AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 14, 1997 (the
"Agreement"), by and among U.S. RESTAURANT PROPERTIES MASTER L.P., a Delaware
limited partnership (the "Partnership"); U.S. RESTAURANT PROPERTIES, INC., a
Maryland corporation (the "Company"); USRP ACQUISITION, L.P., a Delaware
partnership and an indirectly wholly-owned subsidiary of the Company (the
"Acquisition Subsidiary"); USRP MANAGING, INC., a Delaware corporation and
wholly-owned subsidiary to the Company and general partner of the Acquisition
Subsidiary (the "General Partner") and QSV PROPERTIES, INC., a Delaware
corporation and the managing general partner of the Partnership ("QSV").
RECITALS
WHEREAS, Boards of Directors of QSV and of the Company have determined
that it is in the best interests of the Partnership and the Company,
respectively, to effect the merger provided for herein (the "Merger") upon the
terms and subject to the conditions set forth herein;
WHEREAS, the Company will have ownership rights in the assets of the
Partnership pursuant to this Agreement, and in accordance therewith, the Company
has caused to be formed and organized the General Partner and the Acquisition
Subsidiary; and
WHEREAS, all partnership and corporate action, as applicable, on the
part of the parties hereto necessary to authorize the execution of this
Agreement has been duly taken.
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties, covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. THE MERGER; EFFECTIVE TIME
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.2 hereof), in order to effect the
Merger, the Acquisition Subsidiary shall be merged with and into the Partnership
and the separate existence of the Acquisition Subsidiary shall thereupon cease.
The Partnership shall be the surviving entity in the Merger (sometimes
hereinafter referred to as the "Surviving Entity"), the General Partner will be
substituted as managing general partner of the Partnership and, as a result, the
Partnership shall become an indirectly wholly-owned subsidiary of the Company
and shall continue to be governed by the laws of the State of Delaware. The
separate existence of the Partnership with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
Merger shall be pursuant to the provisions of and shall have the effect provided
in the Delaware Revised Uniform Limited Partnership Act (the "Delaware RULPA").
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1.2 Effective Time. Provided that this Agreement has not been
terminated or abandoned pursuant to Section 9 hereof, on the first business day
following the date on which the last to be fulfilled or waived of the conditions
set forth in Section 8 hereof shall be fulfilled or waived, or on such later
date as the Partnership and the Company may agree, a certificate of merger (the
"Certificate of Merger") with respect to the transactions contemplated hereby
shall be executed, acknowledged and filed with the Secretary of State of the
State of Delaware as provided in Section 211 of the Delaware RULPA and the
Merger provided for herein shall become effective at 11:59 p.m. on the date of
such filing or such other time and date as is set forth in the Certificate of
Merger (the "Effective Time").
2. PARTNERSHIP AGREEMENT OF THE SURVIVING ENTITY
The partnership agreement of the Partnership in effect at the Effective
Time shall be the partnership agreement of the Surviving Entity, until duly
amended in accordance with the terms thereof and the Delaware RULPA.
3. EFFECT OF THE MERGER ON PARTNERSHIP INTERESTS
3.1 Effect on Partnership Interests. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any
partnership interest in the Partnership or the Acquiring Subsidiary:
(a) Each unit representing an assignment of limited
partnership interest in the Partnership (the "Units") issued and
outstanding immediately prior to the Effective Time (an aggregate of
8,354,354 Units) shall be exchanged for and converted into one validly
issued, fully paid and nonassessable share of common stock, par value
$.01 per share, of the Company (the "Common Stock") (or an aggregate of
8,354,354 shares). Each certificate representing any such Units (the
"Certificates") outstanding immediately prior to the Effective Date
shall thereafter represent the right to receive a certificate
representing a like number of shares of Common Stock. All Units shall
no longer be outstanding and shall be cancelled and returned and shall
cease to exist;
(b) QSV's 1% Percentage Interest, as defined in the Third
Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of June 27, 1997 (the "Partnership Agreement"),
shall be exchanged for and converted into 84,388 shares of Common Stock
and the right to receive a certificate representing such Common Stock.
(c) At the Effective Time, the options (the "Options") granted
to QSV as of March 24, 1995 that remain unexercised and outstanding as
of the Effective Time shall remain outstanding following the Effective
Time. At the Effective Time, the Options shall, by virtue of the Merger
and without any further action on the part of QSV or the Partnership,
be assumed by the Company and shall be exercisable upon the same terms
and conditions as under the agreement establishing the Options, except
that each such Option shall be exercisable for shares of Common Stock
in like amount to the number of Units for which the Options were
exercisable immediately prior to the Effective Time.
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3.2 Exchange of Units for Company Shares.
(a) Exchange Agent. As of the Effective Time, the Company
shall deposit with American Stock Transfer & Trust Company (the
"Exchange Agent"), for the benefit of holders of Units ("Unitholders"),
for exchange in accordance with this Section 3, certificates
representing the shares of Common Stock to be issued pursuant to
Section 3.1 in exchange for outstanding Units.
(b) Exchange Procedures. Promptly after the Effective Time,
the Surviving Entity shall cause the Exchange Agent to mail to each
Unitholder of record (i) a letter of transmittal, which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, in such form and including such other provisions as the
Company may specify and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing
Company Shares. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange
therefor a certificate representing a number of shares of Common Stock
equal to the number of Units represented by the Certificate, the
Certificate, and the Certificate so surrendered shall forthwith be
cancelled. Declared but unpaid distributions on Units and partnership
interests outstanding as of the applicable record date shall be the
obligation of the Company and the Company hereby agrees to pay such
distributions on the payment date specified in the resolutions of QSV
authorizing such distributions. No interest will be paid or accrued on
unpaid distributions, if any, payable to holders of Certificates. In
the event of a transfer of ownership of Units which is not registered
in the transfer records of the Partnership, a certificate representing
the proper number of shares of Common Stock may be issued to the
transferee if the Certificate representing such Units is presented to
the Exchange Agent, accompanied by all documents required to evidence
and effect such transfer and to evidence that any applicable transfer
taxes have been paid. If any certificate for shares of Common Stock is
to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a condition
to such exchange that the person requesting such exchange (i) pay any
transfer or other taxes required by reason of the exchange of
certificates of shares of Common Stock in a name other than that of the
registered holder of the Certificate surrendered or (ii) establish to
the satisfaction of the Company that such taxes have been paid or are
not applicable.
(c) Transfers. After the Effective Time, there shall be no
transfers on the transfer books of the Partnership of the Units which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Company for transfer,
they shall be cancelled and exchanged for the number of shares of
Common Stock deliverable in respect thereof pursuant to this Agreement
in accordance with the procedures set forth in this Section 3.
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(d) No Liability. In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Company, the posting by such person of a bond
in such amount as the Company may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate, a certificate representing the shares of Common
Stock deliverable in respect thereof pursuant to this Agreement.
4. EFFECT OF MERGER ON PARTNERSHIP INTERESTS IN ACQUIRING SUBSIDIARY
OUTSTANDING PRIOR TO THE EFFECTIVE TIME
At the Effective Time, by virtue of the Merger, all partnership
interests in the Acquiring Subsidiary outstanding immediately prior thereto (all
of which, immediately prior to the Effective time, shall have been owned by the
Company and the General Partner shall continue to be outstanding as interests in
the Partnership.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of the Company, the General Partner
and the Acquisition Subsidiary. The Company, the General Partner and the
Acquisition Subsidiary hereby represent and warrant to the Partnership as
follows:
(a) The Company and the General Partner are corporations and
the Acquisition Subsidiary is a partnership duly formed, validly
existing and in good standing under the applicable laws of its state of
organization.
(b) All action on the part of the Company, the General Partner
and the Acquisition Subsidiary and their respective officers, trustees,
directors, stockholders and partners, as applicable, necessary for the
authorization, execution and delivery of this Agreement, the
performance of all obligations of the Company, the General Partner and
the Acquisition Subsidiary hereunder and, in the case of the Company,
the authorization, issuance and delivery of the shares of Common Stock
has been taken or will be taken prior to the Effective Date, and this
Agreement constitutes the valid and legally binding obligation of each
of the Company, the General Partner and the Acquisition Subsidiary,
enforceable against it in accordance with its terms, except (i) as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditor's rights generally and (ii) as
enforceability may be limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.
(c) Neither the Company, the General Partner nor the
Acquisition Subsidiary is in violation of or default under any
provisions of its articles or certificate of incorporation, bylaws or
partnership agreement, as applicable, or of any instrument, judgment,
order, writ, decree or contract to which, it is a party or by which it
is bound or, in any material respect, of any provision of any federal
or state statute, rule or regulation applicable to it. The execution,
delivery and performance of this Agreement and the consummation of the
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transactions contemplated hereby will not result in any such violation
or be in conflict with or constitute, with or without the passage of
time or the giving of notice, either a default under any such
provision, instrument, judgment, order, writ, decree or contract or an
event which results in the creation of any lien, charge or encumbrance
upon any assets of the Company, the General Partner or the Acquisition
Subsidiary.
5.2 Representations and Warranties of the Partnership. The Partnership
hereby represents and warrants to the Company as follows:
(a) The Partnership is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of
Delaware.
(b) All action on the part of the Partnership and its partners
necessary for the authorization, execution and delivery of this
Agreement and the performance of all obligations of the Partnership
hereunder has been taken or, subject to obtaining the approval of
Unitholders holding a majority of the outstanding Units, will be taken
prior to the Effective Date, and this Agreement constitutes the valid
and legally binding obligation of the Partnership, enforceable against
it in accordance with its terms, except (i) as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement
of creditor's rights generally and (ii) as enforceability may be
limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(c) The Partnership is not in violation of or in default under
any provision of the Partnership Agreement or of any instrument,
judgment, order, writ, decree or contract to which it is a party or by
which it is bound or, in any material respect, of any provision of any
Federal or state statute, rule or regulation applicable to the
Partnership. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not
result in any such violation or be in conflict with or constitute, with
or without the passage of time or the giving of notice, either a
default under any such provision, instrument, judgment, order, writ,
decree or contract or an event which results in the creation of any
lien, charge or encumbrance upon any of the assets of the Partnership.
6. COVENANTS
6.1 Stock Exchange Listing. The Company shall use its best efforts to
obtain an approval to list on the New York Stock Exchange, Inc. ("NYSE") the
Common Stock to be issued in the Merger, subject to official notice of issuance,
prior to the Effective Time.
6.2 Unitholder Approval. The Partnership shall use its best efforts to
obtain the approval of this Agreement by Unitholders holding a majority of the
outstanding Units.
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6.3 Indemnification. Form and after the Effective Time, the Company
agrees that it will indemnify and hold harmless, and advance expenses to, QSV
and, as applicable, each officer, director, partner or other person controlling
the QSV, and any affiliate of it, against any costs or expenses (including
reasonable attorneys' fees), judgment, fines, losses, claims, damages or
liabilities incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to the transactions contemplated hereby, whether asserted
or claimed prior to, at or after the Effective Time, to the fullest extent
permitted by law. In addition, the Company hereby assumes the Partnership's
indemnity obligations under the Partnership Agreement with respect to
liabilities to the foregoing individuals and entities arising out of actions or
omissions occurring prior to the Effective Time.
7. CONDITIONS
7.1 Conditions to the Partnership's Obligation to Effect the Merger.
The obligation of the Partnership to consummate the Merger is subject to
satisfaction of each of the following conditions:
(a) This Agreement shall have been duly approved by
Unitholders holding a majority of the Units outstanding as of April 30,
1997 (the "Record Date") in accordance with applicable law and the
Partnership Agreement;
(b) No statute, rule or regulation shall have been enacted or
promulgated by any governmental authority, nor shall there be any order
or injunction of a United States or state court of competent
jurisdiction in effect, which prohibits the exchange of Units for
shares of Common Stock or the consummation of the Merger;
(c) The Partnership shall have received an opinion of counsel
to the effect that the Merger will be treated as part of a transaction
described in Section 351 of the Internal Revenue Code of 1986, as
amended (the "Code");
(d) The Partnership shall have received a favorable letter
ruling from the Internal Revenue Service as to treatment of the Merger
as part of a transaction described in Section 351 of the Code;
(e) The shares of Common Stock issuable to the Unitholders
pursuant to this Agreement shall have been approved for listing on the
NYSE upon official notice of issuance; and
(f) Amendments to the Partnership Agreement to permit, among
other things, the withdrawal of QSV as managing general partner of the
Partnership, shall have been duly approved by Unitholders holding a
majority of the Units outstanding as of the Record Date in accordance
with applicable law and the Partnership Agreement, and a certificate of
amendment effecting such amendments shall have been duly filed with the
Secretary of State of the State of Delaware.
7.2 Conditions to the Company's Obligation to Effect the Merger. The
obligation of the Company to consummate the Merger is subject to satisfaction of
the following conditions:
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(a) No statute, rule or regulation shall have been enacted or
promulgated by any governmental authority, nor shall there be any order
or injunction of a United States or state court of competent
jurisdiction in effect, which prohibits the exchange of the Units for
Common Stock or consummation of the Merger; and
(b) The contribution of the management compensation rights of
QSV under the terms of the Partnership Agreement and the partnership
agreement of the Operating Partnership to the Operating Partnership
shall have been effected.
8. TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, before or
after approval by the Unitholders, by mutual written consent of the Company and
the Partnership.
8.2 Effect of Termination and Abandonment. In the event of termination
of this Agreement and abandonment of the Merger pursuant to this Section 8, no
party hereto (or any of its directors, trustees, officers or partners, or
persons otherwise controlling or affiliated with any of the parties hereto or
any of their directors, officers or partners) shall have any liability or
further obligation to any other party to this Agreement.
9. MISCELLANEOUS AND GENERAL
9.1 Modification or Amendment. Subject to the applicable provisions of
the Maryland General Corporation Law and the Delaware RULPA, at any time prior
to the Effective Time, the parties hereto may modify or amend this Agreement by
mutual written consent.
9.2 Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same Agreement.
9.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
9.4 No Third Party Beneficiaries. Except as provided in Section 6.3,
this Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
9.5 Captions. The section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
9.6 No Liability. No trustee, beneficiary or stockholder of the Company
shall have any personal liability for any obligations of the Company under this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as of the date first hereinabove written.
U.S. RESTAURANT PROPERTIES, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Xxxx X. Xxxxxxxx
Chairman of the Board
USRP MANAGING, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxx
Chairman of the Board
USRP ACQUISITION, L.P.
By: USRP Managing Inc., the General
Partner
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxx
Chairman of the Board
U.S. RESTAURANT PROPERTIES
MASTER L.P.
By: QSV Properties, Inc.,
the Managing General Partner
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive
Officer
