Document:

Exhibit

10.1

 

CREDIT AGREEMENT

 

Dated as of May 31, 2002

 

among

 

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

 

USRP FUNDING 2002-A, L.P. (the

“General SPE”),

 

as, 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 AND THE 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

 

 

TABLE OF CONTENTS

 

	

  ARTICLE

  I  DEFINITIONS

  
	

   

  	

  1.1

  	

  Definitions.

  
	

   

  	

  1.2

  	

  Computation of Time

  Periods.

  
	

   

  	

  1.3

  	

  Accounting

  Terms.

  
	

  ARTICLE

  II  CREDIT FACILITIES

  
	

   

  	

  2.1

  	

  Revolving

  Loans.

  
	

   

  	

  2.2

  	

  Letter of Credit

  Subfacility.

  
	

   

  	

  2.4

  	

  Joint

  and Several Liability of the Borrowers.

  
	

   

  	

  2.5

  	

  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

  	

  Termination

  and Reduction of Revolving Committed Amount.

  
	

   

  	

  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.

  
	

  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.

  

 

i

 

	

   

  	

  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.

  
	

   

  	

  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, Letters of Credit and Derivative Exposure Reserve.

  
	

   

  	

  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.

  
	

  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.

  

 

ii

 

	

   

  	

  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

  	

  Intentionally

  Omitted.

  
	

   

  	

  8.15

  	

  Negative

  Pledges/Liens.

  
	

   

  	

  8.16

  	

  Operating Lease

  Obligations.

  
	

   

  	

  8.17

  	

  No

  Foreign Subsidiaries.

  
	

  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.

  
	

   

  	

  11.3

  	

  Successors

  and Assigns

  
	

   

  	

  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.

  

 

iii

 

	

  SCHEDULES

  
	

   

  	

   

  	

   

  
	

  Schedule 1.1(a)

  	

   

  	

  Revolving

  Commitments

  
	

  Schedule 2.1(a)

  	

   

  	

  Lenders/Agent

  
	

  Schedule 5.1(i)

  	

   

  	

  Corporate

  Structure

  
	

  Schedule 6.4

  	

   

  	

  Required

  Consents, Authorizations, Notices and Filings

  
	

  Schedule 6.9

  	

   

  	

  Litigation

  
	

  Schedule 6.12

  	

   

  	

  ERISA

  
	

  Schedule 6.13

  	

   

  	

  Subsidiaries

  
	

  Schedule 6.16

  	

   

  	

  Environmental Disclosures

  
	

  Schedule 6.20

  	

   

  	

  Chief

  Executive Offices/Principal Places of Business

  
	

  Schedule 6.28

  	

   

  	

  Closing Date

  Borrowing Base Assets

  
	

  Schedule 7.6

  	

   

  	

  Insurance

  
	

  Schedule 8.1

  	

   

  	

  Indebtedness

  
	

  Schedule 8.2

  	

   

  	

  Liens

  
	

  Schedule 8.6

  	

   

  	

  Investments

  
	

  Schedule 8.11

  	

   

  	

  Permitted

  Restricted Actions

  
	

  Schedule 8.12(b)

  	

   

  	

  Material

  Contingent Obligations

  
	

   

  	

   

  	

   

  
	

  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 Revolving Note

  
	

  Exhibit 3.2

  	

   

  	

  Form of

  Notice of Continuation/Conversion

  
	

  Exhibit 7.1(c)

  	

   

  	

  Form of

  Officer’s Compliance Certificate

  
	

  Exhibit 7.1(k)

  	

   

  	

  Form

  of Borrowing Base Certificate

  
	

  Exhibit 7.12

  	

   

  	

  Form

  of Joinder Agreement

  
	

  Exhibit 11.3(b)

  	

   

  	

  Form of Assignment and

  Assumption

  

 

iv

 

CREDIT AGREEMENT

 

THIS CREDIT

AGREEMENT, dated as of

May 31, 2002 (as amended, modified, restated or supplemented from 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 “Principal Borrower”), USRP FUNDING

2002-A, L.P., a Texas limited partnership (the “General SPE);

collectively, with USRP Operating, the “Borrower”), USRP MANAGING, INC., a

Delaware corporation and the general partner of USRP Operating, as a Guarantor

(the “General Partner”), U.S. RESTAURANT PROPERTIES, INC., a

Maryland corporation, as a Guarantor (“USRP REIT”), the Subsidiary

Guarantors (as defined herein), the Lenders (as defined herein), BANK OF

AMERICA, N.A., as Agent for the Lenders (in such capacity, the “Agent”)

and BANC

OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole

Book Manager (in such capacity “BAS”).

 

W I T N E S S E T H

 

WHEREAS, the Borrowers have requested that the Lenders

provide credit facilities in an aggregate amount of $35,000,000 (the “Credit

Facilities”) for the purposes hereinafter set forth; and

 

WHEREAS, the Lenders have agreed to make the requested

Credit Facilities available to the Borrowers on the terms and conditions

hereinafter set forth;

 

NOW, THEREFORE,

IN CONSIDERATION of the

premises and other good and valuable consideration, the receipt and sufficiency

of which is hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE

I

 

DEFINITIONS

 

1.1          Definitions.

 

As used in this Credit Agreement, the following terms shall have the

meanings specified below unless the context otherwise requires:

 

“Adjusted Base Rate” means the Base Rate plus 3.00%.

 

“Adjusted Eurodollar Rate” means the Eurodollar Rate plus

3.00%.

 

“Administrative

Questionnaire” means an Administrative Questionnaire in a form supplied by

the Agent.

 

“Affiliate” means, with

respect to any Person, any other Person (i) directly or indirectly

controlling or controlled by or under direct or indirect common control with

such Person or (ii) directly or indirectly owning or holding five

percent (5%) or more of the Capital Stock in such Person.  For purposes of this definition, “control”

when used with respect to any Person means the power to direct the management

and policies of such Person, directly or indirectly, whether through the

ownership of voting securities, by contract or otherwise; and the terms

“controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent” shall have the

meaning assigned to such term in the heading hereof, together with any

successors or assigns.

 

“Aggregate Derivative Reserve

Amount” means, at any given time, an amount equal to the aggregate amount

reserved in connection with all Derivative Exposure Reserves in effect at such

time.

 

“Applicable Law” means

all applicable provisions of constitutions, statutes, rules, regulations and

orders of all governmental bodies and all orders and decrees of all 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 Lender may from time to time specify to the Agent and the

Borrower by written notice as the office by which its Eurodollar Loans are made

and maintained.

 

“Approved Fund” means any Fund that is

administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an

entity or an Affiliate of an entity that administers or manages a Lender.

 

“Approved Shoneys Assets” means a collective

reference to those Shoneys Assets which are wholly owned by the General SPE and

have been approved by the Agent and the Required Lenders as assets which may,

to the extent meeting all other requirements set forth herein, contribute to

the calculation of the Borrowing Base Asset Value pursuant to a Determination

Decision delivered in connection with Section 3.24 hereof.

 

“Asset Disposition” means

any disposition (including pursuant to a Sale and Leaseback Transaction) of any

or all of the Property (including without limitation the Capital Stock of a

Subsidiary) of any Consolidated Party whether by sale, lease (other than in the

ordinary course of business), licensing, transfer or otherwise, but other than

pursuant to any casualty or condemnation event.

 

“Asset Value” means, with respect to any given

parcel of Real Property for any given date of calculation, (a) if such Real

Property has been owned for at least one (1) year, the trailing twelve month

EBITDA from such Real Property as of such date of calculation and (b) if such

Real Property has been owned less than one (1) year, the annualized EBITDA from

such Real Property (based on the EBITDA from the date of acquisition through

such date of calculation), in each case, capitalized at eleven and one half

percent (11.5%); provided, that (a) the Agent shall have the right, at its

discretion, to review the appropriateness of the capitalization rate on an

annual basis (such review period to commence on May1 of each calendar year and

end as of June 1 of such calendar year) and (b) the Required Lenders shall

have the right, in their sole discretion, to adjust the capitalization rate

during the Agent’s review period each year (by an amount not to exceed +/–

0.50% in any given year) based on then–prevailing market conditions for

comparable property types (each as determined by the Required Lenders).

 

“Assignment and Assumption” means an assignment

and assumption entered into by a Lender and an Eligible Assignee (with the

consent of any party whose consent is required by Section 11.3, and accepted by

the Agent, in substantially the form of Exhibit 11.3 or any other

form approved by the Agent.

 

“Availability” means, at

any time, an amount (not less than zero) equal to (a) the Revolving Committed

Amount, less (b) the sum of (i) the outstanding principal amount of the

Revolving Loans, plus (ii) the LOC Obligations, plus (iii) the

Aggregate Derivative Reserve Amount.

 

“Bankruptcy Code” means

the Bankruptcy Code in Title 11 of the United States Code, as amended,

modified, succeeded or replaced from time to time.

 

“Bankruptcy Event” means,

with respect to any Person, the occurrence of any of the following:

(i) the entry of a decree or order for relief by a court or governmental

agency in an involuntary case under any applicable bankruptcy, insolvency or

other similar law now or hereafter in effect, or the appointment by a court or

governmental agency of a receiver, liquidator, assignee, custodian, trustee,

sequestrator (or similar official) of such Person or for any substantial part

of its Property or the ordering of the winding up or liquidation of its affairs

by a court or governmental agency; or (ii) the commencement against such

Person of an involuntary case under any applicable bankruptcy, insolvency or

other similar law now or hereafter in effect, or of any case, proceeding or

other action for the appointment of a receiver, liquidator, assignee,

custodian, trustee, sequestrator (or similar official) of such Person or for

any substantial part of its Property or for the winding up or liquidation of

its affairs, and such involuntary case or other case, proceeding or other

action shall remain undismissed for a period of sixty (60) consecutive

days, or the repossession or seizure by a creditor of such Person of a

substantial part of its Property; or (iii) such Person shall commence a

voluntary case under any applicable bankruptcy, insolvency or other similar law

now or hereafter in effect, or consent to the entry of an order for relief in

an involuntary case under any such law, or consent to the appointment of or the

taking possession by a receiver, liquidator, assignee, creditor in possession,

custodian, trustee, sequestrator (or similar 

 

2

 

official) of such Person or for

any substantial part of 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 its inability to, pay its debts generally as they become due.

 

“Bankruptcy Remote Borrowing Entity” means a

Person meeting each of the criteria

set forth on Exhibit 1.1(a) attached hereto.

 

“BAS” shall have the meaning given to such term

in the introductory paragraph hereof.

 

“Base Rate” means, for

any day, the rate per annum equal to the higher of (a) the Federal Funds

Rate for such day plus one–half of one percent (0.5%) and

(b) the Prime Rate for such day. 

Any change in the Base Rate due to a change in the Prime Rate or the

Federal Funds Rate shall be effective on the effective date of such change in

the Prime Rate or Federal Funds Rate.

 

“Base Rate Loan” means

any Loan bearing interest at a rate determined by reference to the Base Rate.

 

“BOA” means Bank of

America, N.A. and its successors and assigns.

 

“BOA Derivative Instrument”

means any derivative transaction, hedging transaction, takeout commitment or

forward equity commitment entered into by and between the General Partner or

the USRP REIT and any Derivative Counterparty.

 

“Borrower” means,

collectively, USRP Operating, the General SPE, and their permitted successors

and assigns.

 

“Borrowing Base” means,

as of any day, an amount equal to thirty percent (30%) multiplied by

the Borrowing Base Asset Value; provided, however, that, prior to such

calculation, each of clauses (a) through (c) below shall be satisfied with

respect to the assets contributing to the Borrowing Base Asset Value:

 

(a)           the assets of single

Concepts or Tenants shall not, in any case, account for more than ten

percent (10%) (or, in the case of the Burger King Concept, twenty

percent (20%)) of the Total Rent; to the extent the assets of a single

Concept or Tenant account for more than ten percent (10%) (or, in the case

of the Burger King Concept, twenty percent (20%)) of the Total Rent

associated with the assets used in calculating Borrowing Base Asset Value, the

assets associated with such Concept or Tenant shall be removed from the calculation

of Borrowing Base Asset Value to the extent necessary to reduce such Concept’s

or Tenant’s percentage of the Total Rent of the assets used in calculating

Borrowing Base Asset Value to a portion equal to or less than ten

percent (10%) (or, in the case of the Burger King Concept, twenty

percent (20%));

 

(b)           the portion of

Borrowing Base Asset Value attributable to Ground Lease Interests shall not, in

any case, exceed twenty percent (20%) of the aggregate Borrowing Base

Asset Value; to the extent Ground Lease Interests constitute more than twenty

percent (20%) of the Borrowing Base Asset Value, the Value of such Ground

Lease Interests shall be removed from the calculation thereof to the extent

necessary to reduce the percentage associated with the Ground Lease Interests

as a portion of all of the assets used in calculating Borrowing Base Asset

Value to a portion equal to or less than twenty percent (20%); and

 

(c)           the underlying

leases with respect to the Borrowing Base Assets shall not, in any case, have a

weighted average remaining lease term of less than nine (9) years; to the

extent the weighted average of the remaining lease term(s) of the underlying

leases with respect to the assets contributing to the Borrowing Base Asset

Value (with each such lease’s term given a weighting in relation to the other

leases involved in such calculation based on the contribution of each such

lease to the Borrowing Base Asset Value) is less than nine (9) years,

assets with remaining lease terms of less than nine (9) years shall be

removed from the calculation of Borrowing Base Asset Value until the weighted

average of the remaining lease terms with respect to all such assets is equal

to or greater than nine (9) years.

 

3

 

“Borrowing Base Asset Value”

means, as of any given calculation date, an amount equal to (a) the sum of (i)

the sum of the Asset Values of all Real Properties which are wholly owned by

the General SPE; plus (ii) the sum of the Asset Values of each of the

Approved Shoneys Assets; less (b) any amounts included in the

above calculations that are attributable to (i) assets subject to one or more

Liens or Negative Pledges; and (ii) Excluded Assets.

 

“Borrowing Base Assets” means, as of any given

date, those assets contributing to the Borrowing Base Asset Value after the

reductions made pursuant to subclause (b) of the definition thereof.

 

“Borrowing Base Certificate”

shall have the meaning given to such term in Section 7.1(k).

 

“Business Day” means a

day other than a Saturday, Sunday or other day on which commercial banks in

Charlotte, North Carolina or New York, New York are authorized or required by

law to close, except  that, when used in connection with a

Eurodollar Loan, such day shall also be a day on which dealings between banks

are carried on in Dollar deposits in London, England.

 

“Businesses” means, at

any time, a collective reference to the businesses operated by the Consolidated

Parties at such time.

 

“Capitalized Lease Obligation”

means Indebtedness represented by obligations under a Capital Lease, and the

amount of such Indebtedness is the capitalized amount of such obligations

determined in accordance with GAAP.

 

“Capital Lease” means, as

applied to any Person, any lease of any Property (whether real, personal or

mixed) by that Person as lessee which, in accordance with GAAP, is required to

be accounted for as a capital lease on the balance sheet of that Person.

 

“Capital Stock” means (i) in the case of a

corporation, capital stock, (ii) in the case of an association or business

entity, any and all shares, interests, participations, rights or other

equivalents (however designated) of capital stock, (iii) in the case of a

partnership, partnership 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 right to 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 the United States or any

agency or instrumentality thereof (provided that the full faith and credit of

the United States is pledged in support thereof) having maturities 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 recognized standing having capital and surplus in

excess of $500,000,000 or (iii) any bank whose short–term commercial

paper rating from S&P is at least A–1 or the equivalent thereof or

from Moody’s is at least P–1 or the equivalent thereof (any such bank

being an “Approved Bank”), in each case with maturities of not more than

270 days from the date of acquisition, (c) commercial paper and variable

or fixed rate notes issued by any Approved Bank (or by the parent company

thereof) or any variable rate notes issued by, or guaranteed by, any domestic

corporation rated A–1 (or the equivalent thereof) or better by S&P or

P–1 (or the equivalent thereof) or better by Moody’s and maturing within

six months of the date of acquisition, (d) repurchase agreements entered

into by any Person with a bank or trust company (including any of the Lenders)

or recognized securities dealer having capital and surplus in excess of

$500,000,000 for direct obligations issued by or fully guaranteed by the United

States in which such Person shall have a perfected first priority security

interest (subject to no other Liens) and having, on the date of purchase

thereof, a fair market value of at least 100% of the amount of the repurchase

obligations and (e) Investments, classified in accordance with GAAP as

current assets, in money market investment programs registered under the

Investment Company Act of 1940, as amended, which are administered by reputable

financial institutions having capital of at least $500,000,000 and the

portfolios of which are limited to Investments of the character described in

the foregoing subdivisions (a) through (d).

 

4

 

“Change in Mangement”

means a change in the identity 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 following events: (a) the sale, lease, transfer or other

disposition (other than by way of merger or consolidation), in one or a series

of related transactions, of all or substantially all of the assets of either of

the Borrowers and such Borrower’s Subsidiaries taken as a whole to any “person” or “group”  (within

the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange

Act), or (b) the USRP REIT shall fail to own and control (whether directly

or indirectly) 80% of the outstanding Capital

Stock of either Borrower.  As used herein, “beneficial ownership” shall have

the meaning provided in Rule 13d–3 of the Securities and Exchange

Commission 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 and regulations issued thereunder, in each case as in

effect from time to time.  References to

sections of the Code shall be construed also to refer to any successor

sections.

 

“Collateral Agent” means

Bank of America, N.A., in such capacity under the Credit Documents, or its

successors and assigns.

 

“Commitment” means

(i) with respect to each Lender, the Revolving Commitment of such Lender,

and (ii) with respect to the Issuing Lender, the LOC Commitment.

 

“Commitment Fee” shall

have the meaning given to such term in Section 5.1(f) hereof.

 

“Concept” means any

distinctive system for establishing and operating restaurants which is the

subject of a license or franchise from a Person.  Not in limitation of the foregoing, and by way of example only,

such systems would include “Burger King,” “Pizza Hut,” “Denny’s,” and “Fina.”

 

“Consolidated Capital Expenditures” means, as of any date, for the four fiscal quarter

period most recently ending on or prior to such date, the sum of all

capital expenditures of the Consolidated

Parties on a consolidated basis, as

determined in accordance with GAAP.

 

“Consolidated Total EBITDA” means, as of any

date, for the four fiscal quarter period most recently ending on or prior to

such date, the sum of (i) Consolidated Net Income, plus (or minus, as

applicable) (ii) an amount which, in the determination of Consolidated Net

Income, has been deducted for (A) interest expense, (B) total

Federal, state, local and foreign income taxes, (C) depreciation and

amortization expense, (D) extraordinary gains (losses) and gains (losses) from

sales of assets for such period, (E) all straight line rent leveling

adjustments (as reported in the consolidated financial statements of the

Consolidated Parties), (F) equity in net earnings (or net loss) of

unconsolidated Affiliates of the Consolidated Parties, (G) amounts incurred by

the Consolidated Parties for such period as “impairment of long lived assets,”

and (H) amounts denoted by the Consolidated Parties as “provision(s) for

doubtful accounts,” in each case without duplication and as determined in

accordance with GAAP; provided, that, (i) each of the above calculations shall

include, without duplication, any amounts attributable to any interests held by

any Consolidated Party in any Minority Interest Entity and (ii) all amounts

included in the above calculations (and not otherwise adjusted to account for Outside

Interests) shall be adjusted to deduct therefrom the pro rata share of such

amounts allocable to Outside Interests.

 

“Consolidated Interest Expense” means, as of

any date, for the four fiscal quarter period most recently ending on or prior

to such date, the sum of (i) interest expense in connection with Unsecured

Indebtedness (including the amortization of debt discount and premium, the

interest component under Capital Leases, the implied interest component under

Synthetic Leases and obligation payments under the any hedging agreements or

similar arrangements entered into by any Consolidated Party) of the

Consolidated Parties on a consolidated basis, as determined in accordance with

GAAP, plus (ii) without duplication, interest expense in connection with

Unsecured Indebtedness (including the amortization of debt discount and

premium, the interest component under Capital Leases and the implied interest

 

5

 

component under

Synthetic Leases) of each Minority Interest Entity multiplied by the respective

Minority Interest of each such entity; provided, that in each case, all of the

above amounts not otherwise adjusted to account for Outside Interests shall be

adjusted to deduct therefrom the pro rata share of such amounts allocable to

the Outside Interests.

 

“Consolidated Net Income” means, as of any

date, for the four fiscal quarter period most recently ending on or prior to

such date, (i) net income (excluding extraordinary items) of the Consolidated

Parties on a consolidated basis after interest expense, income, value added and

similar taxes and depreciation and amortization, all as determined in

accordance with GAAP, plus (ii) without duplication, an amount equal to the

aggregate of net income (excluding extraordinary items) after interest expense,

income, value added and similar taxes and depreciation and amortization, as

determined in accordance with GAAP, of each Minority Interest Entity multiplied

by the respective Minority Interest of each such entity; provided, that in each

case, all of the above amounts not otherwise adjusted to account for Outside

Interests shall be adjusted to deduct therefrom the pro rata share of such

amounts allocable to the Outside Interests.

 

“Consolidated Parties”

means a collective reference to the USRP REIT, the General Partner, the

Borrower and each of their Subsidiaries, and “Consolidated Party” means

any one of them.

 

“Consolidated Scheduled Funded Debt Payments”

means, as of any date, for the four fiscal quarter period most recently ending

on or prior to such date, the sum of (i) all scheduled payments of principal on

Funded Indebtedness of the Consolidated Parties on a consolidated basis

(including, without limitation, (a) the implied principal component of payments

due on Capital Leases and Synthetic Leases, (b) all dividends paid on the

preferred Capital Stock of any Consolidated Party and (c) payments made in

connection with any ground leases, but excluding voluntary prepayments or

mandatory prepayments required pursuant to Section 3.3 and any scheduled

balloon, bullet or similar principal payment repaying the related underlying

principal Indebtedness in full), as determined in accordance with GAAP, plus

(ii) without duplication, the sum of (a) all scheduled payments of principal on

Funded Indebtedness of each Minority Interest Entity multiplied by the

respective Minority Interest of each such entity, (b) all dividends paid on the

preferred Capital Stock of any Minority Interest Entity multiplied by the

respective Minority Interest of each such entity; and (c) payments made by any

Minority Interest Entity in connection with any ground leases multiplied by the

respective Minority Interest of each such entity; provided, that in each case,

all of the above amounts not otherwise adjusted to account for Outside

Interests shall be adjusted to deduct therefrom the pro rata share of such

amounts allocable to the Outside Interests.

 

"Contingent Obligation”

means, with respect to any Person, any obligation of such Person to guarantee

or intended to guarantee any Indebtedness, leases, dividends or other

obligations (“primary obligations”) of any other Person (the “primary obligor”)

in any manner, whether directly or indirectly (exclusive of any non–material

contractual indemnities and non–material guarantees of non–monetary

obligations which have not yet been called on or quantified), including,

without limitation, (a) the direct or indirect guaranty, endorsement (other

than for collection or deposit in the ordinary course of business), co–making,

discounting with recourse or sale with recourse by such Person of the

obligation of a primary obligor, (b) the obligation to make take–or–pay

or similar payments, if required, regardless of nonperformance by any other

party or parties to an agreement, (c) any obligation of such Person, whether or

not contingent, (i) to purchase any such primary obligation or any property

constituting direct or indirect security therefor, (ii) to advance or supply

funds (A) for the purchase or payment of any such primary obligation or (B) to

maintain working capital, equity capital, net worth or other balance sheet

condition or any income statement condition of the primary obligor or otherwise

to maintain the solvency of the primary obligor, (iii) to purchase, lease or

otherwise acquire property, assets, securities or services primarily for the

purpose of assuring the owner of any such primary obligation of the ability of

the primary obligor to make payment of such primary obligation or (iv)

otherwise to assure or hold harmless the holder of such primary obligation

against loss in respect thereof, (d) any residual obligation or liability of

such Person under any Synthetic Lease or any other off–balance sheet

financing, or (e) any obligation of such Person in connection with any

derivative transaction, hedging transaction (including, without limitation, any

Hedging Agreements), takeout commitment or forward equity commitment.  The amount of any Contingent Obligation

shall be deemed to be an amount equal to the stated or determinable amount of

the primary obligation in respect of which such Contingent Obligation is made

(or, if less, the maximum amount of 

 

6

 

such primary obligation for

which such Person may be liable pursuant to the terms of the agreement,

instrument or other document evidencing such Contingent Obligation) or, if not

stated or determinable, the maximum reasonably anticipated liability in respect

thereof (assuming such Person is required to perform thereunder), as determined

by such Person in good faith. 

Contingent Obligations shall not include the following obligations or

liabilities of the General Partner, the Borrower or any other Subsidiaries

thereof (including any Special Purpose Entity) to the extent incurred in

connection with a Securitization Asset Sale: reasonable and customary

obligations of the General Partner, the Borrower or any other Subsidiaries

thereof with respect to (i) the servicing of any assets which are the subject

of such Securitization Asset Sale, (ii) administrative and ministerial matters

relating to any applicable Special Purpose Entity, (iii) maintenance of the

corporate separateness of any such Special Purpose Entity from that of the

General Partner and its other Subsidiaries and (iv) the guaranty of payment of

fees of any Person acting as a trustee in connection with such Securitization

Asset Sale and indemnification obligations owing to any such Person.  In addition, the ownership of a Subordinated

Interest shall not be deemed to give rise to any Contingent Obligation on the

part of the owner thereof.  Further,

Contingent Obligations shall not include liabilities of the General Partner,

Borrower or any Consolidated Party (i) which result solely from the General

Partner or such Consolidated Party being a general partner of a Special Purpose

Entity that is a limited partnership and is not a Consolidated Party, and (ii)

which liabilities are attributable to customary and reasonable non–recourse

exceptions, representations and warranties involved with securitization

transactions and not related to the creditworthiness of the obligors involved

in such transactions (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 a Eurodollar 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)

or Sections 3.7 through 3.12, inclusive, of a Base Rate Loan into a

Eurodollar Loan.

 

“Credit Documents” means a collective reference

to this Credit Agreement, the Notes, the LOC Documents, the USRP Pledge

Agreement, each Joinder Agreement, any UCC

financing statements securing payment under any of such documents, and any

other documents securing the obligations of the Credit Parties under this

Credit Agreement or any other Credit Document (in each case as the same may be amended, modified, restated,

supplemented, extended, renewed or replaced from time to time), and “Credit Document” means any one of

them.

 

“Credit Facilities” shall have the meaning assigned to such term in the recitals hereto.

 

“Credit Parties” means a

collective reference  to the Borrower, the General Partner and the other

Guarantors, and “Credit Party” means any one of them.

 

“Credit Party Obligations”

means, without duplication, (i) all of the obligations of the Credit

Parties to the Lenders (including the Issuing Lender) and the Agent, whenever

arising, under this Credit Agreement, the Notes or any of the other Credit

Documents (including, but not limited to, any interest accruing after the

occurrence of a Bankruptcy Event with respect to any Credit Party, regardless

of whether such interest is an allowed claim under the Bankruptcy Code) and

(ii) all liabilities and obligations, whenever arising, owing from any

Credit Party to any Lender, or any Affiliate of a Lender, arising under any

Hedging Agreement.

 

“Debt Service” means, for

any given calculation period and assuming an opening principal balance equal to

the amount of the principal balance outstanding under this Credit Agreement at

the beginning of such period, an amount of debt service equal to the greater of

(a) the amount of principal and interest payments that would be paid on such

principal balance during such period (assuming level monthly payments of

principal and interest) at an annual interest rate equal to the 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) year amortization schedule and (b)

the amount of principal and interest payments resulting from the application of

a loan constant equal to 10.07% to such opening principal balance (assuming

level monthly payments of principal and interest over a twenty–five (25)

year amortization schedule); provided, however, that to the extent the

amount of actual debt service payments due from the Borrower during the

applicable calculation period exceed the amount calculated in accordance 

 

7

 

with the above provisions, “Debt

Service” shall, notwithstanding the above, equal the amount of such actual debt

service payments due during the applicable period.

 

“Debt Service Coverage Ratio”

means, for any given date of calculation, the ratio of (i) EBITDA generated in

connection with the Borrowing Base Assets during the previous twelve (12)

month period for which the Borrower has delivered officer’s certificates

pursuant to the terms of Section 7.1(c) of this Agreement to (ii) Debt Service

for the same twelve (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 applicable

calculation date, EBITDA with respect to such asset(s) shall be calculated by

annualizing EBITDA amounts attributable to such asset(s) as set forth in the

financial statements which the Borrower has, as of that calculation date, delivered

to the Agent, except to the extent the Borrower has failed to deliver financial

statements accounting for such Borrowing Base Assets pursuant to and in

accordance with this Agreement, in which case the EBITDA for such Borrowing

Base Assets shall, for purposes of this definition, equal zero (0).

 

“Default” means any

event, act or condition which with notice or lapse of time, or both, would

constitute an Event of Default.

 

“Defaulting Lender”

means, at any time, any Lender that, as determined by the Agent, (a) has

failed to make a Loan or purchase a Participation Interest required pursuant to

the term of this Credit Agreement within one Business Day of when due,

(b) other than as set forth in (a) above, has failed to pay to the Agent

or any Lender an amount owed by such Lender pursuant to the terms of this

Credit Agreement within one Business Day 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 or insolvency proceeding or with respect to

which (or with respect to any of the assets of which) a receiver, trustee or

similar official has been appointed.

 

“Delinquency Report”

means a report prepared by the Borrower setting forth in itemized

detail, as of a given date, all delinquencies

with respect to Tenant payments (whether or not such delinquencies result in

the applicable asset being characterized as an Excluded Asset for purposes

hereof) and all other matters causing any asset owned by any of the

Consolidated Parties to constitute an Excluded Asset.  Such report shall identify the respective owners of the assets

named therein and shall identify which, if any, of the assets named therein

constitute Borrowing Base Assets as of the date of such report.

 

“Derivative Counterparty”

means Bank of America, N.A.  or any of

its Affiliates, as applicable, as the counterparty to any derivative

transaction, hedging transaction, takeout commitment or forward equity

commitment entered into by the USRP REIT or the General Partner.

 

“Derivative Exposure Fee

Period” shall have the meaning given to such term in Section 3.6(d)

hereof.

 

“Derivative Exposure Usage

Fee” shall have the meaning given to such term in Section 3.6(d)

hereof.

 

“Derivative Exposure Reserve”

shall have the meaning given to such term in Section 2.3(a).

 

“Determination Decision”

shall have the meaning given to such term in Section 3.24.

 

“Determination Request”

shall have the meaning given to such term in Section 3.24.

 

“Development Activities”

means activities relating directly or indirectly to the development of build–to–suit

Real Property assets that are 100% pre–leased.

 

“Dollars” and “$”

means dollars in lawful currency of the United States.

 

“Domestic Subsidiary”

means any direct or indirect Subsidiary of the Borrower which is incorporated

or organized under the laws of any State of the United States or the District

of Columbia.

 

8

 

“EBITDA” means, (i) for any Person over any period, net earnings

(loss) of such Person for such period plus the sum of the following (but only

to the extent 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 respect of such period; minus

(or plus, as appropriate) (D) extraordinary gains (losses) and gains

(losses) from sales of assets for such period; plus (or minus, as

appropriate) (E) all straight line rent leveling adjustments (reported in the

consolidated financial statements of such Person for purposes of GAAP); plus

(or minus, as appropriate) (F) equity in net earnings (or net loss) of

unconsolidated Affiliates of such Person (if any); plus (G) amounts

incurred by such Person for such period as “impairment of long lived assets,”

and (H) amounts denoted by such Person as “provision(s) for doubtful accounts,”

and (ii) for any Real Property for any period, the net income (excluding extraordinary items)

of such Real Property for such period before (without

duplication) interest expense applicable to

such Real Property, income taxes applicable to such Real Property and

depreciation and amortization applicable to such Real Property, all as

determined in accordance with GAAP.

 

“Eligible Assignee” means (a) a Lender; (b) an

Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other

than a natural person) approved by (i) the Agent, (ii) in the case of any

assignment of a Revolving Commitment, the L/C Issuing Lender, and (iii) unless a

default or Event of Default has occurred and is continuing under this Agreement

or any other Credit Document, the Borrower (each such approval not to be

unreasonably withheld or delayed); provided that notwithstanding the

foregoing, “Eligible Assignee” shall not include the Borrower, any Credit Party

or any of the Borrower’s or any Credit Party’s Affiliates or Subsidiaries.

 

“Environmental Laws”

means any and all lawful and applicable Federal, state, local and foreign

statutes, laws (including, without limitation, the Comprehensive Environmental

Response, Compensation and Liability Act of 1980, the Resource Conservation and

Recovery Act of 1976, the Toxic Substances Control Act, the Water Pollution

Control Act, the Clean Air Act and the 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 to emissions, discharges, releases

or threatened releases of pollutants, contaminants, chemicals, or industrial,

toxic or hazardous substances or wastes into 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 of pollutants, contaminants, chemicals, or

industrial, toxic or hazardous substances or wastes.

 

“Equity Issuance” means

any issuance by any Consolidated Party to any Person of (a) shares of its

Capital Stock, (b) any shares of its Capital Stock pursuant to the

exercise of options or warrants, (c) any shares of its Capital Stock

pursuant to the conversion of any debt securities to equity or (d) any

options or warrants relating to its Capital Stock (other than employee stock

options currently in place).  The term

“Equity Issuance” shall not include any Asset Disposition.

 

“ERISA” means the

Employee Retirement Income Security Act of 1974, as amended, and any successor

statute thereto, as interpreted by the rules and regulations thereunder, all as

the same may be in effect from time to time. 

References to sections of ERISA shall be construed also to refer to any

successor sections.

 

“ERISA Affiliate” means

an entity which is under common control with any Consolidated Party within the

meaning of Section 4001(a)(14) of ERISA, or is a member of a group which

includes any Consolidated Party and which is treated as a single employer under

Sections 414(b) or (c) of the Code.

 

“ERISA Event” means

(i) with respect to any Plan, the occurrence of a Reportable Event or the

substantial cessation of operations (within the meaning of Section 4062(e)

of ERISA); (ii) the withdrawal by any Consolidated Party or any ERISA

Affiliate from a Multiple Employer Plan during a plan year in which it was a

substantial employer (as such term is defined in Section 4001(a)(2) of

ERISA), or the termination of a Multiple Employer Plan; (iii) the

distribution of a notice of intent to terminate or the actual termination of a

Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the

institution of proceedings to terminate or the actual termination of a Plan by

the PBGC under Section 4042 of ERISA; (v) any event or condition

which might constitute grounds under Section 4042 of ERISA for the

termination of, or the appointment of a trustee to administer, any Plan;

(vi) the complete or partial withdrawal of any Consolidated Party or any

ERISA Affiliate 

 

9

 

from a Multiemployer Plan;

(vii) the conditions for imposition of a lien under Section 302(f) of

ERISA exist with respect to any Plan; or (viii) the adoption of an

amendment to any Plan requiring the provision of security to such Plan pursuant

to Section 307 of ERISA.

 

“Eurodollar Loan” means

any Loan that bears interest at a rate based upon the Eurodollar Rate.

 

“Eurodollar Rate” means,

for any Eurodollar Loan for any Interest Period therefor, the rate per annum

(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the

Agent to be equal to the quotient obtained by dividing (a) the Interbank

Offered Rate for such Eurodollar Loan for such Interest Period by (b) 1

minus the Eurodollar Reserve Requirement for such Eurodollar Loan for such Interest

Period.

 

“Eurodollar Reserve

Requirement” means, at any time, the maximum rate at which reserves

(including, without limitation, any marginal, special, supplemental, or

emergency reserves) are required to be maintained under regulations issued from

time to time by the Board of Governors of the Federal Reserve System (or any

successor) by member banks of the Federal Reserve System against “Eurocurrency

liabilities” (as such term is used in Regulation D).  Without limiting the effect of the

foregoing, the Eurodollar Reserve Requirement shall reflect any other reserves

required to be maintained by such member banks with respect to (i) any

category of liabilities which includes deposits by reference to which the

Adjusted Eurodollar Rate is to be determined, or (ii) any category of

extensions of credit or other assets which include Eurodollar Loans.  The Adjusted Eurodollar Rate shall be

adjusted automatically on and as of the effective date of any change in the

Eurodollar Reserve Requirement.

 

“Event of Default” shall have

the meaning assigned to such term in Section 9.1.

 

“Excluded Assets” means, as of any date, (a) all

assets of the Consolidated Parties which are either a lease by a Consolidated

Party, as lessor of a parcel of Real Property, or a promissory note held by a

Consolidated Party which is secured by a mortgage instrument, in either case

where (i) any required rental payment, principal or interest payment, or other

payment due under such lease or promissory note, as the case may be, is more

than sixty (60) days past due, except, with respect to payments due under

a lease, to the extent (A) the aggregate amount of such past due payments with

respect to such lease is less than $500 and (B) the aggregate amount of such

past due payments does not exceed $10,000; (ii) the Tenant under such lease or

the maker of such promissory note, as the case may be, or any Person that is

the franchisor or licensor of any Concept (if any) applicable to such Real

Property, is the subject of a Bankruptcy Event (except to the extent that (A)

such Person has been subject to a proceeding under Chapter 11 of the Federal

Bankruptcy Code, (B) the applicable bankruptcy court has approved and confirmed

such Person’s plan for reorganization, (C) all statutory appeal periods with

respect to such proposed plan have been exhausted or expired without objection,

(D) the approved plan requires such Person to continue to perform its

obligations with respect to the applicable lease/franchise agreement and (E)

such Person is performing its obligations under such approved plan and under

the applicable lease/franchise agreement); (iii) condemnation proceedings have been instituted or condemnation has

occurred with respect to a material portion of the applicable parcel of Real

Property; or (iv) the subject Real Property has been vacant for more than

sixty (60) days and such vacancy is not the result of an on–schedule

moving–in process or scheduled renovations, and (b) all Real Property

assets of the Consolidated Parties which are, as of such date, not subject to a

lease agreement under which a Consolidated Party is the lessor or are otherwise

vacant (except as noted above in subclause (a)).

 

“Executive Officer” of

any Person means any of the chief executive officer, chief operating officer,

president, vice president, chief financial officer or treasurer of such Person.

 

“Exit Fee” shall have the

meaning given to such term in Section 3.5(e) hereof.

 

“Extended Maturity Date”

shall have the meaning given to such term in Section 2.1(c)(ii) hereof.

 

“Federal Funds Rate”

means, for any day, the rate 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 transactions with members of the Federal Reserve System arranged

by Federal funds brokers on such day, as published by the Federal Reserve Bank

of New York on the Business Day next succeeding such day; provided that

(a) if such 

 

10

 

day is not a Business Day, the

Federal Funds Rate for such day shall be such rate on such transactions on the

next preceding Business Day as so published on the next succeeding Business

Day, and (b) if no such rate is so published on such next succeeding

Business Day, the Federal Funds Rate for such day shall be the average rate

charged to the Agent (in its individual capacity) on such day on such

transactions as determined by the Agent.

 

“Fee Letter” means that certain Fee Letter

entered into by and among Borrower, the Agent and BAS and dated as of or prior to

the date hereof.

 

“Fees” means all fees

payable pursuant to Section 3.5.

 

“FFO” means, for a given period, (a) net

earnings of the Consolidated Parties and their Subsidiaries (before minority

interests and before extraordinary and non recurring items) for such period minus

(or plus) (b) gains (or losses) from debt restructuring and sales of

property during such period plus (c) depreciation and amortization of

real and personal property assets for such period, and after adjustments for

unconsolidated partnerships and joint ventures.

 

“FFO Distribution Allowance”

means, (a) for the fiscal quarter ending on or around June 30, 2002, an amount

equal to 95% of FFO for such quarter, plus, to the extent not otherwise

distributed prior to commencement of the quarter for which such calculation is

being performed, 95% of FFO for the immediately preceding fiscal quarter, (b)

for the fiscal quarter ending on or around September 30, 2002, an amount equal

to 95% of FFO for such quarter, plus, to the extent not otherwise distributed

prior to commencement of the quarter for which such calculation is being

performed, 95% of FFO for the immediately preceding two fiscal quarters, (c)

for the fiscal quarter ending on or around December 31, 2002 and for each

fiscal quarter ending thereafter, an amount equal to 95% of FFO for such

quarter, plus, to the extent not otherwise distributed prior to

commencement of the quarter for which such calculation is being performed, 95%

of FFO for the immediately preceding three fiscal quarters.

 

“Financial Covenants”

means a collective reference 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) and (j)

and 8.16 hereof.

 

“Fixed Charge Coverage Ratio”

means, as of the end of any fiscal quarter of the Consolidated Parties, for the

four fiscal quarter period most recently ending on or prior to such date

with respect to the Consolidated Parties on

a consolidated basis, the ratio of (a) Consolidated Total EBITDA for such

period to (b) the sum of (without duplication) (i) Consolidated

Interest Expense for such period plus (ii) Consolidated Scheduled

Funded Debt Payments for such period.

 

“Foreign Lender” shall

have the meaning given to such term in Section 3.11(d) hereof.

 

“Foreign Subsidiary”

means any direct or indirect Subsidiary of the Borrower which is not a Domestic

Subsidiary.

 

“Fully Satisfied” means, with respect to the Credit Party Obligations as of any date,

that, as of such date, (a) all principal of and interest accrued to such date

which constitute Credit Party Obligations

shall have been paid in full in cash, (b) all fees, expenses and other

amounts then due and payable which constitute Credit

Party Obligations shall have been paid in cash, (c) all outstanding

Letters of Credit shall have been (i) terminated, (ii) fully cash

collateralized or (iii) secured by one or more letters of credit on terms

and conditions, and with one or more financial institutions, reasonably

satisfactory to the Issuing Lender and (d) the Commitments shall have been

expired or terminated in full.

 

“Fund” means any Person (other than a natural

person) that is (or will be) engaged in making, purchasing, holding or

otherwise investing in commercial loans and similar extensions of credit in the

ordinary course of its business.

 

“Funded Indebtedness”

means, with respect to any Person, without duplication, (i) all

Indebtedness of such Person other than Indebtedness of the types referred to in

clauses (e), (f), (g), (i), (n) and (p) of the definition of “Indebtedness”

set forth in this Section 1.1, (ii) all Funded Indebtedness of others

of the type 

 

11

 

referred to in clause (i)

above secured by (or for which the holder of such Funded Indebtedness has an

existing right, contingent or otherwise, to be secured by) any Lien on, or

payable out of the proceeds of production from, Property owned or acquired by

such Person, whether or not the obligations secured thereby have been assumed

(or, if less, the aggregate net book value of all Property securing such Funded

Indebtedness of others), (iii) all Guaranty Obligations of such Person

with respect to Funded Indebtedness of the type referred to in clause (i)

above of another Person and (iv) Funded Indebtedness of the type referred

to in clause (i) above of any partnership or unincorporated joint

venture in which such Person is a general partner or a joint venturer to the

extent such Funded Indebtedness is recourse to such Person.

 

“GAAP” means generally

accepted accounting principles in the United States applied on a consistent

basis except as specifically set forth in the definitions contained herein and

subject to the terms of Section 1.3.

 

“General Partner” shall

have the meaning given to such term in the heading hereof.

 

“General SPE” shall have

the meaning given to such 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 Property assets with respect to which a Consolidated Party is the

ground lessee.

 

“Guarantors” means a

collective reference to the 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 to any Person, without duplication, any obligations of such

Person (other than endorsements in the ordinary course of business of

negotiable instruments for deposit or collection) guaranteeing or intended to

guarantee any Indebtedness of any other Person in any manner, whether direct or

indirect, and including without limitation any obligation, whether or not

contingent, (i) to purchase any such Indebtedness or any Property

constituting security therefor, (ii) to advance or provide funds or other

support for the payment or purchase of any such Indebtedness or to maintain

working capital, solvency or other balance sheet condition of such other Person

(including without limitation keep well agreements, maintenance agreements,

comfort letters or similar agreements or arrangements) for the benefit of any

holder of Indebtedness of such other Person, (iii) to lease or purchase

Property, securities or services primarily for the purpose of assuring the

holder of such Indebtedness, or (iv) to otherwise assure or hold harmless

the holder of such Indebtedness against loss in respect thereof.  The amount of any Guaranty Obligation hereunder

shall (subject to any limitations set forth therein) be deemed to be an amount

equal to the outstanding principal amount (or maximum principal amount, if

larger) of the Indebtedness in respect of which such Guaranty Obligation is

made.

 

“Hedging Agreements”

means any interest rate protection agreement or foreign currency exchange

agreement entered into in order to manage existing or anticipated interest rate

or exchange rate risks with respect to the Credit Documents and not for

speculative purposes (including, without limitation, any BOA Derivative

Instruments).

 

“Indebtedness” means,

with respect to any Person, without duplication, (a) all obligations of

such Person for borrowed money, (b) all obligations of such Person

evidenced by bonds, debentures, notes or similar instruments, or upon which

interest payments are customarily made, (c) all obligations of such Person

under conditional sale or other title retention agreements relating to Property

purchased by such Person (other than customary reservations or retentions of

title under agreements with suppliers entered into in the ordinary course of

business), (d) all obligations of such Person issued or assumed as the

deferred purchase price of Property or services purchased by such Person (other

than trade debt incurred in the ordinary course of business and due within six

months of the incurrence thereof) which would appear as liabilities on a

balance sheet of such Person, (e) all obligations of such Person under

take-or-pay or similar arrangements or under commodities agreements, (f) all

Indebtedness of others secured by (or for which the holder of such Indebtedness

has an 

 

12

 

existing right, contingent or

otherwise, to be secured by) any Lien on, or payable out of the proceeds of

production from, Property owned or acquired by such Person, whether or not the

obligations secured thereby have been assumed, (g) all Guaranty

Obligations of such Person with respect to Indebtedness of another Person,

(h) the implied principal component of all obligations of such Person

under Capital Leases, including all Capitalized Lease Obligations of such

Person, (i) all obligations of such Person under hedging agreements and

other similar arrangements, (j) the maximum amount of all performance and

standby letters of credit issued or bankers’ acceptances facilities created for

the account of such Person and, without duplication, all drafts drawn

thereunder (to the extent unreimbursed), (k) all preferred Capital Stock

issued by such Person and which by the terms thereof could be (at the request

of the holders thereof or otherwise) subject to mandatory sinking fund

payments, redemption or other acceleration (other than as a result of a Change

of Control or an Asset Disposition that does not in fact result in a redemption

of such preferred Capital Stock) at any time prior to the Maturity Date,

(l) the principal portion of all obligations of such Person under

Synthetic Leases, (m) all obligations of such Person to repurchase any

securities issued by such Person at any time prior to the Maturity Date which

repurchase obligations are related to the issuance thereof, including, without

limitation, obligations commonly known as residual equity appreciation

potential shares, (n) the Indebtedness of any partnership or unincorporated

joint venture in which such Person is a general partner or a joint venturer to

the extent such Indebtedness is recourse to such Person, (o) the aggregate

amount of uncollected accounts receivable of such Person subject at such time

to a sale of receivables (or similar transaction) to the extent such

transaction is effected with recourse to such Person (whether or not such

transaction would be reflected 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 rent obligations of a Person pursuant to the terms of a real

property lease which is not entered into as a capital or financing lease shall

not be included in the calculation of “Indebtedness” hereunder.

 

“Indemnified Party” shall

have the meaning assigned to such term in Section 11.5(b).

 

“Initial Maturity Date”

shall have the meaning given to such term in Section 2.1(c)(i) hereof.

 

“Interbank Offered Rate” means, 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 Telerate Page 3750 (or any successor

page) as the London interbank offered rate for deposits in Dollars at

approximately 11:00 a.m. (London time) two Business Days prior to the first day

of 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 for

deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days

prior to the first day of such Interest Period for a term comparable to such

Interest Period; provided, however, if more than one rate is

specified on Reuters Screen LIBO Page, the applicable rate shall be the

arithmetic mean of all such rates.

 

“Interest Payment Date”

means (a) as to Base Rate Loans, (i) the 20th day of each

calendar month, (ii) the date 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 Interest Period, (ii) the date of repayment of principal of

such Loan, (iii) the Maturity Date, and (iv) where the applicable Interest

Period for a Eurodollar Loan is greater than one month, the dates occurring

each calendar month following the first day of the Interest Period.

 

“Interest Period” means,

as to Eurodollar Loans, a period of one, two, three, six or twelve months’

duration, as the Borrower may elect, commencing, in each case, on the date of

the borrowing (including continuations and conversions thereof); provided,

however, (a) if any Interest Period would end on a day which is not

a Business Day, such Interest Period shall be extended to the next succeeding

Business Day (except that where the next succeeding Business Day falls in the

next succeeding calendar month, then on the next preceding Business Day),

(b) no Interest Period shall extend beyond the Maturity Date and

(c) where an Interest Period begins on a day for which there is no

numerically corresponding day in the calendar month in which the Interest

Period is to end, such Interest Period shall end on the last Business Day of

such calendar month.

 

“Investment” in any

Person means (a) the acquisition (whether for cash, property, services,

assumption of Indebtedness, securities or otherwise) of assets (other than

equipment, inventory and supplies in

 

13

 

the ordinary course of business

and other than any acquisition of assets constituting a Consolidated Capital

Expenditure), Capital Stock, bonds, notes, debentures, partnership, joint

ventures or other ownership interests or other securities of such other Person,

(b) any deposit with, or advance, loan or other extension of credit to,

such Person (other than deposits made in connection with the purchase of

equipment inventory and supplies in the ordinary course of business) or

(c) any other capital contribution to or investment 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 such Person for

consideration less than the fair market value of the Property disposed in such

transaction, but excluding any Restricted Payment to such Person.  Investments which are capital

contributions or purchases of Capital Stock which have a right to participate

in the profits of the issuer thereof shall be valued at the amount actually

contributed or paid to purchase such Capital Stock as of the date of such

contribution or payment.  Investments

which are loans, advances, extensions of credit or Guaranty Obligations shall

be valued at the principal amount of such loan, advance or extension of credit

outstanding as of the date of determination or, as applicable, the principal

amount of the loan or advance outstanding as of the date of determination

actually guaranteed by such Guaranty Obligation.

 

“I/O Strip” means an

interest in a pool of promissory notes, mortgage loans, or other similar

financial assets, issued in connection with a Securitization Asset Sale or

otherwise, which entitles the holder to receive a portion of the interest paid

on, but not principal repaid in respect of, such financial assets.

 

“Issuing Lender” means

BOA.

 

“Issuing Lender Fees”

shall have the meaning given to such term in Section 3.5(c) hereof.

 

“Joinder Agreement” means

a Joinder Agreement substantially in the form of Exhibit 7.12

hereto, executed and delivered by a new Guarantor in accordance with the

provisions of Section 7.12.

 

“Lender” means any of the

Persons identified as a “Lender” on the signature pages hereto, and any Person

which may become a Lender by way of assignment in accordance with the terms

hereof, together with their successors and permitted assigns.

 

“Lender Party” shall mean

any of the Agent, Collateral Agent or any Lender from time to time a party

hereto; and “Lender Parties” means a collective reference to each.

 

“Letter of Credit” means

any letter of credit issued by the Issuing Lender for the account of the

Borrower in accordance with the terms of Section 2.2.

 

“Letter of Credit Fee”

shall have the meaning assigned to such term in Section 3.5.

 

“Leverage Ratio” means,

as of the end of any fiscal quarter of the Consolidated Parties, the ratio of

(a) Total Liabilities 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 or other title retention agreement, any financing or similar

statement or notice filed under the Uniform Commercial Code as adopted and in

effect in the relevant jurisdiction or other similar recording or notice

statute, and any lease in the nature thereof); provided, that the term “Lien”

shall not refer to or include Negative Pledges.

 

“Loan” or “Loans”

means the Revolving Loans (or a portion of any Revolving bearing interest at

the Adjusted Base Rate or the Adjusted Eurodollar Rate and referred to as a

Base Rate Loan or a Eurodollar Loan), individually or collectively, as

appropriate.

 

14

 

“LOC Commitment” means

the commitment of the Issuing Lender to issue Letters of Credit in an aggregate

face amount at any time outstanding (together with the amounts of any

unreimbursed drawings thereon) of up to the LOC Committed Amount.

 

“LOC Committed Amount”

shall have the meaning assigned to such term in Section 2.2.

 

“LOC Documents” means,

with respect to any Letter of Credit, such Letter of Credit, any amendments

thereto, any documents delivered in connection therewith, any application

therefor, and any agreements, instruments, guarantees or other documents

(whether general in application or applicable only to such Letter of Credit)

governing or providing for (i) the rights and obligations of the parties

concerned or at risk or (ii) any collateral security for such obligations.

 

“LOC Obligations” means,

at any time, the sum of (i) the maximum amount which is, or at any time

thereafter may become, available to be drawn under Letters of Credit then

outstanding, assuming compliance with all requirements for drawings referred to

in such Letters of Credit plus (ii) the aggregate amount of all

drawings under Letters of Credit honored by the Issuing Lender but not

theretofore reimbursed by the Borrower.

 

“Material Adverse Effect”

means a material adverse effect on (i) the condition (financial or

otherwise), operations, business, assets, liabilities or prospects of the

Consolidated Parties taken as a whole, (ii) the ability of any Credit

Party to perform any material obligation under the Credit Documents to which it

is a party or (iii) the material rights and remedies of the Agent and the

Lenders under the Credit Documents; provided, that, for purposes of

Section 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 parcel

of Real Property or the rights and remedies of the Agent and the Lenders with

respect thereto.

 

“Materials of Environmental

Concern” means any gasoline or petroleum (including crude oil or any

fraction thereof) or petroleum 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–formaldehyde insulation.

 

“Maturity Date” shall

have the meaning given to such term in Section 2.1(c)(iii) hereof.

 

“Minority Interest” means

the percentage of the Capital Stock or other equity interest owned by a

Consolidated Party in a Minority Interest Entity accounted for pursuant to the

equity method of accounting under GAAP.

 

“Minority Interest Entity”

means any corporation, partnership, association, joint venture or other entity,

in each case which is not a Consolidated Party, in which a Consolidated Party

owns, directly or indirectly, Capital Stock or any other equity interest.

 

“Moody’s” means Moody’s

Investors Service, Inc., or any successor or assignee of the business of such

company in the business 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 (other than a Multiemployer Plan) which any Consolidated Party or

any ERISA Affiliate and at least one employer other than the Consolidated

Parties or any ERISA Affiliate are contributing sponsors.

 

“Negative Pledge” means a

provision of any agreement (other than this Credit Agreement or any other

Credit Document) that prohibits the creation of any Lien on any assets of a

Person, whether presently owned or hereafter acquired; provided, however,

that an agreement that establishes a maximum ratio of unsecured debt to

unencumbered assets, or of secured debt to total assets, or that otherwise

conditions a

 

15

 

Person’s ability to encumber its

assets upon the maintenance of one or more specified ratios that limit such

Person’s ability to encumber its assets but that do not generally prohibit the

encumbrance of its assets, or the encumbrance of specific assets, shall not

constitute a “Negative Pledge” for purposes of this Credit Agreement.

 

“Net Cash Proceeds” means

the aggregate proceeds paid in cash or Cash Equivalents received by any

Consolidated Party in respect of any Asset Disposition or Equity Issuance (as

applicable), net of (a) direct costs (including, without limitation,

legal, accounting and investment banking fees, and sales commissions)

(b) taxes paid or payable as a result thereof and (c) in the case of

any Asset Disposition, the amount necessary to retire any Indebtedness secured

by a Permitted Lien (ranking senior to any Lien of the Agent) on the related Property; it being understood that “Net Cash Proceeds”

shall include, without limitation, any cash or Cash Equivalents received upon

the sale or other disposition of any non–cash consideration received by

any such Consolidated Party in any such Asset Disposition or Equity Issuance.

 

“Note” or “Notes”

means the Revolving Notes, individually or collectively, as appropriate.

 

“Notice of Borrowing”

means a written notice of borrowing in substantially the form of Exhibit 2.1(b)(i),

as required by Section 2.1(b)(i), Section 2.3(b) or

Section 2.4(b).

 

“Notice of Continuation” means a notice in the

form of Exhibit 3.2 to be delivered to the Agent pursuant to

Section 3.2(a) evidencing the Borrower’s request for the Continuation of a

Eurodollar Loan.

 

“Notice of Conversion”

means a notice in the form of Exhibit 3.2 to be delivered to the

Agent pursuant to Section 3.2(b) evidencing the Borrower’s request for the

Conversion of a Loan from one Type to another Type.

 

“Operating Lease” means,

as applied to any Person, any lease (including, without limitation, leases

which may be terminated by the lessee at any time) of any Property (whether

real, personal or mixed) which is not a Capital Lease other than any such lease

in which that Person is the lessor.

 

“Other Taxes” shall

have the meaning assigned to such term in Section 3.11(b).

 

“Outside Interests” means, at any time,

interests in any assets or entities (and, as applicable, the cost thereof, Cash

and Cash Equivalents held in connection therewith, the income, revenues,

interest expense, taxes, depreciation and amortization attributable thereto)

owned by entities that are not Consolidated Parties.

 

“Participant” has the meaning assigned to such

term in clause (d) of Section 11.3.

 

“Participation Interest”

means a purchase by a Lender of a participation in Letters of Credit or LOC

Obligations as provided in Section 2.2 or in any Loans as provided in

Section 3.14.

 

“PBGC” means the Pension

Benefit Guaranty Corporation established pursuant to Subtitle A of

Title IV of ERISA and any successor thereof.

 

“Permitted Investments”

means, at any time, Investments by the Consolidated Parties permitted to exist

at such time pursuant to the terms of Section 8.6.

 

“Permitted Liens” means,

at any time, Liens in respect of Property of the Consolidated Parties permitted

to exist at such time pursuant to the terms of Section 8.2.

 

“Person” means any

individual, partnership, joint venture, firm, corporation, limited liability

company, association, trust or other enterprise (whether or not incorporated)

or any Governmental Authority.

 

“Plan” means any employee

benefit plan (as defined in Section 3(3) of ERISA) which is covered by

ERISA and with respect to which any Consolidated Party or any ERISA Affiliate

is (or, if such plan were 

 

16

 

terminated at such time, would

under Section 4069 of ERISA be deemed to be) an “employer” within the

meaning of Section 3(5) of ERISA.

 

“Prime Rate” means the

per annum rate of interest established from time to time by BOA as its prime

rate, which rate may not be the lowest rate of interest charged by BOA to its

customers.

 

“Principal Borrower”

shall have the meaning given to such term in the introductory paragraph hereof.

 

“Pro Forma Basis” means, for purposes of

calculating (utilizing the principles set forth in the second paragraph of

Section 1.3) compliance with each of the Financial Covenants  in respect of a proposed transaction,

that such transaction shall be deemed to have occurred as of the first day of

the four fiscal–quarter period ending as of the most recent fiscal quarter end preceding the date of such transaction

with respect to which the Agent has received the Required Financial

Information.  As used herein, “transaction”

shall mean (i) any incurrence or assumption of Indebtedness as referred to

in Section 8.1(h)(i), or (ii) any Asset Disposition as referred to in

Section 8.5(a).  In connection with

any calculation of the Financial Covenants, upon giving effect to a transaction

on a Pro Forma Basis:

 

(A)                              for

purposes of any such calculation in respect of any incurrence or assumption of

Indebtedness as referred to in Section 8.1(h)(i), any Indebtedness which

is retired in connection with such incurrence or assumption shall be excluded

and deemed to have been retired as of the first day of the applicable period;

and

 

(B)                                for

purposes of any such calculation in respect of any Asset Disposition as

referred to in Section 8.5(a), (1) income statement

items (whether positive or negative) and capital expenditures attributable

to the Property disposed of shall be excluded and (2) any Indebtedness

which is retired in connection with such transaction shall be excluded and

deemed to have been retired as of the first day of the applicable period.

 

“Pro Forma Compliance Certificate” means a

certificate of an Executive Officer of the Borrower delivered to the Agent in

connection with (i) any incurrence, assumption or retirement of

Indebtedness as referred to in Section 8.1(h)(i), or (ii) any Asset Disposition

as referred to in Section 8.5(a), as applicable, and containing reasonably

detailed calculations, upon giving effect to the applicable transaction on a

Pro Forma Basis, of those items required for determining compliance with

Section 7.11 as of the most recent fiscal quarter end preceding the date

of the applicable transaction with respect to which the Agent shall have

received the Required Financial Information.

 

“Property” means any

interest in any kind of property 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, a collective reference to each of the facilities and real

properties owned, leased or operated by the Consolidated Parties or in which

any Consolidated Party has an interest at such time; and “Real Property”

means any one of such Real Properties.

 

“Related Parties” means, with respect to any

specified Person, such Person’s Affiliates and the respective directors,

officers, employees, agents and advisors of such Person and such Person’s

Affiliates.

 

“Register” shall have the

meaning assigned to such term in Section 11.3(c).

 

“Regulation D, T, U, or

X” means Regulation D, T, U or X, respectively, of the Board of

Governors of the Federal Reserve System as from time to time in effect and any

successor to all or a portion thereof.

 

“REIT” means a Person

qualifying for treatment as a “real estate investment trust” under the Code.

 

17

 

“Reportable Event” means

any of the events set forth in Section 4043(c) of ERISA, other than those

events as to which the notice requirement has been waived by regulation.

 

“Required Financial Information” means, with

respect to any given date, (i) the financial statements of the Consolidated Parties required to be

delivered pursuant to Section 7.1(a) or (b) for the fiscal period or

quarter ending most recently with respect to such date, and (ii) the

certificate of an Executive Officer of

the Borrower required by Section 7.1(c) to be delivered with the financial

statements described in clause (i) above.

 

“Required Lenders” means,

at any time, (a) the Agent and (b) Lenders (other than Defaulting Lenders)

holding in the aggregate at least 66 2/3% of (i) the Revolving Commitments

(and Participation Interests therein), or (ii) if the Revolving Commitments have been terminated, the

outstanding Loans, LOC Obligations and Participation Interests (including the

Participation Interests of the Issuing Lender in any Letters of Credit).

 

“Requirement of Law”

means, as to any Person, the certificate of incorporation and by–laws or

other organizational or governing documents of such Person, and any law,

treaty, rule or regulation or determination of an arbitrator or a court or

other Governmental Authority, in each case applicable to or binding upon such

Person or to which any of its material property is subject.

 

“Reserve Limit” shall

have the meaning given to such term in Section 2.3(a).

 

“Restricted Payment”

means (i) any dividend or other payment or distribution, direct or

indirect, on account of any shares of any class of Capital Stock of any

Consolidated Party, now or hereafter outstanding (including without limitation

any payment in connection with any dissolution, merger, consolidation or

disposition involving any Consolidated Party), or to the holders, in their

capacity as such, of any shares of any class of Capital Stock of any

Consolidated Party, now or hereafter outstanding (other than dividends or

distributions payable in Capital Stock of the applicable Person and dividends

or distributions payable (directly or indirectly through Subsidiaries) to any

Credit Party other than the General Partner), (ii) any redemption,

retirement, sinking fund or similar payment, purchase or other acquisition for

value, direct or indirect, of any shares of any class of Capital Stock of any

Consolidated Party, now or hereafter outstanding, (iii) any payment made

to retire, or to obtain the surrender of, any outstanding warrants, options or

other rights to acquire shares of any class of Capital Stock of any

Consolidated Party, now or hereafter outstanding, and (iv) any loan or

advance to the General Partner.

 

“Revolving Commitment”

means, with respect to each Lender, the commitment of such Lender in an

aggregate principal amount as set forth on Schedule 1.1(a) attached

hereto, as such schedule may be modified in connection with any assignment made

in accordance with Section 11.3 or as a result of the application of

Section 3.20 hereof.

 

“Revolving Commitment

Percentage” means, for any Lender, the percentage represented by such

Lender’s Revolving Commitment as a portion of the total Revolving Committed

Amount, as such percentage may be modified in connection with any assignment

made in accordance with the provisions of Section 11.3.

 

“Revolving Committed Amount”

means $35,000,000.00, as such amount may be adjusted pursuant to and in

accordance with the terms of this Credit Agreement (including, without

limitation, pursuant to Sections 3.4 hereof).

 

“Revolving Loans” shall

have the meaning assigned to such term in Section 2.1(a).

 

“Revolving Note” or “Revolving

Notes” means the promissory notes of the Borrower in favor of each Lender

provided pursuant to Section 2.1(e) and evidencing the Revolving Loans of

such Lender, individually or collectively, as appropriate, as such promissory

notes may be amended, modified, restated, supplemented, extended, renewed or

replaced from time to time.

 

“S&P” means Standard

& Poor’s Ratings Group, a division of The McGraw Hill Companies, Inc., or

any successor or assignee of the business of such division in the business of

rating securities.

 

18

 

“Sale and Leaseback

Transaction” means any arrangement pursuant to which any Consolidated

Party, directly or indirectly, becomes liable as lessee, guarantor or other

surety with respect to any lease, whether an Operating Lease or a Capital

Lease, of any Property (a) which such Consolidated Party has sold or

transferred (or is to sell or transfer) to a Person which is not a Consolidated

Party or (b) which such Consolidated Party intends to use for

substantially the same purpose as any other Property which has been sold or

transferred (or is to be sold or transferred) by such Consolidated Party to

another Person which is not a Consolidated Party in connection with such lease.

 

“Secured Indebtedness” means, with respect to any

Person, any Indebtedness (other than Indebtedness incurred hereunder) that is

secured in any manner by any Lien. 

Indebtedness in respect of Capitalized Lease Obligations shall not be

deemed to be Secured Indebtedness.  For

clarification purposes, (i) any unsecured guaranty given by any Credit Party of

secured indebtedness of a Person who is not a Credit Party constitutes

Unsecured Indebtedness of such Credit Party giving the guaranty, (ii) any

unsecured guaranty given by any Credit Party of the secured indebtedness of

another Credit Party constitutes the Secured Indebtedness of the Credit Party

directly incurring the secured indebtedness and shall not be calculated as part

of the Indebtedness (either Secured or Unsecured) of such Credit Party giving

the guaranty (except to the extent that the relevant calculation does not

otherwise account for the Indebtedness of the Credit Party directly incurring

the underlying secured indebtedness, in which case it shall constitute the

Unsecured Indebtedness of the Credit Party giving the guaranty), (iii) any

unsecured guaranty given by any Credit Party of the unsecured indebtedness of a

Person who is not a Credit Party constitutes the Unsecured Indebtedness of such

Credit Party giving the guaranty, (iv) any unsecured guaranty given by any

Credit Party of the unsecured Indebtedness of another Credit Party constitutes

the Unsecured Indebtedness of the Credit Party directly incurring such

Indebtedness and shall not be calculated as part of the Indebtedness (either

Secured or Unsecured) of such Credit Party giving the guaranty (except to the

extent that the relevant calculation does not otherwise account for the

Indebtedness of the Credit Party directly incurring the underlying unsecured

indebtedness, in which case it shall constitute the Unsecured Indebtedness of

the Credit Party giving the guaranty), (v) any secured guaranty given by any

Credit Party of secured indebtedness of a Person who is not a Credit Party

constitutes Secured Indebtedness of such Credit Party giving the guaranty, (vi)

any secured guaranty given by any Credit Party of the secured indebtedness of

another Credit Party constitutes the Secured Indebtedness of the Credit Party

directly incurring the secured indebtedness and shall not be calculated as part

of the Indebtedness (either Secured or Unsecured) of such Credit Party giving the

guaranty (except to the extent that the relevant calculation does not otherwise

account for the Indebtedness of the Credit Party directly incurring the

underlying secured indebtedness, in which case it shall constitute the Secured

Indebtedness of the Credit Party giving the guaranty), (vii) any secured

guaranty given by any Credit Party of the unsecured indebtedness of a Person

who is not a Credit Party constitutes the Secured Indebtedness of such Credit

Party giving the guaranty, and (viii) any secured guaranty given by any Credit

Party of the unsecured Indebtedness of another Credit Party constitutes the

Secured Indebtedness of such Credit Party giving the guaranty and shall not be

calculated as part of the Indebtedness (either Secured or Unsecured) of the

Credit Party directly incurring such Indebtedness (except to the extent that

the relevant calculation does not otherwise account for the Indebtedness of

such Credit Party giving the guaranty, in which case it shall constitute the

Unsecured Indebtedness of the Credit Party directly incurring the underlying

unsecured indebtedness).

 

“Securities Act”

means the Securities Act of 1933, as

amended, and all regulations issued pursuant thereto.

 

“Securitization Asset Sale”

means a transaction consisting of one or more limited recourse or nonrecourse

transfers by the Borrower, the General Partner or any of their Subsidiaries, to

a Special Purpose Entity, of promissory notes, mortgage loans, net leased real

property interests, investment securities representing an interest in or

secured by debt or equity tranches of investment securities, chattel paper,

leases or other similar financial assets originated by the General Partner, the

Borrower or any other Subsidiary thereof, together with any related title or

other insurance policies, hedge agreements and other assets directly related to

such financial assets, which transfers may properly be, and is, accounted for

on the consolidated balance sheet of the General Partner as a sale in

conformity with Financial Accounting Standards Board Statement of Financial

Accounting Standard No.  125 followed by

either (x) limited

 

19

 

recourse or nonrecourse sales of

such financial assets (or interests therein) by such Special Purpose Entity to

one or more Persons the accounts of which would not be required to be

consolidated with those of the General Partner in their consolidated financial

statements in accordance with GAAP (provided that subordinated interests in

such 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 a

Lien encumbering only the assets of such Special Purpose Entity; provided that

all of the Indebtedness, liabilities and other obligations of such Special

Purpose Entity incurred in connection with such transactions are nonrecourse

for the payment or performance thereof to the General Partner, the Borrower or

any other Subsidiary (excluding such Special Purpose Entity) other than the

following: (a) reasonable and customary obligations of the General Partner, the

Borrower or any other Subsidiary with respect to (i) the servicing of any

assets which are the subject of such transaction, (ii) administrative and

ministerial matters relating to such Special Purpose Entity, (iii) maintenance

of the corporate separateness of such Special Purpose Entity from that of the

General Partner and its other Subsidiaries, and (iv) the guaranty of payment of

fees of any Person acting as a trustee in connection with such transaction and

indemnification obligations owing to any such Person; (b) reasonable and

customary repurchase obligations and other liabilities resulting from the

breach of representations, warranties and covenants that are not related to

creditworthiness of the obligors on the financial assets the subject of such

transactions and (c) limited recourse provisions giving rise to Indebtedness

solely to the extent permitted under Section 8.1.  For purposes of this definition, whether an obligation

or liability is “reasonable and customary” shall be determined with reference

to terms of similar transactions prevailing as of the date hereof.

 

“Securities

Exchange Act” means the

Securities Exchange Act of 1934, as amended, and all regulations issued

pursuant thereto.

 

“Shoneys Assets” means

all real properties acquired from Shoney’s, Inc. pursuant to the Asset

Transfer Agreement to be executed after the date hereof.

 

“Single Employer Plan”

means any Plan which is covered by Title IV of ERISA, but which is not a

Multiemployer Plan or a Multiple Employer Plan.

 

“Solvent” or “Solvency”

means, with respect to any Person as of a particular date, that on such date

(i) such Person is able to pay its debts and other liabilities, contingent

obligations and 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

debts and liabilities mature in their ordinary course, (iii) such Person

is not engaged in a business or a transaction, and is not about to engage in a

business or a transaction, for which such Person’s Property would constitute

unreasonably small capital after giving due consideration to the prevailing

practice 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 the

total amount of liabilities, including, without limitation, contingent

liabilities, of such Person and (v) the present fair salable value of the

assets of such Person is not less than the amount that will be required to pay

the probable liability of such Person on its debts as they become absolute and

matured.  In computing the amount of

contingent liabilities at any time, it is intended that such liabilities will

be computed at the amount which, in light of all the facts and circumstances

existing at such time, represents the amount that can reasonably be expected to

become 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 have

been approved in writing by the Agent; (b) which has been organized for the

sole purpose of effecting a structured financing; (c) which has no assets other

than (i) the financial assets directly acquired in connection with, and which

are the subject of, such structured financing, and any related title or other

insurance policies, hedge agreements and other assets directly related to such

financial assets, (ii) cash and other assets contributed or distributed to such

Person, or otherwise acquired by it, in connection with such structured

financing, and which assets are retained by such Person either pursuant to the

requirements of such structured financing or to permit it to fulfill its

obligations under the terms of such structured 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 acquisition of such assets,

and (iv) in the case of a

 

20

 

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) any liabilities

resulting from representations and warranties made by such Person with respect

to any such financial assets or other assets being transferred by it to another

Person so long as such representations and warranties (A) are customary or (B)

are substantially similar to those made to such Person when such assets were

initially transferred to it and (iii) trade payables incurred in the ordinary

course of trade or business in an aggregate amount not to exceed $25,000; and

(e) which none of the General Partner, the Borrower or any other Subsidiaries

thereof have any direct obligation to maintain or preserve such Person’s

financial condition or to cause such Person to achieve any specified levels of

operating results except as otherwise permitted in connection with such

structured financing.

 

“Subordinated Interest”

means a subordinate interest (whether characterized as debt or equity, and

including without limitation, general and limited partnership interests,

participation certificates and trust certificates) in a pool of promissory

notes, 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 any time, (a) any corporation more than 50% of whose Capital

Stock of any class or classes having by the terms thereof ordinary voting power

to elect a majority of the directors of such corporation (irrespective of

whether or not at such time, any class or classes of such corporation shall

have or might have voting power by reason of the happening of any contingency)

is at such time owned by such Person directly or indirectly through

Subsidiaries, and (b) any partnership, association, joint venture or other

entity of which such Person directly or indirectly through Subsidiaries owns at

such time more than 50% of the Capital Stock.

 

“Subsidiary Guarantor”

means each of the Persons identified as a “Subsidiary Guarantor” on the

signature pages hereto and each Person which may hereafter execute a Joinder

Agreement pursuant to Section 7.12, together with their successors and

permitted assigns, and “Subsidiary Guarantor” means any one of them.

 

“Synthetic Lease” means

any synthetic lease, tax retention operating lease, off–balance sheet

loan or similar off–balance sheet financing product where such

transaction is considered borrowed money indebtedness for tax purposes but is

classified as an Operating Lease under GAAP.

 

“Tangible Net Worth”

means, as of any given calculation date, the sum of (a) Total Tangible Assets, less

(b) the sum of (i) Total Liabilities less (ii) the aggregate of the

amounts added to Total Liabilities pursuant to clauses (b) and (d) of the

definition thereof and in connection with proviso items (i) and (ii)(B)

contained in such definition.

 

“Taxes” shall

have the meaning assigned to such term in Section 3.11(a).

 

“Tenant” means any Person (or their respective

Affiliates) who is a lessee with respect to any lease held by the Borrower as

lessor or as an assignee of the lessor thereunder.

 

“Term Securitization”

means a Securitization Asset Sale (a) involving only a single transfer (or

series of related and substantially contemporaneous transfers) to a Special

Purpose Entity of financial assets, and any related title or other insurance

policies, hedge agreements and other assets directly related to such financial

assets, by the General Partner, the Borrower or any other Subsidiary thereof

other than any transfer of such assets (i) being substituted for any asset

previously transferred pursuant to customary and reasonable repurchase and

substitution obligations resulting from the breach of representations,

warranties and covenants that are not related to the creditworthiness of the

obligor on the financial assets or (ii) being substituted for cash collateral

or a cash deposit (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 making

advances to such Special Purpose Entity secured directly or indirectly by such

financial assets, are neither required nor permitted to acquire 

 

21

 

additional financial assets (or

interests therein) from, or otherwise make additional advances to, such Special

Purpose Entity, except as otherwise permitted under the immediately preceding

clause (a).

 

“Total Liabilities” means the sum of (a) total liabilities of the

Consolidated Parties on a consolidated basis, as determined in accordance with

GAAP, plus (b) an amount equal to the aggregate total liabilities, as

determined in accordance with GAAP, of each Minority Interest Entity multiplied

by the respective Minority Interest of each such entity plus (c) without

duplication, the Indebtedness of the Consolidated Parties on a consolidated

basis plus (d) without duplication, the aggregate of Indebtedness

(including, without limitation, all Contingent Obligations) of each Minority

Interest Entity multiplied by the respective Minority Interest of each such

entity; provided, that (i) in each case, all of the above amounts not

otherwise adjusted to account for Outside Interests shall be adjusted to deduct

therefrom the pro rata share of such amounts allocable to the Outside Interests

(except to the extent any Credit Party would be legally liable for the full

amount of such liabilities) and (ii) notwithstanding anything contained herein

to the contrary, “Total Liabilities” shall include (A) the maximum amount that

could be owed by any Consolidated Party with respect to such Consolidated

Party’s preferred Capital Stock and (B) the amount equal to (1) the maximum

amount that could be owed by any Minority Interest Entity with respect to such

Minority Interest Entity’s preferred Capital Stock, multiplied by  (2) the respective

Minority Interest of each such entity.

 

“Total Rent” means, with

respect to rental income used in calculating Borrowing Base Asset Value, gross

rental income from all Borrowing Base Assets over the applicable period prior

to reductions for any delinquencies.

 

“Total Tangible Assets”

means the sum of (a) Asset Values of each of the Real Properties, plus

(b) the value of all 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 in the assets of any Minority Interest Entity

and (ii) shall not include any interests in assets which are attributable to

any Outside Interests), less (c) the value of all intangible assets, if

any, included in (a) and (b) above.

 

“Type” with respect to

any Loan, refers to whether such Loan is a Eurodollar Loan or Base Rate Loan.

 

“Unsecured Indebtedness”

means, with respect to any Person and for any given calculation date, all

Indebtedness of such Person that is not Secured Indebtedness, including all

Indebtedness in respect of Capitalized Lease Obligations.  For clarification purposes, (i) any

unsecured guaranty given by any Credit Party of secured indebtedness of a

Person who is not a Credit Party constitutes Unsecured Indebtedness of such

Credit Party giving the guaranty, (ii) any unsecured guaranty given by any

Credit Party of the secured indebtedness of another Credit Party constitutes

the Secured Indebtedness of the Credit Party directly incurring the secured

indebtedness and shall not be calculated as part of the Indebtedness (either

Secured or Unsecured) of such Credit Party giving the guaranty (except to the

extent that the relevant calculation does not otherwise account for the

Indebtedness of the Credit Party directly incurring the underlying secured

indebtedness, in which case it shall constitute the Unsecured Indebtedness of

the Credit Party giving the guaranty), (iii) any unsecured guaranty given by

any Credit Party of the unsecured indebtedness of a Person who is not a Credit

Party constitutes the Unsecured Indebtedness of such Credit Party giving the

guaranty, (iv) any unsecured guaranty given by any Credit Party of the

unsecured Indebtedness of another Credit Party constitutes the Unsecured

Indebtedness of the Credit Party directly incurring such Indebtedness and shall

not be calculated as part of the Indebtedness (either Secured or Unsecured) of

such Credit Party giving the guaranty (except to the extent that the relevant

calculation does not otherwise account for the Indebtedness of the Credit Party

 

22

 

directly incurring the

underlying unsecured indebtedness, in which case it shall constitute the

Unsecured Indebtedness of the Credit Party giving the guaranty), (v) any

secured guaranty given by any Credit Party of secured indebtedness of a Person

who is not a Credit Party constitutes Secured Indebtedness of such Credit Party

giving the guaranty, (vi) any secured guaranty given by any Credit Party of the

secured indebtedness of another Credit Party constitutes the Secured

Indebtedness of the Credit Party directly incurring the secured indebtedness

and shall not be calculated as part of the Indebtedness (either Secured or

Unsecured) of such Credit Party giving the guaranty (except to the extent that

the relevant calculation does not otherwise account for the Indebtedness of the

Credit Party directly incurring the underlying secured indebtedness, in which

case it shall constitute the Secured Indebtedness of the Credit Party giving

the guaranty), (vii) any secured guaranty given by any Credit Party of the

unsecured indebtedness of a Person who is not a Credit Party constitutes the

Secured Indebtedness of such Credit Party giving the guaranty, and (viii) any

secured guaranty given by any Credit Party of the unsecured Indebtedness of

another Credit Party constitutes the Secured Indebtedness of such Credit Party

giving the guaranty and shall not be calculated as part of the Indebtedness

(either Secured or Unsecured) of the Credit Party directly incurring such

Indebtedness (except to the extent that the relevant calculation does not

otherwise account for the Indebtedness of such Credit Party giving the

guaranty, in which case it shall constitute the Unsecured Indebtedness of the

Credit Party directly incurring the underlying unsecured indebtedness).  For purposes of calculating the Financial

Covenants, the Credit Party Obligations shall be deemed Unsecured Indebtedness.

 

“Unused Revolving Committed

Amount” means, for any period, the daily average of the amount by which

(a) the then applicable Revolving Committed Amount exceeds (b) the

sum of (i) the outstanding aggregate principal amount of all Revolving

Loans plus (ii) the outstanding aggregate principal amount of all

LOC Obligations plus (iii) the Aggregate Derivative Reserve Amount.

 

“USRP Operating” has the

meaning 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 Operating

as of the date hereof in favor of the Collateral Agent and for the benefit of

the Lender Parties.

 

“USRP REIT” means

U.S.  Restaurant Properties, Inc.,

 

“Value” means, with

respect to any Consolidated Party’s interest in any Real Property, the book

value of such interest in Real Property plus accumulated depreciation

with respect thereto (provided, for purposes of clarification, that the “Value”

of any interest in Real Property shall not include any amount of the book value

of such Real Property interest attributable to Outside Interests).

 

“Voting Stock” means,

with respect to any Person, Capital Stock issued by such Person the holders of

which are ordinarily, in the absence of contingencies, entitled to vote for the

election of directors (or persons performing similar functions) of such Person,

even though the 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 or indirectly through other Persons 100% of whose Voting

Stock is at the time owned, directly or indirectly, by the Borrower.

 

1.2          Computation of Time Periods.

 

For purposes of computation of periods of time hereunder, the word

“from” means “from and including” and the words “to” and “until” each mean “to

but excluding.”

 

1.3          Accounting

Terms.

 

Except as otherwise expressly provided herein, all accounting terms

used herein shall be interpreted, and all financial statements and certificates

and reports as to financial matters required to be delivered to the Lenders

hereunder shall be prepared, in accordance with GAAP applied on a consistent

basis; provided, however, that calculations of the implied

principal component of all obligations under any Synthetic Lease or the implied

interest component of any rent paid under any Synthetic Lease shall be made by

the Borrower in accordance with accepted financial practice and consistent with

the terms of such Synthetic Lease.  All

calculations made for the purposes of determining compliance with this Credit

Agreement shall (except as otherwise expressly provided herein) be made by

application of GAAP applied on a basis consistent with the most recent annual

or quarterly financial statements delivered pursuant to Section 7.1 (or,

prior to the delivery of the first financial statements pursuant to

Section 7.1, consistent with the financial statements as at December 31,

2001), but, in any event, after elimination for minority interests;  provided,

however, if

 

23

 

(a) the Credit Parties shall object to determining such compliance

on such basis at the time of delivery of such financial statements due 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 60 days after

delivery of such financial statements, then such calculations shall be made on

a basis consistent with the most recent financial statements delivered by the

Credit Parties to the Lenders as to which no such objection shall have been

made.

 

Notwithstanding

the above or anything contained herein to the contrary, the provisions set

forth in FAS 133 shall not be used in accounting for derivatives instruments

and hedging activities in the definitions contained herein.

 

ARTICLE

II

 

CREDIT

FACILITIES

 

2.1          Revolving

Loans.

 

(a)           Revolving Commitment.  Subject to the terms and conditions hereof and in reliance upon

the representations and warranties set forth herein, each Lender severally

agrees to make available to the Borrower such Lender’s Revolving Commitment

Percentage of revolving credit loans requested by the Borrower in Dollars (“Revolving

Loans”) from time to time from the Closing Date until the Maturity Date, or

such earlier date as the Revolving Commitments shall have been terminated as

provided herein; provided, however, that the sum of the aggregate

outstanding principal amount of Revolving Loans shall not, at any time, exceed

the lesser of (i) the Revolving Committed Amount and (ii) the Borrowing Base; provided,

further, (A) with regard to each Lender individually, such Lender’s

outstanding Revolving Loans shall not exceed such Lender’s Revolving Commitment

Percentage of the Revolving Committed Amount, and (B) the sum of (1) the

aggregate outstanding principal amount of Revolving Loans plus (2) the

LOC Obligations plus (3) the Aggregate Derivative Reserve Amount shall

not exceed the lesser of the Revolving Committed Amount and the Borrowing

Base.  Revolving Loans may consist of

Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower

may request; provided, however, that no more than ten (10)  Eurodollar

Loans shall be outstanding hereunder at any time (it being understood that, for

purposes hereof, Eurodollar Loans with different Interest Periods shall be

considered as separate Eurodollar Loans, even if they begin on the same date,

although borrowings, extensions and conversions may, in accordance with the

provisions hereof, be combined at the end of existing Interest Periods to

constitute a new Eurodollar Loan with a single Interest Period).  Revolving Loans hereunder may be repaid and

reborrowed in accordance with the provisions hereof.

 

(b)           Revolving Loan Borrowings.

 

(i)            Notice of Borrowing.  The Borrower shall request a Revolving Loan borrowing by written

notice (or telephonic notice promptly confirmed in writing) to the Agent not

later than 11:00 A.M.  (Charlotte,

North Carolina time) on the Business Day prior to the date of the requested

borrowing in the case of Base Rate Loans, and on the third Business Day prior

to the date of the requested borrowing in the case of Eurodollar Loans.  Each such request for borrowing shall be

irrevocable and shall specify (A) that a Revolving Loan is requested,

(B) the date of the requested borrowing (which shall be a Business Day),

(C) the aggregate principal amount to be borrowed, and (D) whether

the borrowing shall be comprised of Base Rate Loans, Eurodollar Loans or a

combination thereof, and if Eurodollar Loans are requested, the Interest

Period(s) therefor.  If the Borrower

shall fail to specify in any such Notice of Borrowing (I) an applicable

Interest Period in the case of a Eurodollar Loan, then such notice shall be

deemed to be a request for an Interest Period of one month, or (II) the

type of Revolving Loan requested, then such notice shall be deemed to be a

request for a Base Rate Loan hereunder. 

The Agent shall give notice to each affected Lender promptly upon

receipt of each Notice of Borrowing pursuant to this Section 2.1(b)(i),

the contents thereof and each such Lender’s share of any borrowing to be made

pursuant thereto.

 

(ii)           Minimum Amounts. 

Each Eurodollar Loan or Base Rate Loan that is a Revolving Loan shall be

in a minimum aggregate principal amount of $500,000 and integral multiples of

$100,000 in excess thereof (or the remaining amount of the Revolving Committed

Amount, if less).

 

24

 

(iii)          Advances. 

Each Lender will make its Revolving Commitment Percentage of each

Revolving Loan borrowing available to the Agent for the account of the Borrower

as specified in Section 3.15(a), or in such other manner as the Agent may

specify in writing, by 1:00 P.M. 

(Charlotte, North Carolina time) on the date specified in the applicable

Notice of Borrowing in Dollars and in funds immediately available to the

Agent.  Such borrowing will then be made

available to the Borrower by the Agent by crediting the account of the Borrower

on the books of such office with the aggregate of the amounts made available to

the Agent by the Lenders and in like funds as received by the Agent.

 

(c)           Repayment.

The principal amount of all Revolving Loans and all other amounts owed by the

Borrower or any Credit Party hereunder or under any Credit Document shall be

due and payable as follows:

 

(i)            The

principal amount of all Revolving Loans shall be due and payable in full May

31, 2003 (the “Initial Maturity Date”) unless accelerated sooner

pursuant to the terms and conditions set forth herein.

 

(ii)           The

maturity date of the Revolving Loans may be extended to May 31, 2004 (the “Extended

Maturity Date”) if the following conditions are satisfied by the date

specified:

 

(A)          Borrower

has requested the extension by written notice to Bank not more than sixty (60)

days, and not less than thirty (30) days, prior to the Initial Maturity Date;

 

(B)           the

Revolving Commitments hereunder have been reestructured such that (1) the

Revolving Commitment of BOA is, as of the Initial Maturity Date, reduced to an

amount equal to or less than $20,000,000 and (2) the sum of (x) the aggregate outstanding principal

amount of Revolving Loans, plus (y) the LOC Obligations, plus (z)

the Aggregate Derivative Reserve Amount is, as of such date, equal to or less

than the Revolving Commitments of all Persons who have agreed to act as Lenders

hereunder during the extended term;

 

(C)           the Borrower has, on or before the

Initial Maturity Date, paid to the Agent an extension fee (the “Extension Fee”)

in an amount equal to one half of one percent (0.50%) of the sum of the

Revolving Commitments which will be in effect immediately following the Initial

Maturity Date;

 

(D)          all of the conditions precedent set

forth in Sections 5.1 and 5.2 hereof have been complied with or otherwise

satisfied as of the Initial Maturity Date

and the Credit Parties remain in compliance with such provisions and such

conditions remain satisfied as of the Initial Maturity Date;

 

(E)           current

financial statements regarding each Borrower and each Guarantor and all other

financial statements and other information as may be required hereunder

regarding Borrower and each Guarantor shall have been submitted promptly to the

Agent concurrently with Borrower’s request for the extension, and there shall

not have occurred, in the opinion of Agent, any material adverse change in the

business or financial condition of Borrowers or any Guarantor or in any other

state of facts submitted to the Agent in connection with the Credit Documents, from

that which existed on the Closing Date;

 

(F)           the

Agent and each Lender have delivered to the Borrower their respective written

approvals of the extension referenced in this Section 2.1(c)(ii); provided,

that each such approval shall be conditioned only upon such Agent’s 

 

25

 

and Lenders’ reasonable determination that the Credit

Parties have satisfied each of the conditions to extension set forth in this

Section 2.1(c)(ii);

 

(G)           whether

or not the extension becomes effective, Borrower shall pay all out–of–pocket

costs and expenses incurred by the Agent and the Lenders in connection with the

proposed extension (pre– and post–closing), including, without

limitation, appraisal fees and legal fees; all such costs and expenses incurred

up to the Initial Maturity Date shall be due and payable prior to Agent’s and

Lenders’ execution of their approval of the extension referenced in Section

2.1(c)(ii)(F) or, if the proposed extension does not become effective, then upon

demand by the Agent), and any future failure to pay such amounts shall

constitute an Event of Default under the Credit Documents; and

 

(H)          at

the time of the request, and at the time of the extension, there shall not

exist any Default or Event of Default under any Credit Document.

 

(iii)          As used herein, the term “Maturity Date”

means the latest to occur of (A) the Initial Maturity Date and (B) to the

extent all conditions precedent to the extension of the Revolving Loans as set

forth in Section 2.1(c)(ii) have been satisfied, the Extended Maturity

Date.  For purposes of clarification,

notwithstanding the possibility that the conditions precedent set forth in

Section 2.1(c)(ii) may be satisfied as of a later date, the “Maturity Date” on

any date prior to such satisfaction shall be deemed to be the Initial Maturity

Date.

 

(d)           Interest.  Subject to the provisions of

Section 3.1,

 

(i)            Base Rate Loans. 

During such periods as Revolving Loans shall be comprised in whole or in

part of Base Rate Loans, such Base Rate Loans shall bear interest at a per

annum rate equal to the Adjusted Base Rate.

 

(ii)           Eurodollar Loans. 

During such periods as Revolving Loans shall be comprised in whole or in

part of Eurodollar Loans, such Eurodollar Loans shall bear interest at a per

annum rate equal to the Adjusted Eurodollar Rate.

 

Interest on Revolving Loans

shall be payable in arrears on each applicable Interest Payment Date (or at

such other times as may be specified herein).

 

(e)           Revolving Notes. 

The Revolving Loans made by each Lender shall be evidenced by a duly

executed promissory note of the Borrower to such Lender in an original

principal amount equal to such Lender’s Revolving Commitment Percentage of the

Revolving Committed Amount and in substantially the form of Exhibit 2.1(e).

 

2.2          Letter of Credit Subfacility.

 

(a)           Issuance. 

Subject to the terms and conditions hereof and in reliance upon the

representations and warranties set forth herein, the Issuing Lender agrees to

issue, and each Lender severally agrees to participate in the issuance by the

Issuing Lender of, standby and trade Letters of Credit in Dollars from time to

time from the Closing Date until the date thirty (30) days prior to the

Maturity Date as the Borrower may request, in a form acceptable to the Issuing

Lender; provided, however, that (i) the LOC Obligations

outstanding shall not at any time exceed TEN MILLION DOLLARS ($10,000,000) (the

“LOC Committed Amount”) and (ii) the sum of (A) the aggregate

outstanding principal amount of Revolving Loans plus (B) the LOC

Obligations plus (C) the Aggregate Derivative Reserve Amount shall not

exceed the lesser of the Revolving Committed Amount and the Borrowing

Base.  No Letter of Credit shall

(x) have an original expiry date more than one year from the date of issuance

(provided that any such Letter of Credit may contain customary “evergreen”

provisions pursuant to which the expiry date is automatically extended by a

specific time period unless the Issuing Lender gives notice to the beneficiary

of such Letter of Credit at least a specified

 

26

 

time period prior to the expiry

date then in effect) or (y) as originally issued or as extended, have an

expiry date extending beyond the date thirty (30) days prior to the Maturity

Date.  Each Letter of Credit shall

comply with the related LOC Documents. 

The issuance and expiry dates of each Letter of Credit shall be a

Business Day.

 

(b)           Notice and Reports.  The request for the issuance of a Letter of Credit shall be

submitted by the Borrower to the Issuing Lender at least three (3)

Business Days prior to the requested date of issuance.  The Issuing Lender will, at least quarterly

and more frequently upon request, disseminate to each of the Lenders a detailed

report specifying the Letters of Credit which are then issued and outstanding

and any activity with respect thereto which may have occurred since the date of

the prior report, and including therein, among other things, the beneficiary,

the face amount and the expiry date, as well as any payment or expirations

which may have occurred.

 

(c)           Participation. 

Each Lender, upon issuance of a Letter of Credit, shall be deemed to

have purchased without recourse a Participation Interest from the Issuing

Lender in such Letter of Credit and the obligations arising thereunder and any

collateral relating thereto, in each case in an amount equal to its pro rata

share of the obligations under such Letter of Credit (based on the respective

Revolving Commitment Percentages of the Lenders) and shall absolutely,

unconditionally and irrevocably assume and be obligated to pay to the Issuing

Lender and discharge when due, its pro rata share of the obligations arising

under such Letter of Credit.  Without

limiting the scope and nature of each Lender’s Participation Interest in any

Letter of Credit, to the extent that the Issuing Lender has not been reimbursed

as required hereunder or under any such Letter of Credit, each such Lender

shall pay to the Issuing Lender its pro rata share of such unreimbursed drawing

in same day funds on the day of notification by the Issuing Lender of an

unreimbursed drawing pursuant to the provisions of subsection (d)

below.  The obligation of each Lender to

so reimburse the Issuing Lender shall be absolute and unconditional and shall

not be affected by the occurrence of a Default, an Event of Default or any

other occurrence or event.  Any such

reimbursement shall not relieve or otherwise impair the obligation of the

Borrower to reimburse the Issuing Lender under any Letter of Credit, together

with interest as hereinafter provided.

 

(d)           Reimbursement. 

In the event of any drawing under any Letter of Credit, the Issuing

Lender will promptly notify the Borrower. 

Unless the Borrower shall immediately notify the Issuing Lender that the

Borrower intends to otherwise reimburse the Issuing Lender for such drawing,

the Borrower shall be deemed to have requested that the Lenders make a

Revolving Loan in the amount of the drawing as provided in subsection (e)

below on the related Letter of Credit, the proceeds of which will be used to

satisfy the related reimbursement obligations. 

The Borrower promises to reimburse the Issuing Lender on the day of

drawing under any Letter of Credit (either with the proceeds of a Revolving

Loan obtained hereunder or otherwise) in same day funds.  If the Borrower shall fail to reimburse the

Issuing Lender as provided hereinabove, the Borrower promises to pay the

Issuing Lender interest on the the unreimbursed amount of such drawing on

demand at a per annum rate equal to the Adjusted Base Rate plus 5%.  The Borrower’s reimbursement obligations

hereunder shall be absolute and unconditional under all circumstances

irrespective of any rights of setoff, counterclaim or defense to payment the

Borrower may claim or have against the Issuing Lender, the Agent, the Lenders,

the beneficiary of the Letter of Credit drawn upon or any other Person,

including without limitation any defense based on any failure of the Borrower

or any other Credit Party to receive consideration or the legality, validity,

regularity or unenforceability of the Letter of Credit.  The Issuing Lender will promptly notify the

other Lenders of the amount of any unreimbursed drawing and each Lender shall

promptly pay to the Agent for the account of the Issuing Lender in Dollars and

in immediately available funds, the amount of such Lender’s pro rata share of

such unreimbursed drawing.  Such payment

shall be made on the day such notice is received by such Lender from the

Issuing Lender if such notice is received at or before 2:00 P.M.  (Charlotte, North Carolina time), and

otherwise such payment shall be made at or before 12:00 Noon (Charlotte, North

Carolina time) on the Business Day next succeeding the day such notice is

received.  If such Lender does not pay

such amount to the Issuing Lender in full upon such request, such Lender shall,

on demand, pay to the Agent for the account of the Issuing Lender interest on

the unpaid amount during the period from the date of such drawing until such

Lender pays such amount to the Issuing Lender in full at a rate per annum equal

to, if paid within two (2) Business Days of the date that such Lender is

required to make payments of such amount pursuant to the preceding sentence,

the Federal Funds Rate and thereafter at a rate equal to the Base Rate.  Each Lender’s obligation to make such

payment to the Issuing Lender, and the right of the Issuing Lender to receive

the same, shall be absolute and unconditional, shall not be affected by any

circumstance whatsoever and

 

27

 

without regard to the

termination of this Credit Agreement or the Commitments hereunder, the

existence of a Default or Event of Default or the acceleration of the

obligations of the Borrower hereunder and shall be made without any offset,

abatement, withholding or reduction whatsoever.  Simultaneously with the making of each such payment by a Lender

to the Issuing Lender, such Lender shall, automatically and without any further

action on the part of the Issuing Lender or such Lender, acquire a

Participation Interest in an amount equal to such payment (excluding the

portion of such payment constituting interest owing to the Issuing Lender) in

the related unreimbursed drawing portion of the LOC Obligation and in the

interest thereon and in the related LOC Documents, and shall have a claim

against the Borrower with respect thereto.

 

(e)           Repayment with Revolving Loans.  On any day on which the Borrower shall have

requested, or been deemed to have requested, a Revolving Loan advance to

reimburse a drawing under a Letter of Credit, the Agent shall give notice to

the Lenders that a Revolving Loan has been requested or deemed requested by the

Borrower to be made in connection with a drawing under a Letter of Credit, in

which case a Revolving Loan advance comprised of Base Rate Loans (or Eurodollar

Loans to the extent the Borrower has complied with the procedures of

Section 2.1(b)(i) with respect thereto) shall be immediately made to the

Borrower by all Lenders (notwithstanding any termination of the Commitments

pursuant to Section 9.2) pro  rata based on the respective

Revolving Commitment Percentages of the Lenders (determined before giving

effect to any termination of the Commitments pursuant to Section 9.2) and

the proceeds thereof shall be paid directly to the Issuing Lender for

application to the respective LOC Obligations. 

Each such Lender hereby irrevocably agrees to make its pro rata share of

each such Revolving Loan immediately upon any such request or deemed request in

the amount, in the manner and on the date specified in the preceding sentence notwithstanding

(i) the amount of such borrowing may not comply with the minimum amount

for advances of Revolving Loans otherwise required hereunder, (ii) whether

any conditions specified in Section 5.2 are then satisfied,

(iii) whether a Default or an Event of Default then exists,

(iv) failure for any such request or deemed request for Revolving Loan to

be made by the time otherwise required hereunder, (v) whether the date of

such borrowing is a date on which Revolving Loans are otherwise permitted to be

made hereunder or (vi) any termination of the Commitments relating thereto

immediately prior to or contemporaneously with such borrowing.  In the event that any Revolving Loan cannot

for any reason be made on the date otherwise required above (including, without

limitation, as a result of the commencement of a proceeding under the

Bankruptcy Code with respect to the Borrower or any other Credit Party), then

each such Lender hereby agrees that it shall forthwith purchase (as of the date

such borrowing would otherwise have occurred, but adjusted for any payments

received from the Borrower on or after such date and prior to such purchase)

from the Issuing Lender such Participation Interests in the outstanding LOC

Obligations as shall be necessary to cause each such Lender to share in such

LOC Obligations ratably (based upon the respective Revolving Commitment

Percentages of the Lenders (determined before giving effect to any termination

of the Commitments pursuant to Section 9.2)), provided that at the

time any purchase of Participation Interests pursuant to this sentence is

actually made, the purchasing Lender shall be required to pay to the Issuing

Lender, to the extent not paid to the Issuing Lender by the Borrower in

accordance with the terms of subsection (d) above, interest on the

principal amount of Participation Interests purchased for each day from and

including the day upon which such borrowing would otherwise have occurred to

but excluding the date of payment for such Participation Interests, at the rate

equal to, if paid within two (2) Business Days of the date of the

Revolving Loan advance, the Federal Funds Rate, and thereafter at a rate equal

to the Base Rate.

 

(f)            Designation of Consolidated Parties as Account Parties.  Notwithstanding anything to the contrary set

forth in this Credit Agreement, including without limitation

Section 2.2(a), a Letter of Credit issued hereunder may contain a

statement to the effect that such Letter of Credit is issued for the account of

any Subsidiary of the Borrower, provided that notwithstanding such statement,

the Borrower shall be the actual account party for all purposes of this Credit

Agreement for such Letter of Credit and such statement shall not affect the

Borrower’s reimbursement obligations hereunder with respect to such Letter of

Credit.

 

(g)           Renewal, Extension.  The renewal or extension of any Letter of Credit shall, for

purposes hereof, be treated in all respects the same as the issuance of a new

Letter of Credit hereunder.

 

(h)           Uniform Customs and Practices.  The Issuing Lender may have the Letters of

Credit be subject to The Uniform Customs and Practice for Documentary Credits

(the “UCP”) or the International Standby Practices 1998 (the “ISP98”),

in either case as published as of the date of issue by the International

 

28

 

Chamber of Commerce, in which

case the UCP or the ISP98, as applicable, may be incorporated therein and

deemed in all respects to be a part thereof.

 

(i)            Indemnification; Nature of Issuing Lender’s Duties.

 

(i)            In addition to its other obligations under this

Section 2.2, the Borrower hereby agrees to pay, and protect, indemnify and

save each Lender harmless from and against, any and all claims, demands,

liabilities, damages, losses, costs, charges and expenses (including reasonable

attorneys’ fees) that such Lender may incur or be subject to as a consequence,

direct or indirect, of (A) the issuance of any Letter of Credit or

(B) the failure of such Lender to honor a drawing under a Letter of Credit

as a result of any act or omission, whether rightful or wrongful, of any

present or future de jure or de facto government or Governmental Authority (all

such acts or omissions, herein called “Government Acts”).

 

(ii)           As between the Borrower and the Lenders (including the

Issuing Lender), the Borrower shall assume all risks of the acts, omissions or

misuse of any Letter of Credit by the beneficiary thereof.  No Lender (including the Issuing Lender)

shall be responsible:  (A) for the

form, validity, sufficiency, accuracy, genuineness or legal effect of any

document submitted by any party in connection with the application for and

issuance of any Letter of Credit, even if it should in fact prove to be in any

or all respects invalid, insufficient, inaccurate, fraudulent or forged;

(B) for the validity or sufficiency of any instrument transferring or

assigning or purporting to transfer or assign any Letter of Credit or the

rights or benefits thereunder or proceeds thereof, in whole or in part, that

may prove to be invalid or ineffective for any reason; (C) for errors,

omissions, interruptions or delays in transmission or delivery of any messages,

by mail, cable, telegraph, telex or otherwise, whether or not they be in

cipher; (D) for any loss or delay in the transmission or otherwise of any

document required in order to make a drawing under a Letter of Credit or of the

proceeds thereof; and (E) for any consequences arising from causes beyond

the control of such Lender, including, without limitation, any Government

Acts.  None of the above shall affect,

impair, or prevent the vesting of the Issuing Lender’s rights or powers

hereunder.

 

(iii)          In furtherance and extension and not in limitation of the

specific provisions hereinabove set forth, any action taken or omitted by any

Lender (including the Issuing Lender), under or in connection with any Letter

of Credit or the related certificates, if taken or omitted in good faith, shall

not put such Lender under any resulting liability to the Borrower or any other

Credit Party.  It is the intention of

the parties that this Credit Agreement shall be construed and applied to

protect and indemnify each Lender (including the Issuing Lender) against any

and all risks involved in the issuance of the Letters of Credit, all of which

risks are hereby assumed by the Borrower (on behalf of itself and each of the

other Credit Parties), including, without limitation, any and all Government

Acts.  No Lender (including the Issuing

Lender) shall, in any way, be liable for any failure by such Lender or anyone

else to pay any drawing under any Letter of Credit as a result of any

Government Acts or any other cause beyond the control of such Lender.

 

(iv)          Nothing in this subsection (i) is intended to limit

the reimbursement obligations of the Borrower contained in subsection (d)

above.  The obligations of the Borrower

under this subsection (i) shall survive the termination of this Credit

Agreement.  No act or omission of any

current or prior beneficiary of a Letter of Credit shall in any way affect or

impair the rights of the Lenders (including the Issuing Lender) to enforce any

right, power or benefit under this Credit Agreement.

 

(v)           Notwithstanding anything to the contrary contained in this

subsection (i), the Borrower shall have no obligation to indemnify any

Lender (including the Issuing Lender) in respect of any liability incurred by

such Lender (A) arising solely out of the gross negligence or willful

misconduct of such Lender, as determined by a court of competent jurisdiction,

or (B) caused by such Lender’s failure to pay under any Letter of Credit

after presentation to it of a request strictly complying with the terms and

conditions of such Letter of Credit, as determined by a court of

 

29

 

competent jurisdiction, unless such payment is prohibited by any law,

regulation, court order or decree.

 

(j)            Responsibility of Issuing Lender.  It is expressly understood and agreed that

the obligations of the Issuing Lender hereunder to the Lenders are only those

expressly set forth in this Credit Agreement and that the Issuing Lender shall

be entitled to assume that the conditions precedent set forth in Section 5.2

have been satisfied unless it shall have acquired actual knowledge that any

such condition precedent has not been satisfied; provided, however,

that nothing set forth in this Section 2.2 shall be deemed to prejudice

the right of any Lender to recover from the Issuing Lender any amounts made

available by such Lender to the Issuing Lender pursuant to this

Section 2.2 in the event that it is determined by a court of competent

jurisdiction that the payment with respect to a Letter of Credit constituted

gross negligence or willful misconduct on the part of the Issuing Lender.

 

(k)           Conflict with LOC Documents.  In the event of any conflict between this

Credit Agreement and any LOC Document (including any letter of credit

application), this Credit Agreement shall control.

 

2.3          Derivative

Exposure Reserve.

 

(a)           Establishment of Reserve.  To the extent the Borrower (as credit support provider), pursuant

to the terms of any BOA Derivative Instrument, is required to provide

collateral or other credit support for the General Partner’s or the USRP REIT’s

obligations under such BOA Derivative Instrument, the Agent shall, subject to

the terms and conditions set forth in this Section 2.3 and the consent of

the applicable Derivative Counterparty, reserve an amount of Availability which

when combined with all then existing Availability reserves is equal to or less

than SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($7,500,000.00)

(the “Reserve Limit”) in satisfaction of such requirement.  The term “Derivative Exposure Reserve”

shall mean, with respect to any given BOA Derivative Instrument, the reserve

established pursuant to this Section 2.3 in connection with such BOA

Derivative Instrument.  Notwithstanding

anything to the contrary contained in this Credit Agreement, Availability

reserved pursuant to this Section 2.3 shall be deemed an outstanding

principal advance hereunder for purposes of the covenant calculations required

hereunder (including, without limitation, the covenant calculations required

pursuant to Sections 7.11 and 8.1 hereof).

 

(b)           Conditions. 

If, at any time on or prior to the Business Day occurring five (5)

days prior to the date of the termination of this Credit Agreement, Agent has

received notice of the Borrower’s obligation (as credit support provider),

pursuant to a given BOA Derivative Instrument, to provide collateral or other

credit support for the General Partner’s or the USRP REIT’s obligations

thereunder, the Agent shall, within one (1) Business Day of receiving

notice thereof, establish a Derivative Exposure Reserve in connection with such

BOA Derivative Instrument to the extent that (i) the applicable Derivative

Counterparty has consented to the establishment of a Derivative Exposure

Reserve with respect to the Borrower’s obligations (as credit support provider)

under such BOA Derivative Instrument; (ii) the sum of (A) the aggregate outstanding principal amount of the

Revolving Loans, plus (B) the LOC Obligations, plus (C) the

Aggregate Derivative Reserve Amount plus the amount of the pending

Derivative Exposure Reserve is less than the Revolving Committed Amount; and

(iii) to the Agent’s knowledge, no Default or Event of Default exists as of the

date on which the applicable notice is received.

 

(c)           Adjustment of Reserve Amounts.  The amount of any given Derivative Exposure

Reserve shall be adjusted (either up or down, as applicable) from time to time

by the Agent upon receipt by the Agent of any notice from a Derivative

Counterparty that the Borrower’s obligation (as credit support provider) to

provide collateral or other credit support for the General Partner’s or the

USRP REIT’s obligations under the applicable BOA Derivative Instrument has

increased or decreased; provided, that the Agent shall not be required to make

such adjustment to the extent (i) any increase in the Borrower’s obligation (as

credit support provider) to provide collateral or other credit support for the

General Partner’s or the USRP REIT’s obligations under the applicable BOA

Derivative Instrument would cause the

sum of (A) the aggregate outstanding principal amount of the Revolving Loans, plus

(B) the LOC Obligations, plus (C) the Aggregate Derivative Reserve

Amount to exceed the Revolving Committed Amount or (ii) such increase would

cause the aggregate amount of the Derivative Exposure Reserve to exceed the

Reserve Limit.

 

30

 

(d)           Notices. 

The Borrower (i) hereby consents to the establishment of Derivative

Exposure Reserves with respect to any BOA Derivative Instrument existing as of

the date hereof or later existing, (ii) hereby consents to the delivery by each

Derivative Counterparty to the Agent of all notices, reports and other

information regarding any BOA Derivative Instrument concurrently with or prior

to the delivery thereof to the Borrower, and (iii) agrees to direct and hereby

directs each Derivative Counterparty to so deliver such notices, reports and

other information to the Agent.   The

Agent hereby agrees to provide to the Borrower notice, (i) within three (3)

Business Days, of the establishment of a given Derivative Exposure Reserve, the

underlying BOA Derivative Instrument and the amount of such Derivative Exposure

Reserve; (ii) within three (3) Business Days, any adjustment in the amount

of a given Derivative Exposure Reserve and (iii) within three (3) Business

Days, of the making of any Revolving Loan in satisfaction of the Borrower’s

obligations under a given BOA Derivative Instrument in connection with

subsection (f) of this Section 2.3.

 

(e)           Payment from Derivative Exposure Reserve.  In the event any Derivative Counterparty

forecloses upon or otherwise redeems its interest in any amount allocated as a

Derivative Exposure Reserve and so notifies the Agent and Borrower of such

foreclosure/redemption, the Borrower shall be deemed to have requested that the

Lenders make a Revolving Loan in the amount of the applicable Derivative

Exposure Reserve as provided in subsection (f) below.  The Borrower hereby (i) consents to the

application of the proceeds resulting from any Revolving Loans made pursuant to

subsection (f) of this Section 2.3 to the Borrower’s obligations

under the applicable BOA Derivative

Instrument, (ii) covenants and

agrees, to the extent it receives

any of the proceeds resulting from

any Revolving Loans made pursuant to subsection (f) of this

Section 2.3, to apply such proceeds to its obligations under the

applicable BOA Derivative Instrument

immediately upon its receipt thereof and (iii) agrees that, notwithstanding

anything to the contrary contained herein, failure to adhere to the terms of

this Section 2.3 will result in an immediate Event of Default hereunder.

 

(f)            Repayment with Revolving Loans.  On any day on which the Borrower shall have

been deemed, pursuant to subsections (e) or (g) of this Section 2.3,

to have requested a Revolving Loan advance in connection with a given

Derivative Exposure Reserve, the Agent shall give notice to the Lenders that a

Revolving Loan has been deemed requested by the Borrower in connection with

such Derivative Exposure Reserve. 

Concurrently with such notice, a Revolving Loan advance comprised of

Base Rate Loans (or Eurodollar Loans to the extent the Borrower has complied

with the procedures of Section 2.1(b)(i) with respect thereto) shall be

immediately made to the Borrower by all Lenders (notwithstanding any

termination of the Commitments pursuant to Section 9.2) pro  rata

based on the respective Revolving Commitment Percentages of the Lenders

(determined before giving effect to any termination of the Commitments pursuant

to Section 9.2) and the proceeds thereof shall be paid directly to the

applicable Derivative Counterparty for application to the applicable BOA

Derivative Instrument or as cash collateral therefor, as applicable.  Each Lender hereby irrevocably agrees to

make its pro rata share of each such Revolving Loan immediately upon any such

request or deemed request in the amount, in the manner and on the date

specified in the preceding sentence notwithstanding (i) the amount

of such borrowing may not comply with the minimum amount for advances of

Revolving Loans otherwise required hereunder, (ii) whether any conditions

specified in Section 5.2 are then satisfied, (iii) whether a Default

or an Event of Default then exists, (iv) failure for any such request or

deemed request for Revolving Loan to be made by the time otherwise required

hereunder, (v) whether the date of such borrowing is a date on which

Revolving Loans are otherwise permitted to be made hereunder or (vi) any

termination of the Commitments relating thereto immediately prior to or

contemporaneously with such borrowing. 

In the event that any Revolving Loan cannot for any reason be made on

the date otherwise required above (including, without limitation, as a result

of the commencement of a proceeding under the Bankruptcy Code with respect to

the Borrower or any other Credit Party), then each Lender hereby agrees that it

shall forthwith purchase (as of the date such borrowing would otherwise have

occurred, but adjusted for any payments received from the Borrower on or after

such date and prior to such purchase) from the Derivative Counterparty (to the

extent expressly permitted by such Derivative Counterparty) such interests in

the applicable BOA Derivative

Instrument as shall be necessary to

cause each such Lender to share in the obligations secured by the applicable

Derivative Exposure Reserve ratably (based upon the respective Revolving

Commitment Percentages of the Lenders (determined before giving effect to any

termination of the Commitments pursuant to Section 9.2)).

 

31

 

(g)           Termination of Derivative Exposure

Reserves.  The respective Derivative

Exposure Reserves established pursuant to this Section 2.3 shall be

terminated upon the earlier of (i) the termination of the underlying BOA

Derivative Instrument and subsequent payment by the Borrower of all amounts due

thereunder, either through the making of Revolving Loans under

subsection (f) hereof or otherwise, (ii) the Business Day occurring immediately

preceding the Maturity Date, (iii) the Business Day occurring immediately

preceding the date of the termination of this Credit Agreement other than as a

result of the occurrence of the Maturity Date. 

To the extent the Derivative Exposure Reserves are terminated pursuant

to subsections (i), (ii) or (iii) above, the Borrower shall, as of the

date of such termination, be deemed to have requested Revolving Loans to be

made in accordance with subsection (f) hereof in an amount equal to the

Aggregate Derivative Reserve Amount for the purpose of providing cash

collateral to secure its obligations under the BOA Derivative Instruments for

which Derivative Exposure Reserves exist on such date; provided, however, that

to the extent the Derivative Exposure Reserves are to be terminated as a result

of the occurrence of the Maturity Date, the Borrower shall be permitted to

provide such collateral as may be acceptable to the Derivative Counterparty in

lieu of a funding of Revolving Loans hereunder if and to the extent (A) the

Borrower provides fifteen (15) Business Days notice of its intention to

provide such collateral, (B) the Borrower delivers such collateral to the

Derivative Counterparty five (5) Business Days prior to the Maturity Date

and (C) such collateral is deemed acceptable by the Derivative Counterparty.

 

2.4          Joint

and Several Liability of the Borrowers.

 

(a)           Each

of the Borrowers is accepting joint and several liability hereunder in

consideration of the financial accommodation to be provided by the Lenders

under this Credit Agreement, for the mutual benefit, directly and indirectly,

of each of the Borrowers and in consideration of the undertakings of each of

the Borrowers to accept joint and several liability for the obligations of each

of them.

 

(b)           Each

of the Borrowers jointly and severally hereby irrevocably and unconditionally

accepts, not merely as a surety but also as a co–debtor, joint and

several liability with the other Borrowers with respect to the payment and

performance of all of the Credit Party Obligations arising under this Credit

Agreement and the other Credit Documents, it being the intention of the parties

hereto that all the Credit Party Obligations shall be the joint and several

obligations of each of the Borrowers without preferences or distinction among

them.

 

(c)           If

and to the extent that any of the Borrowers shall fail to make any payment with

respect to any of the obligations hereunder as and when due or to perform any

of such obligations in accordance with the terms thereof, then in each such

event, the other Borrowers will make such payment with respect to, or perform,

such obligation.

 

(d)           The

obligations of each Borrower under the provisions of this Section 2.3

constitute full recourse obligations of such Borrower, enforceable against it

to the full extent of its properties and assets, irrespective of the validity,

regularity or enforceability of this Credit Agreement or any other

circumstances whatsoever.

 

(e)           Except

as otherwise expressly provided herein, each Borrower hereby waives notice of

acceptance of its joint and several liability, notice of occurrence of any

Default or Event of Default (except to the extent notice is expressly required

to be given pursuant to the terms of this Credit Agreement), or of any demand

for any payment under this Credit Agreement, notice of any action at any time

taken or omitted by the Lender under or in respect of any of the Credit Party

Obligations hereunder, any requirement of diligence and, generally, all

demands, notices and other formalities of every kind in connection with this

Credit Agreement.  Each Borrower hereby

assents to, and waives notice of, any extension or postponement of the time for

the payment of any of the Credit Party Obligations hereunder, the acceptance of

any partial payment thereon, any waiver, consent or other action or

acquiescence by the Lenders at any time or times in respect of any default by

any Borrower in the performance or satisfaction of any term, covenant,

condition or provision of this Credit Agreement, any and all other indulgences

whatsoever by the Lenders in respect of any of the Credit Party Obligations

hereunder, and the taking,

 

32

 

addition, substitution or release, in whole or in

part, at any time or times, of any security for any of such Credit Party

Obligations or the addition, substitution or release, in whole or in part, of

any Borrower.  Without limiting the

generality of the foregoing, each Borrower assents to any other action or delay

in acting or any failure to act on the part of the Lender, including, without

limitation, any failure strictly or diligently to assert any right or to pursue

any remedy or to comply fully with applicable laws or regulations thereunder

which might, but for the provisions of this Section 2.3, afford grounds

for terminating, discharging or relieving such Borrower, in whole or in part,

from any of its obligations under this Section 2.3, it being the intention

of each Borrower that, so long as any of the Credit Party Obligations hereunder

remain unsatisfied, the obligations of such Borrower under this

Section 2.3 shall not be discharged except by performance and then only to

the extent of such performance.  The

obligations of each Borrower under this Section 2.3 shall not be diminished

or rendered unenforceable by any winding up, reorganization, arrangement,

liquidation, reconstruction or similar proceeding with respect to any

reconstruction or similar proceeding with respect to any Borrower or any

Lender.  The joint and several liability

of the Borrowers hereunder shall continue in full force and effect

notwithstanding any absorption, merger, amalgamation or any other change

whatsoever in the name, membership, constitution or place of formation of any

Borrower or any Lender.

 

(f)            The

provisions of this Section 2.3 are made for the benefit of the Agent and

the Lenders and their respective successors and assigns, and may be enforced by

any such Person from time to time against any of the Borrowers as often as

occasion therefor may arise and without requirement on the part of any Lender

first to marshal any of its claims or to exercise any of its rights against any

of the other Borrowers or to exhaust any remedies available to it against any

of the other Borrowers or to resort to any other source or means of obtaining

payment of any of the Credit Party Obligations or to elect any other

remedy.  Without limiting the generality

of the foregoing, each Borrower hereby specifically waives the benefits of

N.C.  Gen.  Stat.  §§26–7

through 26–9, inclusive, to the extent applicable.  The provisions of this Section 2.3

shall remain in effect until all the Credit Party Obligations hereunder shall

have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any part thereof, made in respect

of any of the Credit Party Obligations, is rescinded or must otherwise be

restored or returned by the Lenders upon the insolvency, bankruptcy or

reorganization of any of the Borrowers, or otherwise, the provisions of this

Section 2.3 will forthwith be reinstated and in effect as though such

payment had not been made.

 

(g)           Notwithstanding

any provision to the contrary contained herein or in any other of the Credit

Documents or Hedging Agreements, the obligations of each Borrower hereunder

shall be limited to an aggregate amount equal to the largest amount that would

not render its obligations hereunder subject to avoidance under

Section 548 of the Bankruptcy Code or any comparable provisions of any

applicable state law.

 

2.5          Appointment

of Principal Borrower as Agent for Borrowers.

 

Each Borrower

hereby appoints the Principal Borrower to act as its exclusive agent for all

purposes under this Credit Agreement and the other Credit Documents (including,

without limitation, with respect to all matters related to the borrowing and

repayment of loans as described in Section 2 and Section 3

hereof).  Each Borrower acknowledges and

agrees that (a) the Principal Borrower may execute such documents on behalf of

all the Borrowers as the Principal Borrower deems appropriate in its sole

discretion and each Borrower shall be bound by and obligated by all of the

terms of any such document executed by the Principal Borrower on its behalf,

(b) any notice or other communication delivered by the Agent or any Lender

hereunder to the Principal 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 to rely on) any document or agreement executed by the Principal

Borrower on behalf of the Borrowers (or any of them).  The Borrowers must act through the Principal Borrower for all

purposes under this Credit Agreement and the other Credit Documents.  Notwithstanding anything contained herein to

the contrary, to the extent any provision in this Credit Agreement requires any

Borrower to interact in any manner with the Agent or the Lenders, such Borrower

shall do so through the Principal Borrower.

 

33

 

ARTICLE

III

 

OTHER PROVISIONS RELATING TO CREDIT FACILITIES

 

3.1          Default

Rate.

 

Upon the occurrence, and during the continuance, of an Event of

Default, (i) the principal of and, to the extent permitted by law,

interest on the Loans and any other amounts owing hereunder or under the other

Credit Documents shall bear interest, payable on demand, at a per annum rate 5%

greater than the rate which would otherwise be applicable (or if no rate is

applicable, whether in respect of interest, fees or other amounts, then the

Adjusted Base Rate plus 5%) and (ii) the Letter of Credit Fee shall

accrue at a per annum rate 5% greater than the rate which would otherwise be

applicable.

 

3.2          Continuation/Conversion.

 

(a)           So long as no Event of Default shall

have occurred and be continuing and to the extent permitted in the definition

of the term “Interest Period”, the Borrower may on any Business Day, with

respect to any Eurodollar Loan, elect to maintain such Eurodollar Loan or any

portion thereof as a Eurodollar Loan by selecting a new Interest Period for such

Eurodollar Loan.  Each new Interest

Period selected under this Section 3.2 shall commence on the last day of

the immediately preceding Interest Period. 

Each selection of a new Interest Period shall be made by the Borrower

giving to the Agent a Notice of Continuation not later than

11:00 A.M.  on the third Business

Day prior to the date of any such Continuation.  Such notice by the Borrower of a Continuation shall be by telephone

or telecopy, confirmed immediately in writing if by telephone, in the form of a

Notice of Continuation, (a) specifying (i) the proposed date of such

Continuation, (ii) the Eurodollar Loan and portion thereof subject to such

Continuation and (iii) the duration of the selected Interest Period, all of

which shall be specified in such manner as is necessary to comply with all

limitations on Loans outstanding hereunder and (b) containing certifications of the Borrower with

respect to the conditions set forth in Section 5.2 clauses (b)

through (e) as set forth in Exhibit 3.2.  Each

Notice of Continuation shall be irrevocable by and binding on the Borrower once

given.  Promptly after receipt of a

Notice of Continuation, the Agent shall notify each Lender Party by telecopy or

other similar form of transmission of the proposed Continuation.  If the Borrower shall fail to select in a

timely manner a new Interest Period for any Eurodollar Loan in accordance with

this Section 3.2(a), such Loan will automatically, on the last day of the

current Interest Period therefor, Convert into a Base Rate Loan notwithstanding

failure of the Borrower to comply with Section 3.2(b).

 

(b)           So long 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 of Conversion to the Agent, Convert

all or a portion of a Loan of one Type into a Loan of another Type.  Any Conversion of a Eurodollar Loan into a

Base Rate Loan shall be made on, and only on, the last day of an Interest

Period for such Eurodollar Loan and, upon Conversion of a Base Rate Loan into a

Eurodollar Loan, the Borrower shall pay accrued interest to the date of

Conversion on the principal amount so Converted.  Each such Notice of Conversion shall be given not later than

12:00 noon on the Business Day prior to the date of any proposed Conversion

into Base Rate Loans and on the third Business Day prior to the date of any

proposed Conversion into Eurodollar Loans. 

Promptly after receipt of a Notice of Conversion, the Agent shall notify

each Lender Party by telecopy or other similar form of transmission of the

proposed Conversion.  Subject to the

restrictions specified above, each Notice of Conversion shall be by

telephone (confirmed immediately 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 to be Converted, (iii) the portion of such Type of Loan

to be Converted, (iv) the Type of Loan such Loan is to be Converted into and

(v) if such Conversion is into a Eurodollar Loan, the requested duration of the

Interest Period of such Loan, and (b)

containing certifications of the Borrower with respect to the conditions set

forth in Section 5.2 clauses (b) through (e) as set forth in Exhibit 3.2.  Each

Notice of Conversion shall be irrevocable by and binding on the Borrower once

given.

 

34

 

3.3          Prepayments.

 

(a)           Voluntary Prepayments.  The Borrower shall have the right to prepay

Loans in whole or in part from time to time; provided, however,

that (i) each partial prepayment of Loans shall be in a minimum principal

amount of $500,000 and integral multiples of $100,000 in excess thereof (or the

then remaining principal balance of the Revolving Loans and (ii) each partial

prepayment shall include payment for any and all applicable fees, expenses,

breakage costs and redeployment costs incurred by the Lenders and the Agent as

a result thereof (as such amounts are reasonably calculated by the Lenders and

the Agent, as applicable, and communicated to the Borrower).  Subject to the foregoing terms, amounts

prepaid under this Section 3.3(a) shall be applied as the Borrower may

elect; provided that if the Borrower shall fail to specify with respect

to any voluntary prepayment, such voluntary prepayment shall be applied first

to Base Rate Loans and then to Eurodollar Loans in direct order of Interest

Period maturities.  All prepayments

under this Section 3.3(a) shall be subject to Section 3.12, but

otherwise without premium or penalty, and shall be accompanied by interest on the principal amount prepaid

through the date of prepayment.

 

(b)           Mandatory Prepayments.

 

(i)            (A)          Revolving Committed Amount.  If, at any time, the sum of (1) the

aggregate outstanding principal amount of Revolving Loans, plus (2) the

LOC Obligations, plus (3) the Aggregate Derivative Reserve Amount shall

exceed the Revolving Committed Amount, the Borrower immediately shall prepay

the Revolving Loans, (after all Revolving Loans have been repaid) cash

collateralize the LOC Obligations, and (after all Revolving Loans have been

paid and all LOC Obligations have been fully cash collateralized) cash

collateralize the then-existing Derivative Exposure Reserves in an amount

sufficient to eliminate such excess.

 

(B)            LOC Committed Amount.  If, at any time, the sum of the aggregate principal amount of LOC

Obligations shall exceed the LOC Committed Amount, the Borrower immediately

shall cash collateralize the LOC Obligations in an amount sufficient to

eliminate such excess.

 

(C)            Derivative Exposure Reserves.  If, at any time, the sum of the Aggregate

Derivative Reserve Amount shall exceed the Reserve Limit, the Borrower

immediately shall cash collateralize its Aggregate Derivative Reserve Amount

obligations in an amount sufficient to eliminate such excess.

 

(D)           Borrowing Base Asset Value.  If, at any time, the sum of (1) the

aggregate outstanding principal amount of Revolving Loans, plus (2) the

LOC Obligations, plus (3) the Aggregate Derivative Reserve Amount shall

exceed the Borrowing Base Asset Value, the Borrower immediately shall prepay

the Revolving Loans, (after all Revolving Loans have been repaid) cash

collateralize the LOC Obligations, and (after all Revolving Loans have been

paid and all LOC Obligations have been fully cash collateralized) cash collateralize

the then-existing Derivative Exposure Reserves in an amount sufficient to

eliminate such excess.

 

(ii)           Application of Mandatory Prepayments.  All amounts required to be paid pursuant to

this Section 3.3(b) shall be applied as follows: (A) with respect to

all amounts prepaid pursuant to Section 3.3(b)(i)(A) or (D), to Revolving

Loans and (after all Revolving Loans have been repaid) to a cash collateral

account in respect of LOC Obligations, (B) with respect to all amounts

prepaid pursuant to Section 3.3(b)(i)(B), to a cash collateral account in

respect of LOC Obligations and (C) with respect to all amounts prepaid pursuant

to Section 3.3(b)(i)(C), to a cash collateral account in respect of the

Borrower’s Aggregate Derivative Reserve Amount obligations.  Within

the parameters of the applications set forth above, prepayments shall be

applied first to Base Rate Loans and then to Eurodollar Loans in direct order

of Interest Period maturities.  All

prepayments under this Section 3.3(b) shall be subject to

Section 3.12, but otherwise without premium or penalty, and shall be accompanied by interest on the

principal amount prepaid through the date of prepayment.

 

35

 

3.4          Termination and Reduction of

Revolving Committed Amount.

 

(a)           Voluntary Reductions.  The Borrower may from time to time permanently reduce or

terminate the Revolving Committed Amount in whole or in part (in minimum

aggregate amounts of $1,000,000 or in integral multiples of $500,000 in excess

thereof (or, if less, the full remaining amount of the then applicable

Revolving Committed Amount)) upon five (5) Business Days’ prior written

notice to the Agent; provided, however, no such termination or

reduction shall be made which would cause the sum of the aggregate outstanding

principal amount of Revolving Loans, plus the LOC Obligations, plus

the Aggregate Derivative Reserve Amount to exceed the Revolving Committed

Amount, unless, concurrently with such termination or reduction, the Revolving

Loans are repaid to the extent necessary to eliminate such excess.  The Agent shall promptly notify each

affected Lender of receipt by the Agent of any notice from the Borrower

pursuant to this Section 3.4(a).

 

(b)           Maturity Date. 

Unless terminated sooner pursuant to Section 3.4(a) or

Section 9.2, the Revolving Commitments of the Lenders and the LOC

Commitment of the Issuing Lender shall automatically terminate on the Maturity

Date.

 

3.5          Fees.

 

(a)           Unused Fee. 

In consideration of the Revolving Commitments of the Lenders hereunder,

the Borrower promises to pay to the Agent for the account of each Lender a fee

(the “Unused Fee”) on the Unused Revolving Committed Amount computed at

a per annum rate for each day during the applicable Unused Fee Calculation

Period (hereinafter defined) equal to three tenths of one

percent (0.30%).  The Unused Fee

shall commence to accrue on the Closing Date and shall be due and payable in

arrears on the last Business Day of each March, June, September and

December (and on any date that the Revolving Committed Amount is reduced

and on the Maturity Date) for the immediately preceding quarter (or portion

thereof) (each such quarter or portion thereof for which the Unused Fee is

payable hereunder being herein referred to as an “Unused Fee Calculation

Period”), beginning with the first of such dates to occur after the Closing

Date.

 

(b)           Letter of Credit Fee.  In consideration of the issuance of Letters

of Credit hereunder, the Borrower promises to pay to the Agent for the account

of each Lender a fee (the “Letter of Credit Fee”) on such Lender’s

Commitment Percentage of the average daily maximum amount available to be drawn

under each such Letter of Credit computed at a per annum rate for each day from

the date of issuance to the date of expiration equal to three

percent (3.00%).  The Letter of

Credit Fee will be payable quarterly in arrears on the last Business Day of

each March, June, September and December for the immediately preceding

calendar quarter (or portion thereof) including the date of payment.

 

(c)           Issuing Lender Fees.  In addition to the Letter of Credit Fee

payable pursuant to clause (b) above, the Borrower promises to pay to the

Issuing Lender for its own account without sharing by the other Lenders (i) a

fee equal to the greater of (A) twelve and one half one hundredths of one

percent (0.125%) and (B) $1,500.00 on each Letter of Credit issued by the

Issuing Lender (such fee to be due upon issuance of such Letter of Credit and,

provided, that to the extent the applicable Letter of Credit contains

“evergreen” provisions, the Borrower shall pay such fee for each renewal of

such Letter of Credit) and (ii) customary charges from time to time of the

Issuing Lender with respect to the issuance, amendment, transfer,

administration, cancellation and conversion of, and drawings under, such

Letters of Credit (collectively, the “Issuing Lender Fees”).

 

(d)           Derivative Exposure Usage Fee.  In consideration of the exposure of the

Lenders hereunder created by amounts reserved as a portion of the Derivative

Exposure Reserve, the Borrower promises to pay to the Agent for the account of

each Lender a fee (the “Derivative Exposure Usage Fee”) on the amount of

Availability reserved pursuant to Section 2.3 hereof as a portion of the

Derivative Exposure Reserve for each day during a given Derivative Exposure Fee

Period (as defined below).  Such fee

shall be computed at a per annum rate equal to three percent (3.00%) applied to

the amount of Availability reserved on each day of the applicable Derivative Exposure

Fee Period (with the total fee for a given Derivative Exposure Fee Period

equaling the sum of each such day’s calculation).  The Derivative Exposure Usage Fee shall, to the extent any

Availability is reserved under Section 2.3 as of the Closing Date,

commence to accrue on the Closing Date and shall be due and payable in arrears

on the last Business Day of each March, June, September and 

 

36

 

December (and

on the Maturity Date) for the immediately preceding quarter (or portion

thereof, as applicable), beginning with the first of such dates to occur after

the Closing Date (each such quarter or portion thereof for which the Derivative

Exposure Reserve Fee is payable hereunder being herein referred to as an “Derivative

Exposure Fee Period”).

 

(e)           Exit Fee.  In

addition to all fees and other sums due and payable hereunder or under any

Credit Document and in consideration of the Agent’s administration of the

Credit Facilities pursuant to the terms hereof and of the other Credit

Documents, the Borrower promises to

pay to the Agent for the account of

the Agent a fee (the “Exit Fee”) in the amount of $100,000 immediately upon the

occurrence of the Maturity Date; provided, however, that in the event that, on

or prior to the Maturity Date, Borrower refinances the entire amount of the

Loan upon terms and conditions acceptable to the Agent and the Borrower, no

Exit Fee shall be due.

 

(f)            Other Fees.  Borrower shall pay to the Agent and BAS the

fees required pursuant to the terms of the Fee Letter.

 

3.6          Capital

Adequacy.

 

If any Lender has determined, after the date hereof, that the adoption

or the becoming effective of, or any change in, or any change by any

Governmental Authority, central bank or comparable agency charged with the

interpretation or administration thereof in the interpretation or

administration of, any applicable law, rule or regulation regarding capital

adequacy, or compliance by such Lender with any request or directive regarding

capital adequacy (whether or not having the force of law) of any such

authority, central bank or comparable agency, has or would have the effect of

reducing the rate of return on such Lender’s capital or assets as a consequence

of its commitments or obligations hereunder to a level below that which such

Lender could have achieved but for such adoption, effectiveness, change or

compliance (taking into consideration such Lender’s policies with respect to

capital adequacy), then, upon notice from such Lender to the Borrower, the Borrower

shall be obligated to pay to such Lender such additional amount or amounts as

will compensate such Lender for such reduction (without duplication of any

amount received by Lender by virtue of the definition of the term “Eurodollar

Reserve Requirement”).  Each

determination by any such Lender of amounts owing under this

Section shall, absent manifest error, be conclusive and binding on the

parties hereto.

 

3.7          Limitation on Eurodollar Loans.

 

If on or prior to the first day of any Interest Period for any

Eurodollar Loan:

 

(a)           the Agent determines (which determination shall be

conclusive) that by reason of circumstances affecting the relevant market,

adequate and reasonable means do not exist for ascertaining the Eurodollar Rate

for such Interest Period; or

 

(b)           the Required Lenders determine (which determination shall

be conclusive) and notify the Agent that the Eurodollar Rate will not

adequately and fairly reflect the cost to the Lenders of funding Eurodollar

Loans for such Interest Period;

 

then the Agent shall give the Borrower prompt notice thereof, and so

long as such condition remains in effect, the Lenders shall be under no

obligation to make additional Eurodollar Loans, Continue Eurodollar Loans, or

to Convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the

last day(s) of the then current Interest Period(s) for the outstanding

Eurodollar Loans, either prepay such Eurodollar Loans or Convert such

Eurodollar Loans into Base Rate Loans in accordance with the terms of this Credit

Agreement.

 

3.8          Illegality.

 

Notwithstanding any other provision of this Credit Agreement, in the

event that it becomes unlawful for any Lender or its Applicable Lending Office

to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall

promptly notify the Borrower thereof and such Lender’s obligation to make or

Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans

shall be suspended until such time as such Lender may again make, maintain, and

fund Eurodollar Loans (in which case the provisions of Section 3.10 shall

be applicable).

 

37

 

3.9          Requirements

of Law.

 

If, after the date hereof, the adoption of any applicable law, rule, or

regulation, or any change in any applicable law, rule, or regulation, or any

change in the interpretation or administration thereof by any Governmental

Authority, central bank, or comparable agency charged with the interpretation

or administration thereof, or compliance by any Lender (or its Applicable

Lending Office) with any request or directive (whether or not having the force

of law) of any such Governmental Authority, central bank, or comparable agency:

 

(i)         shall subject such Lender (or its

Applicable Lending Office) to any tax, duty, or other charge with respect to

any Eurodollar Loans, its Notes, or its obligation to make Eurodollar Loans, or

change the basis of taxation of any amounts payable to such Lender (or its

Applicable Lending Office) under this Credit Agreement or its Notes in respect

of any Eurodollar Loans (other than taxes imposed on the overall net income of

such Lender by the jurisdiction in which such Lender has its principal office

or such Applicable Lending Office);

 

(ii)        shall impose, modify, or deem applicable

any reserve, special deposit, assessment, or similar requirement (other than

the Eurodollar Reserve Requirement utilized in the determination of the

Adjusted Eurodollar Rate) relating to any extensions of credit or other assets

of, or any deposits with or other liabilities or commitments of, such Lender

(or its Applicable Lending Office), including the Commitment of such Lender

hereunder; or

 

(iii)       shall impose on such Lender (or its

Applicable Lending Office) or the London interbank market any other condition

affecting this Credit Agreement or its Notes or any of such extensions of

credit or liabilities or commitments;

 

and the result of any of the foregoing is to increase

the cost to such Lender (or its Applicable Lending Office) of making,

Converting into, Continuing, or maintaining any Eurodollar Loans or to reduce

any sum received or receivable by such Lender (or its Applicable Lending

Office) under this Credit Agreement or its Notes with respect to any Eurodollar

Loans, then the Borrower shall pay to such Lender on demand such amount or

amounts as will compensate such Lender for such increased cost or

reduction.  If any 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), suspend the obligation of

such Lender to make or Continue Eurodollar Loans, or to Convert Base Rate Loans

into Eurodollar Loans, until the event or condition giving rise to such request

ceases to be in effect (in which case the provisions of Section 3.10 shall

be applicable); provided that such suspension shall not affect the right

of such Lender to receive the compensation so requested.  Each Lender shall promptly notify the

Borrower and the Agent of any event of which it has knowledge, occurring after

the date hereof, which will entitle such Lender to compensation pursuant to

this Section 3.9 and will designate a different Applicable Lending Office

if such designation will avoid the need for, or reduce the amount of, such

compensation and will not, in the judgment of such Lender, be otherwise

disadvantageous to it.  Any Lender

claiming compensation under this Section 3.9 shall furnish to the Borrower

and the Agent a statement setting forth the additional amount or amounts to be

paid to it hereunder which shall be conclusive in the absence of manifest

error.  In determining such amount, such

Lender may use any reasonable averaging and attribution methods.

 

3.10        Treatment of Affected Loans.

 

If the obligation of any Lender to make any Eurodollar Loan or to Continue,

or to Convert Base Rate Loans 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 Converted into 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 earlier date 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 the circumstances specified in Section 3.7, 3.8 or 3.9

hereof that gave rise to such Conversion no longer exist:

 

(a)            to the extent that such Lender’s

Eurodollar Loans have been so Converted, all payments and prepayments of

principal that would otherwise be applied to such Lender’s Eurodollar Loans

shall be applied instead to its Base Rate Loans; and

 

38

 

(b)           all Loans that would otherwise be made or Continued by

such Lender as Eurodollar Loans shall be made or Continued instead as Base Rate

Loans, and all Base Rate Loans of such Lender that would otherwise be Converted

into Eurodollar Loans shall remain as Base Rate Loans.

 

If

such Lender gives notice to the Borrower (with a copy to the Agent) that the

circumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave rise

to the Conversion of such Lender’s Eurodollar Loans pursuant to this

Section 3.10 no longer exist (which such Lender agrees to do promptly upon

such circumstances ceasing to exist) at a time when Eurodollar Loans made by

other Lenders are outstanding, such Lender’s Base Rate Loans shall be

automatically Converted, on the first day(s) of the next succeeding Interest

Period(s) for such outstanding Eurodollar Loans, to the extent necessary so

that, after giving effect thereto, all Loans held by the Lenders holding

Eurodollar Loans and by such Lender are held pro rata (as to principal amounts,

interest rate basis, and Interest Periods) in accordance with their respective

Commitments.

 

3.11        Taxes.

 

(a)            Any and all payments by any Credit Party to or for the

account of any Lender or the Agent hereunder or under any other Credit Document

shall be made free and clear of and without deduction for any and all present

or future taxes, duties, levies, imposts, deductions, charges or withholdings,

and all liabilities with respect thereto, excluding, in the case of each

Lender and the Agent, taxes imposed on its income, and franchise taxes imposed

on it, by the jurisdiction under the laws of which such Lender (or its

Applicable Lending Office) or the Agent (as the case may be) is organized or

any political subdivision thereof (all such non-excluded taxes, duties, levies,

imposts, deductions, charges, withholdings, and liabilities being hereinafter

referred to as “Taxes”).  If any

Credit Party shall be required by law to deduct any Taxes from or in respect of

any sum payable under this Credit Agreement or any other Credit Document to any

Lender or the Agent, (i) the sum payable shall be increased as necessary

so that after making all required deductions (including deductions applicable

to additional sums payable under this Section 3.11) such Lender or the

Agent receives an amount equal to the sum it would have received had no such

deductions been made, (ii) such Credit Party shall make such deductions,

(iii) such Credit Party shall pay the full amount deducted to the relevant

taxation authority or other authority in accordance with applicable law, and

(iv) such Credit Party shall furnish to the Agent, at its address referred

to in Section 11.1, the original or a certified copy of a receipt

evidencing payment thereof.

 

(b)           In addition, the Borrower agrees to pay any and all

present or future stamp or documentary taxes and any other excise or property

taxes or charges or similar levies which arise from any payment made under this

Credit Agreement or any other Credit Document or from the execution or delivery

of, or otherwise with respect to, this Credit Agreement or any other Credit

Document (hereinafter referred to as “Other Taxes”).

 

(c)            The

Borrower agrees to indemnify each Lender and the Agent for the full amount of

Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes

imposed or asserted by any jurisdiction on amounts payable under this

Section 3.11) paid by such Lender or the Agent (as the case may be) and

any liability (including penalties, interest, and expenses) arising therefrom

or with respect thereto.

 

(d)           Each Lender that is not a United

States person under Section 7701(a)(30) of the Code, on or prior to the

date of its execution and delivery of this Credit Agreement in the case of each

Lender listed on the signature pages hereof and on or prior to the date on

which it becomes a Lender in the case of each other Lender (such Lender

constituting a “Foreign Lender”), and from time to time thereafter if

requested in writing by the Borrower or the Agent (but only so long as such

Lender remains lawfully able to do so), shall provide the Borrower and the

Agent with (i) Internal Revenue Service Form W-8 BEN or W-8 ECI, as

appropriate, or any successor form prescribed by the Internal Revenue Service,

certifying that such Lender is entitled to benefits under an income tax treaty

to which the United States is a party which reduces to zero the rate of

withholding tax on payments of interest or certifying that the income

receivable pursuant to this Credit Agreement is effectively connected with the

conduct of a trade or business in the United States, (ii) Internal Revenue

Service Form W-8 or W-9, as appropriate, or any successor form prescribed

by the Internal Revenue Service, and/or (iii) any other form or

certificate required by any taxing authority (including any certificate

required by Sections 871(h) and 881(c) of the Internal Revenue Code),

certifying that such Lender is entitled to an exemption from tax on payments

pursuant to this Credit Agreement or any of the other Credit Documents.

 

39

 

(e)            For any period with respect to which

a Lender has failed to provide the Borrower and 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 occurring subsequent 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 from withholding tax, become subject to Taxes

because of its failure to deliver a form required hereunder, the Borrower shall

take such steps as such Lender shall reasonably request to assist such Lender

to recover such Taxes.

 

(f)            If any Credit Party is required to pay additional amounts to or for the

account of any Lender pursuant to this Section 3.11, then such Lender will

agree to use reasonable efforts to change the jurisdiction of its Applicable

Lending Office so as to eliminate or reduce any such additional payment which

may thereafter accrue if such change, in the judgment of such Lender, is not

otherwise disadvantageous to such Lender.

 

(g)           Without prejudice to the survival of

any other agreement of the Credit Parties hereunder, the agreements and

obligations of the Credit Parties contained in this Section 3.11 shall survive the repayment of the Loans, LOC

Obligations and other obligations under the Credit Documents and the

termination of the Commitments hereunder.

 

3.12        Compensation.

 

Upon

the request of any Lender, the Borrower shall pay to such Lender such amount or

amounts as shall be sufficient (in the reasonable opinion of such Lender) to

compensate it for any loss, cost, or expense (excluding loss of anticipated

profits) incurred by it as a result of:

 

(a)            any

payment, prepayment, or Conversion of a Eurodollar Loan for any reason

(including, without limitation, (i) in connection with any assignment by

BOA pursuant to Section 11.3(b) as part of the primary syndication of the

Loans during the 180-day period immediately following the Closing Date and (ii) the

acceleration of the Loans pursuant to Section 9.2) on a date other than

the last day of the Interest Period for such Loan; or

 

(b)           any

failure by the Borrower for any reason (including, without limitation, the

failure of any condition precedent specified in Section 5 to be satisfied)

to borrow, Convert, Continue, or prepay a Eurodollar Loan on the date for such

borrowing, Conversion, Continuation, or prepayment specified in the relevant

notice of borrowing, prepayment, Continuation, or Conversion under this Credit

Agreement.

 

With

respect to Eurodollar Loans, such indemnification may include an amount equal

to the excess, if any, of (a) the amount of interest which would have

accrued on the amount so prepaid, or not so borrowed, Converted or Continued,

for the period from the date of such prepayment or of such failure to borrow,

Convert or Continue to the last day of the applicable Interest Period (or, in

the case of a failure to borrow, Convert or Continue, the Interest Period that

would have commenced on the date of such failure) in each case at the

applicable rate of interest for such Eurodollar Loans provided for herein over

(b) the amount of interest (as reasonably determined by such Lender) which

would have accrued to such Lender on such amount by placing such amount on

deposit for a comparable period with leading banks in the interbank Eurodollar

market.  The covenants of the Borrower

set forth in this Section 3.12 shall survive the repayment of the Loans,

LOC Obligations and other obligations under the Credit Documents and the

termination of the Commitments hereunder.

 

3.13        Pro

Rata Treatment.

 

Except

to the extent otherwise provided herein:

 

(a)            Loans.  Each Loan, each payment or (subject to the

terms of Section 3.3) prepayment of principal of any Loan or reimbursement

obligations arising from drawings under Letters of Credit, each payment of

interest on the Loans or reimbursement obligations arising from drawings under

Letters of Credit, 

 

40

 

each payment of the Letter of Credit Fee, each reduction

of the Revolving Committed Amount and each conversion or extension of any Loan,

shall be allocated pro rata among the Lenders in accordance with the respective

principal amounts of their outstanding Loans of the applicable type and

Participation Interests in Loans of the applicable type and Letters of Credit.

 

(b)           Advances.  No Lender shall be responsible for the

failure or delay by any other Lender in its obligation to make its ratable

share of a borrowing hereunder; provided, however, that the

failure of any Lender to fulfill its obligations hereunder shall not relieve

any other Lender of its obligations hereunder. 

Unless the Agent shall have been notified by any Lender prior to the

date of any requested borrowing that such Lender does not intend to make

available to the Agent its ratable share of such borrowing to be made on such

date, the Agent may assume that such Lender has made such amount available to

the Agent on the date of such borrowing, and the Agent in reliance upon such

assumption, may (in its sole discretion but without any obligation to do so)

make available to the Borrower a corresponding amount.  If such corresponding amount is not in fact

made available to the Agent, the Agent shall be able to recover such

corresponding amount from such Lender. 

If such Lender does not pay such corresponding amount forthwith upon the

Agent’s demand therefor, the Agent will promptly notify the Borrower, and the

Borrower shall immediately pay such corresponding amount to the Agent.  The Agent shall also be entitled to recover

from the Lender or the Borrower, as the case may be, interest on such

corresponding amount in respect of each day from the date such corresponding

amount was made available by the Agent to the Borrower to the date such

corresponding amount is recovered by the Agent at a per annum rate equal to

(i) from the Borrower at the applicable rate for the applicable borrowing

pursuant to the Notice of Borrowing and (ii) from a Lender at the Federal

Funds Rate.

 

3.14        Sharing

of Payments.

 

The

Lenders agree among themselves that, in the event that any Lender shall obtain

payment in respect of any Loan, LOC Obligations or any other obligation owing

to such Lender under this Credit Agreement through the exercise of a right of

setoff, banker’s lien or counterclaim, or pursuant to a secured claim under

Section 506 of Title 11 of the United States Code or other security

or interest arising from, or in lieu of, such secured claim, received by such

Lender under any applicable bankruptcy, insolvency or other similar law or

otherwise, or by any other means, in excess of its pro rata share of such

payment as provided for in this Credit Agreement, such Lender shall promptly

purchase from the other Lenders a Participation Interest in such Loans, LOC

Obligations and other obligations in such amounts, and make such other

adjustments from time to time, as shall be equitable to the end that all

Lenders share such payment in accordance with their respective ratable shares

as provided for in this Credit Agreement. 

The Lenders further agree among themselves that if payment to a Lender

obtained by such Lender through the exercise of a right of setoff, banker’s

lien, counterclaim or other event as aforesaid shall be rescinded or must

otherwise be restored, each Lender which shall have shared the benefit of such

payment shall, by repurchase of a Participation Interest theretofore sold,

return its share of that benefit (together with its share of any accrued

interest payable with respect thereto) to each Lender whose payment shall have

been rescinded or otherwise restored. 

The Borrower agrees that any Lender so purchasing such a Participation

Interest may, to the fullest extent permitted by law, exercise all rights of

payment, including setoff, banker’s lien or counterclaim, with respect to such

Participation Interest as fully as if such Lender were a holder of such Loan,

LOC Obligations or other obligation in the amount of such Participation

Interest.  Except as otherwise expressly

provided in this Credit Agreement, if any Lender shall fail to remit to the

Agent or any other Lender an amount payable by such Lender to the Agent or such

other Lender pursuant to this Credit Agreement on the date when such amount is

due, such payments shall be made together with interest thereon for each date

from the date such amount is due until the date such amount is paid to the

Agent or such other Lender at a rate per annum equal to the Federal Funds

Rate.  If under any applicable

bankruptcy, insolvency or other similar law, any Lender receives a secured

claim in lieu of a setoff to which this Section 3.14 applies, such Lender

shall, to the extent practicable, exercise its rights in respect of such

secured claim in a manner consistent with the rights of the Lenders under this

Section 3.14 to share in the benefits of any recovery on such secured

claim.

 

3.15        Payments, Computations, Etc.

 

(a)           Generally.  Except as otherwise specifically provided

herein, all payments hereunder shall be made to the Agent in Dollars in immediately

available funds, without setoff, deduction, counterclaim or withholding of any

kind, at the Agent’s office specified in Schedule 2.1(a) not later

than 2:00 P.M.  (Charlotte, North

Carolina time) on the date when due. 

Payments received after such time shall be deemed to have been 

 

41

 

received

on the next succeeding Business Day. 

The Agent may (but shall not be obligated to) debit the amount of any

such payment which is not made by such time to any ordinary deposit account of

the Borrower or any other Credit Party maintained

with the Agent (with notice to the Borrower or such other Credit Party).  The

Borrower shall, at the time it makes any payment under this Credit Agreement,

specify to the Agent the Loans, LOC Obligations, Fees, interest or other

amounts payable by the Borrower hereunder to which such payment is to be

applied (and in the event that it fails so to specify, or if such application

would be inconsistent with the terms hereof, the Agent shall distribute such

payment to the Lenders in such manner as the Agent may determine to be

appropriate in respect of obligations owing by the Borrower hereunder, subject

to the terms of Section 3.13(a)). 

The Agent will distribute such payments to such Lenders, if any such

payment is received prior to 2:00 P.M. 

(Charlotte, North Carolina time) on a Business Day in like funds as

received prior to the end of such Business Day and otherwise the Agent will distribute

such payment to such Lenders on the next succeeding Business Day.  Whenever any payment hereunder shall be

stated to be due on a day which is not a Business Day, the due date thereof

shall be extended to the next succeeding Business Day (subject to accrual of

interest and Fees for the period of such extension), except that in the case of

Eurodollar Loans, if the extension would cause the payment to be made in the

next following calendar month, then such payment shall instead be made on the

next preceding Business Day.  Except as

expressly provided otherwise herein, all computations of interest and fees

shall be made on the basis of actual number of days elapsed over a year of 360

days.  Interest shall accrue from and

include the date of borrowing, but exclude the date of payment.

 

(b)           Allocation of

Payments After Event of Default. 

Notwithstanding any other provisions of this Credit Agreement to the

contrary, 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 the Credit Party Obligations or any other amounts outstanding under any of

the Credit Documents shall be paid over or delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket

costs and expenses (including without limitation reasonable attorneys’ fees) of

the Agent in connection with enforcing the rights of the Lenders under the

Credit Documents;

 

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

 

THIRD, to the payment of all of the Credit Party

Obligations consisting of accrued fees and interest;

 

FOURTH, to the payment of the outstanding principal

amount of the Credit Party Obligations (including the payment or cash

collateralization of the outstanding LOC Obligations and Derivative Exposure

Reserves);

 

FIFTH, to the payment of all reasonable out-of-pocket

costs and expenses (including without limitation, reasonable attorneys’ fees)

of each of the Lenders in connection with enforcing its rights under the Credit

Documents or otherwise with respect to the Credit Party Obligations owing to

such Lender;

 

SIXTH, to all other Credit Party Obligations and other

obligations which shall have become due and payable under the Credit Documents

or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH”

above; and

 

SEVENTH, to the payment of the surplus, if any, to

whomever may be lawfully entitled to receive such surplus.

 

In carrying out the

foregoing, (i) amounts received shall be applied in the numerical order

provided until exhausted prior to application to the next succeeding category;

(ii) each of the Lenders shall receive an amount equal to its pro rata

share (based on the proportion that the then outstanding Loans and LOC

Obligations held by such Lender bears to the aggregate then outstanding Loans

and LOC Obligations and Derivative Exposure Reserves) of amounts available to

be applied pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH”

above; and (iii) to the extent that any amounts available for distribution

pursuant to clause “FIFTH” above are attributable to the issued but

undrawn amount of 

 

42

 

outstanding Letters of

Credit, such amounts shall be held by the Agent in a cash collateral account

and applied (A) first, to reimburse the Issuing Lender from time to time for

any drawings under such Letters of Credit and (B) then, following the

expiration of all Letters of Credit, to all other obligations of the types

described in clauses ”FIFTH” and “SIXTH” above in the manner provided in

this Section 3.15(b).

 

3.16        Evidence

of Debt.

 

(a)           Each Lender shall

maintain an account or accounts evidencing each Loan made by such Lender to the

Borrower from time to time, including the amounts of principal and interest

payable and paid to such Lender from time to time under this Credit

Agreement.  Each Lender will make

reasonable efforts to maintain the accuracy of its account or accounts and to

promptly update its account or accounts from time to time, as necessary.

 

(b)           The Agent shall

maintain the Register pursuant to Section 11.3(c), and a subaccount for

each Lender, in which Register and subaccounts (taken together) shall be

recorded (i) the amount, type and Interest Period of each such Loan

hereunder, (ii) the amount of any principal or interest due and payable or

to become due and payable to each Lender hereunder and (iii) the amount of

any sum received by the Agent hereunder from or for the account of any Credit

Party and each Lender’s share thereof. 

The Agent will make reasonable efforts to maintain the accuracy of the

subaccounts referred to in the preceding sentence and to promptly update such

subaccounts from time to time, as necessary.

 

(c)           The entries made in

the accounts, Register and subaccounts maintained pursuant to clause (b)

of this Section 3.16 (and, if consistent with the entries of the Agent,

clause (a)) shall be prima facie evidence of the existence and amounts of

the obligations of the Credit Parties therein

recorded; provided, however, that the failure of any Lender or

the Agent to maintain any such account, such Register or such subaccount, as

applicable, or any error therein, shall not in any manner affect the obligation

of the Credit Parties to repay the

Credit Party Obligations owing to such Lender.

 

3.17        Usury.

 

In no event shall the amount of

interest due or payable on the Loans or other obligations evidenced hereby or

under the other Credit Documents exceed the maximum rate of interest allowed by

Applicable Law and, if any such payment is paid by the Borrower or received by

any Lender Party, then such excess sum shall be credited as a payment of

principal, unless the Borrower shall notify the respective Lender Party in

writing that the Borrower elects to have such excess sum returned to it

forthwith.  It is the express intent of

the parties hereto that the Borrower not pay and the Lender Parties not

receive, directly or indirectly, in any manner whatsoever, interest in excess

of that which may be lawfully paid by the Borrower under Applicable Law.

 

3.18        Agreement Regarding

Interest and Charges.

 

The parties hereto hereby agree

and stipulate that the only charge imposed upon the Borrower for the use of

money in connection with this Credit Agreement is and shall be the interest

specifically described in Section 2.1(d). 

Notwithstanding the foregoing, the parties hereto further agree and

stipulate that all agency fees, syndication fees, facility fees, letter of

credit fees, underwriting fees, default charges, late charges, funding or

“breakage” charges, increased cost charges, attorneys’ fees and reimbursement for

costs and expenses paid by the Agent or any Lender Party to third parties or

for damages incurred by the Agent or any Lender Party, are charges made to

compensate the Agent or any such Lender Party for underwriting or

administrative services and costs or losses performed or incurred, and to be

performed or incurred, by the Agent and the Lender Parties in connection with

this Credit Agreement and shall under no circumstances be deemed to be charges

for the use of money.  Except as

expressly agreed otherwise in writing, all charges other than charges for the

use of money shall be fully earned and nonrefundable when due.

 

3.19        Statements of Account.

 

The Agent will account to the

Borrower monthly with a statement of Loans, Letter of Credit, accrued interest

and Fees, charges and payments made pursuant to this Credit Agreement and the

other Credit Documents, 

 

43

 

and such account rendered by the Agent shall be

prima facie evidence of the amounts and other matters set forth therein.  The failure of the Agent to deliver such a

statement of accounts shall not relieve or discharge the Borrower from any of

its obligations hereunder.

 

3.20        Defaulting Lenders.

 

(a)           Generally. 

If for any reason any Lender Party at any time becomes a Defaulting

Lender, then, in addition to the rights and remedies that may be available to

the Agent or the Borrower under this Credit Agreement or Applicable Law, such

Defaulting Lender’s right to participate in the administration of the Loans,

this Credit Agreement and the other Credit Documents, including without

limitation, any right to vote in respect of, to consent to or to direct any

action or inaction of the Agent or to be taken into account in the calculation

of the Required Lenders, shall be suspended during the pendency of such failure

or refusal.  Upon a Lender Party

becoming a Defaulting Lender, the Agent shall give prompt notice to each other

Lender thereof.  If a Lender Party is a

Defaulting Lender because it has failed to make timely payment to the Agent of

any amount required to be paid to the Agent hereunder (without giving effect to

any notice or cure periods), in addition to other rights and remedies which the

Agent or the Borrower may have under the immediately preceding provisions or

otherwise, the Agent shall be entitled (i) to collect interest from such

Defaulting Lender on such delinquent payment for the period from the date on

which the payment was due until the date on which the payment is made at the

Federal Funds Rate, (ii) to withhold or setoff and to apply in satisfaction of

the defaulted payment and any related interest, any amounts otherwise payable

to such Defaulting Lender under this Credit Agreement or any other Credit

Document and (iii) to bring an action or suit against such Defaulting Lender in

a court of competent jurisdiction to recover the defaulted amount and any

related interest.  Any amounts received

by the Agent in respect of a Defaulting Lender’s Loans shall not be paid to

such Defaulting Lender and shall be held uninvested by the Agent and either

applied against the purchase price of such Loans under the following

subsection (b) or paid to such Defaulting Lender upon the Defaulting

Lender’s curing of its default.

 

(b)           Purchase of Defaulting Lender’s Commitment.  Any Lender Party who is not a Defaulting

Lender shall have the right, but not the obligation, in its sole discretion, to

acquire all of a Defaulting Lender’s Revolving Commitment.  Any Lender Party desiring to exercise such

right shall give written notice thereof to the Agent no sooner than

two (2) Business Days and not later than ten (10) Business Days after

such Defaulting Lender became a Defaulting Lender.  If more than one Lender Party exercises such right, each such

Lender Party shall have the right to acquire an amount of such Defaulting

Lender’s Revolving Commitment in proportion to the Revolving Commitments of the

other Lender Parties exercising such right. 

If after such 10th Business Day, the Lender Parties have not elected to

purchase all of the Revolving Commitment of such Defaulting Lender, then any

Eligible Assignee may purchase such Revolving Commitment.  None of the Agent, the Sole Lead Arranger or

any of the Lender Parties shall have any obligation whatsoever to initiate any

such replacement or to assist in finding an Eligible Assignee.  Upon any such purchase, the Defaulting

Lender’s interest in the Loans and its rights hereunder (but not its liability

in respect thereof or under the Credit Documents or this Credit Agreement to

the extent the same relate to the period prior to the effective date of the

purchase) shall terminate on the date of purchase, and the Defaulting Lender

shall promptly execute all documents reasonably requested to surrender and

transfer such interest to the purchaser thereof, including an appropriate

Assignment 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 Revolving

Commitment of a Defaulting Lender shall be equal to the amount of the principal

balance of the Loans outstanding and owed by the Borrower to the Defaulting

Lender.  Prior to payment of such

purchase price to a Defaulting Lender, the Agent shall apply against such

purchase price any amounts retained by the Agent pursuant to the last sentence

of the immediately preceding subsection (a).  The Defaulting Lender shall be entitled to receive amounts owed

to it by the Borrower under the Credit Documents which accrued prior to the

date of the default by the Defaulting Lender, to the extent the same are

received by the Agent from or on behalf of the Borrower.  There shall be no recourse against any

Lender Party or the Agent for the payment of such sums except to the extent of

the receipt of payments from any other party or in respect of the Loans.  If, prior to a Lender Party’s acquisition of

a Defaulting Lender’s Revolving Commitment pursuant to this subsection, such

Defaulting Lender shall cure the event or condition which caused it to become a

Defaulting Lender and shall have paid all amounts owing by it hereunder as a

result thereof, then such Lender Party shall no longer have the right to

acquire such Defaulting Lender’s Revolving Commitment.

 

44

 

3.21        Assumptions

Concerning Funding of Eurodollar Loans.

 

Calculation

of all amounts payable to a Lender Party under this Article III shall be

made as though such Lender Party had actually funded Eurodollar Loans through

the purchase of deposits in the relevant market bearing interest at the rate

applicable to such Eurodollar Loans in an amount equal to the amount of the

Eurodollar Loans and having a maturity comparable to the relevant Interest

Period; provided, however, that each Lender Party may fund each of its Eurodollar

Loans in any manner it sees fit and the foregoing assumption shall be used only

for calculation of amounts payable under this Article III.

 

3.22        Intentionally Omitted.

 

3.23        Intentionally Omitted.

 

3.24        Approval or Release of Shoneys Assets.

 

Within thirty (30) days

following a written request of the Borrower (a “Determination Request”),

the Agent and Required Lenders shall deliver to the Borrower a written notice

(a “Determination Decision”) determining whether any Shoneys Assets, as

identified by the Borrower in such Determination Request, are assets

which may, to the extent meeting all other requirements set forth herein,

contribute to the calculation of the Borrowing Base Asset Value.  The

decision of the Agent and Required Lenders set forth in the Determination

Decision shall be made in the sole discretion of the Agent and Required

Lenders.  To the extent any of the

assets referenced in a Determination Request are not approved pursuant to the

applicable Determination Decision, the Agent and Lenders hereby agree to permit

the transfer or disposition of such asset by the General SPE and to execute

such documentation as is reasonably requested by the Borrower to permit such

transfer or disposition.  The Borrower

shall not make more than two (2) Determination Requests during the term hereof.

 

ARTICLE

IV

 

GUARANTY

 

4.1          The

Guaranty.

 

Each of the Guarantors hereby

jointly and severally guarantees to each Lender, each Affiliate of a Lender

that enters into a Hedging Agreement, and the Agent as hereinafter provided, as

primary obligor and not as surety, the prompt payment of the Credit Party

Obligations in full when due (whether at stated maturity, as a mandatory

prepayment, by acceleration, as a mandatory cash collateralization or

otherwise) strictly in accordance with the terms thereof.  The Guarantors hereby further agree 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 a mandatory

cash collateralization or otherwise), the Guarantors will, jointly and

severally, promptly pay the same, without any demand or notice whatsoever, and

that in the case of any extension of time of payment or renewal of any of the

Credit Party Obligations, the same will be promptly paid in full when due

(whether at extended maturity, as a mandatory prepayment, by acceleration, as a

mandatory cash collateralization or otherwise) in accordance with the terms of

such extension or renewal.

 

Notwithstanding any provision to

the contrary contained herein or in any other of the Credit Documents or

Hedging Agreements, the obligations of each Guarantor under this Credit Agreement and the other Credit

Documents shall be limited to an aggregate amount equal to the largest

amount that would not render such obligations subject to avoidance under

Section 548 of the Bankruptcy Code or any comparable provisions of any

applicable state law.

 

4.2          Obligations Unconditional.

 

The obligations of the

Guarantors under Section 4.1 are joint and several, absolute and

unconditional, irrespective of the value, genuineness, validity, regularity or

enforceability of any of the Credit Documents or Hedging Agreements, or any

other agreement or instrument referred to therein, or any substitution,

release, impairment or exchange of any other guarantee of or security for any

of the Credit Party Obligations, and, to the fullest extent permitted by

applicable law, irrespective of any other circumstance whatsoever which might

otherwise constitute a legal or 

 

45

 

equitable discharge or defense of a surety or

guarantor, it being the intent of this Section 4.2 that the obligations of

the Guarantors hereunder shall be absolute and unconditional under any and all

circumstances.  Each Guarantor agrees

that such Guarantor shall have no right of subrogation, indemnity,

reimbursement or contribution against the Borrower or any other Guarantor for

amounts paid under this Section 4 until such time as the Credit Party

Obligations have been Fully Satisfied. 

Without limiting the generality of the foregoing, it is agreed that, to

the fullest extent permitted by law, the occurrence of any one or more of the

following shall not alter or impair the liability of any Guarantor hereunder

which shall remain absolute and unconditional as described above:

 

(a)           at any time or from

time to time, without notice to any Guarantor, the time for any performance of

or compliance with any of the Credit Party Obligations shall be extended, or

such performance or compliance shall be waived;

 

(b)           any of 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 any Affiliate of a

Lender, or any other agreement or instrument referred to in the Credit

Documents or such Hedging Agreements shall be done or omitted;

 

(c)           the maturity of any

of the Credit Party Obligations shall be accelerated, or any of the Credit

Party Obligations shall be modified, supplemented or amended in any respect, or

any right under any of the Credit Documents, any Hedging Agreement between any

Consolidated Party and any Lender, or any Affiliate of a Lender, or any other

agreement or instrument referred to in the Credit Documents or such Hedging

Agreements shall be waived or any other guarantee of any of the Credit Party

Obligations or any security therefor shall be released, impaired or exchanged

in whole or in part or otherwise dealt with;

 

(d)           any Lien granted to,

or in favor of, the Agent or any Lender or Lenders as security for any of the

Credit Party Obligations shall fail to attach or be perfected; or

 

(e)           any of the Credit

Party Obligations shall be determined to be void or voidable (including,

without limitation, for the benefit of any creditor of any Guarantor) or shall

be subordinated to the claims of any Person (including, without limitation, any

creditor of any Guarantor).

 

With

respect to its obligations hereunder, each Guarantor hereby expressly waives

diligence, presentment, demand of payment, protest and all notices whatsoever,

and any requirement that the Agent or any Lender exhaust any right, power or

remedy or proceed against any Person under any of the Credit Documents, any

Hedging Agreement between any Consolidated Party and any Lender, or any

Affiliate of a Lender, or any other agreement or instrument referred to in the

Credit Documents or such Hedging Agreements, or against any other Person under

any other guarantee of, or security for, any of the Credit Party Obligations.

 

4.3          Reinstatement.

 

The

obligations of the Guarantors under this Section 4 shall be automatically

reinstated if and to the extent that for any reason any payment by or on behalf

of any Person in respect of the Credit Party Obligations is rescinded or must

be otherwise restored by any holder of any of the Credit Party Obligations,

whether as a result of any proceedings in bankruptcy or reorganization or

otherwise, and each Guarantor agrees that it will indemnify the Agent and each

Lender on demand for all reasonable costs and expenses (including, without

limitation, fees and expenses of counsel) incurred by the Agent or such Lender

in connection with such rescission or restoration, including any such costs and

expenses incurred in defending against any claim alleging that such payment

constituted a preference, fraudulent transfer or similar payment under any

bankruptcy, insolvency or similar law.

 

4.4          Certain Additional Waivers.

 

Without

limiting the generality of the provisions of this Section 4, each

Guarantor hereby specifically waives the benefits of N.C.  Gen. 

Stat.  §§ 26-7 through 26-9,

inclusive, to the extent applicable. 

Each Guarantor further agrees that such Guarantor shall have no right of

recourse to security for the Credit Party Obligations, except through the

exercise of rights of subrogation pursuant to Section 4.2 and through the

exercise of rights of contribution pursuant to Section 4.6.

 

46

 

4.5          Remedies.

 

The

Guarantors agree 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 Credit Party Obligations may be declared to be forthwith due and payable as

provided in Section 9.2 (and shall be deemed to have become automatically

due and payable in the circumstances provided in said Section 9.2) for

purposes of Section 4.1 notwithstanding any stay, injunction or other

prohibition preventing such declaration (or preventing the Credit Party

Obligations from becoming automatically due and payable) as against any other

Person and that, in the event of such declaration (or the Credit Party

Obligations being deemed to have become automatically due and payable), the

Credit Party Obligations (whether or not due and payable by any other Person)

shall forthwith become due and payable by the Guarantors for purposes of

Section 4.1.

 

4.6          Rights of Contribution.

 

The

Guarantors hereby agree as among themselves that, if any Guarantor shall make

an Excess Payment (as defined below), such Guarantor shall have a right of

contribution from each other Guarantor in an amount equal to such other

Guarantor’s Contribution Share (as defined below) of such Excess Payment.  The payment obligations of any Guarantor

under this Section 4.6 shall be subordinate and subject in right of

payment to the Credit Party Obligations until such time as the Credit Party

Obligations have been Fully Satisfied, and none of the Guarantors shall

exercise any right or remedy under this Section 4.6 against any other Guarantor

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 in

excess of its Pro Rata Share of any Guaranteed Obligations; (b) “Pro

Rata Share” shall mean, for any Guarantor in respect of any payment of

Credit Party Obligations, the ratio (expressed as a percentage) as of the date

of such payment of Guaranteed Obligations of (i) the amount by which the

aggregate present fair salable value of all of its assets and properties

exceeds the amount of all debts and liabilities of such Guarantor (including

contingent, subordinated, unmatured, and unliquidated liabilities, but

excluding the obligations of such Guarantor hereunder) to (ii) the amount

by which the aggregate present fair salable value of all assets and other

properties of all of the Credit Parties exceeds the amount of all of the debts and liabilities (including

contingent, subordinated, unmatured, and unliquidated liabilities, but

excluding the Credit Party Obligations) of the Credit Parties; provided, however, that, for

purposes of calculating the Pro Rata Shares of the Guarantors in respect of any

payment of Credit Party Obligations, any Guarantor that became a Guarantor

subsequent to the date of any such payment shall be deemed to have been a

Guarantor on the date of such payment and the financial information for such

Guarantor as of the date such Guarantor became a Guarantor shall be utilized

for such Guarantor in connection with such payment; and (c) “Contribution

Share” shall mean, for any Guarantor in respect of any Excess Payment made

by any other Guarantor, the ratio (expressed as a percentage) as of the date of

such Excess Payment of (i) the amount by which the aggregate present fair

salable value of all of its assets and properties exceeds the amount of all

debts and liabilities of such Guarantor (including contingent, subordinated,

unmatured, and unliquidated liabilities, but excluding the obligations of such

Guarantor hereunder) to (ii) the amount by which the aggregate present

fair salable value of all assets and other properties of the Credit

Parties other than the maker of such Excess

Payment exceeds the amount of all of the debts and liabilities (including

contingent, subordinated, unmatured, and unliquidated liabilities, but

excluding the Credit Party Obligations)

of the Credit Parties other than the

maker of such Excess Payment; provided, however, that, for

purposes of calculating the Contribution Shares of the Guarantors in respect of

any Excess Payment, any Guarantor that became a Guarantor subsequent to the

date of any such Excess Payment shall be deemed to have been a Guarantor on the

date of such Excess Payment and the financial information for such Guarantor as

of the date such Guarantor became a Guarantor shall be utilized for such

Guarantor in connection with such Excess Payment.  This Section 4.6 shall not be deemed to affect any right of

subrogation, indemnity, reimbursement or contribution that any Guarantor may

have under applicable law against the Borrower in respect of any payment of

Guaranteed Obligations.  Notwithstanding

the foregoing, all rights of contribution against any Guarantor shall terminate

from and after such time, if ever, that such Guarantor shall be relieved of its

obligations pursuant to Section 8.5(a).

 

4.7          Guarantee of Payment; Continuing

Guarantee.

 

The

guarantee in this Section 4 is a guaranty of payment and not of

collection, is a continuing guarantee, and shall apply to all Credit Party

Obligations whenever arising.

 

47

 

ARTICLE

V

 

CONDITIONS

 

5.1          Closing

Conditions.

 

The

obligation of the Lenders to enter into this Credit Agreement and to make the

initial Loans or reserve amounts under the Derivative Exposure Reserve or the

Issuing Lender to issue the initial Letter of Credit, whichever shall occur

first, shall be subject to satisfaction of the following conditions (in form

and substance acceptable to the Agent):

 

(a)           Executed Credit

Documents.  Receipt by the Agent of

duly executed copies of:  (i) this

Credit Agreement, (ii) the Notes, (iii) the USRP Operating Pledge

Agreement and (iv) all other Credit Documents.

 

(b)           Corporate

Documents.  Receipt by the Agent of

the following:

 

(i)            Charter

Documents.  Copies of the articles

or certificates of incorporation or other charter documents of each Credit

Party certified to be true and complete as of a recent date by the appropriate

Governmental Authority of the state or other jurisdiction of its incorporation

and certified by a secretary or assistant secretary of such Credit Party to be

true and correct as of the Closing Date.

 

(ii)           Bylaws.  A copy of the bylaws of each Credit Party

certified by a secretary or assistant secretary of such Credit Party to be true

and correct as of the Closing Date.

 

(iii)          Resolutions.  Copies of resolutions of the Board of

Directors of each Credit Party approving and adopting the Credit Documents to

which it is a party, the transactions contemplated therein and authorizing

execution and delivery thereof, certified by a secretary or assistant secretary

of such Credit Party to be true and correct and in force and effect as of the

Closing Date.

 

(iv)          Good

Standing.  Copies of

(A) certificates of good standing, existence or its equivalent with

respect to each Credit Party certified as of a recent date by the appropriate

Governmental Authorities of the state or other jurisdiction of incorporation

and each other jurisdiction in which the failure to so qualify and be in good

standing could have a Material Adverse Effect and (B) to the extent

available, a certificate indicating payment of all corporate or comparable

franchise taxes certified as of a recent date by the appropriate governmental

taxing authorities.

 

(v)           Incumbency.  An incumbency certificate of each Credit

Party certified by a secretary or assistant secretary to be true and correct as

of the Closing Date.

 

(vi)          REIT

Status.  Evidence, satisfactory to

the Agent, that the USRP REIT qualifies as a REIT, that each of its

Subsidiaries that are corporations are Qualified REIT Subsidiaries and that the

execution and performance by the Credit Parties under the Credit Documents

shall not affect such status.

 

(vii)         Bankruptcy

Remote Borrowing Entity Status. 

Evidence, satisfactory to the Agent, that the General SPE qualifies as a

Bankruptcy Remote Borrowing Entity and that the execution and performance by

the Credit Parties under the Credit Documents shall not affect such status.

 

(c)           Opinions of

Counsel.  The Agent shall have

received, in each case dated as of the Closing Date and in form and

substance reasonably satisfactory to the Agent:

 

(i)            a

legal opinion of Richard Wilensky, general counsel for the Credit

Parties; and

 

48

 

(ii)           a

legal opinion of special local counsel for each Credit Party not organized in

the State of Delaware.

 

(d)           Officer’s

Certificates.  The Agent shall have

received a certificate or certificates executed by an Executive Officer of the

Borrower as of the Closing Date, in form and substance satisfactory to the

Agent, stating that (A) each Credit Party is in compliance with all

existing financial obligations, (B) all governmental, shareholder and

third party consents and approvals, if any, with respect to the Credit Documents

and the transactions contemplated thereby have been obtained, (C) no

action, suit, investigation or proceeding is pending or threatened in any court

or before any arbitrator or governmental instrumentality that purports to

affect any Credit Party 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) no Default or Event of Default exists, (2) all representations

and warranties contained herein and in the other Credit Documents are true and

correct in all material respects and (3) on the basis of income

statement items and capital expenditures for

the 12-month period ending on the last day of the most recently ended calendar

month prior to the Closing Date and balance sheet items as of the Closing Date

after giving effect to the Credit Documents, the Credit Parties are in pro

forma compliance with each of the Financial Covenants.

 

(e)           Solvency

Certificate.  The Agent shall have

received a certificate executed by an Executive Officer of the Borrower as of

the Closing Date, in form and substance satisfactory to the Agent, regarding

the Solvency of each of the Credit Parties.

 

(f)            Fees and

Expenses.  Payment by the Credit

Parties to the Lenders and the Agent of all fees and expenses relating to the

Credit Facilities which are due and payable on the Closing Date, including,

without limitation, the payment by Borrower to the Agent (i) for its own

account those fees specified in the Fee Letter, (ii) for the account of the

Lenders existing as of the Closing Date, a commitment fee (the “Commitment

Fee”) in an amount equal to one half of one percent (0.50%) of the Revolving

Committed Amount as of such date (or $175,000) and (iii) all fees and expenses

of Moore & Van Allen, PLLC whether reflected on previously issued invoices

or an invoice to be delivered at closing.

 

(g)           Current and Pro Forma Financial

Statements.  Receipt by the Agent

and the Lenders of (i) the consolidated financial statements of the

Consolidated Parties, including balance sheets and income and cash flow

statements for the fiscal quarter ended March 31, 2002; (ii) pro forma covenant

calculations with respect to each of the Financial Covenants, showing

compliance with such covenants as of the Closing Date; (iii) detailed

projections of financial statements for the Consolidated Parties and of

calculations with respect to each of the Financial Covenants, in each case, for

the three year period following the most recently completed fiscal quarter of

the Consolidated Parties; and (iv) such other information relating to the

Consolidated Parties as the Agent may reasonably require.

 

(h)           Opening Borrowing Base Certificate

and Delinquency Report.  Receipt by

the Agent of a Borrowing Base Certificate containing the Borrower’s most

recently collected information with respect to the Borrowing Base Assets (but,

in any event, with respect to information that is not more than 45 days old 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 correct and

a Delinquency Report dated as of the Closing Date and certified by an Executive Officer of the Borrower to be

true and correct as of the Closing Date.

 

(i)            Other.  Receipt by the Lenders of such other

documents, instruments, agreements or information as reasonably requested by

any 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 and

contingent liabilities of the Consolidated Parties.

 

5.2          Conditions to all Extensions of

Credit.

 

The

obligations of each Lender to make, convert or extend any Loan and of the

Issuing Lender to issue or extend any Letter of Credit (including the initial

Loans and the initial Letter of Credit) are subject to satisfaction of the

following conditions in addition to satisfaction on the Closing Date of the

conditions set forth in Section 5.1:

 

49

 

(a)           The Borrower shall

have delivered (i) in the case of any Loan, an appropriate Notice of

Borrowing, Notice of Continuation or Notice of Conversion or (ii) in the

case of any Letter of Credit, the Issuing Lender shall have received an

appropriate request for issuance in accordance with the provisions of

Section 2.2(b);

 

(b)           The representations

and warranties set forth in Section 6 shall, subject to the limitations

set forth therein, be true and correct in all material respects as of such date

(except for those which expressly relate to an earlier date);

 

(c)           There shall not have

been commenced against any Consolidated Party an involuntary case under any

applicable bankruptcy, insolvency or other similar law now or hereafter in

effect, or any case, proceeding or other action for the appointment of a

receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar

official) of such Person or for any substantial part of its Property or for the

winding up or liquidation of its affairs, and such involuntary case or other

case, proceeding or other action shall remain undismissed;

 

(d)           No Default or Event

of Default shall exist and be continuing either prior to or after giving effect

thereto; and

 

(e)           Immediately after

giving effect to the making of such Loan (and the application of the proceeds

thereof), the establishment of a Derivative Exposure Reserve or to the issuance

of such Letter of Credit, as the case may be, (i) the sum of the aggregate

outstanding principal amount of Revolving Loans plus LOC Obligations plus

the Aggregate Derivative Exposure Amount shall not exceed the lesser of (A) the

Revolving Committed Amount, (B) the Borrowing Base, (ii) the LOC

Obligations shall not exceed the LOC Committed Amount and (iii) the Aggregate

Derivative Exposure Amount shall not exceed Reserve Limit.

 

The

delivery of each Notice of Borrowing and each request for a Letter of Credit

pursuant to Section 2.2(b) shall constitute a representation and warranty

by the Credit Parties of the

correctness of the matters specified in subsections (b), (c), (d) and (e)

above.

 

ARTICLE

VI

 

REPRESENTATIONS AND WARRANTIES

 

The

Credit Parties hereby represent to the Agent and each Lender that:

 

6.1          Financial

Condition.

 

(a)           The audited

consolidated balance sheets and income statements of the Consolidated Parties

for the fiscal years ended December 31, 1999,

December 31, 2000 and December 31, 2001 (including the notes thereto)

(i) have been audited by Deloitte Touche Tohmatsu, (ii) have been

prepared in accordance with GAAP consistently applied throughout the periods

covered thereby and (iii) present fairly (on the basis disclosed in the

footnotes to such financial statements) the consolidated financial condition,

results of operations and cash flows of the Consolidated Parties as of such

date and for such periods.  The

unaudited 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, 2000

and prior to the Closing Date (i) have been prepared in accordance with

GAAP consistently applied throughout the periods covered thereby and

(ii) present fairly (on the basis disclosed in the footnotes to such

financial statements) the consolidated financial condition, results of

operations and cash flows of the Consolidated Parties as of such date and for

such periods.  During the period from

December 31, 2001 to and including the Closing Date, there has been no sale,

transfer or other disposition by any Consolidated Party of any material part of

the business or property of the Consolidated Parties, taken as a whole, and no

purchase or other acquisition by any of them of any business or property

(including any Capital Stock of any other Person) material in relation to the

consolidated financial condition of the Consolidated Parties, taken as a whole,

in each case, which is not reflected in the foregoing 

 

50

 

financial

statements or in the notes thereto and has not otherwise been disclosed in

writing to the Lenders on or prior to the Closing Date.  As of the Closing Date, the Borrower and its

Subsidiaries have no material liabilities (contingent or otherwise) that are

not reflected in the foregoing financial statements or in the notes thereto.

 

(b)           The financial

statements and other information delivered pursuant to Section 5.1(g) have

been prepared in accordance with GAAP (except as may otherwise be permitted

under Section 1.3) and present fairly (on the basis disclosed in the

footnotes to such financial statements) the consolidated financial condition,

results of operations and cash flows of the General Partner and the

Consolidated Parties as of such date and for such periods.

 

6.2          No

Material Change.

 

Since

December 31, 2001, there has been no development or event relating to or

affecting a Consolidated Party which has had or could have a Material Adverse

Effect.

 

6.3          Organization and Good Standing.

 

Each

of the Consolidated Parties (a) is duly organized, validly existing and is

in good standing under the laws of the jurisdiction of its incorporation or

organization, (b) has the corporate or other necessary power and

authority, and the legal right, to own and operate its property, to lease the

property it operates as lessee and to conduct the business in which it is

currently engaged and (c) is duly qualified as a foreign entity and in

good standing under the laws of each jurisdiction where its ownership, lease or

operation of property or the conduct of its business requires such

qualification, other than in such jurisdictions where the failure to be so

qualified and in good standing would not have a Material Adverse Effect.

 

6.4          Power; Authorization; Enforceable

Obligations.

 

Each

of the Credit Parties has the corporate or other necessary power and authority,

and the legal right, to make, deliver and perform the Credit Documents to which

it is a party, and in the case of the Borrower, to obtain extensions of credit

hereunder, and has taken all necessary corporate or other necessary action to

authorize the borrowings and other extensions of credit on the terms and

conditions of this Credit Agreement and to authorize the execution, delivery

and 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 Authority

or any other Person is required to be obtained or made by or on behalf of any

Credit Party in connection with the borrowings or other extensions of credit

hereunder or with the execution, delivery, performance, validity or

enforceability of the Credit Documents to which such Credit Party is a party,

except for 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 each other Credit Document to which any Credit

Party is a party will be, duly executed and delivered on behalf of the Credit

Parties.  This Credit Agreement

constitutes, and each other Credit Document to which any Credit Party is a

party when executed and delivered will constitute, a legal, valid and binding

obligation of such Credit Party enforceable against such party in accordance

with its terms, except as enforceability may be limited by applicable

bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the

enforcement of creditors’ rights generally and by general equitable principles

(whether enforcement is sought by proceedings in equity or at law).

 

6.5          No

Conflicts.

 

Neither

the execution and delivery of the Credit Documents, nor the consummation of the

transactions contemplated therein, nor performance of and compliance with the

terms and provisions thereof by such Credit Party will (a) violate or

conflict with any provision of its articles or certificate of incorporation or

bylaws or other organizational or governing documents of such Person,

(b) violate, contravene or materially conflict with any Requirement of Law

or any other law, regulation (including, without limitation, Regulation U

or Regulation X), order, writ, judgment, injunction, decree or permit

applicable to it, (c) violate, contravene or conflict with contractual

provisions of, or cause an event of default under, any indenture, loan

agreement, mortgage, deed of trust, contract or other agreement or instrument

to which it is a party or by which it may be bound, the violation of which

could have a Material Adverse Effect, or (d) result in or require the

creation of any Lien (other than those contemplated in or created in connection

with the Credit Documents) upon or with respect to its properties.

 

51

 

6.6          No

Default.

 

No

Consolidated Party is in default in any respect under any contract, lease, loan

agreement, indenture, mortgage, security agreement or other agreement or

obligation to which it is a party or by which any of its properties is bound

which default could have a Material Adverse Effect.  No Default or Event of Default has occurred or exists except as

previously disclosed in writing to the Lenders.

 

6.7          Ownership.

 

Each

Consolidated Party is the owner of, and has good and marketable title to, all

of its respective assets and none of such assets is subject to any Lien other

than Permitted Liens and Liens granted in connection with any Term

Securitization specifically contemplated and approved pursuant to the terms

hereof.

 

6.8          Indebtedness.

 

Except

as otherwise permitted under Section 8.1, the Consolidated Parties have no

Indebtedness.

 

6.9          Litigation.

 

Except

as disclosed in Schedule 6.9, there does not exist any pending or

threatened action, suit or legal, equitable, arbitration or administrative

proceeding against any Consolidated Party which might have a Material Adverse

Effect.

 

6.10        Taxes.

 

Each

Consolidated Party has filed, or caused to be filed, all tax returns (Federal,

state, local and foreign) required to be filed and paid (a) all amounts of

taxes 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 intangibles

taxes) owing by it, except for such taxes (i) which are not yet delinquent

or (ii) that are being contested in good faith and by proper proceedings,

and against which adequate reserves are being maintained in accordance with

GAAP.  No Credit Party is aware of any

proposed federal or state income tax assessments against it or any other

Consolidated Party.  No Credit Party is

aware of any other proposed tax assessments against it or any other Consolidated

Party that could have a Material Adverse Effect.

 

6.11        Compliance

with Law.

 

Each

Consolidated Party is in compliance with all Requirements of Law and all other

laws, rules, regulations, orders and decrees (including without limitation

Environmental Laws) applicable to it, or to its properties, unless such failure

to comply could not have a Material Adverse Effect.  No currently-existing Requirement of Law could cause a Material

Adverse Effect.

 

6.12        ERISA.

 

Except

as disclosed and described in Schedule 6.12 attached hereto:

 

(a)            During

the five-year period prior to the date on which this representation is made or

deemed made: (i) no ERISA Event has occurred, and, to the best knowledge

of the Executive Officers of the Credit Parties, no event or condition has

occurred or exists as a result of which any ERISA Event could reasonably be

expected to occur, with respect to any Plan; (ii) no “accumulated funding

deficiency,” as such term is defined in Section 302 of ERISA and

Section 412 of the Code, whether or not waived, has occurred with respect

to any Plan; (iii) each Plan has been maintained, operated, and funded in

compliance with its own terms and in material compliance with the provisions of

ERISA, 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 reasonably

likely to arise on account of any Plan.

 

52

 

(b)           The

actuarial present value of all “benefit liabilities” (as defined in

Section 4001(a)(16) of ERISA), whether or not vested, under each Single

Employer Plan, as of the last annual valuation date prior to the date on which

this representation is made or deemed made (determined, in each case, in

accordance with Financial Accounting Standards Board Statement 87, utilizing

the actuarial assumptions used in such Plan’s most recent actuarial valuation

report), did not exceed as of such valuation date the fair market value of the

assets of such Plan.

 

(c)            Neither

any Consolidated Party nor any ERISA Affiliate has incurred, or, to the best

knowledge of the Executive Officers of the Credit Parties, could be reasonably

expected to incur, any withdrawal liability under ERISA to any Multiemployer

Plan or Multiple Employer Plan.  Neither

any Consolidated Party nor any ERISA Affiliate would become subject to any

withdrawal liability under ERISA if any Consolidated Party or any ERISA

Affiliate were to withdraw completely from all Multiemployer Plans and Multiple

Employer Plans as of the valuation date most closely preceding the date on

which this representation is made or deemed made.  Neither any Consolidated Party nor any ERISA Affiliate has

received any notification that any Multiemployer Plan is in reorganization

(within the meaning of Section 4241 of ERISA), is insolvent (within the

meaning of Section 4245 of ERISA), or has been terminated (within the

meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best

knowledge of the Executive Officers of the Credit Parties, reasonably expected

to be in reorganization, insolvent, or terminated.

 

(d)           No

prohibited transaction (within the meaning of Section 406 of ERISA or

Section 4975 of the Code) or breach of fiduciary responsibility has

occurred with respect to a Plan which has subjected or may subject any

Consolidated Party or any ERISA Affiliate to any liability under

Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the

Code, or under any agreement or other instrument pursuant to which any

Consolidated Party or any ERISA Affiliate has agreed or is required to indemnify

any Person against any such liability.

 

(e)            Neither

any Consolidated Party nor any ERISA Affiliates has any material liability with

respect to “expected post-retirement benefit obligations” within the meaning of

the Financial Accounting Standards Board Statement 106.  Each Plan which is a welfare plan (as

defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA

and Section 4980B of the Code apply has been administered in compliance in

all material respects of such sections.

 

(f)            Neither

the execution and delivery of this Credit Agreement nor the consummation of the

financing transactions contemplated thereunder will involve any transaction

which is subject to the prohibitions of Sections 404, 406 or 407 of ERISA

or in connection with which a tax could be imposed pursuant to

Section 4975 of the Code.  The

representation by the Credit Parties in the preceding sentence is made in

reliance upon and subject to the accuracy of the Lenders’ representation in

Section 11.15 with respect to their source of funds and is subject, in the

event that the source of the funds used by the Lenders in connection with this

transaction is an insurance company’s general asset account, to the application

of Prohibited Transaction Class Exemption 95-60, 60 Fed.  Reg. 

35,925 (1995), compliance with the regulations issued under

Section 401(c)(1)(A) of ERISA, or the issuance of any other prohibited

transaction exemption or similar relief, to the effect that assets in an insurance

company’s general asset account do not constitute assets of an “employee

benefit plan” within the meaning of Section 3(3) of ERISA or a “plan”

within the meaning of Section 4975(e)(1) of the Code.

 

6.13        Corporate Structure; Capital Stock,

etc.

 

The

corporate capital and ownership structure of the Consolidated Parties as of the

Closing Date after giving effect to the Credit Documents executed as of the

date hereof is as described in Schedule 6.13A.  Set forth on Schedule 6.13B is a

complete and accurate list as of the Closing Date with respect to the Borrower

and each of its direct and indirect 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 and effect, if exercised, of all outstanding options,

warrants, rights of conversion or purchase and all other similar rights with

respect thereto as of the Closing Date. 

The outstanding Capital Stock of all such Persons is validly issued,

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 

 

53

 

contemplated

in connection with the Credit Documents). 

Other than as set forth in Schedule 6.13B, neither the

Borrower nor any of its Subsidiaries has outstanding any securities convertible

into or exchangeable for its Capital Stock nor does any such Person have

outstanding any rights to subscribe for or to purchase or any options for the

purchase of, or any agreements providing for the issuance (contingent or

otherwise) of, or any calls, commitments or claims of any character relating to

its Capital Stock.  Each of the Domestic

Subsidiaries of the General Partner, the USRP REIT and the Borrower existing as

of the date hereof, except USRP/HCI Partnership 1, L.P., USRP Funding 2001-A,

L.P., USRP (SFGP), LLC, USRP JV1, LLC, USRP (Adams), LP, USRP GP 7, LLC, USRP

(Maier), LP, USRP GP 6, LLC, USRP (Green), LLC, USRP (Martin), LLC and USRP

(Warren), LLC are listed as Subsidiary Guarantors on the signature pages

hereto.

 

6.14        Governmental Regulations, Etc.

 

(a)           None of the transactions

contemplated by this Credit Agreement (including, without limitation, the

direct or indirect use of the proceeds of the Loans) will violate or result in

a violation of the Securities Act, the Securities Exchange Act or any of

Regulations U and X.  If requested

by any Lender or the Agent, the Borrower will furnish to the Agent and each

Lender a statement, in conformity with the requirements of FR Form U-1

referred to in Regulation U, that no part of the Letters of Credit or

proceeds of 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, or for the purpose of purchasing or carrying or trading in any

securities.

 

(b)           None of the

Consolidated Parties is (i) an “investment company”, or a company

“controlled” by “investment company”, within the meaning of the Investment

Company Act of 1940, as amended, (ii) a “holding company” as defined in,

or otherwise subject to regulation under, the Public Utility Holding Company

Act of 1935, as amended or (iii) subject to regulation under any other

Federal or state statute or regulation which limits its ability to incur

Indebtedness.

 

6.15        Purpose of Loans, Letters of Credit

and Derivative Exposure Reserve.

 

The

proceeds of the Loans hereunder shall be used solely by the Borrower to provide

for working capital and general corporate purposes of the Borrower and its

Subsidiaries.  The Letters of Credit

shall be used only for or in connection with appeal bonds, reimbursement

obligations arising in connection with surety and reclamation bonds,

reinsurance, domestic or international trade transactions and obligations not

otherwise aforementioned relating to transactions entered into by the

applicable account party in the ordinary course of business.  Proceeds paid with respect to the Derivative

Exposure Reserve shall be used only in connection with the Borrower’s exposure

under BOA Derivative Instruments.  No

proceeds of the Loans shall be used to (a) finance the purchase of “margin

stock” as such term is defined in Regulation U of the Federal Reserve

Board or (b) finance the acquisition of any investments in commercial mortgage–backed

securities.

 

6.16        Environmental Matters.

 

Except

as disclosed and described in Schedule 6.16 attached hereto:

 

(a)           Each of the Real

Properties and all operations at the Real Properties are in material compliance

with all applicable Environmental Laws, there is no violation of any

Environmental Law with respect to the Real Properties or the Businesses, and

there are no conditions relating to the Real Properties or the Businesses that

could give rise to liability under any applicable Environmental Laws that could

result in a Material Adverse Effect.

 

(b)           None of the Real

Properties contains, or has previously contained, any Materials of

Environmental Concern at, on or under the Real Properties in amounts or

concentrations that could result in a Material Adverse Effect.

 

(c)           No Consolidated

Party has received any written or verbal notice of, or inquiry from any

Governmental Authority regarding, any violation, alleged violation,

non-compliance, liability or potential liability regarding environmental

matters or compliance with Environmental Laws with regard to any of the 

 

54

 

Real Properties or the Businesses that could result in a

Material Adverse Effect, nor does any Executive Officer of any Credit Party

have knowledge or reason to believe that any such notice will be received or is

being threatened.

 

(d)           Materials of

Environmental Concern have not been transported or disposed of from the Real

Properties, or generated, treated, stored or disposed of at, on or under any of

the Real Properties or any other location, in each case by or on behalf of any

Consolidated Party in a manner that could result in a Material Adverse Effect.

 

(e)           No judicial

proceeding or governmental or administrative action is pending or, to the best

knowledge of the Executive Officers of the Credit Parties, threatened, under

any Environmental Law to which any Consolidated Party is or will be named as a

party, nor are there any consent decrees or other decrees, consent orders,

administrative orders or other orders, or other administrative or judicial

requirements outstanding under any Environmental Law with respect to the

Consolidated Parties, the Real Properties or the Businesses that could result

in a Material Adverse Effect.

 

(f)            There has been no

release, or threat of release, of Materials of Environmental Concern at or from

any of the Real Properties, or arising from or related to the operations

(including, without limitation, disposal) of any Consolidated Party in

connection with the Real Properties or otherwise in connection with the

Businesses in a manner that could result in a Material Adverse Effect.

 

6.17        Intellectual Property.

 

Each Consolidated Party owns, or

has the legal right to use, all trademarks, tradenames, copyrights, technology,

know–how and processes (the “Intellectual Property”) necessary for

each of them to conduct its business as currently conducted except for those

the failure to own or have such legal right to use could not have a Material

Adverse Effect.

 

6.18        Solvency.

 

Each Credit Party is and, after

consummation of the transactions contemplated by the Credit Documents, will be

Solvent.

 

6.19        Investments.

 

All Investments of each

Consolidated Party are Permitted Investments.

 

6.20        Principal

Offices.

 

Set forth on Schedule 6.20

is the chief executive office and principal place of business of each Credit

Party.  Schedule 6.20 may be

updated from time to time by the Borrowers by giving written notice thereof to

the Agent.

 

6.21        Disclosure.

 

Neither this Credit Agreement

nor any financial statements delivered to the Lenders nor any other document,

certificate or statement furnished to the Lenders by or on behalf of any

Consolidated Party in connection with the transactions contemplated hereby

contains any untrue statement of a material fact or omits to state a material

fact necessary in order to make the statements contained therein or herein not

misleading.

 

6.22        No Burdensome Restrictions.

 

No Consolidated Party is a party

to any agreement or instrument or subject to any other obligation or any

charter or corporate restriction or any provision of any applicable law, rule

or regulation which, individually or in the aggregate, could have a Material

Adverse Effect.

 

55

 

6.23        Brokers’

Fees.

 

No Consolidated Party 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 the transactions

contemplated under the Credit Documents.

 

6.24        Labor

Matters.

 

There are no collective

bargaining agreements or Multiemployer Plans covering the employees of a Consolidated

Party as of the Closing Date and none of the Consolidated Parties has suffered

any strikes, walkouts, work stoppages or other material labor difficulty within

the last five years.

 

6.25        Nature

of Business.

 

As of the Closing Date, the

Consolidated Parties are engaged in the business of acquiring, owning,

operating, managing and developing restaurant, service station, other service

retail properties and several miscellaneous properties (including billboard

properties, one office building and one fuel terminal facility).

 

6.26        REIT Status.

 

The USRP REIT is qualified as a

REIT and each of its Subsidiaries that is a corporation is a Qualified REIT

Subsidiary.

 

6.27        Bankruptcy Remote Borrowing Entity.

 

The General SPE is a Bankruptcy

Remote Borrowing Entity and USRP Operating owns 99% of the Capital Stock

thereof.

 

6.28        Closing Date Borrowing Base Assets.

 

Schedule

6.28 sets forth each of

the Borrowing Base Assets as of the Closing Date.  Each asset listed on Schedule 6.28 fully qualifies as a

Borrowing Base Asset and, collectively, the assets listed thereon qualify to be

included in the Borrowing Base.

 

ARTICLE

VII

 

AFFIRMATIVE COVENANTS

 

Each Credit Party hereby

covenants and agrees that, so long as this Credit Agreement is in effect or any

amounts payable hereunder or under any other Credit Document shall remain

outstanding or any Letter of Credit is outstanding, and until all of the

Commitments hereunder shall have terminated:

 

7.1          Information Covenants.

 

The Credit Parties will furnish, or cause to be furnished, to the

Agent and each of the Lenders:

 

(a)           Annual Financial

Statements.  As soon as available,

and in any event within 90 days after the close of each fiscal year of the

Consolidated Parties, a consolidated balance sheet and income statement of the

Consolidated Parties as of the end of such fiscal year, together with related

consolidated statements of retained earnings and cash flows for such fiscal

year (along with a summary of amount of all Asset Dispositions and Equity

Issuances that were made during the prior fiscal year), in each case setting

forth in comparative form consolidated figures for the preceding fiscal year,

all such financial information described above to be in reasonable form and

detail and audited by independent certified public accountants of recognized

national standing reasonably acceptable to the Agent and whose opinion shall be

to the effect that such financial statements have been prepared in accordance

with GAAP (except for changes with which such accountants concur) and shall not

be limited as to the scope of the audit or qualified as to the status of the

Consolidated Parties as a going concern or any other material qualifications or

exceptions.

 

56

 

(b)           Quarterly Financial

Statements.  As soon as available,

and in any event within 45 days after the close of each of the first three

fiscal quarters of each fiscal year of the Consolidated Parties, a consolidated

balance sheet and income statement of the Consolidated Parties as of the end of

such fiscal quarter, together with related consolidated statements of retained

earnings and cash flows for such fiscal quarter, in each case setting forth in

comparative form consolidated figures for the corresponding period of the preceding

fiscal year, all such financial information described above to be in reasonable

form and detail and reasonably acceptable to the Agent, and accompanied by a

certificate of an Executive Officer of the Borrower to the effect that such

quarterly financial statements fairly present in all material respects the

financial condition of the Consolidated Parties and have been prepared in

accordance with GAAP, subject to changes resulting from audit and normal

year-end audit adjustments.

 

(c)           Officer’s

Certificate.  At the time of

delivery of the financial statements provided for in Sections 7.1(a) and

7.1(b) above, a certificate of an Executive Officer of the Borrower

substantially in the form of Exhibit 7.1(c), (i) demonstrating

compliance with the Financial Covenants by calculation thereof as of the end of

each such fiscal period, (ii) stating that no Default or Event of Default

exists, or if any Default or Event of Default does exist, specifying the nature

and extent thereof and what action the Credit Parties propose to take with

respect thereto and disclosing any Hedging Agreements entered into by any

Consolidated Party.

 

(d)           Intentionally

Omitted.

 

(e)           Accountant’s

Certificate.  Within the period for

delivery of the annual financial statements provided in Section 7.1(a), a

certificate of the accountants conducting the annual audit stating that they

have reviewed this Credit Agreement as it relates to accounting and other

financial 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 such

Default or Event of Default exists, specifying the nature and extent thereof, provided

that such accountants shall not be liable by reason of any failure to obtain

knowledge of any such Default or Event of Default that would not be disclosed

in the course of their audit examination.

 

(f)            Auditor’s

Reports.  Promptly upon receipt

thereof, a copy of any other report or “management letter” submitted by

independent accountants to any Consolidated Party in connection with any

annual, interim or special audit of the books of such Person.

 

(g)           Reports.  Promptly upon transmission or receipt

thereof, (i) copies of any filings and registrations with, and reports to

or from, the Securities and Exchange Commission, or any successor agency, and

copies of all financial statements, proxy statements, notices and reports as

any Consolidated Party shall send to its shareholders or to a holder of any

Indebtedness owed by any Consolidated Party in its capacity as such a holder

and (ii) upon the request of the Agent, all reports and written

information to and from the United States Environmental Protection Agency, or

any state or local agency responsible for environmental matters, the United

States Occupational Health and Safety Administration, or any state or local

agency responsible for health and safety matters, or any successor agencies or

authorities concerning environmental, health or safety matters.

 

(h)           Notices.  Upon any Executive Officer of a Credit Party

obtaining knowledge thereof, the Credit Parties will give written notice to the Agent immediately of (i) the

occurrence of an event or condition consisting of a Default or Event of

Default, specifying the nature and existence thereof and what action the Credit

Parties propose to take with respect thereto, and (ii) the occurrence of

any of the following with respect to any Consolidated Party (A) the

pendency or commencement of any litigation, arbitral or governmental proceeding

against such Person which if adversely determined is likely to have a Material

Adverse Effect or (B) the institution of any proceedings against such

Person with respect to, or the receipt of notice by such Person of potential

liability or responsibility for violation, or alleged violation of any Federal,

state or local law, rule or regulation, including but not limited to,

Environmental Laws, the violation of which could have a Material Adverse

Effect.

 

(i)            ERISA.  Upon any Executive Officer of a Credit Party

obtaining knowledge thereof, the Credit Parties will give written notice to the Agent promptly (and in any event within

five Business Days) of: 

 

57

 

(i) any event or condition, including, but not

limited to, any Reportable Event, that constitutes, or might reasonably lead

to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the

receipt of notice as prescribed in ERISA or otherwise of any withdrawal

liability assessed against the Credit Parties or any ERISA Affiliates, or of a determination that any Multiemployer

Plan is in reorganization 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 or any ERISA Affiliate is required to contribute to each

Plan pursuant to its terms and as required to meet the minimum funding standard

set forth in ERISA and the Code with respect thereto; or (iv) any change

in the funding status of any Plan that could have a Material Adverse Effect,

together with a description of any such event or condition or a copy of any

such notice and a statement by an Executive Officer of the Borrower briefly setting forth the details

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 Credit Parties with

respect thereto.  Promptly upon request,

the Credit Parties shall furnish the Agent and the Lenders with such 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 thereto required to be filed with the

Department of Labor and/or the Internal Revenue Service 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 the

Agent, the Credit Parties will furnish or cause to be furnished to the Agent,

at the Credit Parties’ expense, a

report of an environmental assessment of reasonable scope, form and depth,

(including, where appropriate, invasive soil or groundwater sampling) by a

consultant reasonably acceptable to the Agent as to the nature and extent of

the presence of any Materials of Environmental Concern on any Real Properties

(as defined in Section 6.16) contributing to the Borrowing Base and as to

the compliance by any Consolidated Party with Environmental Laws at such Real

Properties.  If the Credit Parties fail

to deliver such an environmental report within seventy-five (75) days

after receipt of such written request then the Agent may arrange for same, and

the Consolidated Parties hereby grant to the Agent and their representatives

access to the Real Properties to reasonably undertake such an assessment

(including, where appropriate, invasive soil or groundwater sampling).  The reasonable cost of any assessment

arranged for by the Agent pursuant to this provision will be payable by the Credit

Parties on demand and added to the Credit

Party Obligations.

 

(k)           Borrowing

Base Certificates/Delinquency Reports. 

Within 15 days after the end of each calendar month, a certificate as of

the 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 as of the date

thereof (a “Borrowing Base Certificate”) and a Delinquency Report with

respect to the last day of such calendar month certified by an Executive

Officer of the Borrower to be true and correct as of such date.

 

(l)            Three Year Projections/Updates.  As soon

as available, and in any event within 90 days after the close of each fiscal

year of the Consolidated Parties, detailed projections of financial statements

for the Consolidated Parties and of calculations with respect to each of the

Financial Covenants, in each case, for the three year period following the most

recently ended fiscal quarter of the Consolidated Parties.

 

(m)          Other Information.  With reasonable promptness upon any such

request, such other information regarding the business, properties or financial

condition of any Consolidated Party as the Agent or the Required Lenders may

reasonably request.

 

7.2          Preservation of Existence,

Franchises, Bankruptcy Remote Borrowing Entity Status and REIT Status.

 

Except

as a result of or in connection with a dissolution, merger or disposition of a

Subsidiary not 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 necessary to preserve and keep

in full force and effect its existence, rights, franchises, authority and

status as a REIT or Qualified REIT Subsidiary, as applicable.  The General SPE shall maintain its respective

status as a Bankruptcy Remote Borrowing Entity and each of the Credit Parties

shall take such action as is required to maintain such status at all times

during the term hereof.  The General SPE

shall, at all times during the term hereof, remain a Wholly Owned Subsidiary of

USRP Operating.

 

58

 

7.3          Books

and Records.

 

Each

Credit Party will, and will cause each of its Subsidiaries to, keep complete

and accurate books and records of its transactions in accordance with good

accounting practices on the basis of GAAP (including the establishment and

maintenance of appropriate reserves).

 

7.4          Compliance

with Law.

 

Each

Credit Party will, and will cause each of its Subsidiaries to, comply with all

laws, rules, regulations and orders, and all applicable restrictions imposed by

all Governmental Authorities, applicable to it and its Property if

noncompliance with any such law, rule, regulation, order or restriction could

have a Material Adverse Effect.

 

7.5          Payment of Taxes and Other

Indebtedness.

 

Each

Credit Party will, and will cause each of its Subsidiaries to, pay and

discharge (a) all taxes, assessments and governmental charges or levies

imposed upon it, or upon its income or profits, or upon any of its properties,

before they shall become delinquent, (b) all lawful claims (including

claims for labor, materials and supplies) which, if unpaid, might give rise to

a Lien upon any of its properties, and (c) except as prohibited hereunder,

all of its other Indebtedness as it shall become due; provided, however,

that no Consolidated Party shall be required to pay any such tax, assessment,

charge, levy, claim or Indebtedness which is being contested in good faith by

appropriate proceedings and as to which adequate reserves therefor have been

established in accordance with GAAP, unless the failure to make any such

payment (i) could give rise to an immediate right to foreclose on a Lien

securing such amounts or (ii) could have a Material Adverse Effect.

 

7.6          Insurance.

 

The present insurance 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 the Agent immediately

upon the occurrence of any change in such insurance coverage.

 

7.7          Maintenance of Property.

 

Each

Credit Party will, will cause each of its Subsidiaries to, and (as applicable)

will use its best efforts to cause the applicable Person in possession of a

Real Property to, maintain and preserve its properties and equipment material

to the conduct of its business in good repair, working order and condition,

normal wear and tear and casualty and condemnation excepted, and will make, or

cause to be made, in such properties and equipment from time to time all

repairs, renewals, replacements, extensions, additions, betterments and

improvements thereto as may be needed or proper, to the extent and in the

manner customary for companies in similar businesses.

 

7.8          Performance of Obligations.

 

Each

Credit Party will, and will cause each of its Subsidiaries to, perform in all

material respects all of its obligations under the terms of all material

agreements and all material indentures, mortgages, security agreements or other

debt instruments to which it is a party or by which it is bound.

 

7.9          Use

of Proceeds.

 

The

Borrower will use the proceeds of the Loans and will use the Letters of Credit

solely for the purposes set forth in Section 6.15.

 

7.10        Audits/Inspections.

 

Upon

reasonable notice and during normal business hours, each Credit Party will, and

will cause each of its Subsidiaries to, permit representatives appointed by the

Agent, including, without limitation, independent accountants, agents,

attorneys, and appraisers to visit and inspect its property (subject to the

rights of tenants under their respective leases), including its books and

records, its accounts receivable and inventory, its facilities and its other

business assets, 

 

59

 

and

to make photocopies or photographs thereof and to write down and record any

information such representative obtains and shall permit the Agent or its

representatives to investigate and verify the accuracy of information provided

to the Lenders and to discuss all such matters with the officers, employees and

representatives of such Person.

 

7.11        Financial

Covenants.

 

(a)           Leverage Ratio.  The Leverage Ratio, as of the last day of

each fiscal quarter of the Consolidated Parties, shall be less than or equal to

0.70 to 1.0.

 

(b)           Tangible Net

Worth.  At all times the

Tangible Net Worth shall be greater than or equal to the sum of (i)

$270,000,000.00, plus (ii) an amount equal to 85% of the Net Cash

Proceeds of any Equity Issuance received by the Consolidated Parties after

December 31, 2001, calculated on a cumulative basis.

 

(c)           Fixed Charge

Coverage Ratio.  The Fixed Charge

Coverage Ratio, as of the last day of each fiscal quarter of the Consolidated

Parties, shall be (i) for fiscal quarters ending on or before December 31,

2003, greater than or equal to 1.35 to 1.0; (ii) for fiscal quarters ending on

or before December 31, 2004, greater than or equal to 1.45 to 1.0 and (iii) for

fiscal quarters ending thereafter, greater than or equal to 1.55 to 1.0.

 

(d)           Distribution

Limitation.  For any given fiscal quarter of the Consolidated

Parties, the aggregate sum of (i) the amount of cash distributions made or

declared by the Consolidated Parties to their shareholders (excluding any

shareholders which are Consolidated Parties) plus (ii) the amount spent

by the Consolidated Parties for the purpose of repurchasing their own Capital

Stock (whether common or preferred) shall not exceed the greater of (1) the FFO

Distribution Allowance for such fiscal quarter or (2) so long as no Default or

Event of Default has occurred and is then continuing, the amount necessary to

maintain the status of the USRP REIT as a REIT.

 

(e)           Secured

Indebtedness to Asset Value Ratio. 

The ratio of (i) Secured Indebtedness to (ii) the sum of Asset Values

for each of the Real Properties (less any amounts attributable to Outside

Interests) as of the end of each fiscal quarter 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, at all times, be equal to or greater than 2.50 to 1.0.

 

7.12        New

Subsidiaries.

 

As soon as practicable

and in any event within 30 days after any Person becomes a direct or indirect

Subsidiary of the General Partner, the USRP REIT or the Borrower, the Borrower

shall provide the Agent with written notice thereof setting forth information

in reasonable detail describing all of the assets of such Person and shall

(a) if such Person is a Domestic Subsidiary, cause such Person to (a)

execute a Joinder Agreement in substantially the same form as Exhibit 7.12 and (b) deliver

such other documentation as the Agent may reasonably request in connection

therewith, including, without limitation, financial statements, certified

resolutions and other organizational and authorizing documents of such Person,

favorable opinions of counsel to such Person (which shall cover, among other

things, the legality, validity, binding effect and enforceability of the

documentation referred to above) and other items of the types required to be

delivered pursuant to Section 5.1, as applicable, all in form, content and

scope reasonably satisfactory to the Agent; provided, that this

Section 7.12 shall not be construed to require USRP/HCI Partnership 1,

L.P., USRP Funding 2001-A, L.P., USRP

(SFGP), LLC, USRP JV1, LLC, USRP (Adams), LP, USRP GP 7, LLC, USRP (Maier), LP,

USRP GP 6, LLC, USRP (Green), LLC, USRP (Martin), LLC and USRP (Warren), LLC

(or their respective successor entities) to execute Joinder Agreements or

otherwise act as Subsidiary Guarantors hereunder unless and until (i) with

respect to USRP/HCI Partnership 1, L.P, such entity ceases to be a joint

venture and is controlled by any Consolidated Party, (ii) with respect to USRP

Funding 2001-A, L.P., such entity ceases to maintain its status as a Special

Purpose Entity, or (iii) with respect to each such entity, such entity is not

prohibited by the terms of other financing transactions or its organizational

documents from acting as a Guarantor hereunder.  For purposes of the preceding sentence, it is understood that no

entity shall be deemed prohibited from executing a Joinder Agreement once it

becomes a Wholly Owned Subsidiary by virtue of a provision in its

organizational documents notwithstanding any such provision in such documents.

 

60

 

7.13        ERISA Exemptions.

 

Each

Credit Party and the Borrower shall not, and shall not permit any of their

respective Subsidiaries to, permit any of their respective assets to become or

be deemed to be “plan assets” within the meaning of ERISA, the Code and the

respective regulations promulgated thereunder.

 

7.14        Further Assurances.

 

The Borrower shall, from

time to time, at the expense of the Borrower, promptly execute, deliver, file and/or

record all further instruments and documents, and take all further action, that

may be necessary or desirable, or that the Agent or Collateral Agent may

reasonably request in order to (a) properly evidence the Borrower’s

Indebtedness hereunder or under any Credit Document or (b) perfect, continue

and protect the pledge, assignment and/or security interest, as applicable,

granted or purported to be granted hereby or pursuant to any Credit Document

and to enable the Agent and/or Collateral Agent to exercise and enforce their

rights and remedies hereunder and under any other Credit Document.  The Borrower shall promptly deliver to the

Collateral Agent a copy of each such instrument and evidence of its proper

filing or recording, as necessary.

 

ARTICLE VIII

 

NEGATIVE COVENANTS

 

Each

Credit Party hereby covenants and agrees that, so long as this Credit Agreement

is in effect or any amounts payable hereunder or under any other Credit

Document shall remain outstanding or any Letter of Credit is outstanding, and

until all of the Commitments hereunder shall have terminated:

 

8.1          Indebtedness.

 

The

Credit Parties will not permit any Consolidated Party to contract, create,

incur, assume or permit to exist any Indebtedness, except:

 

(a)           Indebtedness

arising under this Credit Agreement, the other Credit Documents or Indebtedness

expressly permitted hereunder;

 

(b)           Indebtedness in existence as of the Agreement

Date and described on Schedule 8.1 and any Indebtedness (the “Replacement

Indebtedness”) extending the maturity of, or refunding, refinancing or

replacing, in whole or in part, any such existing Indebtedness (the “Replaced

Indebtedness”) so long as (i) the direct and contingent obligors with

respect to the Replaced Indebtedness and the Replacement Indebtedness shall be

the same, (ii) the Replacement Indebtedness shall not mature prior to the

stated maturity date or mandatory redemption date of the Replaced Indebtedness,

(iii) if the Replaced Indebtedness is subordinated in right of payment or

otherwise to the obligations of each of the Credit Parties under and in respect

of the Credit Documents to which any of them is a party, then the Replacement

Indebtedness must be subordinated to such obligations to at least the same

extent and (iv) the Replacement Indebtedness otherwise complies with all other

terms and conditions contained in any other Section of this Credit

Agreement;

 

(c)           purchase

money Indebtedness (including obligations in respect of Capital Leases or

Synthetic Leases) hereafter incurred by the Borrower or any of its Subsidiaries

to finance the purchase of fixed assets; provided that (i) the

total of all such Indebtedness for all such Persons taken together shall not

exceed an aggregate principal amount of $250,000 at any one time outstanding;

(ii) such Indebtedness when incurred shall not exceed the purchase price

of the asset(s) financed; and (iii) no such Indebtedness shall be

refinanced for a principal amount in excess of the principal balance

outstanding thereon at the time of such refinancing;

 

(d)           Indebtedness

resulting from customary recourse carve-outs associated with securitization

transactions (including, by way of example, those for fraud, misapplication of

proceeds and environmental indemnities) and not involving the creditworthiness

of the applicable obligors;

 

61

 

(e)           Indebtedness

in the form of trade payables incurred in the ordinary course of business;

 

(f)            obligations

of the Borrower in respect of Hedging Agreements;

 

(g)           intercompany

Indebtedness permitted under Section 8.6; provided, however, that the obligations of each obligor of such

Indebtedness shall: (i) be subordinated to the Credit Party Obligations on

terms acceptable to the Required Lenders in their sole discretion and (ii) have

such other terms and provisions as the Agent may reasonably require;

 

(h)           in

addition to the Indebtedness otherwise permitted by this Section 8.1,

 

(i)            other

recourse Indebtedness hereafter incurred by the General Partner, the Borrower or

any of their Subsidiaries provided that (A) the loan documentation with

respect to such Indebtedness shall not contain financial covenants or default

provisions relating to any Consolidated Party that are more restrictive than

the covenants and default provisions contained in the Credit Documents,

(B) the Borrower shall have delivered to the Agent a Pro Forma

Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to the incurrence of such

Indebtedness and to the concurrent retirement of any other Indebtedness of any

Consolidated Party, the Credit Parties would be in compliance with the

Financial Covenants and (C) the aggregate principal amount of such

Indebtedness, together with Indebtedness permitted pursuant to

Sections 8.1(c) and (f) shall not at any time exceed $10,000,000 plus the

amount of any hedge obligations incurred with respect to a Term Securitization;

 

(ii)           Indebtedness

where the recourse of the lender is limited to foreclosure of its security

interest in the subject property; and

 

(iii)          Guaranty

Obligations of any Guarantor with respect to any Indebtedness permitted under

this Section 8.1.

 

Notwithstanding

the foregoing, the General Partner and the Borrower shall not, and shall not

permit any other Subsidiary to, create, incur or assume any Indebtedness after

the Closing Date if immediately prior to the creation, incurring or assumption

thereof, or immediately thereafter and after giving effect thereto, a Default

or Event of Default is or would be in existence, including without limitation,

a Default or Event of Default resulting from a violation of any of the

covenants contained in this Section 8.1.

 

8.2          Liens.

 

The

Credit Parties will not permit any Consolidated Party to contract, create,

incur, assume or permit to exist any Lien with respect to any of its Property,

whether now owned or after acquired, except for:

 

(a)           Liens

in favor of the Agent to secure the Credit Party Obligations;

 

(b)           (i)

Liens, about which any Credit Party has had knowledge for less than

thirty (30) days, in an aggregate amount less than $200,000 (other than

Liens created or imposed under ERISA) for taxes, assessments or governmental

charges or levies not yet due or, if due, are for taxes, assessments or

governmental charges or levies that are more than five (5) days from the

date on which such items may be deemed delinquent or on which penalties for

non-payment may be assessed or (ii) Liens for taxes being contested in good

faith by appropriate proceedings for which adequate reserves determined in

accordance with GAAP have been established (and as to which the Property

subject to any such Lien is not yet subject to foreclosure, sale or loss on

account thereof);

 

(c)           statutory

Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen

and suppliers and other Liens imposed by law or pursuant to customary

reservations or retentions of title arising in the ordinary course of business,

in each case which any Credit Party has had knowledge for less than

thirty (30) days, in an aggregate amount less than $200,000, provided

that such Liens secure only amounts not

 

62

 

yet

due and payable or, if due and payable, are unfiled and no other action has

been taken to enforce the same or are being contested in good faith by

appropriate proceedings for which adequate reserves determined in accordance

with GAAP have been established (and as to which the Property subject to any

such Lien is not yet subject to foreclosure, sale or loss on account thereof);

 

(d)           Liens

(other than Liens created or imposed under ERISA) incurred or deposits made by

any Consolidated Party in the ordinary course of business in connection with

workers’ compensation, unemployment insurance and other types of social

security, or to secure the performance of tenders, statutory obligations, bids,

leases, government contracts, performance and return-of-money bonds and other

similar obligations (exclusive of obligations for the payment of borrowed

money);

 

(e)           Liens

in connection with attachments or judgments (including judgment or appeal

bonds) provided that the judgments secured shall, within 30 days after

the entry thereof, have been discharged or execution thereof stayed pending

appeal, or shall have been discharged within 30 days after the expiration of

any such stay;

 

(f)            easements,

rights-of-way, restrictions (including zoning restrictions), minor defects or

irregularities in title and other similar charges or encumbrances not, in any

material respect, impairing the use of the encumbered Property for its intended

purposes;

 

(g)           Liens

on Property of any Person securing purchase money Indebtedness (including

Capital Leases and Synthetic Leases) of such Person permitted under

Section 8.1(c), provided that any such Lien attaches to such

Property concurrently with or within 90 days after the acquisition thereof;

 

(h)           leases

or subleases granted to others not interfering in any material respect with the

business of any Consolidated Party;

 

(i)            any

interest of title of a lessor under, and Liens arising from UCC financing

statements (or equivalent filings, registrations or agreements in foreign

jurisdictions) relating to, leases permitted by this Credit Agreement;

 

(j)            Liens

deemed to exist in connection with Investments in repurchase agreements

permitted under Section 8.6;

 

(k)           normal

and customary rights of setoff upon deposits of cash in favor of banks or other

depository institutions;

 

(l)            Liens

of a collection bank arising under Section 4-210 of the Uniform Commercial

Code on items in the course of collection;

 

(m)          Liens

of sellers of goods to the Borrower and any of its Subsidiaries arising under

Article 2 of the Uniform Commercial

Code or similar provisions of applicable law in the ordinary course of

business, covering only the goods sold and securing only the unpaid purchase

price for such goods and related expenses;

 

(n)           Liens

existing as of the Closing Date as set forth or as contemplated on Schedule 8.2;

provided that no such Lien shall at any time be extended to or

cover any Property other than the Property subject thereto on the Closing Date;

and

 

(o)           Liens

securing Indebtedness described in Section 8.1(h)(ii).

 

8.3          Nature

of Business.

 

The

Credit Parties will not permit any Consolidated Party to substantively alter

the character or conduct of the business conducted by such Person as of the

Closing Date.

 

63

 

8.4          Consolidation,

Merger, Dissolution, etc.

 

The

Credit Parties will not permit any Consolidated Party to enter into any

transaction of merger or consolidation or liquidate, wind up or dissolve itself

(or suffer any liquidation or dissolution); provided that,

notwithstanding the foregoing provisions of this Section 8.4 but subject

to the terms of Sections 7.12, (a) the Borrower or General Partner may

merge or consolidate with any of its Subsidiaries provided that the

Borrower or General Partner (as applicable) shall be the continuing or

surviving corporation, (b) any Credit Party other than the General Partner

or the Borrower may merge or consolidate with any other Credit Party other than

the General Partner or the Borrower, (c) any Consolidated Party which is

not a Credit Party may be merged or consolidated with or into any Credit Party;

provided that such Credit Party shall be the continuing or surviving

corporation, (d) any Consolidated Party which is not a Credit Party may be

merged or consolidated with or into any other Consolidated Party which is not a

Credit Party, 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 Adverse Effect.

 

8.5          Asset Dispositions/Substitution of

Assets.

 

(a)           The

Credit Parties will not permit any Consolidated Party to make any Asset

Disposition or series of Asset Dispositions in which the aggregate value of the

assets sold or otherwise disposed pursuant to such Asset Disposition or series

of Asset Dispositions exceeds $70,000,000  unless the Borrower shall have delivered

to the Agent at least two (2) Business Days prior to such Asset

Disposition or series of Asset Dispositions a Pro Forma Compliance Certificate

demonstrating on a Pro Forma Basis that, upon giving effect to such Asset

Disposition or series of Asset Dispositions, the Credit Parties shall be in

compliance with all of the covenants contained in Section 7.11.

 

(b)           The General SPE shall not sell,

transfer, assign, pledge, encumber or otherwise dispose of any of its assets

except to the extent the General SPE obtains the prior written consent of the

Agent (which consent may be withheld at the sole reasonable discretion of the

Agent).

 

8.6          Investments.

 

The

Credit Parties will not permit any Consolidated Party to make any Investments

after the Closing Date, except for:

 

(a)           Investments

consisting of cash and Cash Equivalents;

 

(b)           Investments

consisting of accounts receivable created, acquired or made by any Consolidated

Party in the ordinary course of business and payable or dischargeable in

accordance with customary trade terms;

 

(c)           Investments

consisting of Capital Stock, obligations, securities or other property received

by any Consolidated Party in settlement of accounts receivable (created in the

ordinary course of business) from bankrupt obligors or guarantors of bankrupt

obligors;

 

(d)           Investments

consisting of loans or advances to Tenants in an amount not to exceed

$25,000,000.00;

 

(e)           Investments

consisting of advances or loans to directors, officers, employees, agents or

suppliers that do not, in the aggregate, exceed the sum of $700,000.00;

 

(f)            Investments

in any Credit Party;

 

(g)           Investments

entered into in connection with a Term Securitization permitted and

contemplated hereunder;

 

64

 

(h)           Investments

in non-wholly owned general and limited partnerships, joint ventures and other

Persons which are not corporations (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 Development Activities; provided, that (i) the aggregate amount of

Investments made by the Consolidated Parties with respect to such Development

Activities shall not, at any one time, exceed $15,000,000.00 and (ii) all costs

and expenses associated with all existing Development Activities (budget to

completion) shall be included in determining the aggregate Investment of the

Consolidated Parties with respect to such activities;

 

(j)            Investments

consisting of loans to Persons 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) such loans shall be made on commercially reasonable terms;

 

(k)           Investments

in marketable securities that do not, in the aggregate, exceed the sum of

$5,000,000.00;

 

(l)            Investments

in debt and equity securities of Shoney’s, Inc. that do not, in the aggregate,

exceed the sum of $1,800,000.00; provided, that, the Agent is given a summary

of the amount and type of such debt and of equity securities prior to the

making of such investment.

 

8.7          Restricted

Payments.

 

Except

as set forth on Schedule 8.11, the Credit Parties will not permit

any Consolidated Party to, directly or indirectly, declare, order, make or set

apart any sum for or pay any Restricted Payment, except (a) to make

dividends or other distributions payable to any Credit Party (directly or

indirectly through Subsidiaries), (b) Special Purpose Entities may (directly or indirectly through any

intermediate Subsidiaries) (i) make Restricted Payments to the extent required

to do so under the terms of a Term Securitization and (ii) distribute I/0

Strips and other assets to the General Partner, the Borrower or any other

Guarantor and (c) as expressly

permitted by Section 7.11(d), Section 8.6, Section 8.8 or

Section 8.9.

 

8.8          Other

Indebtedness.

 

The

Credit Parties will not permit any Consolidated Party to if any Default or Event

of Default has occurred and is continuing or would be directly or indirectly

caused as a result thereof, (a) after the issuance thereof, amend or

modify any of the terms of any Indebtedness of such Consolidated Party if such

amendment or modification would add or change any terms in a manner adverse to

such Consolidated Party, or shorten the final maturity or average life to

maturity or require any payment to be made sooner than originally scheduled or

increase the interest rate applicable thereto, or (b) make (or give any notice

with respect thereto) any voluntary or optional payment or prepayment or

redemption or acquisition for value of (including without limitation, by way of

depositing money or securities with the trustee with respect thereto before due

for the purpose of paying when due), refund, refinance or exchange of any other

Indebtedness of such Consolidated Party.

 

8.9          Transactions

with Affiliates.

 

The

Credit Parties will not permit any Consolidated Party to enter into or permit

to exist any transaction or series of transactions with any officer, director,

shareholder, Subsidiary or Affiliate of such Person other than

(a) advances of working capital to any Credit Party, (b) transfers of

cash and assets to any Credit Party, (c) intercompany transactions

expressly permitted by Section 8.1, Section 8.4, Section 8.5,

Section 8.6, or Section 8.7, (d) normal compensation and

reimbursement of expenses of officers and directors and (e) except as

otherwise specifically limited in this Credit Agreement, other transactions

which are entered into in the ordinary course of such Person’s business on

terms and conditions substantially as favorable to such Person as would be

obtainable by it in a comparable arms-length transaction with a Person other

than an officer, director, shareholder, Subsidiary or Affiliate.

 

65

 

8.10        Fiscal Year; Organizational Documents.

 

The

Credit Parties will not permit any Consolidated Party to change its fiscal year

or amend, modify or change its articles of incorporation (or corporate charter

or other similar organizational document) or bylaws (or other similar

document).

 

8.11        Limitation

on Restricted Actions.

 

The

Credit Parties will not permit any Consolidated Party to, directly or indirectly,

create or otherwise cause or, except as set forth on Schedule 8.11,

suffer to exist or become effective any encumbrance or restriction on the

ability of any such Person to (a) pay dividends or make any other

distributions to any Credit Party on

its Capital Stock or with respect to any other interest or participation in, or

measured by, its profits, (b) pay any Indebtedness or other obligation

owed to any Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease or

transfer any of its properties or assets to any Credit Party, or (e) act

as a Credit Party and pledge its assets pursuant to the Credit Documents

or any renewals, refinancings, exchanges, refundings or extension thereof,

except (in respect of any of the matters referred to in clauses (a)-(d)

above) for such encumbrances or restrictions existing under or by reason of

(i) this Credit Agreement and the other Credit Documents,

(ii) applicable law, (iii) any

document or instrument governing Indebtedness incurred pursuant to (A)

Section 8.1(b), and (B) with respect to clause (d) of this

Section 8.11 only, Section 8.1(h),  provided that any

such restriction contained therein relates only to the asset or assets

constructed or acquired in connection therewith, (iv) any Permitted Lien

or any document or instrument governing any Permitted Lien, provided

that any such restriction contained therein relates only to the asset or assets

subject to such Permitted Lien or (v) customary restrictions and

conditions contained in any agreement relating to the sale of any Property

permitted under Section 8.5 pending the consummation of such sale.

 

8.12        Contingent

Obligations.

 

Neither

the General Partner nor the Borrower shall become or remain liable, or permit

any other Subsidiary to become or remain liable, on or under any Contingent

Obligation other than the following:

 

(a)           Contingent Obligations arising under

any of the Credit Documents;

 

(b)           Contingent Obligations in existence

as of the Closing Date (the material ones having been disclosed to the Agent in

writing on Schedule 8.12(b) attached hereto) and any Contingent

Obligation incurred in replacement, in whole or in part, of any such existing

Contingent Obligations so long as (i) the amount of such replacement Contingent

Obligation shall not be increased, (ii) such replacement Contingent Obligation

shall not mature or otherwise be required to be performed prior to the

corresponding maturity or performance date of the Contingent Obligation being

so replaced, and (iii) if the Contingent Obligation being so replaced is

subordinated to any of the Credit Party Obligations, such replacement

Contingent Obligation shall be subordinated to such obligations to at least the

same extent;

 

(c)           Contingent Obligations resulting from

endorsement of negotiable instruments for collection or deposit in the ordinary

course of business;

 

(d)           Contingent Obligations incurred in

the 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 extent

constituting Indebtedness permitted under Section 8.1; and

 

(f)            Guaranties by a Consolidated Party

of the obligations of another Consolidated Party;

 

8.13        Sale

Leasebacks.

 

Notwithstanding

anything contained herein to the contrary, the Credit Parties will not permit

any Consolidated Party to enter into any Sale and Leaseback Transaction.

 

66

 

8.14        Intentionally

Omitted.

 

8.15        Negative

Pledges/Liens.

 

Notwithstanding anything

contained herein or in any other Credit Document to the contrary:

 

(a)           none

of the Consolidated Parties shall, at any time, enter into, assume or become

subject to any Negative Pledge on their Property prohibiting or otherwise

restricting the existence of any Lien upon any of its Property in favor of the

Agent (for the benefit of the Lenders) for the purpose of securing the Credit

Party Obligations, except (i) in connection with any document or instrument

governing Indebtedness incurred in accordance with Section 8.1(c);

provided, that any such restriction contained therein relates only to the asset

or assets constructed or acquired in connection therewith, (ii) in connection

with any Permitted Lien or any document or instrument governing any Permitted

Lien, provided, that any such restriction contained therein relates only to the

asset or assets subject to such Permitted Lien and (iii) pursuant to customary

restrictions and conditions contained in any agreement relating to the sale of

any Property permitted under Section 8.5, pending the consummation of such

sale;

 

(b)           none of the Consolidated Parties

shall, at any time, pledge or otherwise encumber (except in connection herewith

or with any of the Credit Documents) any income derived from any of the assets

contributing to the calculation of Borrowing Base Asset Value;

 

(c)           the General SPE shall not, at

any time, contract, create, incur, assume

or permit to exist any Lien with respect to any of its assets except to the

extent such Liens are of the types described in Sections 8.2(b), (c), (d), (e),

(f), (h) and (i);

 

(d)           the General SPE shall  not, in any case, incur any Indebtedness

or Contingent Obligations aside from Indebtedness and/or Contingent Obligations

arising in connection with the Credit Documents and Indebtedness and/or

Contingent Obligations of the type described in Section 8.1(e); and

 

(e)           USRP Operating shall not, at any

time, contract, create, incur, assume or permit to exist any Lien on its

ownership interests in the General SPE or on the income derived therefrom

(except to the extent such Liens arise in connection with the Credit

Documents).

 

8.16        Operating

Lease Obligations.

 

The

Credit Parties will not permit any Consolidated Party to enter into, assume or

permit to exist any obligations for the payment of rental under Operating

Leases (excluding ground leases) which in the aggregate for all such Persons

would exceed $1,000,000 in any fiscal year.

 

8.17        No Foreign Subsidiaries.

 

The

Credit Parties will not create, acquire or permit to exist any Foreign

Subsidiary.

 

8.18        Ground

Leases.

 

For

all leases executed following the Closing Date, the USRP REIT, the General

Partner and the Borrower shall, and shall not permit any other Consolidated

Subsidiary to, lease as lessee any real property pursuant to a ground lease

unless such ground lease contains customary provisions protective of any lender

to the lessee which provisions do not vary in any material respect from those

required 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 shall not permit

any other Consolidated Subsidiary to, permit any of its respective assets to

become or be deemed to be “plan assets” within the meaning of ERISA, the Code

and the respective regulations promulgated thereunder.

 

67

 

8.20        Transfer

of Assets to Non-Guarantor Subsidiaries and Affiliates.

 

The

USRP REIT, the General Partner and the Borrower shall not, and shall not permit

any other Consolidated Subsidiary to, transfer any of their respective assets

to any of their respective Subsidiaries or Affiliates except to the extent the

applicable Subsidiary or Affiliate has, at the time of such transfer, executed

a Joinder Agreement and is a Guarantor hereunder.

 

ARTICLE IX

 

EVENTS OF DEFAULT

 

9.1          Events of

Default.

 

An

Event of Default shall exist upon the occurrence and during the continuance of

any of the following specified events (each an “Event of Default”):

 

(a)           Payment.  Any Credit Party shall

 

(i)            default

in the payment when due of any principal of any of the Loans or of any

reimbursement obligations arising from drawings under Letters of Credit, or

 

(ii)           default,

and such default shall continue for three (3) or more Business Days, in

the payment when due of any interest on the Loans or on any reimbursement

obligations arising from drawings under Letters of Credit, or of any Fees or

other amounts owing hereunder, under any of the other Credit Documents or in

connection herewith or therewith; or

 

(b)           Representations.  Any representation, warranty or statement

made or deemed to be made by any Credit Party herein, in any of the other

Credit Documents, or in any statement or certificate delivered or required to

be delivered pursuant hereto or thereto shall prove untrue in any material

respect on the date as of which it was deemed to have been made; or

 

(c)           Covenants.  Any Credit Party shall

 

(i)            default

in the due performance or observance of any term, covenant or agreement

contained in Sections 7.2, 7.9, 7.11 or 7.12 or Section 8;

 

(ii)           default

in the due performance or observance of any term, covenant or agreement

contained in Sections 7.1(a), (b), (c) or (d) and such default shall

continue unremedied for a period of at least 5 days after the earlier of an

Executive Officer of a Credit Party becoming aware of such default or notice

thereof by the Agent; or

 

(iii)          default

in 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 other

Credit Document and such default shall continue unremedied for a period of at

least 30 days after the earlier of an Executive Officer of a Credit Party

becoming aware of such default or notice thereof by the Agent; or

 

(d)           Other

Credit Documents.  Except as a

result of or in connection with a dissolution, merger or disposition of a

Subsidiary not prohibited by

Section 8.4 or Section 8.5, any Credit Document shall fail to be in

full force and effect or to give the Agent and/or the Lenders the Liens,

rights, powers and privileges purported to be created thereby, or any Credit

Party shall so state in writing; or

 

(e)           Guaranties.  Except as the result of or in connection

with (i) a dissolution, merger or disposition of a Subsidiary not

prohibited by Section 8.4 or

Section 8.5 or (ii) a release specifically provided for in

Section 4.8, the guaranty given by any Guarantor hereunder (including any

Person after the Closing Date

 

68

 

in

accordance with Section 7.12) or any provision thereof shall cease to be

in full force and effect, or any Guarantor (including any Person after the

Closing Date in accordance with Section 7.12) hereunder or any Person

acting by or on behalf of such Guarantor shall deny or disaffirm such

Guarantor’s obligations under such guaranty, or any Guarantor shall default in

the due performance or observance of any term, covenant or agreement on its

part to be performed or observed pursuant to any guaranty; or

 

(f)            Bankruptcy,

etc.  Any Bankruptcy Event shall

occur with respect to the Borrower, the General Partner or any other

Consolidated Party; or

 

(g)           Challenge

of Loan Documents.  The Borrower or

any Guarantor shall disavow, revoke or terminate or attempt to do any of the

foregoing with respect to any Loan Document to which it is a party or shall

otherwise challenge or contest in any action, suit or proceeding in any court

or before any Governmental Authority the validity or enforceability of any Loan

Document; or

 

(h)           Defaults

under Other Agreements.

 

(i)            Any

Consolidated Party shall default in the performance or observance (beyond the

applicable grace period with respect thereto, if any) of any material

obligation or condition of any contract or lease material to the Consolidated

Parties taken as a whole if such default could reasonably be expected to have a

Material Adverse Effect; or

 

(ii)           With

respect to Indebtedness (other than Indebtedness outstanding under this Credit

Agreement) in excess of $5,000,000 in the aggregate (for the Consolidated

Parties taken as a whole), (A) either (1) a default in any payment

shall occur and continue (beyond the applicable grace period with respect

thereto, if any) with respect to any such Indebtedness, (2) a default in

the observance or performance relating to such Indebtedness or contained in any

instrument or agreement evidencing, securing or relating thereto and such

default is not cured within the applicable grace period, if any, or  (3) any event or condition shall occur or

exist, the effect of which event or condition is to cause, or permit, the

holder or holders of such Indebtedness (or trustee or agent on behalf of such

holders) to cause any such Indebtedness to become due prior to its stated

maturity; or (B) any such Indebtedness shall be declared due and payable,

or required to be prepaid other than by a regularly scheduled required

prepayment, prior to the stated maturity thereof; or

 

(i)            Judgments.  One or more judgments or decrees shall be

entered against one or more of the Consolidated Parties involving a liability

of $1,000,000 or more in the aggregate (to the extent not paid or fully covered

by insurance provided by a carrier who has acknowledged coverage and has the

ability to perform) and any such judgments or decrees shall not have been

vacated, discharged or stayed or bonded pending appeal within 30 days from the

entry thereof; or

 

(j)            ERISA.  Any of the following events or conditions,

if such event or condition could involve possible taxes, penalties, and other

liabilities in an aggregate amount in excess of $1,000,000:  (i) any “accumulated funding

deficiency,” as such term is defined in Section 302 of ERISA and

Section 412 of the Code, whether or not waived, shall exist with respect

to any Plan, or any lien shall arise on the assets of any Consolidated Party or

any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event

shall occur with respect to a Single Employer Plan, which is, in the reasonable

opinion of the Agent, likely to result in the termination of such Plan for

purposes of Title IV of ERISA; (iii) an ERISA Event shall occur with

respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the

reasonable opinion of the Agent, likely to result in (A) the termination

of such Plan for purposes of Title IV of ERISA, or (B) any

Consolidated Party or any ERISA Affiliate incurring any liability in connection

with a withdrawal from, reorganization of (within the meaning of

Section 4241 of ERISA), or insolvency (within the meaning of

Section 4245 of ERISA) of such Plan; or (iv) any prohibited

transaction (within the meaning of Section 406 of ERISA or

Section 4975 of the Code) or breach of fiduciary responsibility shall

occur which may subject any Consolidated Party or any ERISA Affiliate to any

liability under Sections 406, 409, 502(i), or 502(l) of ERISA or

Section 4975 of the Code, or under any agreement or other instrument

pursuant to which any Consolidated Party or any ERISA Affiliate has agreed or

is required to indemnify any person against any such liability; or

 

69

 

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

 

(l)            REIT

Status.  The USRP REIT shall, for

any reason, lose or fail to maintain its status as a REIT; or

 

(m)          Material

Adverse Effect.  The Borrower, the

General Partner, any Consolidated Party or any combination thereof shall

experience a change in financial condition that, in the reasonable opinion of

the Agent, has or will have a Material Adverse Effect; or

 

(n)           Disposition

of Assets.  The proceeds generated

from sales, conveyances and dispositions (whether such transactions are entered

into voluntarily or otherwise) of the assets of the Borrower, General Partner

and their Subsidiaries for the period commencing as of the Closing Date and

extending through any given date during the term hereof are, in the aggregate,

greater than $135,000,000 (exclusive of the cash proceeds generated by a Term

Securitization); or

 

(o)           Material

Change in Management, Operations or Business.  There shall occur a Change in Management.

 

9.2          Acceleration; Remedies.

 

Upon

the occurrence and during the continuance of an Event of Default, the Agent may

or, upon the request and direction of the Required Lenders, shall, by written

notice to the Credit Parties take any of the following actions:

 

(a)           Termination

of Commitments.  Declare the

Commitments terminated whereupon the Commitments shall be immediately terminated.

 

(b)           Acceleration.  Declare the unpaid principal of and any

accrued interest in respect of all Loans, any reimbursement obligations arising

from drawings under Letters of Credit and any and all other indebtedness or

obligations of any and every kind owing by the Credit Parties to the Agent and/or any of the Lenders hereunder

to be due whereupon the same shall be immediately due and payable without

presentment, demand, protest or other notice of any kind, all of which are

hereby waived by the Credit Parties.

 

(c)           Cash

Collateral.  Direct the Borrower

to pay (and the Borrower hereby

promises to pay, upon receipt of such

notice) to the Agent additional cash, to be held by the Agent, for the benefit

of the Lenders, in a cash collateral account as additional security for the LOC

Obligations in respect of subsequent drawings under all then outstanding

Letters of Credit in an amount equal to the maximum aggregate amount which may

be drawn under all Letters of Credits then outstanding or as additional security

for the reimbursement of any subsequent drawings in relation to the Derivative

Exposure Reserve in an amount equal to the Aggregate Derivative Reserve Amount.

 

(d)           Enforcement

of Rights.  Enforce any and all

rights and interests created and existing under the Credit Documents including,

without limitation, all rights and remedies against any Guarantor and all

rights of set–off.

 

Notwithstanding

the foregoing, if an Event of Default specified in Section 9.1(f) shall

occur with respect to the Borrower, then, without the giving of any notice or

other action by the Agent or the Lenders, (i) the Commitments

automatically shall terminate, (ii) all of the outstanding Credit Party

Obligations automatically shall immediately become due and payable, (iii) the

Borrower automatically shall be

obligated (and hereby promises) to pay to the Agent additional cash, to be held

by the Agent, for the benefit of the Lenders, in a cash collateral account as

additional security for the LOC Obligations in respect of subsequent drawings

under all then outstanding Letters of Credit in an amount equal to the maximum

aggregate amount which may be drawn under all Letters of Credits then

outstanding and (iv) the Borrower automatically

shall be obligated (and hereby promises) to pay to the Agent additional cash,

to be held by the Agent, for the benefit of the Lenders, in a cash collateral

account as additional security for the reimbursement of any subsequent drawings

in relation to the Derivative Exposure Reserve in an amount equal to the

Aggregate Derivative Reserve Amount.

 

 

70

 

ARTICLE X

 

AGENCY PROVISIONS

 

10.1        Appointment, Powers and Immunities.

 

Each Lender hereby

irrevocably appoints and authorizes the Agent to act as its agent under this

Credit Agreement and the other Credit Documents with such powers and discretion

as are specifically delegated to the Agent by the terms of this Credit

Agreement and the other Credit Documents, together with such other powers as

are reasonably incidental thereto.  The

Agent (which term as used in this sentence and in Section 10.5 and the

first sentence of Section 10.6 hereof shall include its Affiliates and its

own and its Affiliates’ officers, directors, employees, and agents):  (a) shall not have any duties or

responsibilities except those expressly set forth in this Credit Agreement and

shall not be a trustee or fiduciary for any Lender; (b) shall not be

responsible to the Lenders for any recital, statement, representation, or

warranty (whether written or oral) made in or in connection with any Credit

Document 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 any

Credit Document, or any other document referred to or provided for therein or

for any failure by any Credit Party or any other Person to perform any of its

obligations thereunder; (c) shall not be responsible for or have any duty

to ascertain, inquire into, or verify the performance or observance of any

covenants or agreements by any Credit Party or the satisfaction of any

condition or to inspect the property (including the books and records) of any

Credit Party or any of its Subsidiaries or Affiliates; and (d) shall not

be responsible for any action taken or omitted to be taken by it under or in

connection with any Credit Document, except for its own gross negligence or

willful misconduct.  The Agent may

employ agents and attorneys-in-fact and shall not be responsible for the

negligence or misconduct of any such agents or attorneys–in–fact

selected by it with reasonable care.

 

10.2        Reliance by Agent.

 

The Agent shall be

entitled to rely upon any certification, notice, instrument, writing, or other

communication (including, without limitation, any thereof by telephone or

telecopy) 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 advice

and 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 of

any Note as the holder thereof for all purposes hereof unless and until the

Agent receives and accepts an Assignment and Assumption executed in accordance

with Section 11.3(b) hereof.  As to

any matters not expressly provided for by this Credit Agreement, the Agent

shall not be required to exercise any discretion or take any action, but shall

be required to act or to refrain from acting (and shall be fully protected in

so acting or refraining from acting) upon the instructions of the Required

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 that

exposes the Agent to personal liability or that is contrary to any Credit

Document or applicable law or unless it shall first be indemnified to its

satisfaction by the Lenders against any and all liability and expense which may

be incurred by it by reason of taking any such action.

 

10.3        Defaults.

 

The Agent shall not be

deemed to have knowledge or notice of the occurrence of a Default or Event of

Default unless the Agent has received written notice from a Lender or a Credit

Party specifying such Default or Event of Default and stating that such notice

is a “Notice of Default”.  In the event

that the Agent receives such a notice of the occurrence of a Default or Event

of Default, the Agent shall give prompt notice thereof to the Lenders.  The Agent shall (subject to

Section 10.2 hereof) take such action with respect to such Default or

Event of Default as shall reasonably be directed by the Required Lenders (or

such other Lenders as required by Section 11.6), provided  that,

unless and until the Agent shall have received such directions, the Agent may

(but shall not be obligated to) take such action, or refrain from taking such

action, with respect to such Default or Event of Default as it shall deem

advisable in the best interest of the Lenders.

 

71

 

10.4        Rights as a Lender.

 

With respect to its

Commitment and the Loans made by it, BOA (and any successor acting as Agent) in

its capacity as a Lender hereunder shall have the same rights and powers

hereunder as any other Lender and may exercise the same as though it were not

acting as the Agent, and the term “Lender” or “Lenders” shall, unless the

context otherwise indicates, include the Agent in its individual capacity.  BOA (and any successor acting as Agent) and

its Affiliates may (without having to account therefor to any Lender) accept

deposits from, lend money to, make investments in, provide services to, and

generally engage in any kind of lending, trust, or other business with any

Credit Party or any of its Subsidiaries or Affiliates as if it were not acting

as Agent, and BOA (and any successor acting as Agent) and its Affiliates may

accept fees and other consideration from any Credit Party or any of its Subsidiaries

or Affiliates for services in connection with this Credit Agreement or

otherwise without having to account for the same to the Lenders.

 

10.5        Indemnification.

 

The Lenders agree to

indemnify the Agent (to the extent not reimbursed under Section 11.5 hereof,

but without limiting the obligations of the Credit Parties under such Section)

ratably (in accordance with their respective Revolving

Commitments (or, if the Revolving Commitments have been terminated, the

outstanding Revolving Loans and Participation Interests in Letters of Credit

(including the Participation Interests of the Issuing Lender in Letters of

Credit)) for any and all liabilities, obligations, losses, damages,

penalties, actions, judgments, suits, costs, expenses (including attorneys’ fees),

or disbursements of any kind and nature whatsoever that may be imposed on,

incurred by or asserted against the Agent (including by any Lender) in any way

relating to or arising out of any Credit Document or the transactions

contemplated thereby or any action taken or omitted by the Agent under any

Credit Document; provided that no Lender shall be liable for any of the

foregoing to the extent they arise from the gross negligence or willful

misconduct of the Person to be indemnified. 

Without limitation of the foregoing, each Lender agrees to reimburse the

Agent promptly upon demand for its ratable share of any costs or expenses

payable by the Credit Parties under Section 11.5, to the extent that the

Agent is not promptly reimbursed for such costs and expenses by the Credit

Parties.  The agreements in this Section 10.5 shall survive the repayment of

the Loans, LOC Obligations and other obligations under the Credit Documents and

the termination of the Commitments hereunder.

 

10.6        Non-Reliance on Agent and Other

Lenders.

 

Each Lender agrees that

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, made

its own credit analysis of the Credit Parties and their Subsidiaries and

decision to enter into this Credit Agreement and that it will, independently

and without reliance upon the Agent or any other Lender, and based on such

documents and information as it shall deem appropriate at the time, continue to

make its own analysis and decisions in taking or not taking action under the

Credit Documents.  Except for notices,

reports, and other documents and information expressly required to be furnished

to the Lenders by the Agent hereunder, the Agent shall not have any duty or

responsibility to provide any Lender with any credit or other information

concerning the affairs, financial condition, or business of any Credit Party or

any of its Subsidiaries or Affiliates that may come into the possession of the

Agent or any of its Affiliates.

 

10.7        Successor Agent.

 

The Agent may resign at

any time by giving notice thereof to the Lenders and the Credit Parties.  Upon any such resignation, the Required

Lenders shall have the right to appoint a successor Agent.  If no successor Agent shall have been so

appointed by the Required Lenders and shall have accepted such appointment

within thirty (30) days after the retiring Agent’s giving of notice of

resignation, then the retiring Agent may, on behalf of the Lenders, appoint a

successor Agent which shall be a commercial bank organized under the laws of

the United States having combined capital and surplus of at least

$100,000,000.  Upon the acceptance of

any appointment as Agent hereunder by a successor, such successor shall

thereupon succeed to and become vested with all the rights, powers, discretion,

privileges, and duties of the retiring Agent, and the retiring Agent shall be

discharged from its duties and obligations hereunder.  After any retiring Agent’s resignation hereunder as Agent, the

provisions of this Section 10 shall continue in effect for its benefit in

respect of any actions taken or omitted to be taken by it while it was acting

as Agent.

 

72

 

ARTICLE X1

 

MISCELLANEOUS

 

11.1        Notices.

 

Except

as otherwise expressly provided herein, all notices and other communications

shall have been duly given and shall be effective (a) when delivered,

(b) when transmitted via telecopy (or other facsimile device) to the

number set out below, (c) the Business Day following the day on which the

same has been delivered prepaid (or

pursuant to an invoice arrangement) to

a reputable national overnight air courier service, or (d) the third

Business Day following the day on which the same is sent by certified or

registered mail, postage prepaid, in each case to the respective parties at the

address, in the case of the Credit Parties and the Agent, set forth below, and, in the case of the Lenders, set

forth on Schedule 2.1(a), or at such other address as such party

may 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:  H.G. (Carey) Carrington, JR. CFO, COO

Telephone:

Telecopy:

 

if

to the Agent:

 

Bank

of America, N.A.

Portfolio

Management - Charlotte

#NC1-007-15-08

100

North Tryon Street

Charlotte,

NC 28255

Attn:

Russ Ruhnke

Telephone:

(704) 388-7057

Telecopy:

(704) 388-8841

 

and

to:

 

Bank

of America, N.A.

1101

Wootton Parkway, 3rd Floor

Mail

Code:  MD9-978-03-02

Rockville,

MD 20852

Attn:

Derinda Hammond

Telephone:

(301) 517-3186

Telecopy:

(301) 517-3218

 

11.2        Right of Set-Off; Adjustments.

 

Upon the occurrence and

during the continuance of any Event of Default, each Lender (and each of its

Affiliates) is hereby authorized at any time and from time to time, to the

fullest extent permitted by law, to set off and apply any and all deposits

(general or special, time or demand, provisional or final) at any time held and

other indebtedness at any time owing by such Lender (or any of its Affiliates)

to or for the credit or the account of any Credit Party against any and all of

the obligations of such Person now or hereafter existing under this Credit

Agreement, under the Notes, under any other Credit Document or otherwise,

irrespective of whether such Lender shall have made any demand hereunder or

thereunder and although such obligations may be unmatured.  Each Lender agrees promptly to notify any

affected Credit Party after any such set-off and application made by such

Lender; provided, however, that the failure to give such notice

shall not affect the validity of such set-off and

 

73

 

application.  The rights of each Lender under this

Section 11.2 are in addition to other rights and remedies (including,

without limitation, other rights of set-off) that such Lender may have.

 

11.3        Successors and Assigns.

 

(a)           The provisions of this Agreement

shall be binding upon and inure to the benefit of the parties hereto and their

respective successors and assigns permitted hereby, except that the Borrower

may not assign or otherwise transfer any of its rights or obligations hereunder

without the prior written consent of each Lender and no Lender may assign or

otherwise transfer any of its rights or obligations hereunder except (i) to an

Eligible Assignee in accordance with the provisions of paragraph (b) of this

Section, (ii) by way of participation in accordance with the provisions of

paragraph (d) of this Section or (iii) by way of pledge or assignment of a

security interest subject to the restrictions of paragraph (f) of this Section

(and any other attempted assignment or transfer by any party hereto shall be

null and void).  Nothing in this

Agreement, expressed or implied, shall be construed to confer upon any Person

(other than the parties hereto, their respective successors and assigns

permitted hereby, Participants to the extent provided in paragraph (d) of this

Section and, to the extent expressly contemplated hereby, the Related Parties

of each of the Agent and the Lenders) any legal or equitable right, remedy or

claim under or by reason of this Agreement.

 

(b)           Any Lender may at any time assign to

one or more Eligible Assignees all or a portion of its rights and obligations

under this Agreement (including all or a portion of its Commitment and the

Loans at the time owing to it); provided that (i) except in the case of

an assignment of the entire remaining amount of the assigning Lender’s

Commitment and the Loans at the time owing to it or in the case of an

assignment to a Lender or an Affiliate of a Lender or an Approved Fund with

respect to a Lender, the aggregate amount of the Commitment (which for this

purpose includes Loans outstanding thereunder) or, if the applicable Commitment

is not then in effect, the principal outstanding balance of the Loan of the

assigning Lender subject to each such assignment (determined as of the date the

Assignment and Assumption with respect to such assignment is delivered to the

Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of

the Trade Date) shall not be less than $2,500,000, in the case of any

assignment in respect of a revolving facility, or $1,000,000, in the case of

any assignment in respect of a term facility, unless each of the Agent and, so

long as no default or Event of Default has occurred and is continuing hereunder

or any other Credit Document, the Borrower otherwise consent (each such consent

not to be unreasonably withheld or delayed); (ii) each partial assignment shall

be made as an assignment of a proportionate part of all the assigning Lender’s

rights and obligations under this Agreement with respect to the Loan or the

Commitment assigned, except that this clause (ii) shall not apply to rights in

respect of Competitive Loans; (iii) any assignment of a Revolving Commitment

must be approved by the Agent and the Issuing Lender unless the Person that is

the proposed assignee is itself a Lender with a Revolving Commitment (whether

or not the proposed assignee would otherwise qualify as an Eligible Assignee);

and (iv) the parties to each assignment shall execute and deliver to the Agent

an Assignment and Assumption, together with a processing and recordation fee of

$3,500,

and the Eligible Assignee, if it shall not be a Lender, shall deliver to the

Agent an Administrative Questionnaire. 

Subject to acceptance and 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 the extent of the interest assigned by such

Assignment and Assumption, have the rights and obligations of a Lender under

this Agreement, and the assigning Lender thereunder shall, to the extent of the

interest assigned by such Assignment and Assumption, be released from its

obligations under this Agreement (and, in the case of an Assignment and

Assumption covering all of the assigning Lender’s rights and obligations under

this Agreement, such Lender shall cease to be a party hereto) but shall

continue to be entitled to the benefits of Sections 3.6 through 3.12  with

respect to facts and circumstances occurring prior to the effective date of

such assignment.  Any assignment or

transfer by a Lender of rights or obligations under this Agreement that does

not comply with this paragraph shall be treated for purposes of this Agreement

as a sale by such Lender of a participation in such rights and obligations in

accordance with paragraph (d) of this Section.

 

(c)           The Agent, acting solely for this

purpose as an agent of the Borrower, shall maintain at one of its offices a

copy of each Assignment and Assumption delivered to it and a register for the

recordation of the names and addresses of the Lenders, and the Commitments of,

and principal amounts of the Loans owing to, each Lender pursuant to the terms

hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the

Borrower, the Agent and the Lenders may treat each Person whose name is

recorded in the Register pursuant to the terms hereof as a Lender hereunder for

all purposes of this Agreement, notwithstanding notice to the contrary.

 

74

 

The Register shall be

available for inspection by the Borrower and any Lender, at any reasonable time

and from time to time upon reasonable prior notice.

 

(d)           Any Lender may at any time, without

the consent of, or notice to, the Borrower or the Agent, sell participations to

any Person (other than a natural person, the Borrower or any of the Credit

Parties or any of the Borrower’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 this Agreement (including all or a

portion of its Commitment and/or the Loans owing to it); provided that

(i) such Lender’s obligations under this Agreement shall remain unchanged,

(ii) such Lender shall remain solely responsible to the other parties

hereto for the performance of such obligations and (iii) the Borrower, the

Agent and the other Lenders shall continue to deal solely and directly with

such Lender in connection with such Lender’s rights and obligations under this

Agreement.  Any agreement or instrument

pursuant to which a Lender sells such a participation shall provide that such

Lender shall retain the sole right to enforce this Agreement and to approve any

amendment, modification or waiver of any provision of this Agreement; provided

that such agreement or instrument may provide that such Lender will not,

without the consent of the Participant, agree to any amendment, modification or

waiver described in Section 11.6 that affects such Participant.  Subject to paragraph (e) of this Section,

the Borrower agrees that each Participant shall be entitled to the benefits of

Sections 3.6 through 3.12  to the same extent as if it were a Lender

and had acquired its interest by assignment pursuant to paragraph (b) of this

Section.  To the extent permitted by

law, each Participant also shall be entitled to the benefits of Section 11.2 as

though it were a Lender, provided such Participant agrees to be subject to

Sections 3.14 and 3.15 as though it were a Lender.

 

(e)           A Participant shall not be entitled

to receive any greater payment under Sections 3.6 through 3.12  than

the applicable Lender would have been entitled to receive with respect to the

participation sold to such Participant, unless the sale of the participation to

such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender

if it were a Lender shall not be entitled to the benefits of Section 3.11

unless the Borrower is notified of the participation sold to such Participant

and such Participant agrees, for the benefit of the Borrower, to comply with

Section 3.11 as though it were a Lender.

 

(f)            Any Lender may at any time pledge or

assign a security interest in all or any portion of its rights under this

Agreement to secure obligations of such Lender, including without limitation

any pledge or assignment to secure obligations to a Federal Reserve Bank; provided

that no such pledge or assignment shall release such Lender from any of its

obligations hereunder or substitute any such pledgee or assignee for such

Lender as a party hereto.

 

11.4        No Waiver; Remedies Cumulative.

 

No

failure or delay on the part of the Agent or any Lender in exercising any

right, power or privilege hereunder or under any other Credit Document and no

course of dealing between the Agent or any Lender and any of the Credit Parties

shall operate as a waiver thereof; nor shall any single or partial exercise of

any right, power or privilege hereunder or under any other Credit Document preclude

any other or further exercise thereof or the exercise of any other right, power

or privilege hereunder or thereunder. 

The rights and remedies provided herein are cumulative and not exclusive

of any rights or remedies which the Agent or any Lender would otherwise

have.  No notice to or demand on any

Credit Party in any case shall entitle the Credit Parties to any other or further notice or demand in

similar or other circumstances or constitute a waiver of the rights of the

Agent or the Lenders to any other or further action in any circumstances

without notice or demand.

 

11.5        Expenses; Indemnification.

 

(a)           The Credit Parties jointly and

severally agree to pay on demand all costs and expenses of the Agent in

connection with the syndication, preparation, execution, delivery,

administration, modification, and amendment of this Credit Agreement, the other

Credit 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 respect

to advising the Agent as to its rights and responsibilities under the Credit

Documents.  The Credit Parties further

jointly and severally agree to pay on demand all costs and expenses of the

Agent and the Lenders, if any (including, without limitation, reasonable

attorneys’ fees and expenses and the cost of internal counsel), in connection

with any work–out or restructuring relating to the Credit Facilities or

any

 

75

 

enforcement (whether

through negotiations, legal proceedings, or otherwise) of any of the Credit

Documents.

 

(b)           The Credit Parties jointly and

severally agree to indemnify and hold harmless the Agent and each Lender and

each of their Affiliates and their respective officers, directors, employees,

agents, and advisors (each, an “Indemnified Party”) from and against any

and all claims, damages, losses, liabilities, costs, and expenses (including,

without limitation, reasonable attorneys’ fees) that may be incurred by or

asserted or awarded against any Indemnified Party, in each case arising out of

or in connection with or by reason of (including, without limitation, in

connection with any investigation, litigation, or proceeding or preparation of

defense in connection therewith) the Credit Documents, any of the transactions

contemplated 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 is

found in a final, non-appealable judgment by a court of competent jurisdiction

to have resulted from such Indemnified Party’s gross negligence or willful

misconduct.  In the case of an

investigation, litigation or other proceeding to which the indemnity in this

Section 11.5 applies, such indemnity shall be effective whether or not

such investigation, litigation or proceeding is brought by any of the Credit

Parties, their respective directors, shareholders or creditors or an Indemnified

Party or any other Person or any Indemnified Party is otherwise a party thereto

and whether or not the transactions contemplated hereby are consummated.  The Credit Parties agree not to assert any

claim against the Agent, any Lender, any of their Affiliates, or any of their

respective directors, officers, employees, attorneys, agents, and advisers, on

any theory of liability, for special, indirect, consequential, or punitive

damages arising out of or otherwise relating to the Credit Documents, any of

the transactions contemplated herein or the actual or proposed use of the

proceeds of the Loans.

 

(c)           Without prejudice to the survival of

any other agreement of the Credit Parties hereunder, the agreements and

obligations of the Credit Parties contained in this Section 11.5 shall survive the repayment of the Loans, LOC

Obligations and other obligations under the Credit Documents and the

termination of the Commitments hereunder.

 

11.6        Amendments, Waivers and Consents.

 

Neither

this Credit Agreement nor any other Credit Document nor any of the terms hereof

or thereof may be amended, changed, waived, discharged or terminated unless

such amendment, change, waiver, discharge or termination is in writing entered

into by, or approved in writing by, each of the Credit Parties party thereto

and the Required Lenders, provided, however, that:

 

(a)           without

the consent of each Lender affected thereby, neither this Credit Agreement nor

any other Credit Document may be amended, changed, waived, discharged or

terminated so as to

 

(i)            extend

any Commitment or the final maturity of any Loan or of any reimbursement

obligation, or any portion thereof, arising from drawings under Letters of

Credit, or extend or waive any Principal Amortization Payment of any Loan, or

any portion thereof,

 

(ii)           reduce

the rate or extend the time of payment of interest on any Loan or of any

reimbursement obligation, or any portion thereof, arising from drawings under

Letters of Credit (other than as a result of waiving the applicability of any

post–default increase in interest rates) or of any Fees,

 

(iii)          reduce

or waive the principal amount of any Loan or of any reimbursement obligation,

or any portion thereof, arising from drawings under Letters of Credit,

 

(iv)          increase

the Commitment of a Lender over the amount thereof in effect (it being

understood and agreed that a waiver of any condition precedent set forth in

Section 5.2 or of any Default or Event of Default or mandatory reduction

in the Commitments shall not constitute a change in the terms of any Commitment

of any Lender),

 

76

 

(v)           except

as the result of or in connection with a dissolution, merger or disposition of

a Consolidated Party not prohibited by

Section 8.4 or Section 8.5, release the Borrower or substantially all

of the other Credit Parties from its or their obligations under the Credit

Documents,

 

(vi)          amend,

modify or waive any provision of this Section 11.6,

 

(vii)         reduce

any percentage specified in, or otherwise modify, the definition of Required

Lenders, or

 

(viii)        consent

to the assignment or transfer by the Borrower of all or substantially all of

the other Credit Parties of any of its or their rights and obligations under

(or in respect of) the Credit Documents except as permitted thereby;

 

(b)           without

the consent of the Required Lenders, no Default or Event of Default may be

waived for purposes of Section 5.2(d);

 

(c)           without

the consent of the Agent, no provision of Section 10 may be amended,

changed, waived, discharged or terminated; and

 

(d)           without

the consent of the Issuing Lender, no provision of Section 2.2 may be

amended, changed, waived, discharged or terminated.

 

Notwithstanding

the fact that the consent of all the Lenders is required in certain

circumstances as set forth above, (x) each Lender is entitled to vote as

such Lender sees fit on any bankruptcy reorganization plan that affects the

Loans, and each Lender acknowledges that the provisions of Section 1126(c)

of the Bankruptcy Code supersedes the unanimous consent provisions set forth

herein and (y) the Required Lenders shall determine whether or not to

allow a Credit Party to use cash collateral in the context of a bankruptcy or

insolvency proceeding and such determination shall be binding on all of

the Lenders.

 

11.7        Counterparts.

 

This

Credit Agreement may be executed in any number of counterparts, each of which

when so executed shall be an original, but all of which shall constitute one

and the same instrument.  It shall not

be necessary in making proof of this Credit Agreement to produce or account for

more than one such counterpart for each of the parties hereto.  Delivery by facsimile by any of the parties

hereto of an executed counterpart of this Credit Agreement shall be as effective

as an original executed counterpart hereof and shall be deemed a representation

that an original executed counterpart hereof will be delivered.

 

11.8        Headings.

 

The

headings of the sections hereof are provided for convenience only and shall not

in any way affect the meaning or construction of any provision of this Credit

Agreement.

 

11.9        Survival.

 

All

indemnities set 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 Credit Agreement, the making of the Loans, the issuance of the

Letters of Credit, the repayment of the Loans, LOC Obligations and other

obligations under the Credit Documents and the termination of the Commitments

hereunder, and all representations and warranties made by the Credit Parties herein

shall survive until this Credit Agreement shall be terminated in accordance

with the terms of Section 11.13(b).

 

11.10      Governing Law; Submission to

Jurisdiction; Venue.

 

(a)           THIS

CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE OTHER

CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND

THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND

 

77

 

INTERPRETED

IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.  Any legal action or proceeding with respect

to this Credit Agreement or any other Credit Document may be brought in the

courts of the State of North Carolina in Mecklenburg County, or of the United

States for the Western District of North Carolina, and, by execution and

delivery of this Credit Agreement, each of the Credit Parties hereby

irrevocably accepts for itself and in respect of its property, generally and

unconditionally, the nonexclusive jurisdiction of such courts.  Each of the Credit Parties further

irrevocably consents to the service of process out of any of the aforementioned

courts in any such action or proceeding by the mailing of copies thereof by

registered or certified mail, postage prepaid, to it at the address set out for

notices pursuant to Section 11.1, such service to become effective

three (3) days after such mailing. 

Nothing herein shall affect the right of the Agent or any Lender to

serve process in any other manner permitted by law or to commence legal

proceedings or to otherwise proceed against any Credit Party in any other

jurisdiction.

 

(b)           Each

of the Credit Parties hereby irrevocably waives any objection which it may now

or hereafter have to the laying of venue of any of the aforesaid actions or

proceedings arising out of or in connection with this Credit Agreement or any

other Credit Document brought in the courts referred to in subsection (a)

above and hereby further irrevocably waives and agrees not to plead or claim in

any such court that any such action or proceeding brought in any such court has

been brought in an inconvenient forum.

 

(c)           TO

THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS, EACH OF THE CREDIT

PARTIES 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 provision of any of the Credit Documents is determined to be illegal,

invalid or unenforceable, such provision shall be fully severable and the

remaining provisions shall remain in full force and effect and shall be

construed without giving effect to the illegal, invalid or unenforceable

provisions.

 

11.12      Entirety.

 

This

Credit Agreement together with the other Credit Documents represent the entire

agreement of the parties hereto and thereto, and supersede all prior agreements

and understandings, oral or written, if any, including any commitment letters

or correspondence relating to the Credit Documents or the transactions

contemplated herein and therein.

 

11.13      Binding Effect; Termination.

 

(a)           This

Credit Agreement shall become effective at such time on or after the Closing

Date when it shall have been executed by each Credit Party and the Agent, and

the Agent shall have received copies hereof (telefaxed or otherwise) which,

when taken together, bear the signatures of each Lender, and thereafter this

Credit Agreement shall be binding upon and inure to the benefit of each Credit

Party, the Agent and each Lender and their respective successors and assigns.

 

(b)           The

term of this Credit Agreement shall be until the Credit Party Obligations are

Fully Satisfied.

 

11.14      Confidentiality.

 

Each Lender Party agrees

to keep confidential any information furnished or made available to it by or on

behalf of the Credit Parties pursuant to this Credit Agreement; provided

that nothing herein shall prevent any Lender Party from disclosing such

information (a) to any other Lender Party or any Affiliate of any Lender

Party, or any officer, director, employee, agent, or advisor of any Lender

Party or Affiliate of any Lender Party, (b) to any other Person if

reasonably incidental to the administration of the Credit Facilities, (c) as required by any law, rule, or

regulation, (d) upon the order of any court or administrative agency,

(e) upon the request or demand of any

 

78

 

regulatory agency or

authority, (f) that is or becomes available to the public or that is or

becomes available to any Lender Party other than as a result of a disclosure by

any Lender Party prohibited by this Credit Agreement, (g) in connection

with any litigation to which such Lender Party or any of its Affiliates may be

a party, (h) to the extent necessary in connection with the exercise of

any remedy under this Credit Agreement or any other Credit Document,

(i) to the National Association of Insurance Commissioners or any similar

organization or any nationally recognized rating agency that requires access to

information about a Lender’s investment portfolio in connection with ratings

issued with respect to such Lender, (j) to any direct or indirect

contractual counterparty in swap agreements or such contractual counterparty’s

professional advisor (so long as such contractual counterparty or professional

advisor to such contractual counterparty (i) has been approved in writing

by the Borrower and (ii) agrees in a writing enforceable by the Borrower

to be bound by the provisions of this Section 11.14) and (k) subject

to provisions substantially similar to those contained in this

Section 11.14, to any actual or proposed participant or assignee.

 

11.15      Source of Funds.

 

Each

of the Lenders hereby represents and warrants to the Borrower that at least one

of the following statements is an accurate representation as to the source of

funds to be used by such Lender in connection with the financing hereunder:

 

(a)           no

part of such funds constitutes assets allocated to any separate account

maintained by such Lender in which any employee benefit plan (or its related

trust) has any interest;

 

(b)           to

the extent that any part of such funds constitutes assets allocated to any

separate account maintained by such Lender, such Lender has disclosed to the

Borrower the name of each employee benefit plan whose assets in such account

exceed 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 plans

maintained by the same employer or employee organization are deemed to be a

single plan);

 

(c)           to

the extent that any part of such funds constitutes assets of an insurance

company’s general account, such insurance company has complied with all of the

requirements of the regulations issued under Section 401(c)(1)(A) of ERISA;

or

 

(d)           such

funds constitute assets of one or more specific benefit plans which such Lender

has identified in writing to the Borrower.

 

As

used in this Section 11.15, the terms “employee benefit plan” and

“separate account” shall have the respective meanings assigned to such terms in

Section 3 of ERISA.

 

11.16      Regulation D.

 

Each

of the Lenders hereby represents and warrants to the Borrower that it is

a commercial lender, other financial institution or other “accredited” investor

(as defined in SEC Regulation D) which makes or acquires or loans on the

ordinary course of business and that it will make or acquire Loans for its own

account in the ordinary course of business.

 

11.17      Conflict.

 

To

the extent that there is a conflict or inconsistency between any provision

hereof, on the one hand, and any provision of any Credit Document, on the other

hand, this Credit Agreement shall control.

 

[Signature Page to Follow]

 

79

 

IN WITNESS

WHEREOF, each of the parties

hereto has caused a counterpart of this Credit Agreement to be duly executed

and delivered as of the date first above written.

 

	

  BORROWER:

  	

  U.S.

  RESTAURANT PROPERTIES OPERATING, L.P.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

  By:  USRP MANAGING, INC.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

   

  	

  Name:

  	 

	

   

  	

   

  	

  Title:

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

  USRP

  FUNDING 2002-A, L.P.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

  By:  USRP (SFGP) 2, LLC

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

   

  	

  Name:

  	 

	

   

  	

   

  	

  Title:

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	 

	

  GENERAL PARTNER:

  	

   

  	

   

  	 

	

   

  	

  USRP

  MANAGING, INC.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

   

  	

  Name:

  	 

	

   

  	

   

  	

  Title:

  	 

	

   

  	

   

  	

   

  	 

	

  USRP REIT:

  	

   

  	

   

  	 

	

   

  	

  U.S.  RESTAURANT PROPERTIES, INC.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

   

  	

  Name:

  	 

	

   

  	

   

  	

  Title:

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	 

	

  SUBSIDIARY

  GUARANTORS

  	

   

  	

   

  	 

	

   

  	

  ARKANSAS RESTAURANTS

  #10, L.P.,

  	 

	

   

  	

  a Texas limited

  partnership

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By: North American

  Restaurant Management, Inc.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	 

	

   

  	

   

  	

  Title:

  	 

								

 

 

	

   

  	

  RESTAURANT PROPERTY

  PARTNERS, L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: Restaurant Funding,

  Inc

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SOUTHEAST FAST-FOOD

  PARTNERS, L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: Bulldog Management,

  Inc.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (66), LTD.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP GP1, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (FAIN 10), L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP GP5, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (KATY), L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP GP8, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (LAVID), L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP GP, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (PAC), L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP (Cap), Inc.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (QUEST), L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP GP4, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (SAN ANTONIO),

  LTD.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP GP, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (T&C), L.P.,

  
	

   

  	

  a Texas limited

  partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: USRP GP3, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  BULLDOG MANAGEMENT,

  INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  NORTH AMERICAN

  RESTAURANT MANAGEMENT, INC.,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  RESTAURANT FUNDING,

  INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  PINNACLE RESTAURANT

  GROUP, LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (ACQUISITION),

  LLC,

  
	

   

  	

  a Texas limited liability

  company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (BC), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (BILL), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (BOB), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (CAL), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (CAP), INC.

  
	

   

  	

  a Texas corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (CARROLL), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (CENTRAL AVENUE),

  LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (CHRIS), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (DEEDEE), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (DON), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (FINANCE), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (FRED), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (GANT1), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (GANT2), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (GOLD), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP GP, LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP GP1, LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP GP3, LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP GP4, LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP GP5, LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP GP8, LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (ILLINOIS), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (JENNIFER), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (JONES), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (JV2), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (MANAGER), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (MIDON), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (MINNESOTA), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (MISSOURI), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (MOLLY), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (PALMA), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (PAT), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (POPEYE’S), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (RIBBIT), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (SARAH), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (ST.  LOUIS), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (STEVE), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (SUSI), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (SYBRA), LLC,

  
	

   

  	

  a Texas limited

  liability company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (VALERIE), LLC,

  
	

   

  	

  a Texas limited liability

  company

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FUEL SUPPLY, INC.

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  PINNACLE RESTAURANT

  GROUP II, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (CAROLINA), LTD.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  Restaurant Acquisition

  Corp.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (LINCOLN), LTD.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  Restaurant Acquisition

  Corp.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP (NORMAN), LTD.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  Restaurant Acquisition

  Corp.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  USRP (WEST VIRGINIA)

  PARTNERS, L.P.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  USRP Renovation Corp.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  U.S. RESTAURANT

  PROPERTIES DEVELOPMENT, L.P.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:  Restaurant Contractor Corp.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  RESTAURANT RENOVATION

  PARTNERS, L.P.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By: Restaurant

  Acquisition Corp.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  RESTAURANT ACQUISITION

  CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  RESTAURANT CONTRACTOR

  CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

	

   

  	

  USRP RENOVATION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

[remainder of page

left intentionally blank – additional signature page to follow]

 

 

	

  LENDERS:

  	

  BANK OF AMERICA, N.A.

  
	

   

  	

  individually

  in its capacity as a

  Lender and in its capacity as Agent

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
						

 

 

Schedule 1.1(a)

 

Revolving Commitments

 

	

  Lender

  	

   

  	

  Revolving

  Committed Amount

  	

   

  	

  Revolving

  Commitment Percentage

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1.

  Bank of America, N.A.

  	

   

  	

  $

  	

  35,000,000

  	

   

  	

  100.00

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Totals:

  	

   

  	

  $

  	

  35,000,000

  	

   

  	

  100.00

  	

  %

  

 

 

Schedule 2.1(a)

 

LENDER

ADDRESSES AND COMMITMENTS

 

Lender/Agent:

 

Bank

of America, N.A.

 

Bank

of America, N.A.

Portfolio

Management - Charlotte

#NC1-007-15-08

100

North Tryon Street

Charlotte,

NC 28255

Attn:

Russ Ruhnke

Telephone:

(704) 388-7057

Telecopy:

(704) 388-8841

 

and:

 

Bank

of America, N.A.

1101

Wootton Parkway, 3rd Floor

Mail

Code:  MD9-978-03-02

Rockville,

MD 20852

Attn:

Derinda Hammond

Telephone:

(301) 517-3186

Telecopy:

(301) 517-3218

 

Other

Lenders:

 

None.

 

2

 

Schedule 5.1(i)

 

CORPORATE STRUCTURE

 

3

 

Schedule 6.4

 

REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS

 

4

 

Schedule 6.9

 

LITIGATION

 

5

 

Schedule 6.12

 

ERISA

 

6

 

Schedule 6.13

 

SUBSIDIARIES

 

7

 

Schedule 6.16

 

ENVIRONMENTAL DISCLOSURES

 

8

 

Schedule 6.20(c)

 

CHIEF EXECUTIVE OFFICES/

PRINCIPAL PLACES OF BUSINESS

 

9

 

Schedule 6.28

 

CLOSING DATE

BORROWING BASE ASSETS

 

10

 

Schedule 7.6

 

INSURANCE

 

11

 

Schedule 8.1

 

INDEBTEDNESS

 

12

 

Schedule 8.2

 

LIENS

 

13

Schedule 8.6

 

INVESTMENTS

 

14

 

Exhibit 2.1(b)(i)

 

FORM OF NOTICE OF BORROWING

 

Bank

of America, N.A.,

  as Agent for the Lenders

101

North Tryon Street

Independence

Center, 15th Floor

NC1-001-15-04

Charlotte,

North Carolina  28255

Attention:  Agency Services

 

Ladies

and Gentlemen:

 

The

undersigned, U.S.  RESTAURANT  PROPERTIES OPERATING, L.P., as the principal

borrower thereunder (the “Borrower”), refers to the Credit Agreement

dated as of

              ,

2002 (as amended, modified, restated or supplemented from time to time, the “Credit

Agreement”), among the Borrower, the Guarantors, the Lenders and Bank of

America, N.A., as Agent.  Capitalized

terms used herein and not otherwise defined herein shall have the meanings

assigned to such terms in the Credit Agreement.  The Borrower hereby gives notice pursuant to Section 2.1 of

the Credit Agreement that it requests a Revolving Loan advance under the Credit

Agreement, and in connection therewith sets forth below the terms on which 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

  	

   

  	

   

  

 

In

accordance with the requirements of Section 5.2, the Borrower hereby

reaffirms the representations and warranties set forth in the Credit Agreement

as provided in clause (b) of such Section, and confirms that the matters

referenced in clauses (c), (d) and (e) of such Section, are true and correct.

 

	

   

  	

  U.S.  RESTAURANT  PROPERTIES OPERATING, L.P.,

  
	

   

  	

  as

  Principal Borrower

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
						

 

15

 

Exhibit 2.1(e)

 

FORM OF REVOLVING NOTE

 

	

  $

  	

   

  	

   

  	

   

  	

  , 2002

  

 

FOR

VALUE RECEIVED, U.S.  RESTAURANT  PROPERTIES OPERATING, L.P., a Delaware

corporation and USRP FUNDING 2000-A, L.P., a Delaware limited partnership

(collectively, the “Borrower”), hereby promise to pay to the order of

                                        ,

its successors and assigns (the “Lender”), at the office of Bank of

America, N.A., as Agent (the “Agent”), at 101 North Tryon Street, Independence

Center, NC1-001-15-04, Charlotte, North Carolina  28255 (or at such other place or places as the holder

hereof may designate), at the times set forth in the Credit Agreement dated as

of             ,

2002 among the Borrower, the Guarantors, the Lenders and the Agent (as it may

be as amended, modified, restated or supplemented from time to time, the “Credit

Agreement”; all capitalized terms not otherwise defined herein shall have

the meanings set forth in the Credit Agreement), but in no event later than the

Maturity Date, in Dollars and in immediately available funds, the principal

amount of                           DOLLARS

($              )

or, if less than such principal amount, the aggregate unpaid principal amount

of all Revolving Loans made by the Lender to the Borrower pursuant to the

Credit Agreement, and to pay interest from the date hereof on the unpaid

principal amount hereof, in like money, at said office, on the dates and at the

rates selected in accordance with Section 2.1(d) of the Credit Agreement.

 

Upon

the occurrence and during the continuance of an Event of Default, the balance

outstanding hereunder shall bear interest as provided in Section 3.1 of

the Credit Agreement.  Further, in the

event the payment of all sums due hereunder is accelerated under the terms of

the Credit Agreement, this Note, and all other indebtedness of the Borrower to

the Lender shall become immediately due and payable, without presentment,

demand, protest or notice of any kind, all of which are hereby waived by the

Borrower.

 

In

the event this Note is not paid when due at any stated or accelerated maturity,

the Borrower agrees to pay, in addition to the principal and interest, all

costs of collection, including reasonable attorneys’ fees.

 

This

Note and the Loans evidenced hereby may be transferred in whole or in part only

by registration of such transfer on the Register maintained by or on behalf of

the Borrower as provided in Section 11.3(c) of the Credit Agreement.

 

IN

WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its

duly authorized officer as of the day and year first above written.

 

	

  BORROWER:

  	

   

  	

  U.S.  RESTAURANT  PROPERTIES OPERATING, L.P.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:  USRP MANAGING, INC.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

  Name:

  	 

	

   

  	

   

  	

   

  	

  Title:

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  USRP

  FUNDING 2002-A, L.P.

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:  USRP (SFGP) 2, LLC

  	

   

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  	 

												

 

16

 

Exhibit 3.2

 

FORM OF NOTICE

OF CONTINUATION/CONVERSION

 

Bank

of America, N.A.,

  as Agent for the Lenders

101

North Tryon Street

Independence

Center, 15th Floor

NC1-001-15-04

Charlotte,

North Carolina  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 Credit Agreement

dated as of

              ,

2002 (as amended, modified, restated or supplemented from time to time, the “Credit

Agreement”), among the Borrower, the Guarantors, the Lenders and Bank of

America, N.A., as Agent.  Capitalized

terms used herein and not otherwise defined herein shall have the meanings

assigned to such terms in the Credit Agreement.  The Borrower hereby gives notice pursuant to Section 3.2 of

the Credit Agreement that it requests an continuation or conversion of a

Revolving Loan outstanding under the Credit Agreement, and in connection

therewith sets forth below the terms on which such extension 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 with the requirements of Section 5.2, the Borrower hereby

reaffirms the representations and warranties set forth in the Credit Agreement

as provided in clause (b) of such Section, and confirms that the matters

referenced in clauses (c), (d) and (e) of such Section, are true and

correct.

 

The undersigned officer

of U.S. Restaurant Properties Operating L.P. hereby represents and warrants

that he/she has the necessary power and authority to execute this letter on

behalf of the Borrower and that such action has been duly authorized by all

necessary action of the Borrower and its partners prior to or on the date

hereof.

 

	

   

  	

  U.S.  RESTAURANT  PROPERTIES OPERATING, L.P.,

  
	

   

  	

  as

  Principal Borrower

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
						

 

17

 

Exhibit 7.1(c)

 

FORM OF

OFFICER’S COMPLIANCE CERTIFICATE

 

For

the fiscal quarter ended

                           , 20     .

 

I,

                              ,

[Title] of U.S.  RESTAURANT  PROPERTIES OPERATING, L.P., as principal

borrower (the “Borrower”) hereby certify that, to the best of my

knowledge and belief, with respect to that certain Credit Agreement dated as of

                ,

2002 (as amended, modified, restated or supplemented from time to time, the “Credit

Agreement”; all of the defined terms in the Credit Agreement are

incorporated herein by reference) among the Borrower, the Guarantors, the

Lenders and Bank of America, N.A., as Agent:

 

a.                                       The company-prepared financial statements which

accompany this certificate are true and correct in all material respects and

have been prepared in accordance with GAAP applied on a consistent basis,

subject to changes resulting from normal year-end audit adjustments.

 

b.                                      Since

                    

(the date of the last similar certification, or, if none, the Closing Date) no

Default 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) the

Consolidated Parties have entered into the following Hedging Agreements:

 

 

 

 

Delivered

herewith are detailed calculations demonstrating compliance by the Credit

Parties with the Financial Covenants as of the end of the fiscal period

referred to above.

 

This

           day of

                 , 20    .

 

	

   

  	

  U.S.  RESTAURANT  PROPERTIES OPERATING, L.P.,

  
	

   

  	

  as

  Principal Borrower

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
						

 

18

 

Attachment to Officer’s Certificate

 

Computation of

Financial Covenants

 

19

 

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 Credit Agreement (as it may be amended, modified,

restated or supplemented from time to time, the “Credit Agreement”),

dated as of

                 ,

2002, by and among U.S.  RESTAURANT  PROPERTIES OPERATING, L.P., a Delaware

limited partnership (the “Borrower”), the Guarantors, the Lenders and

BANK OF AMERICA, N.A., as Agent.  All of

the defined terms in the Credit Agreement are incorporated herein by reference.

 

The

Credit Parties are required by Section 7.12 of the Credit Agreement to

cause the Subsidiary to become a “Guarantor”.

 

Accordingly,

the Subsidiary hereby agrees as follows with the Agent, for the benefit of the

Lenders:

 

1.           The Subsidiary hereby acknowledges, agrees and confirms

that, by its execution of this Credit Agreement, the Subsidiary will be deemed

to be a party to the Credit 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 had executed the Credit Agreement.  The Subsidiary hereby ratifies, as of the

date hereof, and agrees to be bound by, all of the terms, provisions and

conditions applicable to the Guarantors contained in the Credit Agreement.  Without limiting the generality of the

foregoing terms of this paragraph 1, the Subsidiary hereby jointly and

severally together with the other Guarantors, guarantees to each Lender and the

Agent, as provided in Section 4 of the Credit Agreement, the prompt

payment and performance of the Credit Party Obligations in full when due

(whether at stated maturity, as a mandatory prepayment, by acceleration or

otherwise) strictly in accordance with the terms thereof.

 

2.           The address of the Subsidiary for purposes of all notices

and other communications is                                    ,

                                                    ,

Attention of                            (Facsimile

No. 

                       ).

 

3.           The Subsidiary hereby waives acceptance by the Agent and

the Lenders of the guaranty by the Subsidiary under Section 4 of the

Credit Agreement upon the execution of this Credit Agreement by the Subsidiary.

 

4.           This Credit Agreement may be executed in two or more

counterparts, each of which shall constitute an original but all of which when

taken together shall constitute one contract.

 

5.             This Credit Agreement shall be

governed by and construed and interpreted in accordance with the laws of the

State of North Carolina.

 

IN

WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be duly

executed by its authorized officers, and the Agent, for the benefit of the

Lenders, has caused the same to be accepted by its 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:

  	

   

  	

   

  
						

 

20

 

Exhibit 11.3(b)

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and

Assumption (the “Assignment and Assumption”) is dated as of the Closing

Date set forth below and is entered into by and between [Insert name of Assignor]

(the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined

herein shall have the meanings given to them in the Credit Agreement identified

below (as amended, the “Credit Agreement”), receipt of a copy of which

is hereby acknowledged by the Assignee. 

The Standard Terms and Conditions set forth in Annex 1 attached hereto

are hereby agreed to and incorporated herein by reference and made a part of

this Assignment and Assumption as if set forth herein in full.

 

For an agreed

consideration, the Assignor hereby irrevocably sells and assigns to the

Assignee, and the Assignee hereby irrevocably purchases and assumes from the

Assignor, subject to and in accordance with the Standard Terms and Conditions

and the Credit Agreement, as of the Closing Date inserted by the Agent as

contemplated below (i) all of the Assignor’s rights and obligations in its

capacity as a Lender under the Credit Agreement and any other documents or

instruments delivered pursuant thereto to the extent related to the amount and

percentage interest identified below of all of such outstanding rights and

obligations of the Assignor under the respective facilities identified below

(including without limitation any letters of credit, guarantees, and swingline

loans included in such facilities) and (ii) to the extent permitted to be

assigned under applicable law, all claims, suits, causes of action and any

other right of the Assignor (in its capacity as a Lender) against any Person,

whether known or unknown, arising under or in connection with the Credit Agreement,

any other documents or instruments delivered pursuant thereto or the loan

transactions governed thereby or in any way based on or related to any of the

foregoing, including, but not limited to, contract claims, tort claims,

malpractice claims, statutory claims and all other claims at law or in equity

related 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 recourse

to the Assignor and, except as expressly provided in this Assignment and

Assumption, 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 Credit

  Agreement dated as of April       , 2002 among

  U.S. Restaurant Operating, L.P., USRP Funding 2002-A, L.P., 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)

  	

   

  
	

   

  	

   

  	

  $

  	

   

  	

  $

  	

   

  	

   

  	

  %

  
	

   

  	

   

  	

  $

  	

   

  	

  $

  	

   

  	

   

  	

  %

  
	

   

  	

   

  	

  $

  	

   

  	

  $

  	

   

  	

   

  	

  %

  

 

[7.            Trade

Date:                      ](4)

 

	

  (1)

  	

   

  	

  Select as applicable.

  
	

  (2)

  	

   

  	

  Fill in the appropriate

  terminology for the types of facilities under the Credit Agreement that are

  being assigned under this Assignment (e.g. “Revolving Credit Commitment,”

  “Term Loan Commitment,” etc.)

  
	

  *

  	

   

  	

  Amount to be adjusted

  by the counterparties to take into account any payments or prepayments made

  between the Trade Date and the Closing Date.

  
	

  (3)

  	

   

  	

  Set forth, to at least

  9 decimals, as a percentage of the Commitment/Loans of all Lenders

  thereunder.

  

 

21

 

 

Closing Date:  

                ,

20      [TO BE INSERTED BY AGENT AND WHICH SHALL BE

THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in

this Assignment and Assumption are hereby agreed to:

 

	

   

  	

  ASSIGNOR

  
	

   

  	

  [NAME OF ASSIGNOR]

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  
	

   

  	

  ASSIGNEE

  
	

   

  	

  [NAME OF ASSIGNEE]

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Title:

  
							

 

	

  Consented to and

  Accepted:

  	

   

  
	

   

  	

   

  
	

  BANK OF AMERICA, N.A.

  as

  	

   

  
	

    Agent

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

  Consented to:

  	

   

  
	

   

  	

   

  
	

  U.S.  RESTAURANT  PROPERTIES OPERATING, L.P.,

  	

   

  
	

  as

  Principal Borrower

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

   

  
							

 

	

  (4)

  	

   

  	

  To be completed if the

  Assignor and the Assignee intend that the minimum assignment amount is to be

  determined as of the Trade Date.

  

 

22

 

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 legal

and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is

free and clear of any lien, encumbrance or other adverse claim and (iii) it has

full power and authority, and has taken all action necessary, to execute and

deliver this Assignment and Assumption and to consummate the transactions

contemplated hereby; and (b) assumes no responsibility with respect to (i) any

statements, warranties or representations made in or in connection with the Credit

Agreement or any other Credit Document, (ii) the execution, legality, validity,

enforceability, genuineness, sufficiency or value of the Credit Documents or

any collateral thereunder, (iii) the financial condition of the Borrower, any

of its Subsidiaries or Affiliates or any other Person obligated in respect of

any Credit Document or (iv) the performance or observance by the Borrower, any

of its Subsidiaries or Affiliates or any other Person of any of their

respective obligations under any Credit Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full

power and authority, and has taken all action necessary, to execute and deliver

this Assignment and Assumption and to consummate the transactions contemplated

hereby and to become a Lender under the Credit Agreement, (ii) it meets all

requirements of an Eligible Assignee under the Credit Agreement (subject to

receipt 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 the

Credit Agreement as a Lender thereunder and, to the extent of the Assigned

Interest, shall have the obligations of a Lender thereunder, (iv) it has

received a copy of the Credit Agreement, together with copies of the most

recent financial statements delivered pursuant to the terms thereof, as

applicable, and such other documents and information as it has deemed

appropriate to make its own credit analysis and decision to enter into this

Assignment and Assumption and to purchase the Assigned Interest on the basis of

which it has made such analysis and decision independently and without reliance

on 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 be

delivered by it pursuant to the terms of the Credit Agreement, duly completed

and executed by the Assignee; and (b) agrees that (i) it will, independently

and without reliance on the Agent, the Assignor or any other Lender, and based

on 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 under

the Credit Documents, and (ii) it will perform in accordance with their terms

all of the obligations which by the terms of the Credit Documents are required

to be performed by it as a Lender.

 

2.   Payments.  From and after the Closing Date, the Agent shall make all

payments in respect of the Assigned Interest (including payments of principal,

interest, fees and other amounts) to the Assignor for amounts which have

accrued to but excluding the Closing Date and to the Assignee for amounts which

have accrued from and after the Closing Date.

 

3.  General Provisions. This Assignment

and Assumption shall be binding upon, and inure to the benefit of, the parties

hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of

counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a

signature page of this Assignment and Assumption by telecopy shall be effective

as delivery of a manually executed counterpart of this Assignment and

Assumption.  This Assignment and

Assumption shall be governed by, and construed in accordance with, the law of

the State of North Carolina.

 

1

 

Exhibit 1.1(a)

 

BANKRUPTCY REMOTE

BORROWING ENTITY REQUIREMENTS

 

A “Bankruptcy Remote

Borrowing Entity” shall satisfy the following requirements:

 

1.             General Requirements.  The entity’s Organizational Documents must provide for the

following (the term “Organizational Documents” as used herein means (i)

with respect to a corporation, its articles of incorporation and bylaws, (ii)

with respect to a limited partnership, its limited partnership agreement, and

(iii) with respect to a limited liability company, its articles of organization

and operating agreement):

 

(A)                              Limited

Purpose.  The entity’s purpose must

be limited solely to owning and managing its assets, entering into the Credit

Documents and the transactions contemplated thereby and engaging in incidental

activities in connection therewith.

 

(B)                                Certain

Actions Requiring Unanimous Vote. 

The unanimous vote of the entity’s board of directors (including that of

the Independent Director, as defined in Section 2(A) hereof), partners or

members, as applicable, must be required in order to:

 

(i)                                     take

any Bankruptcy Action (as defined in Addendum A hereof);

 

(ii)                                  dissolve,

liquidate, consolidate, merge or sell all or substantially all of its assets;

 

(iii)                               amend

or recommend the amendment of its Organizational Documents; and

 

(iv)                              engage

in transactions with affiliates (except to the extent such transactions are on terms and conditions substantially as favorable

to such Person as would be obtainable by it in a comparable arms-length

transaction with a Person other than an officer, director, shareholder,

Subsidiary or Affiliate).

 

(C)                                Separateness

Provisions.  The entity must be

required to:

 

(i)                                     not

commingle assets with those of any other entity and must hold its assets in its

own name;

 

(ii)                                  conduct

its own business in its own name;

 

(iii)                               maintain

separate bank accounts, books, records and financial statements;

 

(iv)                              maintain

its books, records, resolutions and agreements as official records;

 

(v)                                 pay

its own liabilities out of its own funds;

 

(vi)                              maintain

adequate capital in light of contemplated business operations;

 

(vii)                           observe

all corporate, partnership, company or other organizational formalities;

 

(viii)                        maintain

an arm’s-length relationship with affiliates;

 

(ix)                                pay

the salaries of its own employees and maintain a sufficient number of employees

in light of contemplated business operations;

 

2

 

(x)                                   not

guarantee or become obligated for the debts of any other entity or hold out its

credit as being available to satisfy the obligations of others;

 

(xi)                                not

acquire obligations or securities of affiliates;

 

(xii)                             not

make loans to any other person or entity;

 

(xiii)                          allocate

fairly and reasonably any overhead for shared office space;

 

(xiv)                         use

separate stationery, invoices and checks;

 

(xv)                            not

pledge its assets for the benefit of any other entity;

 

(xvi)                         hold

itself out as a separate entity, and not fail to correct any known

misunderstanding regarding its separate identity; and

 

(xvii)                      not identify

itself or any of its affiliates as a division or part of the other.

 

(D)                               Subordination

of Indemnification Obligations.  The

entity’s obligation, if any, to indemnify its directors and officers, partners,

or members or managers, as applicable, must be fully subordinated to the loan

and the loan documents and must not constitute a claim against it in the event

that cash flow in excess of amounts necessary to pay holders of the loan is

insufficient to pay such obligations.

 

2.                                       Additional

Requirements for Corporations.  In

addition to the general requirements set forth above, for a corporation to be a

Bankruptcy Remote Borrowing Entity, its Organizational Documents must provide

for the following:

 

(A)                              Independent

Director.  The corporation’s board

of directors must include an Independent Director.  An “Independent Director” means a director of the

corporation who is not at the time of initial appointment, has not been at any

time during the preceding five (5) years, and will not be at any time

prior to payment of the loan in full: (i) a stockholder, director, officer,

employee, partner or member of the corporation or the borrower (if the

corporation is a partner or member of the borrower),  or any affiliate thereof;

(ii) a customer, supplier or other person (including without limitation, an

attorney, accountant or other professional) who derives any portion of its

purchases or revenues from its activities with the corporation or the borrower

(if the corporation is a partner or member of the borrower) or any affiliate

thereof, other than reasonable compensation for the performance of its

obligations as Independent Director; (iii) a person or other entity controlling

or under common control with any such stockholder, partner, member, customer,

supplier or other person; or (iv) a member of the immediate family of any such

stockholder, director, officer, employee, partner, member, customer, supplier

or other person.  As used herein, the

term “control” means the possession, directly or indirectly, of the power to

direct or cause the direction of management, policies or activities of a person

or entity, whether through ownership of voting securities, by contract or

otherwise.

 

3.                                       Additional

Requirements for Limited Partnerships. 

In addition to the general requirements set forth above, for a limited

partnership to be a Bankruptcy Remote Borrowing Entity, its Organizational

Documents must provide for the following:

 

(A)                              General

Partner.  Each general partner of

the limited partnership must be a Bankruptcy Remote Borrowing Entity satisfying

the general requirements set forth above and the additional requirements set

forth herein applicable to such general partner (i.e., corporate, limited

partnership or limited liability company requirements).  In addition, each such general partner’s

Organizational Documents must provide for the following:

 

3

 

(i)                                     Limited

Purpose.  Each such general partner’s

purpose must be limited to serving as a general partner in the limited

partnership.

 

(ii)                                  Unanimous

Vote Required to Withdraw.  The

unanimous vote of each such the general partner’s board of directors (including

that of the Independent Director), partners or members, as applicable, must be

required for the a general partner to withdraw as a general partner of the

limited partnership.

 

(B)                                Continuance

of Partnership.  If there is more

than one general partner, the Organizational Documents must require the

remaining partners to continue the partnership upon an event of dissolution for

so long at least one of the general partners remains solvent.

 

4.                                       Additional

Requirements for Limited Liability Companies(6).  In addition to the general requirements set forth above, for a

limited liability company to be an SPE, its Organizational Documents must

provide for the following:

 

(A)                              Independent

Member/Manager.  The company must

have one, or, if the transaction involves more than $20,000,000.00, two

independent members/managers.  Such

independent members/managers should have the same basic traits as the

independent directors described with respect to corporate SPEs.  The determination of whether the independent

entity/individual must be a manager or a member is dependent upon the locus of

control in the LLC.

 

(B)                                SPE

Member.  At least one member of the

company must be an SPE satisfying the general SPE requirements set forth above

and the additional requirements applicable to such member (i.e., corporate,

limited partnership or limited liability company requirements).  “Bankruptcy” events of dissolution must be

limited to the bankruptcy of such SPE member. 

This may necessitate that the SPE member be designated the sole

“managing member” of the company.  Each

such SPE member’s Organizational Documents must provide for the following:

 

(i)                                     Limited

Purpose.  Such member’s purpose must

be limited to serving as a member in the company.

 

(ii)                                  Unanimous

Vote Required to Withdraw.  The

unanimous vote of such member’s board of directors (including that of the

Independent Director), partners or members, as applicable, must be required for

the member to withdraw as a member of the company.

 

(C)                                Consideration

of Interests of Creditors.  The

company’s members must be required to consider the interests of creditors in

connection with any action subject to the vote of its members (including the

SPE member), notwithstanding that the company may not then be insolvent.

 

(6)           Limited liability companies raise

special issues in that their members have limited liability under state law for

the obligations of the company, yet usually anticipate receiving “flow-through”

or partnership tax treatment.  Because

of certain criteria for such treatment under the Internal Revenue Code, tax

counsel should be consulted with respect to the organizational structure

described herein.

 

4

 

(D)                               Continuance

of Company.  The vote of a

majority-in-interest of the remaining members of the company is sufficient to continue

the life of the company upon the occurrence of an event of dissolution or other

termination event.  If the required

consent of the remaining members to continue the company is not obtained, the

company’s Organization Documents must provide that the company not liquidate

collateral (except as permitted under the loan documents) without the consent

of holders of the loan, and that such holders may continue to exercise all of

their rights under the loan documents and retain any collateral until the loan

has been paid in full or otherwise completely discharged.

 

5

 

Addendum A

 

As used herein, “Bankruptcy

Action” means any of the following:

 

1.                                       Taking

any action that might cause the entity (or the borrower if the entity is a

partner or member of the borrower)  to become insolvent.

 

2.                                       Commencing

any case, proceeding or other action on behalf of the entity (or the borrower

if the entity is a partner or member of the borrower) under any existing or

future law of any jurisdiction relating to bankruptcy, insolvency,

reorganization or relief of debtors.

 

3.                                       Instituting

proceedings to have the entity (or the borrower if the entity is a partner or

member of the borrower) adjudicated as bankrupt or insolvent.

 

4.                                       Consenting

to 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.                                       Filing

a petition or consent to a petition seeking reorganization arrangement,

adjustment, winding-up, dissolution, composition, liquidation or other relief

on behalf of the entity (or the borrower if the entity is a partner or member

of the borrower) of its (or their) debts under any federal or state law

relating to bankruptcy.

 

6.                                       Seeking

or consenting to the appointment of a receiver, liquidator, assignee, trustee,

sequestrator, custodian or any similar official for the entity (or the borrower

if the entity is a partner or member of the borrower) or a substantial portion

of its (or their) properties.

 

7.                                       Making

any assignment for the benefit of the entity’s creditors (or the borrower’s

creditors if the entity is a partner or member of the borrower).

 

8.                                       Taking

any action (or causing the borrower to take any action if the entity is a

partner or member of the borrower) in furtherance of any of the foregoing.

 

***

Note

also the potential necessity for a Non-Consolidation Opinion from Borrower’s

counsel.Exhibit

10.2

 

	

  

  

  

   

  	

   

  	

   

  12240 Inwood Road

  Suite 300

  Dallas, TX 75244

  972-387-1487 * Fax 972-490-9119

   

  

 

July 1, 2002

 

Mr. Russell Ruhnke,

Principal

Bank of America

Portfolio Management

Real Estate/Lodging

NCI-007-15-08

100 North Tryon Street,

16th Floor

Charlotte, North Carolina

28255-0001

 

Re:                               Conditional

Waiver (as defined herein) under that certain $35,000,000 Credit Agreement (the

“Credit Agreement”) dated as of May 31, 2002 among U.S. 

RESTAURANT PROPERTIES OPERATING L.P., a Delaware limited

partnership (“USRP Operating” or the “Principal Borrower”), USRP FUNDING

2002-A, L.P., a Texas limited partnership (the “General SPE);

collectively, with USRP Operating, the “Borrower”), USRP MANAGING, INC., a

Delaware corporation and the general partner of USRP Operating, as a Guarantor

(the “General Partner”), U.S. RESTAURANT PROPERTIES, INC., a

Maryland corporation, as a Guarantor (“USRP REIT”), the Subsidiary

Guarantors (as defined therein), the Lenders (as defined therein), BANK OF

AMERICA, N.A., as Agent for the Lenders (in such capacity, the “Agent”)

and BANC

OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole

Book Manager (in such capacity “BAS”).  Capitalized terms used herein and not otherwise defined shall

have the meanings set forth in the Credit Agreement.

 

Dear Russ:

 

As we have

discussed, USRP Operating is seeking to utilize up to $16,000,000 of the

proceeds of the Loans under the Credit Agreement for the purpose of purchasing

mortgage notes issued by Captain D’s with an aggregate face value of $20,000,000

and otherwise conforming to the description set forth on Schedule 1

attached hereto (the “CD Notes”).  The

Credit Parties acknowledge that this purchase would constitute an “Investment”

as such term is defined in the Credit Agreement and that, absent an agreement

from the Agent to provide a waiver and amendment of certain provisions of the

Credit Agreement, the amount of such Investment would violate the limitations

on Investments set forth in Sections 6.19 and 8.6 of the Credit Agreement.  Therefore, USRP Operating, on behalf of all

of the Credit Parties, hereby requests that the Agent consent to a limited and

temporary waiver and amendment, on the terms and conditions and for the period

described herein, of Sections 6.19 and 8.6 of the Credit Agreement as such

sections apply to the purchase and ownership of the CD Notes by USRP Operating

(the “Conditioned Waiver”).  USRP

Operating (again, on behalf of each of the Credit Parties) also requests that

the Agent agree that such use of the proceeds of the Loans conforms to the

requirements set forth in Sections 6.15 and 7.9 of the Credit Agreement.

 

If approved by the Agent, the period of the requested

waiver and amendment (the “Waiver Period”) will extend until the date occurring

ninety (90) days following the date hereof (the “Initial Waiver Period”);

provided, however, that USRP Operating shall have the option to extend the

Waiver Period beyond the final day of the Initial Waiver Period for the

following time periods through the payment to the Agent of the following,

non-refundable, non-prorated extension fees (the “Extension Fees”):

 

(a)                                  for

the period including calendar days one (1) through fifteen (15) following the

final day of the Initial Waiver Period, $15,000;

 

 

Request for Conditioned

Waiver

 

(b)                                 for

the period including calendar days sixteen (16) through thirty (30) following

the final day of the Initial Waiver Period, $20,000 (for a total of $35,000 in

Extension Fees following the Initial Waiver Period);

 

(c)                                  for

the period including calendar days thirty-one (31) through sixty (60) following

the final day of the Initial Waiver Period, $45,000 (for a total of $80,000 in

Extension Fees following the Initial Waiver Period); and

 

(d)                                 for

the period including calendar days sixty-one (61) through ninety (90) following

the final day of the Initial Waiver Period, $60,000 (for a total of $140,000 in

Extension Fees following the Initial Waiver Period).

 

The Waiver Period shall,

in any case and regardless of any extension provided for herein, terminate as

of the ninety-first (91st) day following the final day of the

Initial Waiver Period (the “Final Waiver Termination Date”).  To the extent any Defaults or Events of

Default that would otherwise exist under the Credit Agreement if not for the

waiver and amendment set forth herein are not fully cured as of the end of the

Initial Waiver Period, the extended period for which USRP Operating has paid

the applicable Extension Fee, or the Final Waiver Termination Date (as

applicable), such failure to cure will result in an immediate Event of Default

under the Credit Agreement (regardless of any additional cure period that may

be provided for in the Credit Agreement).

 

In addition to and

notwithstanding the foregoing matters related to the length of the Waiver

Period, it shall be an immediate Event of Default under the Credit Agreement

(again regardless of any cure periods provided for therein) to the extent there

exists, at any time during the Waiver Period, any breach, default or event of

default under the terms of the CD Notes or any of the documentation relating

thereto.

 

The Credit Parties

hereby acknowledge and agree that (a) the Conditioned Waiver shall be effective

only to the extent that the Credit Parties shall be deemed to be in compliance

with Sections 6.19 and 8.6 of the Credit Agreement despite the Defaults or

Events of Default which would otherwise arise as a result of USRP Operating’s

purchase of the CD Notes and to the extent such Defaults or Events of Default

would be caused solely by the Investment by USRP Operating in the CD Notes; (b)

the Conditioned Waiver shall not be effective as to any other Defaults or

Events of Default (whether or not arising as an indirect result of the purchase

of the CD Notes) that may arise during the Waiver Period, including, without

limitation, Defaults or Events of Default resulting from financial covenant

violations under Section 7.11 of the Credit Agreement or Defaults or Events of

Default under Sections 6.19 or 8.6 of the Credit Agreement which do not relate

to the purchase of the CD Notes; and (c) no terms or conditions of the Credit

Agreement or any of the other Credit Documents shall be modified by the terms

hereof except to the extent expressly set forth herein and no other amendments

or waivers are being sought hereby from the Agent with respect to any other

matters.  In addition, the Credit

Parties hereby agree to indemnify, defend and hold harmless the Agent and its

respective directors, officers, agents, employees and counsel from and against

any and all losses, claims, damages, liabilities, deficiencies, judgments or

expenses incurred, resulting from or arising in connection with the purchase of

the CD Notes or the Conditioned Waiver and agree that all fees, expenses and

costs incurred by the Agent in reviewing and granting the Conditioned Waiver

shall be paid by us upon demand as fees, costs and expenses incurred in

connection with the Credit Agreement. 

Finally, the Credit Parties hereby

represent and warrant that they have no claims, counterclaims, offsets, or

defenses to any of the Credit Documents, or to the performance of their

respective obligations thereunder.  In

consideration of the Agent’s willingness to grant the Conditioned Waiver, each

of the Credit Parties hereby releases the Agent and its officers, employees,

representatives, counsel, trustees and directors, from any and all actions,

causes of action, claims, demands, damages and liabilities of whatever kind or

nature, in law or in equity, now known or unknown, suspected or

 

2

 

unsuspected to the extent

that any of the foregoing arises from any action or failure to act on or prior

to the date hereof.

 

If you need any

additional information in order to evaluate this request, please contact

me.  We ask that you countersign this

letter as evidence of the Agent’s consent to the Conditioned Waiver and return

it to us by fax as soon as possible.

 

We appreciate your

cooperation and understanding in this matter. If you have any questions, please

do not hesitate to contact me.

 

	

   

  	

  Very truly

  yours,

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

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

  	

   

  
	

   

  	

  as Principal Borrower for the Credit Parties

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:  USRP Managing, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ H.G. Carrington, Jr.

  	

   

  
	

   

  	

  Name:

  	

   

  	

  H.G. Carrington,

  Jr.

  	

   

  
	

   

  	

  Title:

  	

   

  	

  Vice President

  	

   

  
									

 

Acknowledged and

consented to

this 1st day of July, 2002

 

	

  By:

  	

  /s/ Russell

  Ruhnke

  
	

   

  	

  Russell Ruhnke,

  on behalf of

  Bank of America, N.A., as Agent

  

 

3

 

Schedule 1

 

Description of CD

Notes

 

4

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