AMENDED AND RESTATED
REVOLVING LINE OF CREDIT
LOAN AGREEMENT
THIS AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT (this
"Agreement") is made as of June 29, 1998 (the "Effective Date"), by and between
FRANCHISE FINANCE CORPORATION OF AMERICA, a Delaware corporation ("FFCA"), whose
address is 17207 North Perimeter Drive, Scottsdale, Arizona 85255, and P. F.
CHANG'S CHINA BISTRO, INC., a Delaware corporation ("Debtor"), whose address is
5090 North 40th Street, Suite 160, Phoenix, Arizona 85018.
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 , 1997 (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 an 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 Paul Fleming, Kelly Fleming, Robert
Vivian and Richard Federico (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.
"Commitment" means that certain Commitment Letter dated March , 1998
between FFCA and Debtor with respect to the transaction described in this
Agreement, and any amendments or supplements thereto.
"Companies" means the Arizona general partnerships and the Arizona
limited liability companies identified on Exhibit G attached hereto.
"Counsel" means Lewis 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.
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"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.
"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 $20,000,000.00.
"Negative Pledges" means the 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 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 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.
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"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 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
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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 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.
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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 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.
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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.
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.
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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 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, subpoena or under federal or state law, or (3) information
received by FFCA from a third party.
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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 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.
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(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 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 P.F.
Chang's 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).
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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.
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;
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(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 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
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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, 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: P. F. Chang's China Bistro, Inc.
5090 North 40th Street, Suite 160
Phoenix, AZ 85018
Attention: Mr. Robert T. Vivian
Telephone: (602) 957-8986
Telecopy: (602) 957-8998
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With a copy to: Kenneth Van Winkle, Jr., Esq.
Lewis and Roca LLP
40 North Central Avenue
Phoenix, AZ 85004-4429
Telephone: (602) 262-5311
Telecopy: (602) 262-5747
If to FFCA: Dennis L. Ruben, Esq.
Executive Vice President and
General Counsel
Franchise Finance Corporation of America
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (602) 585-4500
Telecopy: (602) 585-2226
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
14
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. Notwithstanding anything in this
Agreement to the contrary, upon the execution and delivery of this
Agreement by Debtor and FFCA, the Commitment shall be deemed null and
void and of no further force and effect and the terms and conditions of
this Agreement shall control notwithstanding that such terms may be
inconsistent with or vary from those set forth in the Commitment.
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
15
16
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.
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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17
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
-------------------------------------------
Printed Name
---------------------------------
Its
------------------------------------------
DEBTOR:
P. F. CHINA BISTRO, INC.,
a Delaware corporation
By /s/ Robert Vivian
-------------------------------------------
Printed Name Robert Vivian
---------------------------------
Its CFO
------------------------------------------
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STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on , 1998
by , of Franchise Finance Corporation of America, a Delaware
corporation, on behalf of the corporation.
---------------------------------
Notary Public
My Commission Expires:
---------------------------------
STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on June 29 , 1998
by Robert Vivian , CFO of P. F. Chang's China Bistro, Inc., a Delaware
corporation, on behalf of the corporation.
/s/ Kim Kuharske
---------------------------------
Notary Public
My Commission Expires:
7/25/99
---------------------------------
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AMENDED AND RESTATED PROMISSORY NOTE
Dated as of June 29, 1998
$20,000,000.00 Scottsdale, Arizona
THIS AMENDED AND RESTATED PROMISSORY NOTE (this "Note") executed by
P.F. CHANG'S CHINA BISTRO, INC., a Delaware corporation ("Debtor"), amends and
restates that certain Promissory Note dated as of October , 1997 in the
principal amount of $10,000,000.00, payable to FRANCHISE FINANCE CORPORATION OF
AMERICA, a Delaware corporation ("FFCA").
Debtor, for value received, hereby promises to pay to FFCA, whose
address is 17207 North Perimeter Drive, Scottsdale, Arizona 85255, or order, on
or before the Maturity Date (as defined below), the principal sum of TWENTY
MILLION AND NO/100 DOLLARS ($20,000,000.00), or such much thereof as may be
outstanding from time to time, in accordance with that certain 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 3.50%.
"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 11:000 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 Adjustable Rate Basis shall be
determined in accordance with the methodology for determining the
annual interest rate under the FFCA Credit Facility.
20
"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 July 1 , 1999.
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 August 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
2
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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: P. F. Chang's China Bistro, Inc.
5090 North 40th Street, Suite 160
2201 East Camelback Road
Phoenix, AZ 85018
Attention: Mr. Robert T. Vivian
Telephone: (602) 957-8986
Telecopy: (602) 957-8998
3
22
With a copy to: Kenneth Van Winkle, Jr., Esq.
Lewis and Roca LLP
40 North Central Avenue
Phoenix, AZ 85004-4429
Telephone: (602) 262-5311
Telecopy: (602) 262-5747
If to FFCA: Dennis L. Ruben, Esq.
Executive Vice President and General
Counsel
Franchise Finance Corporation of America
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (602) 585-4500
Telecopy: (602) 585-2226
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 by 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 contained 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.
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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
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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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25
IN WITNESS WHEREOF, Debtor has executed and delivered this Note
effective as of the date first set forth above.
P. F. CHANG'S CHINA BISTRO, INC., a
Delaware corporation
By /s/ Robert Vivian
-----------------------------------
Printed Name Robert Vivian
-------------------------
Title CFO
--------------------------------
7
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made and entered into as
of June 29, 1998 by and between P.F. CHANG'S CHINA BISTRO, INC., a Delaware
corporation ("Debtor"), whose principal place of business is located at 5090
North 40th Street, Suite 160, Phoenix, Arizona 85015, and FRANCHISE FINANCE
CORPORATION OF AMERICA, a Delaware corporation ("FFCA"), whose address is 17207
North Perimeter Drive, Scottsdale, Arizona 85255.
PRELIMINARY STATEMENT:
FFCA has agreed to make the Loan to Debtor. To secure the Loan, Debtor
has agreed to grant FFCA a security interest in the Collateral on the terms and
conditions set forth in this Agreement. Capitalized terms not defined herein
shall have the respective meanings set forth in that certain Amended and
Restated Revolving Line of Credit Loan 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; (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 sue 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
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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 sue 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 of 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 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
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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:
If to Debtor: P. F. Chang's China Bistro, Inc.
5090 North 40th Street, Suite 160
Phoenix, AZ 85018
Attention: Mr. Robert T. Vivian
Telephone: (602) 957-8986
Telecopy: (602) 957-8998
3
29
With a copy to: Kenneth Van Winkle, Jr., Esq.
Lewis and Roca LLP
40 North Central Avenue
Phoenix, AZ 85004-4429
Telephone: (602) 262-5357
Telecopy: (602) 262-5747
If to FFCA: Dennis L. Ruben, Esq.
Senior Vice President and General Counsel
Franchise Finance Corporation of America
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (602) 585-4500
Telecopy: (602) 585-2226
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.
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.
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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.
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31
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
DEBTOR:
P.F.CHANG'S CHINA BISTRO, INC.,
a Delaware corporation
By /s/ Robert Vivian
---------------------------------------
Printed Name Robert Vivian
-----------------------------
Its CFO
--------------------------------------
SECURED PARTY:
FRANCHISE FINANCE CORPORATION OF AMERICA,
a Delaware corporation
By
---------------------------------------
Printed Name
-----------------------------
Title
------------------------------------
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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
33
FORM OF
NEGATIVE PLEDGE AGREEMENT
THIS NEGATIVE PLEDGE AGREEMENT (this "Agreement") is made as of June 29,
1998 by P.F. CHANG'S CHINA BISTRO, INC., a Delaware corporation ("Debtor") whose
principal place of business is located at 5090 North 40th Street, Suite 160,
Phoenix, Arizona 85015 for the benefit of FRANCHISE FINANCE CORPORATION OF
AMERICA, a Delaware corporation ("FFCA"), whose address is 17207 North Perimeter
Drive, Scottsdale, Arizona 85255.
PRELIMINARY STATEMENTS
Capitalized terms not defined herein shall have the respective meanings
set forth in that certain 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 (ii) a leasehold interest in the land 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 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 is Agreement will be recorded in the
real property records of the county 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.
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
34
(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: P.F. Chang's China Bistro, Inc.
5090 North 40th Street, Suite 160
Phoenix, AZ 85018
Attention: Mr. Robert T. Vivian
Telephone: (602) 957-8986
Telecopy: (602) 957-8998
With a copy to: Kenneth Van Winkle, Jr., Esq.
Lewis and Roca LLP
40 North Central Avenue
Phoenix, AZ 85004-4429
Telephone: (602) 262-5311
Telecopy: (602) 262-5747
If to FFCA: Dennis L. Ruben, Esq.
Executive Vice President and
General Counsel
Franchise Finance Corporation of America
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (602) 585-4500
Telecopy: (602) 585-2226
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 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. 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.
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35
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 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
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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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STATE OF ARIZONA )
) SS.
COUNTY OF MARICOPA)
The foregoing instrument was acknowledged before me on June 29, 1998 by
Robert Vivian, CFO of P.F. Chang's China Bistro, Inc. a Delaware corporation, on
behalf of the corporation.
/s/ Kim Kuharske
----------------------------------
Notary Public
My Commission Expires:
7-25-99
----------------------
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Revolving Line of Credit Loan Agreement - Franchise Finance Corp. of America and P.F. Chang's China Bistro Inc.
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