇
China Bistro restaurants.
H. Debt. Debtor shall not, and shall not permit any Subsidiary
to, incur, create, assume or permit to exist any Debt, except (a) Debt
to FFCA or Affiliates of FFCA; (b) Debt incurred pursuant to trade
accounts arising in the ordinary course of business that are not past
due by more than 30 days; (c) letters of credit for deposits not to
exceed $15,000.00 each and (d) existing Debt described on the attached
Exhibit C and any extensions, substitutions or renewals thereof.
I. Fundamental Changes. Debtor shall not consolidate with or
merge into any Person or permit any Person to merge into it; provided
that the Companies may enter into a consolidation or merger with any
person if (i) the survivor formed by or resulting from such
consolidation or merger is the Companies and (ii) at the time of such
consolidation or merger and immediately after giving effect thereto no
Event of Default or Acceleration Event shall have occurred and be
continuing.
J. Disposition of Assets. Without the prior written consent of
FFCA, Debtor shall not, directly or indirectly, sell, assign, lease,
transfer or otherwise dispose of all or substantially all of its assets
(other than in the ordinary course of business for full and fair
consideration).
K. No New Subsidiaries. Without the prior written consent of
FFCA, Debtor shall not, and shall not permit any of its Subsidiaries
to, acquire, incorporate or otherwise organize any Subsidiary, which
was not in existence as of the Effective Date.
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L. Transactions With Affiliates. Without the prior written
consent of FFCA, Debtor will not enter into, and will not permit any
Subsidiary to enter into, any transaction, including, without
limitation, the purchase, sale, or exchange of property or the
rendering of any service, with any Affiliate of Debtor or such
Subsidiary, except transactions for fair value in accordance with
reasonable commercial standards.
M. Maintenance of Assets. Debtor shall maintain, keep and
preserve, and will cause each Subsidiary to maintain, keep and
preserve, all of its tangible and intangible property and other assets
that are necessary and useful in proper conduct of its business.
N. Amendment of Joint Venture Agreements. Without the prior
written approval of FFCA in its sole and absolute discretion, Debtor
shall not amend or terminate any of the Joint Venture Agreements or the
Management Agreements nor shall it permit any of the Joint Venture
Agreements or the Management Agreements to be amended or terminated.
O. Title; First Priority Lien. Debtor shall maintain good and
marketable fee simple title to the Collateral, free and clear of all
liens, encumbrances, charges and other exceptions to title. Debtor
shall maintain good and marketable title to or valid and binding
leasehold interests in, as applicable, the Premises, free and clear of
all liens, encumbrances, charges and other exceptions to title.
6. TRANSACTION CHARACTERIZATION. This Agreement is a contract to extend
a financial accommodation (as such term is used in the Code) for the benefit of
Debtor. It is the intent of the parties hereto that the business relationship
created by this Agreement, the Note and the other Loan Documents is solely that
of creditor and debtor and has been entered into by both parties in reliance
upon the economic and legal bargains contained in the Loan Documents. None of
the agreements contained in the Loan Documents is intended, nor shall the same
be deemed or construed, to create a partnership between Debtor and FFCA, to make
them joint venturers, to make Debtor an agent, legal representative, partner,
subsidiary or employee of FFCA, nor to make FFCA in any way responsible for the
debts, obligations or losses of Debtor.
7. DEFAULT AND REMEDIES. A. Each of the following shall be deemed an
event of default by Debtor, after notice, to the extent required hereunder, and
after the expiration of any applicable grace or cure period without the cure
thereof (each, an "Event of Default"):
(1) If any representation or warranty of Debtor set forth in
any of the Loan Documents is false in any material respect when made or
becomes false in any material respect, or if Debtor renders any
materially false statement or account;
(2) If any principal, interest or other monetary sum due under
the Note or any other Loan Document is not paid within five days from
the date when due and FFCA shall have given notice of such failure to
Debtor and such failure shall not have been cured by Debtor within five
days from the delivery of such notice;
(3) If Debtor fails to observe or perform any of the other
covenants (except as otherwise provided below), conditions, or
obligations of this Agreement other than the covenants in Sections 5.B,
5.H, 5.I, 5.J, 5.N and 5.O of this Agreement or there is a breach
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or default under any other Loan Document beyond any applicable notice
or cure period; provided, however, if any such event does not involve
the payment of any monetary sum, is not the result of a willful or
intentional act or omission of Debtor, does not place any rights or
property of FFCA in immediate jeopardy, and is within the reasonable
power of Debtor to promptly cure after receipt of notice thereof, all
as determined by FFCA in its reasonable discretion, then such event
shall not constitute an Event of Default hereunder, unless otherwise
expressly provided herein, unless and until FFCA shall have given
Debtor notice thereof and a period of 30 days shall have elapsed,
during which period Debtor may correct or cure such event, upon failure
of which an Event of Default shall be deemed to have occurred hereunder
(except as otherwise provided in the following sentence) without
further notice or demand of any kind being required. If such
nonmonetary event cannot reasonably be cured within such 30-day period,
as determined by FFCA in its reasonable discretion, and Debtor is
diligently pursuing a cure of such event, then an Event of Default
shall not be deemed to have occurred hereunder upon the expiration of
such 30-day period and Debtor shall have a reasonable period to cure
such event beyond such 30-day period, which shall not exceed 90 days
after receiving notice of the event from FFCA. If Debtor shall fail to
correct or cure such event within such 90-day period, an Event of
Default shall be deemed to have occurred hereunder without further
notice or demand of any kind being required;
(4) If Debtor fails to observe or perform any of the covenants
in Sections 5.B, 5.H, 5.I, 5.J, 5.N or 5.O of this Agreement; or
(5) If Debtor becomes insolvent within the meaning of the
Code, files or notifies FFCA that it intends to file a petition under
the Code, initiates a proceeding under any similar law or statute
relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts (collectively, an "Action"), becomes the subject of
either an involuntary Action or petition under the Code without such
involuntary Action or petition being dismissed within 30 days of filing
or, if Debtor is diligently proceeding to dismiss such petition, such
longer period of time as if required, but in no event shall such longer
period of time be greater than 90 days, or is not generally paying its
debts as the same become due.
B. Upon and during the continuance of an Event of Default,
subject to the limitations, notices and cure periods set forth in
subsection A, or an Acceleration Event, FFCA shall have no obligation
to fund any Advance to Debtor and FFCA may declare all obligations of
Debtor under the Note, this Agreement and any other Loan Document to be
due and payable, and the same shall thereupon become due and payable
without any presentment, demand, protest or notice of any kind except
as expressly provided herein. Thereafter, FFCA may exercise, at its
option, concurrently, successively or in any combination, all remedies
available at law or in equity, including without limitation any one or
more of the remedies available under the Note or any other Loan
Document. Neither the acceptance of this Agreement nor its enforcement
shall prejudice or in any manner affect FFCA's right to realize upon or
enforce any other security now or hereafter held by FFCA, it being
agreed that FFCA shall be entitled to enforce this Agreement and any
other security now or hereafter held by FFCA in such order and manner
as it may in its absolute discretion determine. No remedy herein
conferred upon or reserved to FFCA is intended to be exclusive of any
other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by any of the Loan
Documents to FFCA,
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or to which FFCA may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be
deemed expedient by FFCA.
8. ASSIGNMENTS BY FFCA. FFCA may assign in whole or in part its rights
under this Agreement. Upon any unconditional assignment of FFCA's entire right
and interest hereunder, FFCA shall automatically be relieved, from and after the
date of such assignment, of liability for the performance of any obligation of
FFCA contained herein arising after the date of the assignment provided that any
assignee shall be bound by all of FFCA's obligations hereunder accruing from and
after the date of such assignment.
9. INDEMNITY. Debtor agrees to indemnify, hold harmless and defend FFCA
and each of its directors, officers, shareholders, employees, successors,
assigns, agents, experts, licensees, affiliates, lenders, mortgagees and
trustees, as applicable (collectively, the "Indemnified Parties"), from and
against any and all losses, costs, claims, liabilities, damages and expenses,
including, without limitation, reasonable attorneys' fees (collectively,
"Losses"), arising as the result of a breach of any of the representations,
warranties, covenants, agreements or obligations of Debtor set forth in this
Agreement, but excluding Losses suffered by an Indemnified Party directly
arising out of such Indemnified Party's gross negligence or willful misconduct.
10. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other
instruments required or permitted to be given by either party pursuant
to this Agreement shall be in writing and given by (i) hand delivery,
(ii) facsimile, (iii) express overnight delivery service or (iv)
certified or registered mail, return receipt requested, and shall be
deemed to have been delivered upon (a) receipt, if hand delivered, (b)
transmission, if delivered by facsimile (and if a copy of such notice
is also mailed by certified or registered mail, return receipt
requested, and deposited with the U.S. Postal Service no later than the
first business day after the notice was transmitted by facsimile), (c)
the next business day following the date of deposit with the delivery
service, if delivered by express overnight delivery service, or (d) the
third business day following the day of deposit of such notice with the
United States Postal Service, if sent by certified or registered mail,
return receipt requested. Notices shall be provided to the parties and
addresses (or facsimile numbers, as applicable) specified below:
If to Debtor: ▇. ▇. ▇▇▇▇▇'▇ China Bistro, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇ and Roca LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to FFCA: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Executive Vice President and
General Counsel
Franchise Finance Corporation of America
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
B. Waiver and Amendment. No provisions of this Agreement shall
be deemed waived or amended except by a written instrument
unambiguously setting forth the matter waived or amended and signed by
the party against which enforcement of such waiver or amendment is
sought. Waiver of any matter shall not be deemed a waiver of the same
or any other matter on any future occasion.
C. Captions. Captions are used throughout this Agreement for
convenience of reference only and shall not be considered in any manner
in the construction or interpretation hereof.
D. FFCA's Liability. Notwithstanding anything to the contrary
provided in this Agreement, it is specifically understood and agreed,
such agreement being a primary consideration for the execution of this
Agreement by FFCA, that (i) there shall be absolutely no personal
liability on the part of any shareholder, director, officer or employee
of FFCA, with respect to any of the terms, covenants and conditions of
this Agreement or the other Loan Documents, (ii) Debtor waives all
claims, demands and causes of action against FFCA's officers,
directors, employees and agents in the event of any breach by FFCA of
any of the terms, covenants and conditions of this Agreement or the
other Loan Documents to be performed by FFCA and (iii) Debtor shall
look solely to the assets of FFCA for the satisfaction of each and
every remedy of Debtor in the event of any breach by FFCA of any of the
terms, covenants and conditions of this Agreement or the other Loan
Documents to be performed by FFCA, such exculpation of liability to be
absolute and without any exception whatsoever.
E. Severability. The provisions of this Agreement shall be
deemed severable. If any part of this Agreement shall be held
unenforceable, the remainder shall remain in full force and effect, and
such unenforceable provision shall be reformed by such court so as to
give maximum legal effect to the intention of the parties as expressed
therein.
F. Construction Generally. This is an agreement between
parties who are experienced in sophisticated and complex matters
similar to the transaction contemplated by
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15
this Agreement and is entered into by both parties in reliance upon the
economic and legal bargains contained herein and shall be interpreted
and construed in a fair and impartial manner without regard to such
factors as the party which prepared the instrument, the relative
bargaining powers of the parties or the domicile of any party. Debtor
and FFCA were each represented by legal counsel competent in advising
them of their obligations and liabilities hereunder.
G. Other Documents. Each of the parties agrees to sign such
other and further documents as may be reasonably necessary to carry out
the intentions expressed in this Agreement.
H. Attorneys' Fees. In the event of any judicial or other
adversarial proceeding between the parties concerning this Agreement,
the prevailing party shall be entitled to recover its reasonable
attorneys' fees and other costs in addition to any other relief to
which it may be entitled. References in this Agreement to the
attorneys' fees and/or costs of a party shall mean both the reasonable
fees and costs of independent outside counsel retained by such party
with respect to this transaction and the reasonable fees and costs of
the party's in-house counsel incurred in connection with this
transaction.
I. Entire Agreement. This Agreement and the other Loan
Documents, together with any other certificates, instruments or
agreements to be delivered in connection therewith, constitute the
entire agreement between the parties with respect to the subject matter
hereof, and there are no other representations, warranties or
agreements, written or oral, between Debtor and FFCA with respect to
the subject matter of this Agreement.
J. Forum Selection; Jurisdiction; Venue; Choice of Law. Debtor
acknowledges that this Agreement was substantially negotiated in the
State of Arizona, the Agreement was signed and delivered by FFCA and
Debtor in the State of Arizona, all payments under the Note will be
delivered in the State of Arizona and there are substantial contacts
between the parties and the transactions contemplated herein and the
State of Arizona. For purposes of any action or proceeding arising out
of this Agreement or any of the other Loan Documents, the parties
hereto hereby expressly submit to the jurisdiction of all federal and
state courts located in the State of Arizona and Debtor consents that
it may be served with any process or paper by registered mail or by
personal service within or without the State of Arizona in accordance
with applicable law. Furthermore, Debtor waives and agrees not to
assert in any such action, suit or proceeding that it is not personally
subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the
action, suit or proceeding is improper. It is the intent of the parties
hereto that all provisions of this Agreement shall be governed by and
construed under the laws of the State of Arizona. Nothing in this
Section shall limit or restrict the right of FFCA to commence any
proceeding in the federal or state courts located in a state other than
Arizona to the extent FFCA deems such proceeding necessary or advisable
to exercise remedies available under this Agreement or the other Loan
Documents.
K. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
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L. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Debtor and FFCA and their respective successors
and permitted assigns, including, without limitation, any United States
trustee, any debtor in possession or any trustee appointed from a
private panel.
M. Survival. All representations, warranties, agreements,
obligations and indemnities of Debtor and FFCA set forth in this
Agreement shall survive the execution of this Agreement and each
Advance.
N. Waiver of Jury Trial and Punitive, Consequential, Special
and Indirect Damages. DEBTOR AND FFCA HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST
THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED
HEREIN OR RELATED HERETO. THIS WAIVER BY THE PARTIES HERETO OF ANY
RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE
TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM FFCA
WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM BROUGHT BY DEBTOR AGAINST FFCA OR ITS SUCCESSORS
WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE
WAIVER BY DEBTOR OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE
PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
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IN WITNESS WHEREOF, Debtor and FFCA have entered into this Agreement as
of the date first above written.
FFCA:
FRANCHISE FINANCE CORPORATION OF
AMERICA, a Delaware corporation
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Printed Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its VICE PRESIDENT
DEBTOR:
▇. ▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC., a
Delaware corporation
By /s/▇▇▇▇▇▇ ▇▇▇▇▇▇
Printed Name ▇▇▇▇▇▇ ▇▇▇▇▇▇
Its CFO/SECRETARY
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STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on November 10,
1998 by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President of Franchise Finance Corporation of
America, a Delaware corporation, on behalf of the corporation.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Notary Public
[STAMP]
My Commission Expires:
7/9/2002
STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on November 10,
1998 by ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFO of ▇. ▇. ▇▇▇▇▇'▇ China Bistro, Inc., a Delaware
corporation, on behalf of the corporation.
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public
[STAMP]
My Commission Expires:
June 23, 2001
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EXHIBIT A
FORM OF NOTE
20
SECOND AMENDED AND RESTATED
PROMISSORY NOTE
Dated as of November 10, 1998
$25,000,000.00 Scottsdale, Arizona
THIS SECOND AMENDED AND RESTATED PROMISSORY NOTE (this "Note") executed by
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC., a Delaware corporation ("Debtor"), amends and
restates that certain Promissory Note dated as of October 24, 1997 in the
principal amount of $10,000,000.00 and that certain Amended and Restated
Promissory Note dated as of June 29, 1998 in the principal amount of
$20,000,000.00, both payable to FRANCHISE FINANCE CORPORATION OF AMERICA, a
Delaware corporation ("FFCA").
Debtor, for value received, hereby promises to pay to FFCA, whose address
is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or order, on or
before the Maturity Date (as defined below), the principal sum of TWENTY-FIVE
MILLION AND NO/100 DOLLARS ($25,000,000.00), or such much thereof as may be
outstanding from time to time, in accordance with that certain Second Amended
and Restated Revolving Line of Credit Loan Agreement dated as of the date of
this Note between Debtor and FFCA, as such agreement may be amended from time
to time (the "Loan Agreement").
Initially capitalized terms which are not otherwise defined in this Note
shall have the meanings set forth in the Loan Agreement. The following terms
shall have the following meanings for all purposes of this Note:
"Applicable Margin" means an annual percentage equal to 6.00%.
"Adjustable Rate" means an annual interest rate equal to the sum of the
Adjustable Rate Basis plus the Applicable Margin.
"Adjustable Rate Basis" means, for any Interest Period, the annual
interest rate (rounded upwards, if necessary, to the nearest 1/100th of one
percent) appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in dollars at approximately 11:00 a.m.
(London time) on the Adjustable Rate Reset Date for a term comparable to such
Interest Period. If for any reasons such rate is not available, the term
"Adjustable Rate Basis" shall mean, for any Interest Period, the annual
interest rate (rounded upwards, if necessary, to the nearest 1/100th of one
percent) appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in dollars at approximately 11:00 a.m. (London time) on the
Adjustable Rate Reset Date for a term comparable to such Interest Period
provided, however, if more than one rate is specified on the Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
Notwithstanding the provisions of the foregoing two sentences, if, the annual
interest rate charge to FFCA under its then existing LIBOR based credit
facility (the "FFCA Credit Facility") is determined by a methodology other than
as described in such sentences, the
21
Adjustable Rate Basis shall be determined in accordance with the
methodology for determining the annual interest rate under the FFCA Credit
Facility.
"Adjustable Rate Reset Date" means the fifteenth day of each calendar
month, or the next succeeding Business Day if such day is not a Business
Day, prior to the next Interest Period.
"Business Day" means any day on which FFCA is open for business in the
State of Arizona, other than a Saturday, Sunday or a legal holiday.
"Interest Period" means (i) initially, the period beginning on the
date of this Note and ending on the last day of the calendar month in which
such date occurs, and (ii) thereafter, the period beginning on the first
day of the calendar month and ending on the last day of such calendar
month.
"Maturity Date" means December 31, 1998.
Debtor shall pay FFCA interest on the outstanding principal amount of this
Note at the Adjustable Rate, on the basis of a 360-day year for the actual
number of days elapsed, in arrears. Commencing on December 1, 1998, and on the
first day of each calendar month thereafter until the Maturity Date, Debtor
shall pay FFCA interest which has accrued at the Adjustable Rate on the
outstanding principal balance of this Note during the preceding Interest Period.
FFCA shall notify Debtor in writing on or before the twenty-fifth day of each
calendar month during the term of this Note of FFCA's determination of the
interest payable on the first day of the next succeeding calendar month. All
outstanding principal and unpaid accrued interest shall be paid on the Maturity
Date.
Each payment hereunder shall be applied first to any past due payments
under this Note (including payment of all Costs (as herein defined)), then to
accrued interest at the Adjustable Rate, and the balance, after the payment of
such accrued interest, if any, shall be applied to the unpaid principal balance
of this Note; provided, however, each payment hereunder while an Event of
Default under this Note has occurred and is continuing shall be applied as FFCA
in its sole discretion may determine.
Upon execution of this Note, Debtor shall establish arrangements whereby
all payments hereunder are transferred by wire or other means directly from
Debtor's bank account to such account as FFCA may designate or as FFCA may
otherwise designate.
Debtor may prepay this Note as provided in the Loan Agreement.
An "Event of Default" shall be deemed to have occurred under this Note if
any principal, interest or other monetary sum due under this Note is not paid
within five days from the date when due and FFCA shall have given notice of such
failure to Debtor and such failure shall not have been cured by Debtor within
five days from the delivery of such notice. Upon the occurrence of (i) an Event
of Default under this Note or (ii) an Event of Default or an Acceleration Event
under any of the other Loan Documents, then, in any of such events, time being
of the essence hereof, FFCA may declare the entire unpaid principal balance of
this Note, accrued interest, if any, and all other sums due under this Note, the
other Loan Documents and
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any other document further securing this Note, due and payable at once without
written notice to Debtor.
All past-due principal and/or interest shall bear interest at the lesser
of the highest rate for which the undersigned may legally contract or the rate
of 18% per annum (the "Default Rate"), and such Default Rate shall continue to
apply following a judgment in favor of FFCA under this Note. If Debtor fails to
make any payment or installment due under this Note within five days of its due
date, Debtor shall pay to FFCA in addition to any other sum due FFCA under this
Note or any other Loan Document a late charge equal to 10% of such past-due
payment or installment.
All payments of principal and interest due hereunder shall be made (i)
without deduction of any present and future taxes, levies, imposts, deductions,
charges or withholdings, which amounts shall be paid by Debtor, and (ii)
without any other right of abatement, reduction, setoff, defense, counterclaim,
interruption, deferment or recoupment for any reason whatsoever. Debtor will
pay the amounts necessary such that the gross amount of the principal and
interest received by FFCA is not less than that required by this Note.
No delay or omission on the part of FFCA in exercising any remedy, right
or option under this Note shall operate as a waiver of such remedy, right or
option. In any event, a waiver on any one occasion shall not be construed as a
waiver or bar to any such remedy, right or option on a future occasion.
Debtor hereby waives presentment, demand for payment, notice of dishonor,
notice of protest, and protest, and except as otherwise provided in the Loan
Documents, all other notices or demands in connection with delivery,
acceptance, performance, default or endorsement of this Note.
All notices, consents, approvals or other instruments required or
permitted to be given by either party pursuant to this Note shall be in writing
and given by (i) hand delivery, (ii) facsimile, (iii) express overnight
delivery service or (iv) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon (a) receipt, if hand
delivered, (b) transmission, if delivered by facsimile (and if a copy of such
notice is also mailed by certified or registered mail, return receipt
requested, and deposited with the U.S. Postal Service no later than the first
business day after the notice was transmitted by facsimile), (c) the next
business day, following the date of deposit with the delivery service, if
delivered by express overnight delivery service, or (d) the third business day
following the day of deposit of such notice with the United States Postal
Service, if sent by certified or registered mail, return receipt requested.
Notices shall be provided to the parties and addresses (or facsimile numbers,
as applicable) specified below:
If to Debtor: ▇.▇. ▇▇▇▇▇'▇ China Bistro, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇ and Roca LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to FFCA: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Executive Vice President and General
Counsel
Franchise Finance Corporation of America
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above.
Should any indebtedness represented by this Note be collected at law or in
equity, or in bankruptcy or other proceedings, or should this Note be placed in
the hands of attorneys for collection after default, Debtor shall pay, in
addition to the principal and interest due and payable hereon, all costs of
collecting or attempting to collect this Note (the "Costs"), including
reasonable attorneys' fees and expenses of FFCA (including those fees and
expenses incurred in connection with any appeal and those of FFCA's in-house
counsel) whether or not a judicial action is commenced by FFCA.
This Note may not be amended or modified except by a written agreement duly
executed be Debtor and FFCA. In case any one or more of the provisions contained
in this Note shall be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Note, and this Note shall be construed as if such
provision had never been contained herein or therein.
Notwithstanding anything to the contrary in any of the Loan Documents, the
obligations of Debtor to FFCA under this Note and any other Loan Documents are
subject to the limitation that payments of interest and late charges to FFCA
shall not be required to the extent that receipt of any such payment by FFCA
would be contrary to provisions of applicable law limiting the maximum rate of
interest that may be charged or collected by FFCA. The portion of any such
payment received by FFCA that is in excess of the maximum interest permitted by
such provisions of law shall be credited to the principal balance of this Note
or if such excess portion exceeds the outstanding principal balance of this
Note, then such excess portion shall be refunded to Debtor. All interest paid or
agreed to be paid to FFCA shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and/or spread throughout the full term of this
Note (including, without limitation, the period of any renewal or extension
thereof) so that interest for such full term shall not exceed the maximum amount
permitted by applicable law.
24
It is the intent of the parties hereto that the business relationship
created by this Note and the other Loan Documents is solely that of creditor
and debtor and has been entered into by both parties in reliance upon the
economic and legal bargains contained in the Loan Documents. None of the
agreements contained in the Loan Documents, is intended, nor shall the same be
deemed or construed, to create a partnership between FFCA and Debtor, to make
them joint venturers, to make Debtor an agent, legal representative, partner,
subsidiary or employee of FFCA, nor to make FFCA in any way responsible for the
debts, obligations or losses of Debtor.
FFCA, by accepting this Note, and Debtor acknowledge and warrant to
each other that each has been represented by independent counsel and Debtor has
executed this Note after being fully advised by said counsel as to its effect
and significance. This Note shall be interpreted and construed in a fair and
impartial manner without regard to such factors as the party which prepared the
instrument, the relative bargaining powers of the parties or the domicile of
any party.
Debtor acknowledges that this Note was substantially negotiated in the
State of Arizona, the Note was executed and delivered in the State of Arizona,
all payments under this Note will be delivered in the State of Arizona and
there are substantial contacts between the parties and the transactions
contemplated herein and the State of Arizona. For purposes of any action or
proceeding arising out of this Note, the parties hereto expressly submit to the
jurisdiction of all federal and state courts located in the State of Arizona.
Debtor consents that it may be served with any process or paper by registered
mail or by personal service within or without the State of Arizona in
accordance with applicable law. Furthermore, Debtor waives and agrees not to
assert in any such action, suit or proceeding that it is not personally subject
to the jurisdiction of such courts, that the action, suit or proceeding is
brought in an inconvenient forum or that venue of the action, suit or
proceeding is improper. It is the intent of Debtor and FFCA that all provisions
of this Note shall be governed by and construed under the laws of the State of
Arizona. Nothing contained in this paragraph shall limit or restrict the right
of FFCA to commence any proceeding in the federal or state courts located in
any state in which FFCA deems such proceeding necessary or advisable to
exercise remedies available under the Loan Documents.
FFCA, BY ACCEPTING THIS NOTE, AND DEBTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
NOTE, THE RELATIONSHIP OF FFCA AND DEBTOR AND/OR ANY CLAIM FOR INJURY OR
DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE PARTIES HERETO
OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM FFCA WITH RESPECT TO ANY AND
ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT
BY DEBTOR AGAINST FFCA OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT
OF OR IN CONNECTION WITH THIS
5
25
NOTE OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY
DEBTOR OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN.
This obligation shall bind Debtor and its successors and assigns, and the
benefits hereof shall inure to FFCA and its successors and assigns. FFCA may
assign its rights under this Note as set forth in the Loan Agreement.
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26
IN WITNESS WHEREOF, Debtor has executed and delivered this Note effective
as of the date set forth above.
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.,
a Delaware corporation
By________________________________
Printed Name______________________
Title_____________________________
7
27
AMENDED AND RESTATED
SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement") is made
and entered into as of November 10, 1998 by and between ▇.▇. ▇▇▇▇▇'▇ CHINA
BISTRO, INC., a Delaware corporation ("Debtor"), whose principal place of
business is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and FRANCHISE FINANCE CORPORATION OF AMERICA, a Delaware corporation
("FFCA"), whose address is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇.
PRELIMINARY STATEMENT:
Debtor and FFCA entered into that certain Security Agreement dated as of
June 29, 1998 (the "Original Agreement") in connection with that certain
Amended and Restated Revolving Line of Credit Loan Agreement dated as of June
29, 1998 (the "Amended Credit Agreement"). Subsequently, FFCA has agreed to
increase the amount of the Loan and Debtor has agreed to pledge its interest in
the Collateral pursuant to this Agreement in order to provide security for the
Loan. This Agreement amends and restates the Original Agreement in order to
reflect the terms and conditions associated with an increase of the Loan and a
pledge of the Collateral. Capitalized terms not defined herein shall have the
respective meanings set forth in the Amended Credit Agreement dated as of the
date hereof between Debtor and FFCA.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises hereinafter set forth, FFCA and Debtor agree as follows:
1. Debtor's Obligation; Security Interest Created. FFCA has agreed to
advance to Debtor the Loan, as evidenced by the execution and delivery of the
Note to FFCA, and Debtor shall pay other sums advanced or expended by FFCA
pursuant to the terms of the Loan Documents, and perform all other terms and
conditions of Debtor set forth in the Loan Documents (collectively, the
"Obligations"). To secure the payment of the Obligations, Debtor hereby grants
to FFCA a security interest in its general partnership or membership interests
in the Companies identified on Exhibit A attached hereto (the "Collateral").
2. Default. Any action or event which would constitute an Event of
Default (a "Default") and shall permit FFCA to exercise and pursue the remedies
specified in Section 3 below.
3. Remedies for Default. In the event that Debtor is, or is deemed to be,
in Default hereunder, FFCA shall have all rights and remedies of a secured
party in, to and against the Collateral granted by the Uniform Commercial Code
in the State of Arizona and otherwise available at law or in equity, including,
without limitation: (i) the right to declare all payments due under the Loan
Documents immediately due and payable and the right to recover all fees and
expenses (including reasonable attorney fees) in connection with the collection
or enforcement thereof, which fees and expenses shall constitute additional
Obligations of Debtor hereunder;
28
(ii) the right to act as, and Debtor hereby constitutes and appoints FFCA,
Debtor's true, lawful and irrevocable attorney-in-fact (which appointment shall
be deemed coupled with an interest) to demand, receive and enforce payments and
to give receipts, releases, satisfaction for and to ▇▇▇ for moneys payable to
Debtor under or with respect to any of the Collateral under this Agreement, and
actions taken pursuant to this appointment may be taken either in the name of
Debtor or in the name of FFCA with the same force and effect as if this
appointment had not been made; (iii) the right to take immediate and exclusive
possession of the Collateral, or any part thereof; (iv) the right to hold,
maintain, preserve and prepare the Collateral for sale, until disposed of; (v)
the right to dispose of the Collateral; (vi) the right to require Debtor to
assemble and package the Collateral and make it available to FFCA for its
possession at a place to be designated by FFCA which is reasonably convenient
to the FFCA; (vii) the right to sell, hold or otherwise dispose of all or any
part of the Collateral; (viii) the right to ▇▇▇ for specific performance of any
obligation under the Loan Documents or to recover damages for breach thereof;
(ix) the right at any time to amend or terminate the Management Agreements
and/or the Joint Venture Agreements; (x) the right to receive all cash
distributions or payments payable in respect of the Collateral; and (xi) the
right to exercise or cause to be exercised all voting rights and partnership or
limited liability company, as applicable, powers in respect of the Collateral.
The remedies of FFCA hereunder are cumulative and the exercise of any one or
more of the remedies provided for herein or under the Uniform Commercial Code
or other applicable law shall not be construed as a waiver or any of the other
remedies of FFCA so long as any part of the Obligations secured hereby remains
unsatisfied. FFCA shall be entitled to receive on demand, as additional
Obligations hereunder, interest at the lower of 18% per annum or the highest
rate permitted by applicable law on all amounts not paid when due under the
Note or this Agreement, for the period such amounts are overdue. FFCA shall
have no duty to mitigate any loss to the Debtor occasioned by enforcement of
any remedy hereunder and shall have no duty of any kind to any subordinated
creditor of Debtor.
4. APPLICATION OF PROCEEDS. Should FFCA exercise the rights and remedies
specified in Section 3 hereof, any proceeds received thereby shall be first
applied to pay the costs and expenses, including reasonable attorneys' fees,
incurred by FFCA as a result of Debtor's Default. The remainder of any
proceeds, net of FFCA's costs and expenses, shall be applied to the
satisfaction of the Obligations and, so long as Debtor is not in Default
hereunder, any excess shall be paid over to Debtor. If Debtor is in Default
hereunder, any excess may be held by FFCA for a reasonable time and either
applied to the Obligations or paid over to Debtor.
5. APPLICABLE LAW. Debtor acknowledges that this Agreement was
substantially negotiated in the State of Arizona, the executed Agreement was
delivered in the State of Arizona, all payments under the Loan Documents will
be delivered in the State of Arizona and there are substantial contacts between
the parties and the transactions contemplated herein and the State of Arizona.
For purposes of any action or proceeding arising out of this Agreement, the
parties hereto expressly submit to the jurisdiction of all federal and state
courts located in the State of Arizona. Debtor consents that it may be served
with any process or paper by registered mail or by personal service within or
without the State of Arizona in accordance with applicable law. Furthermore,
Debtor waives and agrees not to assert in any such action, suit or proceeding
2
29
that it is not personally subject to the jurisdiction of such courts, that the
action, suit or proceeding is brought in an inconvenient forum or that venue of
the action, suit or proceeding is improper. It is the intent of the parties
hereto that all provisions of this Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona. To the extent that a court
of competent jurisdiction finds Arizona law inapplicable with respect to any
provisions hereof, then, as to those provisions only, the laws of the state
where the Collateral is located shall be deemed to apply. Nothing contained in
this paragraph shall limit or restrict the right of FFCA to commence any
proceeding in the federal or state courts located in the state in which the
Collateral is located to the extent FFCA deems such proceeding necessary or
advisable to exercise remedies available under the Loan Documents.
6. Nonassignability. This Agreement may not by assigned by Debtor without
the consent of FFCA. However, FFCA may assign its rights under this Agreement to
any third party without the prior consent of Debtor.
7. Possession. Until a Default occurs, Debtor may retain possession of the
Collateral, shall be entitled to all distributions as a result of its interests
in the Companies and may use it in any lawful manner not inconsistent with this
Agreement, with the provisions of any policies of insurance thereon or the other
Loan Documents.
8. Waiver. No Default hereunder by Debtor shall be deemed to have been
waived by FFCA except by a writing to that effect signed by FFCA and no waiver
of any Default shall operate as a waiver of any other Default on a future
occasion. No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement signed
by Debtor and FFCA.
9. Severability. In case any one or more of the provisions contained herein
or in the Note shall be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof, and this Agreement shall be construed as if such
provision had never been contained herein or therein.
10. Notices; Amendments; Waivers. All notices, demands, designations,
certificates, requests, offers, consents, approvals, appointments and other
instruments given pursuant to this Agreement (collectively called "Notices")
shall be in writing and given by (i) hand delivery, (ii) facsimile, (iii)
express overnight delivery service or (iv) certified or registered mail, return
receipt requested, and shall be deemed to have been delivered upon (a) receipt,
if hand delivered, (b) transmission, if delivered by facsimile, (c) the next
business day, if delivered by express overnight delivery service, or (d) the
third business day following the day of deposit of such notice with the United
States Postal Service, if sent by certified or registered mail, return receipt
requested. Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:
3
30
If to Debtor: ▇.▇. ▇▇▇▇▇'▇ China Bistro, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇ and Roca LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to FFCA: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Senior Vice President and General Counsel
Franchise Finance Corporation of America
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above. Whenever in this Agreement the giving of Notice is required,
the giving thereof may be waived in writing at any time by the person or
persons entitled to receive such Notice.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each thereof shall be deemed to be an original, and all
such counterparts shall constitute but one and the same instrument.
12. HEADINGS. The headings appearing in this Agreement have been
inserted for convenient reference only and shall not modify, define, limit or
expand the express provisions of this Agreement.
13. CHARACTERIZATION; INTERPRETATION. It is the intent of the parties
hereto that the business relationship created by the Note, this Agreement and
the other Loan Documents is solely that of creditor and debtor and has been
entered into by both parties in reliance upon the economic and legal bargains
contained in the Loan Documents. None of the agreements contained in the Loan
Documents is intended, nor shall the same be deemed or construed, to create a
partnership between FFCA and Debtor, to make them joint venturers, to make
Debtor an agent, legal representative, partner, subsidiary or employee of FFCA,
nor to make FFCA in any way responsible for the debts, obligations or losses of
Debtor.
4
31
FFCA and Debtor acknowledge and warrant to each other that each has
been represented by independent counsel and has executed this Agreement after
being fully advised by said counsel as to its effect and significance. This
Agreement shall be interpreted and construed in a fair and impartial manner
without regard to such factors as the party, which prepared the instrument, the
relative bargaining powers of the parties or the domicile of any party.
14. TIME OF THE ESSENCE. Time is of the essence in the performance
of each and every obligation under this Agreement.
15. WAIVER OF JURY TRIAL AND PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES. FFCA AND DEBTOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT
TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, THE RELATIONSHIP OF FFCA AND DEBTOR, DEBTOR'S USE OR OCCUPANCY OF
THE COLLATERAL, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR
STATUTORY REMEDY. THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY
HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR
BARGAIN. FURTHERMORE, DEBTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES FROM FFCA WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY DEBTOR AGAINST FFCA OR ITS
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENTS CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY
DEBTOR OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES HAS BEEN NEGOTIATED BY DEBTOR AND FFCA AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN.
5
32
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
DEBTOR:
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.,
a Delaware corporation
By
----------------------------------
Printed Name
------------------------
Its
---------------------------------
SECURED PARTY:
FRANCHISE FINANCE CORPORATION OF
AMERICA, a Delaware corporation
By
----------------------------------
Printed Name
------------------------
Title
-------------------------------
6
33
EXHIBIT A
COMPANIES
PFCCB NUC LLC, an Arizona limited liability company
PFCCB Southeastern LLC, an Arizona limited liability company
PFCCB Mid-Atlantic LLC, an Arizona limited liability company
PFCCB LouTex Joint Venture, an Arizona general partnership
PFCCB Florida Joint Venture, an Arizona general partnership
34
EXHIBIT F
NEGATIVE PLEDGE
35
AMENDED AND RESTATED
NEGATIVE PLEDGE AGREEMENT
THIS AMENDED AND RESTATED NEGATIVE PLEDGE AGREEMENT (this "Agreement") is
made as of November 10, 1998 by ▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC., a Delaware
corporation ("Debtor") whose principal place of business is located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ for the benefit of
FRANCHISE FINANCE CORPORATION OF AMERICA, a Delaware corporation ("FFCA"), whose
address is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
PRELIMINARY STATEMENTS
This Agreement amends and restates that certain Negative Pledge Agreement
date as of June 29, 1998 executed by Debtor in favor of FFCA. Capitalized
terms not defined herein shall have the respective meanings set forth in that
certain Second Amended and Restated Revolving Line of Credit Loan Agreement
(the "Loan Agreement") dated as of the date hereof between FFCA and Debtor.
Debtor either holds (i) fee title to the property legally described on the
attached Exhibit A, and fee title to the buildings and improvements located
thereon or (iii) a leasehold interest in the real property legally described on
the attached Exhibit A (in any case, the "Premises"). FFCA has agreed to make
the Loan to Debtor. In consideration of the Loan and as a security for the Loan,
Debtor has agreed to execute and deliver this Agreement.
AGREEMENT
1. NEGATIVE PLEDGE. Debtor agrees that it shall not sell, assign,
mortgage, grant, bargain, convey, pledge or encumber by deed of trust, security
agreement or other consensual monetary lien in or on Debtor's interest in the
Premises or any portion thereof or permit Debtor's interest in the Premises or
any part thereof to be sold, assigned, mortgaged, granted, bargained, conveyed,
pledged or encumbered by deed of trust, security agreement or other consensual
monetary lien without the prior written consent of FFCA, which consent may be
withheld in FFCA's sole discretion. Any sale, assignment, mortgage, grant,
bargain, conveyance, pledge or consensual encumbrance in breach of the
preceding sentence shall be null and void and of no force and effect, and shall
constitute an "Event of Default" under the Loan Agreement. Debtor acknowledges
that a material inducement to FFCA's willingness to advance the Loan is the
execution and delivery by Debtor of this Agreement.
2. RECORDATION. Debtor agrees that, at FFCA's election, this Agreement
will be recorded in the real property records of the country where the Premises
is located to provide constructive notice of the terms and conditions of this
Agreement; provided, however, that this Agreement does not encumber or affect
any landlord's or lessor's interest in the Premises.
3. RELEASE. FFCA agrees that at such time as the obligations of Debtor
under the Loan Documents are paid and satisfied in full, FFCA shall execute a
release of this Agreement.
36
4. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this Agreement
shall be in writing and given by (i) hand delivery, (ii) facsimile, (iii)
express overnight delivery service or (iv) certified or registered mail, return
receipt requested, and shall be deemed to have been delivered upon (a) receipt,
if hand delivered, (b) electronic confirmation of transmission, if delivered by
facsimile, (c) the next business day, if delivered by express overnight
delivery service, or (d) the third business day following the day of deposit of
such notice with the United States Postal Service, if sent by certified or
registered mail, return receipt requested. Notices shall be provided to the
parties and addresses (or facsimile numbers, as applicable) specified below:
If to Debtor: ▇.▇. ▇▇▇▇▇'▇ China Bistro, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇ and Roca LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to FFCA: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Executive Vice President and
General Counsel
Franchise Finance Corporation of America
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
B. Waiver and Amendment. No provisions of this Agreement shall be deemed
waived or amended except by a written instrument unambiguously setting forth
the matter waived or amended and signed by the party against which enforcement
of such waiver or amendment is sought. Waiver of any matter shall not be deemed
a waiver of the same or any other matter on any future occasion.
C. Captions. Captions are used throughout this Agreement for convenience
of reference only and shall not be considered in any manner in the construction
or interpretation hereof.
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37
D. Severability. The provisions of this Agreement shall be deemed
severable. If any part of this Agreement shall be held unenforceable, the
remainder shall remain in full force and effect, and such unenforceable
provision shall be reformed by such court so as to give maximum legal effect to
the intention of the parties as expressed therein.
E. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of Debtor and FFCA and their respective successors and permitted
assigns, including, without limitation, any United States trustee, any debtor
in possession or any trustee appointed from a private panel.
F. Forum Selection; Jurisdiction; Venue; Choice of Law. Debtor and FFCA
acknowledge that this Agreement was substantially negotiated in the State of
Arizona, the Agreement was signed and delivered by Debtor in the State of
Arizona, and there are substantial contacts between the parties and the
transactions contemplated herein and the State of Arizona. For purposes of any
action or proceeding arising out of this Agreement, the parties hereto hereby
expressly submit to the jurisdiction of all federal and state courts located in
the State of Arizona and Debtor consents that it may be served with any process
or paper by registered mail or by personal service within or without the State
of Arizona in accordance with applicable law. Furthermore, Debtor waives and
agrees not to assert in any such action, suit or proceeding that it is not
personally subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the action, suit
or proceeding is improper. It is the intent of the parties hereto that all
provisions of this Agreement shall be governed by and construed under the laws
of the State of Arizona. To the extent that a court of competent jurisdiction
finds Arizona law inapplicable with respect to any provisions hereof, then, as
to those provisions only, the laws of the state where the Premises is located
shall be deemed to apply. Nothing in this Section shall limit or restrict the
right of FFCA to commence any proceeding in the federal or state courts located
in the state in which the Premises are located to the extent FFCA deems such
proceeding necessary or advisable to exercise remedies available under this
Agreement.
H. Waiver of Jury Trial and Punitive, Consequential, Special and
Indirect Damages. DEBTOR AND FFCA HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT
TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THIS WAIVER BY
THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN
NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO
SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM FFCA WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY DEBTOR AGAINST FFCA OR ITS SUCCESSORS WITH RESPECT TO
ANY
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MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY DEBTOR OF ANY RIGHT IT MAY
HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN
NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
I. Costs. Debtor shall be responsible for the payment of all
out-of-pocket costs and expenses incurred by Debtor and FFCA in connection with
this Agreement, including, without limitation, reasonable attorneys' fees and
recording and filing fees and charges.
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IN WITNESS WHEREOF, Debtor has caused this Agreement to be executed
and delivered as of the day and year first above written.
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.,
a Delaware corporation
By_____________________________
Printed Name___________________
Its____________________________
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STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on November , 1998 by
, of ▇.▇. ▇▇▇▇▇'▇ China Bistro, Inc., a
Delaware corporation, on behalf of the corporation.
---------------------------------
Notary Public
My Commission Expires:
-----------------------------------
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EXHIBIT G
COMPANIES
PFCCB NUC LLC, an Arizona limited liability company
PFCCB Southeastern LLC, an Arizona limited liability company
PFCCB Mid-Atlantic LLC, an Arizona limited liability company
PFCCB LouTex Joint Venture, an Arizona general partnership
PFCCB Florida Joint Venture, an Arizona general partnership