Exhibit 10.2

 

[j4544ex10d2image002.jpg]

 

 

 

12240 Inwood Road
Suite 300
Dallas, TX 75244
972-387-1487 * Fax 972-490-9119

 

 

July 1, 2002

 

Mr. Russell Ruhnke, Principal

Bank of America

Portfolio Management

Real Estate/Lodging

NCI-007-15-08

100 North Tryon Street, 16th Floor

Charlotte, North Carolina 28255-0001

 

Re:                               Conditional Waiver (as defined herein) under
that certain $35,000,000 Credit Agreement (the “Credit Agreement”) dated as of
May 31, 2002 among U.S.  RESTAURANT PROPERTIES OPERATING L.P., a Delaware
limited partnership (“USRP Operating” or the “Principal Borrower”), USRP FUNDING
2002-A, L.P., a Texas limited partnership (the “General SPE); collectively, with
USRP Operating, the “Borrower”), USRP MANAGING, INC., a Delaware corporation and
the general partner of USRP Operating, as a Guarantor (the “General Partner”),
U.S. RESTAURANT PROPERTIES, INC., a Maryland corporation, as a Guarantor (“USRP
REIT”), the Subsidiary Guarantors (as defined therein), the Lenders (as defined
therein), BANK OF AMERICA, N.A., as Agent for the Lenders (in such capacity, the
“Agent”) and BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole
Book Manager (in such capacity “BAS”).  Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.

 

Dear Russ:

 

As we have discussed, USRP Operating is seeking to utilize up to $16,000,000 of
the proceeds of the Loans under the Credit Agreement for the purpose of
purchasing mortgage notes issued by Captain D’s with an aggregate face value of
$20,000,000 and otherwise conforming to the description set forth on Schedule 1
attached hereto (the “CD Notes”).  The Credit Parties acknowledge that this
purchase would constitute an “Investment” as such term is defined in the Credit
Agreement and that, absent an agreement from the Agent to provide a waiver and
amendment of certain provisions of the Credit Agreement, the amount of such
Investment would violate the limitations on Investments set forth in Sections
6.19 and 8.6 of the Credit Agreement.  Therefore, USRP Operating, on behalf of
all of the Credit Parties, hereby requests that the Agent consent to a limited
and temporary waiver and amendment, on the terms and conditions and for the
period described herein, of Sections 6.19 and 8.6 of the Credit Agreement as
such sections apply to the purchase and ownership of the CD Notes by USRP
Operating (the “Conditioned Waiver”).  USRP Operating (again, on behalf of each
of the Credit Parties) also requests that the Agent agree that such use of the
proceeds of the Loans conforms to the requirements set forth in Sections 6.15
and 7.9 of the Credit Agreement.

 

If approved by the Agent, the period of the requested waiver and amendment (the
“Waiver Period”) will extend until the date occurring ninety (90) days following
the date hereof (the “Initial Waiver Period”); provided, however, that USRP
Operating shall have the option to extend the Waiver Period beyond the final day
of the Initial Waiver Period for the following time periods through the payment
to the Agent of the following, non-refundable, non-prorated extension fees (the
“Extension Fees”):

 

(a)                                  for the period including calendar days one
(1) through fifteen (15) following the final day of the Initial Waiver Period,
$15,000;

 

--------------------------------------------------------------------------------

 

Request for Conditioned Waiver

 

(b)                                 for the period including calendar days
sixteen (16) through thirty (30) following the final day of the Initial Waiver
Period, $20,000 (for a total of $35,000 in Extension Fees following the Initial
Waiver Period);

 

(c)                                  for the period including calendar days
thirty-one (31) through sixty (60) following the final day of the Initial Waiver
Period, $45,000 (for a total of $80,000 in Extension Fees following the Initial
Waiver Period); and

 

(d)                                 for the period including calendar days
sixty-one (61) through ninety (90) following the final day of the Initial Waiver
Period, $60,000 (for a total of $140,000 in Extension Fees following the Initial
Waiver Period).

 

The Waiver Period shall, in any case and regardless of any extension provided
for herein, terminate as of the ninety-first (91st) day following the final day
of the Initial Waiver Period (the “Final Waiver Termination Date”).  To the
extent any Defaults or Events of Default that would otherwise exist under the
Credit Agreement if not for the waiver and amendment set forth herein are not
fully cured as of the end of the Initial Waiver Period, the extended period for
which USRP Operating has paid the applicable Extension Fee, or the Final Waiver
Termination Date (as applicable), such failure to cure will result in an
immediate Event of Default under the Credit Agreement (regardless of any
additional cure period that may be provided for in the Credit Agreement).

 

In addition to and notwithstanding the foregoing matters related to the length
of the Waiver Period, it shall be an immediate Event of Default under the Credit
Agreement (again regardless of any cure periods provided for therein) to the
extent there exists, at any time during the Waiver Period, any breach, default
or event of default under the terms of the CD Notes or any of the documentation
relating thereto.

 

The Credit Parties hereby acknowledge and agree that (a) the Conditioned Waiver
shall be effective only to the extent that the Credit Parties shall be deemed to
be in compliance with Sections 6.19 and 8.6 of the Credit Agreement despite the
Defaults or Events of Default which would otherwise arise as a result of USRP
Operating’s purchase of the CD Notes and to the extent such Defaults or Events
of Default would be caused solely by the Investment by USRP Operating in the CD
Notes; (b) the Conditioned Waiver shall not be effective as to any other
Defaults or Events of Default (whether or not arising as an indirect result of
the purchase of the CD Notes) that may arise during the Waiver Period,
including, without limitation, Defaults or Events of Default resulting from
financial covenant violations under Section 7.11 of the Credit Agreement or
Defaults or Events of Default under Sections 6.19 or 8.6 of the Credit Agreement
which do not relate to the purchase of the CD Notes; and (c) no terms or
conditions of the Credit Agreement or any of the other Credit Documents shall be
modified by the terms hereof except to the extent expressly set forth herein and
no other amendments or waivers are being sought hereby from the Agent with
respect to any other matters.  In addition, the Credit Parties hereby agree to
indemnify, defend and hold harmless the Agent and its respective directors,
officers, agents, employees and counsel from and against any and all losses,
claims, damages, liabilities, deficiencies, judgments or expenses incurred,
resulting from or arising in connection with the purchase of the CD Notes or the
Conditioned Waiver and agree that all fees, expenses and costs incurred by the
Agent in reviewing and granting the Conditioned Waiver shall be paid by us upon
demand as fees, costs and expenses incurred in connection with the Credit
Agreement.  Finally, the Credit Parties hereby represent and warrant that they
have no claims, counterclaims, offsets, or defenses to any of the Credit
Documents, or to the performance of their respective obligations thereunder.  In
consideration of the Agent’s willingness to grant the Conditioned Waiver, each
of the Credit Parties hereby releases the Agent and its officers, employees,
representatives, counsel, trustees and directors, from any and all actions,
causes of action, claims, demands, damages and liabilities of whatever kind or
nature, in law or in equity, now known or unknown, suspected or

 

2

--------------------------------------------------------------------------------

 

unsuspected to the extent that any of the foregoing arises from any action or
failure to act on or prior to the date hereof.

 

If you need any additional information in order to evaluate this request, please
contact me.  We ask that you countersign this letter as evidence of the Agent’s
consent to the Conditioned Waiver and return it to us by fax as soon as
possible.

 

We appreciate your cooperation and understanding in this matter. If you have any
questions, please do not hesitate to contact me.

 

 

Very truly yours,

 

 

 

 

 

 

 

U.S. Restaurant Properties Operating, L.P.,

 

 

as Principal Borrower for the Credit Parties

 

 

 

 

 

 

By:  USRP Managing, Inc.

 

 

 

 

 

 

By:

 

/s/ H.G. Carrington, Jr.

 

 

Name:

 

H.G. Carrington, Jr.

 

 

Title:

 

Vice President

 

 

Acknowledged and consented to
this 1st day of July, 2002

 

By:

/s/ Russell Ruhnke

 

Russell Ruhnke, on behalf of
Bank of America, N.A., as Agent

 

3

--------------------------------------------------------------------------------

 

Schedule 1

 

Description of CD Notes

 

4

--------------------------------------------------------------------------------