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EXHIBIT 10.6
PROPERTY MANAGEMENT AGREEMENT
THIS PROPERTY MANAGEMENT AGREEMENT (this "Agreement") made as of the 9th
day of January 2001, among USRP Funding 2001-A, L.P., a Delaware limited
partnership (the "Issuer"), U.S. Restaurant Properties Operating, L.P., a
Delaware limited partnership (the "Property Manager"), and Wells Fargo Bank
Minnesota, N.A., a national banking association (the "Indenture Trustee"). All
capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Indenture, dated as of January 9, 2001 (the "Indenture"),
between the Issuer and the Indenture Trustee.
ARTICLE I
ESTABLISHMENT OF AGENCY
1.1. EXCLUSIVE AGENCY. Issuer hereby appoints the Property Manager and
the Property Manager hereby accepts appointment on the terms and conditions
hereinafter provided as sole and exclusive leasing, managing, and operating
agent of the Properties, such agency to be performed in accordance with the
terms and conditions set forth in this Agreement and the Indenture. Issuer
warrants and represents to the Property Manager that it has valid fee or
leasehold title to the Properties with all requisite authority to appoint the
Property Manager and to enter into this Agreement. It shall be the Property
Manager's obligation hereunder to generally enforce the obligations of the
tenants ("Tenant" or "Tenants") under the leases (hereinafter individually
referred to as "Lease" and collectively as "Leases") of the Properties in the
name of and on behalf Issuer and the Indenture Trustee.
1.2. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY MANAGER.
(a) The Property Manager represents and warrants to the other parties
hereto, and for the benefit of the Issuer, the Indenture Trustee and the
Noteholders, as of the Closing Date:
(i) The Property Manager is a limited partnership duly created
and validly existing, in good standing under the laws of the State of
Delaware and is in compliance with the laws of each State in which any
Property is located to the extent the failure to be so in compliance
would affect materially and adversely the enforceability of the related
Lease and its performance under this Agreement;
(ii) The execution and delivery of this Agreement by the
Property Manager, and the performance and compliance with the terms of
this Agreement by the Property Manager, will not violate its
organizational documents or constitute an event which, with notice or
lapse of time, or both, would constitute a default under, or result in
the breach of, any material agreement or other instrument to which it is
a party or by which it is bound;
(iii) The Property Manager has the full power and authority to
enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance
of this Agreement, and has duly executed and delivered this Agreement;
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(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Property Manager, enforceable against the
Property Manager in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(v) The Property Manager is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Property
Manager's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Property Manager to
perform its obligations under this Agreement or the financial condition
of the Property Manager; and
(vi) No litigation is pending or, to the best of the Property
Manager's knowledge, threatened against the Property Manager that, if
determined adversely to the Property Manager, would prohibit the
Property Manager from entering into this Agreement or that, in the
Property Manager's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Property
Manager to perform its obligations under this Agreement or the financial
condition of the Property Manager.
(b) The representations and warranties of the Property Manager set forth
in this Section 1.2 shall survive the execution and delivery of this Agreement
and shall inure to the benefit of the Persons to whom and for whose benefit they
were made until all amounts owed to the Noteholders under or in connection with
this Agreement, the Indenture and the Notes have been indefeasibly paid in full.
Upon discovery by any party hereto of any breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties.
(c) Any successor Property Manager shall be deemed to have made, as of
the date of its succession, each of the representations and warranties set forth
in Section 1.2(a), subject to such appropriate modifications to the
representation and warranty set forth in Section 1.2(a)(i) to accurately reflect
such successor's jurisdiction of organization and whether it is a corporation,
partnership, bank, association or other type of organization.
1.3. RECORDINGS AND FILINGS; BOOKS AND RECORDS; DOCUMENT DEFECTS.
(a) In connection with the Grant made by the Issuer to the Indenture
Trustee pursuant to the Granting Clause of the Indenture and the delivery of the
Lease Files for the Leases to the Indenture Trustee in furtherance of such
Grant, (1) each Mortgage and UCC Financing Statement referred to in the
definition of "Lease File" in the Indenture has been submitted to the
appropriate Title Company (as defined below) on or before the Closing Date for
recording or filing, as the case may be, in the appropriate public office for
real property records or for UCC Financing Statements, at the expense of USRP
and (2) each title insurance binder or commitment referred to in the definition
of "Lease File" herein shall be issued as a final title insurance policy by the
title companies (the "Title Companies") issuing same (the "Title Insurance
Policies"). Each such Mortgage shall
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reflect that it should be returned by the public recording office to the
Indenture Trustee following recording, and each such UCC Financing Statement
shall reflect that the file copy thereof should be returned to the Indenture
Trustee following filing, provided that, in those instances where the public
recording office retains the original Mortgage, the Property Manager, on behalf
of the Indenture Trustee, shall obtain therefrom a certified copy of the
recorded original. Each of the Title Companies issuing the Title Insurance
Policies have been instructed to deliver such policies to the Indenture Trustee.
The Property Manager, on behalf of Indenture Trustee, shall diligently pursue
with the Title Companies the return of each of the Mortgages and UCC Financing
Statements from the appropriate recording or filing offices and the delivery of
the Title Insurance Policies by the related Title Companies. If any such
document or instrument is lost or returned unrecorded or unfiled, as the case
may be, because of a defect therein, the Indenture Trustee shall notify the
Property Manager and the Property Manager shall promptly prepare and cause to be
executed a substitute therefor or cure such defect, as the case may be, and
thereafter, the Property Manager shall cause the same to be duly recorded or
filed, as appropriate. The Property Manager shall perform all obligations that
the Indenture Trustee may have under the Mortgages prepared for Properties
located in the States of Missouri and Pennsylvania. The Indenture Trustee shall
cooperate as necessary for the Property Manager to perform such obligations.
The Issuer shall, to the same extent set forth in the Indenture,
reimburse, indemnify and hold harmless the Indenture Trustee from any loss,
liability or expense incurred by the Indenture Trustee in connection with the
Property Manager's performance of the Indenture Trustee's obligations under any
Mortgage.
(b) The Issuer shall deliver to and deposit with, or cause to be
delivered to and deposited with, the Property Manager all documents and records
in the possession of the Issuer or USRP that relate to the Properties and the
Leases and that are not required to be a part of a Lease File in accordance with
the definition thereof, and the Property Manager shall hold all such documents
and records in trust on behalf of the Indenture Trustee. The Property Manager's
possession of such documents and records shall be at the will of the Issuer and
the Indenture Trustee for the sole purpose of facilitating the servicing of the
Properties and Leases pursuant to this Agreement and such possession by the
Property Manager shall be in a custodial capacity only on behalf of the
Indenture Trustee. The ownership of such documents and records shall be vested
in the Issuer, subject to the lien of the Indenture, and the ownership of all
documents and records with respect to the Properties and the Leases that are
prepared by or which come into possession of the Property Manager shall
immediately vest in the Issuer, subject to the lien of the Indenture, and shall
be delivered to and deposited with the Property Manager and retained and
maintained in trust by the Property Manager in such custodial capacity only on
behalf of the Indenture Trustee, except as otherwise provided herein. All such
documents and records shall be appropriately marked to clearly reflect the
ownership of such documents and records by the Issuer, subject to the lien of
the Indenture and the applicable Mortgage, and that such documents and records
are being held on behalf of the Indenture Trustee, and the Property Manager
shall release such documents and records from its custody only in accordance
with this Agreement.
(c) If any party hereto discovers that any document constituting a part
of a Lease File has not been properly executed, is missing, contains information
that does not conform in any respect with the corresponding information set
forth in Schedule 1 to the Contribution Agreement or does
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not appear to be regular on its face (each, a "Document Defect"), or that any of
the representations or warranties of USRP set forth in Section 2 of the
Contribution Agreement are incorrect in any material respect (each, a "Breach"),
such party shall give prompt written notice thereof to the other parties
thereto. Upon its discovery or receipt of notice of any such Document Defect or
Breach, the Property Manager shall notify USRP. If USRP does not correct any
Document Defect or Breach within the time periods and in accordance with the
provisions of the Contribution Agreement, the Property Manager, or if it fails
to do so, the Indenture Trustee, shall upon direction from the Directing
Noteholder and subject to the Indenture, on behalf of the Issuer, exercise such
rights and remedies as the Issuer may have (or the Indenture Trustee may have as
third party beneficiary) under the Contribution Agreement with respect to such
Document Defect or Breach, as applicable.
(d) Notwithstanding the foregoing, the delivery of a commitment to issue
a policy of owner's title insurance in lieu of the delivery of the actual policy
of owner's title insurance shall not be considered a Document Defect with
respect to any Lease File if such actual policy of insurance is delivered to the
Indenture Trustee not later than 270 days after the Closing Date.
ARTICLE II
PROPERTY MANAGER'S DUTIES AND POWERS
2.1. GENERAL. The Property Manager shall manage, coordinate and
supervise the ordinary and usual business and affairs pertaining to the
operation, maintenance and management of the Properties. Without limiting the
foregoing or any other provision in this Agreement, the Property Manager shall
have such responsibilities and obligations, and shall perform and take, or cause
to be performed or taken, all services and actions customarily performed or
taken by property managers of properties which are similar in nature, location
and character to the Properties. The Property Manager shall take all action
necessary to cause compliance by the Issuer with its obligations under the
Indenture, including, without limitation, Article XI of the Indenture, and shall
perform all such duties and obligations specified to be performed by the
Property Manager in the Indenture, including, without limitation, Article XI of
the Indenture, as if fully set forth herein. The Property Manager shall perform
all of its duties in an efficient and economical manner, subject to the
direction of the Issuer and pursuant to the terms and provisions of this
Agreement and the Indenture.
2.2. COLLECTIONS OF RENTS AND OTHER MONIES.
(a) Everything done by the Property Manager under the provisions of this
Article II shall be done as the agent of the Issuer and the Indenture Trustee
and all obligations or expenses incurred hereunder shall, except as otherwise
specifically provided, be for the account of, on behalf of, and at the expense
of the Issuer payable from the proceeds of the Collateral as set forth in the
Indenture. The Property Manager shall use its best, diligent efforts to collect
all rents and other charges due from all Tenants at the Properties under their
respective Leases and shall deposit or cause to be deposited all such monies
into the Collection Account pursuant to Section 2.11 of this Agreement.
(b) Except as otherwise directed in writing by the Issuer, the Property
Manager shall take all such actions as the Property Manager shall deem necessary
or advisable to collect the aforesaid rents and other charges and to enforce all
rights and remedies of the Issuer under the Leases or to protect the interests
of Issuer and the Indenture Trustee, including, without limitation, the
preparation
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and delivery to Tenants of all "late payment," default and other appropriate
notices, requests, bills, demands and statements. The Property Manager may
retain, with the Issuer's prior consent, legal counsel, collection agencies and
such other persons and firms as the Property Manager shall deem appropriate or
advisable to enforce, the rights and remedies of the Issuer and the Indenture
Trustee against any Tenant in default in the performance of its obligations
under a Lease.
(c) Nothing herein shall be construed as a guarantee by the Property
Manager as to the credit worthiness of or of the collectibility of accounts
receivable from the Tenants.
2.3. RENTING OF PREMISES. The Property Manager shall, and shall cause
the Issuer to, comply with the provisions of Section 11.03. The Property Manager
shall not be authorized to enter into a new lease or modify an existing Lease
without the Directing Noteholder's prior written approval, which approval shall
be obtained and given in accordance with Section 11.03(c) of the Indenture. In
the event the Property Manager obtains a new Tenant or a renewal of a Lease, the
Property Manager shall be entitled to pay a reasonable brokerage commission to
its employee who negotiated such Lease or renewal, and the brokerage commission
shall be a reimbursable expense hereunder. The Property Manager is also
authorized to incur reasonable outside brokerage fees in the leasing of a
Property and such brokerage commission shall be a reimbursable expense
hereunder.
2.4. COMPLIANCE WITH LAWS. The Property Manager shall use its diligent
best efforts to enforce Tenant's obligations under the Lease regarding the
Property's compliance with applicable laws, rules and regulations and the
Property Manager shall renew, as necessary, all real estate permits and real
estate licenses which are legally required for the real estate operations of the
Property. Notwithstanding the foregoing, the Property Manager shall have no
obligation to renew or maintain any license or permit required for operation of
a Tenant's business upon a Property.
2.5. PERSONNEL. The Property Manager shall employ, compensate, retain,
supervise and discharge such employees as may be necessary for the proper and
efficient management and maintenance of the Property as the Property Manager is
obligated so to do hereunder, but nothing herein shall obligate the Property
Manager to maintain any employees at the Property as on-site managers. The
Property Manager shall employ, at its expense, all administrative, clerical and
other office personnel necessary to handle general administrative and financial
reporting duties set forth in this Agreement.
2.6. PROFESSIONALS AND CONTRACTORS. The Property Manager shall (i)
identify and, upon the prior approval of the Directing Noteholder, enter into
contracts with architects, engineers, accountants, attorneys, tradesmen and
other independent contractors to perform services; and (ii) supervise the
administration and monitor the performance of all work to be performed and
services to be rendered under all such contracts. The Property Manager shall use
due care in the selection of all such professionals and other independent
contractors. However, the Directing Noteholder's prior approval shall not be
required (y) in any cases of emergency or where immediate action is necessary
for the protection or preservation of the Property or rental revenue, such
determination of emergency or immediacy being in the reasonable determination of
the Property Manager, provided that the Property Manager shall deliver written
notice to Issuer within twenty-four (24) hours after taking any
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such action or (z) for any such services that do not exceed the least of $2,500
per month, $25,000 per contract and $150,000 in the aggregate per year.
2.7. MAINTENANCE AND REPAIR OF PROPERTY. The Property Manager shall not
have the duty to maintain and repair the buildings, appurtenances or grounds of
the Property to the extent these are obligations of the Tenant under the Lease.
The Property Manager shall, however, have the authority and shall use its best
efforts to enforce such obligations of Tenant, and to institute legal
proceedings for the enforcement and/or collection therefor, and for the
dispossession of Tenants from the Property. In the event that the Property
Manager is unable to cause the Tenant to perform its obligations to maintain the
Property, the Property Manager shall cause the Property to be maintained and
repaired in a good and safe condition, at the expense of the Issuer as set forth
herein.
2.8. TENANT RELATIONS AND DISPUTES.
(a) The Property Manager shall develop and maintain good relations with
Tenants at each Property. The Property Manager shall receive, and use its best
efforts to attend to and resolve, all complaints of Tenants and shall attempt to
resolve any complaints, disputes or disagreements by or among Tenants.
(b) The Property Manager shall periodically monitor or cause the
periodic monitoring of the occupancy of all Tenants to insure their compliance
with the terms and provisions of their respective Leases. The Property Manager
shall notify the respective Tenants, the Issuer, the Indenture Trustee and the
Directing Noteholder of any violations of such Leases and use reasonable efforts
to cause such Tenants to correct such violations promptly.
2.9. FINANCIAL SERVICES. The Property Manager shall: (i) maintain
accounts receivable and delinquency records; (ii) maintain rent rolls; (iii)
process and pay operating and capital invoices; (iv) make all other
disbursements provided in Paragraph 2.12 below; (v) maintain or cause to be
maintained books of account for Issuer's funds; (vi) deliver or cause to be
delivered the reports and information required pursuant to Paragraph 2.14 below;
and (vii) cause all federal and state income tax returns and other tax returns
and reports to be prepared for the Issuer. The Issuer, the Indenture Trustee,
the Directing Noteholder and each Noteholder shall have full access, upon
reasonable prior notice, to all books, records and financial statements
maintained by the Property Manager on behalf of the Issuer.
2.10. INSURANCE. The Property Manager shall maintain or cause to be
maintained on behalf of the Issuer and the Indenture Trustee all forms of
insurance required under Section 11.01 of the Indenture.
2.11. COLLECTION ACCOUNT. (a) The Property Manager shall establish and
maintain one or more accounts (collectively, the "Collection Account"), held on
behalf of the Indenture Trustee for the benefit of the Noteholders and the
Issuer. The Collection Account shall be an Eligible Account. The Property
Manager shall deposit or cause to be deposited in the Collection Account, within
one Business Day after receipt (in the case of payments by Tenants or other
collections on the Leases), the following
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payments and collections received or made by or on behalf of the Property
Manager subsequent to the Closing Date (other than in respect of payments on the
Leases due and payable on or before the Closing Date, which payments shall be
delivered promptly to USRP or its designee, with negotiable instruments endorsed
as necessary and appropriate without recourse): (i) all payments on account of
Rent; (ii) all payments of other amounts payable by the Tenants under the Leases
(other than amounts in respect of Tenant security deposits and reserve or escrow
payments); (iii) all Insurance Proceeds, Condemnation Proceeds and Liquidation
Proceeds received in respect of any Property; (iv) any amounts required to be
deposited by the Property Manager pursuant to the Indenture in connection with
losses resulting from a deductible clause in a blanket hazard policy; (v) any
other amounts required to be so deposited under this Agreement.
The Property Manager will instruct each bank at which a lockbox and/or
lockbox account is maintained by the Property Manager for the purpose of
collecting Rents and other amounts due under Leases, including, without
limitation any account to which automated clearing house deposits are made by
Tenants, to transfer any of the foregoing collections and payments received in
any such lockbox and/or lockbox account to the Collection Account immediately
after such funds have cleared and become available in accordance with the
policies of such bank. The Property Manager shall not make any withdrawals from
any such lockbox or lockbox account except for transfers to the Collection
Account as provided in the preceding sentence.
The foregoing requirements for deposit in the Collection Account shall
be exclusive. If the Property Manager shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding. The Property Manager shall not make any withdrawals from the
Collection Account except in accordance with Section 2.12 hereof and this
Section 2.11. The Collection Account shall be maintained as a segregated
account, separate and apart from trust funds created for trust certificates or
bonds of other series serviced and the other accounts of the Property Manager.
(b) Funds in the Collection Account shall be invested in Permitted
Investments in accordance with the provisions of Section 2.13.
(c) Upon the establishment of the Lockbox Account under the Indenture,
the Property Manager shall close the Collection Account and deposit all amounts
then on deposit in the Collection Account to the Lockbox Account. Thereafter any
amounts received by the Property Manager shall be deposited to the Lockbox
Account within one Business Day of receipt.
2.12. WITHDRAWALS FROM THE COLLECTION ACCOUNT.
By 12:00 p.m. New York City time on each Remittance Date, the Property
Manager shall withdraw from the Collection Account and deliver to the Indenture
Trustee by wire transfer of immediately available funds, for deposit in the
Payment Account under the Indenture, an aggregate amount equal to all funds
available in the Collection Account on such Remittance Date (other than any
amounts therein that represent collections in respect of the Properties of
amounts due thereon after the related Determination Date which amount shall be
retained in the Collection Account for distribution on future Remittance Dates)
or amounts in respect of Tenant security deposits and
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reserve or escrow payments which amounts shall be deposited into the related
Deposit Account or Escrow Account in accordance with Section 2.16, as applicable
within one Business Day after receipt.
2.13. INVESTMENT OF FUNDS IN THE INVESTMENT ACCOUNTS.
(a) The Property Manager shall direct any depository institution
maintaining the Collection Account, the Deposit Accounts and the Escrow Accounts
(collectively, the "Investment Accounts") to invest the funds held therein in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, not later than the Business Day immediately
preceding the next succeeding Remittance Date. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
the Investment Account shall be made in the name of the Indenture Trustee (in
its capacity as such). The Property Manager shall promptly deliver to the
Indenture Trustee, and the Indenture Trustee shall maintain continuous
possession of, any Permitted Investment that is either (1) a "certificated
security," as such term is defined in the Uniform Commercial Code, or (ii) other
property in which a secured party may perfect its security interest by
possession under the Uniform Commercial Code or any other applicable law. If
amounts on deposit in the Investment Account are at any time invested in a
Permitted Investment payable on demand, the Property Manager shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the
lesser of (1) all amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by the Property Manager that such Permitted Investment
would not constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
Interest and investment income realized on funds deposited in the Investment
Account for each Collection Period shall be added to the amount remitted to the
Indenture Trustee for deposit into the Payment Account on the Remittance Date
for such Collection Period unless (with respect to any Deposit Account or Escrow
Account) otherwise required by law or the related Lease.
(b) Whether or not the Property Manager directs the investment of funds
in the Investment Account, interest and investment income realized on funds
deposited therein shall be added to the amount required to be remitted to the
Indenture Trustee in accordance with Section 2.12 on each Remittance Date. If
any loss shall be incurred in respect of any Permitted Investment on deposit in
the Investment Account, the Property Manager shall promptly deposit therein from
its own funds, without right of reimbursement, not later than the end of the
Investment Period during which such loss was incurred, the amount of the net
investment loss, if any, for such Collection Period.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Indenture Trustee shall take such action
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as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
2.14. REPORTING.
(a) Not later than 12:00 p.m. New York City time on the Remittance Date,
the Property Manager shall deliver to each of the Issuer, the Indenture Trustee
and the Directing Noteholder a report containing such information with respect
to the Properties and the Leases as the Indenture Trustee or the Directing
Noteholder may reasonably request, including, without limitation, the
information set forth on Exhibit A hereto (such report, the "Determination Date
Report"), reflecting information as of the close of business on the last day of
the related Collection Period, in a mutually agreeable electronic format. The
Determination Date Report and any written information supplemental thereto shall
include such information with respect to the Properties and the Leases as is
required by the Indenture Trustee for purposes for making the calculations and
reports required to be made by it under the Indenture. Concurrent with the
delivery of the Determination Date Report, the Property Manager shall also
deliver a certification by the Property Manager that no Replacement Event (or
any other circumstance that but for the passage of time and/or the giving of
notice would result in a Replacement Event) under this Agreement then exists and
no Default or Event of Default under the Indenture then exists, or, if such a
Replacement Event, Default, Event of Default or other circumstance does exist,
specifying the details thereof. Such information shall be delivered by the
Property Manager to each of the Issuer, the Indenture Trustee and the Directing
Noteholder in CMSA format and such electronic or other form as may be reasonably
acceptable to the Issuer, the Indenture Trustee or the Directing Noteholder, as
applicable.
(b) So long as USRP is the Property Manager, USRP shall deliver to the
Indenture Trustee, the Issuer and the Directing Noteholder:
(i) as soon as available and in any event within 90 days (or
the next succeeding Business Day if the last day of such period is not a
Business Day) after the end of each fiscal year of U.S. Restaurant
Properties, Inc. ("USV"), a copy of the audited financial statements
(including balance sheet, income statement and, if prepared, statement
of cash flows) for such year for USV and its consolidated subsidiaries,
certified by independent public accountants or recognized national
standing, and
(ii) as soon as available and in any event within 45 days (or
next succeeding Business Day if the last day of such period is not a
Business Day) after the end of each fiscal quarter of USV, a balance
sheet of USV and any consolidated subsidiaries of USV, as of the end of
such quarter, and statements of income of USV and any consolidated
subsidiaries of USV, for such quarter, certified by the chief financial
officer or chief accounting officer of USV and stating the information
set forth therein fairly presents the financial condition of USV and any
consolidated subsidiaries of USV in accordance with GAAP as of and for
the periods then ended, subject to normal year-end adjustments.
(c) On each Remittance Date, the Property Manager shall determine
whether the amount being remitted from the Collection Account to the Indenture
Trustee on such Remittance Date will be sufficient to pay the all of the amounts
required to be paid pursuant to clauses (i) through (v) of
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Section 3.02(b) of the Indenture on the immediately succeeding Payment Date. In
the event the Property Manager determines that such funds will not be sufficient
to pay all of such amounts on such Payment Date (a "Shortfall"), the Property
Manager shall notify the Indenture Trustee, the Issuer and the Directing
Noteholder of such Shortfall on or before 12:00 p.m. New York City time on such
Remittance Date.
2.15 SUBSTITUTION. The Property Manager shall take all actions
reasonably required in connection with the substitution of a Qualified
Substitute Franchise Unit for a Defective Franchise Unit, as those terms are
defined in the Contribution Agreement.
2.16 DEPOSIT ACCOUNT AND ESCROW ACCOUNTS.
(a) The Property Manger shall establish and maintain one or more
accounts (the "Deposit Accounts"), into which all cash Tenant security deposits
shall be deposited and retained. Each Deposit Account shall be an Eligible
Account, unless otherwise required under the related Lease. Withdrawals of
amounts so deposited into a Deposit Account may be made only: (i) as directed by
the Issuer in writing; (ii) to refund to Tenants any sums required pursuant to
the Lease; (iii) to clear and terminate the Deposit Account at the termination
of this Agreement or (iv) to withdraw any amounts deposited in error. Funds on
deposit in the Deposit Accounts shall be invested in Permitted Investments in
accordance with Section 2.13, unless otherwise required by law or the terms of
the related Lease. The Property Manager shall pay interest and investment
income, if any, earned on the investment of funds in Deposit Accounts maintained
thereby to the related Tenants, if required by law or the terms of the related
Lease, or, if not so required, to the Collection Account for remittance to the
Indenture Trustee on each Remittance Date in accordance with Section 2.12.
(b) The Property Manager shall establish and maintain one or more
accounts (the "Escrow Accounts"), into which all reserve and/or escrow payments
made by or on behalf of the Tenants under the Leases, if any, shall be deposited
and retained. Withdrawals of amounts so deposited may be made only to pay for,
or to reimburse the related Tenant in connection with, the purposes for which
such reserve or escrow payments were made in accordance with the related Lease
and/or any agreement with the related Tenant governing such reserve and/or
escrow payments. All Escrow Accounts shall be Eligible Accounts, unless
otherwise required by the related Lease and/or any agreement with the related
Tenant governing such reserve and/or escrow payments.
ARTICLE III
THE PROPERTY MANAGER
3.1. COMPENSATION OF PROPERTY MANAGER. The compensation which Property
Manager shall be entitled to receive for services performed as Property Manager
under this Agreement shall be a monthly fee (the "Property Management Fee") of
0.01% of the Value of each Property as of the related Determination Date,
payable on the related Payment Date in accordance with Section 3.02(b) of the
Indenture. Notwithstanding anything to the contrary contained herein, the
Property Management Fee shall be payable solely from the proceeds of the
Collateral in the priority and manner set forth in the Indenture.
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3.2. USE AND MAINTENANCE OF PROPERTIES. The Property Manager agrees to
not knowingly allow any Tenant to use or operate the Property for any purpose
which might void any policy of insurance held by Issuer or the Indenture Trustee
or which might render any loss thereunder uncollectible, or which would be in
violation of any governmental restriction, including but not limited to using,
generating, manufacturing, producing, storing, releasing, discharging, treating,
or disposing of, on, under, from or about a Property any Hazardous Materials in
violation of any Environmental Laws or allow any other person or entity to do
so. The Property Manager shall use its best efforts to secure full compliance by
Tenants with the terms and conditions of their respective Leases. The Property
Manager shall be expected to use its best efforts to perform such other acts and
deeds as are reasonable, necessary and proper in the discharge of its duties
under this Agreement.
3.3. QUARTERLY STATEMENT AS TO COMPLIANCE.
The Property Manager shall deliver to the Issuer, the Indenture Trustee
and the Directing Noteholder, as soon as available and in any event by March 31,
June 30, September 30 and December 31 of each year (or the next succeeding
Business Day if any such day is not a Business Day), beginning March 31, 2001,
an Officer's Certificate stating, as to each signer thereof, that (i) a review
of the activities of the Property Manager during the three calendar month period
then ended, and of its performance under this Agreement, has been made under
such officer's supervision, (ii) to the best of such officer's knowledge, based
on such review, the Property Manager complied in all material respects
throughout such period with the minimum servicing standards in the Uniform
Single Attestation Program for Mortgage Bankers, to the extent applicable, and
fulfilled in all material respects throughout such period its obligations under
this Agreement or, if there was noncompliance with such standards or a default
in the fulfillment of any such obligation in any material respect, such
Officer's Certificate shall include a description of such noncompliance or
specify each such default, as the case may be, known to such officer and the
nature and status thereof.
3.4. REPORTS BY INDEPENDENT PUBLIC ACCOUNTANTS.
On or before September 30 of each year, beginning September 30, 2001,
the Property Manager, at its expense, shall cause a firm of independent public
accountants (which may also render other services to the Property Manager) to
furnish to the Issuer, the Indenture Trustee and the Directing Noteholder a
report containing such firm's opinion that, on the basis of an examination
conducted by such firm substantially in accordance with standards established by
the American Institute of Certified Public Accountants, the assertion made
pursuant to Section 3.3 regarding compliance by the Property Manager with the
minimum servicing standards in the Uniform Single Attestation for Mortgage
Bankers during the preceding fiscal year is fairly stated in all material
respects, subject to such exceptions and other qualifications that, in the
opinion of such firm, such institute's standards require it to report.
3.5. ACCESS TO CERTAIN INFORMATION.
The Property Manager shall afford to the Issuer, the Indenture Trustee,
the Directing Noteholder, each Noteholder and to the OTS, the FDIC and any other
banking or insurance regulatory authority that may exercise authority over any
Noteholder, access to any records regarding
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the Properties and the Leases and its servicing thereof within its control,
except to the extent it is prohibited from doing so by applicable law or
contract or to the extent such information is subject to a privilege under
applicable law to be asserted on behalf of the Issuer or the Noteholders. Such
access shall be afforded without charge but only upon reasonable prior written
request and during normal business hours at the offices of the Property Manager.
3.6. PROPERTY MANAGER REPLACEMENT EVENTS.
(a) "Replacement Event" means any one of the following events:
(i) any failure by the Property Manager to remit to the
Collection Account, the Lockbox Account or the Payment Account (or to
the Indenture Trustee for deposit into the Payment Account) any amount
as and when required to be so remitted pursuant to the terms of this
Agreement; or
(ii) any failure on the part of the Property Manager duly to
observe or perform any other of the covenants or agreements on the part
of the Property Manager contained in this Agreement which continues
unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Property Manager by any other party hereto or the
Directing Noteholder; or
(iii) any breach on the part of the Property Manager of any
representation or warranty contained in this Agreement; or
(iv) there shall have been commenced before a court or agency
or supervisory authority having jurisdiction in the premises an
involuntary proceeding against the Property Manager under any present or
future federal or state bankruptcy, insolvency or similar law for the
appointment of a conservator, receiver, liquidator, trustee or similar
official in any bankruptcy, insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding_up
or liquidation of its affairs, which action shall not have been
dismissed for a period of 60 days; or
(v) the Property Manager shall consent to the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to it or of or
relating to all or substantially all of its property; or
(vi) the Property Manager shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or reorganization
statute, make an assignment for the benefit of its creditors,
voluntarily suspend payment of its obligations, or take any action in
furtherance of the foregoing; or
(vii) the Property Manager shall assign any of its obligations
hereunder to any other Person (other than any such assignment permitted
by the terms hereof); or
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(viii) the Directing Noteholder shall elect in its sole and
absolute discretion to replace the Property Manager; or
(ix) the Issuer or the Indenture Trustee shall have received
written notice from any Rating Agency that the continuation of the
Property Manager in such capacity would result in a downgrade,
qualification or withdrawal of any rating then assigned by such Rating
Agency to any Note.
The Property Manager will notify the Issuer, the Indenture Trustee and the
Directing Noteholder of the occurrence of a Replacement Event or an event which,
with the giving of notice or the expiration of any cure period, or both, would
constitute a Replacement Event promptly upon obtaining knowledge thereof.
(b) If any Replacement Event shall occur, the Directing Noteholder may,
in its sole and absolute discretion, terminate, by notice in writing to the
Property Manager (with a copy of such notice to each other party hereto), all of
the rights and obligations (accruing from and after such notice) of the Property
Manager under this Agreement. From and after the receipt by the Property Manager
of such written notice and if a successor property manager is not immediately
named, all authority and power of the Property Manager under this Agreement,
whether with respect to the Issuer or the Properties or the Leases or otherwise,
shall pass to and be vested in the Indenture Trustee pursuant to and under this
Section, and, without limitation, the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of and at the expense of the
Property Manager, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Properties, the
Leases and related documents, or otherwise, and to appoint a successor property
manager approved by the Directing Noteholder in its sole discretion. The
Property Manager agrees that, if it is terminated pursuant to this Section, it
shall promptly (and in any event not later than ten Business Days subsequent to
its receipt of the notice of termination) provide the Indenture Trustee or the
successor property manager with all documents and records requested thereby to
enable the Indenture Trustee or the successor property manager to assume the
Property Manager's functions hereunder, and shall cooperate with the Indenture
Trustee or the successor property manager in effecting the termination of the
Property Manager's responsibilities and rights hereunder, including the transfer
within two Business Days to the Indenture Trustee for administration by it of
all cash amounts which shall at the time be or should have been credited by the
Property Manager to the Collection Account or thereafter be received by or on
behalf of it with respect to any Lease or Property (provided, however, that the
Property Manager shall, if terminated pursuant to this Section, continue to be
obligated for or entitled to pay or receive all amounts accrued or owing by or
to it under this Agreement on or prior to the date of such termination). Any
costs or expenses in connection with any actions to be taken by the Property
Manager pursuant to this paragraph shall be borne by the Property Manager.
3.7. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Property Manager receives a notice of
termination pursuant to Section 3.6, the Indenture Trustee if a successor
property manager is not named shall be the
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successor in all respects to the Property Manager in its capacity as such under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
and arising thereafter placed on the Property Manager by the terms and
provisions hereof; provided that any failure to perform such duties or
responsibilities caused by the Property Manager's failure to cooperate or to
provide information or monies required by Section 3.6 shall not be considered a
default by the Indenture Trustee hereunder. Neither the Indenture Trustee nor
any other successor shall be liable for any of the representations and
warranties of the terminated party or for any losses incurred by the terminated
party. As compensation therefore, the Indenture Trustee or other successor
property manager shall be entitled to all fees and other compensation which the
terminated party would have been entitled to for future services rendered if the
terminated party had continued to act hereunder. Notwithstanding the above, the
Indenture Trustee may, if it shall be unwilling to so act, or shall, if it is
unable to so act or if Directing Noteholder so requests in writing to the
Indenture Trustee, promptly appoint a successor to the Property Manager in
accordance with the instructions of the Directing Noteholder (or, if the
Directing Noteholder fails to give such instructions, promptly appoint, or
petition a court of competent jurisdiction to appoint, any established
commercial lease servicing institution acceptable to the Directing Noteholder)
as the successor to the Property Manager hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Property Manager
hereunder. No appointment of a successor to the Property Manager hereunder shall
be effective until the assumption of the successor to such party of all its
responsibilities, duties and liabilities hereunder, and pending such appointment
and assumption, the Indenture Trustee shall act in such capacity as herein
provided. In connection with any such appointment and assumption, the Indenture
Trustee may make such arrangements for the compensation, which shall accrue from
the date of such appointment and assumption, of such successor out of payments
on the Leases or otherwise as it, the Directing Noteholder and such successor
shall agree; provided, however, that no such compensation shall be in excess of
that provided herein, unless the Directing Noteholder agrees otherwise. The
Issuer, the Indenture Trustee, such successor and each other party hereto shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
3.8. ASSIGNMENT; BENEFICIARIES. Neither the Issuer nor the Property
Manager shall assign its rights and/or obligations under this Agreement (except,
in the case of the Issuer, to the Indenture Trustee in accordance with the
Indenture) without the prior written consent of the Indenture Trustee and the
Directing Noteholder. The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the Issuer, the
Indenture Trustee, the Directing Noteholder and the Noteholders. No other
person, including any Tenant, shall be entitled to any benefit or equitable
right, remedy or claim under this Agreement.
3.9. NOTICES. All notices required or permitted by this Agreement shall
be in writing and shall be sent by facsimile confirmed by the sender when
followed by U.S. mail, mailed no later than the following day or by registered
or certified mail, or by overnight courier service, addressed in the case of:
Issuer:
USRP Funding 2001-A, L.P.
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12240 Inwood Road, Suite 300
Dallas, Texas 75244
Attention: Asset Management Department
Telephone: (972) 387_1487
Facsimile: (972) 490-9119
Property Manager:
U.S. Restaurant Properties Operating, L.P.
12240 Inwood Road, Suite 300
Dallas, Texas 75244
Attention: Asset Management Department
Telephone: (972) 387_1487
Facsimile: (972) 490-9119
Indenture Trustee:
Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044-3562
Attention: Corporate Trust Services (CMBS) - USRP 2001-A
Telephone: 410-884-2000
Facsimile: 410-884-2360
Directing Noteholder:
Banc of America Mortgage Capital Corporation
100 North Tyron Street
Charlotte, NC 28255
Attention: Jeffrey B. Hoyle
Telephone: 704-388-4385
Facsimile: 704-388-8841
or to such other address and facsimile number as shall, from time to time, have
been designated by written notice by such party given to the other parties as
herein provided.
3.10. SECURITY DEPOSITS. The Property Manager shall maintain any Tenant
security deposits or other Tenant security in the Collection Account and shall
utilize such solely in accordance with the terms of the related Lease.
3.11. ISSUER DEBTS. Nothing contained in this Agreement shall be deemed
or construed to create a partnership or joint venture between the Issuer and the
Property Manager or to cause the Property Manager to be responsible in any way
for the debts or obligations of the Issuer or any other party (but nothing
contained herein shall affect the Property Manager's responsibility to transmit
payments for the account of the Issuer as provided herein), it being the
intention of the parties that
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the only relationship hereunder is that of agent and principal, and the Property
Manager shall not represent to anyone that its relationship to Issuer is other
than that set forth herein.
ARTICLE IV
MISCELLANEOUS
4.1. MISCELLANEOUS.
(a) This Agreement shall constitute the entire agreement between the
parties hereto and no modification thereof shall be effective unless made by
supplemental agreement in writing executed by the parties hereto.
(b) Nothing contained in this Agreement shall constitute or be construed
to be or create a partnership or joint venture between the Issuer, its
successors or assigns, on the one part, and the Property Manager, it successors
or assigns on the other part.
(c) If any one or more of the provisions of this Agreement, or the
applicability of any such provision to a specific situation shall be held
invalid or unenforceable, such provision shall be modified to the minimum extent
necessary to make it or its application valid and enforceable, and the validity
and enforceability of all other provisions of this Agreement and all other
applications of such provisions shall not be affected thereby.
(d) Unless the context clearly requires otherwise, the singular number
herein shall include the plural, the plural number shall include the singular
and any gender shall include all genders. Titles and captions herein shall not
affect the construction of this Agreement.
(e) This Agreement may not be amended, terminated, supplanted or
superceded without the prior written consent of each of the parties hereto and
the Directing Noteholder.
(f) The Directing Noteholder shall be a third party beneficiary to this
Agreement, entitled to enforce the provisions hereof as if a party hereto.
4.2. CHOICE OF LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN
SUCH STATE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES), AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
4.3. VENUE; JURISDICTION. Any action or proceeding against any of the
parties hereto relating in any way to this Agreement may be brought and enforced
in the courts of the State of New York sitting in the borough of Manhattan or of
the United States District Court for the Southern District of New York and each
of the parties hereto irrevocably submits to the Jurisdiction of each such court
in respect of any such action or proceeding. Each of the parties hereto hereby
waives, to
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the fullest extent permitted by law, any right to remove any such action or
proceeding by reason of improper venue or inconvenient forum.
4.4. TERM. This Agreement shall remain in full force and effect until
terminated by mutual agreement of the parties hereto with the consent of the
Directing Noteholder, and if not terminated before the Final Payment Date, shall
terminate on the Final Payment Date.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
executed by their duly authorized representatives.
USRP FUNDING 2001-A, L.P.
By: USRP (SFGP), LLC
By: /S/ FRED MARGOLIN
----------------------------------------
Name: Fred Margolin
Title: Manager
U.S. RESTAURANT PROPERTIES OPERATING, L.P.
By:USRP MANAGING, INC.
By: /s/ FRED MARGOLIN
----------------------------------------
Name: Fred Margolin
Title: President
WELLS FARGO BANK MINNESOTA, N.A.
as Indenture Trustee
By:
Name:
Title:
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EXHIBIT A
FORM OF DETERMINATION DATE REPORT
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