**Exhibit10.2**

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

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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 Carolina28255-0001

 

Re:                               ConditionalWaiver (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 limitedpartnership (“USRP Operating” or the “Principal Borrower”), **USRP FUNDING2002-A, L.P.**, a Texas limited partnership (the “General SPE);collectively, with USRP Operating, the “Borrower”), **USRP MANAGING, INC.**, aDelaware corporation and the general partner of USRP Operating, as a Guarantor(the “General Partner”), **U.S. RESTAURANT PROPERTIES, INC.**, aMaryland corporation, as a Guarantor (“USRP REIT”), the SubsidiaryGuarantors (as defined therein), the Lenders (as defined therein), **BANK OFAMERICA, N.A.**, as Agent for the Lenders (in such capacity, the “Agent”)and **BANCOF AMERICA SECURITIES LLC**, as Sole Lead Arranger and SoleBook Manager (in such capacity “BAS”).  Capitalized terms used herein and not otherwise defined shallhave the meanings set forth in the Credit Agreement.

 

Dear Russ:

 

As we havediscussed, USRP Operating is seeking to utilize up to $16,000,000 of theproceeds of the Loans under the Credit Agreement for the purpose of purchasingmortgage notes issued by Captain D’s with an aggregate face value of $20,000,000and otherwise conforming to the description set forth on Schedule 1attached hereto (the “CD Notes”).  TheCredit Parties acknowledge that this purchase would constitute an “Investment”as such term is defined in the Credit Agreement and that, absent an agreementfrom the Agent to provide a waiver and amendment of certain provisions of theCredit Agreement, the amount of such Investment would violate the limitationson Investments set forth in Sections 6.19 and 8.6 of the Credit Agreement.  Therefore, USRP Operating, on behalf of allof the Credit Parties, hereby requests that the Agent consent to a limited andtemporary waiver and amendment, on the terms and conditions and for the perioddescribed herein, of Sections 6.19 and 8.6 of the Credit Agreement as suchsections apply to the purchase and ownership of the CD Notes by USRP Operating(the “Conditioned Waiver”).  USRPOperating (again, on behalf of each of the Credit Parties) also requests thatthe Agent agree that such use of the proceeds of the Loans conforms to therequirements set forth in Sections 6.15 and 7.9 of the Credit Agreement.

 

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

 

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

 

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Request for ConditionedWaiver

 

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

 

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

 

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

 

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

 

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

 

The Credit Partieshereby acknowledge and agree that (a) the Conditioned Waiver shall be effectiveonly to the extent that the Credit Parties shall be deemed to be in compliancewith Sections 6.19 and 8.6 of the Credit Agreement despite the Defaults orEvents of Default which would otherwise arise as a result of USRP Operating’spurchase of the CD Notes and to the extent such Defaults or Events of Defaultwould 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 orEvents of Default (whether or not arising as an indirect result of the purchaseof the CD Notes) that may arise during the Waiver Period, including, withoutlimitation, Defaults or Events of Default resulting from financial covenantviolations under Section 7.11 of the Credit Agreement or Defaults or Events ofDefault under Sections 6.19 or 8.6 of the Credit Agreement which do not relateto the purchase of the CD Notes; and (c) no terms or conditions of the CreditAgreement or any of the other Credit Documents shall be modified by the termshereof except to the extent expressly set forth herein and no other amendmentsor waivers are being sought hereby from the Agent with respect to any othermatters.  In addition, the CreditParties hereby agree to indemnify, defend and hold harmless the Agent and itsrespective directors, officers, agents, employees and counsel from and againstany and all losses, claims, damages, liabilities, deficiencies, judgments orexpenses incurred, resulting from or arising in connection with the purchase ofthe CD Notes or the Conditioned Waiver and agree that all fees, expenses andcosts incurred by the Agent in reviewing and granting the Conditioned Waivershall be paid by us upon demand as fees, costs and expenses incurred inconnection with the Credit Agreement. Finally, the Credit Parties herebyrepresent and warrant that they have no claims, counterclaims, offsets, ordefenses to any of the Credit Documents, or to the performance of theirrespective obligations thereunder.  Inconsideration of the Agent’s willingness to grant the Conditioned Waiver, eachof 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 ornature, in law or in equity, now known or unknown, suspected or

 

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unsuspected to the extentthat any of the foregoing arises from any action or failure to act on or priorto the date hereof.

 

If you need anyadditional information in order to evaluate this request, please contactme.  We ask that you countersign thisletter as evidence of the Agent’s consent to the Conditioned Waiver and returnit to us by fax as soon as possible.

 

We appreciate yourcooperation and understanding in this matter. If you have any questions, pleasedo 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 andconsented tothis 1st day of July, 2002

 
| By:    | /s/ Russell  Ruhnke                                            |
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|   | Russell Ruhnke,  on behalf of  Bank of America, N.A., as Agent |

 

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Schedule 1

 

Description of CDNotes

 

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