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EXHIBIT 10.6
EXCEPTED HOLDER AGREEMENT
This Excepted Holder Agreement (this "AGREEMENT") is made and entered into
as of March 9, 2001, by and between U.S. Restaurant Properties, Inc., a Maryland
corporation (the "COMPANY"), LSF3 Capital Investments I, LLC, a Delaware limited
liability company ("BUYER 1"), and LSF3 Capital Investments II, LLC, a Delaware
limited liability company ("BUYER 2") (Buyer 1 and Buyer 2 are sometimes
referred to collectively herein as "BUYER").
R E C I T A L S
A. Buyer proposes to purchase from the Company and from stockholders of
the Company (with such collective purchases referred to herein as the
"ACQUISITIONS") approximately 3,729,765 shares of common stock, par value $.001
per share, of the Company ("COMMON STOCK").
B. To help the Company maintain its status as a REIT, the Company's
Restated Articles of Incorporation (the "ARTICLES"), impose certain limitations
on the ownership of the Company's stock. Capitalized terms used in this
Agreement that are not otherwise defined shall have the meanings given to them
in the Articles. The Articles contain a general restriction prohibiting any
Person from owning more than a specified percentage (initially set at 9.8%) of
the Common Stock of the Company and any series of Preferred Stock of the
Company.
C. Pursuant to Section 7.10 of the Articles, the Company's Board of
Directors is permitted to increase the Common Stock Ownership Limit with respect
to a stockholder (as to such stockholder, an "EXCEPTED HOLDER LIMIT") and allow
ownership in excess of the Common Stock Ownership Limit if certain conditions
described in Section 7.11 of the Articles are satisfied.
D. This Agreement is intended to recognize that the Board of Directors of
the Company has agreed to increase the Common Stock Ownership Limit of Buyer if
certain conditions are satisfied and Buyer intends to satisfy such conditions by
execution of this Agreement.
A G R E E M E N T
1. REPRESENTATIONS AND COVENANTS OF BUYER 1 AND BUYER 2
Beginning on the date hereof, and during any period that an Excepted
Holder Limit established pursuant to this Agreement (as subsequently adjusted)
remains in effect, Buyer 1 and Buyer 2 represent and agree, severally and not
jointly, as follows:
1.1 As required by Section 7.11(A) of the Articles as a prerequisite to
increasing the Common Stock Ownership Limit of a stockholder, assuming no
individual, as such term is defined in Code Section 542(a)(2), is currently in
violation of its 9.8% Common Stock Ownership Limit, the Acquisitions will not
cause the Company to be "closely held" within the meaning of Section 856(h) of
the Code (assuming ownership of shares of Equity Stock by all
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Persons equal to the greatest of (i) the actual ownership, (ii) the Beneficial
Ownership of Equity Stock by each Person or (iii) the applicable Ownership Limit
with respect to such Person).
1.2 Applying the constructive stock ownership rules of Code Section
856(h), Common Stock purchased by Buyer pursuant to the Acquisitions will not be
considered to be owned by any individual, as such term is defined in Code
Section 542(a)(2), who would be treated as owning Common Stock in excess of his
Common Stock Ownership Limit of 9.8% of the outstanding shares of Common Stock
of the Company. If at any time after the date of this Agreement, under the
constructive ownership rules of Code Section 856(h) and taking the Common Stock
owned by Buyer into account, an individual, as such term is defined in Section
542(a)(2) of the Code, would be treated as owning Common Stock in excess of such
individual's Common Stock Ownership Limit in violation of Section 7.2, the
Excess Stock and other provisions of Section 7.2 of the Articles shall be
applied first to the Common Stock actually owned by such individual, second to
the Common Stock treated as owned by such individual (other than as a result of
Common Stock actually owned by Buyer) and third to the Common Stock treated as
owned by such individual as a result of Common Stock actually owned by Buyer.
1.3 Buyer will not own, actually, Beneficially, or Constructively shares
of the Company's Equity Stock that would violate the Excepted Holder Limit
established for Buyer pursuant to this Agreement and the resolutions of the
Board of Directors.
1.4 As modified by Section 1.2 above, Buyer agrees that any violation or
attempted violation of Article 1 of this Agreement or the provisions of the
Board of Directors' resolution implementing this Agreement (or other action
contrary to the ownership restrictions imposed under the Articles) will
automatically subject the shares that otherwise would result in the violation to
the treatment described in Section 7.2 of the Articles.
2. ESTABLISHMENT OF AN EXCEPTED HOLDER LIMIT FOR BUYER
Based on the representations and agreements contained in this Agreement,
the Company, effective as of the execution of this Agreement, is increasing the
Common Stock Ownership Limit of Buyer by adopting a resolution of its Board of
Directors in the form attached to this Agreement as Exhibit "A."
3. RELATED PARTY RENTS
3.1 Buyer 1 and Buyer 2 hereby represent, severally and not jointly, that,
to the best knowledge of such Buyer based upon the due diligence described
below, such Buyer and each Indirect Equity Owner does not own (directly or
constructively through the application of Code Section 318, as modified by Code
Section 856(d)(5)) an interest in any tenant of the Company (or any entity owned
or controlled by the Company) listed on Schedule 1 attached hereto that would
cause the Company to own (directly or constructively through the application of
Code Section 318, as modified by Code Section 856(d)(5)) more than a 9.9%
interest (within the meaning of Section 856(d)(2)(B) of the Code) in such
tenant, without regard to the other interests in such tenant which the Company
may own (directly or constructively through the application
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of Code Section 318, as modified by Code Section 856(d)(5)). The due diligence
referred to above consisted of a review by Buyer 1 and Buyer 2, respectively, of
the most recently received copies of all financial reports received from (i)
each partnership or limited liability company in which Buyer 1 and Buyer 2, as
the case may be, directly or indirectly holds an equity interest; and (ii) each
corporation or trust in which Buyer 1 and Buyer 2, as the case may be, directly
or indirectly or indirectly owns a 10% or greater equity interest (which
financial reports describe all entities in which such partnerships, limited
liability companies, corporations and trust own an equity interest as of the
date of such reports) and comparing the information contained in such financial
reports to Schedule 1. For purposes of this Agreement, an "Indirect Equity
Owner" means any Person (i) that is deemed to Beneficially Own or Constructively
Own an interest in shares of the Company that are held by Buyer, and (ii) whose
direct or indirect ownership of any interest in any tenant of the Company would
be attributed to the Company through the application of Section 318 of the Code,
as modified by Code Section 856(d)(5). In addition, Buyer 1 and Buyer 2 have
received representations from each Indirect Equity Owner of such Buyer that the
Indirect Equity Owner does not own more than a 9.9% (within the meaning of
Section 856(d)(2)(B) of the Code) in a tenant described on Schedule 1. These
representations are made only with respect to the date hereof assuming the
Acquisitions have already taken place and do not constitute continuing
representations or covenants with respect to the matters described in this
Section 3.1.
3.2 Buyer and the Company agree that Buyer will provide the following
information to the Company and the Company will provide the following
information to Buyer on an annual basis:
(a) No later than December 31, of each calendar year, the Company will
update the information contained in Schedule 1 (the "TENANT LIST") and
provide such information to Buyer and to any Indirect Equity Owner;
(b) No later than 30 days after receipt of the Tenant List, Buyer 1
and Buyer 2 and any Indirect Equity Owner will inform the Company of its
direct equity ownership of any tenant in which it owns a 10% or greater
equity interest (as described in Code Section 856(d)(2)(B)) and whose name
appears on the Tenant List;
(c) No later than March 31, of each calendar year after 2000 (but only
for so long as Buyer owns or Constructively Owns at least 10% of the
Equity Stock of the Company), Buyer shall deliver to the Company, subject
to such confidentiality restrictions as Buyer may reasonably require,
copies of the most recently received information regarding investments
from (i) each partnership or limited liability company in which Buyer or
any Indirect Equity Owner directly or indirectly holds an equity interest;
and (ii) each corporation or trust in which Buyer or any Indirect Equity
Owner directly or indirectly owns a 10% or greater equity interest (each
such partnership, limited liability company, corporation or trust referred
to as a "BUYER ENTITY"). In the alternative, Buyer may satisfy the
requirements of this Section 3.2(c) by certifying to the Company, not
later than March 31 of each calendar year after 2000 (but only for so long
as Buyer owns or Constructively Owns at least 10% of the Equity Stock of
the Company), that Buyer personnel have reviewed the information regarding
investments of
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each Buyer Entity described in the preceding sentence together with the
Tenant List most recently provided by the Company, and that such review
has not revealed (except as specifically noted) any circumstances in which
Buyer, any Indirect Equity Owner or any Buyer Entity would own (directly
or constructively through the application of Section 318 (as modified by
Code Section 856(d)(5)) more than a 9.9% interest (as described in Code
Section 856(d)(2)(B)) in any such tenant.
3.3 No later than 30 days after receipt of the Tenant List, Buyer shall
provide the Tenant List to each Buyer Entity and any Indirect Equity Owner.
Buyer agrees and Buyer will cause each Buyer Entity and Indirect Equity Owner to
agree that they will not acquire an equity interest in any of the tenants listed
on the Tenant List without the consent of the Company.
4. MISCELLANEOUS
4.1 All questions concerning the construction, validity and interpretation
of this Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Maryland, without giving effect to any choice of
law or conflict of law provision (whether of the State of Maryland or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Maryland.
4.2 This Agreement may be signed by the parties in separate counterparts,
each of which when so signed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
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Each of the parties has caused this Agreement to be signed by its duly
authorized officers as of the date forth in the introductory paragraph of this
Agreement.
The "Company"
U.S. Restaurant Properties, Inc.,
a Maryland corporation
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: CEO
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"Buyer"
LSF3 Capital Investments I, LLC,
a Delaware limited liability company
By: /s/ X.X. Dell
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Name: X.X. Dell
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Title: President
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LSF3 Capital Investments II, LLC,
a Delaware limited liability company
By: /s/ X.X. Dell
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Name: X.X. Dell
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Title: President
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EXHIBIT A
EXCEPTED HOLDER LIMITED RESOLUTION
In accordance with Article 7 of the Corporation's Restated Articles of
Incorporation (the "Articles"), the Board of Directors (capitalized terms used
in this resolution that are not otherwise defined herein shall have the meanings
given to those terms in the Articles) hereby determines that, effective upon the
purchase by LSF3 Capital Investments I, LLC, a Delaware limited liability
company and LSF3 Capital Investments II, LLC, a Delaware limited liability
company (collectively, "Buyer") of Common Stock of the Corporation pursuant to
that certain Amended and Restated Stock Purchase Agreement (the "Agreement")
among Lone Star U.S. Acquisitions, LLC, Lone Star Fund II (U.S.), L.P. and the
Corporation dated as of February 27, 2001 (the "REIT Ownership Date"):
(1) Pursuant to Section 7.10 of the Articles, the aggregate Common Stock
Ownership Limit relating to Buyer is increased to 40% of the outstanding shares
of Common Stock of the Corporation; provided, however, pursuant to Section
7.11(A) and Section 7.11(B) of the Articles, such increase is contingent upon
the execution by Buyer of an Excepted Holder Agreement in the form attached
hereto as Exhibit A, the accuracy of Buyer's representations and warranties
contained in such Excepted Holder Agreement and the completion of the
transactions contemplated by the Agreement; and
(2) If at any time after the REIT Ownership Date, under the constructive
ownership rules of Code Section 856(h) and taking the Common Stock owned by
Buyer into account, an individual, as such term is defined in Section 542(a)(2)
of the Code, would be treated as owning Common Stock in excess of such
individual's Common Stock Ownership Limit in violation of Section 7.2, the
Excess Stock and other provisions of Section 7.2 of the Articles shall be
applied first to the Common Stock actually owned by such individual, second to
the Common Stock constructively owned by such individual (other than as a result
of Common Stock actually owned by Buyer) and third to the Common Stock
constructively owned by such individual as a result of Common Stock actually
owned by Buyer.
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