EXHIBIT 10.11
LOAN AGREEMENT
THIS is an agreement (the
“Agreement”) made as of December 8, 2003 by and between
FIRST HAWAIIAN BANK, a Hawaii corporation, as lender (the
“Lender”), and USRP (HAWAII), LLC, a Texas limited
liability company, USRP (BOB), LLC, a Texas limited liability
company, and FUEL SUPPLY, INC., a Texas corporation, jointly and
severally, as borrower (individually and collectively, the
“Borrower”).
This Agreement relates to a loan
(the “Loan”) in the principal amount of TWELVE MILLION
AND NO/100 DOLLARS ($12,000,000.00) to be made to the Borrower by
the Lender, upon the terms and conditions set forth
below.
In consideration of the mutual
covenants hereinafter set forth, and intending to be legally bound
thereby, the Borrower and the Lender hereby agree as
follows:
SECTION 1. Definitions .
As used in this Agreement, each of
the following terms shall have the meaning set forth below with
respect thereto:
“ Assignment of Rents
” means those certain Absolute Assignment of Rentals and
Lessor’s Interest in Lease executed concurrently herewith by
the Borrower and the Negative Pledgors.
“ Borrower ”
means, jointly and severally, individually and collectively, USRP
(HAWAII), LLC, a Texas limited liability company, USRP (BOB), LLC,
a Texas limited liability company, and FUEL SUPPLY, INC., a Texas
corporation.
“ Closing Date ”
means the date on which the Lender determines that all of the
conditions set forth in Section 4 of this Agreement have been
satisfied.
“ Compliance
Certificate ” means the certificate in the form attached
hereto as Exhibit “1” and made a part
hereof.
“ Debt Service Coverage
Ratio ” means the ratio between (a) (i) EBITDA plus
rental income of USRP (Hawaii), LLC, plus (ii) EBITDA plus rental
income of USRP (Bob), LLC, plus (iii) EBITDAR of Fuel Supply, Inc.
for the Hawaii stations’ wholesale contracts, and (b)
principal and interest payments under this Loan.
“ EBITDA ” means
earnings before interest, taxes, depreciation and
amortization.
“ EBITDAR ” means
earnings before interest, taxes, depreciation, amortization and
rental expense.
“ Event of Default
” means any of the events described in Section 6.1 of this
Agreement.
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“ Expenses ”
means the fees, costs and expenses described in Section 5.7 of this
Agreement.
“ Financing Statement
” means those certain UCC-1 Financing Statements perfecting a
first security interest in and to the collateral described in the
Security Agreement and the Assignment of Rents.
“ GAAP ” means
generally accepted accounting principles.
“ Guarantor ”
means, individually and collectively, U.S. RESTAURANT PROPERTIES,
INC., and U.S. RESTAURANT PROPERTIES OPERATING L.P.
“ Guaranty ”
means the guaranty agreement executed by the Guarantor in favor of
the Lender guaranteeing the due and punctual payment of the Note,
and the observance and performance of the Borrower’s
obligations under the Loan Documents.
“ Land ” means
that certain parcel of real property owned by the Borrower and more
particularly described in Exhibit “A” attached to the
Mortgage.
“ Lender ” means
First Hawaiian Bank, a Hawaii corporation.
“ Loan Documents
” means all of the documents and instruments executed by or
for the benefit of the Borrower in connection with the Loan,
including, without limitation, this Agreement, the Note, the
Mortgage, the Security Agreement, the Assignment of Rents, the
Financing Statement, the Negative Pledge and the
Guaranty.
“ Loan Fee ”
means the fee in the amount of $112,425.00, payable by the Borrower
to the Lender on or before the Closing Date.
“ Loan to Value Ratio
” means the ratio of the Principal Balance to the fair market
value of the Land as shown on the appraisal report as required by
Section 4.10 herein.
“ Maturity Date ”
means (a)
, or (b) the date, following the occurrence of an Event of Default,
on which the Lender notifies the Borrower that the entire Principal
Balance, together with all accrued interest thereon, and all fees,
charges, expenses and other sums payable under this Agreement and
the other Loan Documents, shall become due and payable.
“ Mortgage ”
means, individually and collectively, the Real Property Mortgage
and Financing Statement executed concurrently herewith by USRP
(Bob), LLC in favor of the Lender and the Real Property Mortgage
and Financing Statement executed concurrently herewith by USRP
(Hawaii), LLC in favor of the Lender, which shall constitute at all
times a valid and subsisting first mortgage lien upon the Land, all
structures and improvements constructed or to be constructed on the
Land, and a valid and subsisting first security interest in all
building materials, equipment, machines and any other personal
property now owned or hereafter acquired by the Borrower and
incorporated in the improvements or otherwise situated upon the
Land.
“ Mortgagor ”
means USRP (Hawaii), LLC and USRP (Bob), LLC.
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“ Negative Pledge
” means those certain Negative Pledge Agreements executed
concurrently herewith by the Negative Pledgors.
“ Negative Pledgors
” means USRP (FRED), LLC, USRP (SARAH), LLC, USRP (JENNIFER),
LLC, USRP (STEVE), LLC and FUEL SUPPLY, INC.
“ Note ” means
the promissory note dated the date of this Agreement, executed by
the Borrower in favor of the Lender, evidencing the
Borrower’s agreement to repay the Principal Balance
hereunder, together with interest thereon, as provided
therein.
“ Principal Balance
” means the aggregate outstanding principal balance of the
Loan.
“ Quarter ” means
any one of the following three-calendar-month periods in any
calendar year: January 1 to and including March 31; April 1 to
and including June 30; July 1 to and including September 30; and
October 1 to and including December 31.
“ Release Price ”
means the sum shown on Exhibit “3” payable by the
Borrower as a condition for the release by the Lender of its
mortgage lien and of its security interest over and in any parcel
of Land.
“ Security Agreement
” means those certain Security Agreements executed
concurrently herewith by and between the Borrower and the Lender,
and by and between the Negative Pledgors and the Lender, which
shall effect an assignment to the Lender of, and grant to the
Lender a valid and subsisting first security interest in and to all
collateral as described therein.
“ Title Insurer ”
means a title insurance company, authorized to do business in the
State of Hawaii, which shall issue the Title Policy.
“ Title Policy ”
means a policy of title insurance issued by the Title Insurer, in
the form and with the indorsements described in Section 4.8 of this
Agreement.
SECTION 2. The Loan .
2.1 Amount . Subject to the
terms and conditions contained in this Agreement, the Lender agrees
to lend to the Borrower, and the Borrower agrees, jointly and
severally, to borrow from the Lender, the principal sum of
TWELVE MILLION AND NO/100 DOLLARS ($12,000,000.00)
.
2.2 Interest . Interest on
the Principal Balance shall accrue from the Closing Date until
payment in full as provided in the Note.
2.3 Payments . The Borrower
shall make such payments to the Lender as provided in the
Note.
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2.4 Prepayments .
(a) Mandatory Prepayments .
Whenever the Mortgagor sells any parcel of Land, the Borrower shall
pay the applicable Release Price therefor to the Lender.
(b) Voluntary Prepayments .
The Borrower may voluntarily prepay all or any portion of the Loan
as provided in the Note.
2.5 Security Documents . In
order to secure and provide further assurance to the Lender of the
due and punctual payment of the Note, and the observance and
performance by the Borrower of all of its obligations under the
Loan Documents, the Borrower shall, on or before the Closing Date,
deliver to the Lender, the Mortgage, the Security Agreement, the
Assignment of Rents, the Financing Statement, the Negative Pledge
and the Guaranty, duly executed by the appropriate parties thereto,
in form and substance satisfactory to the Lender.
2.6 Closing . Closing of the
Loan shall be subject to the satisfaction of all of the conditions
precedent set forth in Section 4 of this Agreement.
SECTION 3. Representations and Warranties by
the Borrower .
The Borrower represents and warrants
to the Lender that:
3.1 Organization, Standing and
Authority of Borrower . Each limited liability company Borrower
is a Texas limited liability company duly registered and validly
existing under the laws of the State of Texas and in good standing
under the laws of the States of Texas and Hawaii, and has all
requisite power and authority to carry on the business and to own
the property that it now carries on and owns. The corporate
Borrower is a Texas corporation duly registered and validly
existing under the laws of the State of Texas and in good standing
under the laws of the States of Texas and Hawaii, and has all
requisite power and authority to carry on the business and to own
the property that it now carries on and owns. The Borrower has all
requisite power and authority to execute and deliver the Loan
Documents and to observe and perform all of the provisions and
conditions thereof. The execution and delivery of the Loan
Documents have been duly authorized by the respective members and
Board of Directors, and to the extent required, by the managers or
shareholders, of the Borrower and no other company or corporate
action of the Borrower is requisite to the execution and delivery
of the Loan Documents.
3.2 Tax Returns and Payments
. All tax returns and reports of the Borrower required by law to be
filed have been duly filed and all taxes, assessments,
contributions, fees and other governmental charges (other than
those presently payable without penalty or interest and those which
have been disclosed to the Lender but which are currently being
contested in good faith) upon the Borrower or upon the properties
or assets or income of the Borrower, which are due and payable,
have been paid.
3.3 Litigation . There is, to
the knowledge of the Borrower, no action, suit, proceeding or
investigation pending at law or in equity or before any federal,
state, territorial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality or
threatened
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against or affecting the Borrower which might
materially adversely affect the Borrower’s ability to operate
its business or to perform its obligations under the Loan
Documents.
3.4 Compliance with Other
Instruments, None Burdensome . The Borrower is not in violation
of or in default with respect to any term or provision of its
applicable Articles of Organization, Operating Agreement, Articles
of Incorporation or Bylaws or any mortgage, indenture, contract,
agreement or instrument applicable to the Borrower or by which it
may be bound; and the execution, delivery, performance of and
compliance with each and all of the Loan Documents will not result
in any such violation or be in conflict with or constitute a
default under any such term or provision or result in the creation
of any mortgage, lien or charge on any of the properties or assets
of the Borrower not contemplated by this Agreement.
3.5 Financial Statements .
All financial statements heretofore delivered to the Lender by or
on behalf of the Borrower or the Guarantor are true and correct in
all respects, and fairly represent the financial condition of the
respective entities as of the dates thereof; and no material,
adverse changes have occurred in the financial condition reflected
therein since the dates thereof.
3.6 Brokers, Finders and
Agents . The Borrower has not employed or engaged any broker,
finder or agent who may claim a commission or fee or other
compensation with respect to the Loan. The Borrower will indemnify
the Lender against all claims of brokers for commissions or fees in
connection with the Loan and all losses, damages, costs and charges
(including attorneys’ fees) which the Lender may sustain
because of such claims or in consequence of defending against such
claims.
3.7 Character of Representations
and Warranties . None of the financial statements or any
certificate or statement furnished to the Lender by or on behalf of
the Borrower in connection with the Loan, and none of the
representations and warranties in this Agreement 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. To the best knowledge of the Borrower, there
is no fact which materially adversely affects or in the future (so
far as the Borrower can now foresee) may materially adversely
affect the ability of the Borrower to observe or perform its
obligations under the Loan Documents which has not been set forth
herein or in a certificate or opinion of counsel or other written
statement furnished to the Lender by or on behalf of the
Borrower.
SECTION 4. Conditions of The Lender’s
Obligation .
The Lender’s obligation to
make the Loan hereunder, is subject to the fulfillment, to the
Lender’s sole, personal and subjective satisfaction, prior to
or on the Closing Date, of the following conditions:
4.1 Representations and
Warranties True at Closing . The representations and warranties
contained in Section 3 of this Agreement and otherwise made by or
on behalf of the Borrower in connection with the Loan shall be true
and correct as of the Closing Date, with the same effect as if made
at such time.
4.2 Execution of Loan
Documents . The Borrower shall have executed and delivered to
the Lender and the Lender shall have approved, all of the Loan
Documents.
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4.3 Expenses . The Borrower
shall have paid to the Lender on the Closing Date the Loan Fee and
all of the fees and expenses (including, without limitation, fees
and disbursements and expenses of legal counsel for the Lender)
provided for in Section 5.7 which the Lender shall determine to be
due and payable as of the Closing Date.
4.4 No Event of Default .
There shall exist at the Closing Date no condition or event which
would constitute an Event of Default or which, after notice or
lapse of time, or both, would constitute an Event of
Default.
4.5 Opinion of Counsel . The
Borrower shall have delivered to the Lender, and the Lender shall
have approved, an opinion of legal counsel for the Borrower in
substantially the form set forth in Exhibit “2”
attached hereto and made a part hereof.
4.6 Company Proceedings and
Documents . All company proceedings taken by the limited
liability company Borrower in connection with the Loan shall be
satisfactory in form and substance to the Lender and its counsel,
and the Lender shall have received: (i) properly certified
resolutions of the members, and to the extent required, by the
managers, of such Borrower duly authorizing the execution and
delivery of the Loan Documents and the consummation of the
transactions contemplated hereby, (ii) a certificate of good
standing of such Borrower issued by the Director of the Department
of Commerce and Consumer Affairs of the State of Hawaii and by the
comparable administrative agency of the State of Texas, (iii) a
copy of the Articles of Organization of such Borrower, certified as
true and exact by said Director, (iv) a copy of the Operating
Agreement of such Borrower, certified as true, correct and complete
by the manager of such Borrower, and (v) such authenticated copies
of such other company documents as the Lender may reasonably
request.
4.7 Corporate Proceedings and
Documents . All corporate proceedings taken by the corporate
Borrower in connection with the Loan shall be satisfactory in form
and substance to the Lender and its counsel, and the Lender shall
have received: (i) properly certified resolutions of the Board of
Directors, and to the extent required, by the shareholders, of such
Borrower duly authorizing the execution and delivery of the Loan
Documents and the consummation of the transactions contemplated
hereby, (ii) a certificate of good standing of such Borrower issued
by the Director of the Department of Commerce and Consumer Affairs
of the State of Hawaii and by the comparable administrative agency
of the State of Texas, (iii) a copy of the Articles of
Incorporation of such Borrower, certified as true and exact by said
Director, (iv) a copy of the Bylaws of such Borrower, certified as
true, correct and complete by the secretary of such Borrower, and
(v) such authenticated copies of such other company documents as
the Lender may reasonably request.
4.8 Evidence of Tax Payments; Tax
Clearance Certificate . The Lender shall have received a Tax
Clearance Certificate issued by the Department of Taxation of the
State of Hawaii, and issued by the comparable agency of the State
of Texas, certifying that all taxes due to the respective states by
the Borrower up to and including a date within thirty (30) days of
the Closing Date have been paid.
4.9 Title Insurance . The
Borrower shall have delivered to the Lender the Title Policy
including such indorsements as the Lender may require, issued by
the Title Insurer and reinsured by
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such number of additional title insurance
companies as the Lender may require, in form, substance and amount
(which shall not be less than the full principal amount of the
Note) satisfactory to the Lender, insuring (or agreeing to insure)
that the Mortgage constitutes a valid first lien on the Land, free
and clear of all defects, liens, encumbrances and exceptions to
title whatsoever, except such as are shown on Exhibit
“A” attached thereto and such other minor encumbrances,
defects, liens and exceptions to title which individually or in the
aggregate do not have a material adverse effect on the value of
such property, as determined by the Lender in its reasonable
discretion (the “Permitted Liens”). The Title Policy
shall effect full coverage against losses arising out of
encroachments against boundary or setback lines, losses arising out
of the violation of zoning ordinances and regulations and such
other losses with respect to which the Lender may require coverage.
The Title Policy shall contain no exclusions, stipulations or
exceptions not theretofore approved by the Lender. THE LENDER
HEREBY NOTIFIES THE BORROWER THAT THE LENDER MAY NOT MAKE THE
GRANTING OF THE LOAN CONTINGENT UPON THE BORROWER PROCURING ANY
SUCH POLICY OR POLICIES WITH A TITLE INSURER DESIGNATED BY THE
LENDER.
4.9 Financing Statement and
Personal Property Lien Report . The Borrower shall have
delivered to the Lender a financing statement and personal property
lien report, in form and substance satisfactory to the Lender,
issued by a recognized corporate searcher of titles, advising the
Lender that a search of the public records discloses, as of the
Closing Date, no security agreements, chattel mortgages, financing
statements, title retention agreements, notices or certificates of
tax liens or other instruments or documents filed or recorded
against the Borrower except those which may be approved by the
Lender in writing.
4.10 Appraisal . The Lender
shall have received an appraisal report, in form and substance
satisfactory to the Lender, from the Lender’s appraisal
department or from a recognized real estate appraiser retained by
the Lender, appraising the fair market value of the Land in
accordance with the Uniform Standards of Professional Appraisal
Practice and federal regulations applicable to the
Lender.
4.11 Compliance Certificate .
The Borrower shall have furnished to the Lender the Compliance
Certificate, dated concurrently with this Agreement, executed by an
authorized corporate officer of the Borrower.
4.12 Compliance with Law;
Governmental Authorization . All restrictive covenants, land
use laws and regulations, zoning ordinances and regulations,
building codes and regulations, environmental and ecological laws
and regulations, and any other applicable laws, statutes,
ordinances or regulations, shall have been fully complied with, and
all licenses, permits and all certificates with respect to the
operation of the Borrower’s business shall have been
obtained.
SECTION 5. Other Covenants of the
Borrower .
The Borrower covenants and agrees
with the Lender as follows:
5.1 Information . The
Borrower shall (a) furnish directly to the Lender with reasonable
promptness such data and information, financial or otherwise,
(including such financial information as may be required in any
separate agreement between the Borrower and the Lender) concerning
the
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Borrower as from time to time may reasonably be
requested by the Lender; (b) promptly notify the Lender of any
condition or event which constitutes a breach or event of default
of any covenant, condition, warranty, representation or provision
of any of the Loan Documents, and of any materially adverse change
in the financial condition or operations of the Borrower; and (c)
furnish directly to the Lender, not more than sixty (60) days after
the end of each Quarter, a certificate of the Borrower, signed by
an authorized executive officer of the Borrower, to the effect that
the signer has reviewed the relevant terms of this Agreement, and
the other Loan Documents, and has made, or caused to be made under
his supervision, a review of the transactions and condition of the
Borrower during such Quarter, and that such review has not
disclosed, and the signer does not have knowledge of the existence,
of any Event of Default, or, if any Event of Default has occurred
or exists, specifying the nature and period of existence thereof
and what action the Borrower has taken or is taking or proposes to
take with respect thereto.
5.2 Preservation of Juristic
Existence . The Borrower shall maintain its juristic existence
in good standing under the laws of the State of Hawaii and any
other jurisdiction in which it conducts business, and shall not,
without the prior written consent of the Lender, amend, modify, or
terminate its constituent documents, true and correct copies of
which the Borrower represents have been provided to the
Lender.
5.3 Payment of Taxes . The
Borrower shall pay or cause to be paid all taxes, assessments, or
other governmental charges levied upon any of its properties or
assets, or in respect of its income before the same become
delinquent, except that the Borrower will have the right to contest
assessments and other charges in the manner provided in Section
6.2.
5.4 Maintenance and Performance
of Contracts . The Borrower shall at all times maintain and
perform all material contracts, licenses, permits, and other
agreements applicable to its business and operations and provide
timely notice to the Lender of the expiration of any such
contracts, licenses, permits or agreements, and of any default by
the Borrower or any third party under any of such contracts,
licenses, permits or agreements.
5.5 Insurance . The Borrower
shall maintain at all times during the term of the Loan such
insurance as is normally carried by prudent entities engaged in the
same or similar business as the Borrower.
5.6 Indemnification of the
Lender . The Borrower shall indemnify and hold the Lender
harmless from any and all claims asserted against the Lender by any
person, entity or governmental authority arising out of or in
connection with the Loan except for claims arising out of the
Lender’s gross negligence or wilful misconduct. The Lender
shall be entitled to appear in any action or proceeding to defend
itself against such claims, and all reasonable costs incurred by
the Lender in connection therewith, including reasonable
attorneys’ fees, shall be reimbursed by the Borrower to the
Lender within ten (10) days after presentment, as provided in
Section 5.7. Any failure to so reimburse the Lender within the
specified time period shall constitute an Event of Default under
this Agreement, and the unreimbursed amount shall thereupon be
added
