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EXHIBIT 99.1
OPTION AGREEMENT
This Option Agreement (this "Agreement"), dated as of March 24, 1995,
is between U.S. Restaurant Properties Master L.P., a Delaware limited
partnership (the "Partnership"), and QSV Properties Inc., a Delaware
corporation that is the Managing General Partner of the Partnership (the
"Managing General Partner").
RECITALS
WHEREAS, Section 5.05(a) of the Second Amended and Restated Agreement
of Limited Partnership of the Partnership (the "Partnership Agreement")
provides that the Partnership may grant options to purchase units of limited
partnership in the Partnership (the "Units") to the Managing General Partner
upon the approval by a Majority Vote of the Limited Partners (as defined in the
Partnership Agreement);
WHEREAS, at a special meeting of the Partnership's limited partners on
March 17, 1995, the limited partners approved by a Majority Vote of the Limited
Partners the issuance of options to the Managing General Partner to purchase
400,000 Units; and
WHEREAS, in consideration of the Managing General Partner's efforts in
connection with the approval by the limited partners of the Partnership of
amendments to the Partnership Agreement and the additional efforts that it will
expend to expand the Partnership's business and opportunities as contemplated
under the Partnership Agreement, the Partnership desires to grant options to
the Managing General Partner to purchase 400,000 Units, upon the terms and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
agreements herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
PART II
OPTIONS
SECTION 2.1 GRANT OF THE OPTIONS. The Partnership hereby grants
to the Managing General Partner options (the "Options") to purchase 400,000
Units at an exercise price of $15.50 per Unit (the "Exercise Price").
SECTION 2.2 VESTING. Unless otherwise accelerated pursuant to
Section 1.5 hereof, the Options will vest in full and become exercisable on
March 24, 1996.
SECTION 2.3 EXERCISE. Subject to Sections 1.2 and 1.5, the
Options shall only be exercisable during the period beginning at 9:00 a.m.
Central Time on March 24, 1996 and ending at 5:00 p.m. Central Time on March
24, 2006 (the "Exercise Period"). During the Exercise Period, the Managing
General Partner may exercise any or all of the Options granted under this
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Agreement. Following any such exercise, this Agreement shall remain in effect
with respect to any remaining unexercised Options. To exercise any Options,
the Managing General Partner must deliver to the Partnership a written notice
of such exercise (a "Notice of Exercise"), which notice must specify the number
of Options exercised and the aggregate Exercise Price for the Units to be
issued. Along with the Notice of Exercise, the Managing General Partner shall
pay such aggregate Exercise Price to the Partnership by delivery of cash or a
cashier's check payable to the Partnership.
SECTION 2.4 INVESTMENT REPRESENTATION AND WARRANTY. The Managing
General Partner hereby represents and warrants to the Partnership that the
Managing General Partner (a) is experienced in the evaluation of businesses
similar to the Partnership, (b) is able to fend for itself in the transactions
contemplated by this Agreement, (c) has such knowledge, skill and experience in
financial, investment and business matters as to be capable of evaluating the
merits and risks of exercising the Options, (b) has the ability to bear the
economic risks of exercising the Options, and (e) has reviewed all financial
and other information that it considers necessary to evaluate an investment in
the Units.
SECTION 2.5 CEASING TO SERVE AS MANAGING GENERAL PARTNER.
(a) In the event the Managing General Partner is removed
as a General Partner pursuant to Section 14.02 of the Partnership
Agreement, the Options shall immediately vest in full (if not already
vested) and shall be exercisable in the manner described in Section
1.3 hereof for a period of six (6) months from the date of such
ceasing to serve; provided, however, that in no event shall the
Options be exercisable after 5:00 p.m. Central Time on March 24,
2006. Upon the earlier of (i) the expiration of such six-month period
or (ii) March 25, 2006, the Options shall terminate and shall no
longer be exercisable.
(b) In the event the Managing General Partner voluntarily
withdraws from the Partnership pursuant to Section 14.01 of the
Partnership Agreement or pursuant to Section 17-602(a) of the Delaware
Revised Uniform Limited Partnership Act in violation of Section 14.01
of the Partnership Agreement, upon such voluntary withdrawal the
Options shall terminate, shall not vest (if not already vested), and,
if already vested, shall no longer be exercisable.
(c) In the event the Managing General Partner ceases to
serve as the Managing General Partner for a reason other than those
described in Sections 1.5(a) or (b) hereof, such ceasing to serve
shall not affect vesting of the Options pursuant to Section 1.2 hereof
or the Managing General Partner's right to exercise the Options
pursuant to Section 1.3 hereof.
SECTION 2.6 ADJUSTMENTS. Each Option shall entitle the Managing
General Partner to purchase one Unit. If subsequent to the date hereof an
Adjustment Event (as hereinafter defined) occurs, then any unexercised Options
existing at that time shall be converted into the right to purchase the number
of Units or other securities that would have been received by a holder of the
number of Units for which such unexercised Options could have been exercised
immediately before such Adjustment Event. Corresponding adjustments shall also
then be made to: (a) the
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number of unexercised Options so that such number equals the new number of
Units or other securities for which they are exercisable, and (b) the Exercise
Price so that the aggregate Exercise Price for the unexercised Options
immediately before the Adjustment Event equals the aggregate Exercise Price for
the unexercised Options immediately after such event. If pursuant to this
Section 1.6 the Options become exercisable into securities other than Units,
references in this Agreement to the Units shall after the Adjustment Event
refer to such securities. The term "Adjustment Event" shall mean any
combination or before the Adjustment Event equals the aggregate Exercise Price
for the unexercised Options immediately after such event. If pursuant to this
Section 1.6 the Options become exercisable into securities other than Units,
references in this Agreement to the Units shall after the Adjustment Event
refer to such securities. The term "Adjustment Event" shall mean any
combination or split-up of the Units, or any required exchange of the Units for
another security, whether pursuant to the consolidation, merger,
recapitalization, reclassification, or reorganization of the Partnership or
otherwise.
SECTION 2.7 NO UNITHOLDER RIGHTS. The Managing General Partner
shall not be considered the holder of any Units issuable upon exercise of the
Options until the Partnership has properly issued them upon the exercise of the
respective Options in accordance with this Agreement. The Managing General
Partner shall therefore not be entitled to receive any distributions on such
Units or to vote them until such issuance.
SECTION 2.8 TRANSFERABILITY. The Options are not transferable
except by operation of law pursuant to a consolidation, merger,
recapitalization or reorganization of the Managing General Partner. Any
transferee of the Managing General Partner's rights under this Agreement and
any transferee of any of the Options pursuant to this Section 1.7 shall be
subject to the terms and provisions of this Agreement as if such transferee was
the Managing General Partner.
PART III
RESTRICTIONS
SECTION 3.1 PROHIBITIONS ON EXERCISE. Notwithstanding anything
to the contrary in this Agreement, the Partnership shall not be required to
issue any Units upon an exercise of the Options until: (a) the Partnership has
listed the Units to be issued or the related depository receipts on the stock
exchanges, the National Market System (the "National Market System") of the
National Association of Securities Dealers Automated Quotation System (the
"NASDAQ System"), or the NASDAQ System, respectively, upon which the Units or
the related depository receipts are then listed, and (b) the Partnership
believes that such issuance will not violate any federal, state, or other
securities law. Upon execution of this Agreement, the Partnership will use
reasonable efforts to list the Units to be issued or the related depository
receipts on the stock exchanges, the National Market System, or the NASDAQ
System, respectively, upon which the Units are then listed.
SECTION 3.2 RESTRICTED SECURITIES. The Managing General Partner
acknowledges that neither the issuance of the Options nor the Units issuable
upon their exercise will be registered under any federal, state, or other
securities law, and that they will therefore be "restricted securities" under
Rule 144 under the Securities Act.
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SECTION 3.3 SECTION 16 RESTRICTIONS. Except as permitted without
violating Section 16 of the Securities and Exchange Act of 1934, as amended,
and the rules promulgated thereunder, the Managing General Partner represents
and warrants to the Partnership that the Managing General Partner has not sold
any Units during the six month period immediately preceding the date hereof.
PART IV
GENERAL
SECTION 4.1 AMENDMENT. No amendment or modification of any of
the provisions of this Agreement shall be effective unless in writing and
signed by both the Partnership and the Managing General Partner.
SECTION 4.2 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement and understanding between the Partnership and the Managing
General Partner with respect to the Options and supersedes all prior agreements
and understandings, both written and oral, with respect to the Options.
SECTION 4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED ACCORDING TO, AND GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER THE APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
SECTION 4.4 NOTICES. All notices and other communications in
connection with this Agreement shall be in writing and shall be considered
delivered only upon the recipient's actual receipt of such notice or other
communication. Each party shall address such notices and other communications
to the other party at its address set forth below (or to such other address to
which such other party has notified such party in accordance with this Section
3.4 to send such notices or communications):
Partnership: U.S. Restaurant Properties Master L.P.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Managing General Partner: QSV Properties Inc.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
SECTION 4.5 SEVERABILITY. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability (but shall be construed and given effect to the extent
possible), without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
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SECTION 4.6 STATUS AS THE MANAGING GENERAL PARTNER. Neither this
Agreement nor the Options granted hereunder shall confer upon the Managing
General Partner the right to continue to serve as the Managing General Partner
of the Partnership.
SECTION 4.7 SUCCESSORS. This Agreement shall be binding upon and
shall inure to the benefit of each party hereto and its successors and
permitted transferees.
SECTION 4.8 PAYMENT OF WITHHOLDING TAX. In the event that the
Partnership determines that any federal, state or local tax or any other charge
is required by law to be withheld with respect to the exercise of the Options
granted hereby, the Managing General Partner shall, as an additional
requirement under Section 1.3 hereof, upon notice from the Partnership, pay to
the Partnership cash in an amount equal to such withholding tax or charge,
prior to the issuance of Units to the Managing General Partner and the
admission of the Managing General Partner as a partner of the Partnership with
respect to such Units, or otherwise make such arrangements for the payment of
such withholding tax as the Partnership, in its sole discretion, shall permit.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
U.S. RESTAURANT PROPERTIES
MASTER L.P.
By: QSV Properties, Inc., its Managing
General Partner
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President and Chief Executive
Officer
QSV PROPERTIES INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
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