**Exhibit10.4**

 

**ExecutionVersion**

 

TERM LOAN CREDIT AGREEMENT

 

Dated as of November 4, 2003

 

among

 

U.S. RESTAURANT PROPERTIES OPERATING L.P. (“USRP Operating”),

USRP FUNDING 2002-A, L.P. (the “General SPE”),

USRP (S&C), LLC, a Texas limited liability company(“S&C”),

USRP (JV1), LLC, a Texas limited liability company(“JV1”),

USRP/HCI PARTNERSHIP 1, L.P., a Texas limitedpartnership (“HCI”),

USRP HOLDING CORP., a Texas corporation (“USRPHolding),

collectively, the “Borrower,”

 

USRP MANAGING, INC. (the “General Partner”),

the General Partner of the Borrower, as a Guarantor,

 

U.S. RESTAURANT PROPERTIES, INC. (the “USRP REIT”),

as a Guarantor,

 

and

 

THE SUBSIDIARIES OF THE BORROWER, GENERAL PARTNER ANDTHE USRP REIT

FROM TIME TO TIME PARTY HERETO,

as guarantors (the “Guarantors”),

 

THE LENDERS

FROM TIME TO TIME PARTY HERETO (the “Lenders”),

 

BANK OF AMERICA, N.A.

as agent (the “Agent”)

 

and

 

BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Book Manager

 

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TABLE OF CONTENTS

 
| ARTICLE I   DEFINITIONS                                     |
|------------------------------------------------------------------|
|                                                             | 1.1 | Definitions. |
|                                                             | 1.2 | Computation of Time  Periods. |
|                                                             | 1.3 | Accounting  Terms. |
|                                                             | 1.4 | References to  Agreements and Laws. |
|                                                             | 1.5 | Times of Day. |
| ARTICLE II   CREDIT FACILITIES                              |
|                                                             | 2.1 | Term Loans. |
|                                                             | 2.2 | Joint and  Several Liability of the Borrowers. |
|                                                             | 2.3 | Appointment  of Principal Borrower as Agent for Borrowers. |
| ARTICLE III  OTHER PROVISIONS RELATING TO CREDIT FACILITIES |
|                                                             | 3.1 | Default Rate. |
|                                                             | 3.2 | Continuation/Conversion. |
|                                                             | 3.3 | Prepayments. |
|                                                             | 3.4 | Intentionally  Omitted. |
|                                                             | 3.5 | Fees. |
|                                                             | 3.6 | Capital  Adequacy. |
|                                                             | 3.7 | Limitation on Eurodollar  Loans. |
|                                                             | 3.8 | Illegality. |
|                                                             | 3.9 | Requirements  of Law. |
|                                                             | 3.10 | Treatment of Affected  Loans. |
|                                                             | 3.11 | Taxes. |
|                                                             | 3.12 | Compensation. |
|                                                             | 3.13 | Pro Rata  Treatment. |
|                                                             | 3.14 | Sharing  of Payments. |
|                                                             | 3.15 | Payments, Computations,  Etc. |
|                                                             | 3.16 | Evidence of  Debt. |
|                                                             | 3.17 | Usury. |
|                                                             | 3.18 | Agreement  Regarding Interest and Charges. |
|                                                             | 3.19 | Statements of Account. |
|                                                             | 3.20 | Defaulting  Lenders. |
|                                                             | 3.21 | Assumptions  Concerning Funding of Eurodollar Loans. |
|                                                             | 3.22 | Release of  HCI. |
| ARTICLE IV   GUARANTY                                       |
|                                                             | 4.1 | The Guaranty. |
|                                                             | 4.2 | Obligations Unconditional. |
|                                                             | 4.3 | Reinstatement. |
|                                                             | 4.4 | Certain Additional Waivers. |
|                                                             | 4.5 | Remedies. |
|                                                             | 4.6 | Rights  of Contribution. |
|                                                             | 4.7 | Guarantee of  Payment; Continuing Guarantee. |
| ARTICLE V   CONDITIONS                                      |
|                                                             | 5.1 | Closing  Conditions. |
|                                                             | 5.2 | Conditions to  all Extensions of Credit. |
| ARTICLE VI   REPRESENTATIONS AND WARRANTIES                 |
|                                                             | 6.1 | Financial  Condition. |
|                                                             | 6.2 | No Material  Change. |
|                                                             | 6.3 | Organization and Good Standing. |
|                                                             | 6.4 | Power;  Authorization; Enforceable Obligations. |
|                                                             | 6.5 | No Conflicts. |
|                                                             | 6.6 | No Default. |
|                                                             | 6.7 | Ownership. |
|                                                             | 6.8 | Indebtedness. |
|                                                             | 6.9 | Litigation. |
|                                                             | 6.10 | Taxes. |

 

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|                                    | 6.11 | Compliance  with Law.                                                                               |
|-----------------------------------------|------|-----------------------------------------------------------------------------------------------------|
|                                    | 6.12 | ERISA.                                                                                              |
|                                    | 6.13 | Corporate  Structure; Capital Stock, etc.                                                           |
|                                    | 6.14 | Governmental Regulations,  Etc.                                                                     |
|                                    | 6.15 | Purpose  of Loans; Termination of Replaced Credit Agreement.                                        |
|                                    | 6.16 | Environmental  Matters.                                                                             |
|                                    | 6.17 | Intellectual  Property.                                                                             |
|                                    | 6.18 | Solvency.                                                                                           |
|                                    | 6.19 | Investments.                                                                                        |
|                                    | 6.20 | Principal  Offices.                                                                                 |
|                                    | 6.21 | Disclosure.                                                                                         |
|                                    | 6.22 | No Burdensome Restrictions.                                                                         |
|                                    | 6.23 | Brokers’ Fees.                                                                                 |
|                                    | 6.24 | Labor Matters.                                                                                      |
|                                    | 6.25 | Nature of  Business.                                                                                |
|                                    | 6.26 | REIT Status.                                                                                        |
|                                    | 6.27 | Bankruptcy Remote  Borrowing Entity.                                                                |
|                                    | 6.28 | Closing Date  Borrowing Base Assets.                                                                |
|                                    | 6.29 | Tax  Shelter Regulations.                                                                           |
|                                    | 6.30 | Representations  and Warranties Under Revolving Credit Documents.                                   |
| ARTICLE VII  AFFIRMATIVE COVENANTS |
|                                    | 7.1  | Information  Covenants.                                                                             |
|                                    | 7.2  | Preservation  of Existence, Franchises, Bankruptcy Remote Borrowing Entity Status and REIT  Status. |
|                                    | 7.3  | Books and  Records.                                                                                 |
|                                    | 7.4  | Compliance  with Law.                                                                               |
|                                    | 7.5  | Payment of  Taxes and Other Indebtedness.                                                           |
|                                    | 7.6  | Insurance.                                                                                          |
|                                    | 7.7  | Maintenance  of Property.                                                                           |
|                                    | 7.8  | Performance of Obligations.                                                                         |
|                                    | 7.9  | Use of Proceeds.                                                                                    |
|                                    | 7.10 | Audits/Inspections.                                                                                 |
|                                    | 7.11 | Financial  Covenants.                                                                               |
|                                    | 7.12 | New  Subsidiaries.                                                                                  |
|                                    | 7.13 | ERISA  Exemptions.                                                                                  |
|                                    | 7.14 | Further  Assurances.                                                                                |
| ARTICLE VIII  NEGATIVE COVENANTS   |
|                                    | 8.1  | Indebtedness.                                                                                       |
|                                    | 8.2  | Liens.                                                                                              |
|                                    | 8.3  | Nature of  Business.                                                                                |
|                                    | 8.4  | Consolidation,  Merger, Dissolution, etc.                                                           |
|                                    | 8.5  | Asset  Dispositions/Substitution of Assets.                                                         |
|                                    | 8.6  | Investments.                                                                                        |
|                                    | 8.7  | Restricted  Payments.                                                                               |
|                                    | 8.8  | Other  Indebtedness.                                                                                |
|                                    | 8.9  | Transactions with  Affiliates.                                                                      |
|                                    | 8.10 | Fiscal Year;  Organizational Documents.                                                             |
|                                    | 8.11 | Limitation on  Restricted Actions.                                                                  |
|                                    | 8.12 | Contingent  Obligations.                                                                            |
|                                    | 8.13 | Sale  Leasebacks.                                                                                   |
|                                    | 8.14 | Borrowing Base Asset  Removal.                                                                      |
|                                    | 8.15 | Negative  Pledges/Liens.                                                                            |
|                                    | 8.16 | Operating Lease  Obligations.                                                                       |
|                                    | 8.17 | No  Foreign Subsidiaries.                                                                           |
|                                    | 8.18 | Ground Leases.                                                                                      |
|                                    | 8.19 | ERISA  Exemptions.                                                                                  |

 

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|                                | 8.20  | Transfer  of Assets to Non-Guarantor Subsidiaries and Affiliates. |
|-------------------------------------|-------|-------------------------------------------------------------------|
|                                | 8.21  | Revolving  Credit Document Covenants and Amendments.              |
| ARTICLE IX   EVENTS OF DEFAULT |
|                                | 9.1   | Events of  Default.                                               |
|                                | 9.2   | Acceleration;  Remedies.                                          |
| ARTICLE X   AGENCY PROVISIONS  |
|                                | 10.1  | Appointment, Powers  and Immunities.                              |
|                                | 10.2  | Reliance by  Agent.                                               |
|                                | 10.3  | Defaults.                                                         |
|                                | 10.4  | Rights as a  Lender.                                              |
|                                | 10.5  | Indemnification.                                                  |
|                                | 10.6  | Non-Reliance on  Agent and Other Lenders.                         |
|                                | 10.7  | Successor Agent.                                                  |
| ARTICLE XI   MISCELLANEOUS     |
|                                | 11.1  | Notices.                                                          |
|                                | 11.2  | Right of Set-Off; Adjustments.                                    |
|                                | 11.4  | No Waiver; Remedies  Cumulative.                                  |
|                                | 11.5  | Expenses; Indemnification.                                        |
|                                | 11.6  | Amendments, Waivers  and Consents.                                |
|                                | 11.7  | Counterparts.                                                     |
|                                | 11.8  | Headings.                                                         |
|                                | 11.9  | Survival.                                                         |
|                                | 11.10 | Governing  Law; Submission to Jurisdiction; Venue.                |
|                                | 11.11 | Severability.                                                     |
|                                | 11.12 | Entirety.                                                         |
|                                | 11.13 | Binding Effect;  Termination.                                     |
|                                | 11.14 | Confidentiality.                                                  |
|                                | 11.15 | Source of Funds.                                                  |
|                                | 11.16 | Regulation D.                                                |
|                                | 11.17 | Conflict.                                                         |
|                                | 11.18 | USA  Patriot Act Notice.                                          |

 

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| SCHEDULES              |
|------------------------|
|                   |   |   |
| Schedule 1.1(a)   |   | Commitments/Loans |
| Schedule 2.1(a)   |   | Lenders/Agent |
| EXHIBITS               |
|                   |   |   |
| Exhibit 1.1(a)    |   | Bankruptcy Remote Borrowing Entity  Requirements |
| Exhibit 2.1(b)(i) |   | Form of Notice of Borrowing |
| Exhibit 2.1(e)    |   | Form of Term Note |
| Exhibit 3.2       |   | Form of Notice of  Continuation/Conversion |
| Exhibit 7.1(c)    |   | Form of Officer’s Compliance  Certificate |
| Exhibit 7.12      |   | Form of Joinder Agreement |
| Exhibit 11.3(b)   |   | Form of Assignment and Assumption |

 

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**TERMLOAN CREDIT AGREEMENT**

 

**THIS TERM LOAN CREDIT AGREEMENT**,dated as of November 4, 2003 (as amended, modified, restated or supplementedfrom time to time, the “Credit Agreement”), is by and among **U.S.  RESTAURANT PROPERTIES OPERATING L.P.**,a Delaware limited partnership (“USRP Operating” or the “PrincipalBorrower”), **USRP FUNDING 2002-A, L.P.**, a Texas limited partnership (the “GeneralSPE”);**USRP (S&C), LLC**, a Texas limited liability company (“S&C”),**USRP(JV1), LLC**, a Texas limited liability company (“JV1”), **USRP/HCIPARTNERSHIP 1, L.P.**, a Texas limited partnership (“HCI”), **USRP HOLDINGCORP.**, a Texas corporation (“USRP Holding”; and together withthe Principal Borrower, the General SPE, JV1, HCI and S&C, the “Borrower”),**USRPMANAGING, INC.**, a Delaware corporation and the general partner ofUSRP 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 herein), theLenders (as defined herein), **BANK OF AMERICA, N.A.**, as Agent for theLenders (in such capacity, the “Agent”) and **BANC OF AMERICA SECURITIES LLC**,as Sole Lead Arranger and Sole Book Manager (in such capacity “BAS”).

 

**W I T NE S S E T H**

 

**WHEREAS**, theBorrowers have requested that the Lenders provide a term loan credit facilityin an aggregate amount equal to $35,000,000 (the “Credit Facility”) forthe purposes hereinafter set forth; and

 

**WHEREAS**, theLenders have agreed to make the requested Credit Facility available to theBorrowers on the terms and conditions hereinafter set forth;

 

**NOW, THEREFORE, IN CONSIDERATION**ofthe premises and other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, the parties hereto agree asfollows:

 

 

# **ARTICLE I**DEFINITIONS

 

## **1.1          Definitions.**

 

As used in thisCredit Agreement, the following terms shall have the meanings specified belowunless the context otherwise requires:

 

“2001-A Term Securitization Documents” meansthat certain Amended and Restated Indenture dated as of August 1, 2001 by andamong USRP Funding 2001-A, L.P., as issuer, Wells Fargo Bank Minnesota, N.A.,as indenture trustee and MBIA Insurance Corporation, as certificate issuer andall documents and instruments executed in connection therewith or pursuant tothe terms thereof, in each case as amended prior to the Closing Date.

 

“Adjusted Base Rate” means the Base Rate plus1.50%.

 

“Adjusted Eurodollar Rate” means the EurodollarRate plus 3.50%.

 

“AdministrativeQuestionnaire” means an Administrative Questionnaire in a form supplied bythe Agent.

 

“Advance” shall have the meaning assigned tosuch term in Section 2.1(b).

 

“Affiliate” means, with respect to any Person,any other Person (i) directly or indirectly controlling or controlled byor under direct or indirect common control with such Person or(ii) directly or indirectly owning or holding five percent (5%) ormore of the Capital Stock in such Person. For purposes of this definition, “control” when used with respect to anyPerson means the power to direct the management and policies of such

 

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Person, directlyor indirectly, whether through the ownership of voting securities, by contractor otherwise; and the terms “controlling” and “controlled” have meaningscorrelative to the foregoing.

 

“Agent” shall have the meaning assigned to suchterm in the heading hereof, together with any successors or assigns.

 

“Applicable Law” means all applicable provisions of constitutions, statutes, rules,regulations and orders of all governmental bodies and all orders and decrees ofall courts, tribunals and arbitrators.

 

“Applicable Lending Office” means, for each Lender,the office of such Lender (or of an Affiliate of such Lender) as such Lendermay from time to time specify to the Agent and the Borrower by written noticeas the office by which its Eurodollar Loans are made and maintained.

 

“Approved Fund” means any Fund that isadministered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) anentity or an Affiliate of an entity that administers or manages a Lender.

 

“Asset Disposition” means any disposition(including pursuant to a Sale and Leaseback Transaction) of any or all of theProperty (including without limitation the Capital Stock of a Subsidiary) ofany Consolidated Party whether by sale, lease (other than in the ordinarycourse of business), licensing, transfer or otherwise, but other than pursuantto any casualty or condemnation event.

 

“Asset Value” means, with respect to any givenparcel of Real Property for any given date of calculation, (a) if such RealProperty has been owned for at least one (1) year, the trailing twelve monthEBITDA from such Real Property as of such date of calculation and (b) if suchReal Property has been owned less than one (1) year, the annualized EBITDA fromsuch Real Property (based on the EBITDA from the date of acquisition throughsuch date of calculation), in each case, capitalized at ten and one halfpercent (10.5%); provided, that (a) the Agent shall have the right, at itsdiscretion, to review the appropriateness of the capitalization rate on anannual basis (such review period to commence on May 1 of each calendar year andend as of June 1 of such calendar year); (b) the Required Lenders shallhave the right to adjust the capitalization rate during the Agent’s reviewperiod each year (by an amount not to exceed +/- 0.50% in any given year) basedon then-prevailing market conditions for comparable property types (each asdetermined by the Required Lenders) and on the Agent’s review andrecommendation; and (c) the applicable capitalization rate shall not at anytime, notwithstanding the provisions regarding adjustment thereof set forthabove, (i) exceed 11.5% or (ii) be less than 9.5%.

 

“Assignment and Assumption” means an assignmentand assumption entered into by a Lender and an Eligible Assignee (with theconsent of any party whose consent is required by Section 11.3, and accepted bythe Agent, in substantially the form of Exhibit 11.3 or any otherform approved by the Agent.

 

“Bankruptcy Code” means the Bankruptcy Code inTitle 11 of the United States Code, as amended, modified, succeeded orreplaced from time to time.

 

“Bankruptcy Event” means, with respect to anyPerson, the occurrence of any of the following: (i) the entry of a decreeor order for relief by a court or governmental agency in an involuntary caseunder any applicable bankruptcy, insolvency or other similar law now orhereafter in effect, or the appointment by a court or governmental agency of areceiver, liquidator, assignee, custodian, trustee, sequestrator (or similarofficial) of such Person or for any substantial part of its Property or theordering of the winding up or liquidation of its affairs by a court orgovernmental agency; or (ii) the commencement against such Person of aninvoluntary case under any applicable bankruptcy, insolvency or other similarlaw now or hereafter in effect, or of any case, proceeding or other action forthe appointment of a receiver, liquidator, assignee, custodian, trustee,sequestrator (or similar official) of such Person or for any substantial partof its Property or for the winding up or liquidation of its affairs, and suchinvoluntary case or other case, proceeding or other action shall remainundismissed for a period of sixty (60) consecutive days, or therepossession or seizure by a creditor of such Person of a substantial part ofits Property; or (iii) such Person shall commence a voluntary case underany applicable bankruptcy, insolvency or other similar law now or hereafter ineffect, or consent to the entry of an order for relief in an involuntary caseunder any such law, or consent to the appointment of or the taking

 

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possession by areceiver, liquidator, assignee, creditor in possession, custodian, trustee,sequestrator (or similar official) of such Person or for any substantial partof its Property or make any general assignment for the benefit of creditors; or(iv) such Person shall be unable to, or shall admit in writing itsinability to, pay its debts generally as they become due.

 

“BankruptcyRemote Borrowing Entity” means a Person meetingeach of the criteria set forth on Exhibit 1.1(a) attached hereto.

 

“BAS” shall have the meaning given to such termin the introductory paragraph hereof.

 

“Base Rate” means, for any day, the rate perannum equal to the higher of (a) the Federal Funds Rate for such day plusone-half of one percent (0.5%) and (b) the Prime Rate for suchday.  Any change in the Base Rate due toa change in the Prime Rate or the Federal Funds Rate shall be effective on theeffective date of such change in the Prime Rate or Federal Funds Rate.

 

“Base Rate Loan” means any portion of the Loansbearing interest at a rate determined by reference to the Base Rate.

 

“BOA” means Bank of America, N.A. and itssuccessors and assigns.

 

“Borrower” means, collectively, USRP Operating,the General SPE, S&C, HCI, JV1, USRP Holding and their respective permittedsuccessors and assigns.

 

“Borrowing Base” means, as of any day, anamount equal to the Borrowing Base Percentage multiplied by the Borrowing BaseAsset Value; provided, however, that, prior to such calculation, each ofclauses (a) through (c) below shall be satisfied with respect to theassets contributing to the Borrowing Base Asset Value:

 

(a)           the assets of single Concepts orTenants shall not, in any case, account for more than twenty percent (20%)(or, following the date on which the obligations under the Revolving CreditDocuments are Fully Satisfied, fifteen percent (15.0%)) of the Total Rent; tothe extent the assets of a single Concept or Tenant account for more thantwenty percent (20%) (or, following the date on which the obligationsunder the Revolving Credit Documents are Fully Satisfied, fifteen percent(15.0%)) of the Total Rent associated with the assets used in calculatingBorrowing Base Asset Value, the assets associated with such Concept or Tenantshall be removed from the calculation of Borrowing Base Asset Value to theextent necessary to reduce such Concept’s or Tenant’s percentage of the TotalRent of the assets used in calculating Borrowing Base Asset Value to a portion equalto or less than twenty percent (20%) (or, following the date on which theobligations under the Revolving Credit Documents are Fully Satisfied, fifteenpercent (15.0%));

 

(b)           the portion of Borrowing Base AssetValue attributable to Ground Lease Interests shall not, in any case, exceedtwenty percent (20%) (or, following the date on which the obligationsunder the Revolving Credit Documents are Fully Satisfied, fifteen percent(15.0%)) of the aggregate Borrowing Base Asset Value; to the extent Ground LeaseInterests constitute more than twenty percent (20%) (or, following thedate on which the obligations under the Revolving Credit Documents are FullySatisfied, fifteen percent (15.0%)) of the Borrowing Base Asset Value, theValue of such Ground Lease Interests shall be removed from the calculationthereof to the extent necessary to reduce the percentage associated with theGround Lease Interests as a portion of all of the assets used in calculatingBorrowing Base Asset Value to a portion equal to or less than twentypercent (20%) (or, following the date on which the obligations under theRevolving Credit Documents are Fully Satisfied, fifteen percent (15.0%)); and

 

(c)           the underlying leases with respect tothe Borrowing Base Assets pursuant to which Borrower is the lessor shall not,in any case, have a weighted average remaining lease term of less than, (i) forthe period commencing as of the date hereof and ending as of (and including)the date 24 calendar months thereafter, eight (8) years, (ii) for theperiod commencing as of the day after the date which is

 

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24 monthsfollowing the date hereof and ending as of (and including) the date 48 monthsfollowing the date hereof, seven (7) years, and (iii) for all periodsthereafter, six (6) years; to the extent the weighted average of the remaininglease term(s) of the underlying leases with respect to the assets contributingto the Borrowing Base Asset Value (with each such lease’s term given aweighting in relation to the other leases involved in such calculation based onthe contribution of each such lease to the Borrowing Base Asset Value) is lessthan the applicable required term of years, assets with remaining lease termsof less than the applicable required term of years shall be removed from thecalculation of Borrowing Base Asset Value until the weighted average of theremaining lease terms with respect to all such assets is equal to or greaterthan the applicable required term of years.

 

“Borrowing Base Asset Value” means, as of anygiven calculation date, an amount equal to (a) the sum of the Asset Values ofall Real Properties which are wholly owned by any of the General SPE, JV1 (orWholly-Owned Subsidiaries thereof), HCI (or Wholly-Owned Subsidiaries thereof)or S&C; less (b) any amounts included in the above calculations thatare attributable to (i) assets subject to one or more Liens or NegativePledges; and (ii) Excluded Assets.

 

“Borrowing Base Assets” means, as of any givendate, those assets contributing to the Borrowing Base Asset Value after thereductions made pursuant to subclause (b) of the definition thereof.

 

“Borrowing Base Certificate” shall have themeaning given to such term in Section 7.1(k).

 

“Borrowing Base Percentage” means (a) prior tothe date on which the obligations under the Revolving Credit Documents areFully Satisfied, fifty percent (50.0%); and (b) following such date, forty-fivepercent (45.0%).

 

“Business Day” means a day other than aSaturday, Sunday or other day on which commercial banks in Charlotte, NorthCarolina or New York, New York are authorized or required by law to close.

 

“Businesses” means, at any time, a collectivereference to the businesses operated by the Consolidated Parties at such time.

 

“Capitalized Lease Obligation”means Indebtedness represented by obligations under a Capital Lease, and theamount of such Indebtedness is the capitalized amount of such obligationsdetermined in accordance with GAAP.

 

“Capital Lease” means, as applied to anyPerson, any lease of any Property (whether real, personal or mixed) by thatPerson as lessee which, in accordance with GAAP, is required to be accountedfor as a capital lease on the balance sheet of that Person.

 

“Capital Stock” means (i) in the case of acorporation, capital stock, (ii) in the case of an association or businessentity, any and all shares, interests, participations, rights or otherequivalents (however designated) of capital stock, (iii) in the case of apartnership, partnership units or interests (whether general or limited),(iv) in the case of a limited liability company, membership interests and(v) any other interest or participation that confers on a Person the rightto receive a share of the profits and losses of, or distributions of assets of,the issuing Person.

 

“Cash Equivalents” means, as at any date,(a) securities issued or directly and fully guaranteed or insured by theUnited States or any agency or instrumentality thereof (provided that the fullfaith and credit of the United States is pledged in support thereof) havingmaturities of not more than twelve months from the date of acquisition,(b) Dollar denominated time deposits and certificates of deposit of(i) any Lender, (ii) any domestic commercial bank of recognizedstanding having capital and surplus in excess of $500,000,000 or (iii) anybank whose short-term commercial paper rating from S&P is at least A-1 orthe equivalent thereof or from Moody’s is at least P-1 or the equivalentthereof (any such bank being an “Approved Bank”), in each case withmaturities of not more than 270 days from the date of acquisition,(c) commercial paper and variable or fixed rate notes issued by anyApproved Bank (or by the parent company thereof) or any variable rate notesissued by, or guaranteed by, any domestic corporation rated A-1 (or theequivalent thereof) or better by S&P or

 

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P-1 (or theequivalent thereof) or better by Moody’s and maturing within six months of thedate of acquisition, (d) repurchase agreements entered into by any Personwith a bank or trust company (including any of the Lenders) or recognizedsecurities dealer having capital and surplus in excess of $500,000,000 fordirect obligations issued by or fully guaranteed by the United States in whichsuch Person shall have a perfected first priority security interest (subject tono other Liens) and having, on the date of purchase thereof, a fair marketvalue of at least 100% of the amount of the repurchase obligations and (e) Investments,classified in accordance with GAAP as current assets, in money marketinvestment programs registered under the Investment Company Act of 1940, asamended, which are administered by reputable financial institutions havingcapital of at least $500,000,000 and the portfolios of which are limited toInvestments of the character described in the foregoing subdivisions (a)through (d).

 

“Change in Management” means a change in theidentity of the Chief Executive Officer of the General Partner or the USRP REIT,other than on account of the death or permanent disability of such Person.

 

“Change of Control” means any of the followingevents: (a) the sale, lease, transfer or other disposition, in one or aseries of related transactions, of all or substantially all of the assets ofany of the Borrowers and such Borrower’s Subsidiaries taken as a whole to any “person” or “group”(withinthe meaning of Sections 13(d) and 14(d)(2) of the Securities ExchangeAct), or (b) the USRP REIT shall fail to own and control (whether directlyor indirectly) 80% of the outstanding Capital Stock of any Borrower.  As used herein, “beneficial ownership” shallhave the meaning provided in Rule 13d-3 of the Securities and ExchangeCommission under the Securities Exchange Act.

 

“Closing Date” means the date hereof.

 

“Code” means the Internal Revenue Code of 1986,as amended, and any successor statute thereto, as interpreted by the rules andregulations issued thereunder, in each case as in effect from time totime.  References to sections of theCode shall be construed also to refer to any successor sections.

 

“Collateral Agent” means Bank of America, N.A.,in such capacity under the Intercreditor Agreement and the Security Documents,or its successors and assigns.

 

“Commitment” means as to each Lender, itsobligation to make its Term Loan to the Borrower pursuant to Section 2.1,in an aggregate principal amount at any one time outstanding not to exceed theamount set forth opposite such Lender’s name on Schedule 1.1(a) or inthe Assignment and Assumption pursuant to which such Lender becomes a partyhereto, as applicable, as such amount may be adjusted from time to time inaccordance with this Credit Agreement.

 

“Concept” means anydistinctive brand, trade name or system for establishing and operatingrestaurants and/or convenience stores which is the subject of a license orfranchise from a Person.  Not inlimitation of the foregoing, and by way of example only, such systems wouldinclude “Burger King,” “Pizza Hut,” “Denny’s,” and “Fina.”

 

“Consolidated Capital Expenditures” means, asof any date, for the four fiscal quarter period most recently ending on orprior to such date, the sum of all capital expenditures of the ConsolidatedParties on a consolidated basis, as determined in accordance with GAAP.

 

“Consolidated Fixed Charges” means, as of anydate, for the four fiscal quarter period most recently ending on or prior tosuch date, the sum of (a) all scheduled payments of principal on FundedIndebtedness of the Consolidated Parties on a consolidated basis (including,without limitation, (i) the implied principal component of payments due onCapital Leases and Synthetic Leases, (ii) all dividends paid on the preferredCapital Stock of any Consolidated Party and (iii) an amount, not less than zero(0), equal to  (A) payments made inconnection with any ground leases, but excluding voluntary prepayments ormandatory prepayments required pursuant to Section 3.3 and any scheduledballoon, bullet or similar principal payment repaying the related underlyingprincipal Indebtedness in full), as determined in accordance with GAAP, less(B) the rental income received by the Consolidated Parties in connection withsuch ground leased properties in connection with operating leases under which aConsolidated Party is the

 

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lessor, plus (b)without duplication, the sum of (i) all scheduled payments of principal onFunded Indebtedness of each Unconsolidated Affiliate multiplied by therespective Unconsolidated Affiliate Interest of each such entity, (ii) alldividends paid on the preferred Capital Stock of any Unconsolidated Affiliatemultiplied by the respective Unconsolidated Affiliate Interest of each suchentity; and (iii) an amount, not less than zero (0), equal to (A) (1) paymentsmade by any Unconsolidated Affiliate in connection with any ground leases, less(2) the rental income received by any Unconsolidated Affiliate in connectionwith such ground leased properties in connection with operating leases underwhich an Unconsolidated Affiliate is the lessor, multiplied by (B) therespective Unconsolidated Affiliate Interest of each such entity; provided,that in each case, all of the above amounts not otherwise adjusted to accountfor Minority Interests shall be adjusted to deduct therefrom the pro rata shareof such amounts allocable to the Minority Interests, plus (c) ConsolidatedInterest Expense.

 

“Consolidated Interest Expense” means, as ofany date, for the four fiscal quarter period most recently ending on or priorto such date, the sum of (i) interest expense in connection with FundedIndebtedness (including the amortization of debt discount and premium, theinterest component under Capital Leases, the implied interest component underSynthetic Leases and obligation payments under the any hedging agreements orsimilar arrangements entered into by any Consolidated Party) of theConsolidated Parties on a consolidated basis, as determined in accordance withGAAP, plus (ii) without duplication, interest expense in connection with FundedIndebtedness (including the amortization of debt discount and premium, theinterest component under Capital Leases and the implied interest componentunder Synthetic Leases) of each Unconsolidated Affiliate multiplied by therespective Unconsolidated Affiliate Interest of each such entity; provided,that in each case, all of the above amounts not otherwise adjusted to accountfor Minority Interests shall be adjusted to deduct therefrom the pro rata shareof such amounts allocable to the Minority Interests.

 

“Consolidated Net Income” means, as of anydate, for the four fiscal quarter period most recently ending on or prior tosuch date, (i) net income (excluding extraordinary items) of the ConsolidatedParties on a consolidated basis after interest expense, income, value added andsimilar taxes and depreciation and amortization, all as determined inaccordance with GAAP, plus (ii) without duplication, an amount equal to theaggregate of net income (excluding extraordinary items) after interest expense,income, value added and similar taxes and depreciation and amortization, asdetermined in accordance with GAAP, of each Unconsolidated Affiliate multipliedby the respective Unconsolidated Affiliate Interest of each such entity;provided, that in each case, all of the above amounts not otherwise adjusted toaccount for Minority Interests shall be adjusted to deduct therefrom the prorata share of such amounts allocable to the Minority Interests.

 

“Consolidated Parties” means a collectivereference to the USRP REIT, the General Partner, the Borrower and each of theirSubsidiaries, and “Consolidated Party” means any one of them.

 

“Consolidated Total EBITDA” means, as of anydate, for the four fiscal quarter period most recently ending on or prior tosuch date, the sum of (a) Consolidated Net Income, plus (b) the sum of the following (but only to the extent taken intoaccount in determining Consolidated Net Income for such period):  (i) depreciation and amortization expensefor such period; plus (ii) interest expense for such period; plus(iii) income tax expense in respect of such period; minus (or plus,as appropriate) (iv) extraordinary gains (losses) and gains (losses) from salesof assets for such period (provided, for purposes of clarification, thatsuch gains shall be subtracted from the overall amount calculated pursuant tothis clause (ii) and such losses shall be added to such amount); plus (or minus, as appropriate)(v) extraordinary gains (or losses) (provided, for purposes ofclarification, that such gains shall be subtracted from the overall amountcalculated pursuant to this clause (b) and such losses shall be added to suchamount), plus (or minus, as appropriate) (vi) allstraight line rent leveling adjustments (reported in the consolidated financialstatements of such Person for purposes of GAAP); plus (or minus,as appropriate) (vii) equity in net earnings (or net loss) of unconsolidatedAffiliates of such Person (if any); plus (viii) amounts incurred by suchPerson for such period as “impairment of long lived assets,” in eachcase without duplication and as determined in accordance with GAAP; provided,that, (A) each of the above calculations shall include, without duplication,any amounts attributable to any interests held by any Consolidated Party in anyUnconsolidated Affiliate and (B) all amounts included in the above calculations(and not otherwise

 

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adjusted toaccount for Minority Interests) shall be adjusted to deduct therefrom the prorata share of such amounts allocable to Minority Interests.

 

“Contingent Obligation”means, with respect to any Person, any obligation of such Person to guaranteeor intended to guarantee any Indebtedness, leases, dividends or otherobligations (“primary obligations”) of any other Person (the “primary obligor”)in any manner, whether directly or indirectly (exclusive of any non-materialcontractual indemnities and non-material guarantees of non-monetary obligationswhich have not yet been called on or quantified), including, withoutlimitation, (a) the direct or indirect guaranty, endorsement (other than forcollection or deposit in the ordinary course of business), co-making,discounting with recourse or sale with recourse by such Person of theobligation of a primary obligor, (b) the obligation to make take-or-pay orsimilar payments, if required, regardless of nonperformance by any other partyor parties to an agreement, (c) any obligation of such Person, whether or notcontingent, (i) to purchase any such primary obligation or any propertyconstituting direct or indirect security therefor, (ii) to advance or supplyfunds (A) for the purchase or payment of any such primary obligation or (B) tomaintain working capital, equity capital, net worth or other balance sheetcondition or any income statement condition of the primary obligor or otherwiseto maintain the solvency of the primary obligor, (iii) to purchase, lease orotherwise acquire property, assets, securities or services primarily for thepurpose of assuring the owner of any such primary obligation of the ability ofthe primary obligor to make payment of such primary obligation or (iv)otherwise to assure or hold harmless the holder of such primary obligationagainst loss in respect thereof, (d) any residual obligation or liability ofsuch Person under any Synthetic Lease or any other off-balance sheet financing,or (e) any obligation of such Person in connection with any derivativetransaction, hedging transaction (including, without limitation, any HedgingAgreements), takeout commitment or forward equity commitment.  The amount of any Contingent Obligationshall be deemed to be an amount equal to the stated or determinable amount ofthe primary obligation in respect of which such Contingent Obligation is made(or, if less, the maximum amount of such primary obligation for which suchPerson may be liable pursuant to the terms of the agreement, instrument orother document evidencing such Contingent Obligation) or, if not stated ordeterminable, the maximum reasonably anticipated liability in respect thereof(assuming such Person is required to perform thereunder), as determined by suchPerson in good faith.  ContingentObligations shall not include the following obligations or liabilities of theGeneral Partner, the Borrower or any other Subsidiaries thereof (including anySpecial Purpose Entity and any Bankruptcy Remote Borrowing Entity) to theextent incurred in connection with a Securitization Asset Sale: reasonable andcustomary obligations of the General Partner, the Borrower or any otherSubsidiaries thereof with respect to (i) the servicing of any assets which arethe subject of such Securitization Asset Sale, (ii) administrative andministerial matters relating to any applicable Special Purpose Entity, (iii)maintenance of the corporate separateness of any such Special Purpose Entityfrom that of the General Partner and its other Subsidiaries and (iv) theguaranty of payment of fees of any Person acting as a trustee in connectionwith such Securitization Asset Sale and indemnification obligations owing toany such Person.  In addition, theownership of a Subordinated Interest shall not be deemed to give rise to anyContingent Obligation on the part of the owner thereof.  Further, Contingent Obligations shall notinclude liabilities of the General Partner, Borrower or any Consolidated Party(i) which result solely from the General Partner or such Consolidated Partybeing a general partner of a Special Purpose Entity that is a limitedpartnership and is not a Consolidated Party, and (ii) which liabilities areattributable to customary and reasonable non-recourse exceptions,representations and warranties involved with securitization transactions andnot related to the creditworthiness of the obligors involved in suchtransactions (including, without limitation, exceptions for fraud,environmental indemnities and misapplication of proceeds).

 

“Continue”, “Continuation” and “Continued”shall refer to the continuation pursuant to Section 3.2(a) hereof of aEurodollar Loan from one Interest Period to the next Interest Period.

 

“Convert”, “Conversion” and “Converted”shall refer to a conversion pursuant to Section 3.2(b) orSections 3.7 through 3.12, inclusive, of a Base Rate Loan into aEurodollar Loan.

 

“Credit Documents” means a collective referenceto this Credit Agreement, the Notes, each Joinder Agreement, and the Security Documents (in each caseas the same may be amended, modified,

 

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restated,supplemented, extended, renewed or replaced from time to time), and “CreditDocument” means any one of them.

 

“Credit Facility” shall have the meaningassigned to such term in the recitals hereto.

 

“Credit Parties” means a collective referenceto the Borrower, the General Partner and the other Guarantors, and “CreditParty” means any one of them.

 

“Credit Party Obligations” means, withoutduplication, all of the obligations of the Credit Parties to the Lenders andthe Agent, whenever arising, under this Credit Agreement, the Notes or any ofthe other Credit Documents (including, but not limited to, any interestaccruing after the occurrence of a Bankruptcy Event with respect to any CreditParty, regardless of whether such interest is an allowed claim under theBankruptcy Code) and (ii) all liabilities and obligations, wheneverarising, owing from any Credit Party to any Lender, or any Affiliate of aLender, arising under any Hedging Agreement.

 

“Creditor Group” means a collective referenceto the Collateral Agent, the Lender Parties hereunder and the “Lender Parties”as such term is defined in the Revolving Credit Agreement.

 

“Debt Service” means, for any given calculationperiod and assuming an opening principal balance equal to the amount of theprincipal balance outstanding under this Credit Agreement and the RevolvingCredit Agreement at the beginning of such period, an amount of debt serviceequal to the greater of (a) the amount of principal and interest payments thatwould be paid on such principal balance during such period (assuming levelmonthly payments of principal and interest) at an annual interest rate equal tothe yield, as of the last day of the calculation period, on the seven year U.S.Treasury Bond plus 2.50% and with a twenty-five (25) yearamortization schedule and (b) the amount of principal and interest paymentsresulting from the application of a loan constant equal to 9.33% to suchopening principal balance (assuming level monthly payments of principal andinterest over a twenty-five (25) year amortization schedule); provided,however, that to the extent the amount of actual debt service payments due fromthe Borrower during the applicable calculation period exceed the amountcalculated in accordance with the above provisions, “Debt Service” shall,notwithstanding the above, equal the amount of such actual debt servicepayments due during the applicable period.

 

“Debt Service Coverage Ratio” means, for anygiven date of calculation, the ratio of (i) EBITDA generated in connection withthe Borrowing Base Assets during the previous twelve (12) month period forwhich the Borrower has delivered officer’s certificates pursuant to the termsof Section 7.1(c) of this Agreement to (ii) Debt Service for the sametwelve (12) month period. Notwithstanding the foregoing, to the extent any Borrowing Base Asset(s)have been held by the Borrower for less than twelve months as of the applicablecalculation date, EBITDA with respect to such asset(s) shall be calculated byannualizing EBITDA amounts attributable to such asset(s) as set forth in thefinancial statements which the Borrower has, as of that calculation date,delivered to the Agent, except to the extent the Borrower has failed to deliverfinancial statements accounting for such Borrowing Base Assets pursuant to andin accordance with this Agreement, in which case the EBITDA for such BorrowingBase Assets shall, for purposes of this definition, equal zero (0).

 

“Default” means any event, act or conditionwhich with notice or lapse of time, or both, would constitute an Event ofDefault.

 

“Defaulting Lender” means, at any time, anyLender that, as determined by the Agent, (a) has failed to make a Loan orpurchase a Participation Interest required pursuant to the term of this CreditAgreement within one Business Day of when due, (b) other than as set forthin (a) above, has failed to pay to the Agent or any Lender an amount owed bysuch Lender pursuant to the terms of this Credit Agreement within one BusinessDay of when due, unless such amount is subject to a good faith dispute or(c) has been deemed insolvent or has become subject to a bankruptcy orinsolvency proceeding or with respect to which (or with respect to any of theassets of which) a receiver, trustee or similar official has been appointed.

 

“Delinquency Report” means a report prepared bythe Borrower setting forth in itemized detail, as of a given date, alldelinquencies with respect to Tenant payments (whether or not suchdelinquencies result in the applicable asset being characterized as an ExcludedAsset for purposes hereof) and all other matters

 

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causing any assetowned by any of the Consolidated Parties to constitute an Excluded Asset.  Such report shall identify the respectiveowners of the assets named therein and shall identify which, if any, of theassets named therein constitute Borrowing Base Assets as of the date of suchreport.

 

“Determination Decision”shall have the meaning given to such term in Section 3.22.

 

“Determination Request”shall have the meaning given to such term in Section 3.22.

 

“Development Activities”means activities relating directly or indirectly to the development ofbuild-to-suit Real Property assets that are 100% pre-leased.

 

“Dollars” and “$” means dollars inlawful currency of the United States.

 

“Domestic Subsidiary” means any direct orindirect Subsidiary of the Borrower which is incorporated or organized underthe laws of any State of the United States or the District of Columbia.

 

“EBITDA” means, (a) for any Person over any period, (i) net earnings (loss) of suchPerson for such period plus (ii) the sum of the following (but only to theextent taken into account in determining net earnings (loss) for such period):(A) depreciation and amortization expense for such period; plus (B)interest expense for such period; plus (C) income tax expense in respectof such period; minus (or plus, as appropriate) (D) extraordinarygains (losses) and gains (losses) from sales of assets for such period (provided,for purposes of clarification, that such gains shall be subtracted from theoverall amount calculated pursuant to this clause (ii) and such losses shall beadded to such amount); plus (or minus,as appropriate) (E) extraordinary gains (or losses) (provided, forpurposes of clarification, that such gains shall be subtracted from the overallamount calculated pursuant to this clause (ii) and such losses shall be addedto such amount), plus (or minus, as appropriate) (F) allstraight line rent leveling adjustments (reported in the consolidated financialstatements of such Person for purposes of GAAP); plus (or minus,as appropriate) (G) equity in net earnings (or net loss) of unconsolidatedAffiliates of such Person (if any); plus (H) amounts incurred by suchPerson for such period as “impairment of long lived assets,” in eachcase without duplication and as determined in accordance with GAAP; and (b) for any Real Property for anyperiod, the net income (excluding extraordinary items) of such Real Propertyfor such period (which, for leased Real Properties, shall be the rental incomefor such Real Properties during such period) before (without duplication)interest expense applicable to such Real Property, income taxes applicable tosuch Real Property and depreciation and amortization applicable to such RealProperty, all as determined in accordance with GAAP.

 

“Eligible Assignee” means (a) a Lender; (b) anAffiliate of a Lender; (c) an Approved Fund; and (d) any other Person (otherthan a natural person) approved by the Agent, in its discretion; providedthat notwithstanding the foregoing, “Eligible Assignee” shall not include theBorrower, any Credit Party or any of the Borrower’s or any Credit Party’sAffiliates or Subsidiaries.

 

“Environmental Laws” means any and all lawfuland applicable Federal, state, local and foreign statutes, laws (including,without limitation, the Comprehensive Environmental Response, Compensation andLiability Act of 1980, the Resource Conservation and Recovery Act of 1976, the ToxicSubstances Control Act, the Water Pollution Control Act, the Clean Air Act andthe Hazardous Materials Transportation Act), regulations, ordinances, rules,judgments, orders, decrees, permits, concessions, grants, franchises, licenses,agreements or other governmental restrictions relating to the environment or toemissions, discharges, releases or threatened releases of pollutants,contaminants, chemicals, or industrial, toxic or hazardous substances or wastesinto the environment including, without limitation, ambient air, surface water,ground water, or land, or otherwise relating to the manufacture, processing,distribution, use, treatment, storage, disposal, transport, or handling ofpollutants, contaminants, chemicals, or industrial, toxic or hazardoussubstances or wastes.

 

“Equity Issuance” means any issuance by anyConsolidated Party to any Person of (a) shares of its Capital Stock,(b) any shares of its Capital Stock pursuant to the exercise of options orwarrants, (c) any shares of its Capital Stock pursuant to the conversionof any debt securities to equity or (d) any options or warrants

 

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relating to itsCapital Stock (other than employee stock options currently in place).  The term “Equity Issuance” shall not includeany Asset Disposition.

 

“ERISA” means the Employee Retirement IncomeSecurity Act of 1974, as amended, and any successor statute thereto, asinterpreted by the rules and regulations thereunder, all as the same may be ineffect from time to time.  References tosections of ERISA shall be construed also to refer to any successor sections.

 

“ERISA Affiliate” means an entity which isunder common control with any Consolidated Party within the meaning ofSection 4001(a)(14) of ERISA, or is a member of a group which includes anyConsolidated Party and which is treated as a single employer underSections 414(b) or (c) of the Code.

 

“ERISA Event” means (i) with respect toany Plan, the occurrence of a Reportable Event or the substantial cessation ofoperations (within the meaning of Section 4062(e) of ERISA); (ii) thewithdrawal by any Consolidated Party or any ERISA Affiliate from a MultipleEmployer Plan during a plan year in which it was a substantial employer (assuch term is defined in Section 4001(a)(2) of ERISA), or the terminationof a Multiple Employer Plan; (iii) the distribution of a notice of intentto terminate or the actual termination of a Plan pursuant toSection 4041(a)(2) or 4041A of ERISA; (iv) the institution ofproceedings to terminate or the actual termination of a Plan by the PBGC underSection 4042 of ERISA; (v) any event or condition which mightconstitute grounds under Section 4042 of ERISA for the termination of, orthe appointment of a trustee to administer, any Plan; (vi) the complete orpartial withdrawal of any Consolidated Party or any ERISA Affiliate from aMultiemployer Plan; (vii) the conditions for imposition of a lien underSection 302(f) of ERISA exist with respect to any Plan; or (viii) theadoption of an amendment to any Plan requiring the provision of security tosuch Plan pursuant to Section 307 of ERISA.

 

“Eurodollar Loan” means any portion of theLoans that bears interest at a rate based upon the Eurodollar Rate.

 

“Eurodollar Rate” means, for any EurodollarLoan for any Interest Period therefor, the rate per annum (rounded upwards, ifnecessary, to the nearest 1/100 of 1%) determined by the Agent to be equal tothe quotient obtained by dividing (a) the Interbank Offered Rate for suchEurodollar Loan for such Interest Period by (b) 1 minus the EurodollarReserve Requirement for such Eurodollar Loan for such Interest Period.

 

“Eurodollar Reserve Requirement” means, at anytime, the maximum rate at which reserves (including, without limitation, anymarginal, special, supplemental, or emergency reserves) are required to bemaintained under regulations issued from time to time by the Board of Governorsof the Federal Reserve System (or any successor) by member banks of the FederalReserve System against “Eurocurrency liabilities” (as such term is used inRegulation D).  Without limitingthe effect of the foregoing, the Eurodollar Reserve Requirement shall reflectany other reserves required to be maintained by such member banks with respectto (i) any category of liabilities which includes deposits by reference towhich the Adjusted Eurodollar Rate is to be determined, or (ii) anycategory of extensions of credit or other assets which include EurodollarLoans.  The Adjusted Eurodollar Rateshall be adjusted automatically on and as of the effective date of any changein the Eurodollar Reserve Requirement.

 

“Event of Default” shall have the meaningassigned to such term in Section 9.1.

 

“ExcludedAssets” means, as of any date, with respect to each of the General SPE,S&C, JV1 and each of its Wholly Owned Subsidiaries and HCI and each of itsWholly Owned Subsidiaries (a) all assets of such Person which are either alease by a Person, as lessor of a parcel of Real Property, or a promissory noteheld by such Person which is secured by a mortgage instrument, in either casewhere (i) any required rental payment, principal or interest payment, or otherpayment due under such lease or promissory note, as the case may be, is morethan sixty (60) days past due, except, with respect to payments due undera lease, to the extent (A) the aggregate amount of such past due payments withrespect to such lease is less than $2500 and (B) the aggregate amount of suchpast due payments does not exceed $30,000; (ii) the Tenant under such lease orthe maker of such promissory note, as the case may be, is the subject of aBankruptcy Event (except to the extent that(A) such Person has been subject to a proceeding under Chapter 11 of theFederal Bankruptcy Code, (B) the applicable bankruptcy court has approved andconfirmed such Person’s plan for reorganization, (C) all

 

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statutory appeal periodswith respect to such proposed plan have been exhausted or expired withoutobjection, (D) the approved plan requires such Person to continue to performits obligations with respect to the applicable lease/franchise agreement and(E) such Person is performing its obligations under such approved plan andunder the applicable lease/franchise agreement); (iii) condemnation proceedings have been instituted or condemnation hasoccurred with respect to a material portion of the applicable parcel of RealProperty; or (iv) the subject Real Property has been vacant for more thansixty (60) days and such vacancy is not the result of an on-schedulemoving-in process or scheduled renovations, and (b) all Real Property assets ofthe General SPE, S&C, JV1 and its Wholly Owned Subsidiaries and HCI and its Wholly Owned Subsidiaries which are, as of such date, not subject to alease agreement under which a Consolidated Party is the lessor or are otherwisevacant (except as noted above in subclause (a)).

 

“Executive Officer” of any Person means any ofthe chief executive officer, chief operating officer, president, vice president,chief financial officer or treasurer of such Person.

 

“Federal Funds Rate” means, for any day, therate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)equal to the weighted average of the rates on overnight Federal funds transactionswith members of the Federal Reserve System arranged by Federal funds brokers onsuch day, as published by the Federal Reserve Bank of New York on the BusinessDay next succeeding such day; provided that (a) if such day is nota Business Day, the Federal Funds Rate for such day shall be such rate on suchtransactions on the next preceding Business Day as so published on the nextsucceeding Business Day, and (b) if no such rate is so published on suchnext succeeding Business Day, the Federal Funds Rate for such day shall be theaverage rate charged to the Agent (in its individual capacity) on such day onsuch transactions as determined by the Agent.

 

“Fee Letter” means that certain Fee Letterentered into by and among Borrower, BOA and BAS and dated as of or prior to thedate hereof.

 

“Fees” means all fees payable pursuant toSection 3.5 (if any).

 

“FFO” means, for a given period, (a)Consolidated Net Income (before Unconsolidated Affiliate Interests and beforeextraordinary and non recurring items) for such period minus (or plus)(b) gains (or losses) from debt restructuring and sales of property during suchperiod, plus (c) depreciation and amortization of real and personalproperty assets for such period, and after adjustments for unconsolidated partnershipsand joint ventures, plus (d) impairment charges reported by such Personsfor such period.  In determining whetheran amount distributed in a given fiscal quarter is applicable to the FFO ofsuch fiscal quarter or a prior fiscal quarter, the Borrower shall, in allcases, assume that amounts distributed are distributed with respect to FFOearned in the most recent fiscal quarter for which there exists undistributedFFO.

 

“FFO Distribution Allowance” means, for eachfiscal quarter of the Consolidated Parties, an amount equal to 95% of FFO forsuch quarter, plus, to the extent not otherwise distributed prior tocommencement of the quarter for which such calculation is being performed, 95%of FFO for the immediately preceding three fiscal quarters.

 

“Financial Covenants” means a collectivereference to the covenants contained in Sections 7.11, 8.1(c) and (h), 8.2(b)and (c), 8.5(a) and (b), 8.6(d), (e), (h), (i), (j), (k), (l) and (m) and 8.16hereof.

 

“Fixed Charge Coverage Ratio” means, as of theend of any fiscal quarter of the Consolidated Parties, for the four fiscalquarter period most recently ending on or prior to such date with respect tothe Consolidated Parties on a consolidated basis, the ratio of(a) Consolidated Total EBITDA for such period to (b) ConsolidatedFixed Charges for such period.

 

“Foreign Lender” shall have the meaning givento such term in Section 3.11(d) hereof.

 

“Foreign Subsidiary” means any direct orindirect Subsidiary of the Borrower which is not a Domestic Subsidiary.

 

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“Fully Satisfied” means, with respect to theCredit Party Obligations as of any date, that, as of such date, (a) allprincipal of and interest accrued to such date which constitute Credit PartyObligations shall have been paid in full in cash, and (b) all fees,expenses and other amounts then due and payable which constitute Credit PartyObligations shall have been paid in cash.

 

“Fund” means any Person (other than a naturalperson) that is (or will be) engaged in making, purchasing, holding orotherwise investing in commercial loans and similar extensions of credit in theordinary course of its business.

 

“Funded Indebtedness” means, with respect toany Person, without duplication, (i) all Indebtedness of such Person otherthan Indebtedness of the types referred to in clauses (e), (f), (g), (i),(n) and (p) of the definition of “Indebtedness” set forth in thisSection 1.1, (ii) all Funded Indebtedness of others of the typereferred to in clause (i) above secured by (or for which the holder ofsuch Funded Indebtedness has an existing right, contingent or otherwise, to besecured by) any Lien on, or payable out of the proceeds of production from,Property owned or acquired by such Person, whether or not the obligationssecured thereby have been assumed (or, if less, the aggregate net book value ofall Property securing such Funded Indebtedness of others), (iii) allGuaranty Obligations of such Person with respect to Funded Indebtedness of thetype referred to in clause (i) above of another Person and(iv) Funded Indebtedness of the type referred to inclause (i) above of any partnership or unincorporated joint venturein which such Person is a general partner or a joint venturer to the extentsuch Funded Indebtedness is recourse to such Person.

 

“GAAP” means generally accepted accountingprinciples in the United States applied on a consistent basis except asspecifically set forth in the definitions contained herein and subject to theterms of Section 1.3.

 

“General Partner” shall have the meaning givento such term in the heading hereof.

 

“General SPE” shall have the meaning given tosuch term in the heading hereof.

 

“Governmental Authority” means any Federal,state, local or foreign court or governmental agency, authority,instrumentality or regulatory body.

 

“Ground Lease Interests” means Real Propertyassets with respect to which a Consolidated Party is the ground lessee.

 

“Guarantors” means a collective reference tothe USRP REIT, the General Partner and each of the Subsidiary Guarantors,together with each of their successors and permitted assigns, and “Guarantor“ means any one of them.

 

“Guaranty Obligations” means, with respect toany Person, without duplication, any obligations of such Person (other than endorsementsin the ordinary course of business of negotiable instruments for deposit orcollection) guaranteeing or intended to guarantee any Indebtedness of any otherPerson in any manner, whether direct or indirect, and including withoutlimitation any obligation, whether or not contingent, (i) to purchase anysuch Indebtedness or any Property constituting security therefor, (ii) toadvance or provide funds or other support for the payment or purchase of anysuch Indebtedness or to maintain working capital, solvency or other balancesheet condition of such other Person (including without limitation keep wellagreements, maintenance agreements, comfort letters or similar agreements orarrangements) for the benefit of any holder of Indebtedness of such otherPerson, (iii) to lease or purchase Property, securities or servicesprimarily for the purpose of assuring the holder of such Indebtedness, or(iv) to otherwise assure or hold harmless the holder of such Indebtednessagainst loss in respect thereof.  The amountof any Guaranty Obligation hereunder shall (subject to any limitations setforth therein) be deemed to be an amount equal to the outstanding principalamount (or maximum principal amount, if larger) of the Indebtedness in respectof which such Guaranty Obligation is made.

 

“Hawaii Loan Documents” means that certain LoanAgreement to be entered into by and among USRP (Bob), LLC, USRP (Hawaii), LLCand Fuel Supply, Inc. (as the borrowers thereunder) and First Hawaiian Bank (asthe lender) and each of the “Loan Documents” as defined therein; provided, thatsuch

 

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documents shallsubstantially similar to those delivered to the Agent prior to the Closing Dateand be otherwise in form and substance acceptable to the Agent in itsdiscretion.

 

“HCI” hasthe meaning given to such term in the Preamble of this Credit Agreement.

 

“Hedging Agreements” means (a) any and allrate swap transactions, basis swaps, credit derivative transactions, forwardrate transactions, commodity swaps, commodity options, forward commoditycontracts, equity or equity index swaps or options, bond or bond price or bondindex swaps or options or forward bond or forward bond price or forward bondindex transactions, interest rate options, forward foreign exchangetransactions, cap transactions, floor transactions, collar transactions,currency swap transactions, cross-currency rate swap transactions, currencyoptions, spot contracts, or any other similar transactions or any combinationof any of the foregoing (including any options to enter into any of theforegoing), whether or not any such transaction is governed by or subject toany master agreement  (including,without limitation, any BOA Derivative Instruments), and (b) any and alltransactions of any kind, and the related confirmations, which are subject tothe terms and conditions of, or governed by, any form of master agreementpublished by the International Swaps and Derivatives Association, Inc., anyInternational Foreign Exchange Master Agreement, or any other master agreement(any such master agreement, together with any related schedules, a “MasterAgreement”), including any such obligations or liabilities under any MasterAgreement, in each case (with respect to both clause (a) and (b) of thisdefinition, entered into between any Consolidated Party and any Lender.

 

“ICA Joinder Agreement” shall have the meaninggiven to such term in the Intercreditor Agreement.

 

“Indebtedness” means, with respect to anyPerson, without duplication, (a) all obligations of such Person forborrowed money, (b) all obligations of such Person evidenced by bonds,debentures, notes or similar instruments, or upon which interest payments arecustomarily made, (c) all obligations of such Person under conditionalsale or other title retention agreements relating to Property purchased by suchPerson (other than customary reservations or retentions of title underagreements with suppliers entered into in the ordinary course of business),(d) all obligations of such Person issued or assumed as the deferredpurchase price of Property or services purchased by such Person (other thantrade debt incurred in the ordinary course of business and due within sixmonths of the incurrence thereof) which would appear as liabilities on abalance sheet of such Person, (e) all obligations of such Person undertake-or-pay or similar arrangements or under commodities agreements,(f) all Indebtedness of others secured by (or for which the holder of suchIndebtedness has an existing right, contingent or otherwise, to be secured by)any Lien on, or payable out of the proceeds of production from, Property ownedor acquired by such Person, whether or not the obligations secured thereby havebeen assumed, (g) all Guaranty Obligations of such Person with respect toIndebtedness of another Person, (h) the implied principal component of allobligations of such Person under Capital Leases, including all CapitalizedLease Obligations of such Person, (i) all obligations of such Person underhedging agreements and other similar arrangements, (j) the maximum amountof all performance and standby letters of credit issued or bankers’ acceptancesfacilities created for the account of such Person and, without duplication, alldrafts drawn thereunder (to the extent unreimbursed), (k) all preferredCapital Stock issued by such Person and which by the terms thereof could be (atthe request of the holders thereof or otherwise) subject to mandatory sinkingfund payments, redemption or other acceleration (other than as a result of aChange of Control or an Asset Disposition that does not in fact result in aredemption of such preferred Capital Stock) at any time or which are otherwiseclassified as liabilities or indebtedness under GAAP, (l) the principalportion of all obligations of such Person under Synthetic Leases, (m) allobligations of such Person to repurchase any securities issued by such Personat any time prior to the Maturity Date which repurchase obligations are relatedto the issuance thereof, including, without limitation, obligations commonlyknown as residual equity appreciation potential shares, (n) theIndebtedness of any partnership or unincorporated joint venture in which suchPerson is a general partner or a joint venturer to the extent such Indebtednessis recourse to such Person, (o) the aggregate amount of uncollectedaccounts receivable of such Person subject at such time to a sale ofreceivables (or similar transaction) to the extent such transaction is effectedwith recourse to such Person (whether or not such transaction would bereflected on the balance sheet of such Person in accordance with GAAP) and (p)all Contingent Obligations of such Person. For purposes of clarification, the ordinary and customary rentobligations of a Person pursuant to the terms of a real property lease which isnot entered into as a capital or financing lease shall not be included in thecalculation of “Indebtedness” hereunder.

 

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“Indemnified Party” shall have the meaningassigned to such term in Section 11.5(b).

 

“Interbank Offered Rate” means, for any Eurodollar Loan for any InterestPeriod therefor, the rate per annum (rounded upwards, if necessary, to thenearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successorpage) as the London interbank offered rate for deposits in Dollars atapproximately 11:00 a.m. (London time) two Business Days prior to the first dayof such Interest Period. If for any reason such rate is not available, the term“LIBOR” shall mean, for any Eurodollar Loan for any Interest Period therefor,the rate per annum (‘rounded upwards, if necessary, to the nearest 1/100 of 1%)appearing on Reuters Screen LIBO Page as the London interbank offered rate fordeposits in Dollars at approximately 11:00 a.m. (London time) two Business Daysprior to the first day of such Interest Period for a term comparable to suchInterest Period; provided, however, if more than one rate isspecified on Reuters Screen LIBO Page, the applicable rate shall be thearithmetic mean of all such rates.

 

“Intercreditor Agreement”means that certain Intercreditor Agreement dated as of the date hereof andentered into by and among the Collateral Agent, the Agent and the “Agent” underthe Revolving Credit Agreement with respect to the priority of payments made byBorrower hereunder and under the Revolving Credit Agreement and the allocationof proceeds derived from the collateral under the Security Documents, as thesame may be amended, restated, supplemented or otherwise modified from time totime in accordance with its terms.

 

“Interest Payment Date” means (a) as toBase Rate Loans, (i) the 20th day of each calendar month, (ii) thedate of repayment of principal of such Loan and (iii) the Maturity Date, and(b) as to Eurodollar Loans, (i) the last day of each applicable InterestPeriod, (ii) the date of repayment of principal of such Loan, (iii) theMaturity Date, and (iv) where the applicable Interest Period for a EurodollarLoan is greater than one month, the dates occurring each calendar monthfollowing the first day of the Interest Period.

 

“Interest Period” means, as to EurodollarLoans, a period of one, two, three, six or twelve months duration (to theextent available from each of the Lenders), as the Borrower may elect,commencing, in each case, on the date of the borrowing (including continuationsand conversions thereof); provided, however, (a) if anyInterest Period would end on a day which is not a Business Day, such InterestPeriod shall be extended to the next succeeding Business Day (except that wherethe next succeeding Business Day falls in the next succeeding calendar month,then on the next preceding Business Day), (b) no Interest Period shallextend beyond the Maturity Date and (c) where an Interest Period begins ona day for which there is no numerically corresponding day in the calendar monthin which the Interest Period is to end, such Interest Period shall end on thelast Business Day of such calendar month.

 

“Investment” in any Person means (a) theacquisition (whether for cash, property, services, assumption of Indebtedness,securities or otherwise) of assets (other than equipment, inventory andsupplies in the ordinary course of business and other than any acquisition ofassets constituting a Consolidated Capital Expenditure), Capital Stock, bonds,notes, debentures, partnership, joint ventures or other ownership interests orother securities of such other Person, (b) any deposit with, or advance,loan or other extension of credit to, such Person (other than deposits made inconnection with the purchase of equipment inventory and supplies in theordinary course of business) or (c) any other capital contribution to orinvestment in such Person, including, without limitation, any Guaranty Obligations(including any support for a letter of credit issued on behalf of such Person)incurred for the benefit of such Person and any Asset Disposition to suchPerson for consideration less than the fair market value of the Propertydisposed in such transaction, but excluding any Restricted Payment to suchPerson.  Investments which are capitalcontributions or purchases of Capital Stock which have a right to participatein the profits of the issuer thereof shall be valued at the amount actuallycontributed or paid to purchase such Capital Stock as of the date of suchcontribution or payment.  Investmentswhich are loans, advances, extensions of credit or Guaranty Obligations shallbe valued at the principal amount of such loan, advance or extension of creditoutstanding as of the date of determination or, as applicable, the principalamount of the loan or advance outstanding as of the date of determinationactually guaranteed by such Guaranty Obligation.

 

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“I/O Strip” means aninterest in a pool of promissory notes, mortgage loans, or other similarfinancial assets, issued in connection with a Securitization Asset Sale orotherwise, which entitles the holder to receive a portion of the interest paidon, but not principal repaid in respect of, such financial assets.

 

“Joinder Agreement” means a Joinder Agreementsubstantially in the form of Exhibit 7.12 hereto, executed anddelivered by a new Guarantor in accordance with the provisions ofSection 7.12.

 

“JV1” shall have the meaning given to such termin the introductory paragraph hereof.

 

“JV1 Pledge Agreement” means that certain Pledge and Security Agreement entered into by JV1 asof the date hereof in favor of the Collateral Agent and for the benefit of theLender Parties.

 

“Lender” means any of the Persons identified asa “Lender” on the signature pages hereto, and any Person which may become aLender by way of assignment in accordance with the terms hereof, together withtheir successors and permitted assigns.

 

“Lender Party” shall mean any of the Agent orany Lender from time to time a party hereto; and “Lender Parties” means acollective reference to each.

 

“Leverage Ratio” means, as of the end of anyfiscal quarter of the Consolidated Parties, the ratio of (a) TotalLiabilities to (b) Total Tangible Assets.

 

“Lien” means any mortgage, pledge,hypothecation, assignment, deposit arrangement, security interest, encumbrance,lien (statutory or otherwise), preference, priority or charge of any kind(including any agreement to give any of the foregoing, any conditional sale orother title retention agreement, any financing or similar statement or noticefiled under the Uniform Commercial Code as adopted and in effect in therelevant jurisdiction or other similar recording or notice statute, and anylease in the nature thereof); provided, that the term “Lien” shall not refer toor include Negative Pledges.

 

“Loan” or “Loans” means the Term Loans(or a portion of any Term Loans bearing interest at the Adjusted Base Rate orthe Adjusted Eurodollar Rate and referred to as a Base Rate Loan or aEurodollar Loan), individually or collectively, as appropriate.

 

“Material Adverse Effect” means a materialadverse effect on (i) the condition (financial or otherwise), operations,business, assets, liabilities or prospects of the Consolidated Parties taken asa whole, (ii) the ability of any Credit Party to perform any materialobligation under the Credit Documents or the Revolving Credit Documents towhich it is a party or (iii) the material rights and remedies of the Agentand the Lenders under the Credit Documents; provided, that, for purposes ofSection 6.16 hereof only, “Material Adverse Effect” means any one of (i)through (iii) above or (iv) a material adverse effect on the value of,conditions on, operations on, business conducted on or prospects of any parcelof Real Property or the rights and remedies of the Agent and the Lenders withrespect thereto.

 

“Materials of Environmental Concern” means anygasoline or petroleum (including crude oil or any fraction thereof) orpetroleum products or any hazardous or toxic substances, materials or wastes,defined or regulated as such in or under any Environmental Laws, including,without limitation, asbestos, polychlorinated biphenyls and urea-formaldehydeinsulation.

 

“Maturity Date” shall mean the date occurringsixty (60) calendar months following the date hereof.

 

“Maximum Loan Amount” means, as of any date ofdetermination, an amount equal to the sum of each of the Commitments of theLenders as of such date.

 

“Minority Interests” means, at any time,interests in any assets or entities (and, as applicable, the cost thereof, Cashand Cash Equivalents held in connection therewith, the income, revenues,interest

 

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expense, taxes,depreciation and amortization attributable thereto) owned by entities that arenot Consolidated Parties.

 

“Moody’s” means Moody’s Investors Service,Inc., or any successor or assignee of the business of such company in thebusiness of rating securities.

 

“Multiemployer Plan” means a Plan which is a“multiemployer plan” as defined in Sections 3(37) or 4001(a)(3) of ERISA.

 

“Multiple Employer Plan” means a Plan (otherthan a Multiemployer Plan) which any Consolidated Party or any ERISA Affiliateand at least one employer other than the Consolidated Parties or any ERISAAffiliate are contributing sponsors.

 

“Negative Pledge” means a provision of any agreement (other than this Credit Agreement,any other Credit Document or any Revolving Credit Document) that prohibits thecreation of any Lien on any assets of a Person, whether presently owned orhereafter acquired; provided, however, that an agreement thatestablishes a maximum ratio of unsecured debt to unencumbered assets, or ofsecured debt to total assets, or that otherwise conditions a Person’s abilityto encumber its assets upon the maintenance of one or more specified ratiosthat limit such Person’s ability to encumber its assets but that do notgenerally prohibit the encumbrance of its assets, or the encumbrance ofspecific assets, shall not constitute a “Negative Pledge” for purposes of thisCredit Agreement.

 

“Net Cash Proceeds” means the aggregateproceeds paid in cash or Cash Equivalents received by any Consolidated Party inrespect of any Asset Disposition or Equity Issuance (as applicable), net of(a) direct costs (including, without limitation, legal, accounting andinvestment banking fees, and sales commissions) (b) taxes paid or payableas a result thereof and (c) in the case of any Asset Disposition, theamount necessary to retire any Indebtedness secured by a Permitted Lien(ranking senior to any Lien of the Agent) on the related Property; it beingunderstood that “Net Cash Proceeds” shall include, without limitation, any cashor Cash Equivalents received upon the sale or other disposition of any non-cashconsideration received by any such Consolidated Party in any such AssetDisposition or Equity Issuance.

 

“Note” or “Notes” means the Term Notes,individually or collectively, as appropriate.

 

“Notice of Borrowing” means a written notice ofborrowing in substantially the form of Exhibit 2.1(b)(i), asrequired by Section 2.1(b)(i), Section 2.3(b) or Section 2.4(b).

 

“Notice of Continuation” means a notice in theform of Exhibit 3.2 to be delivered to the Agent pursuant toSection 3.2(a) evidencing the Borrower’s request for the Continuation of aEurodollar Loan.

 

“Notice of Conversion”means a notice in the form of Exhibit 3.2 to be delivered to theAgent pursuant to Section 3.2(b) evidencing the Borrower’s request for theConversion of a Loan from one Type to another Type.

 

“Operating Lease” means, as applied to anyPerson, any lease (including, without limitation, leases which may beterminated by the lessee at any time) of any Property (whether real, personalor mixed) which is not a Capital Lease other than any such lease in which thatPerson is the lessor.

 

“Other Taxes” shall have the meaning assignedto such term in Section 3.11(b).

 

“Outstanding Amount” means, with respect to theTerm Loans on any date, the aggregate outstanding principal amount thereof asof such date.

 

“Participant” has the meaning assigned to suchterm in clause (d) of Section 11.3.

 

“Participation Interest” means a purchase by aLender of a participation in any Loans as provided in Section 3.14.

 

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“PBGC” means the Pension Benefit GuarantyCorporation established pursuant to Subtitle A of Title IV of ERISA andany successor thereof.

 

“Permitted Investments” means, at any time,Investments by the Consolidated Parties permitted to exist at such timepursuant to the terms of Section 8.6.

 

“Permitted Liens” means, at any time, Liens inrespect of Property of the Consolidated Parties permitted to exist at such timepursuant to the terms of Section 8.2.

 

“Person” means any individual, partnership,joint venture, firm, corporation, limited liability company, association, trustor other enterprise (whether or not incorporated) or any GovernmentalAuthority.

 

“Plan” means any employee benefit plan (asdefined in Section 3(3) of ERISA) which is covered by ERISA and withrespect to which any Consolidated Party or any ERISA Affiliate is (or, if suchplan were terminated at such time, would under Section 4069 of ERISA bedeemed to be) an “employer” within the meaning of Section 3(5) of ERISA.

 

“Preferred Stock”****means,with respect to any Person, shares of Capital Stock in such Person which areentitled to preference or priorityover any other Capital Stock in such Person in respect of the payment ofdividends or distribution of assets upon liquidation or both.

 

“Prepayment Administration Fee” shall have the meaning assigned to such term inSection 3.5(a).

 

“Prime Rate” means the per annum rate of interestestablished from time to time by BOA as its prime rate, which rate may not bethe lowest rate of interest charged by BOA to its customers.

 

“Principal Borrower” shall have the meaninggiven to such term in the introductory paragraph hereof.

 

“Pro Forma Basis” means, for purposes ofcalculating (utilizing the principles set forth in the second paragraph ofSection 1.3) compliance with each of the Financial Covenants in respect ofa proposed transaction, that such transaction shall be deemed to have occurredas of the first day of the applicable period for which a given calculation isbeing performed.  As used herein, “transaction”shall mean (i) any incurrence or assumption of Indebtedness as referred toin Section 8.1(h)(i), or (ii) any Asset Disposition as referred to inSection 8.5(a).  In connection withany calculation of the Financial Covenants, upon giving effect to a transactionon a Pro Forma Basis:

 

(A)          forpurposes of any such calculation in respect of any incurrence or assumption ofIndebtedness as referred to in Section 8.1(h)(i), any Indebtedness whichis retired in connection with such incurrence or assumption shall be excludedand deemed to have been retired as of the first day of the applicable period;and

 

(B)           forpurposes of any such calculation in respect of any Asset Disposition asreferred to in Section 8.5(a), (1) income statementitems (whether positive or negative) and capital expenditures attributableto the Property disposed of shall be excluded and (2) any Indebtednesswhich is retired in connection with such transaction shall be excluded anddeemed to have been retired as of the first day of the applicable period.

 

“Pro Forma Compliance Certificate” means acertificate of an Executive Officer of the Borrower delivered to the Agent inconnection with (i) any incurrence, assumption or retirement ofIndebtedness as referred to in Section 8.1(h)(i), or (ii) any AssetDisposition as referred to in Section 8.5(a), as applicable, andcontaining reasonably detailed calculations, upon giving effect to theapplicable transaction on a Pro Forma Basis, of those items required fordetermining compliance with Section 7.11 as of the most recent fiscalquarter end preceding the date of the applicable transaction with respect towhich the Agent shall have received the Required Financial Information.

 

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“ProRata Share” means as to each Lender that is not a DefaultingLender, with respect to such Lender’s outstanding Loans at any time, afraction (expressed as a percentage, carried out to the ninth decimal place),the numerator of which is the amount of the Loans of such Lender at such timeand the denominator of which is the Outstanding Amount (less all Loans held bynon-Defaulting Lenders) at such time. The initial Pro Rata Share of each Lender is set forth opposite the nameof such Lender on Schedule 1.1(a) or in the Assignment andAssumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Property” means any interest in any kind ofproperty or asset, whether real, personal or mixed, or tangible or intangible.

 

“Qualified REIT Subsidiary”shall have the meaning given to such term in the Code.

 

“Real Properties” means, at any time, acollective reference to each of the facilities and real properties owned,leased or operated by the Consolidated Parties or in which any ConsolidatedParty has an interest at such time; and “Real Property” means any one ofsuch Real Properties.

 

“Related Parties” means, with respect to anyspecified Person, such Person’s Affiliates and the respective directors,officers, employees, agents and advisors of such Person and such Person’sAffiliates.

 

“Replaced Credit Agreement”means that certain Credit Agreement dated as of May 31, 2002 among the Borrower,the Guarantors, the Agent, the lenders identified therein and BAS, as the samehas been amended, restated, supplemented or otherwise modified prior to thedate hereof.

 

“Register” shall have the meaning assigned tosuch term in Section 11.3(c).

 

“Regulation D, T, U, or X” meansRegulation D, T, U or X, respectively, of the Board of Governors of theFederal Reserve System as from time to time in effect and any successor to allor a portion thereof.

 

“REIT” means a Personqualifying for treatment as a “real estate investment trust” under the Code.

 

“Reportable Event” means any of the events setforth in Section 4043(c) of ERISA, other than those events as to which thenotice requirement has been waived by regulation.

 

“Required Financial Information” means, withrespect to any given date, (i) the financial statements of theConsolidated Parties required to be delivered pursuant to Section 7.1(a)or (b) for the fiscal period or quarter ending most recently with respect tosuch date, and (ii) the certificate of an Executive Officer of theBorrower required by Section 7.1(c) to be delivered with the financialstatements described in clause (i) above.

 

“Required Lenders” means, at any time, (a) theAgent, (b) the “Agent” under the Revolving Credit Agreement and (c) Lenders(other than Defaulting Lenders) and Revolving Lenders holding in the aggregateat least 66 2/3% of the Revolver/Term Outstanding Amount (excluding amountsheld by Defaulting Lenders).

 

“Required Term Loan Lenders” means, at anytime, (a) the Agent and (b) Lenders (other than Defaulting Lenders) holding inthe aggregate at least 66 2/3% of the Outstanding Amount.

 

“Requirement of Law” means, as to any Person,the certificate of incorporation and by-laws or other organizational orgoverning documents of such Person, and any law, treaty, rule or regulation ordetermination of an arbitrator or a court or other Governmental Authority, ineach case applicable to or binding upon such Person or to which any of itsmaterial property is subject.

 

“Restricted Payment” means (i) anydividend or other payment or distribution, direct or indirect, on account ofany shares of any class of Capital Stock of any Consolidated Party, now orhereafter outstanding (including without limitation any payment in connectionwith any dissolution, merger, consolidation or disposition involving anyConsolidated Party), or to the holders, in their capacity as such, of anyshares of any

 

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class of CapitalStock of any Consolidated Party, now or hereafter outstanding (other thandividends or distributions payable in Capital Stock of the applicable Personand dividends or distributions payable (directly or indirectly throughSubsidiaries) to any Credit Party other than the General Partner),(ii) any redemption, retirement, sinking fund or similar payment, purchaseor other acquisition for value, direct or indirect, of any shares of any classof Capital Stock of any Consolidated Party, now or hereafter outstanding, (iii) anypayment made to retire, or to obtain the surrender of, any outstandingwarrants, options or other rights to acquire shares of any class of CapitalStock of any Consolidated Party, now or hereafter outstanding, and(iv) any loan or advance to the General Partner.

 

“Revolver Obligations” means, at any time, anamount equal to the amount of the “Credit Party Obligations,” as defined in theRevolving Credit Agreement.

 

“Revolver/Term Outstanding Amount” means anamount equal to the sum of (a) (i) the Revolving Commitments (andParticipation Interests therein), or (ii) if the Revolving Commitmentshave been terminated, the outstanding Loans, LOC Obligations and ParticipationInterests (including the Participation Interests of the Issuing Lender in anyLetters of Credit), in each case, if any; provided, that all capitalized termsused in this clause (a) shall have the meanings given to such terms in theRevolving Credit Agreement), plus (b) the Outstanding Amount, if any.

 

“Revolving Credit Agreement” shall mean thatcertain revolving Credit Agreement dated as of the date hereof among Borrower,the Guarantors, BOA, as Agent and Issuing Lender, BAS and such other lenders asmay be party thereto from time to time, as the same may be amended, restated,supplemented or otherwise modified from time to time following the date hereof.

 

“Revolving Credit Documents” means the “CreditDocuments” as such term is defined in the Revolving Credit Agreement.

 

“Revolving Lenders” means the “Lenders” as suchterm is defined in the Revolving Credit Agreement; provided, that, for purposesof this Agreement, such term shall not be deemed to include “DefaultingLenders” under the Revolving Credit Agreement.

 

“S&C” hasthe meaning given to such term in the Preamble of this Credit Agreement.

 

“S&P” means Standard & Poor’s RatingsGroup, a division of The McGraw Hill Companies, Inc., or any successor orassignee of the business of such division in the business of rating securities.

 

“Sale and Leaseback Transaction” means anyarrangement pursuant to which any Person, directly or indirectly, becomesliable as lessee, guarantor or other surety with respect to any lease, whetheran Operating Lease or a Capital Lease, of any Property (a) which suchPerson has sold or transferred (or is to sell or transfer) to a Person which isnot a consolidated affiliate of such Person or (b) which such Personintends to use for substantially the same purpose as any other Property whichhas been sold or transferred (or is to be sold or transferred) by such Person toanother Person which is not a consolidated affiliate of such Person inconnection with such lease.

 

“Secured Indebtedness”means, with respect to any Person, any Indebtedness (other than Indebtednessincurred hereunder or under the Revolving Credit Documents) that is secured inany manner by any Lien.  Indebtedness inrespect of Capitalized Lease Obligations shall not be deemed to be SecuredIndebtedness.  For clarificationpurposes,

 

(i) any unsecured guaranty given by any Credit Party ofsecured indebtedness of a Person who is not a Credit Party constitutesUnsecured Indebtedness of such Credit Party giving the guaranty,

 

(ii) any unsecured guaranty given by any Credit Party ofthe secured indebtedness of another Credit Party constitutes the SecuredIndebtedness of the Credit Party directly incurring the secured indebtednessand shall not be calculated as part of the Indebtedness (either Secured or

 

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Unsecured)of such Credit Party giving the guaranty (except to the extent that therelevant calculation does not otherwise account for the Indebtedness of theCredit Party directly incurring the underlying secured indebtedness, in whichcase it shall constitute the Unsecured Indebtedness of the Credit Party givingthe guaranty),

 

(iii) any unsecured guaranty given by any Credit Partyof the unsecured indebtedness of a Person who is not a Credit Party constitutesthe Unsecured Indebtedness of such Credit Party giving the guaranty,

 

(iv) any unsecured guaranty given by any Credit Party ofthe unsecured Indebtedness of another Credit Party constitutes the UnsecuredIndebtedness of the Credit Party directly incurring such Indebtedness and shallnot be calculated as part of the Indebtedness (either Secured or Unsecured) ofsuch Credit Party giving the guaranty (except to the extent that the relevantcalculation does not otherwise account for the Indebtedness of the Credit Partydirectly incurring the underlying unsecured indebtedness, in which case itshall constitute the Unsecured Indebtedness of the Credit Party giving theguaranty),

 

(v) any secured guaranty given by any Credit Party ofsecured indebtedness of a Person who is not a Credit Party constitutes SecuredIndebtedness of such Credit Party giving the guaranty,

 

(vi) any secured guaranty given by any Credit Party ofthe secured indebtedness of another Credit Party constitutes the SecuredIndebtedness of the Credit Party directly incurring the secured indebtednessand shall not be calculated as part of the Indebtedness (either Secured orUnsecured) of such Credit Party giving the guaranty (except to the extent thatthe relevant calculation does not otherwise account for the Indebtedness of theCredit Party directly incurring the underlying secured indebtedness, in whichcase it shall constitute the Secured Indebtedness of the Credit Party givingthe guaranty),

 

(vii) any secured guaranty given by any Credit Party ofthe unsecured indebtedness of a Person who is not a Credit Party constitutesthe Secured Indebtedness of such Credit Party giving the guaranty, and

 

(viii) any secured guaranty given by any Credit Party ofthe unsecured Indebtedness of another Credit Party constitutes the SecuredIndebtedness of such Credit Party giving the guaranty and shall not be calculatedas part of the Indebtedness (either Secured or Unsecured) of the Credit Partydirectly incurring such Indebtedness (except to the extent that the relevantcalculation does not otherwise account for the Indebtedness of such CreditParty giving the guaranty, in which case it shall constitute the UnsecuredIndebtedness of the Credit Party directly incurring the underlying unsecuredindebtedness).

 

“Secured Parties” shall have the meaning given tosuch term in the Intercreditor Agreement.

 

“Securities Act” means the Securities Act of1933, as amended, and all regulations issued pursuant thereto.

 

“Securitization Asset Sale”means a transaction consisting of one or more limited recourse or nonrecoursetransfers by the Borrower, the General Partner or any of their Subsidiaries, toa Special Purpose Entity, of promissory notes, mortgage loans, net leased realproperty interests, investment securities representing an interest in orsecured by debt or equity tranches of investment securities, chattel paper,leases or other similar financial assets originated by the General Partner, theBorrower or any other Subsidiary thereof, together with any related title orother insurance policies, hedge agreements and other assets directly related tosuch financial assets, which transfers may properly be, and is, accounted foron the consolidated balance sheet of the General Partner as a sale inconformity with Financial Accounting Standards Board Statement of FinancialAccounting Standard No. 125 followed by either (x) limited recourse ornonrecourse sales of such financial assets (or interests therein) by suchSpecial Purpose Entity

 

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to one or more Persons the accounts of which would not be required to beconsolidated with those of the General Partner in their consolidated financialstatements in accordance with GAAP (provided that subordinated interests insuch financial assets and I/O Strips may be issued or sold to any Person) or(y) the incurrence by such Special Purpose Entity of Indebtedness secured by aLien encumbering only the assets of such Special Purpose Entity; provided thatall of the Indebtedness, liabilities and other obligations of such SpecialPurpose Entity incurred in connection with such transactions are nonrecoursefor the payment or performance thereof to the General Partner, the Borrower orany other Subsidiary (excluding such Special Purpose Entity) other than thefollowing: (a) reasonable and customary obligations of the General Partner, theBorrower or any other Subsidiary with respect to (i) the servicing of anyassets which are the subject of such transaction, (ii) administrative andministerial matters relating to such Special Purpose Entity, (iii) maintenanceof the corporate separateness of such Special Purpose Entity from that of theGeneral Partner and its other Subsidiaries, and (iv) the guaranty of payment offees of any Person acting as a trustee in connection with such transaction andindemnification obligations owing to any such Person; (b) reasonable andcustomary repurchase obligations and other liabilities resulting from thebreach of representations, warranties and covenants that are not related tocreditworthiness of the obligors on the financial assets the subject of suchtransactions and (c) limited recourse provisions giving rise to Indebtednesssolely to the extent permitted under Section 8.1.  For purposes of this definition, whether anobligation or liability is “reasonable and customary” shall be determined withreference to terms of similar transactions prevailing as of the date hereof.

 

“Securities Exchange Act” means the SecuritiesExchange Act of 1934, as amended, and all regulations issued pursuant thereto.

 

“Security Documents” means a collectivereference to , the USRP Pledge Agreement, the USRP Holding Pledge Agreement,the JV1 Pledge Agreement, any UCC financingstatements securing payment under any of such documents, and any otherdocuments securing the obligations of the Credit Parties under this CreditAgreement or any other Credit Document (in each case as the same may beamended, modified, restated, supplemented, extended, renewed or replaced fromtime to time).

 

“Single Employer Plan” means any Plan which iscovered by Title IV of ERISA, but which is not a Multiemployer Plan or aMultiple Employer Plan.

 

“Solvent” or “Solvency” means, withrespect to any Person as of a particular date, that on such date (i) suchPerson is able to pay its debts and other liabilities, contingent obligationsand other commitments as they mature in the normal course of business,(ii) such Person does not intend to, and does not believe that it will,incur debts or liabilities beyond such Person’s ability to pay as such debtsand liabilities mature in their ordinary course, (iii) such Person is notengaged in a business or a transaction, and is not about to engage in abusiness or a transaction, for which such Person’s Property would constituteunreasonably small capital after giving due consideration to the prevailingpractice in the industry in which such Person is engaged or is to engage,(iv) the fair value of the Property of such Person is greater than thetotal amount of liabilities, including, without limitation, contingentliabilities, of such Person and (v) the present fair salable value of theassets of such Person is not less than the amount that will be required to paythe probable liability of such Person on its debts as they become absolute andmatured.  In computing the amount ofcontingent liabilities at any time, it is intended that such liabilities willbe computed at the amount which, in light of all the facts and circumstancesexisting at such time, represents the amount that can reasonably be expected tobecome an actual or matured liability.

 

“Special Purpose Entity” means any Person (a)which has a legal structure and capitalization intended to make such entity a“bankruptcy remote” entity and which legal structure and capitalization havebeen approved in writing by the Agent; (b) which has been organized for thesole purpose of effecting a structured financing; (c) which has no assets otherthan (i) the financial assets directly acquired in connection with, and whichare the subject of, such structured financing, and any related title or otherinsurance policies, hedge agreements and other assets directly related to suchfinancial assets, (ii) cash and other assets contributed or distributed to suchPerson, or otherwise acquired by it, in connection with such structuredfinancing, and which assets are retained by such Person either pursuant to therequirements of such structured financing or to permit it to fulfill itsobligations under the terms of such structured

 

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financing,(iii) assets which such Person is to (and does in fact) dispose of promptly,and in any event within two Business Days, following such Person’s acquisitionof such assets, and (iv) in the case of a Securitization Asset Sale,subordinated interests acquired in connection with such Securitization Asset Sale;(d) which has no Indebtedness, liabilities or other obligations other than (i)those directly incurred in connection with such structured financing, (ii) anyliabilities resulting from representations and warranties made by such Personwith respect to any such financial assets or other assets being transferred byit to another Person so long as such representations and warranties (A) arecustomary or (B) are substantially similar to those made to such Person whensuch assets were initially transferred to it and (iii) trade payables incurredin the ordinary course of trade or business in an aggregate amount not toexceed $100,000; and (e) which none of the General Partner, the Borrower or anyother Subsidiaries thereof have any direct obligation to maintain or preservesuch Person’s financial condition or to cause such Person to achieve anyspecified levels of operating results except as otherwise permitted inconnection with such structured financing.

 

“Subordinated Interest”means a subordinate interest (whether characterized as debt or equity, andincluding without limitation, general and limited partnership interests,participation certificates and trust certificates) in a pool of promissorynotes, mortgage loans, chattel paper, leases or other similar financial assets,issued in connection with a Securitization Asset Sale or otherwise.

 

“Subsidiary” means, as to any Person at anytime, (a) any corporation more than 50% of whose Capital Stock of anyclass or classes having by the terms thereof ordinary voting power to elect amajority of the directors of such corporation (irrespective of whether or notat such time, any class or classes of such corporation shall have or might havevoting power by reason of the happening of any contingency) is at such time ownedby such Person directly or indirectly through Subsidiaries, and (b) anypartnership, association, joint venture or other entity of which such Persondirectly or indirectly through Subsidiaries owns at such time more than 50% ofthe Capital Stock.

 

“Subsidiary Guarantor” means each of thePersons identified as a “Subsidiary Guarantor” on the signature pages heretoand each Person which may hereafter execute a Joinder Agreement pursuant toSection 7.12, together with their successors and permitted assigns, and “SubsidiaryGuarantor” means any one of them.

 

“Synthetic Lease” means any synthetic lease,tax retention operating lease, off-balance sheet loan or similar off-balancesheet financing product where such transaction is considered borrowed money indebtednessfor tax purposes but is classified as an Operating Lease under GAAP.

 

“Tangible Net Worth” means, as of any givencalculation date, (a) Total Tangible Assets, less (b) the sum of (i)Total Liabilities less (ii) the aggregate of the amounts added to TotalLiabilities pursuant to clauses (b) and (d) of the definition thereof and inconnection with proviso items (i) and (ii)(A) and (C) contained in suchdefinition.

 

“Taxes” shall have the meaning assigned to suchterm in Section 3.11(a).

 

“Tenant” means any Person (or their respectiveAffiliates) who is a lessee with respect to any lease held by the Borrower aslessor or as an assignee of the lessor thereunder.

 

“Term Loan” or “Term Loans” shall havethe meanings assigned to such terms in Section 2.1(a) hereof.

 

“Term Note” or “Term Notes” means thepromissory notes of the Borrower in favor of each Lender provided pursuant toSection 2.1(a) and evidencing the Term Loans of such Lender, individuallyor collectively, as appropriate, as such promissory notes may be amended,modified, restated, supplemented, extended, renewed or replaced from time totime.

 

“Term Securitization”means a Securitization Asset Sale (a) involving only a single transfer (orseries of related and substantially contemporaneous transfers) to a SpecialPurpose Entity of financial

 

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assets, and any related title or other insurance policies, hedgeagreements and other assets directly related to such financial assets, by theGeneral Partner, the Borrower or any other Subsidiary thereof other than anytransfer of such assets (i) being substituted for any asset previouslytransferred pursuant to customary and reasonable repurchase and substitutionobligations resulting from the breach of representations, warranties andcovenants that are not related to the creditworthiness of the obligor on thefinancial assets or (ii) being substituted for cash collateral or a cashdeposit (including in connection with reasonable and customary “pre-funding”arrangements), and (b) under which the Persons acquiring such financial assets(or interests therein) from the applicable Special Purpose Entity or makingadvances to such Special Purpose Entity secured directly or indirectly by suchfinancial assets, are neither required nor permitted to acquire additionalfinancial assets (or interests therein) from, or otherwise make additionaladvances to, such Special Purpose Entity, except as otherwise permitted underthe immediately preceding clause (a).

 

“Total Liabilities”means the sum of (a) total liabilities of the Consolidated Parties on aconsolidated basis, as determined in accordance with GAAP, plus (b) anamount equal to the aggregate total liabilities, as determined in accordancewith GAAP, of each Unconsolidated Affiliate multiplied by the respectiveUnconsolidated Affiliate Interest of each such entity plus (c) withoutduplication, the Indebtedness of the Consolidated Parties on a consolidatedbasis plus (d) without duplication, the aggregate of Indebtedness(including, without limitation, all Contingent Obligations) of eachUnconsolidated Affiliate multiplied by the respective Unconsolidated AffiliateInterest of each such entity; provided, that (i) in each case, all of the aboveamounts not otherwise adjusted to account for Minority Interests shall beadjusted to deduct therefrom the pro rata share of such amounts allocable tothe Minority Interests (except to the extent any Credit Party would be legallyliable for the full amount of such liabilities) and (ii) notwithstandinganything contained herein to the contrary, “Total Liabilities” shall include,without duplication (A) all obligations ofany Consolidated Party to purchase, redeem, retire, defease or otherwise makeany payment in respect of any Preferred Stock of any entity in which it ownsany Capital Stock, valued, in the case of redeemable Preferred Stock, at thegreater of its voluntary or involuntary liquidation preference plus accrued andunpaid dividends; (B) the maximum amount that could be owed by anyConsolidated Party with respect to all of such Consolidated Party’s otherPreferred Stock and (C) the amount equal to (1) the maximum amount that couldbe owed by any Unconsolidated Affiliate with respect to such UnconsolidatedAffiliate’s Preferred Stock, multiplied by (2) the respective UnconsolidatedAffiliate Interest of each such entity.

 

“Total Rent” means, with respect to rentalincome used in calculating Borrowing Base Asset Value, gross rental income fromall Borrowing Base Assets over the applicable period.

 

“Total Tangible Assets” means the sum of (a)Asset Values of each of the Real Properties, plus (b) the book value ofall other assets and interests therein held by the Consolidated Parties(provided, that, the amounts calculated pursuant to clauses (a) and (b) above(i) shall include, without duplication, each Consolidated Parties’ interests inthe assets of any Unconsolidated Affiliate and (ii) shall not include anyinterests in assets which are attributable to any Minority Interests), less(c) the value of all intangible assets, if any, included in (a) and (b) above.

 

“Type” with respect toany Loan, refers to whether such Loan is a Eurodollar Loan or Base Rate Loan.

 

“Unconsolidated Affiliate Interest” means thepercentage of the Capital Stock or other equity interest owned by aConsolidated Party in a Unconsolidated Affiliate accounted for pursuant to theequity method of accounting under GAAP.

 

“Unconsolidated Affiliate” means anycorporation, partnership, association, joint venture or other entity, in eachcase which is not a Consolidated Party, in which a Consolidated Party owns,directly or indirectly, Capital Stock or any other equity interest.

 

“Unsecured Indebtedness”means, with respect to any Person and for any given calculation date, allIndebtedness of such Person that is not Secured Indebtedness, including allIndebtedness in respect of Capitalized Lease Obligations (subject to theprovisions and allocation rules set forth in the definition of

 

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“Secured Indebtedness” set forth herein). For purposes of calculating theFinancial Covenants, the Credit Party Obligations and the Revolver Obligationsshall be deemed Unsecured Indebtedness.

 

“USRP Holding” has the meaning given to such term in the Preamble of this CreditAgreement.

 

“USRP Holding Pledge Agreement” means that certain Pledge and Security Agreemententered into by USRP Holding as of November 4, 2003 in favor of the Collateral Agent and for the benefit of the CreditorGroup.

 

“USRP Operating” has themeaning given to such term in the Preamble of this Credit Agreement.

 

“USRP Pledge Agreement”means that certain Pledge and Security Agreement entered into by USRP Operatingas of the date hereof in favor of the Collateral Agent and for the benefit ofthe Creditor Group.

 

“USRP REIT” meansU.S.  Restaurant Properties, Inc..

 

“Value” means, with respect to any ConsolidatedParty’s interest in any Real Property, the book value of such interest in RealProperty plus accumulated depreciation with respect thereto (provided,for purposes of clarification, that the “Value” of any interest in RealProperty shall not include any amount of the book value of such Real Propertyinterest attributable to Minority Interests).

 

“Voting Stock” means, with respect to anyPerson, Capital Stock issued by such Person the holders of which areordinarily, in the absence of contingencies, entitled to vote for the electionof directors (or persons performing similar functions) of such Person, even thoughthe right so to vote has been suspended by the happening of such a contingency.

 

“Wholly Owned Subsidiary” means any Person 100%of whose Voting Stock is at the time owned by the Borrower directly orindirectly through other Persons 100% of whose Voting Stock is at the timeowned, directly or indirectly, by the Borrower.

 

## **1.2          Computation of Time Periods.**

 

For purposes ofcomputation of periods of time hereunder, the word “from” means “from andincluding” and the words “to” and “until” each mean “to but excluding.”

 

## **1.3          Accounting Terms.**

 

Except asotherwise expressly provided herein, all accounting terms used herein shall beinterpreted, and all financial statements and certificates and reports as tofinancial matters required to be delivered to the Lenders hereunder shall beprepared, in accordance with GAAP applied on a consistent basis; provided,however, that calculations of the implied principal component of allobligations under any Synthetic Lease or the implied interest component of anyrent paid under any Synthetic Lease shall be made by the Borrower in accordancewith accepted financial practice and consistent with the terms of suchSynthetic Lease.  All calculations madefor the purposes of determining compliance with this Credit Agreement shall(except as otherwise expressly provided herein) be made by application of GAAPapplied on a basis consistent with the most recent annual or quarterlyfinancial statements delivered pursuant to Section 7.1 (or, prior to thedelivery of the first financial statements pursuant to Section 7.1,consistent with the financial statements as at September 30, 2003), but, in anyevent, after elimination for Unconsolidated Affiliate Interests;****provided,however, if (a) the Credit Parties shall object to determining suchcompliance on such basis at the time of delivery of such financial statementsdue to any change in GAAP or the rules promulgated with respect thereto or(b) the Agent or the Required Lenders shall so object in writing within 60days after delivery of such financial statements, then such calculations shallbe made on a basis consistent with the most recent financial statementsdelivered by the Credit Parties to the Lenders as to which no such objectionshall have been made.

 

Notwithstandingthe above or anything contained herein to the contrary, the provisions setforth in FAS 133 shall not be used in accounting for derivatives instrumentsand hedging activities in the definitions contained herein.

 

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## **1.4          References to Agreements and Laws.**

 

Unless otherwiseexpressly provided herein, (a) references to organizational documents,agreements (including the Credit Documents and the Revolving Credit Documents)and other contractual instruments shall be deemed to include all subsequentamendments, restatements, extensions, supplements and other modificationsthereto, but only to the extent that such amendments, restatements, extensions,supplements and other modifications are not prohibited by any Credit Document;and (b) references to any law, rule, regulation, mandate, standard orrequirement shall include all provisions consolidating, amending, replacing,supplementing or interpreting such law, rule, regulation, mandate, standard orrequirement.

 

## **1.5          Times of Day.**

 

Unless otherwisespecified, all references herein to times of day shall be deemed to bereferences to Charlotte, North Carolina time.

 

# **ARTICLE II**CREDIT FACILITIES

 

## **2.1          Term Loans.**

 

(a)           TermLoan Commitment.  Subject to theterms and conditions set forth herein, each Lender severally agrees to make aloan (each such loan, a “Term Loan” and, collectively, the “TermLoans”) to the Borrower in an aggregate amount not to exceed the amount ofsuch Lender’s Commitment.  Amountsrepaid on the Term Loans may not be reborrowed.  The Borrower shall make principal and interest payments on theTerm Loans in accordance with the terms hereof.  Each Term Loan shall be evidenced by a promissory note of theBorrower to the appropriate Lender in substantially the form of Exhibit C(each a “Term Note”).  The TermLoans may, from time to time at the option of the Borrower (subject to theterms and conditions set forth in this Credit Agreement, including, withoutlimitation, Sections 2.1(d) and 3.2), consist of Base Rate Loans or EurodollarLoans, or a combination thereof, as the Borrower may request (subject to theterms and conditions set forth herein); provided, however, thatno more than five (5)****Eurodollar Loans shall be outstandinghereunder at any time (it being understood that, for purposes hereof,Eurodollar Loans with different Interest Periods shall be considered asseparate Eurodollar Loans, even if they begin on the same date, althoughborrowings, extensions and conversions may, in accordance with the provisionshereof, be combined at the end of existing Interest Periods to constitute a newEurodollar Loan with a single Interest Period).

 

(b)           BorrowingProcedures.

 

(i)            Notwithstanding anything containedherein to the contrary, (A) the Borrower shall be entitled to no more than oneadvance (the “Advance”) of the Term Loans hereunder, (B) the Advanceshall be in an amount equal to or less than the Maximum Loan Amount and (C) tothe extent the Borrower has not requested the Advance on or before November 15,2003, this Credit Agreement and the Lenders’ respective obligations andcommitments to make the Term Loans shall automatically terminate without noticeto the Borrower; provided, however, that Borrower shall remain responsible forpayment of all costs and expenses incurred by the Administrative Agent inaccordance with Sections 5.1(f) and 11.5 hereof and for allapplicable fees due and owing pursuant to the terms hereof.  The Borrower shall submit an appropriateNotice of Borrowing to the Agent not later than 11:00 A.M. (Charlotte, NorthCarolina time) on the Business Day most nearly preceding the date on which itdesires to receive the Advance (which date shall be a Business Day).  Such Notice of Borrowing shall be irrevocable,shall specify (1) the amount of the advance requested, (2) the date on which itrequest the Advance to be made, (3) whether the Advance shall be comprised ofBase Rate Loans, Eurodollar Loans or a combination thereof, and if EurodollarLoans are requested, the Interest Period(s) therefor and (4) shall containcertifications of an Executive Officer of the Borrower stating that each of the

 

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conditions set forth inSections 5.1 and 5.2 hereof for the making of the Advance have been satisfiedas of the date of such requested Advance.

 

(ii)           Following receipt of a Notice ofBorrowing, the Agent shall promptly notify each Lender of the amount of its ProRata Share of the Advance requested therein and each Lender shall make its TermLoan (in an amount not to exceed such Lender’s Commitment) available to theAgent in immediately available funds not later than 1:00 p.m. on theBusiness Day specified in the applicable Notice of Borrowing.  Upon satisfaction of the applicableconditions set forth in Sections 5.1 and 5.2, the Agentshall make all funds so received available to the Borrower in like funds asreceived by the Agent by wire transfer of such funds in accordance withinstructions provided to (and reasonably acceptable to) the Agent by theBorrower.

 

(c)           PrincipalPayments.  Except to the extentaccelerated or otherwise due sooner pursuant to the provisions hereof or of anyother Credit Document, the Borrower shall not be required to make any principalpayments on the Term Loans until the Maturity Date.  The entire principal balance of the Term Loans shall be due andpayable as of the Maturity Date. Notwithstanding anything to the contrary contained herein, to the extentthe principal balance of the Term Loans is accelerated pursuant to the terms ofthe Credit Documents, the entire Outstanding Amount and all other amounts dueunder the Credit Documents shall be immediately due and payable as of the dateof such acceleration.

 

(d)           Interest.  Subject to the provisions ofSection 3.1,

 

(i)            Base Rate Loans.  During such periods as Term Loans shall becomprised in whole or in part of Base Rate Loans, such Base Rate Loans shallbear interest at a per annum rate equal to the Adjusted Base Rate.

 

(ii)           Eurodollar Loans.  During such periods as Term Loans shall becomprised in whole or in part of Eurodollar Loans, such Eurodollar Loans shallbear interest at a per annum rate equal to the Adjusted Eurodollar Rate.

 

Interest on TermLoans shall be payable in arrears on each applicable Interest Payment Date (orat such other times as may be specified herein).

 

## **2.2          Joint and Several Liability of theBorrowers.**

 

(a)           Eachof the Borrowers is accepting joint and several liability hereunder inconsideration of the financial accommodation to be provided by the Lenders underthis Credit Agreement, for the mutual benefit, directly and indirectly, of eachof the Borrowers and in consideration of the undertakings of each of theBorrowers to accept joint and several liability for the obligations of each ofthem.

 

(b)           Eachof the Borrowers jointly and severally hereby irrevocably and unconditionallyaccepts, not merely as a surety but also as a co-debtor, joint and severalliability with the other Borrowers with respect to the payment and performanceof all of the Credit Party Obligations arising under this Credit Agreement andthe other Credit Documents, it being the intention of the parties hereto thatall the Credit Party Obligations shall be the joint and several obligations ofeach of the Borrowers without preferences or distinction among them.

 

(c)           Ifand to the extent that any of the Borrowers shall fail to make any payment withrespect to any of the obligations hereunder as and when due or to perform anyof such obligations in accordance with the terms thereof, then in each suchevent, the other Borrowers will make such payment with respect to, or perform,such obligation.

 

(d)           Theobligations of each Borrower under the provisions of this Section 2.2constitute full recourse obligations of such Borrower, enforceable against itto the full extent of its properties and assets,

 

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irrespective ofthe validity, regularity or enforceability of this Credit Agreement or anyother circumstances whatsoever.

 

(e)           Exceptas otherwise expressly provided herein, each Borrower hereby waives notice ofacceptance of its joint and several liability, notice of occurrence of anyDefault or Event of Default (except to the extent notice is expressly requiredto be given pursuant to the terms of this Credit Agreement), or of any demandfor any payment under this Credit Agreement, notice of any action at any timetaken or omitted by the Lender under or in respect of any of the Credit PartyObligations hereunder, any requirement of diligence and, generally, alldemands, notices and other formalities of every kind in connection with thisCredit Agreement.  Each Borrower herebyassents to, and waives notice of, any extension or postponement of the time forthe payment of any of the Credit Party Obligations hereunder, the acceptance ofany partial payment thereon, any waiver, consent or other action oracquiescence by the Lenders at any time or times in respect of any default byany Borrower in the performance or satisfaction of any term, covenant, conditionor provision of this Credit Agreement, any and all other indulgences whatsoeverby the Lenders in respect of any of the Credit Party Obligations hereunder, andthe taking, addition, substitution or release, in whole or in part, at any timeor times, of any security for any of such Credit Party Obligations or theaddition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of theforegoing, each Borrower assents to any other action or delay in acting or anyfailure to act on the part of the Lender, including, without limitation, anyfailure strictly or diligently to assert any right or to pursue any remedy orto comply fully with applicable laws or regulations thereunder which might, butfor the provisions of this Section 2.2, afford grounds for terminating,discharging or relieving such Borrower, in whole or in part, from any of itsobligations under this Section 2.2, it being the intention of eachBorrower that, so long as any of the Credit Party Obligations hereunder remainunsatisfied, the obligations of such Borrower under this Section 2.2 shallnot be discharged except by performance and then only to the extent of suchperformance.  The obligations of eachBorrower under this Section 2.2 shall not be diminished or renderedunenforceable by any winding up, reorganization, arrangement, liquidation,reconstruction or similar proceeding with respect to any reconstruction orsimilar proceeding with respect to any Borrower or any Lender.  The joint and several liability of theBorrowers hereunder shall continue in full force and effect notwithstanding anyabsorption, merger, amalgamation or any other change whatsoever in the name,membership, constitution or place of formation of any Borrower or any Lender.

 

(f)            Theprovisions of this Section 2.2 are made for the benefit of the Agent andthe Lenders and their respective successors and assigns, and may be enforced byany such Person from time to time against any of the Borrowers as often asoccasion therefor may arise and without requirement on the part of any Lenderfirst to marshal any of its claims or to exercise any of its rights against anyof the other Borrowers or to exhaust any remedies available to it against anyof the other Borrowers or to resort to any other source or means of obtainingpayment of any of the Credit Party Obligations or to elect any otherremedy.  Without limiting the generalityof the foregoing, each Borrower hereby specifically waives the benefits of N.C.  Gen. Stat.  §§26-7 through 26-9, inclusive,to the extent applicable.  Theprovisions of this Section 2.2 shall remain in effect until all the CreditParty Obligations hereunder shall have been paid in full or otherwise fullysatisfied.  If at any time, any payment,or any part thereof, made in respect of any of the Credit Party Obligations, isrescinded or must otherwise be restored or returned by the Lenders upon theinsolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise,the provisions of this Section 2.2 will forthwith be reinstated and ineffect as though such payment had not been made.

 

(g)           Notwithstandingany provision to the contrary contained herein or in any other of the CreditDocuments or Hedging Agreements, the obligations of each Borrower hereundershall be limited to an aggregate amount equal to the largest amount that wouldnot render its obligations hereunder subject to avoidance underSection 548 of the Bankruptcy Code or any comparable provisions of anyapplicable state law.

 

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## **2.3**          Appointment of Principal Borroweras Agent for Borrowers.

 

Each Borrowerhereby appoints the Principal Borrower to act as its exclusive agent for allpurposes under this Credit Agreement and the other Credit Documents (including,without limitation, with respect to all matters related to the borrowing andrepayment of loans as described in Articles II and III hereof).  Each Borrower acknowledges and agrees that(a) the Principal Borrower may execute such documents on behalf of all theBorrowers as the Principal Borrower deems appropriate in its sole discretionand each Borrower shall be bound by and obligated by all of the terms of anysuch document executed by the Principal Borrower on its behalf, (b) any noticeor other communication delivered by the Agent or any Lender hereunder to thePrincipal Borrower shall be deemed to have been delivered to each Borrower and(c) the Agent and each of the Lenders shall accept (and shall be permitted torely on) any document or agreement executed by the Principal Borrower on behalfof the Borrowers (or any of them).  TheBorrowers must act through the Principal Borrower for all purposes under thisCredit Agreement and the other Credit Documents.  Notwithstanding anything contained herein to the contrary, to theextent any provision in this Credit Agreement requires any Borrower to interactin any manner with the Agent or the Lenders, such Borrower shall do so throughthe Principal Borrower.

 

# **ARTICLE III**OTHER PROVISIONS RELATING TO CREDIT FACILITIES

 

## **3.1          Default Rate.**

 

Upon theoccurrence, and during the continuance, of an Event of Default, the principalof and, to the extent permitted by law, interest on the Loans and any otheramounts owing hereunder or under the other Credit Documents shall bearinterest, payable on demand, at a per annum at a per annum rate equal to theAdjusted Base Rate plus five percent (5.0%).

 

## **3.2          Continuation/Conversion.**

 

(a)           Solong as no Event of Default shall have occurred and be continuing and to theextent permitted in the definition of the term “Interest Period”, the Borrowermay on any Business Day, with respect to any Eurodollar Loan, elect to maintainsuch Eurodollar Loan or any portion thereof as a Eurodollar Loan by selecting anew Interest Period for such Eurodollar Loan. Each new Interest Period selected under this Section 3.2 shallcommence on the last day of the immediately preceding Interest Period.  Each selection of a new Interest Periodshall be made by the Borrower giving to the Agent a Notice of Continuation notlater than 11:00 A.M. on the third Business Day prior to the date of anysuch Continuation.  Such notice by theBorrower of a Continuation shall be by telephone or telecopy, confirmed immediatelyin writing if by telephone, in the form of a Notice of Continuation, (a)specifying (i) the proposed date of such Continuation, (ii) the Eurodollar Loanand portion thereof subject to such Continuation and (iii) the duration of theselected Interest Period, all of which shall be specified in such manner as isnecessary to comply with all limitations on Loans outstanding hereunder and (b)containing certifications of the Borrower with respect to the conditions setforth in Section 5.2 clauses (b) through (e) as set forth in Exhibit 3.2.  EachNotice of Continuation shall be irrevocable by and binding on the Borrower oncegiven.  Promptly after receipt of aNotice of Continuation, the Agent shall notify each Lender Party by telecopy orother similar form of transmission of the proposed Continuation.  If the Borrower shall fail to select in atimely manner a new Interest Period for any Eurodollar Loan in accordance withthis Section 3.2(a), such Loan will automatically, on the last day of thecurrent Interest Period therefor, Convert into a Base Rate Loan notwithstandingfailure of the Borrower to comply with Section 3.2(b).

 

(b)           Solong as no Default or Event of Default shall have occurred and be continuing,the Borrower may on any Business Day, upon the Borrower’s giving of a Notice ofConversion to the Agent, Convert all or a portion of a Loan of one Type into aLoan of another Type.  Any Conversion ofa Eurodollar Loan into a Base Rate Loan shall be made on, and only on, the lastday of an Interest Period for such Eurodollar Loan and, upon Conversion of aBase Rate Loan into a Eurodollar Loan, the Borrower shall pay accrued interestto the date of Conversion on the principal amount so Converted.  Each such Notice of Conversion shall begiven not later than 12:00 noon on the Business Day prior to the date of any

 

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proposedConversion into Base Rate Loans and on the third Business Day prior to the dateof any proposed Conversion into Eurodollar Loans.  Promptly after receipt of a Notice of Conversion, the Agent shallnotify each Lender Party by telecopy or other similar form of transmission ofthe proposed Conversion.  Subject to therestrictions specified above, each Notice of Conversion shall be by telephone (confirmedimmediately in writing) or telecopy in the form of a Notice of Conversion (a)specifying (i) the requested date of such Conversion, (ii) the Type of Loan tobe Converted, (iii) the portion of such Type of Loan to be Converted, (iv) theType of Loan such Loan is to be Converted into and (v) if such Conversion isinto a Eurodollar Loan, the requested duration of the Interest Period of suchLoan, and (b) containing certifications of the Borrower with respect tothe conditions set forth in Section 5.2 clauses (b) through (e) asset forth in Exhibit 3.2.  Each Notice of Conversion shall beirrevocable by and binding on the Borrower once given.

 

## **3.3          Prepayments.**

 

(a)           Voluntary Prepayments.  The Borrower shall have the right to prepayLoans in whole or in part from time to time; provided, however,that (i) each partial prepayment of Loans shall be in a minimum principalamount of $500,000 and integral multiples of $100,000 in excess thereof (or thethen remaining principal balance of the Loans, (ii) each partial prepaymentshall be accompanied by interest on the principal amount prepaid through thedate of prepayment and include payment for any and all applicable fees,expenses, breakage costs and redeployment costs incurred by the Lenders and theAgent as a result thereof (as such amounts are reasonably calculated by theLenders and the Agent, as applicable, and communicated to the Borrower), (iii)each partial prepayment shall be accompanied by any Prepayment AdministrationFee payable in connection with such prepayment and (iv) all such voluntary prepaymentsshall be made to the Collateral Agent for allocation in accordance with theIntercreditor Agreement.  Subject to theforegoing terms, amounts prepaid under this Section 3.3(a) shall beapplied as the Borrower may elect; provided that if the Borrower shallfail to specify with respect to any voluntary prepayment, such voluntaryprepayment shall be applied first to Base Rate Loans and then to EurodollarLoans in direct order of Interest Period maturities.  All prepayments under this Section 3.3(a) shall be subjectto Section 3.12.

 

(b)           Mandatory Prepayments.

 

(i)                                     (A)          Maximum Loan Amount.  If, at any time, the Outstanding Amount,shall exceed the Maximum Loan Amount, the Borrower immediately shall prepay theLoans in an amount sufficient to eliminate such excess.

 

(B)           Borrowing Base Asset Value.  If, at any time, the sum of (1) theOutstanding Amount, plus (2) the Revolver Obligations shall exceed theBorrowing Base, the Borrower immediately shall prepay the Loans and/or theRevolver Obligations (as determined by the distribution provisions of theIntercreditor Agreement) in an amount sufficient to eliminate such excess.

 

(ii)           Applicationof Mandatory Prepayments. All prepayments under this Section 3.3(b)shall be subject to Section 3.12, but otherwise without premium orpenalty, and shall be accompanied by interest on the principal amount prepaidthrough the date of prepayment.  Allamounts required to be paid pursuant to this Section 3.3(b) shall be appliedfirst, to 100% of the outstanding interest with respect to the Term Loans beingprepaid and, thereafter, to the principal balance of the Term Loans. Allprepayments made hereunder shall be made to the Collateral Agent for allocationin accordance with the Intercreditor Agreement.  Within the parameters of the applications set forth above,prepayments shall be applied first to Base Rate Loans and then to EurodollarLoans in direct order of Interest Period maturities.

 

## **3.4          Intentionally Omitted.**

 

## **3.5          Fees.**

 

(a)           To the extent Borrower makes anyprepayment of the Loans pursuant to Section 3.3(a) during the period commencingon the Closing Date and ending as of the date occurring twelve (12)

 

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calendar monthsthereafter, Borrower shall, together with the applicable prepayment, pay to theAgent (for the benefit of the Lenders) a prepayment administration fee (the “PrepaymentAdministration Fee”) in an amount equal to one percent (1.0%) of theprincipal amount of the Loans being prepaid.

 

(b)           In addition to the foregoing,Borrower shall pay to the Agent and BAS the fees required pursuant to the termsof the Fee Letter.

 

## **3.6          Capital Adequacy.**

 

If any Lender hasdetermined, after the date hereof, that the adoption or the becoming effectiveof, or any change in, or any change by any Governmental Authority, central bankor comparable agency charged with the interpretation or administration thereofin the interpretation or administration of, any applicable law, rule orregulation regarding capital adequacy, or compliance by such Lender with anyrequest or directive regarding capital adequacy (whether or not having theforce of law) of any such authority, central bank or comparable agency, has orwould have the effect of reducing the rate of return on such Lender’s capitalor assets as a consequence of its Loans or obligations hereunder to a levelbelow that which such Lender could have achieved but for such adoption,effectiveness, change or compliance (taking into consideration such Lender’spolicies with respect to capital adequacy), then, upon notice from such Lenderto the Borrower, the Borrower shall be obligated to pay to such Lender suchadditional amount or amounts as will compensate such Lender for such reduction(without duplication of any amount received by Lender by virtue of thedefinition of the term “Eurodollar Reserve Requirement”).  Each determination by any such Lender ofamounts owing under this Section shall, absent manifest error, beconclusive and binding on the parties hereto.

 

## **3.7          Limitation on Eurodollar Loans.**

 

If on or prior to thefirst day of any Interest Period for any Eurodollar Loan:

 

(a)           theAgent determines (which determination shall be conclusive) that by reason ofcircumstances affecting the relevant market, adequate and reasonable means donot exist for ascertaining the Eurodollar Rate for such Interest Period; or

 

(b)           theRequired Lenders determine (which determination shall be conclusive) and notifythe Agent that the Eurodollar Rate will not adequately and fairly reflect thecost to the Lenders of funding Eurodollar Loans for such Interest Period;

 

then the Agentshall give the Borrower prompt notice thereof, and so long as such conditionremains in effect, the Lenders shall be under no obligation to make additionalEurodollar Loans, Continue Eurodollar Loans, or to Convert Base Rate Loans intoEurodollar Loans and the Borrower shall, on the last day(s) of the then currentInterest Period(s) for the outstanding Eurodollar Loans, either prepay suchEurodollar Loans or Convert such Eurodollar Loans into Base Rate Loans inaccordance with the terms of this Credit Agreement.

 

## **3.8          Illegality.**

 

Notwithstandingany other provision of this Credit Agreement, in the event that it becomesunlawful for any Lender or its Applicable Lending Office to make, maintain, orfund Eurodollar Loans hereunder, then such Lender shall promptly notify theBorrower thereof and such Lender’s obligation to make or Continue EurodollarLoans and to Convert Base Rate Loans into Eurodollar Loans shall be suspended untilsuch time as such Lender may again make, maintain, and fund Eurodollar Loans(in which case the provisions of Section 3.10 shall be applicable).

 

## **3.9          Requirements of Law.**

 

If, after the datehereof, the adoption of any applicable law, rule, or regulation, or any changein any applicable law, rule, or regulation, or any change in the interpretationor administration thereof by any Governmental Authority, central bank, orcomparable agency charged with the interpretation or administration thereof, orcompliance by any Lender (or its Applicable Lending Office) with any request ordirective (whether or not having the force of law) of any such GovernmentalAuthority, central bank, or comparable agency:

 

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(i)        shall subject such Lender (or itsApplicable Lending Office) to any tax, duty, or other charge with respect toany Eurodollar Loans, its Notes, or its obligation to make Eurodollar Loans, orchange the basis of taxation of any amounts payable to such Lender (or itsApplicable Lending Office) under this Credit Agreement or its Notes in respectof any Eurodollar Loans (other than taxes imposed on the overall net income ofsuch Lender by the jurisdiction in which such Lender has its principal officeor such Applicable Lending Office);

 

(ii)       shall impose, modify, or deem applicableany reserve, special deposit, assessment, or similar requirement (other thanthe Eurodollar Reserve Requirement utilized in the determination of theAdjusted Eurodollar Rate) relating to any extensions of credit or other assetsof, or any deposits with or other liabilities or commitments of, such Lender(or its Applicable Lending Office), including the Commitment of such Lenderhereunder; or

 

(iii)      shall impose on such Lender (or its ApplicableLending Office) or the London interbank market any other condition affectingthis Credit Agreement or its Notes or any of such extensions of credit orliabilities or commitments;

 

andthe result of any of the foregoing is to increase the cost to such Lender (orits Applicable Lending Office) of making, Converting into, Continuing, ormaintaining any Eurodollar Loans or to reduce any sum received or receivable bysuch Lender (or its Applicable Lending Office) under this Credit Agreement orits Notes with respect to any Eurodollar Loans, then the Borrower shall pay tosuch Lender on demand such amount or amounts as will compensate such Lender forsuch increased cost or reduction.  Ifany Lender requests compensation by the Borrower under this Section 3.9,the Borrower may, by notice to such Lender (with a copy to the Agent), suspendthe obligation of such Lender to make or Continue Eurodollar Loans, or toConvert Base Rate Loans into Eurodollar Loans, until the event or conditiongiving rise to such request ceases to be in effect (in which case theprovisions of Section 3.10 shall be applicable); provided that suchsuspension shall not affect the right of such Lender to receive thecompensation so requested.  Each Lendershall promptly notify the Borrower and the Agent of any event of which it hasknowledge, occurring after the date hereof, which will entitle such Lender tocompensation pursuant to this Section 3.9 and will designate a differentApplicable Lending Office if such designation will avoid the need for, orreduce the amount of, such compensation and will not, in the judgment of suchLender, be otherwise disadvantageous to it. Any Lender claiming compensation under this Section 3.9 shallfurnish to the Borrower and the Agent a statement setting forth the additionalamount or amounts to be paid to it hereunder which shall be conclusive in theabsence of manifest error.  Indetermining such amount, such Lender may use any reasonable averaging andattribution methods.

 

## **3.10        Treatment of Affected Loans.**

 

If the obligation of anyLender to make any Eurodollar Loan or to Continue, or to Convert Base RateLoans into, Eurodollar Loans shall be suspended pursuant to Section 3.7,3.8 or 3.9 hereof, such Lender’s Eurodollar Loans shall be automatically Convertedinto Base Rate Loans on the last day(s) of the then current Interest Period(s)for such Eurodollar Loans (or, in the case of a Conversion, on such earlierdate as such Lender may specify to the Borrower with a copy to the Agent) and,unless and until such Lender gives notice as provided below that thecircumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave riseto such Conversion no longer exist:

 

(a)           tothe extent that such Lender’s Eurodollar Loans have been so Converted, allpayments and prepayments of principal that would otherwise be applied to suchLender’s Eurodollar Loans shall be applied instead to its Base Rate Loans; and

 

(b)           allLoans that would otherwise be made or Continued by such Lender as EurodollarLoans shall be made or Continued instead as Base Rate Loans, and all Base RateLoans of such Lender that would otherwise be Converted into Eurodollar Loansshall remain as Base Rate Loans.

 

If such Lendergives notice to the Borrower (with a copy to the Agent) that the circumstancesspecified in Section 3.7, 3.8 or 3.9 hereof that gave rise to theConversion of such Lender’s Eurodollar Loans pursuant to this Section 3.10no longer exist (which such Lender agrees to do promptly upon suchcircumstances ceasing to exist) at a time when Eurodollar Loans made by otherLenders are outstanding, such Lender’s Base Rate Loans shall be automaticallyConverted, on the first day(s) of the next succeeding Interest Period(s) forsuch outstanding Eurodollar Loans, to the

 

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extent necessaryso that, after giving effect thereto, all Loans held by the Lenders holdingEurodollar Loans and by such Lender are held pro rata (as to principal amounts,interest rate basis, and Interest Periods) in accordance with their respectiveCommitments.

 

## **3.11        Taxes.**

 

(a)           Anyand all payments by any Credit Party to or for the account of any Lender or theAgent hereunder or under any other Credit Document shall be made free and clearof and without deduction for any and all present or future taxes, duties,levies, imposts, deductions, charges or withholdings, and all liabilities withrespect thereto, excluding, in the case of each Lender and the Agent,taxes imposed on its income, and franchise taxes imposed on it by thejurisdiction under the laws of which such Lender (or its Applicable LendingOffice) or the Agent (as the case may be) is organized or any politicalsubdivision thereof (all such non-excluded taxes, duties, levies, imposts,deductions, charges, withholdings, and liabilities being hereinafter referredto as “Taxes”).  If any CreditParty shall be required by law to deduct any Taxes from or in respect of anysum payable under this Credit Agreement or any other Credit Document to anyLender or the Agent, (i) the sum payable shall be increased as necessaryso that after making all required deductions (including deductions applicableto additional sums payable under this Section 3.11) such Lender or theAgent receives an amount equal to the sum it would have received had no suchdeductions been made, (ii) such Credit Party shall make such deductions,(iii) such Credit Party shall pay the full amount deducted to the relevanttaxation authority or other authority in accordance with applicable law, and(iv) such Credit Party shall furnish to the Agent, at its address referredto in Section 11.1, the original or a certified copy of a receiptevidencing payment thereof.

 

(b)           Inaddition, the Borrower agrees to pay any and all present or future stamp ordocumentary taxes and any other excise or property taxes or charges or similarlevies which arise from any payment made under this Credit Agreement or anyother Credit Document or from the execution or delivery of, or otherwise withrespect to, this Credit Agreement or any other Credit Document (hereinafterreferred to as “Other Taxes”).

 

(c)           TheBorrower agrees to indemnify each Lender and the Agent for the full amount ofTaxes and Other Taxes (including, without limitation, any Taxes or Other Taxesimposed or asserted by any jurisdiction on amounts payable under thisSection 3.11) paid by such Lender or the Agent (as the case may be) andany liability (including penalties, interest, and expenses) arising therefromor with respect thereto.

 

(d)           EachLender that is not a United States person under Section 7701(a)(30) of theCode, on or prior to the date of its execution and delivery of this CreditAgreement in the case of each Lender listed on the signature pages hereof andon or prior to the date on which it becomes a Lender in the case of each otherLender (such Lender constituting a “Foreign Lender”), and from time totime thereafter if requested in writing by the Borrower or the Agent (but onlyso long as such Lender remains lawfully able to do so), shall provide the Borrowerand the Agent with (i) Internal Revenue Service Form W-8 BEN or W-8ECI, as appropriate, or any successor form prescribed by the Internal RevenueService, certifying that such Lender is entitled to benefits under an incometax treaty to which the United States is a party which reduces to zero the rateof withholding tax on payments of interest or certifying that the incomereceivable pursuant to this Credit Agreement is effectively connected with theconduct of a trade or business in the United States, (ii) Internal RevenueService Form W-8 or W-9, as appropriate, or any successor form prescribedby the Internal Revenue Service, and/or (iii) any other form orcertificate required by any taxing authority (including any certificate requiredby Sections 871(h) and 881(c) of the Internal Revenue Code), certifyingthat such Lender is entitled to an exemption from tax on payments pursuant tothis Credit Agreement or any of the other Credit Documents.

 

(e)           Forany period with respect to which a Lender has failed to provide the Borrowerand the Agent with the appropriate form pursuant to Section 3.11(d)(unless such failure is due to a change in treaty, law, or regulation occurringsubsequent to the date on which a form originally was required to be provided),such Lender shall not be entitled to indemnification under Section 3.11(a)or 3.11(b) with respect to Taxes imposed by the United States; provided,however, that should a Lender, which is otherwise exempt fromwithholding tax, become subject to Taxes because of its failure to deliver aform required hereunder, the Borrower shall take such steps as such Lendershall reasonably request to assist such Lender to recover such Taxes.

 

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(f)            Ifany Credit Party is required to pay additional amounts to or for the account ofany Lender pursuant to this Section 3.11, then such Lender will agree touse reasonable efforts to change the jurisdiction of its Applicable LendingOffice so as to eliminate or reduce any such additional payment which maythereafter accrue if such change, in the judgment of such Lender, is nototherwise disadvantageous to such Lender.

 

(g)           Withoutprejudice to the survival of any other agreement of the Credit Partieshereunder, the agreements and obligations of the Credit Parties contained inthis Section 3.11 shall survive the repayment of the Loans and otherobligations under the Credit Documents.

 

## **3.12        Compensation.**

 

Upon the request of anyLender, the Borrower shall pay to such Lender such amount or amounts as shallbe sufficient (in the reasonable opinion of such Lender) to compensate it forany loss, cost, or expense (excluding loss of anticipated profits) incurred byit as a result of:

 

(a)           anypayment, prepayment, or Conversion of a Eurodollar Loan for any reason(including, without limitation, the acceleration of the Loans pursuant toSection 9.2) on a date other than the last day of the Interest Period forsuch Loan; or

 

(b)           anyfailure by the Borrower for any reason (including, without limitation, thefailure of any condition precedent specified in Section 5 to be satisfied)to borrow, Convert, Continue, or prepay a Eurodollar Loan on the date for suchborrowing, Conversion, Continuation, or prepayment specified in the relevantnotice of borrowing, prepayment, Continuation, or Conversion under this CreditAgreement.

 

With respect toEurodollar Loans, such indemnification may include an amount equal to theexcess, if any, of (a) the amount of interest which would have accrued onthe amount so prepaid, or not so borrowed, Converted or Continued, for theperiod from the date of such prepayment or of such failure to borrow, Convertor Continue to the last day of the applicable Interest Period (or, in the caseof a failure to borrow, Convert or Continue, the Interest Period that wouldhave commenced on the date of such failure) in each case at the applicable rateof interest for such Eurodollar Loans provided for herein over (b) theamount of interest (as reasonably determined by such Lender) which would haveaccrued to such Lender on such amount by placing such amount on deposit for acomparable period with leading banks in the interbank Eurodollar market.  The covenants of the Borrower set forth inthis Section 3.12 shall survive the repayment of the Loans and otherobligations under the Credit Documents.

 

## **3.13        Pro Rata Treatment.**

 

Except to theextent otherwise provided herein and subject to the terms of the IntercreditorAgreement, each Loan, each payment or (subject to the terms ofSection 3.3) prepayment of principal of any Loan, each payment of intereston the Loans and each conversion or extension of any Loan, shall be allocatedpro rata among the Lenders in accordance with the respective principal amountsof their outstanding Loans of the applicable Type and Participation Interestsin Loans of the applicable Type.

 

## **3.14        Sharing of Payments.**

 

The Lenders agreeamong themselves that, in the event that any Lender shall obtain payment inrespect of any Loan or any other obligation owing to such Lender under thisCredit Agreement through the exercise of a right of setoff, banker’s lien orcounterclaim, or pursuant to a secured claim under Section 506 ofTitle 11 of the United States Code or other security or interest arisingfrom, or in lieu of, such secured claim, received by such Lender under anyapplicable bankruptcy, insolvency or other similar law or otherwise, or by anyother means, in excess of its pro rata share of such payment as provided for inthis Credit Agreement, such Lender (and the other Lenders) shall adhere to theprovisions of the Intercreditor Agreement with respect to such payment and anyrescission or restoration thereof.  TheBorrower agrees that any Lender purchasing such a Participation Interesthereunder as a result of any such payments may, to the fullest extent permittedby law, exercise all rights of payment, including setoff, banker’s lien orcounterclaim, with respect to such Participation Interest as fully as if suchLender were a holder of such Loan or other obligation in the amount of such

 

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ParticipationInterest.  Except as otherwise expresslyprovided in this Credit Agreement, if any Lender shall fail to remit to theCollateral Agent, Agent or any other Lender an amount payable by such Lender tothe Agent or such other Lender pursuant to this Credit Agreement on the datewhen such amount is due, such payments shall be made by such Lender togetherwith interest thereon for each date from the date such amount is due until thedate such amount is paid to the Collateral Agent, Agent or such other Lender ata rate per annum equal to the Federal Funds Rate.  If under any applicable bankruptcy, insolvency or other similarlaw, any Lender receives a secured claim in lieu of a setoff to which thisSection 3.14 applies, such Lender shall, to the extent practicable,exercise its rights in respect of such secured claim in a manner consistentwith the rights of the Lenders under this Section 3.14 and the SecuredParties under the Credit Agreement to share in the benefits of any recovery onsuch secured claim.

 

## **3.15        Payments, Computations, Etc.**

 

(a)           Generally.  Notwithstanding anything to the contrarycontained herein, all payments made by any Credit Party hereunder shall be paidto the Collateral Agent for allocation in accordance with the IntercreditorAgreement.  Except as otherwisespecifically provided herein, all payments hereunder shall be made to theCollateral Agent (for the benefit of the Agent and Lenders) in Dollars in immediatelyavailable funds, without setoff, deduction, counterclaim or withholding of anykind, at the Collateral Agent’s office specified in the Intercreditor Agreementnot later than 2:00 P.M. (Charlotte, North Carolina time) on the date whendue.  Payments received after such timeshall be deemed to have been received on the next succeeding Business Day.  The Agent may (but shall not be obligatedto) debit the amount of any such payment which is not made by such time to anyordinary deposit account of the Borrower or any other Credit Party maintainedwith the Agent (with notice to the Borrower or such other Credit Party).  The Agent shall distribute payments receivedfrom the Collateral Agent under the Intercreditor Agreement in accordance withthe terms of the Intercreditor Agreement. The Agent will distribute such payments to the Lenders entitled thereto,if any such payment is received prior to 2:00 P.M.  (Charlotte, North Carolina time) on aBusiness Day in like funds as received prior to the end of such Business Dayand otherwise the Agent will distribute such payment to such Lenders on thenext succeeding Business Day.  Wheneverany payment hereunder shall be stated to be due on a day which is not aBusiness Day, the due date thereof shall be extended to the next succeedingBusiness Day (subject to accrual of interest and Fees for the period of suchextension), except that in the case of Eurodollar Loans, if the extension wouldcause the payment to be made in the next following calendar month, then suchpayment shall instead be made on the next preceding Business Day.  Except as expressly provided otherwiseherein, all computations of interest and fees shall be made on the basis ofactual number of days elapsed over a year of 360 days.  Interest shall accrue from and include thedate of borrowing, but exclude the date of payment.

 

(b)           Allocationof Payments After Event of Default. After the occurrence and during the continuance of an Event of Default,all amounts collected or received by the Agent or any Lender on account of theCredit Party Obligations shall continue to be paid to the Collateral Agent andall payments received by Agent from the Collateral Agent during such periodsshall continue to be paid over or delivered in accordance with the IntercreditorAgreement; provided that, if the Intercreditor Agreement has beenterminated, such amounts shall be applied by the Agent in the following order:

 

FIRST, to the payment of all reasonable out-of-pocketcosts and expenses (including without limitation reasonable attorneys’ fees) ofthe Agent in connection with enforcing the rights of the Lenders under theCredit Documents;

 

SECOND, to payment of any fees owed to the Agent;

 

THIRD, to the payment of all of the Credit PartyObligations consisting of accrued fees and interest;

 

FOURTH, to the payment of the outstanding principalamount of the Credit Party Obligations;

 

FIFTH, to the payment of all reasonable out-of-pocketcosts and expenses (including without limitation, reasonable attorneys’ fees)of each of the Lenders in connection with enforcing its rights

 

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under the CreditDocuments or otherwise with respect to the Credit Party Obligations owing tosuch Lender;

 

SIXTH, to all other Credit Party Obligations and otherobligations which shall have become due and payable under the Credit Documentsor otherwise and not repaid pursuant to clauses ”FIRST” through “FIFTH”above; and

 

SEVENTH, to the payment of the surplus, if any, towhomever may be lawfully entitled to receive such surplus.

 

In carrying outthe foregoing, amounts received shall be applied in the numerical orderprovided until exhausted prior to application to the next succeedingcategory.  In allocating paymentsreceived from the Collateral Agent (or, in the event the IntercreditorAgreement is terminated, the Credit Parties), the Agent shall pay to each ofthe Lenders an amount equal to such Lender’s pro rata share of the total amountof the applicable obligations with respect to which such payment is made.

 

## **3.16        Evidence of Debt.**

 

(a)           EachLender shall maintain an account or accounts evidencing each Loan made by suchLender to the Borrower from time to time, including the amounts of principaland interest payable and paid to such Lender from time to time under thisCredit Agreement.  Each Lender will makereasonable efforts to maintain the accuracy of its account or accounts and topromptly update its account or accounts from time to time, as necessary.

 

(b)           TheAgent shall maintain the Register pursuant to Section 11.3(c), and asubaccount for each Lender, in which Register and subaccounts (taken together)shall be recorded (i) the amount, type and Interest Period of each suchLoan hereunder, (ii) the amount of any principal or interest due andpayable or to become due and payable to each Lender hereunder and(iii) the amount of any sum received by the Agent hereunder from or forthe account of any Credit Party and each Lender’s share thereof.  The Agent will make reasonable efforts tomaintain the accuracy of the subaccounts referred to in the preceding sentenceand to promptly update such subaccounts from time to time, as necessary.

 

(c)           Theentries made in the accounts, Register and subaccounts maintained pursuant toclause (b) of this Section 3.16 (and, if consistent with the entriesof the Agent, clause (a)) shall be prima facie evidence of the existenceand amounts of the obligations of the Credit Parties therein recorded; provided,however, that the failure of any Lender or the Agent to maintain anysuch account, such Register or such subaccount, as applicable, or any errortherein, shall not in any manner affect the obligation of the Credit Parties torepay the Credit Party Obligations owing to such Lender.

 

## **3.17        Usury.**

 

Inno event shall the amount of interest due or payable on the Loans or otherobligations evidenced hereby or under the other Credit Documents exceed themaximum rate of interest allowed by Applicable Law and, if any such payment ispaid by the Borrower or received by any Lender Party, then such excess sumshall be credited as a payment of principal, unless the Borrower shall notifythe respective Lender Party in writing that the Borrower elects to have suchexcess sum returned to it forthwith.  Itis the express intent of the parties hereto that the Borrower not pay and theLender Parties not receive, directly or indirectly, in any manner whatsoever,interest in excess of that which may be lawfully paid by the Borrower underApplicable Law.

 

## **3.18        AgreementRegarding Interest and Charges.**

 

Theparties hereto hereby agree and stipulate that the only charge imposed upon theBorrower for the use of money in connection with this Credit Agreement is andshall be the interest specifically described in Section 2.1(d).  Notwithstanding the foregoing, the partieshereto further agree and stipulate that all agency fees, syndication fees,facility fees, underwriting fees, default charges, late charges, funding or“breakage” charges, increased cost charges, attorneys’ fees and reimbursementfor costs and expenses paid by the Agent or any Lender Party to third partiesor

 

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fordamages incurred by the Agent or any Lender Party, are charges made tocompensate the Agent or any such Lender Party for underwriting oradministrative services and costs or losses performed or incurred, and to beperformed or incurred, by the Agent and the Lender Parties in connection withthis Credit Agreement and shall under no circumstances be deemed to be charges forthe use of money.  Except as expresslyagreed otherwise in writing, all charges other than charges for the use ofmoney shall be fully earned and nonrefundable when due.

## ** **

## **3.19        Statements of Account.**

 

TheAgent will account to the Borrower monthly with a statement of Loans, accruedinterest and Fees, charges and payments made pursuant to this Credit Agreementand the other Credit Documents, and such account rendered by the Agent shall beprima facie evidence of the amounts and other matters set forth therein.  The failure of the Agent to deliver such astatement of accounts shall not relieve or discharge the Borrower from any ofits obligations hereunder.

 

## **3.20        Defaulting Lenders.**

 

(a)           Generally.  If for any reason any Lender Party at anytime becomes a Defaulting Lender, then, in addition to the rights and remediesthat may be available to the Agent or the Borrower under this Credit Agreementor Applicable Law, such Defaulting Lender’s right to participate in theadministration of the Loans, this Credit Agreement and the other CreditDocuments, including without limitation, any right to vote in respect of, toconsent to or to direct any action or inaction of the Agent or to be taken intoaccount in the calculation of the Required Lenders or the Required Term LoanLenders, shall be suspended during the pendency of such failure orrefusal.  Upon a Lender Party becoming aDefaulting Lender, the Agent shall give prompt notice to each other Lenderthereof.  If a Lender Party is aDefaulting Lender because it has failed to make timely payment to the Agent ofany amount required to be paid to the Agent hereunder (without giving effect toany notice or cure periods), in addition to other rights and remedies which theAgent or the Borrower may have under the immediately preceding provisions orotherwise, the Agent shall be entitled (i) to collect interest from suchDefaulting Lender on such delinquent payment for the period from the date onwhich the payment was due until the date on which the payment is made at the FederalFunds Rate, (ii) to withhold or setoff and to apply in satisfaction of thedefaulted payment and any related interest, any amounts otherwise payable tosuch Defaulting Lender under this Credit Agreement or any other Credit Documentand (iii) to bring an action or suit against such Defaulting Lender in a courtof competent jurisdiction to recover the defaulted amount and any relatedinterest.  Any amounts received by theAgent in respect of a Defaulting Lender’s Loans shall not be paid to suchDefaulting Lender and shall be held uninvested by the Agent and either appliedagainst the purchase price of such Loans under the followingsubsection (b) or paid to such Defaulting Lender upon the DefaultingLender’s curing of its default.

 

(b)           Purchase of Defaulting Lender’sLoans.  Any Lender Party who is nota Defaulting Lender shall have the right, but not the obligation, in its solediscretion, to acquire all of a Defaulting Lender’s outstanding Loans.  Any Lender Party desiring to exercise suchright shall give written notice thereof to the Agent no sooner thantwo (2) Business Days and not later than ten (10) Business Days aftersuch Defaulting Lender became a Defaulting Lender.  If more than one Lender Party exercises such right, each suchLender Party shall have the right to acquire an amount of such DefaultingLender’s outstanding Loans in proportion to the outstanding Loans of the otherLender Parties exercising such right. If after such 10th Business Day, the Lender Parties have not elected topurchase all of the outstanding Loans of such Defaulting Lender, then anyEligible Assignee may purchase such outstanding Loans.  None of the Agent, the Sole Lead Arranger orany of the Lender Parties shall have any obligation whatsoever to initiate anysuch replacement or to assist in finding an Eligible Assignee.  Upon any such purchase, the DefaultingLender’s interest in the Loans and its rights hereunder (but not its liabilityin respect thereof or under the Credit Documents or this Credit Agreement tothe extent the same relate to the period prior to the effective date of thepurchase) shall terminate on the date of purchase, and the Defaulting Lendershall promptly execute all documents reasonably requested to surrender andtransfer such interest to the purchaser thereof, including an appropriateAssignment and Assumption Agreement and, notwithstanding Section 11.3,shall pay to the Agent an assignment fee in the amount of $5,000.  The purchase price for the outstanding Loansof a Defaulting Lender shall be equal to the amount of the principal balance ofsuch Loans outstanding and owed by the Borrower to the Defaulting Lender.  Prior to payment of such purchase price to aDefaulting Lender, the Agent shall apply against such purchase price anyamounts retained by the Agent pursuant to the last sentence of the immediatelypreceding subsection (a).  TheDefaulting Lender shall be entitled to receive amounts owed to it by theBorrower

 

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underthe Credit Documents which accrued prior to the date of the default by theDefaulting Lender, to the extent the same are received by the Agent from or onbehalf of the Borrower.  There shall beno recourse against any Lender Party or the Agent for the payment of such sumsexcept to the extent of the receipt of payments from any other party or inrespect of the Loans.  If, prior to aLender Party’s acquisition of a Defaulting Lender’s outstanding Loans pursuantto this subsection, such Defaulting Lender shall cure the event or conditionwhich caused it to become a Defaulting Lender and shall have paid all amountsowing by it hereunder as a result thereof, then such Lender Party shall nolonger have the right to acquire such Defaulting Lender’s outstanding Loans.

 

## **3.21        AssumptionsConcerning Funding of Eurodollar Loans.**

 

Calculation of all amounts payable to a Lender Party under thisArticle III shall be made as though such Lender Party had actually fundedEurodollar Loans through the purchase of deposits in the relevant market bearinginterest at the rate applicable to such Eurodollar Loans in an amount equal tothe amount of the Eurodollar Loans and having a maturity comparable to therelevant Interest Period; provided, however, that each LenderParty may fund each of its Eurodollar Loans in any manner it sees fit and theforegoing assumption shall be used only for calculation of amounts payableunder this Article III.

 

## **3.22        Release of HCI.**

 

Notwithstanding anything contained herein to the contrary, the Agentshall release HCI as a Borrower and Credit Party hereunder and under each ofthe Credit Documents, (a) upon receipt by the Agent of a request for release ofHCI from the Borrower and all supporting documentation, materials andinformation required by Agent in connection therewith; (b) upon receipt byAgent of evidence (satisfactory to Agent in its reasonable discretion) that allProperty owned by HCI has been transferred to JV1, that HCI has been or willbe, immediately upon receipt of an acknowledgement of release by Agent, mergedinto JV1 or otherwise dissolved in a manner acceptable to the Agent, in itsreasonable discretion and that the entities that were formerly Wholly OwnedSubsidiaries of HCI are or will be, immediately upon receipt of anacknowledgement of release by Agent, Wholly Owned Subsidiaries of JV1 andCredit Parties hereunder and (c) to the extent no Default or Event of Defaultexists as of the date of such requested release or is otherwise likely to occuras a result of the granting of such release. Upon satisfaction of the above-noted conditions, Agent shall deliver toBorrower written confirmation of the release of HCI as a Borrower and CreditParty hereunder and under the other Credit Documents.  All references contained herein to HCI and all portions of any representations,warranties and covenants contained in any Credit Document and directly relatedto HCI or its ownership structure (but not portions of such representation,warranties and covenants related, in any manner, to any other Credit Party orPerson) shall, immediately upon the delivery by Agent to the Borrower of thewritten confirmation of release pursuant to this Section 3.22, be deemed to bedeleted from such Credit Documents and to be of no further force or effect;provided, however, that Borrower’s delivery of a request for release withrespect to HCI shall be deemed to be an ongoing representation, warranty andcovenant that HCI has been or will be, immediately upon the receipt of Agent’sconfirmation of release, merged into JV1 or otherwise dissolved in the mannershown in the materials and information provided to Agent in connectiontherewith and an ongoing representation and warranty that such materials andinformation are true and correct in all material respects.  Each of the Lenders hereby consents to therelease of HCI upon the terms and conditions set forth in this Section 3.22.

 

# **ARTICLE IV**GUARANTY

 

## **4.1          The Guaranty.**

 

Each of theGuarantors hereby jointly and severally guarantees to each Lender, eachAffiliate of a Lender that enters into a Hedging Agreement, and the Agent ashereinafter provided, as primary obligor and not as surety, the prompt paymentof the Credit Party Obligations in full when due (whether at stated maturity,as a mandatory prepayment, by acceleration, as a mandatory cashcollateralization or otherwise) strictly in accordance with the termsthereof.  The Guarantors hereby furtheragree that if any of the Credit Party Obligations are not paid in full when due(whether at stated maturity, as a mandatory prepayment, by acceleration, as amandatory cash collateralization or otherwise), the Guarantors will, jointlyand severally, promptly pay the same, without any demand or notice whatsoever,and that in the

 

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case of any extension of time of payment or renewal of any of theCredit Party Obligations, the same will be promptly paid in full when due(whether at extended maturity, as a mandatory prepayment, by acceleration, as amandatory cash collateralization or otherwise) in accordance with the terms ofsuch extension or renewal.

 

Notwithstandingany provision to the contrary contained herein or in any other of the CreditDocuments or Hedging Agreements, the obligations of each Guarantor under thisCredit Agreement and the other Credit Documents shall be limited to anaggregate amount equal to the largest amount that would not render suchobligations subject to avoidance under Section 548 of the Bankruptcy Codeor any comparable provisions of any applicable state law.

 

## **4.2          Obligations Unconditional.**

 

The obligations ofthe Guarantors under Section 4.1 are joint and several, absolute andunconditional, irrespective of the value, genuineness, validity, regularity orenforceability of any of the Credit Documents or Hedging Agreements, or anyother agreement or instrument referred to therein, or any substitution,release, impairment or exchange of any other guarantee of or security for anyof the Credit Party Obligations, and, to the fullest extent permitted byapplicable law, irrespective of any other circumstance whatsoever which mightotherwise constitute a legal or equitable discharge or defense of a surety orguarantor, it being the intent of this Section 4.2 that the obligations ofthe Guarantors hereunder shall be absolute and unconditional under any and allcircumstances.  Each Guarantor agreesthat such Guarantor shall have no right of subrogation, indemnity,reimbursement or contribution against the Borrower or any other Guarantor foramounts paid under this Section 4 until such time as the Credit PartyObligations have been Fully Satisfied. Without limiting the generality of the foregoing, it is agreed that, tothe fullest extent permitted by law, the occurrence of any one or more of thefollowing shall not alter or impair the liability of any Guarantor hereunderwhich shall remain absolute and unconditional as described above:

 

(a)           atany time or from time to time, without notice to any Guarantor, the time forany performance of or compliance with any of the Credit Party Obligations shallbe extended, or such performance or compliance shall be waived;

 

(b)           anyof the acts mentioned in any of the provisions of any of the Credit Documents,any Hedging Agreement between any Consolidated Party and any Lender, or anyAffiliate of a Lender, or any other agreement or instrument referred to in theCredit Documents or such Hedging Agreements shall be done or omitted;

 

(c)           thematurity of any of the Credit Party Obligations shall be accelerated, or any ofthe Credit Party Obligations shall be modified, supplemented or amended in anyrespect, or any right under any of the Credit Documents, any Hedging Agreementbetween any Consolidated Party and any Lender, or any Affiliate of a Lender, orany other agreement or instrument referred to in the Credit Documents or suchHedging Agreements shall be waived or any other guarantee of any of the CreditParty Obligations or any security therefor shall be released, impaired orexchanged in whole or in part or otherwise dealt with;

 

(d)           anyLien granted to, or in favor of, the Agent or any Lender or Lenders as securityfor any of the Credit Party Obligations shall fail to attach or be perfected;or

 

(e)           anyof the Credit Party Obligations shall be determined to be void or voidable(including, without limitation, for the benefit of any creditor of anyGuarantor) or shall be subordinated to the claims of any Person (including,without limitation, any creditor of any Guarantor).

 

With respect toits obligations hereunder, each Guarantor hereby expressly waives diligence,presentment, demand of payment, protest and all notices whatsoever, and anyrequirement that the Agent or any Lender exhaust any right, power or remedy orproceed against any Person under any of the Credit Documents, any HedgingAgreement between any Consolidated Party and any Lender, or any Affiliate of aLender, or any other agreement or instrument referred to in the CreditDocuments or such Hedging Agreements, or against any other Person under anyother guarantee of, or security for, any of the Credit Party Obligations.

 

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## **4.3          Reinstatement.**

 

The obligations ofthe Guarantors under this Section 4 shall be automatically reinstated ifand to the extent that for any reason any payment by or on behalf of any Personin respect of the Credit Party Obligations is rescinded or must be otherwiserestored by any holder of any of the Credit Party Obligations, whether as aresult of any proceedings in bankruptcy or reorganization or otherwise, and eachGuarantor agrees that it will indemnify the Agent and each Lender on demand forall reasonable costs and expenses (including, without limitation, fees andexpenses of counsel) incurred by the Agent or such Lender in connection withsuch rescission or restoration, including any such costs and expenses incurredin defending against any claim alleging that such payment constituted apreference, fraudulent transfer or similar payment under any bankruptcy,insolvency or similar law.

 

## **4.4          Certain Additional Waivers.**

 

Without limitingthe generality of the provisions of this Section 4, each Guarantor herebyspecifically waives the benefits of N.C. Gen.  Stat.  §§ 26-7 through 26-9, inclusive, to theextent applicable.  Each Guarantorfurther agrees that such Guarantor shall have no right of recourse to securityfor the Credit Party Obligations, except through the exercise of rights ofsubrogation pursuant to Section 4.2 and through the exercise of rights ofcontribution pursuant to Section 4.6.

 

## **4.5          Remedies.**

 

The Guarantorsagree that, to the fullest extent permitted by law, as between the Guarantors,on the one hand, and the Agent and the Lenders, on the other hand, the CreditParty Obligations may be declared to be forthwith due and payable as providedin Section 9.2 (and shall be deemed to have become automatically due andpayable in the circumstances provided in said Section 9.2) for purposes ofSection 4.1 notwithstanding any stay, injunction or other prohibitionpreventing such declaration (or preventing the Credit Party Obligations frombecoming automatically due and payable) as against any other Person and that,in the event of such declaration (or the Credit Party Obligations being deemedto have become automatically due and payable), the Credit Party Obligations(whether or not due and payable by any other Person) shall forthwith become dueand payable by the Guarantors for purposes of Section 4.1.

 

## **4.6          Rights of Contribution.**

 

The Guarantorshereby agree as among themselves that, if any Guarantor shall make an ExcessPayment (as defined below), such Guarantor shall have a right of contributionfrom each other Guarantor in an amount equal to such other Guarantor’sContribution Share (as defined below) of such Excess Payment.  The payment obligations of any Guarantorunder this Section 4.6 shall be subordinate and subject in right ofpayment to the Credit Party Obligations until such time as the Credit PartyObligations have been Fully Satisfied, and none of the Guarantors shallexercise any right or remedy under this Section 4.6 against any otherGuarantor until such Credit Party Obligations have been Fully Satisfied.  For purposes of this Section 4.6,(a) ”Excess Payment” shall mean the amount paid by any Guarantor inexcess of its Pro Rata Share of any Guaranteed Obligations; (b) ”ProRata Share” shall mean, for any Guarantor in respect of any payment ofCredit Party Obligations, the ratio (expressed as a percentage) as of the dateof such payment of Guaranteed Obligations of (i) the amount by which theaggregate present fair salable value of all of its assets and propertiesexceeds the amount of all debts and liabilities of such Guarantor (includingcontingent, subordinated, unmatured, and unliquidated liabilities, butexcluding the obligations of such Guarantor hereunder) to (ii) the amountby which the aggregate present fair salable value of all assets and otherproperties of all of the Credit Parties exceeds the amount of all of the debtsand liabilities (including contingent, subordinated, unmatured, andunliquidated liabilities, but excluding the Credit Party Obligations) of theCredit Parties; provided, however, that, for purposes ofcalculating the Pro Rata Shares of the Guarantors in respect of any payment ofCredit Party Obligations, any Guarantor that became a Guarantor subsequent tothe date of any such payment shall be deemed to have been a Guarantor on thedate of such payment and the financial information for such Guarantor as of thedate such Guarantor became a Guarantor shall be utilized for such Guarantor inconnection with such payment; and (c) ”Contribution Share” shallmean, for any Guarantor in respect of any Excess Payment made by any otherGuarantor, the ratio (expressed as a percentage) as of the date of such ExcessPayment of (i) the amount by which the aggregate present fair salablevalue of all of its assets and properties exceeds the amount of all debts andliabilities of such Guarantor (including contingent, subordinated, unmatured,and unliquidated liabilities, but excluding the obligations of such Guarantorhereunder) to (ii) the amount by which the aggregate present fair salablevalue of all assets and other properties of the Credit Parties other than themaker

 

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of such Excess Payment exceeds the amount of all of the debts andliabilities (including contingent, subordinated, unmatured, and unliquidatedliabilities, but excluding the Credit Party Obligations) of the Credit Partiesother than the maker of such Excess Payment; provided, however,that, for purposes of calculating the Contribution Shares of the Guarantors inrespect of any Excess Payment, any Guarantor that became a Guarantor subsequentto the date of any such Excess Payment shall be deemed to have been a Guarantoron the date of such Excess Payment and the financial information for suchGuarantor as of the date such Guarantor became a Guarantor shall be utilizedfor such Guarantor in connection with such Excess Payment.  This Section 4.6 shall not be deemed toaffect any right of subrogation, indemnity, reimbursement or contribution thatany Guarantor may have under applicable law against the Borrower in respect ofany payment of Guaranteed Obligations. Notwithstanding the foregoing, all rights of contribution against anyGuarantor shall terminate from and after such time, if ever, that suchGuarantor shall be relieved of its obligations pursuant to Section 8.5(a).

 

## **4.7          Guarantee of Payment; ContinuingGuarantee.**

 

The guarantee inthis Section 4 is a guaranty of payment and not of collection, is acontinuing guarantee, and shall apply to all Credit Party Obligations wheneverarising.

 

# **ARTICLE V**CONDITIONS

 

## **5.1          Closing Conditions.**

 

The obligation of the Agent and Lenders to enterinto this Agreement and to make the Advance under the Term Loans shall besubject to satisfaction of the following conditions (in form and substancereasonably acceptable to the Agent) as of the Closing Date:

 

(a)           ExecutedCredit Documents.  Receipt by theAgent of duly executed copies of: (i) this Credit Agreement, (ii) the Notes, (iii) SecurityDocuments, (iv) the Intercreditor Agreement and (v) all other Credit Documents.

 

(b)           CorporateDocuments.  Receipt by the Agent ofthe following:

 

(i)          Charter Documents.  Copies of the articles or certificates ofincorporation or other charter documents of each Credit Party certified to betrue and complete as of a recent date by the appropriate Governmental Authorityof the state or other jurisdiction of its incorporation and certified by asecretary or assistant secretary of such Credit Party to be true and correct asof the Closing Date.

 

(ii)         Bylaws.  A copy of the bylaws of each Credit Partycertified by a secretary or assistant secretary of such Credit Party to be trueand correct as of the Closing Date.

 

(iii)        Resolutions.  Copies of resolutions of the Board ofDirectors of each Credit Party approving and adopting the Credit Documents towhich it is a party, the transactions contemplated therein and authorizingexecution and delivery thereof, certified by a secretary or assistant secretaryof such Credit Party to be true and correct and in force and effect as of theClosing Date.

 

(iv)        Good Standing.  Copies of (A) certificates of goodstanding, existence or its equivalent with respect to each Credit Partycertified as of a recent date by the appropriate Governmental Authorities ofthe state or other jurisdiction of incorporation and each other jurisdiction inwhich the failure to so qualify and be in good standing could have a MaterialAdverse Effect and (B) to the extent available, a certificate indicatingpayment of all corporate or comparable franchise taxes certified as of a recentdate by the appropriate governmental taxing authorities.

 

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(v)         Incumbency.  An incumbency certificate of each CreditParty certified by a secretary or assistant secretary to be true and correct asof the Closing Date.

 

(vi)        REIT Status.  Evidence, satisfactory to the Agent, thatthe USRP REIT qualifies as a REIT, that each of its Subsidiaries that arecorporations are Qualified REIT Subsidiaries and that the execution andperformance by the Credit Parties under the Credit Documents shall not affectsuch status.

 

(vii)       Bankruptcy Remote Borrowing EntityStatus.  Evidence, satisfactory tothe Agent, that the General SPE qualifies as a Bankruptcy Remote BorrowingEntity and that the execution and performance by the Credit Parties under theCredit Documents shall not affect such status.

 

(c)           Opinions of Counsel.  The Agent shall have received, in each casedated as of the Closing Date and in form and substance reasonably satisfactoryto the Agent:

 

(i)          a legal opinion of Richard Wilensky,general counsel for the Credit Parties; and

 

(ii)         a legal opinion of special localcounsel for each Credit Party not organized in the State of Delaware.

 

(d)           Officer’s Certificates.  The Agent shall have received a certificateor certificates executed by an Executive Officer of the Borrower as of theClosing Date, in form and substance satisfactory to the Agent, stating that(A) each Credit Party is in compliance with all existing financialobligations, (B) all governmental, shareholder and third party consentsand approvals, if any, with respect to the Credit Documents and the transactionscontemplated thereby have been obtained, (C) no action, suit,investigation or proceeding is pending or threatened in any court or before anyarbitrator or governmental instrumentality that purports to affect any CreditParty or any transaction contemplated by the Credit Documents, if such action,suit, investigation or proceeding could have a Material Adverse Effect, and(D) immediately after giving effect to the Transaction, (1) noDefault or Event of Default exists, (2) all representations and warrantiescontained herein and in the other Credit Documents are true and correct in allmaterial respects and (3) on the basis of income statement items andcapital expenditures for the 12-month period ending on the last day of the mostrecently ended calendar month prior to the Closing Date and balance sheet itemsas of the Closing Date after giving effect to the Credit Documents, the CreditParties are in pro forma compliance with each of the Financial Covenants.

 

(e)           Solvency Certificate.  The Agent shall have received a certificateexecuted by an Executive Officer of the Borrower as of the Closing Date, inform and substance satisfactory to the Agent, regarding the Solvency of each ofthe Credit Parties.

 

(f)            Fees and Expenses.  Payment by the Credit Parties to the Lendersand the Agent of all fees and expenses relating to the Credit Facility whichare due and payable on the Closing Date, including, without limitation, thepayment by Borrower to the Agent and BAS those fees specified in the Fee Letterand all fees and expenses of Moore & Van Allen, PLLC whether reflected onpreviously issued invoices or an invoice to be delivered at closing.

 

(g)           Current and Pro Forma FinancialStatements.  Receipt by the Agentand the Lenders of (i) the consolidated financial statements of theConsolidated Parties, including balance sheets and income and cash flowstatements for the fiscal quarter ended September 30, 2003; (ii) pro formacovenant calculations with respect to each of the Financial Covenants, showingcompliance with such covenants as of the Closing Date; (iii) detailedprojections of financial statements for the Consolidated Parties and ofcalculations with respect to each of the Financial Covenants, in each case, forthe three year period following the most recently completed fiscal quarter ofthe Consolidated Parties; and (iv) such other information relating to theConsolidated Parties as the Agent may reasonably require.

 

(h)           Opening Borrowing Base Certificateand Delinquency Report.  Receipt bythe Agent of a Borrowing Base Certificate containing the Borrower’s mostrecently collected information with respect to

 

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the Borrowing Base Assets(but, in any event, with respect to information that is not more than 45 daysold as of the Closing Date), substantially in the form of Exhibit 7.1(d)and certified by an Executive Officer of the Borrower to be true and correctand a Delinquency Report dated as of the Closing Date and certified by anExecutive Officer of the Borrower to be true and correct as of the ClosingDate.

 

(i)            Evidence of Termination.Evidence, acceptable to the Agent in its reasonable discretion, indicating thatthe Replaced Credit Agreement has been terminated as of the Closing Date.

 

(j)            Other.  Receipt by the Lenders of such otherdocuments, instruments, agreements or information as reasonably requested byany Lender, including, but not limited to, information regarding litigation,tax, accounting, labor, insurance, pension liabilities (actual or contingent),real estate leases, material contracts, debt agreements, property ownership andcontingent liabilities of the Consolidated Parties.

 

## **5.2          Conditions to all Extensions ofCredit.**

 

The obligations ofeach Lender to continue or convert any portion of the Loans are subject tosatisfaction of the following conditions in addition to satisfaction on theClosing Date of the conditions set forth in Section 5.1:

 

(a)           The Borrower shall have delivered anappropriate Notice of Continuation or Notice of Conversion;

 

(b)           The representations and warrantiesset forth in Section 6 shall, subject to the limitations set forththerein, be true and correct in all material respects as of such date (exceptfor those which expressly relate to an earlier date);

 

(c)           There shall not have been commencedagainst any Consolidated Party an involuntary case under any applicablebankruptcy, insolvency or other similar law now or hereafter in effect, or anycase, proceeding or other action for the appointment of a receiver, liquidator,assignee, custodian, trustee, sequestrator (or similar official) of such Personor for any substantial part of its Property or for the winding up orliquidation of its affairs, and such involuntary case or other case, proceedingor other action shall remain undismissed;

 

(d)           No Default or Event of Default shallexist and be continuing either prior to or after giving effect thereto; and

 

(e)           The Outstanding Amount shall not, asof such date, exceed the Maximum Loan Amount and the sum of the OutstandingAmount plus the Revolver Obligations shall not, as of such date, exceedthe Borrowing Base.

 

The delivery ofeach Notice of Continuation or Notice of Conversion pursuant to the terms ofthis Credit Agreement shall constitute a representation and warranty by the CreditParties of the correctness of the matters specified in subsections (b),(c) and (d) above.

 

# **ARTICLE VI**REPRESENTATIONS AND WARRANTIES

 

The Credit Partieshereby represent to the Agent and each Lender that:

 

## **6.1          Financial Condition.**

 

(a)           The audited consolidated balancesheets and income statements of the Consolidated Parties for the fiscal yearsended December 31, 1999, December 31, 2000, December 31,2001 and December 31, 2002 (including the notes thereto) (i) have been auditedby Deloitte & Touche, (ii) have been prepared in accordance with GAAPconsistently applied throughout the periods covered thereby and(iii) present fairly (on the basis

 

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disclosed in thefootnotes to such financial statements) the consolidated financial condition,results of operations and cash flows of the Consolidated Parties as of suchdate and for such periods.  Theunaudited interim balance sheets of the Consolidated Parties as at the end of,and the related unaudited interim statements of earnings and of cash flows for,each fiscal month and quarterly period ended after December 31, 2002and prior to the Closing Date (i) have been prepared in accordance withGAAP consistently applied throughout the periods covered thereby and(ii) present fairly (on the basis disclosed in the footnotes to suchfinancial statements) the consolidated financial condition, results ofoperations and cash flows of the Consolidated Parties as of such date and forsuch periods.  During the period fromDecember 31, 2002 to and including the Closing Date, there has been no sale,transfer or other disposition by any Consolidated Party of any material part ofthe business or property of the Consolidated Parties, taken as a whole, and nopurchase or other acquisition by any of them of any business or property(including any Capital Stock of any other Person) material in relation to theconsolidated financial condition of the Consolidated Parties, taken as a whole,in each case, which is not reflected in the foregoing financial statements orin the notes thereto and has not otherwise been disclosed in writing to theLenders on or prior to the Closing Date. As of the Closing Date, the Borrower and its Subsidiaries have nomaterial liabilities (contingent or otherwise) that are not reflected in theforegoing financial statements or in the notes thereto.

 

(b)           The financial statements and otherinformation delivered pursuant to Section 5.1(g) have been prepared inaccordance with GAAP (except as may otherwise be permitted underSection 1.3) and present fairly (on the basis disclosed in the footnotesto such financial statements) the consolidated financial condition, results ofoperations and cash flows of the General Partner and the Consolidated Partiesas of such date and for such periods.

 

## **6.2          No Material Change.**

 

Since December 31,2002, there has been no development or event relating to or affecting aConsolidated Party which has had or could have a Material Adverse Effect.

 

## **6.3          Organization and Good Standing.**

 

Each of theConsolidated Parties (a) is duly organized, validly existing and is ingood standing under the laws of the jurisdiction of its incorporation ororganization, (b) has the corporate or other necessary power andauthority, and the legal right, to own and operate its property, to lease theproperty it operates as lessee and to conduct the business in which it iscurrently engaged and (c) is duly qualified as a foreign entity and ingood standing under the laws of each jurisdiction where its ownership, lease oroperation of property or the conduct of its business requires suchqualification, other than in such jurisdictions where the failure to be soqualified and in good standing would not have a Material Adverse Effect.

 

## **6.4          Power; Authorization; EnforceableObligations.**

 

Each of the CreditParties has the corporate or other necessary power and authority, and the legalright, to make, deliver and perform the Credit Documents to which it is aparty, and in the case of the Borrower, to obtain extensions of credithereunder, and has taken all necessary corporate or other necessary action toauthorize the borrowings and other extensions of credit on the terms andconditions of this Credit Agreement and to authorize the execution, deliveryand performance of the Credit Documents to which it is a party.  No consent or authorization of, filing with,notice to or other similar act by or in respect of, any Governmental Authorityor any other Person is required to be obtained or made by or on behalf of any CreditParty in connection with the borrowings or other extensions of credit hereunderor with the execution, delivery, performance, validity or enforceability of theCredit Documents to which such Credit Party is a party, exceptfor consents, authorizations, notices and filings described in Schedule 6.4,all of which have been obtained or made or have the status described in such Schedule 6.4.  This Credit Agreement has been, and eachother Credit Document to which any Credit Party is a party will be, dulyexecuted and delivered on behalf of the Credit Parties.  This Credit Agreement constitutes, and eachother Credit Document to which any Credit Party is a party when executed anddelivered will constitute, a legal, valid and binding obligation of such CreditParty enforceable against such party in accordance with its terms, except asenforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally and by general equitable principles (whetherenforcement is sought by proceedings in equity or at law).

 

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## **6.5          No Conflicts.**

 

Neither theexecution and delivery of the Credit Documents, nor the consummation of thetransactions contemplated therein, nor performance of and compliance with theterms and provisions thereof by such Credit Party will (a) violate orconflict with any provision of its articles or certificate of incorporation orbylaws or other organizational or governing documents of such Person,(b) violate, contravene or materially conflict with any Requirement of Lawor any other law, regulation (including, without limitation, Regulation Uor Regulation X), order, writ, judgment, injunction, decree or permitapplicable to it, (c) violate, contravene or conflict with contractualprovisions of, or cause an event of default under, any indenture, loanagreement, mortgage, deed of trust, contract or other agreement or instrumentto which it is a party or by which it may be bound, the violation of whichcould have a Material Adverse Effect, or (d) result in or require thecreation of any Lien (other than those contemplated in or created in connectionwith the Credit Documents) upon or with respect to its properties.

 

## **6.6          No Default.**

 

No ConsolidatedParty is in default in any respect under any contract, lease, loan agreement,indenture, mortgage, security agreement or other agreement or obligation towhich it is a party or by which any of its properties is bound which defaultcould have a Material Adverse Effect. No Default or Event of Default has occurred or exists except aspreviously disclosed in writing to the Lenders.

 

## **6.7          Ownership.**

 

Each ConsolidatedParty is the owner of, and has good and marketable title to, all of itsrespective assets and none of such assets is subject to any Lien other thanPermitted Liens and Liens granted in connection with any Term Securitizationspecifically contemplated and approved pursuant to the terms hereof.

 

## **6.8          Indebtedness.**

 

Except asotherwise permitted under Section 8.1, the Consolidated Parties have noIndebtedness.

 

## **6.9          Litigation.**

 

Except asdisclosed in Schedule 6.9, there does not exist any pending orthreatened action, suit or legal, equitable, arbitration or administrativeproceeding against any Consolidated Party which might have a Material AdverseEffect.

 

## **6.10        Taxes.**

 

Each ConsolidatedParty has filed, or caused to be filed, all material tax returns (Federal,state, local and foreign) required to be filed and paid (a) all amounts oftaxes shown thereon to be due (including interest and penalties) and(b) all other taxes, fees, assessments and other governmental charges(including mortgage recording taxes, documentary stamp taxes and intangiblestaxes) owing by it, except for such taxes (i) which are not yet delinquentor (ii) that are being contested in good faith and by proper proceedings,and against which adequate reserves are being maintained in accordance withGAAP.  No Credit Party is aware of anyproposed federal or state income tax assessments against it or any otherConsolidated Party.  No Credit Party isaware of any other proposed tax assessments against it or any otherConsolidated Party that could have a Material Adverse Effect.

 

## **6.11        Compliance with Law.**

 

Each ConsolidatedParty is in compliance with all Requirements of Law and all other laws, rules,regulations, orders and decrees (including without limitation EnvironmentalLaws) applicable to it, or to its properties, unless such failure to complycould not have a Material Adverse Effect. No currently-existing Requirement of Law could cause a Material AdverseEffect.

 

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## **6.12        ERISA.**

 

Except asdisclosed and described in Schedule 6.12 attached hereto:

 

(a)           Duringthe five-year period prior to the date on which this representation is made ordeemed made: (i) no ERISA Event has occurred, and, to the best knowledgeof the Executive Officers of the Credit Parties, no event or condition hasoccurred or exists as a result of which any ERISA Event could reasonably beexpected to occur, with respect to any Plan; (ii) no “accumulated fundingdeficiency,” as such term is defined in Section 302 of ERISA andSection 412 of the Code, whether or not waived, has occurred with respectto any Plan; (iii) each Plan has been maintained, operated, and funded incompliance with its own terms and in material compliance with the provisions ofERISA, the Code, and any other applicable Federal or state laws; and(iv) no lien in favor of the PBGC or a Plan has arisen or is reasonablylikely to arise on account of any Plan.

 

(b)           Theactuarial present value of all “benefit liabilities” (as defined inSection 4001(a)(16) of ERISA), whether or not vested, under each SingleEmployer Plan, as of the last annual valuation date prior to the date on whichthis representation is made or deemed made (determined, in each case, inaccordance with Financial Accounting Standards Board Statement 87, utilizingthe actuarial assumptions used in such Plan’s most recent actuarial valuationreport), did not exceed as of such valuation date the fair market value of theassets of such Plan.

 

(c)           Neitherany Consolidated Party nor any ERISA Affiliate has incurred, or, to the bestknowledge of the Executive Officers of the Credit Parties, could be reasonablyexpected to incur, any withdrawal liability under ERISA to any MultiemployerPlan or Multiple Employer Plan.  Neitherany Consolidated Party nor any ERISA Affiliate would become subject to anywithdrawal liability under ERISA if any Consolidated Party or any ERISAAffiliate were to withdraw completely from all Multiemployer Plans and MultipleEmployer Plans as of the valuation date most closely preceding the date onwhich this representation is made or deemed made.  Neither any Consolidated Party nor any ERISA Affiliate hasreceived any notification that any Multiemployer Plan is in reorganization(within the meaning of Section 4241 of ERISA), is insolvent (within themeaning of Section 4245 of ERISA), or has been terminated (within themeaning of Title IV of ERISA), and no Multiemployer Plan is, to the bestknowledge of the Executive Officers of the Credit Parties, reasonably expectedto be in reorganization, insolvent, or terminated.

 

(d)           Noprohibited transaction (within the meaning of Section 406 of ERISA orSection 4975 of the Code) or breach of fiduciary responsibility hasoccurred with respect to a Plan which has subjected or may subject anyConsolidated Party or any ERISA Affiliate to any liability underSections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of theCode, or under any agreement or other instrument pursuant to which anyConsolidated Party or any ERISA Affiliate has agreed or is required toindemnify any Person against any such liability.

 

(e)           Neitherany Consolidated Party nor any ERISA Affiliates has any material liability withrespect to “expected post-retirement benefit obligations” within the meaning ofthe Financial Accounting Standards Board Statement 106.  Each Plan which is a welfare plan (asdefined in Section 3(1) of ERISA) to which Sections 601-609 of ERISAand Section 4980B of the Code apply has been administered in compliance inall material respects of such sections.

 

(f)            Neitherthe execution and delivery of this Credit Agreement nor the consummation of thefinancing transactions contemplated thereunder will involve any transactionwhich is subject to the prohibitions of Sections 404, 406 or 407 of ERISAor in connection with which a tax could be imposed pursuant to Section 4975of the Code.  The representation by theCredit Parties in the preceding sentence is made in reliance upon and subjectto the accuracy of the Lenders’ representation in Section 11.15 withrespect to their source of funds and is subject, in the event that the sourceof the funds used by the Lenders in connection with this transaction is aninsurance company’s general asset account, to the application of ProhibitedTransaction Class Exemption 95-60, 60 Fed. Reg.  35,925 (1995), compliancewith the regulations issued under Section 401(c)(1)(A) of ERISA, or theissuance of any other prohibited transaction exemption or similar relief, tothe effect that assets in an insurance company’s general asset account do notconstitute assets of an

 

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“employee benefitplan” within the meaning of Section 3(3) of ERISA or a “plan” within themeaning of Section 4975(e)(1) of the Code.

 

## **6.13        Corporate Structure; Capital Stock,etc.**

 

The corporatecapital and ownership structure of the Consolidated Parties as of the ClosingDate after giving effect to the Credit Documents executed as of the date hereofis as described in Schedule 6.13A. Set forth on Schedule 6.13B is a complete and accurate listas of the Closing Date with respect to the Borrower and each of its direct andindirect Subsidiaries of (i) jurisdiction of incorporation,(ii) number of shares of each class of Capital Stock outstanding,(iii) number and percentage of outstanding shares of each class owned(directly or indirectly) by the Consolidated Parties and (iv) number andeffect, if exercised, of all outstanding options, warrants, rights ofconversion or purchase and all other similar rights with respect thereto as ofthe Closing Date (except for employee stock options required to be disclosed inregularly-filed publicly accessible documents).  The outstanding Capital Stock of all such Persons is validlyissued, fully paid and non-assessable and is owned by the Consolidated Parties,directly or indirectly, in the manner set forth on Schedule 6.13B,free and clear of all Liens (other than those arising under or contemplated inconnection with the Credit Documents). Other than as set forth in Schedule 6.13B, neither theBorrower nor any of its Subsidiaries has outstanding any securities convertibleinto or exchangeable for its Capital Stock nor does any such Person haveoutstanding any rights to subscribe for or to purchase or any options for thepurchase of, or any agreements providing for the issuance (contingent orotherwise) of, or any calls, commitments or claims of any character relating toits Capital Stock.  Each of the DomesticSubsidiaries of the General Partner, the USRP REIT and the Borrower existing asof the date hereof, except USRP Funding 2001-A, L.P., USRP (SFGP), LLC, USRP(Hawaii), LLC, USRP (Bob), LLC and Fuel Supply, Inc. are listed as SubsidiaryGuarantors on the signature pages hereto. S&C has no Subsidiaries and owns no Capital Stock of any otherPerson.  HCI has no Subsidiaries thatare not Credit Parties and owns no Capital Stock of any other Person.  JV1 has no Subsidiaries that are not CreditParties and each Subsidiary of JV1 is set forth on Schedule 6.13Aattached hereto.

 

## **6.14        Governmental Regulations, Etc.**

 

(a)           Noneof the transactions contemplated by this Credit Agreement (including, withoutlimitation, the direct or indirect use of the proceeds of the Loans) willviolate or result in a violation of the Securities Act, the Securities ExchangeAct or any of Regulations U and X. If requested by any Lender or the Agent, the Borrower will furnish tothe Agent and each Lender a statement, in conformity with the requirements ofFR Form U-1 referred to in Regulation U, that no part of the proceedsof the Loans will be used, directly or indirectly, for the purpose of “buying”or “carrying” any “margin stock” within the meaning of Regulations U and X, orfor the purpose of purchasing or carrying or trading in any securities.

 

(b)           Noneof the Consolidated Parties is (i) an “investment company”, or a company“controlled” by “investment company”, within the meaning of the InvestmentCompany Act of 1940, as amended, (ii) a “holding company” as defined in,or otherwise subject to regulation under, the Public Utility Holding CompanyAct of 1935, as amended or (iii) subject to regulation under any otherFederal or state statute or regulation which limits its ability to incurIndebtedness.

 

## **6.15        Purpose of Loans; Termination ofReplaced Credit Agreement.**

 

The proceeds ofthe Loans hereunder shall be used by the Borrower solely for the purpose ofproviding funds for the purchase by JV1 of certain preferred equity interestsin USRP/HCI Partnership 1, L.P. on terms and conditions acceptable to the Agentin its sole and absolute discretion.  Noproceeds of the Loans shall be used to (y) finance the purchase of “marginstock” as such term is defined in Regulation U of the Federal ReserveBoard or (z) finance the acquisition of any investments in commercialmortgage-backed securities. The Replaced Credit Agreement has been or shall beterminated as of the date hereof.

 

## **6.16        Environmental Matters.**

 

Except asdisclosed and described in Schedule 6.16 attached hereto:

 

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(a)           Eachof the Real Properties and all operations at the Real Properties are inmaterial compliance with all applicable Environmental Laws, there is noviolation of any Environmental Law with respect to the Real Properties or theBusinesses, and there are no conditions relating to the Real Properties or theBusinesses that could give rise to liability under any applicable EnvironmentalLaws that could result in a Material Adverse Effect.

 

(b)           Noneof the Real Properties contains, or has previously contained, any Materials ofEnvironmental Concern at, on or under the Real Properties in amounts orconcentrations that could result in a Material Adverse Effect.

 

(c)           NoConsolidated Party has received any written or verbal notice of, or inquiryfrom any Governmental Authority regarding, any violation, alleged violation,non-compliance, liability or potential liability regarding environmentalmatters or compliance with Environmental Laws with regard to any of the RealProperties or the Businesses that could result in a Material Adverse Effect,nor does any Executive Officer of any Credit Party have knowledge or reason tobelieve that any such notice will be received or is being threatened.

 

(d)           Materialsof Environmental Concern have not been transported or disposed of from the RealProperties, or generated, treated, stored or disposed of at, on or under any ofthe Real Properties or any other location, in each case by or on behalf of anyConsolidated Party in a manner that could result in a Material Adverse Effect.

 

(e)           Nojudicial proceeding or governmental or administrative action is pending or, tothe best knowledge of the Executive Officers of the Credit Parties, threatened,under any Environmental Law to which any Consolidated Party is or will be namedas a party, nor are there any consent decrees or other decrees, consent orders,administrative orders or other orders, or other administrative or judicialrequirements outstanding under any Environmental Law with respect to theConsolidated Parties, the Real Properties or the Businesses that could result ina Material Adverse Effect.

 

(f)            Therehas been no release, or threat of release, of Materials of EnvironmentalConcern at or from any of the Real Properties, or arising from or related tothe operations (including, without limitation, disposal) of any ConsolidatedParty in connection with the Real Properties or otherwise in connection withthe Businesses in a manner that could result in a Material Adverse Effect.

 

## **6.17        Intellectual Property.**

 

Each Consolidated Party owns, or has the legal rightto use, all trademarks, tradenames, copyrights, technology, know-how andprocesses (the “Intellectual Property”) necessary for each of them toconduct its business as currently conducted except for those the failure to ownor have such legal right to use could not have a Material Adverse Effect.

 

## **6.18        Solvency.**

 

Each Credit Partyis and, after consummation of the transactions contemplated by the CreditDocuments, will be Solvent.

 

## **6.19        Investments.**

 

All Investments ofeach Consolidated Party are Permitted Investments.

 

## **6.20        Principal Offices.**

 

Set forth on Schedule 6.20is the chief executive office and principal place of business of each CreditParty.  Schedule 6.20 may beupdated from time to time by the Borrowers by giving written notice thereof tothe Agent.

 

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## **6.21        Disclosure.**

 

Neither thisCredit Agreement nor any financial statements delivered to the Lenders nor anyother document, certificate or statement furnished to the Lenders by or onbehalf of any Consolidated Party in connection with the transactionscontemplated hereby contains any untrue statement of a material fact or omitsto state a material fact necessary in order to make the statements containedtherein or herein not misleading.

 

## **6.22        No Burdensome Restrictions.**

 

No ConsolidatedParty is a party to any agreement or instrument or subject to any otherobligation or any charter or corporate restriction or any provision of anyapplicable law, rule or regulation which, individually or in the aggregate, couldhave a Material Adverse Effect.

 

## **6.23        Brokers’ Fees.**

 

No ConsolidatedParty has any obligation to any Person in respect of any finder’s, broker’s,investment banking or other similar fee in connection with any of thetransactions contemplated under the Credit Documents.

 

## **6.24        Labor Matters.**

 

There are nocollective bargaining agreements or Multiemployer Plans covering the employeesof a Consolidated Party as of the Closing Date and none of the ConsolidatedParties has suffered any strikes, walkouts, work stoppages or other materiallabor difficulty within the last five years.

 

## **6.25        Nature of Business.**

 

As of the ClosingDate, the Consolidated Parties are engaged in the business of acquiring,owning, operating, managing and developing restaurant, service station, otherservice retail properties and several miscellaneous properties (includingbillboard properties, one office building and one fuel terminal facility).

 

## **6.26        REIT Status.**

 

The USRP REIT isqualified as a REIT and each of its Subsidiaries that is a corporation is aQualified REIT Subsidiary.  Each of theSubsidiaries of the USRP REIT set forth on Schedule 6.26 is a taxableREIT subsidiary, as such term is used in the Code. The USRP REIT has noSubsidiaries that are taxable REIT subsidiaries except those set forth on Schedule6.26.

 

## **6.27        Bankruptcy Remote Borrowing Entity.**

 

Each of S&C,HCI and each of its Wholly Owned Subsidiaries, JV1 and each of its Wholly OwnedSubsidiaries and the General SPE is a Bankruptcy Remote Borrowing Entity.  USRP Operating owns 99% of the Capital Stockof the General SPE.  USRP Holding owns100% of the Capital Stock of S&C. JV1 holds 100% of the Capital Stock of HCI.  USRP Operating owns 100% of the Capital Stock of JV1.

 

## **6.28        Closing Date Borrowing Base Assets.**

 

Schedule 6.28sets forth each of the Borrowing Base Assets as of the Closing Date.  Each asset listed on Schedule 6.28fully qualifies as a Borrowing Base Asset and, collectively, the assets listedthereon qualify to be included in the Borrowing Base.

 

## **6.29        Tax Shelter Regulations.**

 

The Borrower does notintend to treat the Loans and/or Letters of Credit and related transactions asbeing a “reportable transaction” (within the meaning of Treasury Regulationsection 1.6011-4). If the Borrower determines to take any action inconsistentwith such intention, it will promptly notify the Agent thereof.  The Borrower acknowledges that the Agentand/or one or more of the Lenders may treat the Loans as part of a transactionthat is

 

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subject to Treasury Regulation section 1.6011-4 or section 301.6112-1,and the Agent and such Lender or Lenders, as applicable, may file such IRSforms or maintain such lists and other records as they may determine isrequired by such Treasury Regulations.

 

## **6.30        Representations and WarrantiesUnder Revolving Credit Documents.**

 

All of therepresentations and warranties of the Borrower and the other “Credit Parties”as defined in the Revolving Credit Agreement and the other Revolving Credit Documentsare true and correct in all material respects (except to the extent the samehave been waived in accordance with the terms thereof).

 

# **ARTICLE VII**AFFIRMATIVE COVENANTS

 

Each Credit Partyhereby covenants and agrees that, so long as this Credit Agreement is in effector any amounts payable hereunder or under any other Credit Document shallremain outstanding:

 

## **7.1          Information Covenants.**

 

The Credit Partieswill furnish, or cause to be furnished, to the Agent and each of the Lenders:

 

(a)           AnnualFinancial Statements.  As soon asavailable, and in any event within 90 days after the close of each fiscal yearof the Consolidated Parties, a consolidated balance sheet and income statementof the Consolidated Parties as of the end of such fiscal year, together withrelated consolidated statements of retained earnings and cash flows for suchfiscal year (along with a summary of amount of all Asset Dispositions andEquity Issuances that were made during the prior fiscal year), in each casesetting forth in comparative form consolidated figures for the preceding fiscalyear, all such financial information described above to be in reasonable formand detail and audited by independent certified public accountants ofrecognized national standing reasonably acceptable to the Agent and whoseopinion shall be to the effect that such financial statements have beenprepared in accordance with GAAP (except for changes with which suchaccountants concur) and shall not be limited as to the scope of the audit orqualified as to the status of the Consolidated Parties as a going concern orany other material qualifications or exceptions.

 

(b)           QuarterlyFinancial Statements.  As soon asavailable, and in any event within 45 days after the close of each of the firstthree fiscal quarters of each fiscal year of the Consolidated Parties, aconsolidated balance sheet and income statement of the Consolidated Parties asof the end of such fiscal quarter, together with related consolidatedstatements of retained earnings and cash flows for such fiscal quarter, in eachcase setting forth in comparative form consolidated figures for thecorresponding period of the preceding fiscal year, all such financialinformation described above to be in reasonable form and detail and reasonablyacceptable to the Agent, and accompanied by a certificate of an ExecutiveOfficer of the Borrower to the effect that such quarterly financial statementsfairly present in all material respects the financial condition of theConsolidated Parties and have been prepared in accordance with GAAP, subject tochanges resulting from audit and normal year-end audit adjustments.

 

(c)           Officer’sCertificate.  At the time ofdelivery of the financial statements provided for in Sections 7.1(a) and7.1(b) above, a certificate of an Executive Officer of the Borrowersubstantially in the form of Exhibit 7.1(c), (i) demonstratingcompliance with the Financial Covenants by calculation thereof as of the end ofeach such fiscal period, (ii) stating that no Default or Event of Defaultexists, or if any Default or Event of Default does exist, specifying the natureand extent thereof and what action the Credit Parties propose to take withrespect thereto and disclosing any Hedging Agreements entered into by anyConsolidated Party.

 

(d)           IntentionallyOmitted.

 

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(e)           Accountant’sCertificate.  Within the period fordelivery of the annual financial statements provided in Section 7.1(a), acertificate of the accountants conducting the annual audit stating that theyhave reviewed this Credit Agreement as it relates to accounting and otherfinancial matters and stating further whether, in the course of their audit,they have become aware of any Default or Event of Default and, if any suchDefault or Event of Default exists, specifying the nature and extent thereof, providedthat such accountants shall not be liable by reason of any failure to obtainknowledge of any such Default or Event of Default that would not be disclosedin the course of their audit examination.

 

(f)            Auditor’sReports.  Promptly upon receiptthereof, a copy of any other report or “management letter” submitted byindependent accountants to any Consolidated Party in connection with anyannual, interim or special audit of the books of such Person.

 

(g)           Reports.  Promptly upon transmission or receiptthereof, (i) copies of any filings and registrations with, and reports toor from, the Securities and Exchange Commission, or any successor agency, andcopies of all financial statements, proxy statements, notices and reports asany Consolidated Party shall send to its shareholders or to a holder of anyIndebtedness owed by any Consolidated Party in its capacity as such a holderand (ii) upon the request of the Agent, all reports and writteninformation to and from the United States Environmental Protection Agency, orany state or local agency responsible for environmental matters, the UnitedStates Occupational Health and Safety Administration, or any state or localagency responsible for health and safety matters, or any successor agencies orauthorities concerning environmental, health or safety matters.

 

(h)           Notices.  Upon any Executive Officer of a Credit Partyobtaining knowledge thereof, the Credit Parties will give written notice to theAgent immediately of (i) the occurrence of an event or conditionconsisting of a Default or Event of Default, specifying the nature andexistence thereof and what action the Credit Parties propose to take withrespect thereto, and (ii) the occurrence of any of the following withrespect to any Consolidated Party (A) the pendency or commencement of anylitigation, arbitral or governmental proceeding against such Person which ifadversely determined is likely to have a Material Adverse Effect or (B) theinstitution of any proceedings against such Person with respect to, or thereceipt of notice by such Person of potential liability or responsibility forviolation, or alleged violation of any Federal, state or local law, rule orregulation, including but not limited to, Environmental Laws, the violation ofwhich could have a Material Adverse Effect.

 

(i)            ERISA.  Upon any Executive Officer of a Credit Partyobtaining knowledge thereof, the Credit Parties will give written notice to theAgent promptly (and in any event within five Business Days) of: (i) anyevent or condition, including, but not limited to, any Reportable Event, thatconstitutes, or might reasonably lead to, an ERISA Event; (ii) withrespect to any Multiemployer Plan, the receipt of notice as prescribed in ERISAor otherwise of any withdrawal liability assessed against the Credit Parties orany ERISA Affiliates, or of a determination that any Multiemployer Plan is inreorganization or insolvent (both within the meaning of Title IV of ERISA);(iii) the failure to make full payment on or before the due date(including extensions) thereof of all amounts which any Consolidated Party orany ERISA Affiliate is required to contribute to each Plan pursuant to itsterms and as required to meet the minimum funding standard set forth in ERISAand the Code with respect thereto; or (iv) any change in the fundingstatus of any Plan that could have a Material Adverse Effect, together with adescription of any such event or condition or a copy of any such notice and astatement by an Executive Officer of the Borrower briefly setting forth thedetails regarding such event, condition, or notice, and the action, if any,which has been or is being taken or is proposed to be taken by the CreditParties with respect thereto.  Promptlyupon request, the Credit Parties shall furnish the Agent and the Lenders withsuch additional information concerning any Plan as may be reasonably requested,including, but not limited to, copies of each annual report/return(Form 5500 series), as well as all schedules and attachments theretorequired to be filed with the Department of Labor and/or the Internal RevenueService pursuant to ERISA and the Code, respectively, for each “plan year”(within the meaning of Section 3(39) of ERISA).

 

(j)            Environmental.  Upon the reasonable written request of theAgent, the Credit Parties will furnish or cause to be furnished to the Agent,at the Credit Parties’ expense, a report of an environmental assessment ofreasonable scope, form and depth, (including, where appropriate, invasive soilor groundwater sampling) by a consultant reasonably acceptable to the Agent asto the nature and extent of the presence of any

 

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Materials ofEnvironmental Concern on any Real Properties (as defined in Section 6.16)contributing to the Borrowing Base and as to the compliance by any ConsolidatedParty with Environmental Laws at such Real Properties.  If the Credit Parties fail to deliver suchan environmental report within seventy-five (75) days after receipt ofsuch written request then the Agent may arrange for same, and the ConsolidatedParties hereby grant to the Agent and their representatives access to the RealProperties to reasonably undertake such an assessment (including, whereappropriate, invasive soil or groundwater sampling).  The reasonable cost of any assessment arranged for by the Agentpursuant to this provision will be payable by the Credit Parties on demand andadded to the Credit Party Obligations.

 

(k)           BorrowingBase Certificates/Delinquency Reports. Within 15 days after the end of each calendar month, a certificate as ofthe end of the immediately preceding month, substantially in the form of Exhibit 7.1(k)and certified by an Executive Officer of the Borrower to be true and correct asof the date thereof (a “Borrowing Base Certificate”) and a DelinquencyReport with respect to the last day of such calendar month certified by anExecutive Officer of the Borrower to be true and correct as of such date.

 

(l)            ThreeYear Projections/Updates.  As soonas available, and in any event within 90 days after the close of each fiscalyear of the Consolidated Parties, detailed projections of financial statementsfor the Consolidated Parties and of calculations with respect to each of theFinancial Covenants, in each case, for the three year period following the mostrecently ended fiscal quarter of the Consolidated Parties.

 

(m)          OtherInformation.  With reasonablepromptness upon any such request, such other information regarding thebusiness, properties or financial condition of any Consolidated Party as theAgent or the Required Lenders may reasonably request.

 

(n)           ReportableTransactions.  Promptly afterBorrower has notified Agent of any intention by Borrower to treat Loans andrelated transactions as being a “reportable transaction” (within the meaning ofTreasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886or any successor form (and Borrower hereby agrees that the Agent and each Lendermay disclose to any and all Persons, without limitation of any kind, anyinformation with respect to the “tax treatment” and “tax structure” (in eachcase, within the meaning of Treasury Regulation Section 1.6011-4) of thetransactions contemplated hereby and all materials of any kind (includingopinions or other tax analyses) that are provided to the Agent or such Lenderrelating to such tax treatment and tax structure).

 

## **7.2          Preservation of Existence,Franchises, Bankruptcy Remote Borrowing Entity Status and REIT Status.**

 

Except as a resultof or in connection with a dissolution, merger or disposition of a Subsidiarynot prohibited by Section 8.4 or Section 8.5, each Credit Party will,and will cause each of its corporate Subsidiaries to, do all things necessaryto preserve and keep in full force and effect its existence, rights,franchises, authority and status as a REIT or Qualified REIT Subsidiary, asapplicable.  The General SPE, HCI andits Wholly Owned Subsidiaries, JV1 and its Wholly Owned Subsidiaries andS&C shall each maintain their respective status as a Bankruptcy RemoteBorrowing Entities and each of the Credit Parties shall take such action as isrequired to maintain such status at all times during the term hereof.  The General SPE shall, at all times duringthe term hereof, remain a Wholly Owned Subsidiary of USRP Operating.  S&C shall, at all times during the termhereof, remain a Wholly Owned Subsidiary of USRP Holding.  USRP Holding shall, at all times during theterm hereof, remain a Wholly Owned Subsidiary of USRP Operating.  JV1 shall, at all times during the termhereof, remain a Wholly Owned Subsidiary of USRP Operating.  HCI shall, at all times during the termhereof, be subject either to the ownership structure set forth on Schedule6.13A as of the Closing Date or be a Wholly Owned Subsidiary of JV1. Theentities set forth on Schedule 6.26 shall, at all times during the termhereof, remain taxable REIT subsidiaries, as such term is used in the Code;provided, that such schedule may be amended from time to time by the Borrowerwith the consent of the Agent, which consent may be withheld in the Agent’sreasonable discretion.

 

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## **7.3          Books and Records.**

 

Each Credit Partywill, and will cause each of its Subsidiaries to, keep complete and accuratebooks and records of its transactions in accordance with good accountingpractices on the basis of GAAP (including the establishment and maintenance ofappropriate reserves).

 

## **7.4          Compliance with Law.**

 

Each Credit Partywill, and will cause each of its Subsidiaries to, comply with all laws, rules,regulations and orders, and all applicable restrictions imposed by allGovernmental Authorities, applicable to it and its Property if noncompliancewith any such law, rule, regulation, order or restriction could have a MaterialAdverse Effect.

 

## **7.5          Payment of Taxes and OtherIndebtedness.**

 

Each Credit Party will, and will cause each of itsSubsidiaries to, pay and discharge (a) all taxes, assessments and governmentalcharges or levies imposed upon it, or upon its income or profits, or upon anyof its properties, before they shall become delinquent, (b) all lawfulclaims (including claims for labor, materials and supplies) which, if unpaid,might give rise to a Lien upon any of its properties, and (c) except asprohibited hereunder, all of its other Indebtedness as it shall become due; provided,however, that no Consolidated Party shall be required to pay any suchtax, assessment, charge, levy, claim or Indebtedness which is being contestedin good faith by appropriate proceedings and as to which adequate reservestherefor have been established in accordance with GAAP, unless the failure tomake any such payment (i) could give rise to an immediate right to forecloseon a Lien securing such amounts or (ii) could have a Material AdverseEffect.

 

## **7.6          Insurance.**

 

Each Consolidated Partywill, and will cause each of its Subsidiaries to, at all times maintain in fullforce and effect insurance (including worker’s compensation insurance,liability insurance, environmental insurance, casualty insurance and businessinterruption insurance) in such amounts, covering such risks and liabilitiesand with such deductibles or self-insurance retentions as are in accordance withnormal industry practice.  The presentinsurance coverage of the Consolidated Parties is outlined as to carrier,policy number, expiration date, type and amount on Schedule 7.6,and the Borrower shall update such Schedule 7.6 and notify theAgent immediately upon the occurrence of any change in such insurance coverage.

 

## **7.7          Maintenance of Property.**

 

Each Credit Partywill, will cause each of its Subsidiaries to, and (as applicable) will use itsbest efforts to cause the applicable Person in possession of a Real Propertyto, maintain and preserve its properties and equipment material to the conductof its business in good repair, working order and condition, normal wear andtear and casualty and condemnation excepted, and will make, or cause to bemade, in such properties and equipment from time to time all repairs, renewals,replacements, extensions, additions, betterments and improvements thereto asmay be needed or proper, to the extent and in the manner customary forcompanies in similar businesses.

 

## **7.8          Performance of Obligations.**

 

Each Credit Partywill, and will cause each of its Subsidiaries to, perform in all materialrespects all of its obligations under the terms of all material agreements andall material indentures, mortgages, security agreements or other debtinstruments to which it is a party or by which it is bound.

 

## **7.9          Use of Proceeds.**

 

The Borrower willuse the proceeds of the Loans solely for the purposes set forth inSection 6.15.

 

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## **7.10        Audits/Inspections.**

 

Upon reasonablenotice and during normal business hours, each Credit Party will, and will causeeach of its Subsidiaries to, permit representatives appointed by the Agent,including, without limitation, independent accountants, agents, attorneys, andappraisers to visit and inspect its property (subject to the rights of tenantsunder their respective leases), including its books and records, its accountsreceivable and inventory, its facilities and its other business assets, and tomake photocopies or photographs thereof and to write down and record anyinformation such representative obtains and shall permit the Agent or itsrepresentatives to investigate and verify the accuracy of information providedto the Lenders and to discuss all such matters with the officers, employees andrepresentatives of such Person.

 

## **7.11        Financial Covenants.**

 

(a)           LeverageRatio.  The Leverage Ratio, as ofthe last day of each fiscal quarter of the Consolidated Parties, shall be (i)for fiscal quarters ending on or before September 30, 2005, less than or equalto 0.65 to 1.0; and (ii) for fiscal quarters ending thereafter, less than orequal to .60 to 1.0.

 

(b)           TangibleNet Worth.  At all times theTangible Net Worth shall be greater than or equal to the sum of (i)$230,000,000.00, plus (ii) an amount equal to 85% of the Net CashProceeds of any Equity Issuance by the Consolidated Parties issued afterSeptember 30, 2003, calculated on a cumulative basis.

 

(c)           FixedCharge Coverage Ratio.  The FixedCharge Coverage Ratio, as of the last day of each fiscal quarter of theConsolidated Parties, shall be (i) for fiscal quarters ending on or beforeSeptember 30, 2005, greater than or equal to 1.40 to 1.0; and (ii) for fiscalquarters ending thereafter, greater than or equal to 1.50 to 1.0.

 

(d)           DistributionLimitation.  For any given fiscal quarter of the Consolidated Parties, the aggregatesum of (i) the amount of cash distributions made or declared by theConsolidated Parties to their shareholders (excluding any shareholders whichare Consolidated Parties) plus (ii) the amount spent by the ConsolidatedParties for the purpose of repurchasing their own Capital Stock (whether commonor preferred) shall not exceed the greater of (1) the FFO DistributionAllowance for such fiscal quarter or (2) so long as no Default or Event ofDefault has occurred and is then continuing, the amount necessary to maintainthe status of the USRP REIT as a REIT.

 

(e)           Secured Indebtedness to Asset Value Ratio.  The ratio of (i) Secured Indebtednessof the Consolidated Parties on a consolidated basis to (ii) the sum of Asset Values for each of the Real Properties (lessany amounts attributable to Minority Interests) as of the end of each fiscalquarter of the Consolidated Parties shall be less than or equal to 0.40 to 1.0.

 

(f)            Debt Service Coverage Ratio.  The Debt Service Coverage Ratio shall be, atall times, be equal to or greater than 2.25 to 1.0.

 

For clarificationpurposes, the Credit Parties shall be permitted, in determining compliance withthe financial covenants set forth above in clauses (a), (c), (d) and (f) ofthis Section 7.11, to round the results of the final ratio calculations (butnot calculations of any of other amounts used in determining such ratios) tothe nearest hundredth (.01).

 

## **7.12        New Subsidiaries.**

 

As soon aspracticable and in any event within 30 days after any Person becomes a director indirect Subsidiary of the General Partner, the USRP REIT or the Borrower,the Borrower shall provide the Agent with written notice thereof setting forthinformation in reasonable detail describing all of the assets of such Personand shall (a) if such Person is a Domestic Subsidiary, cause suchPerson to (a) execute a Joinder Agreement in substantially the same form as Exhibit 7.12and (b) deliver such other documentation as the Agent may reasonablyrequest in connection therewith, including, without limitation, financialstatements, certified resolutions and other organizational and authorizingdocuments of such Person, favorable opinions of counsel to such Person (whichshall cover, among other things, the legality, validity, binding effect andenforceability of the documentation referred to above) and other items of thetypes required to be delivered pursuant to Section 5.1, as applicable, allin form,

 

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content and scopereasonably satisfactory to the Agent; provided, that this Section 7.12shall not be construed to require USRP Funding 2001-A, L.P., USRP (SFGP), LLC,LLC, USRP (Hawaii), LLC, USRP (Bob), LLC and Fuel Supply, Inc. (or theirrespective successor entities) to execute Joinder Agreements or otherwise actas Subsidiary Guarantors hereunder unless and until (i) with respect to USRPFunding 2001-A, L.P., such entity ceases to maintain its status as a SpecialPurpose Entity, or (ii) with respect to each such entity, such entity is notprohibited by the terms of other financing transactions or its organizationaldocuments from acting as a Guarantor hereunder.  For purposes of the preceding sentence, it is understood that noentity shall be deemed prohibited from executing a Joinder Agreement once itbecomes a Wholly Owned Subsidiary by virtue of a provision in itsorganizational documents notwithstanding any such provision in such documents.

 

## **7.13        ERISA Exemptions.**

 

Each Credit Party and the Borrower shall not, and shall not permit any oftheir respective Subsidiaries to, permit any of their respective assets tobecome or be deemed to be “plan assets” within the meaning of ERISA, the Codeand the respective regulations promulgated thereunder.

 

## **7.14        Further Assurances.**

 

The Borrowershall, from time to time, at the expense of the Borrower, promptly execute,deliver, file and/or record all further instruments and documents, and take allfurther action, that may be necessary or desirable, or that the Agent orCollateral Agent may reasonably request in order to (a) properly evidence theBorrower’s Indebtedness hereunder or under any Credit Document or (b) perfect,continue and protect the pledge, assignment and/or security interest, asapplicable, granted or purported to be granted hereby or pursuant to any CreditDocument and to enable the Agent and/or Collateral Agent to exercise andenforce their rights and remedies hereunder and under any other CreditDocument.  The Borrower shall promptlydeliver to the Collateral Agent and the Agent a copy of each such instrumentand evidence of its proper filing or recording, as necessary.

 

# **ARTICLE VIII**NEGATIVE COVENANTS

 

Each Credit Partyhereby covenants and agrees that, so long as this Credit Agreement is in effector any amounts payable hereunder or under any other Credit Document shallremain outstanding:

 

## **8.1          Indebtedness.**

 

The Credit Partieswill not permit any Consolidated Party to contract, create, incur, assume orpermit to exist any Indebtedness, except:

 

(a)           Indebtednessarising under this Credit Agreement, the other Credit Documents and theRevolving Credit Documents;

 

(b)           Indebtedness under the Hawaii Loan Documents orin existence as of the Agreement Date and described on Schedule 8.1and any Indebtedness (the “Replacement Indebtedness”) extending thematurity of, or refunding, refinancing or replacing, in whole or in part, anysuch existing Indebtedness (the “Replaced Indebtedness”) so long as (i)the direct and contingent obligors with respect to the Replaced Indebtednessand the Replacement Indebtedness shall be the same, (ii) the ReplacementIndebtedness shall not mature prior to the stated maturity date or mandatoryredemption date of the Replaced Indebtedness, (iii) if the ReplacedIndebtedness is subordinated in right of payment or otherwise to theobligations of each of the Credit Parties under and in respect of the CreditDocuments to which any of them is a party, then the Replacement Indebtednessmust be subordinated to such obligations to at least the same extent and (iv)the Replacement Indebtedness otherwise complies with all other terms andconditions contained in any other Section of this Credit Agreement;

 

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(c)           purchasemoney Indebtedness (including obligations in respect of Capital Leases orSynthetic Leases) hereafter incurred by the Borrower or any of its Subsidiariesto finance the purchase of fixed assets; provided that (i) thetotal of all such Indebtedness for all such Persons taken together shall notexceed an aggregate principal amount of $250,000 at any one time outstanding;(ii) such Indebtedness when incurred shall not exceed the purchase priceof the asset(s) financed; and (iii) no such Indebtedness shall berefinanced for a principal amount in excess of the principal balanceoutstanding thereon at the time of such refinancing;

 

(d)           Indebtedness resulting from customary recourse carve-outsassociated with securitization transactions (including, by way of example,those for fraud, misapplication of proceeds and environmental indemnities) andnot involving the creditworthiness of the applicable obligors;

 

(e)           Indebtednessin the form of trade payables incurred in the ordinary course of business;

 

(f)            obligationsof the Borrower in respect of Hedging Agreements to the extent such agreementsare for the purpose of hedging interest rate risk with respect to theIndebtedness under the Credit Documents or are otherwise approved by the Agent,in its discretion;

 

(g)           intercompany Indebtedness permittedunder Section 8.6; provided, however,that the obligations of each obligor of such Indebtedness shall: (i) besubordinated to the Credit Party Obligations on terms acceptable to theRequired Term Loan Lenders in their sole discretion and (ii) have such otherterms and provisions as the Agent may reasonably require;

 

(h)           inaddition to the Indebtedness otherwise permitted by this Section 8.1,

 

(i)            otherrecourse Indebtedness hereafter incurred by the General Partner, the Borroweror any of their Subsidiaries provided that (A) the loandocumentation with respect to such Indebtedness shall not contain financialcovenants or default provisions relating to any Consolidated Party that aremore restrictive than the covenants and default provisions contained in theCredit Documents, (B) the Borrower shall have delivered to the Agent a ProForma Compliance Certificate demonstrating that, upon giving effect on a ProForma Basis to the incurrence of such Indebtedness and to the concurrentretirement of any other Indebtedness of any Consolidated Party, the CreditParties would be in compliance with the Financial Covenants and (C) theaggregate principal amount of such Indebtedness, together with Indebtednesspermitted pursuant to Sections 8.1(c) and (f) shall not at any time exceed$20,000,000 plus the amount of any hedge obligations incurred with respect to aTerm Securitization;

 

(ii)           Indebtednesswhere the recourse of the lender is limited to foreclosure of its securityinterest in the subject property; and

 

(iii)          GuarantyObligations of any Guarantor with respect to any Indebtedness permitted underthis Section 8.1.

 

Notwithstanding the foregoing, the General Partner and the Borrower shallnot, and shall not permit any other Subsidiary to, create, incur or assume anyIndebtedness after the Closing Date if immediately prior to the creation,incurring or assumption thereof, or immediately thereafter and after givingeffect thereto, a Default or Event of Default is or would be in existence,including without limitation, a Default or Event of Default resulting from aviolation of any of the covenants contained in this Section 8.1.

 

## **8.2          Liens.**

 

The Credit Partieswill not permit any Consolidated Party to contract, create, incur, assume orpermit to exist any Lien with respect to any of its Property, whether now ownedor after acquired, except for:

 

(a)           Liens in favor of the Agent to securethe Credit Party Obligations;

 

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(b)           (i) Liens, about which any CreditParty has had knowledge for less than thirty (30) days, in an aggregateamount less than $200,000 (other than Liens created or imposed under ERISA) fortaxes, assessments or governmental charges or levies not yet due or, if due,are for taxes, assessments or governmental charges or levies that are more thanfive (5) days from the date on which such items may be deemed delinquentor on which penalties for non-payment may be assessed or (ii) Liens for taxesbeing contested in good faith by appropriate proceedings for which adequatereserves determined in accordance with GAAP have been established (and as towhich the Property subject to any such Lien is not yet subject to foreclosure,sale or loss on account thereof);

 

(c)           statutory Liens of landlords andLiens of carriers, warehousemen, mechanics, materialmen and suppliers and otherLiens imposed by law or pursuant to customary reservations or retentions oftitle arising in the ordinary course of business, in each case which any CreditParty has had knowledge for less than thirty (30) days, in an aggregateamount less than $200,000, provided that such Liens secure only amountsnot yet due and payable or, if due and payable, are unfiled and no other actionhas been taken to enforce the same or are being contested in good faith byappropriate proceedings for which adequate reserves determined in accordancewith GAAP have been established (and as to which the Property subject to anysuch Lien is not yet subject to foreclosure, sale or loss on account thereof);

 

(d)           Liens (other than Liens created orimposed under ERISA) incurred or deposits made by any Consolidated Party in theordinary course of business in connection with workers’ compensation, unemploymentinsurance and other types of social security, or to secure the performance oftenders, statutory obligations, bids, leases, government contracts, performanceand return-of-money bonds and other similar obligations (exclusive ofobligations for the payment of borrowed money);

 

(e)           Liens in connection with attachmentsor judgments (including judgment or appeal bonds) provided that thejudgments secured shall, within 30 days after the entry thereof, have beendischarged or execution thereof stayed pending appeal, or shall have beendischarged within 30 days after the expiration of any such stay;

 

(f)            easements, rights-of-way,restrictions (including zoning restrictions), minor defects or irregularitiesin title and other similar charges or encumbrances not, in any materialrespect, impairing the use of the encumbered Property for its intendedpurposes;

 

(g)           Liens on Property of any Personsecuring purchase money Indebtedness (including Capital Leases and SyntheticLeases) of such Person permitted under Section 8.1(c), providedthat any such Lien attaches to such Property concurrently with or within 90days after the acquisition thereof;

 

(h)           leases or subleases granted to othersnot interfering in any material respect with the business of any ConsolidatedParty;

 

(i)            any interest of title of a lessorunder, and Liens arising from UCC financing statements (or equivalent filings,registrations or agreements in foreign jurisdictions) relating to, leasespermitted by this Credit Agreement;

 

(j)            Liens deemed to exist in connectionwith Investments in repurchase agreements permitted under Section 8.6;

 

(k)           normal and customary rights of setoffupon deposits of cash in favor of banks or other depository institutions;

 

(l)            Liens of a collection bank arisingunder Section 4-210 of the Uniform Commercial Code on items in the courseof collection;

 

(m)          Liens of sellers of goods to theBorrower and any of its Subsidiaries arising under Article 2 of theUniform Commercial Code or similar provisions of applicable law in the ordinarycourse of

 

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business, covering onlythe goods sold and securing only the unpaid purchase price for such goods andrelated expenses;

 

(n)           Liens existing as of the Closing Dateas set forth or as contemplated on Schedule 8.2; providedthat no such Lien shall at any time be extended to or cover any Propertyother than the Property subject thereto on the Closing Date (other than inconnection with the collateral substitution provisions contained in the 2001-ATerm Securitization Documents);

 

(o)           Liens on property owned by USRP(Bob), LLC, USRP (Hawaii), LLC and/or Fuel Supply, Inc. created in connectionwith the Hawaii Loan Documents; and

 

(p)           Liens securing Indebtedness describedin Section 8.1(h)(ii).

 

## **8.3          Nature of Business.**

 

The Credit Partieswill not permit any Consolidated Party to substantively alter the character orconduct of the business conducted by such Person as of the Closing Date.

 

## **8.4          Consolidation, Merger, Dissolution, etc.**

 

The Credit Partieswill not permit any Consolidated Party to enter into any transaction of mergeror consolidation or liquidate, wind up or dissolve itself (or suffer anyliquidation or dissolution); provided that, notwithstanding theforegoing provisions of this Section 8.4 but subject to the terms ofSections 7.12, (a) the Borrower or General Partner may merge orconsolidate with any of its Subsidiaries provided that the Borrower orGeneral Partner (as applicable) shall be the continuing or surviving corporation,(b) any Credit Party other than the General Partner or the Borrower maymerge or consolidate with any other Credit Party other than the General Partneror the Borrower, (c) any Consolidated Party which is not a Credit Partymay be merged or consolidated with or into any Credit Party; providedthat such Credit Party shall be the continuing or surviving corporation,(d) any Consolidated Party which is not a Credit Party may be merged orconsolidated with or into any other Consolidated Party which is not a CreditParty, and (e) any Wholly Owned Subsidiary of the Borrower may dissolve,liquidate or wind up its affairs at any time provided that such dissolution,liquidation or winding up, as applicable, could not have a Material AdverseEffect and such entity does not hold any material property or assets (except tothe extent such property or assets are able to be transferred to a Credit Partywithout additional consideration from such Credit Party and without adverse taxconsequences to such Credit Party).

 

## **8.5          Asset Dispositions/Substitution ofAssets.**

 

(a)           The Credit Parties will not permitany Consolidated Party to make any Asset Disposition or series of AssetDispositions in which the aggregate value of the assets sold or otherwisedisposed pursuant to such Asset Disposition or series of Asset Dispositionsexceeds an amount equal to (i) ten percent (10.0%) multiplied by (ii)Total Tangible Assets, as calculated on the Closing Date, unless the Borrowershall have delivered to the Agent at least two (2) Business Days prior tosuch Asset Disposition or series of Asset Dispositions a Pro Forma ComplianceCertificate demonstrating on a Pro Forma Basis that, upon giving effect to suchAsset Disposition or series of Asset Dispositions, the Credit Parties shall be incompliance with all of the covenants contained in Section 7.11.

 

(b)           Neither the General SPE, nor HCI orany of its Wholly Owned Subsidiaries, nor JV1 or any of its Wholly OwnedSubsidiaries, nor S&C shall sell, transfer, assign, pledge, encumber orotherwise dispose of any of their respective assets except to the extent suchentity obtains the prior written consent of the Agent (which consent may bewithheld at the sole reasonable discretion of the Agent).

 

## **8.6          Investments.**

 

The Credit Partieswill not permit any Consolidated Party to make or have any Investments afterthe Closing Date, except for:

 

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(a)           Investments in any Credit Party;

 

(b)           Investments consisting of cash andCash Equivalents;

 

(c)           Investments consisting of accountsreceivable created, acquired or made by any Consolidated Party in the ordinarycourse of business and payable or dischargeable in accordance with customarytrade terms;

 

(d)           Investments consisting of CapitalStock, obligations, securities or other property received by any ConsolidatedParty in settlement of accounts receivable (created in the ordinary course ofbusiness) from bankrupt obligors or guarantors of bankrupt obligors;

 

(e)           Investments consisting of loans oradvances to Tenants in an amount not to exceed $25,000,000.00 in the aggregate;

 

(f)            Investments consisting of advancesor loans to employees existing as of the date hereof and additional suchInvestments made following the date hereof that do not, in the aggregate,exceed the sum of $100,000.00;

 

(g)           Investments entered into inconnection with a Term Securitization permitted and contemplated hereunder;

 

(h)           Investments in non-wholly ownedgeneral and limited partnerships, joint ventures and other Persons which are notcorporations (excluding such Investments in existence as of the date hereof),the aggregate book value of which constitutes less than five percent (5%)of Total Tangible Assets;

 

(i)            Investments in DevelopmentActivities; provided, that (i) the aggregate amount of Investments madeby the Consolidated Parties with respect to such Development Activities shallnot, at any one time, exceed $15,000,000.00 and (ii) all costs and expensesassociated with all existing Development Activities (budget to completion)shall be included in determining the aggregate Investment of the ConsolidatedParties with respect to such activities;

 

(j)            Investments consisting of loans toPersons who have or are purchasing real property from a Consolidated Party;provided that (i) the total aggregate amount of such loans shall not exceed$45,000,000.00, (ii) such loans shall be made on a secured basis and (iii) suchloans shall be made on commercially reasonable terms and require at least 10%cash equity;

 

(k)           Investments in marketable securitiesthat do not, in the aggregate, exceed the sum of $5,000,000.00;

 

(l)            Investments in common equitysecurities that do not, in the aggregate, exceed the sum of $5,000,000.00 andInvestments in preferred equity securities that do not, in the aggregate,exceed the sum of $5,000,000.00; provided, that, the Agent is given a summaryof the amount and type of such equity securities prior to the making of suchinvestment; and

 

(m)          Investments in debt securities that donot, in the aggregate, exceed $30,000,000.00; provided, that such debtsecurities are fully performing and have a current yield equal to or in excessof 9.50%.

 

Notwithstandingthe foregoing, the Credit Parties will not permit the total Investments of theConsolidated Parties related to items (c) through (m) above shall not, in anycase, exceed 12.0% of Total Tangible Assets.

 

## **8.7          Restricted Payments.**

 

Except as setforth on Schedule 8.11, the Credit Parties will not permit anyConsolidated Party to, directly or indirectly, declare, order, make or setapart any sum for or pay any Restricted Payment, except (a) to makedividends or other distributions payable to any Credit Party (directly orindirectly through Subsidiaries), (b) SpecialPurpose Entities

 

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may(directly or indirectly through any intermediate Subsidiaries) (i) makeRestricted Payments to the extent required to do so under the terms of a TermSecuritization and (ii) distribute I/O Strips and other assets to the GeneralPartner, the Borrower or any other Guarantor and (c) as expresslypermitted by Section 7.11(d), Section 8.6, Section 8.8 orSection 8.9.

 

## **8.8          Other Indebtedness.**

 

The Credit Partieswill not permit any Consolidated Party to if any Default or Event of Defaulthas occurred and is continuing or would be directly or indirectly caused as aresult thereof, (a) after the issuance thereof, amend or modify any of theterms of any Indebtedness of such Consolidated Party if such amendment ormodification would add or change any terms in a manner adverse to suchConsolidated Party, or shorten the final maturity or average life to maturityor require any payment to be made sooner than originally scheduled or increasethe interest rate applicable thereto, or (b) make (or give any notice withrespect thereto) any voluntary or optional payment or prepayment or redemptionor acquisition for value of (including without limitation, by way of depositingmoney or securities with the trustee with respect thereto before due for thepurpose of paying when due), refund, refinance or exchange of any otherIndebtedness of such Consolidated Party.

 

## **8.9          Transactions with Affiliates.**

 

The Credit Partieswill not permit any Consolidated Party to enter into or permit to exist anytransaction or series of transactions with any officer, director, shareholder,Subsidiary or Affiliate of such Person other than (a) advances of workingcapital to any Credit Party, (b) transfers of cash and assets to anyCredit Party, (c) intercompany transactions expressly permitted bySection 8.1, Section 8.4, Section 8.5, Section 8.6, orSection 8.7, (d) normal compensation and reimbursement of expenses ofofficers and directors and (e) except as otherwise specifically limited inthis Credit Agreement, other transactions which are entered into in theordinary course of such Person’s business on terms and conditions substantiallyas favorable to such Person as would be obtainable by it in a comparablearms-length transaction with a Person other than an officer, director, shareholder,Subsidiary or Affiliate.

 

## **8.10        Fiscal Year; OrganizationalDocuments.**

 

The Credit Partieswill not permit any Consolidated Party to change its fiscal year or amend,modify or change its articles of incorporation (or corporate charter or othersimilar organizational document) or bylaws (or other similar document).

 

## **8.11        Limitation on Restricted Actions.**

 

The Credit Partieswill not permit any Consolidated Party to, directly or indirectly, create orotherwise cause or, except as set forth on Schedule 8.11, suffer toexist or become effective any encumbrance or restriction on the ability of anysuch Person to (a) pay dividends or make any other distributions to anyCredit Party on its Capital Stock or with respect to any other interest orparticipation in, or measured by, its profits, (b) pay any Indebtedness orother obligation owed to any Credit Party, (c) make loans or advances toany Credit Party, (d) sell, lease or transfer any of its properties orassets to any Credit Party, or (e) act as a Credit Party and pledge itsassets pursuant to the Credit Documents or any renewals, refinancings,exchanges, refundings or extension thereof, except (in respect of any of thematters referred to in clauses (a)-(d) above) for such encumbrances orrestrictions existing under or by reason of (i) this Credit Agreement andthe other Credit Documents, (ii) applicable law, (iii) any documentor instrument governing Indebtedness incurred pursuant to (A)Section 8.1(b), and (B) with respect to clause (d) of this Section 8.11only, Section 8.1(h), provided that any such restriction containedtherein relates only to the asset or assets constructed or acquired inconnection therewith, (iv) any Permitted Lien or any document orinstrument governing any Permitted Lien, provided that any suchrestriction contained therein relates only to the asset or assets subject tosuch Permitted Lien or (v) customary restrictions and conditions containedin any agreement relating to the sale of any Property permitted under Section 8.5pending the consummation of such sale.

 

## **8.12        Contingent Obligations.**

 

Neitherthe General Partner nor the Borrower shall become or remain liable, or permitany other Subsidiary to become or remain liable, on or under any ContingentObligation other than the following:

 

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(a)           Contingent Obligations arising underany of the Credit Documents;

 

(b)           Contingent Obligations in existenceas of the Closing Date (the material ones having been disclosed to the Agent inwriting on Schedule 8.12(b) attached hereto) and any ContingentObligation incurred in replacement, in whole or in part, of any such existingContingent Obligations so long as (i) the amount of such replacement ContingentObligation shall not be increased, (ii) such replacement Contingent Obligationshall not mature or otherwise be required to be performed prior to thecorresponding maturity or performance date of the Contingent Obligation beingso replaced, and (iii) if the Contingent Obligation being so replaced issubordinated to any of the Credit Party Obligations, such replacementContingent Obligation shall be subordinated to such obligations to at least thesame extent;

 

(c)           Contingent Obligations resulting fromendorsement of negotiable instruments for collection or deposit in the ordinarycourse of business;

 

(d)           Contingent Obligations incurred inthe ordinary course of business with respect to surety and appeal bonds,performance and return-of-money bonds and other similar obligations;

 

(e)           Contingent Obligations to the extentconstituting Indebtedness permitted under Section 8.1; and

 

(f)            Guaranties by a Consolidated Partyof the obligations of another Consolidated Party;

 

## **8.13        Sale Leasebacks.**

 

Notwithstandinganything contained herein to the contrary, the Credit Parties will not permitany Consolidated Party to enter into any Sale and Leaseback Transaction (exceptto the extent USRP (Bob), LLC or USRP (Hawaii), LLC enters into any suchtransaction with respect to any gas station assets held by such Person).

 

## **8.14        Borrowing Base Asset Removal.**

 

(a)           Notwithstandinganything to the contrary contained herein, prior to the date on which theobligations under the Revolving Credit Documents are Fully Satisfied, no CreditParty shall, at any time, seek to otherwise voluntarily remove or permit to beremoved any Borrowing Base Assets from qualification as such (whether inanticipation of the Disposition or encumbrance thereof or otherwise), unless(i) the Borrower shall have delivered to the Agent (and, to the extent suchremoval shall require Required Lender approval, the Required Lenders) at leasttwenty (20) Business Days prior to the effective date of such removal, a ProForma Compliance Certificate demonstrating that, upon giving effect to suchremoval, on a Pro Forma Basis, the Credit Parties shall be in compliance withall of the Financial Covenants contained herein and (ii) to the extent (A) theBorrowing Base Asset Value attributable to the Borrowing Base Asset(s) proposedfor removal, plus the Borrowing Base Asset Values attributable to all othersuch assets that have been removed during the previous twelve (12) calendarmonths or that have been approved for removal pursuant to the terms hereofduring such period (and which the Borrower still intends to remove from theBorrowing Base calculation) is less than ten percent (10.0%) of the aggregateBorrowing Base Asset Value, as determined as of the Closing Date, the Agenthas, in its reasonable discretion, approved such removal in writing; or (B) theBorrowing Base Asset Value attributable to the Borrowing Base Asset(s) proposedfor removal, plus the Borrowing Base Asset Values attributable to all othersuch assets that have been removed during the previous twelve (12) calendarmonths or that have been approved for removal pursuant to the terms hereofduring such period (and which the Borrower still intends to remove from theBorrowing Base calculation) is greater than ten percent (10.0%) of theaggregate Borrowing Base Asset Value, as determined as of the Closing Date, theAgent and the Required Lenders have approved such removal in writing; provided,however, that to the extent the Borrowing Base Asset Value attributable to theBorrowing Base Asset(s) proposed for removal, plus the Borrowing Base Asset Valuesattributable to all other such assets that have been removed during the termhereof or that have been approved for removal pursuant to the terms hereofduring such period (and which the Borrower still intends to remove from theBorrowing Base calculation) is greater than twenty percent (20.0%) of theaggregate Borrowing Base Asset Value, as determined as of the Closing Date,such removal shall, in any case, require the written approval of the Agent andthe Required Lenders.

 

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(b)           Commencingas of the date on which the obligations under the Revolving Credit Documentsare Fully Satisfied and continuing for a period of ninety (90) days thereafter,the Credit Parties shall be permitted to remove Borrowing Base Assets fromqualification as such without further approval from the Agent or the RequiredLenders upon delivery to the Agent of a Pro Forma Compliance Certificatedemonstrating that, upon giving effect to such removal, on a Pro Forma Basis,the Credit Parties shall be in compliance with all of the Financial Covenantscontained herein; provided, that Agent does not dispute any of the amounts orcalculations set forth in such Pro Forma Compliance Certificate.

 

(c)           Commencingas of the date occurring ninety (90) days following the date on which theobligations under the Revolving Credit Documents are Fully Satisfied, andnotwithstanding anything to the contrary contained herein, no Credit Partyshall, at any time, seek to otherwise voluntarily remove or permit to beremoved any Borrowing Base Assets from qualification as such (whether inanticipation of the Disposition or encumbrance thereof or otherwise), unless(i) the Borrower shall have delivered to the Agent (and, to the extent suchremoval shall require Required Lender approval, the Required Lenders) at leasttwenty (20) Business Days prior to the effective date of such removal, a ProForma Compliance Certificate demonstrating that, upon giving effect to suchremoval, on a Pro Forma Basis, the Credit Parties shall be in compliance withall of the Financial Covenants contained herein and (ii) to the extent (A) theBorrowing Base Asset Value attributable to the Borrowing Base Asset(s) proposedfor removal, plus the Borrowing Base Asset Values attributable to all othersuch assets that have been removed during the previous twelve (12) calendarmonths (or, if shorter the period commencing as of the date occurring ninety(90) days following the date on which the obligations under the RevolvingCredit Documents are Fully Satisfied and extending through the date of therequest for removal) or that have been approved for removal pursuant to theterms hereof during such period (and which the Borrower still intends to removefrom the Borrowing Base calculation) is less than ten percent (10.0%) of theaggregate Borrowing Base Asset Value, as determined as of the date occurringninety (90) days following the date on which the obligations under theRevolving Credit Documents are Fully Satisfied, the Agent has, in its reasonablediscretion, approved such removal in writing; or (B) the Borrowing Base AssetValue attributable to the Borrowing Base Asset(s) proposed for removal, plusthe Borrowing Base Asset Values attributable to all other such assets that havebeen removed during the previous twelve (12) calendar months (or, if shorterthe period commencing as of the date occurring ninety (90) days following thedate on which the obligations under the Revolving Credit Documents are FullySatisfied and extending through the date of the request for removal) or thathave been approved for removal pursuant to the terms hereof during such period(and which the Borrower still intends to remove from the Borrowing Basecalculation) is greater than ten percent (10.0%) of the aggregate BorrowingBase Asset Value, as determined as of the date occurring ninety (90) daysfollowing the date on which the obligations under the Revolving CreditDocuments are Fully Satisfied, the Agent and the Required Lenders have approvedsuch removal in writing; provided, however, that to the extent the BorrowingBase Asset Value attributable to the Borrowing Base Asset(s) proposed forremoval, plus the Borrowing Base Asset Values attributable to all other suchassets that have been removed during the period commencing as of the dateoccurring ninety (90) days following the date on which the obligations underthe Revolving Credit Documents are Fully Satisfied and extending through thedate of such requested removal or that have been approved for removal pursuantto the terms hereof during such period (and which the Borrower still intends toremove from the Borrowing Base calculation) is greater than twenty percent(20.0%) of the aggregate Borrowing Base Asset Value, as determined as of thedate occurring ninety (90) days following the date on which the obligationsunder the Revolving Credit Documents are Fully Satisfied, such removal shall,in any case, require the written approval of the Agent and the RequiredLenders.

 

(d)           All approvals or rejections ofremoval requests delivered by the Borrower to the Agent and/or Required Lendershereunder shall be delivered by the Agent and/or the Required Lenders, asapplicable, within fifteen (15) days of their receipt thereof or shall bedeemed to be an approval of such request. ** **Followingthe date on which the obligations under the Revolving Credit Documents areFully Satisfied, the Credit Parties shall be permitted to remove Borrowing BaseAssets from qualification as such to the extent the Borrowing Base, at alltimes, exceeds the outstanding principal balance of the Term Loans.

 

## **8.15        Negative Pledges/Liens.**

## ** **

Notwithstanding anythingcontained herein or in any other Credit Document to the contrary:

 

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(a)           noneof the Consolidated Parties shall, at any time, enter into, assume or becomesubject to any Negative Pledge on their Property prohibiting or otherwiserestricting the existence of any Lien upon any of its Property in favor of theAgent (for the benefit of the Lenders) for the purpose of securing the CreditParty Obligations, except (i) in connection with any document or instrumentgoverning Indebtedness incurred in accordance with Section 8.1(c);provided, that any such restriction contained therein relates only to the assetor assets constructed or acquired in connection therewith, (ii) in connectionwith any Permitted Lien or any document or instrument governing any PermittedLien, provided, that any such restriction contained therein relates only to theasset or assets subject to such Permitted Lien, (iii) pursuant to customaryrestrictions and conditions contained in any agreement relating to the sale ofany Property permitted under Section 8.5, pending the consummation of suchsale and (iv) with respect to USRP (Bob), LLC, USRP (Hawaii), LLC and FuelSupply, Inc., pursuant to the terms of the Hawaii Loan Documents;

 

(b)           noneof the Consolidated Parties shall, at any time, pledge or otherwise encumber(except in connection herewith or with any of the Credit Documents) any incomederived from any of the assets contributing to the calculation of BorrowingBase Asset Value;

 

(c)           theGeneral SPE shall not, at any time, contract, create, incur, assume or permitto exist any Lien with respect to any of its assets except to the extent suchLiens are of the types described in Sections 8.2(a), (b), (c), (d), (e), (f),(h) and (i);

 

(d)           the General SPE shall****not, in any case, incur anyIndebtedness or Contingent Obligations aside from Indebtedness and/orContingent Obligations arising in connection with the Credit Documents andIndebtedness and/or Contingent Obligations of the type described in Section8.1(e);

 

(e)           USRPOperating shall not, at any time, contract, create, incur, assume or permit toexist any Lien on its ownership interests in the General SPE or on the incomederived therefrom (except to the extent such Liens arise in connection with theCredit Documents);

 

(f)            S&C shall not, at any time,contract, create, incur, assume or permit to exist any Lien with respect to anyof its assets except to the extent such Liens are of the types described inSections 8.2(a), (b), (c), (d), (e), (f), (h) and (i);

 

(g)           S&C shall****not, in any case, incur any Indebtedness or ContingentObligations aside from Indebtedness and/or Contingent Obligations arising inconnection with the Credit Documents and Indebtedness and/or ContingentObligations of the type described in Section 8.1(e);

 

(h)           USRP Holding shall not, at any time,contract, create, incur, assume or permit to exist any Lien on its ownershipinterests in S&C or on the income derived therefrom (except to the extentsuch Liens arise in connection with the Credit Documents);

 

(i)            HCI and its Wholly OwnedSubsidiaries shall not, at any time, contract, create, incur, assume or permitto exist any Lien with respect to any of its assets except to the extent suchLiens are of the types described in Sections 8.2(a), (b), (c), (d), (e), (f),(h) and (i);

 

(j)            HCI  and its Wholly Owned Subsidiaries shall****not, in any case, incur any Indebtedness or ContingentObligations aside from Indebtedness and/or Contingent Obligations arising inconnection with the Credit Documents and Indebtedness and/or ContingentObligations of the type described in Section 8.1(e);

 

(k)           JVI shall not, at any time, contract,create, incur, assume or permit to exist any Lien on its ownership interests inHCI or on the income derived therefrom (except to the extent such Liens arisein connection with the Credit Documents);

 

(l)            JV1 and its Wholly OwnedSubsidiaries shall not, at any time, contract, create, incur, assume or permitto exist any Lien with respect to any of its assets except to the extent suchLiens are of the types described in Sections 8.2(a), (b), (c), (d), (e), (f),(h) and (i);

 

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(m)          JV1and its Wholly Owned Subsidiaries shall****not,in any case, incur any Indebtedness or Contingent Obligations aside fromIndebtedness and/or Contingent Obligations arising in connection with theCredit Documents and Indebtedness and/or Contingent Obligations of the typedescribed in Section 8.1(e); and

 

(n)           USRP Operating shall not, at anytime, contract, create, incur, assume or permit to exist any Lien on itsownership interests in JV1 or on the income derived therefrom (except to theextent such Liens arise in connection with the Credit Documents).

 

## **8.16        Operating Lease Obligations.**

 

The Credit Partieswill not permit any Consolidated Party to enter into, assume or permit to existany obligations for the payment of rental under Operating Leases (excludingGround Lease Interests) which in the aggregate for all such Persons wouldexceed $1,000,000 in any fiscal year.

 

## **8.17        No Foreign Subsidiaries.**

 

The Credit Partieswill not create, acquire or permit to exist any Foreign Subsidiary.

 

## **8.18        Ground Leases.**

 

Forall leases executed following the Closing Date, the USRP REIT, the GeneralPartner and the Borrower shall, and shall not permit any other ConsolidatedSubsidiary to, lease as lessee any real property pursuant to a ground leaseunless such ground lease contains customary provisions protective of any lenderto the lessee which provisions do not vary in any material respect from thoserequired under the Borrower’s standard underwriting procedures and policies.

 

## **8.19        ERISA Exemptions.**

 

The USRP REIT, the General Partner and the Borrower shall not, and shallnot permit any other Consolidated Subsidiary to, permit any of its respectiveassets to become or be deemed to be “plan assets” within the meaning of ERISA,the Code and the respective regulations promulgated thereunder.

 

## **8.20        Transfer of Assets to Non-GuarantorSubsidiaries and Affiliates.**

 

The USRP REIT, the General Partner and the Borrower shall not, and shallnot permit any other Consolidated Subsidiary to, transfer any of theirrespective assets to any of their respective Subsidiaries or Affiliates except(a) to the extent the applicable Subsidiary or Affiliate has, at the time ofsuch transfer, executed a Joinder Agreement and is a Guarantor hereunder or (b)pursuant to the terms of the collateral substitution provisions of the 2001-ATerm Securitization Documents.

 

## **8.21        Revolving Credit Document Covenantsand Amendments.**

 

Borrower shall notviolate any of the covenants, terms or conditions set forth in the RevolvingCredit Documents (except to the extent such covenants, terms or conditions arewaived in accordance with the terms thereof) or otherwise permit to exist any“Event of Default” (as defined in the Revolving Credit Agreement) to occur atany time during the term of this Credit Agreement.

 

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# **ARTICLE IX**EVENTS OF DEFAULT

 

## **9.1          Events of Default.**

 

An Event ofDefault shall exist upon the occurrence and during the continuance of any ofthe following specified events (each an “Event of Default”):

 

(a)           Payment.  Any Credit Party shall

 

(i)            default in the payment when due ofany principal of any of the Loans, or

 

(ii)           default,and such default shall continue for three (3) or more Business Days, inthe payment when due of any interest on the Loans or of any Fees or otheramounts owing hereunder, under any of the other Credit Documents or inconnection herewith or therewith; or

 

(b)           Representations.  Any representation, warranty or statementmade or deemed to be made by any Credit Party herein, in any of the otherCredit Documents, or in any statement or certificate delivered or required tobe delivered pursuant hereto or thereto shall prove untrue in any materialrespect on the date as of which it was deemed to have been made; or

 

(c)           Covenants.  Any Credit Party shall

 

(i)            defaultin the due performance or observance of any term, covenant or agreementcontained in Sections 7.2, 7.9, 7.11 or 7.12 or Section 8;

 

(ii)           defaultin the due performance or observance of any term, covenant or agreementcontained in Sections 7.1(a), (b), (c) or (k) or either of Sections 7.10or 7.14 and such default shall continue unremedied for a period of at least 5days after the earlier of an Executive Officer of a Credit Party becoming awareof such default or notice thereof by the Agent; or

 

(iii)          defaultin the due performance or observance by it of any term, covenant or agreement(other than those referred to in subsections (a), (b), (c)(i) or (c)(ii)of this Section 9.1) contained in this Credit Agreement or any otherCredit Document and such default shall continue unremedied for a period of atleast 30 days after the earlier of an Executive Officer of a Credit Partybecoming aware of such default or notice thereof by the Agent; or

 

(d)           OtherCredit Documents.  Except as aresult of or in connection with a dissolution, merger or disposition of aSubsidiary not prohibited by Section 8.4 or Section 8.5, any CreditDocument shall fail to be in full force and effect or to give the Agent and/orthe Lenders the Liens, rights, powers and privileges purported to be createdthereby, or any Credit Party shall so state in writing; or

 

(e)           Guaranties.  Except as the result of or in connectionwith (i) a dissolution, merger or disposition of a Subsidiary not prohibited bySection 8.4 or Section 8.5 or (ii) a release specifically providedfor in Section 4.8, the guaranty given by any Guarantor hereunder(including any Person after the Closing Date in accordance withSection 7.12) or any provision thereof shall cease to be in full force andeffect, or any Guarantor (including any Person after the Closing Date inaccordance with Section 7.12) hereunder or any Person acting by or onbehalf of such Guarantor shall deny or disaffirm such Guarantor’s obligationsunder such guaranty, or any Guarantor shall default in the due performance orobservance of any term, covenant or agreement on its part to be performed orobserved pursuant to any guaranty; or

 

(f)            Bankruptcy,etc.  Any Bankruptcy Event shalloccur with respect to the Borrower, the General Partner or any otherConsolidated Party; or

 

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(g)           Challenge of Credit Documents.  The Borrower or any Guarantor shall disavow,revoke or terminate or attempt to do any of the foregoing with respect to anyCredit Document to which it is a party or shall otherwise challenge or contestin any action, suit or proceeding in any court or before any GovernmentalAuthority the validity or enforceability of any Credit Document; or

 

(h)           Defaultsunder Other Agreements.

 

(i)            AnyConsolidated Party shall default in the performance or observance (beyond theapplicable grace period with respect thereto, if any) of any materialobligation or condition of any contract or lease material to the ConsolidatedParties taken as a whole if such default could reasonably be expected to have aMaterial Adverse Effect; or

 

(ii)           Withrespect to Indebtedness (other than Indebtedness outstanding under this CreditAgreement) in excess of $5,000,000 in the aggregate (for the ConsolidatedParties taken as a whole), (A) either (1) a default in any paymentshall occur and continue (beyond the applicable grace period with respectthereto, if any) with respect to any such Indebtedness, (2) a default in theobservance or performance relating to such Indebtedness or contained in anyinstrument or agreement evidencing, securing or relating thereto and suchdefault is not cured within the applicable grace period, if any, or  (3) any event or condition shall occur orexist, the effect of which event or condition is to cause, or permit, theholder or holders of such Indebtedness (or trustee or agent on behalf of suchholders) to cause any such Indebtedness to become due prior to its statedmaturity; or (B) any such Indebtedness shall be declared due and payable,or required to be prepaid other than by a regularly scheduled requiredprepayment, prior to the stated maturity thereof; or

 

(i)            Judgments.  One or more judgments or decrees shall beentered against one or more of the Consolidated Parties involving a liabilityof $1,000,000 or more in the aggregate (to the extent not paid or fully coveredby insurance provided by a carrier who has acknowledged coverage and has theability to perform) and any such judgments or decrees shall not have beenvacated, discharged or stayed or bonded pending appeal within 30 days from theentry thereof; or

 

(j)            ERISA.  Any of the following events or conditions,if such event or condition could involve possible taxes, penalties, and otherliabilities in an aggregate amount in excess of $1,000,000:  (i) any “accumulated fundingdeficiency,” as such term is defined in Section 302 of ERISA andSection 412 of the Code, whether or not waived, shall exist with respectto any Plan, or any lien shall arise on the assets of any Consolidated Party orany ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Eventshall occur with respect to a Single Employer Plan, which is, in the reasonableopinion of the Agent, likely to result in the termination of such Plan forpurposes of Title IV of ERISA; (iii) an ERISA Event shall occur withrespect to a Multiemployer Plan or Multiple Employer Plan, which is, in thereasonable opinion of the Agent, likely to result in (A) the terminationof such Plan for purposes of Title IV of ERISA, or (B) anyConsolidated Party or any ERISA Affiliate incurring any liability in connectionwith a withdrawal from, reorganization of (within the meaning ofSection 4241 of ERISA), or insolvency (within the meaning ofSection 4245 of ERISA) of such Plan; or (iv) any prohibitedtransaction (within the meaning of Section 406 of ERISA orSection 4975 of the Code) or breach of fiduciary responsibility shalloccur which may subject any Consolidated Party or any ERISA Affiliate to anyliability under Sections 406, 409, 502(i), or 502(l) of ERISA orSection 4975 of the Code, or under any agreement or other instrumentpursuant to which any Consolidated Party or any ERISA Affiliate has agreed oris required to indemnify any person against any such liability; or

 

(k)           Ownership.  There shall occur a Change of Control; or

 

(l)            REITStatus.  The USRP REIT shall, forany reason, lose or fail to maintain its status as a REIT; or

 

(m)          MaterialAdverse Effect.  The Borrower, theGeneral Partner, any Consolidated Party or any combination thereof shallexperience a change in financial condition that, in the reasonable opinion ofthe Agent, has or will have a Material Adverse Effect; or

 

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(n)           Dispositionof Assets.  The proceeds generatedfrom sales, conveyances and dispositions (whether such transactions are enteredinto voluntarily or otherwise and exclusive of the cash proceeds generated by aTerm Securitization) of the assets of the Borrower, General Partner and theirSubsidiaries for the period commencing as of the Closing Date and extendingthrough any given date during the term hereof are, in the aggregate, greaterthan an amount equal to (i) twenty-five percent (25.0%) multiplied by(ii) Total Tangible Assets, as calculated as of the Closing Date; or

 

(o)           MaterialChange in Management, Operations or Business.  There shall occur a Change in Management.

 

## **9.2          Acceleration; Remedies.**

 

Subject to theterms of the Intercreditor Agreement, upon the occurrence and during thecontinuance of an Event of Default, the Agent may or, upon the request anddirection of the Required Term Loan Lenders, shall, by written notice to theCredit Parties take any of the following actions:

 

(a)           Terminationof Commitments.  Declare theCommitments terminated whereupon the Commitments shall be immediatelyterminated.

 

(b)           Acceleration.  Declare the unpaid principal of and anyaccrued interest in respect of all Loans and any and all other indebtedness orobligations of any and every kind owing by the Credit Parties to the Agentand/or any of the Lenders hereunder to be due whereupon the same shall beimmediately due and payable without presentment, demand, protest or othernotice of any kind, all of which are hereby waived by the Credit Parties.

 

(c)           Enforcementof Rights.  Enforce any and allrights and interests created and existing under the Credit Documents including,without limitation, all rights and remedies against any Guarantor and allrights of set-off.

 

Notwithstandingthe foregoing, if an Event of Default specified in Section 9.1(f) shalloccur with respect to the Borrower, then, without the giving of any notice orother action by the Agent or the Lenders, (i) the Commitmentsautomatically shall terminate and (ii) all of the outstanding Credit PartyObligations automatically shall immediately become due and payable.

 

 

# **ARTICLE X**AGENCY PROVISIONS

 

## **10.1        Appointment, Powers and Immunities.**

 

Each Lender herebyirrevocably appoints and authorizes the Agent to act as its agent under thisCredit Agreement and the other Credit Documents with such powers and discretionas are specifically delegated to the Agent by the terms of this CreditAgreement and the other Credit Documents, together with such other powers asare reasonably incidental thereto.  TheAgent (which term as used in this sentence and in Section 10.5 and thefirst sentence of Section 10.6 hereof shall include its Affiliates and itsown and its Affiliates’ officers, directors, employees, and agents):  (a) shall not have any duties orresponsibilities except those expressly set forth in this Credit Agreement andshall not be a trustee or fiduciary for any Lender; (b) shall not beresponsible to the Lenders for any recital, statement, representation, orwarranty (whether written or oral) made in or in connection with any CreditDocument or any certificate or other document referred to or provided for in,or received by any of them under, any Credit Document, or for the value,validity, effectiveness, genuineness, enforceability, or sufficiency of anyCredit Document, or any other document referred to or provided for therein orfor any failure by any Credit Party or any other Person to perform any of itsobligations thereunder; (c) shall not be responsible for or have any dutyto ascertain, inquire into, or verify the performance or observance of anycovenants or agreements by any Credit Party or the satisfaction of anycondition or to inspect the property (including the books and records) of anyCredit Party or any of its Subsidiaries or Affiliates; and (d) shall notbe responsible for any action taken or omitted

 

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to be taken by it underor in connection with any Credit Document, except for its own gross negligenceor willful misconduct.  The Agent mayemploy agents and attorneys-in-fact and shall not be responsible for thenegligence or misconduct of any such agents or attorneys-in-fact selected by itwith reasonable care.

 

## **10.2        Reliance by Agent.**

 

The Agent shall beentitled to rely upon any certification, notice, instrument, writing, or othercommunication (including, without limitation, any thereof by telephone ortelecopy) believed by it to be genuine and correct and to have been signed,sent or made by or on behalf of the proper Person or Persons, and upon adviceand statements of legal counsel (including counsel for any Credit Party),independent accountants, and other experts selected by the Agent.  The Agent may deem and treat the payee ofany Note as the holder thereof for all purposes hereof unless and until theAgent receives and accepts an Assignment and Assumption executed in accordancewith Section 11.3(b) hereof.  As toany matters not expressly provided for by this Credit Agreement, the Agentshall not be required to exercise any discretion or take any action, but shallbe required to act or to refrain from acting (and shall be fully protected inso acting or refraining from acting) upon the instructions of the Required TermLoan Lenders, and such instructions shall be binding on all of the Lenders; provided,however, that the Agent shall not be required to take any action thatexposes the Agent to personal liability or that is contrary to any CreditDocument or applicable law or unless it shall first be indemnified to itssatisfaction by the Lenders against any and all liability and expense which maybe incurred by it by reason of taking any such action.

 

## **10.3        Defaults.**

 

The Agent shallnot be deemed to have knowledge or notice of the occurrence of a Default or Eventof Default unless the Agent has received written notice from a Lender or aCredit Party specifying such Default or Event of Default and stating that suchnotice is a “Notice of Default”.  In theevent that the Agent receives such a notice of the occurrence of a Default orEvent of Default, the Agent shall give prompt notice thereof to theLenders.  The Agent shall (subject toSection 10.2 hereof and the terms of the Intercreditor Agreement) takesuch action with respect to such Default or Event of Default as shallreasonably be directed by the Required Term Loan Lenders (or such other Lendersas required by Section 11.6), providedthat, unless anduntil the Agent shall have received such directions, the Agent may (but shallnot be obligated to) take such action, or refrain from taking such action, withrespect to such Default or Event of Default as it shall deem advisable in thebest interest of the Lenders (subject to the terms of the IntercreditorAgreement).

 

## **10.4        Rights as a Lender.**

 

With respect to itsCommitment and the Loans made by it, BOA (and any successor acting as Agent) inits capacity as a Lender hereunder shall have the same rights and powershereunder as any other Lender and may exercise the same as though it were notacting as the Agent, and the term “Lender” or “Lenders” shall, unless thecontext otherwise indicates, include the Agent in its individual capacity.  BOA (and any successor acting as Agent) andits Affiliates may (without having to account therefor to any Lender) acceptdeposits from, lend money to, make investments in, provide services to, andgenerally engage in any kind of lending, trust, or other business with anyCredit Party or any of its Subsidiaries or Affiliates as if it were not actingas Agent, and BOA (and any successor acting as Agent) and its Affiliates mayaccept fees and other consideration from any Credit Party or any of itsSubsidiaries or Affiliates for services in connection with this CreditAgreement or otherwise without having to account for the same to the Lenders.

 

## **10.5        Indemnification.**

 

The Lenders agreeto indemnify the Agent (to the extent not reimbursed under Section 11.5hereof, but without limiting the obligations of the Credit Parties under suchSection) ratably (in accordance with their respective outstanding Term Loan)for any and all liabilities, obligations, losses, damages, penalties, actions,judgments, suits, costs, expenses (including attorneys’ fees), or disbursementsof any kind and nature whatsoever that may be imposed on, incurred by or assertedagainst the Agent (including by any Lender) in any way relating to or arisingout of any Credit Document or the transactions contemplated thereby or anyaction taken or omitted by the Agent under any Credit Document; providedthat no Lender shall be liable for any of the foregoing to the extent theyarise from the gross negligence or willful misconduct of the Person to beindemnified.  Without limitation of theforegoing,

 

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each Lender agrees to reimburse the Agent promptly upon demand for itsratable share of any costs or expenses payable by the Credit Parties underSection 11.5, to the extent that the Agent is not promptly reimbursed forsuch costs and expenses by the Credit Parties. The agreements in this Section 10.5 shall survive the repayment ofthe Loans and other obligations under the Credit Documents.

 

## **10.6        Non-Reliance on Agent and OtherLenders.**

 

Each Lender agreesthat it has, independently and without reliance on the Agent or any other Lender,and based on such documents and information as it has deemed appropriate, madeits own credit analysis of the Credit Parties and their Subsidiaries anddecision to enter into this Credit Agreement and that it will, independentlyand without reliance upon the Agent or any other Lender, and based on suchdocuments and information as it shall deem appropriate at the time, continue tomake its own analysis and decisions in taking or not taking action under theCredit Documents.  Except for notices,reports, and other documents and information expressly required to be furnishedto the Lenders by the Agent hereunder, the Agent shall not have any duty orresponsibility to provide any Lender with any credit or other informationconcerning the affairs, financial condition, or business of any Credit Party orany of its Subsidiaries or Affiliates that may come into the possession of theAgent or any of its Affiliates.

 

## **10.7        Successor Agent.**

 

The Agent mayresign at any time by giving notice thereof to the Lenders and the CreditParties.  Upon any such resignation, theRequired Term Loan Lenders shall have the right to appoint a successorAgent.  If no successor Agent shall havebeen so appointed by the Required Term Loan Lenders and shall have acceptedsuch appointment within thirty (30) days after the retiring Agent’s givingof notice of resignation, then the retiring Agent may, on behalf of theLenders, appoint a successor Agent which shall be a commercial bank organizedunder the laws of the United States having combined capital and surplus of atleast $100,000,000.  Upon the acceptanceof any appointment as Agent hereunder by a successor, such successor shallthereupon succeed to and become vested with all the rights, powers, discretion,privileges, and duties of the retiring Agent, and the retiring Agent shall bedischarged from its duties and obligations hereunder.  After any retiring Agent’s resignation hereunder as Agent, theprovisions of this Section 10 shall continue in effect for its benefit inrespect of any actions taken or omitted to be taken by it while it was actingas Agent.  If no successor Agent hasaccepted appointment as Agent under this Credit Agreement by the date which is30 days following a retiring Agent’s notice of resignation, the retiringAgent’s resignation shall nevertheless thereupon become effective and theLenders shall perform all the duties of the Agent hereunder until such time, ifany, as the Required Lenders appoint a successor agent as provided for above.

 

# **ARTICLE XI**MISCELLANEOUS

 

## **11.1        Notices.**

 

Except asotherwise expressly provided herein, all notices and other communications shallhave been duly given and shall be effective (a) when delivered,(b) when transmitted via telecopy (or other facsimile device) to thenumber set out below, (c) the Business Day following the day on which thesame has been delivered prepaid (orpursuant to an invoice arrangement) to a reputable national overnightair courier service, or (d) the third Business Day following the day onwhich the same is sent by certified or registered mail, postage prepaid, ineach case to the respective parties at the address, in the case of the CreditParties and the Agent, set forth below, and, in the case of the Lenders, setforth on Schedule 2.1(a), or at such other address as such partymay specify by written notice to the other parties hereto:

 
|   | if to any Credit Party: |
|--------|-------------------------|
|   |                    |   |
|   |                    | U.S.  Restaurant Properties Operating, L.P. |
|   |                    | c/o  U.S. Restaurant Properties, Inc. |
|   |                    | 12240  Inwood Road, Suite 300 |
|   |                    | Dallas,  TX 75244 |
|   |                    | Attn:  Stacy M. Riffe, CFO |

 

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|   |                                               | Telephone:  (972) 387-1487, ext 112                                                     |
|--------|----------------------------------------------------|-----------------------------------------------------------------------------------------|
|   |                                               | Telecopy:  (972) 490-9119                                                               |
|   |                                               |                                                                                    |
|   | if to the Agent (for  credit-related matters):     |
|   |                                               |                                                                                    |
|   |                                               | Bank  of America, N.A.                                                                  |
|   |                                               | 231  South LaSalle Street                                                               |
|   |                                               | M/C:  IL1-231-10-35                                                                |
|   |                                               | Chicago,  IL  60697                                                                |
|   |                                               | Attention:  Matthew W. Sadler, Vice President, Global Portfolio Management, Real Estate |
|   |                                               | Phone:  (312) 828-7107                                                             |
|   |                                               | Fax:  (312) 974-4970                                                               |
|   |                                               | E-mail:  matthew.w.sadler@bankofamerica.com                                        |
|   |                                               |                                                                                    |
|   | and  if to the Agent (for administrative matters): |
|   |                                               |                                                                                    |
|   |                                               | Bank  of America, N.A.                                                                  |
|   |                                               | 231  South LaSalle Street                                                               |
|   |                                               | Mail  code:  IL1-231-10-30                                                         |
|   |                                               | Chicago,  IL 60697                                                                      |
|   |                                               | Attention: Charlene E. Wright-Jones, Assistant Vice  President                          |
|   |                                               | Phone:  312-828-4160                                                               |
|   |                                               | Fax:  312-828-3950                                                                 |
|   |                                               | E-mail:  charlene.wright-jones@bankofamerica.com                                   |

 

## **11.2        Right of Set-Off; Adjustments.**

 

Upon the occurrence and during the continuance of anyEvent of Default, each Lender (and each of its Affiliates) is hereby authorized(subject to the terms and conditions of the Intercreditor Agreement) at anytime and from time to time, to the fullest extent permitted by law, to set offand apply any and all deposits (general or special, time or demand, provisionalor final) at any time held and other indebtedness at any time owing by suchLender (or any of its Affiliates) to or for the credit or the account of anyCredit Party against any and all of the obligations of such Person now orhereafter existing under this Credit Agreement, under the Notes, under anyother Credit Document or otherwise, irrespective of whether such Lender shallhave made any demand hereunder or thereunder and although such obligations maybe unmatured.  Each Lender agreespromptly to notify any affected Credit Party after any such set-off and applicationmade by such Lender; provided, however, that the failure to givesuch notice shall not affect the validity of such set-off and application.  The rights of each Lender under thisSection 11.2 are in addition to other rights and remedies (including, withoutlimitation, other rights of set-off) that such Lender may have.

 

## **11.3        Successors and Assigns.**

 

(a)           The provisions of this Agreement shallbe binding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns permitted hereby, except that the Borrowermay not assign or otherwise transfer any of its rights or obligations hereunderwithout the prior written consent of each Lender and no Lender may assign orotherwise transfer any of its rights or obligations hereunder except (i) to anEligible Assignee in accordance with the provisions of paragraph (b) of thisSection, (ii) by way of participation in accordance with the provisions ofparagraph (d) of this Section or (iii) by way of pledge or assignment of asecurity interest subject to the restrictions of paragraph (f) of this Section(and any other attempted assignment or transfer by any party hereto shall benull and void).  Nothing in thisAgreement, expressed or implied, shall be construed to confer upon any Person (otherthan the parties hereto, their respective successors and assigns permittedhereby, Participants to the extent provided in paragraph (d) of this Sectionand, to the extent expressly contemplated hereby, the Related Parties of eachof the Agent and the Lenders) any legal or equitable right, remedy or claimunder or by reason of this Agreement.

 

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(b)           Any Lender may at any time assign toone or more Eligible Assignees all or a portion of its rights and obligationsunder this Agreement (including all or a portion of its Loans at the time owingto it); provided that (i) except in the case of an assignment of theentire remaining amount of the assigning Lender’s Loans at the time owing to itor in the case of an assignment to a Lender or an Affiliate of a Lender or anApproved Fund with respect to a Lender, the aggregate amount of the principaloutstanding balance of the Loan of the assigning Lender subject to each suchassignment (determined as of the date the Assignment and Assumption withrespect to such assignment is delivered to the Agent or, if “Trade Date” isspecified in the Assignment and Assumption, as of the Trade Date) shall not beless than $2,500,000, unless each of the Agent and, so long as no default orEvent of Default has occurred and is continuing hereunder or any other CreditDocument, the Borrower otherwise consent (each such consent not to beunreasonably withheld or delayed); (ii) each partial assignment shall be madeas an assignment of a proportionate part of all the assigning Lender’s rightsand obligations under this Agreement with respect to the Loan assigned; (iii)any assignment Loans must be approved by the Agent unless the Person that isthe proposed assignee is itself a Lender with holding a Loan (whether or notthe proposed assignee would otherwise qualify as an Eligible Assignee); and(iv) the parties to each assignment shall execute and deliver to the Agent anAssignment and Assumption and an ICA Joinder Agreement, together with aprocessing and recordation fee of $3,500**,** and the Eligible Assignee, if it shallnot be a Lender, shall deliver to the Agent an AdministrativeQuestionnaire.  Subject to acceptanceand recording thereof by the Agent pursuant to paragraph (c) of this Section,from and after the effective date specified in each Assignment and Assumption,the Eligible Assignee thereunder shall be a party to this Agreement and, to theextent of the interest assigned by such Assignment and Assumption, have therights and obligations of a Lender under this Agreement, and the assigningLender thereunder shall, to the extent of the interest assigned by suchAssignment and Assumption, be released from its obligations under thisAgreement (and, in the case of an Assignment and Assumption covering all of theassigning Lender’s rights and obligations under this Agreement, such Lendershall cease to be a party hereto) but shall continue to be entitled to thebenefits of Sections 3.6 through 3.12**with respect to facts and circumstancesoccurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with thisparagraph shall be treated for purposes of this Agreement as a sale by such Lenderof a participation in such rights and obligations in accordance with paragraph(d) of this Section.

 

(c)           The Agent, acting solely for thispurpose as an agent of the Borrower, shall maintain at one of its offices acopy of each Assignment and Assumption delivered to it and a register for therecordation of the names and addresses of the Lenders and the principal amountsof the Loans owing to each Lender pursuant to the terms hereof from time totime (the “Register”).  Theentries in the Register shall be conclusive, and the Borrower, the Agent andthe Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrowerand any Lender, at any reasonable time and from time to time upon reasonableprior notice.

 

(d)           Any Lender may at any time, withoutthe consent of, or notice to, the Borrower or the Agent, sell participations(in minimum amounts of not less than $2,500,000) to any Person (other than anatural person, the Borrower or any of the Credit Parties or any of theBorrower’s or any Credit Party’s Affiliates or Subsidiaries) (each, a “Participant”)in all or a portion of such Lender’s rights and/or obligations under thisAgreement (including all or a portion of the Loans owing to it); providedthat (i) such Lender’s obligations under this Agreement shall remainunchanged, (ii) such Lender shall remain solely responsible to the otherparties hereto for the performance of such obligations and (iii) theBorrower, the Agent and the other Lenders shall continue to deal solely anddirectly with such Lender in connection with such Lender’s rights andobligations under this Agreement.  Anyagreement or instrument pursuant to which a Lender sells such a participationshall provide that such Lender shall retain the sole right to enforce thisAgreement and to approve any amendment, modification or waiver of any provisionof this Agreement; provided that such agreement or instrument mayprovide that such Lender will not, without the consent of the Participant,agree to any amendment, modification or waiver described in Section 11.6 thataffects such Participant.  Subject toparagraph (e) of this Section, the Borrower agrees that each Participant shallbe entitled to the benefits of Sections 3.6 through 3.12**to the same extent as if itwere a Lender and had acquired its interest by assignment pursuant to paragraph(b) of this Section.  To the extentpermitted by law, each Participant also shall be entitled to the benefits ofSection 11.2 as though it were a Lender, provided such Participant agrees to besubject to Sections 3.14 and 3.15 and the Intercreditor Agreement as though it werea Lender.

 

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(e)           AParticipant shall not be entitled to receive any greater payment under Sections3.6 through 3.12**than the applicable Lender would have been entitled toreceive with respect to the participation sold to such Participant, unless thesale of the participation to such Participant is made with the Borrower’s priorwritten consent.  A Participant thatwould be a Foreign Lender if it were a Lender shall not be entitled to thebenefits of Section 3.11 unless the Borrower is notified of theparticipation sold to such Participant and such Participant agrees, for thebenefit of the Borrower, to comply with Section 3.11 as though it were aLender.

 

(f)            AnyLender may at any time pledge or assign a security interest in all or anyportion of its rights under this Agreement to secure obligations of suchLender, including without limitation any pledge or assignment to secureobligations to a Federal Reserve Bank; provided that no such pledge orassignment shall release such Lender from any of its obligations hereunder orsubstitute any such pledgee or assignee for such Lender as a party hereto.

 

## **11.4        No Waiver; Remedies Cumulative.**

 

No failure ordelay on the part of the Agent or any Lender in exercising any right, power orprivilege hereunder or under any other Credit Document and no course of dealingbetween the Agent or any Lender and any of the Credit Parties shall operate asa waiver thereof; nor shall any single or partial exercise of any right, poweror privilege hereunder or under any other Credit Document preclude any other orfurther exercise thereof or the exercise of any other right, power or privilegehereunder or thereunder.  The rights andremedies provided herein are cumulative and not exclusive of any rights orremedies which the Agent or any Lender would otherwise have.  No notice to or demand on any Credit Partyin any case shall entitle the Credit Parties to any other or further notice ordemand in similar or other circumstances or constitute a waiver of the rightsof the Agent or the Lenders to any other or further action in any circumstanceswithout notice or demand.

 

## **11.5        Expenses; Indemnification.**

 

(a)           The Credit Parties jointly andseverally agree to pay on demand all costs and expenses of the Agent inconnection with the syndication, preparation, execution, delivery,administration, modification, and amendment of this Credit Agreement, the otherCredit Documents, and the other documents to be delivered hereunder, including,without limitation, the reasonable fees and expenses of counsel for the Agent(including the cost of internal counsel) with respect thereto and with respectto advising the Agent as to its rights and responsibilities under the CreditDocuments.  The Credit Parties furtherjointly and severally agree to pay on demand all costs and expenses of theAgent and the Lenders, if any (including, without limitation, reasonableattorneys’ fees and expenses and the cost of internal counsel), in connectionwith any work-out or restructuring relating to the Credit Facility or anyenforcement (whether through negotiations, legal proceedings, or otherwise) ofany of the Credit Documents.

 

(b)           The Credit Parties jointly andseverally agree to indemnify and hold harmless the Agent and each Lender andeach of their Affiliates and their respective officers, directors, employees,agents, and advisors (each, an “Indemnified Party”) from and against anyand all claims, damages, losses, liabilities, costs, and expenses (including,without limitation, reasonable attorneys’ fees) that may be incurred by orasserted or awarded against any Indemnified Party, in each case arising out ofor in connection with or by reason of (including, without limitation, inconnection with any investigation, litigation, or proceeding or preparation ofdefense in connection therewith) the Credit Documents, any of the transactionscontemplated herein or the actual or proposed use of the proceeds of the Loans,except to the extent such claim, damage, loss, liability, cost, or expense isfound in a final, non-appealable judgment by a court of competent jurisdictionto have resulted from such Indemnified Party’s gross negligence or willfulmisconduct.  In the case of an investigation,litigation or other proceeding to which the indemnity in this Section 11.5applies, such indemnity shall be effective whether or not such investigation,litigation or proceeding is brought by any of the Credit Parties, theirrespective directors, shareholders or creditors or an Indemnified Party or anyother Person or any Indemnified Party is otherwise a party thereto and whetheror not the transactions contemplated hereby are consummated.  The Credit Parties agree not to assert anyclaim against the Agent, any Lender, any of their Affiliates, or any of theirrespective directors, officers, employees, attorneys, agents, and advisers, onany theory of liability, for special, indirect, consequential, or punitivedamages

 

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arising out of or otherwise relating to the CreditDocuments, any of the transactions contemplated herein or the actual orproposed use of the proceeds of the Loans.

 

(c)           Without prejudice to the survival ofany other agreement of the Credit Parties hereunder, the agreements andobligations of the Credit Parties contained in this Section 11.5 shallsurvive the repayment of the Loans and other obligations under the CreditDocuments.

 

## **11.6        Amendments, Waivers and Consents.**

 

(a)           Neither this Credit Agreement nor anyother Credit Document nor any of the terms hereof or thereof may be amended,deleted or otherwise changed unless such amendment, deletion or change is inwriting entered into by, or approved in writing by, each of the Credit Partiesparty thereto and the Required Lenders, provided, however, that:

 

(i)            without the consent of each Lenderaffected thereby (in addition to Required Lender consent), neither this CreditAgreement nor any other Credit Document may be amended, deleted or otherwisechanged so as to:

 

(A)          extend any Commitment or the finalmaturity of any Loan or extend any payment due (or to be due) in connectionwith any Loan, or any portion thereof,

 

(B)           reduce the rate or extend the time ofpayment of interest on any Loan (subject to the right of the Required RevolvingLenders to waive the applicability of any post-default increase in interestrates pursuant to Section 11.6(b) below) or of any Fees,

 

(C)           reduce the principal amount of anyLoan,

 

(D)          increase the Commitment of a Lenderover the amount thereof in effect (it being understood and agreed that a waiverof any condition precedent set forth in Section 5.2 or of any Default orEvent of Default or mandatory reduction in the Commitments shall not constitutea change in the terms of any Commitment of any Lender),

 

(E)           except as the result of or inconnection with a dissolution, merger or disposition of a Consolidated Partynot prohibited by Section 8.4 or Section 8.5, release the Borrower orsubstantially all of the other Credit Parties from its or their obligationsunder the Credit Documents,

 

(F)           amend or modify any provision of thisSection 11.6,

 

(G)           reduce any percentage specified in,or otherwise modify, the definition of Required Lenders or Required Term LoanLenders, or

 

(H)          consent to the assignment or transferby the Borrower or any of the other Credit Parties of all or substantially allof their rights and obligations under (or in respect of) the Credit Documentsexcept as permitted thereby;

 

(ii)           without the consent of the Agent, noprovision of Section 10 may be amended, deleted or otherwise changed; and

 

(iii)          provisions contained in this CreditAgreement and in the Credit Documents pertaining to purely ministerial oradministrative matters may be amended, deleted or otherwise changed upon the obtainingof the written consent of the Credit Parties and Required Term Loan Lenders(regardless of whether Required Lender consent is obtained) to the extend suchamendments, deletions and/or other changes do not, in the judgment of theCollateral Agent, materially and adversely effect the rights, remedies orexpected financial return of the Revolving Lenders.

 

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Notwithstandingthe fact that the consent of all the Lenders is required in certain circumstancesas set forth above, (x) each Lender is entitled to vote as such Lendersees fit on any bankruptcy reorganization plan that affects the Loans, and eachLender acknowledges that the provisions of Section 1126(c) of theBankruptcy Code supersedes the unanimous consent provisions set forth hereinand (y) the Required Lenders shall, subject to the terms of theIntercreditor Agreement, determine whether or not to allow a Credit Party touse cash collateral in the context of a bankruptcy or insolvency proceeding andsuch determination shall be binding on all of the Lenders.

 

(b)           Noneof the terms or conditions of this Credit Agreement or of any of the otherCredit Documents may be waived without the written consent of the Required TermLoan Lenders; provided, however, that:

 

(i)            without the consent of each Lenderaffected thereby, neither this Credit Agreement nor any other Credit Documentmay be waived so as to (whether expressly or effectively):

 

(A)          extendany Commitment or the final maturity of any Loan (provided, that any waiverwhich has the effect of extending the final maturity of any Loan or any suchobligation shall constitute an amendment requiring approval pursuant to clause(a) of this Section 11.6), or otherwise waive any payment due (or to be due) inconnection with any Loan, or any portion thereof,

 

(B)           reducethe rate or extend the time of payment of interest on any Loan (other than as aresult of waiving the applicability of any post-default increase in interestrates) or of any Fees,

 

(C)           waivethe principal amount of any Loan,

 

(D)          increasethe Commitment of a Lender over the amount thereof in effect (it beingunderstood and agreed that a waiver of any condition precedent set forth inSection 5.2 or of any Default or Event of Default or mandatory reductionin the Commitments shall not constitute a change in the terms of any Commitmentof any Lender),

 

(E)           exceptas the result of or in connection with a dissolution, merger or disposition ofa Consolidated Party not prohibited by Section 8.4 or Section 8.5,release the Borrower or substantially all of the other Credit Parties from itsor their obligations under the Credit Documents,

 

(F)           waiveany provision of this Section 11.6 (provided, that any such waiver shall,for purposes hereof, constitute an amendment requiring approval pursuant toclause (a) of this Section 11.6),

 

(G)           reduceany percentage specified in, or otherwise modify, the definition of RequiredLenders or Required Term Loan Lenders (provided, that any waiver having such aneffect shall, for purposes hereof, constitute an amendment requiring approvalpursuant to clause (a) of this Section 11.6), or

 

(H)          consentto the assignment or transfer by the Borrower or any of the other CreditParties of all or substantially all of their rights and obligations under (orin respect of) the Credit Documents except as permitted thereby; and

 

(ii)           withoutthe consent of the Agent, no provision of Section 10 may be waived.

 

## **11.7        Counterparts.**

 

This CreditAgreement may be executed in any number of counterparts, each of which when soexecuted shall be an original, but all of which shall constitute one and thesame instrument.  It shall not benecessary in making proof of

 

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this Credit Agreement toproduce or account for more than one such counterpart for each of the partieshereto.  Delivery by facsimile by any ofthe parties hereto of an executed counterpart of this Credit Agreement shall beas effective as an original executed counterpart hereof and shall be deemed arepresentation that an original executed counterpart hereof will be delivered.

 

## **11.8        Headings.**

 

The headings ofthe sections hereof are provided for convenience only and shall not in any wayaffect the meaning or construction of any provision of this Credit Agreement.

 

## **11.9        Survival.**

 

All indemnitiesset forth herein, including, without limitation, in Section 2.2(i), 3.11,3.12, 10.5 or 11.5 shall survive the execution and delivery of this CreditAgreement, the making of the Loans, the repayment of the Loans and otherobligations under the Credit Documents, and all representations and warrantiesmade by the Credit Parties herein shall survive until this Credit Agreementshall be terminated in accordance with the terms of Section 11.13(b).

 

## **11.10      Governing Law; Submission toJurisdiction; Venue.**

 

(a)           THISCREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE OTHERCREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER ANDTHEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCEWITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding with respect to this Credit Agreement orany other Credit Document may be brought in the courts of the State of NorthCarolina in Mecklenburg County, or of the United States for the WesternDistrict of North Carolina, and, by execution and delivery of this CreditAgreement, each of the Credit Parties hereby irrevocably accepts for itself andin respect of its property, generally and unconditionally, the nonexclusivejurisdiction of such courts.  Each ofthe Credit Parties further irrevocably consents to the service of process outof any of the aforementioned courts in any such action or proceeding by themailing of copies thereof by registered or certified mail, postage prepaid, toit at the address set out for notices pursuant to Section 11.1, suchservice to become effective three (3) days after such mailing.  Nothing herein shall affect the right of theAgent or any Lender to serve process in any other manner permitted by law or tocommence legal proceedings or to otherwise proceed against any Credit Party inany other jurisdiction.

 

(b)           Eachof the Credit Parties hereby irrevocably waives any objection which it may nowor hereafter have to the laying of venue of any of the aforesaid actions orproceedings arising out of or in connection with this Credit Agreement or anyother Credit Document brought in the courts referred to in subsection (a)above and hereby further irrevocably waives and agrees not to plead or claim inany such court that any such action or proceeding brought in any such court hasbeen brought in an inconvenient forum.

 

(c)           TOTHE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS, EACH OF THE CREDITPARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT,ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

## **11.11      Severability.**

 

If any provisionof any of the Credit Documents is determined to be illegal, invalid orunenforceable, such provision shall be fully severable and the remainingprovisions shall remain in full force and effect and shall be construed withoutgiving effect to the illegal, invalid or unenforceable provisions.

 

## **11.12      Entirety.**

 

This CreditAgreement together with the other Credit Documents represent the entireagreement of the parties hereto and thereto, and supersede all prior agreementsand understandings, oral or written, if any, including any

 

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commitment letters orcorrespondence relating to the Credit Documents or the transactionscontemplated herein and therein.

 

## **11.13      Binding Effect; Termination.**

 

(a)           ThisCredit Agreement shall become effective at such time on or after the ClosingDate when it shall have been executed by each Credit Party and the Agent, andthe Agent shall have received copies hereof (telefaxed or otherwise) which,when taken together, bear the signatures of each Lender, and thereafter thisCredit Agreement shall be binding upon and inure to the benefit of each CreditParty, the Agent and each Lender and their respective successors and assigns.

 

(b)           Theterm of this Credit Agreement shall be until the Credit Party Obligations areFully Satisfied.

 

## **11.14      Confidentiality.**

 

Each Lender Partyagrees to maintain the confidentiality of the Information (as defined below),except that Information may be disclosed (a) to its and its Affiliates’directors, officers, employees and agents, including accountants, legal counseland other advisors (it being understood that the Persons to whom suchdisclosure is made will be informed of the confidential nature of suchInformation and instructed to keep such Information confidential), (b) to theextent requested by any regulatory authority (including any self-regulatoryauthority, such as the National Association of Insurance Commissioners), (c) tothe extent required by applicable laws or regulations or by any subpoena or similarlegal process, (d) to any other party hereto, (e) in connection with theexercise of any remedies hereunder or under any other Credit Document or anyaction or proceeding relating to this Agreement or any other Credit Document orthe enforcement of rights hereunder or thereunder, (f) subject to an agreementcontaining provisions substantially the same as those of this Section, to (i)any assignee of or Participant in, or any prospective assignee of orParticipant in, any of its rights or obligations under this Agreement or (ii)any actual or prospective counterparty (or its advisors) to any swap orderivative transaction relating to the Borrower and its obligations, (g) withthe consent of the Borrower or (h) to the extent such Information (x) becomes publiclyavailable other than as a result of a breach of this Section or (y) becomesavailable to any Lender Party on a nonconfidential basis from a source otherthan the Borrower.  For purposes of thisSection, “Information” means all information received from any CreditParty relating to any Credit Party or any of their respective businesses, otherthan any such information that is available to the Agent or any Lender on anonconfidential basis prior to disclosure by any Credit Party, provided that,in the case of information received from a Credit Party after the date hereof,such information is clearly identified at the time of delivery asconfidential.  Any Person required tomaintain the confidentiality of Information as provided in this Section shallbe considered to have complied with its obligation to do so if such Person hasexercised the same degree of care to maintain the confidentiality of suchInformation as such Person would accord to its own confidential information.Notwithstanding anything herein to the contrary, “Information” shall notinclude, and the Borrower, the other Credit Parties**,** the Lender Parties and therespective Affiliates of each of the foregoing (and the respective partners,directors, officers, employees, agents, advisors and other representatives ofeach of the foregoing and their Affiliates) may disclose to any and allPersons, without limitation of any kind (a) any information with respect to theU.S. federal and state income tax treatment of the transactions contemplated herebyand any facts that may be relevant to understanding such tax treatment, whichfacts shall not include for this purpose the names of the parties or any otherPerson named herein, or information that would permit identification of theparties or such other Persons, or any pricing terms or other nonpublic businessor financial information that is unrelated to such tax treatment or facts, and(b) all materials of any kind (including opinions or other tax analyses)relating to such tax treatment or facts that are provided to any of the Personsreferred to above.

 

## **11.15      Source of Funds.**

 

Each of theLenders hereby represents and warrants to the Borrower that at least one of thefollowing statements is an accurate representation as to the source of funds tobe used by such Lender in connection with the financing hereunder:

 

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(a)           nopart of such funds constitutes assets allocated to any separate accountmaintained by such Lender in which any employee benefit plan (or its relatedtrust) has any interest;

 

(b)           tothe extent that any part of such funds constitutes assets allocated to anyseparate account maintained by such Lender, such Lender has disclosed to theBorrower the name of each employee benefit plan whose assets in such accountexceed 10% of the total assets of such account as of the date of such purchase(and, for purposes of this clause (b), all employee benefit plansmaintained by the same employer or employee organization are deemed to be asingle plan);

 

(c)           tothe extent that any part of such funds constitutes assets of an insurancecompany’s general account, such insurance company has complied with all of therequirements of the regulations issued under Section 401(c)(1)(A) ofERISA; or

 

(d)           suchfunds constitute assets of one or more specific benefit plans which such Lenderhas identified in writing to the Borrower.

 

As used in thisSection 11.15, the terms “employee benefit plan” and “separate account”shall have the respective meanings assigned to such terms in Section 3 ofERISA.

 

## **11.16      Regulation D.**

 

Each of theLenders hereby represents and warrants to the Borrower that it is a commerciallender, other financial institution or other “accredited” investor (as definedin SEC Regulation D) which makes or acquires or loans on the ordinarycourse of business and that it will make or acquire Loans for its own accountin the ordinary course of business.

 

## **11.17      Conflict.**

 

To the extent thatthere is a conflict or inconsistency between any provision hereof, on the onehand, and any provision of any Credit Document, on the other hand, this CreditAgreement shall control.

 

## **11.18      USA Patriot Act Notice.**

 

Each Lender andthe Agent (for itself and not on behalf of any Lender) hereby notifies theBorrower that pursuant to the requirements of the USA Patriot Act (Title III ofPub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is requiredto obtain, verify and record information that identifies the Borrower, whichinformation includes the name and address of the Borrower and other informationthat will allow such Lender or the Agent, as applicable, to identify theBorrower in accordance with the Act.

 

[Remainder of PageLeft Intentionally Blank – Signature Pages, Schedules and Exhibits toFollow]

 

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**IN WITNESS WHEREOF**,each of the parties hereto has caused a counterpart of this Credit Agreement tobe duly executed and delivered as of the date first above written.

 

 
| **PRINCIPAL BORROWER**: | **U.S. RESTAURANT PROPERTIES OPERATING L.P.** |
|-------------------------|-----------------------------------------------|
|                    |                                          |
|                    | By:  USRP MANAGING, INC.                 |
|                    |                                          |
|                    |                                          | By: |   | /s/  Stacy M. Riffe |   |
|                    |                                          | Name: | Stacy M. Riffe |
|                    |                                          | Title: | Chief Financial Officer |

 

 
| **GENERAL SPE:** | **USRP FUNDING 2002-A, L.P.** |
|------------------|-------------------------------|
|             |                          |
|             | By:  USRP (SFGP) 2, LLC  |
|             |                          |
|             |                          | By: |   | /s/  Stacy M. Riffe |   |
|             |                          | Name: | Stacy M. Riffe |
|             |                          | Title: | Chief Financial Officer |

 

 
| **S&C:** | **USRP (S&C), LLC** |
|--------------|-------------------------|
|         |                    |
|         |                    | By: |   | /s/  Stacy M. Riffe |   |
|         |                    | Name: | Stacy M. Riffe |
|         |                    | Title: | Chief Financial Officer |

 

 
| **HCI:** | **USRP/HCI PARTNERSHIP 1, L.P.** |
|----------|----------------------------------|
|     |                             |
|     | By:  USRP (JV1), LLC        |
|     |                             |
|     |                             | By: |   | /s/  Stacy M. Riffe |   |
|     |                             | Name: | Stacy M. Riffe |
|     |                             | Title: | Chief Financial Officer |

 

 
| **JV1:** | **USRP (JV1), LLC**       |
|----------|---------------------------|
|     |                      |
|     | By:  USRP (JV1), LLC |
|     |                      |
|     |                      | By: |   | /s/  Stacy M. Riffe |   |
|     |                      | Name: | Stacy M. Riffe |
|     |                      | Title: | Chief Financial Officer |

 

 
| **USRP Holding:** | **USRP HOLDING CORP.** |
|-------------------|------------------------|
|              |                   |
|              |                   | By: |   | /s/  Stacy M. Riffe |   |
|              |                   | Name: | Stacy M. Riffe |
|              |                   | Title: | Chief Financial Officer |

 

 
| **GENERAL PARTNER:** | **USRP MANAGING, INC.** |
|----------------------|-------------------------|
|                 |                    |
|                 |                    | By: |   | /s/  Stacy M. Riffe |   |
|                 |                    | Name: | Stacy M. Riffe |
|                 |                    | Title: | Chief Financial Officer |

 

 

----

 
| **USRP REIT:** | **U.S. RESTAURANT PROPERTIES, INC.** |
|----------------|--------------------------------------|
|           |                                 |
|           |                                 | By: |   | /s/  Stacy M. Riffe |   |
|           |                                 | Name: | Stacy M. Riffe |
|           |                                 | Title: | Chief Financial Officer |

 

 
| **SUBSIDIARY**  |                                                             |
|-----------------|------------------------------------------------------------------|
| **GUARANTORS**: | **ARKANSAS RESTAURANTS #10, L.P.,**a Texas  limited  partnership |
|            |                                                             |
|            |                                                             | By: North American  Restaurant Management, Inc. |
|            |                                                             |   |
|            |                                                             | By: |   | /s/  Stacy M. Riffe |   |
|            |                                                             | Name: | Stacy M. Riffe |
|            |                                                             | Title: | Chief Financial Officer |

 

 
|   | **RESTAURANT PROPERTY PARTNERS, L.P.,**a  Texas  limited partnership |
|--------|----------------------------------------------------------------------|
|   |                                                                 |
|   |                                                                 | By: Restaurant Funding,  Inc. |
|   |                                                                 |   |
|   |                                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                                 | Name: | Stacy M. Riffe |
|   |                                                                 | Title: | Chief Financial Officer |

 

 
|   | **USRP (66), LTD.,**a Texas limited  partnership |
|--------|--------------------------------------------------|
|   |                                             |
|   |                                             | By: USRP GP1, LLC |
|   |                                             |   |
|   |                                             | By: |   | /s/  Stacy M. Riffe |   |
|   |                                             | Name: | Stacy M. Riffe |
|   |                                             | Title: | Chief Financial Officer |

 

 
|   | **USRP (FAIN 10), L.P.,**a Texas limited  partnership |
|--------|-------------------------------------------------------|
|   |                                                  |
|   |                                                  | By: USRP GP5, LLC |
|   |                                                  |   |
|   |                                                  | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                  | Name: | Stacy M. Riffe |
|   |                                                  | Title: | Chief Financial Officer |

 

 
|   | **USRP (KATY), L.P.,**a Texas limited  partnership |
|--------|----------------------------------------------------|
|   |                                               |
|   |                                               | By: USRP GP8, LLC |
|   |                                               |   |
|   |                                               | By: |   | /s/  Stacy M. Riffe |   |
|   |                                               | Name: | Stacy M. Riffe |
|   |                                               | Title: | Chief Financial Officer |

 

 

----

 
|   | **USRP (PAC), L.P.,**a Texas limited  partnership |
|--------|---------------------------------------------------|
|   |                                              |
|   |                                              | By: USRP (Cap), Inc. |
|   |                                              |   |
|   |                                              | By: |   | /s/  Stacy M. Riffe |   |
|   |                                              | Name: | Stacy M. Riffe |
|   |                                              | Title: | Chief Financial Officer |

 

 
|   | **USRP (QUEST), L.P.,**a Texas limited  partnership |
|--------|-----------------------------------------------------|
|   |                                                |
|   |                                                | By: USRP GP4, LLC |
|   |                                                |   |
|   |                                                | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                | Name: | Stacy M. Riffe |
|   |                                                | Title: | Chief Financial Officer |

 

 
|   | **USRP (SAN ANTONIO), LTD.,**a Texas limited  partnership |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: USRP GP, LLC |
|   |                                                      |   |
|   |                                                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                      | Name: | Stacy M. Riffe |
|   |                                                      | Title: | Chief Financial Officer |

 

 
|   | **USRP (T&C), L.P.,**a Texas limited  partnership |
|--------|-------------------------------------------------------|
|   |                                                  |
|   |                                                  | By: USRP GP3, LLC |
|   |                                                  |   |
|   |                                                  | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                  | Name: | Stacy M. Riffe |
|   |                                                  | Title: | Chief Financial Officer |

 

 
|   | **BULLDOG MANAGEMENT, INC.** |
|--------|------------------------------|
|   |                         |
|   |                         | By: |   | /s/  Stacy M. Riffe |   |
|   |                         | Name: | Stacy M. Riffe |
|   |                         | Title: | Chief Financial Officer |

 

 
|   | **NORTH AMERICAN RESTAURANT MANAGEMENT,  INC.** |
|--------|-------------------------------------------------|
|   |                                            |
|   |                                            | By: |   | /s/  Stacy M. Riffe |   |
|   |                                            | Name: | Stacy M. Riffe |
|   |                                            | Title: | Chief Financial Officer |

 

 
|   | **RESTAURANT FUNDING, INC.** |
|--------|------------------------------|
|   |                         |
|   |                         | By: |   | /s/  Stacy M. Riffe |   |
|   |                         | Name: | Stacy M. Riffe |
|   |                         | Title: | Chief Financial Officer |

 

 

----

 
|   | **PINNACLE RESTAURANT GROUP, LLC,**a Texas  limited liability company |
|--------|-----------------------------------------------------------------------|
|   |                                                                  |
|   |                                                                  | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                                  | Name: | Stacy M. Riffe |
|   |                                                                  | Title: | Chief Financial Officer |

 

 
|   | **USRP (ACQUISITION), LLC,**a Texas limited  liability  company |
|--------|-----------------------------------------------------------------|
|   |                                                            |
|   |                                                            | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                            | Name: | Stacy M. Riffe |
|   |                                                            | Title: | Chief Financial Officer |

 

 
|   | **USRP (BC), LLC,**a Texas limited liability  company |
|--------|-------------------------------------------------------|
|   |                                                  |
|   |                                                  | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                  | Name: | Stacy M. Riffe |
|   |                                                  | Title: | Chief Financial Officer |

 

 
|   | **USRP (BILL), LLC,**a Texas limited  liability company |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                    | Name: | Stacy M. Riffe |
|   |                                                    | Title: | Chief Financial Officer |

 

 
|   | **USRP (CAL), LLC,**a Texas limited  liability company |
|--------|--------------------------------------------------------|
|   |                                                   |
|   |                                                   | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                   | Name: | Stacy M. Riffe |
|   |                                                   | Title: | Chief Financial Officer |

 

 
|   | **USRP (CAP), INC.**a Texas corporation |
|--------|-----------------------------------------|
|   |                                    |
|   |                                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                                    | Name: | Stacy M. Riffe |
|   |                                    | Title: | Chief Financial Officer |

 

 
|   | **USRP (CARROLL), LLC,** a Texas limited  liability company |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                        | Name: | Stacy M. Riffe |
|   |                                                        | Title: | Chief Financial Officer |

 

 
|   | **USRP (CENTRAL AVENUE), LLC,**a Texas  limited  liability company |
|--------|--------------------------------------------------------------------|
|   |                                                               |
|   |                                                               | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                               | Name: | Stacy M. Riffe |
|   |                                                               | Title: | Chief Financial Officer |

 

 
|   | **USRP (CHRIS), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 

----

 
|   | **USRP (DEEDEE), LLC,**a Texas limited  liability company |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                      | Name: | Stacy M. Riffe |
|   |                                                      | Title: | Chief Financial Officer |

 

 
|   | **USRP (DON), LLC,**a Texas limited  liability company |
|--------|--------------------------------------------------------|
|   |                                                   |
|   |                                                   | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                   | Name: | Stacy M. Riffe |
|   |                                                   | Title: | Chief Financial Officer |

 

 
|   | **USRP (FINANCE), LLC,**a Texas limited  liability company |
|--------|------------------------------------------------------------|
|   |                                                       |
|   |                                                       | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                       | Name: | Stacy M. Riffe |
|   |                                                       | Title: | Chief Financial Officer |

 

 
|   | **USRP (FRED), LLC,**a Texas limited  liability company |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                    | Name: | Stacy M. Riffe |
|   |                                                    | Title: | Chief Financial Officer |

 

 
|   | **USRP (GANT1), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (GANT2), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (GOLD), LLC,**a Texas limited  liability company |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                    | Name: | Stacy M. Riffe |
|   |                                                    | Title: | Chief Financial Officer |

 

 
|   | **USRP GP, LLC,**a Texas limited liability  company |
|--------|-----------------------------------------------------|
|   |                                                |
|   |                                                | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                | Name: | Stacy M. Riffe |
|   |                                                | Title: | Chief Financial Officer |

 

 
|   | **USRP GP1, LLC,**a Texas limited liability  company |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                 | Name: | Stacy M. Riffe |
|   |                                                 | Title: | Chief Financial Officer |

 

 

----

 
|   | **USRP GP3, LLC,**a Texas limited liability  company |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                 | Name: | Stacy M. Riffe |
|   |                                                 | Title: | Chief Financial Officer |

 

 
|   | **USRP GP4, LLC,**a Texas limited liability  company |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                 | Name: | Stacy M. Riffe |
|   |                                                 | Title: | Chief Financial Officer |

 

 
|   | **USRP GP5, LLC,**a Texas limited liability  company |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                 | Name: | Stacy M. Riffe |
|   |                                                 | Title: | Chief Financial Officer |

 

 
|   | **USRP GP6, LLC,**a Texas limited liability  company |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                 | Name: | Stacy M. Riffe |
|   |                                                 | Title: | Chief Financial Officer |

 

 
|   | **USRP GP7, LLC,**a Texas limited liability  company |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                 | Name: | Stacy M. Riffe |
|   |                                                 | Title: | Chief Financial Officer |

 

 
|   | **USRP GP8, LLC,**a Texas limited liability  company |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                 | Name: | Stacy M. Riffe |
|   |                                                 | Title: | Chief Financial Officer |

 

 
|   | **USRP (ILLINOIS), LLC,**a Texas limited  liability company |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                        | Name: | Stacy M. Riffe |
|   |                                                        | Title: | Chief Financial Officer |

 

 
|   | **USRP (JENNIFER), LLC,**a Texas limited  liability company |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                        | Name: | Stacy M. Riffe |
|   |                                                        | Title: | Chief Financial Officer |

 

 
|   | **USRP (JONES), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 

----

 
|   | **USRP (JV2), LLC,**a Texas limited  liability company* |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                    | Name: | Stacy M. Riffe |
|   |                                                    | Title: | Chief Financial Officer |

 

 
|   | **USRP (MANAGER), LLC,**a Texas limited  liability company |
|--------|------------------------------------------------------------|
|   |                                                       |
|   |                                                       | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                       | Name: | Stacy M. Riffe |
|   |                                                       | Title: | Chief Financial Officer |

 

 
|   | **USRP (MIDON), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (MINNESOTA), LLC,**a Texas limited  liability  company |
|--------|---------------------------------------------------------------|
|   |                                                          |
|   |                                                          | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                          | Name: | Stacy M. Riffe |
|   |                                                          | Title: | Chief Financial Officer |

 

 
|   | **USRP (MISSOURI), LLC,**a Texas limited  liability company |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                        | Name: | Stacy M. Riffe |
|   |                                                        | Title: | Chief Financial Officer |

 

 
|   | **USRP (MOLLY), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (PALMA), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (PAT), LLC,** a Texas limited  liability company |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                    | Name: | Stacy M. Riffe |
|   |                                                    | Title: | Chief Financial Officer |

 

----

* *NOTE – ALTHOUGHINCLUDED IN THE EXECUTED SIGNATURE PAGES OF THE DOCUMENT, THE JV2 ENTITY HASBEEN DELETED AS A GUARANTOR – IT IS NOT A CONSOLIDATED PARTY AND WAS INCLUDEDBY THE BORROWER IN ITS LIST OF SUNSIDIARY GUARANTORS IN ERROR*

 

 

----

 
|   | **USRP (POPEYE’S), LLC,**a Texas limited  liability company |
|--------|------------------------------------------------------------------|
|   |                                                             |
|   |                                                             | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                             | Name: | Stacy M. Riffe |
|   |                                                             | Title: | Chief Financial Officer |

 

 
|   | **USRP (RIBBIT), LLC,**a Texas limited  liability company |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                      | Name: | Stacy M. Riffe |
|   |                                                      | Title: | Chief Financial Officer |

 

 
|   | **USRP (SARAH), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (ST. LOUIS), LLC,**a Texas limited  liability company |
|--------|--------------------------------------------------------------|
|   |                                                         |
|   |                                                         | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                         | Name: | Stacy M. Riffe |
|   |                                                         | Title: | Chief Financial Officer |

 

 
|   | **USRP (STEVE), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (SUSI), LLC,**a Texas limited  liability company |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                    | Name: | Stacy M. Riffe |
|   |                                                    | Title: | Chief Financial Officer |

 

 
|   | **USRP (SYBRA), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (VALERIE), LLC,**a Texas limited  liability company |
|--------|------------------------------------------------------------|
|   |                                                       |
|   |                                                       | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                       | Name: | Stacy M. Riffe |
|   |                                                       | Title: | Chief Financial Officer |

 

 

----

 
|   | **PINNACLE RESTAURANT GROUP II, LLC** |
|--------|---------------------------------------|
|   |                                  |
|   |                                  | By: |   | /s/  Stacy M. Riffe |   |
|   |                                  | Name: | Stacy M. Riffe |
|   |                                  | Title: | Chief Financial Officer |

 

 
|   | **USRP (CAROLINA), LTD.** |
|--------|---------------------------|
|   |                      |
|   |                      | By: |   | Restaurant  Acquisition Corp. |   |
|   |                      |
|   |                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                      | Name: | Stacy M. Riffe |
|   |                      | Title: | Chief Financial Officer |

 

 
|   | **USRP (LINCOLN), LTD.** |
|--------|--------------------------|
|   |                     |
|   |                     | By: |   | Restaurant  Acquisition Corp. |   |
|   |                     |
|   |                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                     | Name: | Stacy M. Riffe |
|   |                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (NORMAN), LTD.** |
|--------|-------------------------|
|   |                    |
|   |                    | By: |   | Restaurant  Acquisition Corp. |   |
|   |                    |
|   |                    | By: |   | /s/  Stacy M. Riffe |   |
|   |                    | Name: | Stacy M. Riffe |
|   |                    | Title: | Chief Financial Officer |

 

 
|   | **U.S. RESTAURANT PROPERTIES DEVELOPMENT  L.P.** |
|--------|--------------------------------------------------|
|   |                                             |
|   |                                             | By: |   | Restaurant  Contractor Corp. |   |
|   |                                             |   |
|   |                                             |
|   |                                             | By: |   | /s/  Stacy M. Riffe |   |
|   |                                             | Name: | Stacy M. Riffe |
|   |                                             | Title: | Chief Financial Officer |

 

 
|   | **RESTAURANT RENOVATION PARTNERS, L.P.** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     | By: |   | Restaurant  Acquisition Corp. |   |
|   |                                     |   |
|   |                                     |
|   |                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                     | Name: | Stacy M. Riffe |
|   |                                     | Title: | Chief Financial Officer |

 

 
|   | **RESTAURANT ACQUISITION CORP.** |
|--------|----------------------------------|
|   |                             |
|   |                             | By: |   | /s/  Stacy M. Riffe |   |
|   |                             | Name: | Stacy M. Riffe |
|   |                             | Title: | Chief Financial Officer |

 

 

----

 
|   | **RESTAURANT CONTRACTOR CORP.** |
|--------|---------------------------------|
|   |                            |
|   |                            | By: |   | /s/  Stacy M. Riffe |   |
|   |                            | Name: | Stacy M. Riffe |
|   |                            | Title: | Chief Financial Officer |

 

 
|   | **USRP RENOVATION CORP.** |
|--------|---------------------------|
|   |                      |
|   |                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                      | Name: | Stacy M. Riffe |
|   |                      | Title: | Chief Financial Officer |

 

 
|   | **USRP (Green), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (Martin), LLC,**a Texas limited  liability company |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                      | Name: | Stacy M. Riffe |
|   |                                                      | Title: | Chief Financial Officer |

 

 
|   | **USRP (SFGP)2, LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (SHOPORT)1, LLC,**a Texas limited  liability company |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                        | Name: | Stacy M. Riffe |
|   |                                                        | Title: | Chief Financial Officer |

 

 
|   | **USRP (Warren), LLC,**a Texas limited  liability company |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                      | Name: | Stacy M. Riffe |
|   |                                                      | Title: | Chief Financial Officer |

 

 
|   | **USRP (KRUSE), LLC,**a Texas limited  liability company |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                     | Name: | Stacy M. Riffe |
|   |                                                     | Title: | Chief Financial Officer |

 

 
|   | **USRP (PETERS), LLC,**a Texas limited  liability company |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: |   | /s/  Stacy M. Riffe |   |
|   |                                                      | Name: | Stacy M. Riffe |
|   |                                                      | Title: | Chief Financial Officer |

 

 

----

 
|   | **USRP (ADAMS), L.P.** |
|--------|------------------------|
|   |                   |
|   |                   | By:  USRP GP7, LLC |
|   |                   |
|   |                   | By: |   | /s/  Stacy M. Riffe |   |
|   |                   | Name: | Stacy M. Riffe |
|   |                   | Title: | Chief Financial Officer |

 

 
|   | **USRP (Maier), L.P.** |
|--------|------------------------|
|   |                   |
|   |                   | By:  USRP GP6, LLC |
|   |                   |   |
|   |                   | By: |   | /s/  Stacy M. Riffe |   |
|   |                   | Name: | Stacy M. Riffe |
|   |                   | Title: | Chief Financial Officer |

 

 
|   | **USRP (SHO)1, L.P.** |
|--------|-----------------------|
|   |                  |
|   |                  | By:  USRP (SHOPORT)1, LLC |
|   |                  |
|   |                  | By: |   | /s/  Stacy M. Riffe |   |
|   |                  | Name: | Stacy M. Riffe |
|   |                  | Title: | Chief Financial Officer |

 

[remainder of pageleft intentionally blank – additional signature pages, schedules and exhibitsto follow]

 

 

----

 
| **AGENT:** |                                                |
|------------|-----------------------------------------------------|
|       | **BANK OF AMERICA, N.A.**, in its capacity as Agent |
|       |                                                |
|       |                                                |
|       | By:                                                 |   |   |
|       | Name:                                               |   |   |
|       | Title:                                              |   |   |
|            |                                                     |  |  |  |  |

 

 
| **LENDERS**: | **BANK OF AMERICA, N.A.**  individually in its capacity as a  Lender |
|--------------|----------------------------------------------------------------------|
|         |                                                                 |
|         | By:                                                                  |   |   |
|         | Name:                                                                |   |   |
|         | Title:                                                               |   |   |
|              |                                                                      |  |  |  |  |

 

 

----

 

**Schedule 1.1(a)**

**Commitments**

 
| **Lender**                |   | **Commitment** |       | **Commitment  Percentage** |   |
|---------------------------|--------|----------------|------------|----------------------------|--------|
|                      |   |           |       |                       |   |
| 1. Bank of America,  N.A. |   | $              | 35,000,000 |                       | 100.00 | % |
|                      |   |           |       |                       |   |
| 2.                        |   |           |       |                       | %      |
|                      |   |           |       |                       |   |
| Totals:                   |   | $              |       |                       | 100.00 | % |

 

1

----

 

**Schedule 2.1(a)**

 

**LENDERADDRESSES AND COMMITMENTS**

 

 

Lender/Agent:

 

Bank of America,N.A.

(forcredit-related matters):

 

Matthew W. Sadler

Vice President

Global Portfolio Management, Real Estate

Bank of America, N.A.

231 South LaSalle Street

M/C: IL1-231-10-35

Chicago, IL 60697

Phone:  (312)828-7107

Fax:  (312)974-4970

E-mail:  matthew.w.sadler@bankofamerica.com

 

(for administrative matters):

 

Charlene E. Wright-Jones

Assistant Vice President

Bank of America, N.A.

231 South LaSalle Street

Mail code: IL1-231-10-30

Chicago, IL 60697

Phone: 312-828-4160

Fax: 312-828-3950

E-mail:  charlene.wright-jones@bankofamerica.com

 

Other Lenders:

 

2

----

 

Exhibit 1.1(a)

 

BANKRUPTCY REMOTEBORROWING ENTITY REQUIREMENTS

 

A “Bankruptcy RemoteBorrowing Entity” shall satisfy the following requirements:

 

1.             General Requirements.  The entity’s Organizational Documents must provide for thefollowing (the term “Organizational Documents” as used herein means (i)with respect to a corporation, its bylaws, (ii) with respect to a limitedpartnership, its limited partnership agreement, and (iii) with respect to alimited liability company, its operating agreement):

 

(A)                              LimitedPurpose.  The entity’s purpose mustbe limited solely to owning and managing its assets, entering into the CreditDocuments and the transactions contemplated thereby and engaging in incidentalactivities in connection therewith.

 

(B)                                CertainActions Requiring Unanimous Vote. The unanimous vote of the entity’s board of directors (including that ofthe Independent Director, as defined in Section 2(A) hereof), partners ormembers, as applicable, must be required in order to:

 

(i)            take any Bankruptcy Action (asdefined in Addendum A hereof);

 

(ii)                                  dissolve,liquidate, consolidate, merge or sell all or substantially all of its assets;

 

(iii)          amend or recommend the amendment ofits Organizational Documents; and

 

(iv)                              engagein transactions with affiliates (except to the extent such transactions are onterms and conditions substantially as favorable to such Person as would beobtainable by it in a comparable arms-length transaction with a Person otherthan an officer, director, shareholder, Subsidiary or Affiliate).

 

(C)           Separateness Provisions.  The entity must be required to:

 

(i)                                     notcommingle assets with those of any other entity and must hold its assets in itsown name;

 

(ii)                                  conductits own business in its own name;

 

(iii)                               maintain separate bankaccounts, books, records and financial statements;

 

(iv)                              maintainits books, records, resolutions and agreements as official records;

 

(v)                                 payits own liabilities out of its own funds;

 

(vi)                              maintainadequate capital in light of contemplated business operations;

 

(vii)                           observe all corporate,partnership, company or other organizational formalities;

 

(viii)                        maintain an arm’s-lengthrelationship with affiliates;

 

(ix)                                paythe salaries of its own employees and maintain a sufficient number of employeesin light of contemplated business operations;

 

3

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(x)                                   notguarantee or become obligated for the debts of any other entity or hold out itscredit as being available to satisfy the obligations of others;

 

(xi)                                notacquire obligations or securities of affiliates;

 

(xii)                             not make loans to anyother person or entity;

 

(xiii)                          allocate fairly andreasonably any overhead for shared office space;

 

(xiv)                         use separate stationery, invoicesand checks;

 

(xv)                            notpledge its assets for the benefit of any other entity;

 

(xvi)                         hold itself out as a separateentity, and not fail to correct any known misunderstanding regarding itsseparate identity; and

 

(xvii)                      not identify itself or any of itsaffiliates as a division or part of the other.

 

(D)                               Subordinationof Indemnification Obligations.  Theentity’s obligation, if any, to indemnify its directors and officers, partners,or members or managers, as applicable, must be fully subordinated to the loanand the loan documents and must not constitute a claim against it in the eventthat cash flow in excess of amounts necessary to pay holders of the loan isinsufficient to pay such obligations.

 

2.                                       AdditionalRequirements for Corporations.  Inaddition to the general requirements set forth above, for a corporation to be aBankruptcy Remote Borrowing Entity, its Organizational Documents must providefor the following:

 

(A)                              IndependentDirector.  The corporation’s boardof directors must include an Independent Director.  An “Independent Director” means a director of thecorporation who is not at the time of initial appointment, has not been at anytime during the preceding five (5) years, and will not be at any timeprior to payment of the loan in full: (i) a stockholder, director, officer,employee, partner or member of the corporation or the borrower (if thecorporation is a partner or member of the borrower),****or any affiliate thereof;(ii) a customer, supplier or other person (including without limitation, anattorney, accountant or other professional) who derives any portion of itspurchases or revenues from its activities with the corporation or the borrower(if the corporation is a partner or member of the borrower) or any affiliatethereof, other than reasonable compensation for the performance of itsobligations as Independent Director; (iii) a person or other entity controllingor under common control with any such stockholder, partner, member, customer,supplier or other person; or (iv) a member of the immediate family of any suchstockholder, director, officer, employee, partner, member, customer, supplieror other person.  As used herein, theterm “control” means the possession, directly or indirectly, of the power todirect or cause the direction of management, policies or activities of a personor entity, whether through ownership of voting securities, by contract orotherwise.

 

3.                                       AdditionalRequirements for Limited Partnerships. In addition to the general requirements set forth above, for a limitedpartnership to be a Bankruptcy Remote Borrowing Entity, its OrganizationalDocuments must provide for the following:

 

(A)                              GeneralPartner.  Each general partner ofthe limited partnership must be a Bankruptcy Remote Borrowing Entity satisfyingthe general requirements set forth above and the additional requirements setforth herein applicable to such general partner (i.e., corporate, limitedpartnership or limited liability company requirements).  In addition, each such general partner’sOrganizational Documents must provide for the following:

 

4

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(i)                                     LimitedPurpose.  Each such generalpartner’s purpose must be limited to serving as a general partner in thelimited partnership.

 

(ii)                                  UnanimousVote Required to Withdraw.  Theunanimous vote of each such the general partner’s board of directors (includingthat of the Independent Director), partners or members, as applicable, must berequired for the a general partner to withdraw as a general partner of thelimited partnership.

 

(B)                                Continuanceof Partnership.  If there is morethan one general partner, the Organizational Documents must require theremaining partners to continue the partnership upon an event of dissolution forso long at least one of the general partners remains solvent.

 

4.                                       AdditionalRequirements for Limited Liability Companies.  In addition to the general requirements set forth above, for alimited liability company to be an SPE, its Organizational Documents mustprovide for the following:

 

(A)                              IndependentMember/Manager.  The company musthave one independent member/manager. Such independent member/manager should have the same basic traits as theindependent directors described with respect to corporate SPEs.  The determination of whether the independententity/individual must be a manager or a member is dependent upon the locus ofcontrol in the LLC.

 

(B)                                SPEMember.  At least one member of thecompany must be an SPE satisfying the general SPE requirements set forth aboveand the additional requirements applicable to such member (i.e., corporate,limited partnership or limited liability company requirements).  “Bankruptcy” events of dissolution must belimited to the bankruptcy of such SPE member. This may necessitate that the entity be designated the sole “managingmember” of the company.  Each such SPEmember’s Organizational Documents must provide for the following:

 

(i)                                     LimitedPurpose.  Such member’s purpose mustbe limited to serving as a member in the company.

 

(ii)                                  UnanimousVote Required to Withdraw.  Theunanimous vote of such member’s board of directors (including that of theIndependent Director), partners or members, as applicable, must be required forthe member to withdraw as a member of the company.

 

(C)                                Considerationof Interests of Creditors.  Thecompany’s members must be required to consider the interests of creditors inconnection with any action subject to the vote of its members (including theSPE member), notwithstanding that the company may not then be insolvent.

 

(D)                               Continuanceof Company.  The vote of amajority-in-interest of the remaining members of the company is sufficient tocontinue the life of the company upon the occurrence of an event of dissolutionor other termination event.  If therequired consent of the remaining members to continue the company is notobtained, the company’s Organization Documents must provide that the companynot liquidate collateral (except as permitted under the loan documents) withoutthe consent of holders of the loan, and that such holders may continue toexercise all of their rights under the loan documents and retain any collateraluntil the loan has been paid in full or otherwise completely discharged.

 

5

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Addendum A

 

As used herein, “BankruptcyAction” means any of the following:

 

1.                                       Takingany action that might cause the entity (or the borrower if the entity is apartner or member of the borrower)****to become insolvent.

 

2.                                       Commencingany case, proceeding or other action on behalf of the entity (or the borrowerif the entity is a partner or member of the borrower) under any existing orfuture law of any jurisdiction relating to bankruptcy, insolvency,reorganization or relief of debtors.

 

3.                                       Institutingproceedings to have the entity (or the borrower if the entity is a partner ormember of the borrower) adjudicated as bankrupt or insolvent.

 

4.                                       Consentingto the institution of bankruptcy or insolvency proceedings against the entity(or the borrower if the entity is a partner or member of the borrower).

 

5.                                       Filinga petition or consent to a petition seeking reorganization arrangement,adjustment, winding-up, dissolution, composition, liquidation or other reliefon behalf of the entity (or the borrower if the entity is a partner or memberof the borrower) of its (or their) debts under any federal or state lawrelating to bankruptcy.

 

6.                                       Seekingor consenting to the appointment of a receiver, liquidator, assignee, trustee,sequestrator, custodian or any similar official for the entity (or the borrowerif the entity is a partner or member of the borrower) or a substantial portionof its (or their) properties.

 

7.                                       Makingany assignment for the benefit of the entity’s creditors (or the borrower’screditors if the entity is a partner or member of the borrower).

 

8.                                       Takingany action (or causing the borrower to take any action if the entity is apartner or member of the borrower) in furtherance of any of the foregoing.

 

***

Note also the potential necessity for aNon-Consolidation Opinion from Borrower’s counsel.

 

----

 

**Exhibit 2.1(b)(i)**

 

**FORM OFNOTICE OF BORROWING**

 

CharleneE. Wright-Jones

AssistantVice President

Bankof America, N.A.

231South LaSalle Street

Mailcode:  IL1-231-10-30

Chicago,IL 60697

Phone:  312-828-4160

Fax:  312-828-3950

E-mail:  charlene.wright-jones@bankofamerica.com

 

Ladies andGentlemen:

 

The undersigned,U.S.  RESTAURANT PROPERTIES OPERATING,L.P., as the Principal Borrower thereunder (the “Borrower”), refers tothe Term Loan Credit Agreement dated as of November 4, 2003 (as amended,modified, restated or supplemented from time to time, the “Credit Agreement”),among the Borrower, the other borrowers named therein, the Guarantors, theLenders and Bank of America, N.A., as Agent. Capitalized terms used herein and not otherwise defined herein shallhave the meanings assigned to such terms in the Credit Agreement.  The Borrower hereby gives notice pursuant toSection 2.1 of the Credit Agreement that it requests a Loan advance underthe Credit Agreement, and in connection therewith sets forth below the terms onwhich such Loan advance is requested to be made:

 
| [(A)   |   | Date of Borrowing  (which is a Business Day) |   |                                        ]* |
|--------|--------|----------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                         |   |                                                                                                                                                                                                                                         |
| [(B)   |   | Principal Amount of  Borrowing               |   |                                        ]* |
|   |   |                                         |   |                                                                                                                                                                                                                                         |
| (C)    |   | Interest rate basis                          |   |                                                                                                                                                                                                                                         |
|   |   |                                         |   |                                                                                                                                                                                                                                         |
| (D)    |   | Interest Period and the  last day thereof    |   |                                                                                                                                                                                                                                         |
|   |   |                                         |   |                                                                                                                                                                                                                                         |
| (E)    |   | Purpose of borrowing                         |   |                                                                                                                                                                                                                                         |

 

 

 

In accordance withthe requirements of Section 5.2, the Borrower hereby reaffirms therepresentations and warranties set forth in the Credit Agreement as provided inclause (b) of such Section, and confirms that the matters referenced inclauses (c), (d) and (e) of such Section, are true and correct.  The Borrower hereby covenants and agrees touse the proceeds of the borrowing requested above solely for those purposesexpressly permitted pursuant to Sections 6.15 and 7.9 of the Credit Agreement.

 
|   | U.S.  RESTAURANT PROPERTIES OPERATING, L.P., |
|--------|---------------------------------------------------|
|   | as Principal Borrower                             |   |
|   |                                              |
|   | By:                                               |   | /s/ Stacy M. Riffe |   |
|   | Name:                                             | Stacy M. Riffe |
|   | Title:                                            | Chief Financial Officer |
|        |                                                   |  |  |  |  |

 

2

----

 

**Exhibit2.1(e)**

 

**TERMNOTE**

**[USRP/BANKOF AMERICA, N.A.]**

 
| $35,000,000.00 |   | November 4, 2003 |
|----------------|--------|------------------|

 

FOR VALUE RECEIVED, U.S.RESTAURANT PROPERTIES OPERATING, L.P., a Delaware corporation, USRP FUNDING2002-A, L.P., a Texas limited partnership, USRP (S&C), LLC, a Texas limitedliability company, USRP (JV1), LLC, a Texas limited liability company, USRP/HCIPARTNERSHIP 1, L.P., a Texas limited partnership and USRP Holding Corp., a Texascorporation (collectively, the “Borrower”), hereby promise to pay to theorder of BANK OF AMERICA, N.A., its successors and assigns (the “Lender”),at the office of Bank of America, N.A., as Agent (the “Agent”), at****231 South LaSalle Street**,**Mail code: IL1-231-10-30, Chicago, IL 60697 (or at such other place orplaces as the holder hereof may designate), at the times set forth in the TermLoan Credit Agreement dated as of November 4, 2003 among the Borrower, theGuarantors, the Lenders and the Agent (as it may be as amended, modified,restated or supplemented from time to time, the “Credit Agreement”; allcapitalized terms not otherwise defined herein shall have the meanings setforth in the Credit Agreement), but in no event later than the Maturity Date,in Dollars and in immediately available funds, the principal amount of **THIRTY-FIVEMILLION AND NO/100 DOLLARS ($35,000,000.00)** or, if less than suchprincipal amount, the aggregate unpaid principal amount of all Loans made bythe Lender to the Borrower pursuant to the Credit Agreement, and to payinterest from the date hereof on the unpaid principal amount hereof, in likemoney, at said office, on the dates and at the rates selected in accordancewith Section 2.1(d) of the Credit Agreement.

 

Upon the occurrence andduring the continuance of an Event of Default, the balance outstandinghereunder shall bear interest as provided in Section 3.1 of the CreditAgreement.  Further, in the event thepayment of all sums due hereunder is accelerated under the terms of the CreditAgreement, this Note, and all other indebtedness of the Borrower to the Lendershall become immediately due and payable, without presentment, demand, protestor notice of any kind, all of which are hereby waived by the Borrower.

 

In the event this Note isnot paid when due at any stated or accelerated maturity, the Borrower agrees topay, in addition to the principal and interest, all costs of collection,including reasonable attorneys’ fees.

 

This Note and the Loansevidenced hereby may be transferred in whole or in part only by registration ofsuch transfer on the Register maintained by or on behalf of the Borrower asprovided in Section 11.3(c) of the Credit Agreement.

 

 

[remainder of page left intentionally blank –signature page to follow]

 

3

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IN WITNESS WHEREOF, the Borrower has caused this Noteto be duly executed by its duly authorized officer as of the day and year firstabove written.

 
| **PRINCIPAL BORROWER**: | **U.S.  RESTAURANT  PROPERTIES OPERATING L.P.** |
|-------------------------|------------------------------------------------------|
|                    |                                                 |   |   |
|                    | By:  USRP MANAGING, INC.                        |
|                    |                                                 |   |   |
|                    |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|                    |                                                 | Name: | Stacy M. Riffe |
|                    |                                                 | Title: | Chief Financial Officer |
|                    |                                                 |   |   |
| **GENERAL SPE:**        | **USRP FUNDING 2002-A, L.P.**                        |
|                    |                                                 |   |   |
|                    | By:  USRP (SFGP) 2, LLC                         |
|                    |                                                 |   |   |
|                    |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|                    |                                                 | Name: | Stacy M. Riffe |
|                    |                                                 | Title: | Chief Financial Officer |
|                    |                                                 |   |   |
| **S&C:**            | **USRP (S&C), LLC**                              |
|                    |                                                 |   |   |
|                    |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|                    |                                                 | Name: | Stacy M. Riffe |
|                    |                                                 | Title: | Chief Financial Officer |
|                    |                                                 |   |   |
| **HCI:**                | **USRP/HCI PARTNERSHIP 1, L.P.**                     |
|                    |                                                 |   |   |
|                    | By:  USRP (JV1), LLC                            |
|                    |                                                 |   |   |
|                    |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|                    |                                                 | Name: | Stacy M. Riffe |
|                    |                                                 | Title: | Chief Financial Officer |
|                    |                                                 |   |   |
| **JV1:**                | **USRP (JV1), LLC**                                  |
|                    |                                                 |   |   |
|                    |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|                    |                                                 | Name: | Stacy M. Riffe |
|                    |                                                 | Title: | Chief Financial Officer |
|                    |                                                 |   |   |
| **USRP Holding:**       | **USRP HOLDING CORP.**                               |
|                    |                                                 |   |   |
|                    |                                                 | By: |   | /s/  Stacy M. Riffe |   |
|                    |                                                 | Name: | Stacy M. Riffe |
|                    |                                                 | Title: | Chief Financial Officer |
|                         |                                                      |  |  |  |  |  |  |  |  |

 

4

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**Exhibit 3.2**

 

**FORM OF NOTICE OFCONTINUATION/CONVERSION**

 

Bank of America, N.A.,

  as Agent for the Lenders

101 North Tryon Street

Independence Center, 15thFloor

NC1-001-15-04

Charlotte, NorthCarolina  28255

Attention:  Agency Services

 

Ladies and Gentlemen:

 

The undersigned, U.S. RESTAURANT PROPERTIES OPERATING, L.P., as principal borrower thereunder(the “Borrower”), refers to the Term Loan Credit Agreement dated as ofNovember 4, 2003 (as amended, modified, restated or supplemented from time totime, the “Credit Agreement”), among the Borrower, the other borrowersnamed therein, the Guarantors, the Lenders and Bank of America, N.A., as Agent. Capitalized terms used herein and nototherwise defined herein shall have the meanings assigned to such terms in theCredit Agreement.  The Borrower herebygives notice pursuant to Section 3.2 of the Credit Agreement that itrequests an continuation or conversion of a Loan outstanding under the CreditAgreement, and in connection therewith sets forth below the terms on which suchextension or conversion is requested to be made:

 
| (A)    |   | Loan Type                                    |   |
|--------|--------|----------------------------------------------|--------|
|   |   |                                         |   |
| (B)    |   | Date of Extension or  Conversion             |   |
|   |   | (which is the last day  of the               |   |
|   |   | the applicable Interest  Period)             |   |
|   |   |                                         |   |
| (C)    |   | Principal Amount of  Extension or Conversion |   |
|   |   |                                         |   |
| (D)    |   | Interest rate basis                          |   |
|   |   |                                         |   |
| (E)    |   | Interest Period and the  last day thereof    |   |
|   |   |                                         |   |

 

In accordance withthe requirements of Section 5.2, the Borrower hereby reaffirms therepresentations and warranties set forth in the Credit Agreement as provided inclause (b) of such Section, and confirms that the matters referenced inclauses (c), (d) and (e) of such Section, are true and correct.

 

The undersigned officer of U.S. Restaurant PropertiesOperating L.P. hereby represents and warrants that he/she has the necessarypower and authority to execute this letter on behalf of the Borrower and thatsuch action has been duly authorized by all necessary action of the Borrowerand its partners prior to or on the date hereof.

 
|   | U.S.  RESTAURANT PROPERTIES OPERATING, L.P., |
|--------|---------------------------------------------------|
|   | as Principal Borrower                             |   |
|   |                                              |
|   | By:                                               |   | /s/ Stacy M. Riffe |   |
|   | Name:                                             | Stacy M. Riffe |
|   | Title:                                            | Chief Financial Officer |
|        |                                                   |  |  |  |  |

 

5

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**Exhibit 7.1(c)**

 

**FORM OF OFFICER’S COMPLIANCECERTIFICATE**

 

For the fiscal quarter ended                           , 20   .

 

I,                                       ,[Title] of U.S.  RESTAURANT PROPERTIESOPERATING, L.P., as principal borrower (the “Borrower”) hereby certifythat, to the best of my knowledge and belief, with respect to that certainCredit Agreement dated as of November 4, 2003 (as amended, modified, restatedor supplemented from time to time, the “Credit Agreement”; all of thedefined terms in the Term Loan Credit Agreement are incorporated herein byreference) among the Borrower, the Guarantors, the Lenders and Bank of America,N.A., as Agent:

 

a.             The company-prepared financialstatements which accompany this certificate are true and correct in allmaterial respects and have been prepared in accordance with GAAP applied on aconsistent basis, subject to changes resulting from normal year-end auditadjustments.

 

b.             Since                   (the date of the last similar certification, or, if none, the Closing Date) noDefault or Event of Default has occurred under the Credit Agreement; and

 

c.             Since                   (the date of the last similar certification, or, if none, the Closing Date) theConsolidated Parties have entered into the following Hedging Agreements:

 

Delivered herewith are detailed calculationsdemonstrating compliance by the Credit Parties with the Financial Covenants asof the end of the fiscal period referred to above.

 

This            day of                 , 20   .

 

 
|   | U.S.  RESTAURANT PROPERTIES OPERATING, L.P., |
|--------|---------------------------------------------------|
|   | as Principal Borrower                             |
|   |                                              |   |
|   | By:                                               |   | /s/ Stacy M. Riffe |
|   | Name:                                             | Stacy M. Riffe |
|   | Title:                                            | Chief Financial Officer |
|        |                                                   |  |  |

 

6

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Attachment to Officer’sCertificate

 

**Computation of Financial Covenants**

 

7

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**Exhibit 7.12**

 

**FORM OF JOINDER AGREEMENT**

 

**THIS JOINDER AGREEMENT** (the “Agreement”),dated as of                     , 20  ,is by and between                                      ,a                                      (the “Subsidiary”), and **BANK OF AMERICA, N. A.**, in its capacity as Agent under that certain Term LoanCredit Agreement (as it may be amended, modified, restated or supplemented fromtime to time, the “Credit Agreement”), dated as of November 4, 2003, byand among U.S. RESTAURANT PROPERTIES OPERATING L.P., a Delaware limitedpartnership (“USRP Operating” or the “Principal Borrower”), USRPFUNDING 2002-A, L.P., a Texas limited partnership (the “General SPE”);USRP (S&C), LLC, a Texas limited liability company (“S&C”), USRP(JV1), LLC, a Texas limited liability company (“JV1”), USRP/HCIPARTNERSHIP 1, L.P., a Texas limited partnership (“HCI”), USRP HOLDINGCORP., a Texas corporation (“USRP Holding”; and together with thePrincipal Borrower, the General SPE, HCI, JV1 and S&C, the “Borrower”),the Guarantors, the Lenders and BANK OF AMERICA, N.A., as Agent.  All of the defined terms in the CreditAgreement are incorporated herein by reference.

 

The Credit Parties are required by Section 7.12of the Credit Agreement to cause the Subsidiary to become a “Guarantor”.

 

Accordingly, the Subsidiary hereby agrees as followswith the Agent, for the benefit of the Lenders:

 

1.             TheSubsidiary hereby acknowledges, agrees and confirms that, by its execution ofthis Credit Agreement, the Subsidiary will be deemed to be a party to theCredit Agreement and a “Guarantor” for all purposes of the Credit Agreement,and shall have all of the obligations of a Guarantor thereunder as if it hadexecuted the Credit Agreement.  TheSubsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,all of the terms, provisions and conditions applicable to the Guarantorscontained in the Credit Agreement.  Withoutlimiting the generality of the foregoing terms of this paragraph 1, theSubsidiary hereby jointly and severally together with the other Guarantors,guarantees to each Lender and the Agent, as provided in Section 4 of theCredit Agreement, the prompt payment and performance of the Credit PartyObligations in full when due (whether at stated maturity, as a mandatoryprepayment, by acceleration or otherwise) strictly in accordance with the termsthereof.

 

2.             Theaddress of the Subsidiary for purposes of all notices and other communicationsis                                 ,                                                          ,Attention of                      (Facsimile No.                    ).

 

3.             TheSubsidiary hereby waives acceptance by the Agent and the Lenders of theguaranty by the Subsidiary under Section 4 of the Credit Agreement uponthe execution of this Credit Agreement by the Subsidiary.

 

4.             ThisCredit Agreement may be executed in two or more counterparts, each of whichshall constitute an original but all of which when taken together shallconstitute one contract.

 

5.             ThisCredit Agreement shall be governed by and construed and interpreted inaccordance with the laws of the State of North Carolina.

 

IN WITNESS WHEREOF, the Subsidiary has caused thisJoinder Agreement to be duly executed by its authorized officers, and theAgent, for the benefit of the Lenders, has caused the same to be accepted byits authorized officer, as of the day and year first above written.

 
|   | [SUBSIDIARY]                            |   |
|--------|-----------------------------------------|--------|
|   |                                    |   |
|   | By:                                     |   |   |   |
|   | Name:                                   |   |   |   |
|   | Title:                                  |   |   |
|   |                                    |   |
|   | Acknowledged and  accepted:             |   |
|   |                                    |   |
|   | BANK OF AMERICA,  N.  A., as Agent |   |
|   |                                    |   |
|   | By:                                     |   |   |   |
|   | Name:                                   |   |   |   |
|   | Title:                                  |   |   |   |
|        |                                         |        |  |  |  |  |  |  |  |  |

 

8

----

 

**Exhibit 11.3(b)**

 

ASSIGNMENT AND ASSUMPTION

 

This Assignmentand Assumption (the “Assignment and Assumption”) is dated as of theClosing Date set forth below and is entered into by and between [*Insert nameof Assignor*] (the “Assignor”) and [*Insert name of Assignee*](the “Assignee”).  Capitalizedterms used but not defined herein shall have the meanings given to them in theTerm Loan Credit Agreement identified below (as amended, the “CreditAgreement”), receipt of a copy of which is hereby acknowledged by theAssignee.  The Standard Terms andConditions set forth in Annex 1 attached hereto are hereby agreed to andincorporated herein by reference and made a part of this Assignment andAssumption as if set forth herein in full.

 

For an agreedconsideration, the Assignor hereby irrevocably sells and assigns to theAssignee, and the Assignee hereby irrevocably purchases and assumes from theAssignor, subject to and in accordance with the Standard Terms and Conditionsand the Credit Agreement, as of the Closing Date inserted by the Agent ascontemplated below (i) all of the Assignor’s rights and obligations in itscapacity as a Lender under the Credit Agreement and any other documents orinstruments delivered pursuant thereto to the extent related to the amount andpercentage interest identified below of all of such outstanding rights andobligations of the Assignor under the respective facilities identified below(including without limitation any letters of credit, guarantees, and swinglineloans included in such facilities) and (ii) to the extent permitted to beassigned under applicable law, all claims, suits, causes of action and anyother right of the Assignor (in its capacity as a Lender) against any Person,whether known or unknown, arising under or in connection with the CreditAgreement, any other documents or instruments delivered pursuant thereto or theloan transactions governed thereby or in any way based on or related to any ofthe foregoing, including, but not limited to, contract claims, tort claims,malpractice claims, statutory claims and all other claims at law or in equityrelated to the rights and obligations sold and assigned pursuant to clause (i)above (the rights and obligations sold and assigned pursuant to clauses (i) and(ii) above being referred to herein collectively as, the “Assigned Interest”).  Such sale and assignment is without recourseto the Assignor and, except as expressly provided in this Assignment andAssumption, without representation or warranty by the Assignor.

 
| 1.     | Assignor:          |                                                                                                                                                                                                                                                                                                                                          |   |
|--------|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |               |                                                                                                                                                                                                                                                                                                                                          |   |
| 2.     | Assignee:          |                                                                                                                                                                                                                                                                                                                                          |   |
|   |               | [and is an  Affiliate/Approved Fund of [*identify Lender*](1)                                                                                                                                                                                                                                                                                 |
|   |               |                                                                                                                                                                                                                                                                                                                                          |   |
| 3.     | Borrower(s):       |                                                                                                                                                                                                                                                                                                                                          |   |
|   |               |                                                                                                                                                                                                                                                                                                                                          |   |
| 4.     | Agent:             |                                      ,  as the agent under the Credit Agreement                                                                      |
|   |               |                                                                                                                                                                                                                                                                                                                                          |   |
| 5.     | Credit Agreement:  | That certain Term Loan  Credit Agreement dated as of November 4, 2003 among U.S. Restaurant Operating,  L.P., USRP Funding 2002-A, L.P., as the Principal Borrower, the other  Borrowers thereunder, the Guarantors referenced therein, the Lenders parties  thereto, Bank of America, N.A., as Agent, and the other agents parties  thereto. |
|   |               |                                                                                                                                                                                                                                                                                                                                          |   |
| 6.     | Assigned Interest: |                                                                                                                                                                                                                                                                                                                                          |   |

 
| **Facility Assigned(2)** |   | **Aggregate  Amount of  Commitment/Loans for all  Lenders*** |   | **Amount of  Commitment/Loans  Assigned*** |   | **Percentage  Assigned of  Commitment/Loans(3)** |   |
|--------------------------|--------|--------------------------------------------------------------|--------|--------------------------------------------|--------|--------------------------------------------------|--------|
|                     |   | $                                                            |   | $                                          |   |                                             | %      |
|                     |   | $                                                            |   | $                                          |   |                                             | %      |
|                     |   | $                                                            |   | $                                          |   |                                             | %      |

 

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(1)Select as applicable.

(2) Fill in the appropriate terminology for the types of facilitiesunder the Credit Agreement that are being assigned under this Assignment (e.g.“Revolving Credit Commitment,” “Term Loan Commitment,” etc.)

* Amountto be adjusted by the counterparties to take into account any payments orprepayments made between the Trade Date and the Closing Date.

(3) Set forth, to at least 9 decimals, as a percentage of theCommitment/Loans of all Lenders thereunder.

 

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| [7. | Trade Date: |   |                              ](4) |
|-----|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Closing Date:                                           , 20      [TO BEINSERTED BY AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OFTRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth inthis Assignment and Assumption are hereby agreed to:

 
|   | ASSIGNOR           |
|--------|--------------------|
|   | [NAME OF ASSIGNOR] |
|   |               |
|   | By:                |   |   |
|   |               | Title: |
|   |               |
|   | ASSIGNEE           |
|   | [NAME OF ASSIGNEE] |
|   |               |
|   | By:                |   |   |
|   |               | Title: |
|        |                    |  |  |  |  |

 

Consented to andAccepted:

 

BANK OF AMERICA, N.A., asAgent

 
| By                                                       |   |   |   |
|----------------------------------------------------------|--------|--------|--------|
|   Title:                                       |   |
|                                                     |   |
| Consented to:                                            |   |
|                                                     |   |
| U.S.  RESTAURANT PROPERTIES OPERATING, L.P.  , |   |
| as Principal Borrower                                    |   |
|                                                     |   |
| By:                                                      |   |   |   |
| Name:                                                    |   |   |   |
| Title:                                                   |   |   |   |
|                                                          |        |        |        |  |  |  |  |

 

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(4) To be completed if the Assignor and the Assignee intend that theminimum assignment amount is to be determined as of the Trade Date.

 

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ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.  Representations and Warranties.

 

1.1   Assignor.  The Assignor (a) represents and warrants that (i) it is the legaland beneficial owner of the Assigned Interest, (ii) the Assigned Interest isfree and clear of any lien, encumbrance or other adverse claim and (iii) it hasfull power and authority, and has taken all action necessary, to execute anddeliver this Assignment and Assumption and to consummate the transactionscontemplated hereby; and (b) assumes no responsibility with respect to (i) anystatements, warranties or representations made in or in connection with theCredit Agreement or any other Credit Document, (ii) the execution, legality,validity, enforceability, genuineness, sufficiency or value of the CreditDocuments or any collateral thereunder, (iii) the financial condition of theBorrower, any of its Subsidiaries or Affiliates or any other Person obligatedin respect of any Credit Document or (iv) the performance or observance by theBorrower, any of its Subsidiaries or Affiliates or any other Person of any oftheir respective obligations under any Credit Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has fullpower and authority, and has taken all action necessary, to execute and deliverthis Assignment and Assumption and to consummate the transactions contemplatedhereby and to become a Lender under the Credit Agreement, (ii) it meets allrequirements of an Eligible Assignee under the Credit Agreement (subject toreceipt of such consents as may be required under the Credit Agreement), (iii)from and after the Closing Date, it shall be bound by the provisions of theCredit Agreement as a Lender thereunder and, to the extent of the AssignedInterest, shall have the obligations of a Lender thereunder, (iv) it hasreceived a copy of the Credit Agreement, together with copies of the mostrecent financial statements delivered pursuant to the terms thereof, asapplicable, and such other documents and information as it has deemedappropriate to make its own credit analysis and decision to enter into thisAssignment and Assumption and to purchase the Assigned Interest on the basis ofwhich it has made such analysis and decision independently and without relianceon the Agent or any other Lender, and (v) if it is a Foreign Lender(5),attached to the Assignment and Assumption is any documentation required to bedelivered by it pursuant to the terms of the Credit Agreement, duly completedand executed by the Assignee; and (b) agrees that (i) it will, independentlyand without reliance on the Agent, the Assignor or any other Lender, and basedon such documents and information as it shall deem appropriate at the time,continue to make its own credit decisions in taking or not taking action underthe Credit Documents, and (ii) it will perform in accordance with their termsall of the obligations which by the terms of the Credit Documents are requiredto be performed by it as a Lender.

 

2.   Payments.  From and after the Closing Date, the Agent shall make allpayments in respect of the Assigned Interest (including payments of principal,interest, fees and other amounts) to the Assignor for amounts which have accruedto but excluding the Closing Date and to the Assignee for amounts which haveaccrued from and after the Closing Date. The Assignee hereby acknowledges andagrees to the terms contained in the Intercreditor Agreement.

 

3.  General Provisions. This Assignment andAssumption shall be binding upon, and inure to the benefit of, the partieshereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number ofcounterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of asignature page of this Assignment and Assumption by telecopy shall be effectiveas delivery of a manually executed counterpart of this Assignment andAssumption.  This Assignment andAssumption shall be governed by, and construed in accordance with, the law ofthe State of North Carolina.

 

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