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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 6, 1999
U. S. RESTAURANT PROPERTIES, INC.
(Exact name of Registrant as specified in its Charter)
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MARYLAND 1-13089 75-2687420
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(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification Number)
================================================================================
5310 Harvest Hill Rd., Suite 270, LB 168, Dallas, Texas 75230
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 387-1487
Not applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
U. S. Restaurant Properties, Inc. (the "Company") is filing this
Current Report on Form 8-K for the purposes of incorporating by reference the
exhibits attached hereto into Part II of the Company's registration statement on
Form S-3 (Registration No. 333-34263).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits.
1.1 Underwriting Agreement by and between the Company, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Warburg
Dillon Read LLC dated June 29, 1999 relating to the issuance
of up to 1,161,500 shares of the Company's common stock,
which number includes 151,500 shares issuable to the
Underwriters to cover over-allotments, if any.
8.1 Opinion of Locke Liddell & Sapp LLP as to certain tax
matters.
23.1 Consent of Locke Liddell & Sapp LLP (included in Exhibit 8.1
hereto).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: July 6, 1999
U. S. RESTAURANT PROPERTIES, INC.
/s/ Robert J. Stetson
----------------------------------------
Robert J. Stetson
Chief Executive Officer and
President
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
1.1 Underwriting Agreement by and between the Company, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Warburg Dillon Read LLC dated
June 29, 1999 relating to the issuance of up to 1,161,500 shares of
the Company's common stock, which number includes 151,500 shares
issuable to the Underwriters to cover over-allotments, if any.
8.1 Opinion of Locke Liddell & Sapp LLP as to certain tax matters.
23.1 Consent of Locke Liddell & Sapp LLP (included in Exhibit 8.1 hereto).
</TABLE>
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EXHIBIT 1.1
U.S. RESTAURANT PROPERTIES, INC.
Common Stock, Warrants to Purchase Common Stock,
Preferred Stock, Depositary Shares
UNDERWRITING AGREEMENT
June 29, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281-1305
Ladies and Gentlemen:
U.S. Restaurant Properties, Inc. (the "Company") proposes to issue and
sell an amount up to the aggregate initial public offering price of its (i)
shares of common stock, par value $.001 per share (the "Common Stock"), (ii)
warrants to purchase shares of Common Stock (the "Common Stock Warrants"), and
(iii) shares of preferred stock, par value $.001 per share (the "Preferred
Stock"), or any combination thereof, from time to time, in or pursuant to one or
more offerings on terms to be determined at the time of sale.
The Preferred Stock will be issued in one or more series and each
series of Preferred Stock may vary, as applicable, as to the title, specific
number of shares, rank, stated value, liquidation preference, dividend rate or
rates (or method of calculation), dividend payment dates, redemption provisions,
sinking fund requirements, conversion provisions (and terms of the related
Underlying Securities (as defined below)) and any other variable terms as set
forth in the applicable articles supplementary (each, the "Articles
Supplementary") relating to such series of Preferred Stock. A series of
Preferred Stock may be represented by depositary shares (the "Depositary
Shares") that are evidenced by depositary receipts (the "Depositary Receipts")
issued pursuant to a deposit agreement (each, a "Deposit Agreement") among the
Company, depositary identified therein (the "Depositary") and the registered
holders of the Depositary Receipts issued thereunder.
Each issue of Common Stock Warrants will be issued pursuant to a
separate warrant agreement (each, a "Warrant Agreement") between the Company and
the warrant agent identified therein (each, a "Warrant Agent"). The Warrants may
vary, as applicable, as to, among other terms, title, type, specific number,
exercise dates or periods, exercise price(s), expiration date(s) and terms of
the related Underlying Securities.
As used herein, "Securities" shall mean the Common Stock, Common Stock
Warrants, Preferred Stock, Depositary Shares, or any combination thereof,
initially issuable by the Company and "Underlying Securities" shall mean the
Common Stock, Preferred Stock or Depositary Shares, as applicable.
Whenever the Company determines to make an offering of Securities
through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), or through an underwriting
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syndicate managed by Merrill Lynch, the Company will enter into an agreement
(each, a "Terms Agreement") providing for the sale of such Securities to, and
the purchase and offering thereof by, Merrill Lynch and such other underwriters,
if any, selected by Merrill Lynch (the "Underwriters", which term shall include
Merrill Lynch, whether acting as sole Underwriter or as a member of an
underlying syndicate, as well as any Underwriter substituted pursuant to Section
10 hereof). The Terms Agreement relating to the offering of Securities shall
specify the number or aggregate principal amount, as the case may be, of
Securities to be initially issued (the "Initial Underwritten Securities"), the
name of each Underwriter participating in such offering (subject to substitution
as provided in Section 10 hereof) and the name of any Underwriter other than
Merrill Lynch acting as co-manager in connection with such offering, the number
or aggregate principal amount, as the case may be, of Initial Underwritten
Securities which each such Underwriter severally agrees to purchase, whether
such offering is on a fixed or variable price basis, and, if on a fixed price
basis, the initial offering price, the price at which the Initial Underwritten
Securities are to be purchased by the Underwriters, the form, time, date and
place of delivery and payment of the Initial Underwritten Securities and any
other material variable terms of the Initial Underwritten Securities, as well as
the material variable terms of any related Underlying Securities. In addition,
if applicable, such Terms Agreement shall specify whether the Company has agreed
to grant to the Underwriters an option to purchase additional Securities to
cover over-allotments, if any, and the number or aggregate principal amount, as
the case may be, of Securities subject to such option (the "Option Underwritten
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of any Option
Underwritten Securities. The Terms Agreement, which shall be substantially in
the form of Exhibit A hereto, may take the form of an exchange of any standard
form of written telecommunication between the Company and Merrill Lynch, acting
for itself, and, if applicable, as representative of any other Underwriters.
Each offering of Underwritten Securities through Merrill Lynch as sole
Underwriter or through an underwriting syndicate managed by Merrill Lynch will
be governed by this Underwriting Agreement, as supplemented by the applicable
Terms Agreement.
The Company and U.S. Restaurant Properties Operating L.P., a Delaware
limited partnership subsidiary of the Company (the "Operating Partnership"),
have filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (File No. 333-34263) for the registration of
the Securities and the Underlying Securities under the Securities Act of 1933,
as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 430A or Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"). Such registration
statement (as amended or supplemented prior to the date of this Underwriting
Agreement, if applicable) has been declared effective by the Commission, and the
Company has filed such post-effective amendments thereto, as may be required
prior to the execution of the applicable Terms Agreement and each such
post-effective amendment has been declared effective by the Commission. Such
registration statement (as so amended, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933
Act Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration Statement"; and the final prospectus and the final prospectus
supplement relating to the offering of the Underwritten Securities, in the forms
first furnished to the Underwriters by the Company for use in connection with
the offering of the Underwritten Securities, are collectively referred to herein
as the "Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement; provided, further, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration Statement"), then all references to
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Company elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or
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preliminary prospectus and the applicable term sheet or abbreviated term sheet
(the "Term Sheet"), as the case may be, in the forms first furnished to the
Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references to the date of the Prospectus shall mean the
date of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to
(i) any prospectus used before the Registration Statement became effective and
(ii) any prospectus that omitted, as applicable, the Rule 430A Information, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations and was used after such effectiveness and prior to the initial
delivery of the Prospectus to the Underwriters by the Company. For purposes of
this Underwriting Agreement, all references to the Registration Statement,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or "stated"
in the Registration Statement or the Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Underwriting Agreement to amendments or supplements
to the Registration Statement or the Prospectus shall be deemed to mean and
include the filing of any document under the 1934 Act which is or is deemed to
be incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
SECTION 1. Representations and Warranties of the Company and the
Operating Partnership.
(a) The Company and the Operating Partnership represent and warrant,
jointly and severally, to the Underwriters, as of the date hereof, as of the
Closing Time (as defined below) and, if applicable, as of each Date of Delivery
(as defined below) (in each case, a "Representation Date"), as follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act. The Registration Statement (including any Rule
462(b) Registration Statement) has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement (or such Rule 462(b) Registration Statement) has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with. At the
respective times the Registration Statement (including any Rule 462(b)
Registration Statement) and any post-effective amendments thereto
(including the filing of the Company's most recent Annual Report on
Form 10-K with the Commission (the "Annual Report on Form 10-K"))
became effective and at each Representation Date, the Registration
Statement (including any Rule 462(b) Registration Statement) and any
amendments thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. At the date of
the Prospectus, at the Closing Time and at each Date of Delivery, if
any, neither the Prospectus nor any amendments and supplements thereto
included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, the Company will comply with
the requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing
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by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement or the Prospectus.
(ii) Each preliminary prospectus and prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with the offering
of Underwritten Securities will, at the time of such delivery, be
identical to any electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(iii) The documents incorporated by reference or deemed to be
incorporated by reference in the Registration Statement and the
Prospectus pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission under the 1934 Act
(the "1934 Act Regulations"), and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective and as of the applicable Representation Date, did not
and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(iv) Deloitte & Touche LLP, the accounting firm that audited
the financial statements and supporting schedules included in, or
incorporated by reference into, the Registration Statement and
Prospectus, are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(v) The financial statements (including any and all amendments
thereto) included in, or incorporated by reference into, the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the
respective entity or entities presented therein at the respective dates
indicated and the results of their operations for the respective
periods specified. Except as otherwise stated in the Registration
Statement and Prospectus, such financial statements have been prepared
in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved. The supporting
schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information required to
be stated therein. The Company's ratios of earnings to fixed charges
(actual and, if any, pro forma) included in the Prospectus under the
caption "Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends" and in Exhibit 12 to the Registration Statement have
been calculated in compliance with Item 503(d) of Regulation S-K of the
Commission. The financial information and data included in the
Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis
consistent with that of the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus and the books and records of the respective entities
presented therein. Pro forma financial information included in or
incorporated by reference in the Registration Statement and the
Prospectus has been prepared in accordance with the applicable
requirements of the 1933 Act, the 1933 Act Regulations and guidelines
of the American Institute of Certified Public Accountants with respect
to pro forma financial information and includes all adjustments
necessary to present fairly the pro forma financial position of the
Company at the respective dates indicated and the results of operations
for the respective periods specified.
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(vi) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or is pending or, to
the knowledge of the Company, threatened by the Commission or by the
state securities authority of any jurisdiction, and any request on the
part of the Commission for additional information has been complied
with. No order preventing or suspending the use of the Prospectus has
been issued and no proceeding for that purpose has been instituted or,
to the knowledge of the Company, threatened by the Commission or by the
state securities authority of any jurisdiction.
(vii) The Company has been duly formed and is validly existing
as a corporation in good standing under the laws of the State of
Maryland, is duly qualified to do business as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification (except where the
failure to be so qualified would not have a material adverse effect on
the condition, financial or otherwise, or in the earnings, assets,
business affairs or business prospects of the Company or the
Subsidiaries (as defined below), considered as a whole (a "Material
Adverse Effect")), and has all corporate power and authority necessary
to own or hold its properties and its interests in its Subsidiaries, to
conduct the business in which it is engaged and to enter into and
perform its obligations under this Underwriting Agreement. Except for
the Subsidiaries, the Company owns no direct or indirect equity or
other beneficial interest in any corporation, partnership, joint
venture or other business entity.
(viii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the State
of Delaware, is duly qualified to do business as a foreign limited
partnership in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification
(except where the failure to be so qualified would not have a Material
Adverse Effect), and has all partnership power and authority necessary
to own or hold its properties and its interests in its Subsidiaries, to
conduct the business in which it is engaged and to enter into and
perform its obligations under this Underwriting Agreement. USRP
Managing, Inc., a wholly owned Delaware corporate subsidiary of the
Company ("USRP Managing"), is the sole general partner of the Operating
Partnership. The Agreement of Limited Partnership of the Operating
Partnership (the "Operating Partnership Agreement") is in full force
and effect, and the aggregate percentage interests of the Company, USRP
Managing and the limited partners in the Operating Partnership are as
contained in the Prospectus. To the extent the Underwritten Securities
are issued in accordance with this Underwriting Agreement, (i) the
percentage interest of the partners in the Operating Partnership will
be adjusted accordingly and (ii) the Company will contribute the
proceeds from the sale of the Underwritten Securities to the Operating
Partnership in exchange for a number of units of limited partner
interest ("Units") equal to the number of Underwritten Securities
issued.
(ix) USRP Managing has been duly formed and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification (except where the
failure to be so qualified would not have a Material Adverse Effect),
and has all corporate power and authority necessary to own or hold its
assets, to conduct the business in which it is engaged and to enter
into this Underwriting Agreement. All of the issued and outstanding
capital stock of USRP Managing has been duly authorized and validly
issued and is fully paid and nonassessable, is owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities and has been offered and
sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws). No shares of capital
stock of USRP Managing are reserved for any purpose, and there are no
outstanding securities convertible into or exchangeable
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for any capital stock of USRP Managing, and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such capital stock or any other securities of
USRP Managing.
(x) All of the subsidiaries (as defined in the 1933 Act
Regulations) of the Company, including the Operating Partnership and
USRP Managing, are listed on Schedule A hereto (collectively, the
"Subsidiaries"). Each of the Subsidiaries has been duly incorporated or
formed, as the case may be, and is an existing corporation, general or
limited partnership, or other legal entity, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or
formation, as the case may be. Each of the Subsidiaries has full power
(corporate and other) and authority to own or hold its properties and
to conduct the business in which it is engaged, and is duly qualified
or registered to do business in each jurisdiction in which it owns or
leases real property or in which the conduct of its business requires
such qualification or registration, except where the failure to be so
qualified or registered, considering all such cases in the aggregate,
would not have a Material Adverse Effect.
(xi) All of the issued and outstanding capital stock or
ownership interests of each Subsidiary have been duly authorized and
are validly issued, fully paid and nonassessable and, except for the
6.9% limited partner interest in the Operating Partnership which is
owned by QSV Properties, Inc. ("QSV") and the .02% limited partner
interests owned by certain sellers of properties to the Operating
Partnership, is wholly owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(xii) The Company has authorized, issued and outstanding
capital stock as set forth in its quarterly report on Form 10-Q for the
quarter ended March 31, 1999. All of the issued and outstanding shares
of capital stock of the Company have been duly authorized and are
validly issued, fully paid and nonassessable and conform to the
description thereof in the Registration Statement and the Prospectus.
The stockholders of the Company have no preemptive or similar rights
with respect to the Underwritten Securities.
(xiii) Except for transactions described in the Prospectus and
transactions in connection with dividend reinvestment plans, stock
option and other employee benefit plans, there are no outstanding
rights, warrants or options to acquire, or instruments convertible into
or exchangeable for, or agreements or understandings with respect to
the sale or issuance of, any shares of capital stock of or partnership
or other equity interest in the Company or any Subsidiary, except for
the shares of Common Stock which may be issued in exchange for Units.
(xiv) If the Underwritten Securities being sold pursuant to
the applicable Terms Agreements include Common Stock, such Underwritten
Securities have been, or as of the date of such Terms Agreement will
have been, duly authorized by the Company for issuance and sale
pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and delivered by the Company
pursuant to this Underwriting Agreement and such Terms Agreement
against payment of the consideration therefor specified in such Terms
Agreement, will be validly issued, fully paid and nonassessable and
will not be subject to preemptive or other similar rights of any
securityholder of the Company. No holder of such Underwritten
Securities is or will be subject to personal liability by reason of
being such a holder.
(xv) If the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Preferred Stock and/or Depositary
Shares, such Underwritten Securities have been, or as of the date of
such Terms Agreement will have been, duly authorized by the Company
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for issuance and sale pursuant to this Underwriting Agreement and such
Terms Agreement. The applicable Preferred Stock, when issued and
delivered by the Company pursuant to this Underwriting Agreement and
such Terms Agreement against payment of the consideration therefor, or
for the related Depositary Shares, as the case may be, specified in
such Terms Agreement, will be validly issued, fully paid and
nonassessable and will not be subject to preemptive or other similar
rights of any securityholder of the Company. In addition, upon deposit
by the Company of any Preferred Stock represented by Depositary Shares
with the applicable Depositary and the execution and delivery by such
Depositary of the Depositary Receipts evidencing such Depositary
Shares, in each case pursuant to the applicable Deposit Agreement, such
Depositary Shares will represent legal and valid interests in such
Preferred Stock. No holder of such Preferred Stock or Depositary
Receipts evidencing Depositary Shares is or will be subject to personal
liability by reason of being such a holder. The applicable Articles
Supplementary will be in full force and effect prior to the Closing
Time.
(xvi) If the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Depositary Shares, the
applicable Deposit Agreement has been, or prior to the issuance of such
Depositary Shares will have been, duly authorized, executed and
delivered by the Company and, upon such authorization, execution and
delivery, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law). Each registered holder of a Depositary
Receipt under the applicable Deposit Agreement will be entitled to the
proportional rights, preferences and limitations of the Preferred Stock
represented by the Depositary Shares evidenced by such Depositary
Receipt and to such other rights as are granted to such registered
holder in such Deposit Agreement.
(xvii) If the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Warrants, such Underwritten
Securities have been, or as of the date of such Terms Agreement will
have been, duly authorized by the Company for issuance and sale
pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and authenticated in the manner
provided for the applicable Warrant Agreement and delivered against
payment of the consideration therefor specified in such Terms
Agreement, will constitute valid and binding obligations of the
Company, entitled to the benefits provided by such Warrant Agreement
and enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xviii) If the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Warrants, each applicable
Warrant Agreement has been, or prior to the issuance of such
Underwritten Securities will have been, duly authorized, executed and
delivered by the Company and, upon such authorization, execution and
delivery, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
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(xix) If the Underlying Securities related to the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
include Common Stock, Preferred Stock or Depositary Shares, such
Underlying Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized and reserved for issuance by
the Company upon exercise of the Common Stock Warrants. If the
Underlying Securities include Common Stock or Preferred Stock, such
Underlying Securities, when issued upon such exercise or conversion, as
applicable, will be validly issued, fully paid and nonassessable and
will not be subject to preemptive or other similar rights of any
securityholder of the Company. If the Underlying Securities include
Depositary Shares, such Underlying Securities, upon deposit by the
Company of the Preferred Stock represented thereby with the applicable
Depositary and the execution and delivery by such Depositary of the
Depositary Receipts evidencing such Depositary Shares, in each case
pursuant to the applicable Deposit Agreement, will represent legal and
valid interests in such Preferred Stock. No holder of such Common
Stock, Preferred Stock or Depositary Receipts evidencing Depositary
Shares is or will be subject to personal liability by reason of being
such a holder.
(xx) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement, Deposit Agreement and Warrant Agreement, as
of each Representation Date, and any Underlying Securities, when issued
and delivered in accordance with the terms of the related Underwritten
Securities, will conform in all material respects to the statements
relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case
may be, as an exhibit to the Registration Statement.
(xxi) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) the Company and its
Subsidiaries have not incurred any liabilities or obligations, direct
or contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Company and its
Subsidiaries on a consolidated basis, (ii) there has not been any
material change in the capital stock or structure, short-term debt or
long-term debt of the Company and its Subsidiaries or any material
adverse change, or any development that is reasonably likely to involve
a prospective material adverse change, in the condition (financial or
other), business, prospects, net worth or results of operations of the
Company and its Subsidiaries on a consolidated basis, and (iii) except
for regular dividends on the Common Stock, in amounts per share that
are consistent with past practice or the charter documents of the
Company, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(xxii) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened any litigation,
action, suit or proceeding to which the Company, any of its
Subsidiaries or any of its officers or directors is a party, or that
any of its properties or other assets is the subject of, before or by
any court or governmental agency or body, that is reasonably likely to
have a Material Adverse Effect or might materially and adversely affect
the properties or other assets of the Company and its Subsidiaries.
(xxiii) During the period of at least the last 24 calendar
months prior to the date of this Underwriting Agreement, the Company
has timely filed with the Commission all documents and other material
required to be filed pursuant to Sections 13, 14 and 15(d) under the
1934 Act. During the period of at least the last 36 calendar months
preceding the filing of the Registration Statement, the Company has
filed all reports required to be filed pursuant to Sections 13, 14 and
15(d) under the 1934 Act. Immediately preceding the filing of the
Registration Statement, the
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<PAGE> 9
aggregate market value of the Company's voting stock held by
non-affiliates of the Company was equal to or greater than $150
million.
(xxiv) There are no contracts or documents of the Company that
are required to be filed as exhibits to the Registration Statement or
to any of the documents incorporated by reference therein by the 1933
Act, the 1934 Act, the 1933 Act Regulations or the 1934 Act Regulations
that have not been so filed. All of the contracts to which any of the
Company or its Subsidiaries is a party (i) have been duly authorized,
executed and delivered by such entity, constitute valid and binding
agreements of such entity and are enforceable against such entity in
accordance with the terms thereof, except as such enforcement may be
limited by (A) bankruptcy, insolvency, reorganization or other similar
laws affecting creditors' rights generally and (B) general equity
principles and limitations on the availability of equitable relief or
(ii) in the case of any contract to be executed at or before the
Closing Time, will at the Closing Time be duly authorized, executed and
delivered by the Company and/or a Subsidiary, and constitute valid and
binding agreements of such entity enforceable against each entity in
accordance with the terms thereof, except as such enforcement may be
limited by (x) bankruptcy, insolvency, reorganization or similar other
laws affecting creditors' rights generally and (y) general equity
principles and limitations on the availability of equitable relief.
(xxv) The Company and the Operating Partnership have full
corporate power and authority to enter into this Underwriting Agreement
and the applicable Terms Agreement. This Underwriting Agreement and the
applicable Terms Agreement have been duly authorized, executed and
delivered by the Company and the Operating Partnership.
(xxvi) The execution and performance of this Underwriting
Agreement, the applicable Terms Agreement and each applicable Warrant
Agreement, Deposit Agreement and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated herein and in the
Registration Statement and the Prospectus and the consummation of the
transactions contemplated herein and therein will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any agreement or instrument to which
the Company or its Subsidiaries is a party or by which they are bound
or to which any of the property or other assets of the Company or its
Subsidiaries is subject, (ii) the articles of incorporation, charter,
by-laws, certificate of general or limited partnership, partnership
agreement or other organizational document, as applicable, of the
Company or its Subsidiaries, or (iii) to the best of the Company's
knowledge, any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or its
Subsidiaries or any of their properties or other assets; no consent,
approval, authorization or order of, filing with, or notice to any
court or governmental agency or body is required for the consummation
of the transactions contemplated by this Underwriting Agreement in
connection with the issuance or sale of the Underwritten Securities by
the Company, except such as may be required under the 1933 Act and
applicable state securities, blue sky, or real estate syndication laws,
if any, or pursuant to the listing requirements of the New York Stock
Exchange ("NYSE"). The issuance of the Underwritten Securities will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, bond, debenture, note agreement, evidence of
indebtedness, contract or other agreement or instrument to which the
Company or its Subsidiaries are a party.
(xxvii) The Company and its Subsidiaries have complied in all
respects with all laws, regulations and orders applicable to them or
their respective businesses, except where the failure to be so in
compliance would not have a Material Adverse Effect; the Company and
its Subsidiaries are not in default under any indenture, mortgage, deed
of trust, voting trust
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<PAGE> 10
agreement, loan agreement, bond, debenture, note agreement or evidence
of indebtedness, lease, contract or other agreement or instrument to
which they are a party or by which they or any of their properties or
other assets are bound, violation of which would individually or in the
aggregate have a Material Adverse Effect, and no other party under any
such agreement or instrument to which the Company or its Subsidiaries
are a party is, to the knowledge of the Company, in default in any
material respect thereunder; and the Company and its Subsidiaries are
not in violation of their respective articles of incorporation,
charter, by-laws, certificate of general or limited partnership,
partnership agreement or other organizational documents, as the case
may be.
(xxviii) No labor dispute with the employees of the Company or
its Subsidiaries exists or, to the knowledge of the Company or the
Operating Partnership, is imminent; and neither the Company nor the
Operating Partnership is aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors which might be expected to have a Material
Adverse Effect.
(xxix) No authorization, approval, consent or order of any
court or governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company or the
Operating Partnership of the transactions contemplated by this
Underwriting Agreement or the applicable Terms Agreement except such as
may be required under the 1933 Act or the 1933 Act Regulations or state
or foreign securities laws or real estate syndication laws or such as
have been received prior to the date of this Underwriting Agreement.
(xxx) Commencing with the taxable year ending December 31,
1997, the Company has been, and upon the sale of the Underwritten
Securities, the Company will continue to be, organized and operated in
conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended
(the "Code"), and its proposed method of operation will enable it to
continue to meet the requirements for taxation as a real estate
investment trust under the Code. The Company has no intention of
changing its operations or engaging in activities which would cause it
to fail to qualify, or make economically undesirable its continued
qualification, as a real estate investment trust.
(xxxi) Neither the Company nor any Subsidiary is required to
be registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), or is or will become a "holding company" or a "subsidiary
company" of a "registered holding company" as defined in the Public
Utility Holding Company Act of 1935, as amended.
(xxxii) The Company and its Subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and
neither the Company nor any of its Subsidiaries has received any notice
or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its Subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xxxiii) The Company and its Subsidiaries possess such
material certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or
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<PAGE> 11
bodies necessary to conduct the business now operated by them, or
proposed to be conducted by them, and neither the Company nor any of
its Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
(xxxiv) Except as disclosed in the Prospectus and except for
persons who received Units in the Operating Partnership in connection
with transactions with the Operating Partnership, there are no persons
with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company or the Operating Partnership under the 1933
Act.
(xxxv) The Underwritten Securities have been approved for
listing on the NYSE, subject to official notice of issuance.
(xxxvi) Except for those properties listed on Schedule B below
as being subject to leases, the Company and each of its Subsidiaries
have good and marketable title to all properties and assets, as
described in the Prospectus, owned by them, free and clear of all
liens, charges, encumbrances, claims, restrictions or defects, except
such as are described in the Prospectus or are not material in relation
to the business or operations of the Company and its Subsidiaries, and
the Company and its Subsidiaries have valid, subsisting and enforceable
leases for the properties listed on Schedule B hereto as leased to the
Company and its Subsidiaries, with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such
properties by the Company and its Subsidiaries; all liens, charges,
encumbrances, claims or restrictions on or affecting any of the
properties or the assets of the Company and its Subsidiaries which are
required to be disclosed in the Prospectus are disclosed therein;
except for the tenants listed on Schedule C hereto, no tenant under any
of the leases pursuant to which the Company or its Subsidiaries lease
their properties has an option or right of first refusal to purchase
the premises demised under such lease; to the best of the Company's
knowledge, the use and occupancy of each of the properties of the
Company and its Subsidiaries complies in all material respects with all
applicable codes and zoning laws and regulations; the Company and its
Subsidiaries have no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect
the size of, use of, improvement of, construction on, or access to any
of the properties of the Company and its Subsidiaries; and the Company
and its Subsidiaries have no knowledge of any pending or threatened
proceeding or action that will in any manner materially affect the size
of, use of, improvements or construction on, or access to any of the
properties of the Company or its Subsidiaries.
(xxxvii) Title insurance in favor of the Company and its
Subsidiaries is maintained with respect to each of the properties owned
by them in an amount at least equal to the cost of acquisition of such
property.
(xxxviii) The mortgages and deeds of trust encumbering the
properties and assets described or referred to in the Prospectus are
not convertible into the equity securities of the Company or any
Subsidiary and such mortgages and deeds of trust are not and will not
be cross-defaulted or cross-collateralized with any property not owned
by the Operating Partnership.
(xxxix) Except as would not, singularly or in the aggregate,
have a Material Adverse Effect, (i) there does not exist on any of the
properties owned or operated by the Company or its Subsidiaries any
Hazardous Materials (as defined below) in unlawful quantities, (ii)
there has not occurred on or off such properties any unlawful spills,
releases, discharges or disposal of
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<PAGE> 12
Hazardous Materials and (iii) the Company and its Subsidiaries have not
failed to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, sale, storage,
handling, transport and disposal of any Hazardous Materials.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, oil,
petroleum, petroleum products, hazardous materials, hazardous wastes,
hazardous or toxic substances, asbestos or any material as defined by
any environmental laws, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended (42 U.S.C. Section 9601, et seq.) (CERCLA), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Section
1801, et seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Section 6901, et seq.), and in the regulations adopted
pursuant to each of the foregoing or by any federal, state or local
governmental authority having jurisdiction over the properties owned or
operated by the Company or its Subsidiaries.
Except for the 123 Burger King properties in the Company's
portfolio at the time current management took control in May 1994, all
of the properties have been, and it is contemplated that all future
acquisitions will be, subjected to a Phase I or similar environmental
assessment (which generally includes a site inspection, interviews and
a records review, but no subsurface sampling). These assessments and
certain follow-up investigations (including, as appropriate, asbestos,
radon and lead surveys, additional public records review, subsurface
sampling and other testing) of the properties have not revealed any
environmental liability that the Company believes would have a Material
Adverse Effect.
(xl) Property and casualty insurance in favor of each of the
Company and its Subsidiaries is maintained with respect to each of the
properties owned or leased by each of them in an amount and on such
items as is reasonable and customary for businesses of this type.
(xli) The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in
which they are engaged; and neither the Company nor any of its
Subsidiaries has any reason to believe that it or any of its
Subsidiaries will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its businesses at a
cost that would not have a Material Adverse Effect, except as described
in or contemplated by the Registration Statement and the Prospectus.
(xlii) Each national, regional or local restaurant or service
station brand or franchise identified or stated in the Prospectus as a
brand or franchise being operated on a property is in actual operation
on such property. Except as described in the Prospectus, each tenant (a
"Tenant") of a property owned or leased by the Company is in actual
possession of such property under a lease to such Tenant (each, a
"Lease"). Except as disclosed in the Prospectus, each Lease is in full
force and effect and neither the Company nor any of its Subsidiaries
has notice of any defense to the obligations of the Tenant thereunder
or any claim asserted or threatened by any person or entity, which
claim would have a Material Adverse Effect. To the knowledge of the
Company, no Tenant of any of the properties is in default under any of
the Leases governing such properties and there is no event which, but
for the passage of time or the giving of notice, or both, would
constitute a material default under any of such Leases.
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(xliii) Except as disclosed in Schedule D hereto, all Leases
with Tenants are "triple net leases" and generally provide that the
Tenant is responsible for property operating costs, including property
taxes, insurance and maintenance.
(xliv) Except as specifically disclosed in the Prospectus,
there is no material defect in the condition of any property, the
improvements thereon, the structural elements thereof, or the
mechanical systems therein, nor any material damage from casualty or
other cause, nor any soil condition of any such property that will not
support all of the improvements thereon without the need for unusual or
new subsurface excavations, fill, footings, caissons or other
installations, except for (a) ordinary wear and tear and (b) any such
defect, damage or condition that has been corrected or will be
corrected in the ordinary course of the business of such property as
part of the Company's scheduled annual maintenance and improvement
program.
(xlv) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as described therein, (i) there has not been any material
adverse change in the assets or properties, business, results of
operations or condition (financial or otherwise) of the Company or any
of its Subsidiaries, whether or not arising from transactions in the
ordinary course of business; (ii) neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with its
assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree; and (iii) neither the
Company nor any of its Subsidiaries has undertaken any liability or
obligation, direct or contingent, except such liabilities or
obligations undertaken in the ordinary course of business.
(xlvi) The Company and its Subsidiaries are conducting their
respective businesses in material compliance with all applicable laws,
rules and regulations of the jurisdictions in which they are conducting
business, including, without limitation, the Americans with
Disabilities Act of 1990 and all applicable local, state and federal
employment, truth-in-advertising, franchising and immigration laws and
regulations, except where the failure to be so in compliance would not
have a Material Adverse Effect.
(xlvii) No transaction has occurred between or among the
Company and any of its officers or directors or any affiliate or
affiliates of any such officer or director that is required by the 1933
Act to be described in and is not described or incorporated by
reference in the Registration Statement and the Prospectus.
(xlviii) The Company has not taken, nor will it take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any capital stock of the Company to facilitate the sale
or resale of any of the Underwritten Securities.
(xlix) The Company and the Operating Partnership have not
taken and will not take, directly or indirectly, any action prohibited
by Regulation M under the 1934 Act.
(l) The assets of the Company do not constitute "plan assets"
under the Employee Retirement Income Security Act of 1974, as amended.
(li) The Company has filed all federal, state, local and
foreign income tax returns which have been required to be filed (except
in any case in which the failure to so file would not
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<PAGE> 14
have a Material Adverse Effect) and has paid all taxes required to be
paid and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except, in all
cases, for any such tax, assessment, fine or penalty that is being
contested in good faith. To the knowledge of the Company, there are no
tax returns of the Company or any of its Subsidiaries that are
currently being audited by state, local or federal taxing authorities
or agencies which would have a Material Adverse Effect.
(lii) The Company and its Subsidiaries maintain a system of
internal accounting controls which the Company believes is sufficient
to provide reasonable assurance that (a) transactions are executed in
accordance with management's general or specific authorization; (b)
transactions are recorded as necessary to permit the preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (c) access to
financial assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(liii) Neither the Company or any of its Subsidiaries nor, to
the knowledge of the Company, any employee or agent of the Company or
any Subsidiary, has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the
Prospectus.
(liv) The Company has not distributed and, prior to the later
to occur of (i) the Closing Time or (ii) completion of the distribution
of the Underwritten Securities, will not distribute any offering
material in connection with the offering and sale of the Underwritten
Securities other than the Registration Statement, the Prospectus or
other materials, if any, permitted by the 1933 Act.
(b) Any certificate signed by any officer of the Company or any of its
Subsidiaries and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by such entity to
each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations, warranties and
agreements herein contained and shall be subject to the terms and conditions
herein set forth.
(b) Subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement, an option to the
Underwriters, severally and not jointly, to purchase up to the number or
aggregate principal amount, as the case may be, of the Option Underwritten
Securities set forth therein at a price per Option Underwritten Security equal
to the price per Initial Underwritten Security, less an amount equal to any
dividends or distributions declared by the Company and paid or payable on the
Initial Underwritten Securities but not payable on the Option Underwritten
Securities. Such option, if granted, will expire 30 days after the date of such
Terms Agreement, and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial Underwritten Securities upon notice
by Merrill Lynch to the Company setting forth the number of Option Underwritten
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option
Underwritten Securities. Any such time and date of payment and delivery (each, a
"Date of Delivery") shall be determined by Merrill Lynch, but shall not be later
than seven full business
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<PAGE> 15
days after the exercise of said option, nor in any event prior to the Closing
Time, unless otherwise agreed upon by Merrill Lynch and the Company. If the
option is exercised as to all or any portion of the Option Underwritten
Securities, each of the Underwriters, severally and not jointly, will purchase
that proportion of the total number of Option Underwritten Securities then being
purchased which the number of Initial Underwritten Securities each such
Underwriter has severally agreed to purchase as set forth in such Terms
Agreement bears to the total number of Initial Underwritten Securities, subject
to such adjustments as Merrill Lynch in its discretion shall make to eliminate
any sales or purchases of a fractional number of Option Underwritten Securities.
(c) Payment of the purchase price for, and delivery of certificates
for, the Initial Underwritten Securities to be purchased by the Underwriters
shall be made at the offices of Rogers & Wells LLP, 200 Park Avenue, New York,
New York 10166, or at such other place as shall be agreed upon by the
Underwriters and the Company at 10:00 A.M. on the fourth business day (or the
third business day if required under Rule 15c6-1 of the 1934 Act, or unless
postponed in accordance with the provisions of Section 10) following the date of
the applicable Terms Agreement or at such other time as shall be agreed upon by
the Underwriters and the Company (such time and date of payment and delivery
being herein called the "Closing Time"). In addition, in the event that any or
all of the Option Underwritten Securities are purchased by the Underwriters,
payment of the purchase price for, and delivery of certificates for, such Option
Underwritten Securities shall be made at the above-mentioned offices of Rogers &
Wells LLP, or at such other place as shall be agreed upon by the Underwriters
and the Company on each Date of Delivery as specified in the notice from the
Underwriters to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Underwriters for the respective accounts of the Underwriters of the Initial
Underwritten Securities to be purchased by them. Certificates for the Initial
Underwritten Securities and the Option Underwritten Securities, if any, shall be
in such denominations and registered in such names as the Underwriters may
request in writing at least two business days before the Closing Time or the
relevant Date of Delivery, as the case may be. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Initial
Underwritten Securities and the Option Underwritten Securities, if any, which it
has agreed to purchase. Merrill Lynch, individually and not as representatives
of the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Underwritten Securities or the Option
Underwritten Securities, if any, to be purchased by any Underwriters whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but any such payment shall not relieve such Underwriter from
its obligations hereunder. The certificates for the Initial Underwritten
Securities and the Option Underwritten Securities, if any, will be made
available for examination and packaging by the Underwriters not later than 10:00
A.M. on the last business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be, in New York, New York.
SECTION 3. Covenants of the Company and the Operating Partnership. Each
of the Company and the Operating Partnership covenants with the Underwriters, as
follows:
(a) The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434
of the 1933 Act Regulations, if and as applicable, and will notify the
Underwriters immediately, and confirm the notice in writing, of (i) the
effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii)
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) the issuance by the Commission of any
stop order suspending the effectiveness of the
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<PAGE> 16
Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus, or of the suspension of the
qualification of the Initial Underwritten Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424 and will take such steps as
it deems necessary to ascertain promptly whether the Prospectus
transmitted for filing under Rule 424 was received for filing by the
Commission and, in the event that it was not, it will promptly file the
Prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b) of the 1933 Act
Regulations), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Underwriters with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Underwriters or counsel for the
Underwriters shall object.
(c) The Company has furnished or will deliver to the
Underwriters and counsel for the Underwriters, without charge, signed
copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents
and certificates of experts, and will also deliver to the Underwriters,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for
each of the Underwriters. The Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to any
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) The Company will deliver to each Underwriter, without
charge, as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus as such
Underwriter may reasonably request. The Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical
to any electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters,
to amend or supplement the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company will forthwith amend or
supplement the Prospectus (in form and substance reasonably
satisfactory to counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances existing
at the time it is delivered to a purchaser, not misleading, and the
Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
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(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities for offering and
sale under the applicable securities laws and real estate syndication
laws of such states and other jurisdictions as the Underwriters may
designate. In each jurisdiction in which the Underwritten Securities
have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for so long as may be required for the
distribution of the Underwritten Securities.
(g) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon
as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with
the provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from
the sale of the Underwritten Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to
Sections 13, 14 or 15 of the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
(j) The Company will file with the NYSE all documents and
notices required by the NYSE of companies that have securities listed
on such exchange and will use its best efforts to maintain the listing
of any Underwritten Securities listed on the NYSE.
(k) During a period of 30 days from the date of any Prospectus
relating to the Underwritten Securities, the Company, its executive
officers and the members of its Board of Directors and QSV will not,
without the prior written consent of the Underwriters, directly or
indirectly, sell, offer to sell, grant any option for the sale of,
enter into any agreement to sell, or otherwise dispose of any
securities of the same class or series or ranking on a parity with any
Underwritten Securities (other than the Underwritten Securities covered
by such Prospectus). This transfer restriction does not apply to (i)
grants of options, and the issuance of shares in respect of such
options, pursuant to a stock option plan; (ii) the issuance of shares
pursuant to a dividend reinvestment plan; and (iii) the issuance of
shares of Common Stock, or any security convertible into or
exchangeable or exercisable for Common Stock, in connection with the
acquisition of real property or an interest or interests in real
property.
(l) If the applicable Terms Agreement specifies that any
related Underlying Securities include Common Stock, Preferred Stock
and/or Depositary Shares, the Company will reserve and keep available
at all times, free of preemptive or other similar rights, a sufficient
number of shares of Common Stock and/or Preferred Stock, as applicable,
for the purpose of enabling the Company to satisfy any obligations to
issue such Underlying Securities upon exercise of the related Warrants,
as applicable, or upon conversion of the Preferred Stock or Depositary
Shares, as applicable.
(m) The Company will use its best efforts to continue to meet
the requirements to qualify as a "real estate investment trust" under
the Code.
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(n) During the period from the Closing Time until five years
after the Closing Time, the Company and the Operating Partnership will
deliver to the Underwriters, (i) promptly upon their becoming
available, copies of all current, regular and periodic reports of the
Company mailed to its stockholders or filed with any securities
exchange or with the Commission or any governmental authority
succeeding to any of the Commission's functions, and (ii) such other
information concerning the Company and the Operating Partnership as the
Underwriters may reasonably request.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Underwriting Agreement
and the applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto; (ii)
the cost of printing, or reproducing, and distributing to the Underwriters
copies of this Underwriting Agreement and the applicable Terms Agreement; (iii)
the preparation, issuance and delivery of the Underwritten Securities to the
Underwriters, including capital duties, stamp duties and stock transfer taxes,
if any, payable upon issuance of any of the Underwritten Securities, the sale of
the Underwritten Securities to the Underwriters, their transfer between the
Underwriters pursuant to an agreement between such Underwriters, if any, and the
fees and expenses of the transfer agent for the Underwritten Securities; (iv)
the fees and disbursements of the Company's counsel and accountants; (v) the
qualification of the Underwritten Securities under securities laws and real
estate syndication laws in accordance with the provisions of Section 3(f)
hereof, including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey; (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto; (vii) the cost of printing, or reproducing,
and delivering to the Underwriters copies of the Blue Sky Survey; (viii) the fee
of the National Association of Securities Dealers, Inc., if any; (ix) the fees
and expenses incurred in connection with the listing of the Underwritten
Securities on the NYSE and (x) any transfer taxes imposed on the sale of the
Underwritten Securities to the several Underwriters.
If this Underwriting Agreement is cancelled or terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy, as of the date hereof
and at Closing Time, of the representations and warranties of the Company and
the Operating Partnership herein contained, to the performance by the Company
and the Operating Partnership of their respective obligations hereunder, and to
the following further conditions:
(a) At Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission; (ii) if the Company has elected to rely upon Rule 430A
of the 1933 Act Regulations, the public offering price of the
Underwritten Securities and any price-related information previously
omitted from the effective Registration Statement pursuant to such Rule
430A shall have been transmitted to the Commission for filing pursuant
to Rule 424(b) of the 1933 Act Regulations within the prescribed time
period, and prior to the applicable Closing Time, the Company shall
have provided evidence satisfactory to the Underwriters of such timely
filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirements of Rule 430A of the 1933 Act Regulations; and (iii) there
shall not have come to the attention of the
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<PAGE> 19
Underwriters any facts that would cause the Underwriters to believe
that the Prospectus, at the time it was required to be delivered to
purchasers of the Underwritten Securities, included an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances
existing at such time, not misleading. If a Rule 462(b) Registration
Statement is required, such Rule 462(b) Registration Statement shall
have been transmitted to the Commission for filing and have become
effective within the prescribed time period and, prior to the Closing
Time, the Company shall have provided to the Underwriters evidence of
such filing and effectiveness in accordance with Rule 462(b) of the
1933 Act Regulations.
(b) At Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time,
of Locke Lidell & Sapp LLP, counsel for the Company, as to
which for matters of Maryland law Rogers & Wells LLP may rely
upon, in form and substance reasonably satisfactory to counsel
for the Underwriters, to the effect that:
(i) Each of the Company, the Operating Partnership,
and USRP Managing has been duly incorporated or formed, as
the case may be, and is validly existing as a corporation,
general or limited partnership, or other legal entity, as
the case may be, in good standing under and by virtue of
the laws of its jurisdiction of incorporation or
formation, as the case may be, and has full power
(corporate or other) and authority to conduct the business
in which it is engaged or proposes to engage and to own,
lease and operate its properties as described in the
Prospectus and to enter into and perform its obligations
under this Agreement and the other agreements to which it
is a party, and is duly qualified or registered to do
business in each jurisdiction listed on a schedule
attached to such counsel's opinion. All of the issued and
outstanding capital stock or ownership interests of each
of the Operating Partnership and USRP Managing have been
duly authorized and are validly issued, fully paid and
nonassessable and, except for the 6.9% limited partner
interest in the Operating Partnership owned by QSV and the
.02% limited partner interests owned by certain sellers of
properties to the Operating Partnership, are wholly owned
by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(ii) The Company has authorized, issued and
outstanding capital stock as set forth or incorporated by
reference in the Prospectus; all of the issued and
outstanding shares of capital stock of the Company have
been duly and validly authorized and issued; and all of
the issued and outstanding shares of capital stock of the
Company are fully paid and nonassessable and none of them
was issued in violation of any preemptive or other similar
right. The Underwritten Securities have been duly
authorized by the Company for issuance and sale and when
issued and sold pursuant to this Underwriting Agreement
will be duly and validly issued, fully paid and
nonassessable and none of them will have been issued in
violation of any preemptive or other similar right. Except
as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or
other right calling for the issuance of, and, to the
knowledge of such counsel, no commitment, plan or
arrangement to issue, any share of capital stock of the
Company or any security convertible into, exercisable for,
or exchangeable for capital stock of the Company. To the
best of
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<PAGE> 20
such counsel's knowledge, no holder of any security of the
Company has the right to have any security owned by such
holder included for registration in the Registration
Statement or to demand registration of any security owned
by such holder during the 180 days after the date of this
Underwriting Agreement. The issued and outstanding capital
stock of the Company and the Underwritten Securities
conform, or will conform, in all material respects to the
descriptions thereof contained in the Registration
Statement and the Prospectus. The form of certificate used
to evidence the Underwritten Securities is in due and
proper form and complies with all applicable statutory
requirements, with any applicable requirements of the
Company's organizational documents and with the
requirements of the NYSE.
(iii) The Registration Statement has become effective
under the 1933 Act, the Prospectus has been filed as
required by Section 1(a)(i) hereof and, to the best
knowledge of such counsel, after due inquiry, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that
purpose has been instituted or threatened by the
Commission.
(iv) Each part of the Registration Statement, when
such part became effective, and the Prospectus and any
amendment or supplement thereto, on the date of filing
thereof with the Commission and at the Closing Time,
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations,
and such counsel has no reason to believe that either (i)
any part of the Registration Statement, when such part
became effective or was filed under the 1933 Act or 1934
Act, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (ii) the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission or at the Closing Time, included an untrue
statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading; and the documents (excluding any exhibits
thereto) incorporated by reference in the Registration
Statement or Prospectus or any amendment or supplement
thereto, when they became effective under the 1933 Act or
were filed with the Commission under the 1933 Act or 1934
Act, as the case may be, complied as to form in all
material respects with the requirements of the 1933 Act,
the 1934 Act, the 1933 Act Regulations or the 1934 Act
Regulations, as applicable; it being understood that such
counsel need express no opinion as to the financial
statements or other financial data included in any of the
documents mentioned in this clause.
(v) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental
proceedings, contracts and other documents are accurate
and fairly present the information required to be shown;
and such counsel does not know of any statutes or legal or
governmental proceedings required to be described in the
Prospectus that are not described as required, or of any
contracts or documents of a character required to be
described in the Registration Statement or Prospectus (or
required to be filed under the 1934 Act if upon such
filing they would be incorporated by reference therein) or
to be filed as exhibits to the Registration Statement that
are not described and filed as required.
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<PAGE> 21
(vi) This Underwriting Agreement and the applicable
Terms Agreement have been duly authorized, executed and
delivered by the Company and constitutes the legal, valid
and binding obligation of the Company enforceable against
it in accordance with their terms, except as the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles; the
execution, delivery and performance of this Underwriting
Agreement, the applicable Terms Agreement and each
applicable Warrant Agreement, Deposit Agreement and any
other agreement or instrument entered into or issued or to
be entered into or issued by the Company in connection
with the transactions contemplated in the Underwriting
Agreement and such Terms Agreement and in the Registration
Statement and the Prospectus and the consummation of the
transactions contemplated herein and therein, including
the issuance of the Underwritten Securities, will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (a) any
statute, indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement
or evidence of indebtedness, lease, contract or other
agreement or instrument known to such counsel to which the
Company or its Subsidiaries are a party or by which they
are bound or to which any of the property or other assets
of the Company or its Subsidiaries is subject, (b) the
articles of incorporation, charter, by-laws, certificate
of general or limited partnership, partnership agreement,
or other organizational document of the Company or any of
its Subsidiaries, as applicable, or (c) any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or its Subsidiaries or any of their properties or
other assets; and no consent, approval, authorization,
notice to, order of, or filing with, any court or
governmental agency or body is required for the
consummation of the transactions contemplated by this
Underwriting Agreement and the applicable Terms Agreement
in connection with the issuance or sale of the
Underwritten Securities by the Company, except such as
have been obtained under the 1933 Act or from the NYSE.
(vii) Commencing with the taxable year ended December
31, 1997, the Company was organized and operated in
conformity with the requirements for qualification as a
"real estate investment trust" under the Code. The
Company's proposed method of operation will permit it to
continue to meet the requirements for taxation as a "real
estate investment trust" under the Code. The federal
income tax treatment described in the Prospectus under the
caption "Federal Income Tax Considerations" has been
reviewed by counsel and is accurate in all material
respects.
(viii) The agreement of each of the Company and QSV
that for a period of 30 days from the date of this
Underwriting Agreement they will not, except for the sale
of the Underwritten Securities by the Company, without the
prior written consent of Merrill Lynch, offer, sell,
contract to sell, grant any option to sell, or otherwise
dispose of, directly or indirectly, any share of capital
stock or securities convertible into or exchangeable for,
or any rights to purchase or acquire, shares of capital
stock owned by them, has been duly and validly executed
and delivered by them and constitutes the legal, valid and
binding obligation of the Company and QSV, as the case may
be, enforceable against
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<PAGE> 22
them in accordance with its terms, except as the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(ix) To the best of such counsel's knowledge, neither
the Company nor any of its Subsidiaries is in violation of
any term or provision of their respective articles of
incorporation, charter, by-laws, certificate of general or
limited partnership, partnership agreement or other
organizational document, as applicable, or in violation of
or default under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture,
note agreement or evidence of indebtedness, lease,
contract, permit, judgment, decree, order, statute, rule
or regulation.
(x) To the best of such counsel's knowledge, there is
no litigation or governmental or other proceeding or
investigation, before any court or before or by any public
body or board pending or threatened against, or involving
the assets, properties or businesses of, the Company or
any of its Subsidiaries, involving the Company's or any of
its Subsidiaries' officers or directors or to which any of
the Company's or any of its Subsidiaries' properties or
other assets are subject which would have a Material
Adverse Effect.
(xi) Neither the Company nor any of its Subsidiaries
is an "investment company" within the meaning of the 1940
Act.
(2) Middleberg, Riddle & Gianna, counsel for the Company,
shall have furnished to the Underwriters its written opinion, as
counsel to the Company, addressed to the Underwriters and dated
the date of the Closing Time, in form and substance satisfactory
to the Underwriters, to the effect that:
(i) Each of the Company's Subsidiaries (other than the
Operating Partnership and USRP Managing) has been duly
incorporated or formed, as the case may be, and is validly
existing as a corporation, general or limited partnership,
or other legal entity, as the case may be, in good
standing under the laws of its jurisdiction of
incorporation or formation, as the case may be, and has
full power (corporate or other) and authority to own or
hold its properties and to conduct the business in which
it is engaged, and is duly qualified or registered to do
business in each jurisdiction in which it owns or leases
real property or in which the conduct of its business
requires such qualification or registration, except where
the failure to be so qualified or registered, considering
all such cases in the aggregate, does not involve a
material risk to the business, properties, financial
position or results of operations of the Company and its
Subsidiaries taken as a whole. All of the issued and
outstanding capital stock or ownership interests of each
Subsidiary (other than the Operating Partnership and USRP
Managing) have been duly authorized and are validly
issued, fully paid and nonassessable and are wholly owned
by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(ii) To the best of such counsel's knowledge, no
holder of any security of the Company has the right to
have any security owned by such holder
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<PAGE> 23
included for registration in the Registration Statement or
to demand registration of any security owned by such
holder during the 180 days after the date of this
Underwriting Agreement.
(3) The Underwriters shall have received from Rogers &
Wells LLP, counsel to the Underwriters, such opinion or
opinions, dated as of the Closing Time, with respect to the
validity of the Underwritten Securities, the Registration
Statement, the Prospectus and other related matters as the
Underwriters reasonably may request, and such counsel shall have
received such papers and information as they request to enable
them to pass upon such matters.
(4) In giving its opinions required by subsection (b)(3)
of this Section, Rogers & Wells LLP shall additionally state
that such counsel has participated in conferences with officers
and other representatives of the Company and the independent
public accountants for the Company at which the contents of the
Registration Statement and the Prospectus and related matters
were discussed and in the preparation of the Prospectus and, on
the basis of the foregoing, nothing has come to its attention
that would lead it to believe that either the Registration
Statement or any amendment thereto (excluding the financial
statements and financial schedules included or incorporated by
reference therein or the Statement of Eligibility, as to which
such counsel need express no belief), at the time it became
effective or at the time an Annual Report on Form 10-K was filed
by the Company with the Commission (whichever is later), or at
the Representation Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or supplement
thereto (excluding the financial statements or financial
schedules included or incorporated by reference therein or the
Statement of Eligibility, as to which such counsel need express
no belief), at the Representation Date or at the Closing Time,
included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In giving its opinions, Rogers & Wells LLP may rely upon,
or assume the accuracy of, (A) as to all matters of fact,
certificates and written statements of officers and employees of
and accountants for the Company and its Subsidiaries and (B) as
to the qualification and good standing of each of the Company
and its Subsidiaries to do business in any jurisdiction,
certificates of appropriate government officials or opinions of
counsel in such jurisdictions, and (C) in respect to the opinion
by Rogers & Wells LLP only, as to certain matters of Maryland
law, the opinion of Locke Lidell & Sapp LLP given pursuant to
Section 5(b)(1) above.
(c) At the time of execution of this Underwriting Agreement and at the
Closing Time, the Underwriters shall have received a letter, dated the date of
delivery thereof, from Deloitte & Touche LLP, the independent public accountants
of the Company, in the form previously agreed to by the Underwriters.
(d) The Underwriters shall have received from the Company a
certificate, signed by the President or the Chairman of the Board of Directors
and by the principal financial or accounting officer of the Company, dated as of
the Closing Time, to the effect that, to the best of their knowledge based upon
reasonable investigation:
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<PAGE> 24
(i) The representations and warranties of the Company in this
Underwriting Agreement are true and correct, as if made at and as of
the Closing Time, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Time.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened by the Commission nor has
any state securities authority suspended the qualification or
registration of the Underwritten Securities for offering or sale in any
jurisdiction.
(iii) Since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or Prospectus that has not
been so set forth, and there has been no document required to be filed
under the 1934 Act and the 1934 Act Regulations of the Commission
thereunder that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed.
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (a) there has
not been, and no development has occurred which could reasonably be
expected to result in, a material adverse change in the general
affairs, business, business prospects, properties, management,
condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration
Statement and the Prospectus and (b) neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree,
which is not set forth in the Registration Statement and the
Prospectus.
(v) such other matters as the Underwriters or the
Underwriters' counsel may reasonably request.
(e) On or prior to the Closing Time, the Underwriters shall have
received the executed agreements referred to in Section 3(k).
(f) Prior to the Closing Time, the Underwritten Securities shall have
been duly authorized for listing by the NYSE, subject to official notice of
issuance.
(g) All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Underwriters or the Underwriter's counsel. The
Company will furnish the Underwriters with such conformed copies of such
opinions, certificates, letters and other documents as the Underwriters
shall reasonably request and the Company shall furnish to the Underwriters
such further certificates and documents as the Underwriters shall have
reasonably requested.
(h) Subsequent to the execution and delivery of this Underwriting
Agreement (i) no downgrading or adverse change shall have occurred in the
rating accorded any security of the Company by any "nationally recognized
statistical rating organization," as that term is defined by the Commission
for purposes of Rule 436(g)(2) of the 1933 Act Regulations and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible
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<PAGE> 25
negative implications, its rating of any security of the Company, that, in
either event, makes it impractical or inadvisable, in the Underwriter's
judgment, to offer or deliver the Underwritten Securities on the terms and
in the manner contemplated by the Prospectus.
(i) In the event that the Underwriters are granted an over-allotment
option by the Company in the applicable Terms Agreement and the
Underwriters exercise their option to purchase all or any portion of the
Option Underwritten Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished
by the Company or any of its Subsidiaries hereunder shall be true and
correct as of each Date of Delivery, and, at the relevant Date of Delivery,
Merrill Lynch shall have received:
(1) A certificate, dated such Date of Delivery, of the President or
a Vice President of the Company and the chief financial officer or
chief accounting officer of the Company, confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(2) The favorable opinion of Locke Lidell & Sapp LLP, counsel for
the Company, together with the favorable opinion of Middleberg, Riddle
& Gianna, special counsel for the Company, each in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Underwritten Securities and otherwise
to the same effect as the opinion required by Sections 5(b)(1) and (2)
hereof.
(3) The favorable opinion of Rogers & Wells LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(b)(3) hereof.
(4) A letter from Deloitte & Touche LLP, in form and substance
satisfactory to Merrill Lynch and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to
Merrill Lynch pursuant to Section 5(c) hereof, except that the
"specified date" on the letter furnished pursuant to this paragraph
shall be a date not more than three business days prior to such Date of
Delivery.
(5) Since the time of execution of such Terms Agreement, there
shall not have occurred a downgrading in, or withdrawal of, the rating
assigned to the Underwritten Securities or any of the Company's other
securities by any such rating organization, and no such rating
organization shall have publicly announced that it has under
surveillance or review its rating of the Underwritten Securities or any
of the Company's other securities.
SECTION 6. Indemnification.
(a) Each of the Company and the Operating Partnership agrees, jointly and
severally, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or
25
<PAGE> 26
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company or the Operating Partnership by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever for which indemnification is provided under subsection (i) above
if such settlement is effected with the written consent of the indemnifying
party; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by Merrill Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever for which indemnification is provided under subsection (i)
above, to the extent that any such expense is not paid under (i) or (ii)
above.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and the Operating Partnership and each person, if any, who controls the
Company and the Operating Partnership within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company or the Operating Partnership by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
reasonably approved by the indemnified parties defendant in such action;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. If an
26
<PAGE> 27
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel) (in addition to local counsel) in
any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances, (ii)
the indemnifying party does not promptly retain counsel reasonably satisfactory
to the indemnified party or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. The indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as required by this Section 6, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by Section
6(a)(ii) effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying
parties, on the one hand, and the indemnified parties, on the other hand, from
the offering of the Underwritten Securities pursuant to the applicable Terms
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying parties, on the one hand, and of the indemnified parties, on
the other hand, in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Operating
Partnership, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Underwritten Securities pursuant to the
applicable Terms Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such Underwritten
Securities (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial public offering price of such
Underwritten Securities as set forth on such cover.
27
<PAGE> 28
The relative fault of the Company and the Operating Partnership, on the one
hand, and the Underwriters, on the other hand, shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Operating Partnership or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Operating Partnership and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company or the Operating Partnership, as the case may be. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Underwritten Securities set forth opposite
their respective names in the applicable Terms Agreement and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Underwriting
Agreement or the applicable Terms Agreement, or contained in certificates of the
officers of the Company or the Operating Partnership submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
termination of the applicable Terms Agreement, or any investigation made by or
on behalf of any Underwriter or controlling person, or by or on behalf of the
Company or the Operating Partnership and shall survive delivery of the
Underwritten Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) This Underwriting Agreement (excluding the applicable Terms Agreement)
may be terminated for any reason at any time by the Company or by Merrill Lynch
upon the giving of 30 days' prior written notice of such termination to the
other party hereto.
28
<PAGE> 29
(b) The Underwriters may terminate the applicable Terms Agreement, by
notice to the Company, at any time at or prior to Closing Time (i) if there has
been, since the date of such Terms Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change,
affecting the Company and its Subsidiaries as a whole, in the condition,
financial or otherwise, or in the earnings, assets, business affairs or business
prospects of the Company and its Subsidiaries, whether or not arising in the
ordinary course of business; (ii) if there has occurred any material adverse
change in the financial markets in the United States, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic condition, in each case the effect of which is
such as to make it, in judgement of the Underwriters, impracticable or
inadvisable to (x) commence or continue the offering of Underwritten Securities
to the public, or (y) enforce contracts for the sale of the Underwritten
Securities; or (iii) if trading in the Common Stock has been suspended by the
Commission or if trading generally on either the NYSE or the American Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either federal, New
York or Maryland authorities.
(c) In the event of any such termination, in respect to this Underwriting
Agreement or such terminated Terms Agreement, (x) the covenants set forth in
Section 3 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(g) hereof, the provisions of Section 4
hereof, the indemnity and contribution agreements set forth in Sections 6 and 7
hereof, and the provisions of Sections 8 and 13 hereof shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), the non-defaulting Underwriters shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth. If, however, the Underwriters
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Underwritten Securities to be purchased pursuant to such Terms Agreement,
each of the non-defaulting Underwriters named in such Terms Agreement shall
be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Underwritten Securities to be purchased pursuant to such Terms Agreement,
the applicable Terms Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination
of the applicable Terms Agreement, each of the Underwriters or the Company shall
have the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
29
<PAGE> 30
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch & Co., Merrill Lynch, Pierce
Fenner & Smith Incorporated at Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, N.Y. 10281-1201, attention of John Case (with
copy, which shall not constitute notice, to Jay L. Bernstein, Esq., c/o Rogers &
Wells LLP, 200 Park Avenue, New York, New York 10166); notices to the Company
and the Operating Partnership shall be directed to any of them at Robert J.
Stetson c/o the Company at 5310 Harvest Hill Road, Suite 270, Dallas, Texas
75230 (with copy, which shall not constitute notice, to Kenneth L. Betts, Esq.,
c/o Locke Liddle & Sapp LLP, 2200 Ross Avenue, Suite 2200, Dallas, Texas 75201).
SECTION 12. Parties. This Underwriting Agreement and the applicable Terms
Agreement shall each inure to the benefit of and be binding upon the parties
hereto and their respective successors. Nothing expressed or mentioned in this
Underwriting Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than those referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Underwriting
Agreement or the applicable Terms Agreement or any provision herein or therein
contained. This Underwriting Agreement and the applicable Terms Agreement and
all conditions and provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the parties hereto and thereto and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Underwriting Agreement and the
Terms Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in
said State. Specified times of day refer to New York City time.
SECTION 14. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
30
<PAGE> 31
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
Merrill Lynch, the Company and the Operating Partnership in accordance with its
terms.
Very truly yours,
U.S. RESTAURANT PROPERTIES, INC.
By:
-----------------------------------------------
Name: Robert J. Stetson
Title: Chief Executive Officer and President
U.S. RESTAURANT PROPERTIES OPERATING L.P.
By: USRP Managing, Inc., its general partner
By:
-----------------------------------------------
Name: Robert J. Stetson
Title: Chief Executive Officer and President
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------------------
Name:
Title:
<PAGE> 32
Exhibit A
U.S. RESTAURANT PROPERTIES, INC.
(a Maryland corporation)
June 29, 1999
TERMS AGREEMENT
To: U.S. Restaurant Properties, Inc.
5310 Harvest Hill Road
Suite 270
Dallas, Texas 75230
Ladies and Gentlemen:
We understand that U.S. Restaurant Properties, Inc., a Maryland
corporation (the "Company"), proposes to issue and sell 1,010,000 shares of its
common stock, par value $.001 per share (the "Common Stock") (such securities
also being hereinafter referred to as the "Initial Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the underwriters named below (the "Underwriters") offer to purchase,
severally and not jointly, the number of Underwritten Securities opposite their
names set forth below at the purchase price set forth below, and a proportionate
share of Option Underwritten Securities set forth below, to the extent any are
purchased.
<TABLE>
<CAPTION>
NUMBER OF INITIAL UNDERWRITTEN
UNDERWRITER SECURITIES
- ---------------------------- ------------------------------
<S> <C>
Merrill Lynch & Co. 710,000
Warburg Dillon Read LLC 300,000
---------
Total 1,010,000
=========
</TABLE>
The Underwritten Securities shall have the following terms:
Common Stock
Title: Common Stock, par value $.001 per share
Number of Initial Underwritten Securities: 1,010,000
Number of Option Underwritten Securities: 151,500
Purchase price per share: $20.375
Listing requirements: New York Stock Exchange
Lock-up provisions: 30 days, applicable to the Company, its executive officers
and members of its Board of Directors
Closing date and location: July 6, 1999, Rogers & Wells LLP, 200 Park Avenue,
New York, New York 10166
<PAGE> 33
All of the provisions contained in the Underwriting Agreement to which this
Terms Agreement is attached are hereby incorporated by reference in their
entirety herein and shall be deemed to be a part of this Terms Agreement to the
same extent as if such provisions had been set forth in full herein. Terms
defined in such document are used herein as therein defined.
Please accept this offer no later than June 29, 1999 by signing a copy of
this Terms Agreement in the space set forth below and returning the signed copy
to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
--------------------------------------------
Name:
Title:
[Acting on behalf of itself and the other named
Underwriters.]
U.S. RESTAURANT PROPERTIES, INC.
By:
------------------------------------------------
Name: Robert J. Stetson
Title: Chief Executive Officer and President
U.S. RESTAURANT PROPERTIES OPERATING L.P.
By: USRP Managing, Inc., its general partner
By:
------------------------------------------------
Name: Robert J. Stetson
Title: Chief Executive Officer and President
<PAGE> 34
SCHEDULE A
SUBSIDIARIES
<TABLE>
<CAPTION>
U.S.
U.S. Restaurant
# of Restaurant USRP Properties USRP Restaurant
Props Properties, Managing Operating Renovation Acquisition
OWNER --> Owned State Inc. Inc. L.P. Corp. Corp.
- ------------------------------------------- ----- ----- ----------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
OWNEE
USRP Managing, Inc. DE 100.00%
USRP Renovation Corp. TX 100.00%
Restaurant Acquisition Corp. TX 100.00%
Restaurant Funding, Inc. TX 100.00%
Restaurant Contractor Corp. TX 100.00%
U.S. Restaurant Properties Operating L.P. 576 DE 90.69% 1.00%
Restaurant Property Partners, L.P. 5 TX 99.00%
USRP (West Virginia) Partners, L.P. 2 TX 99.00% 1.00%
Restaurant Renovation Partners, L.P. 3 TX 99.00% 1.00%
U.S. Restaurant Properties Development L.P. TX 99.00%
USRP (Carolina), Ltd. 3 TX 99.00% 1.00%
USRP (Lincoln), Ltd. 5 TX 99.00% 1.00%
USRP (Norman), Ltd. 2 TX 99.00% 1.00%
USRP (Consolidating), LLC 58 TX 100.00%
USRP (DeeDee), LLC 7 TX 100.00%
USRP (Sybra), LLC 6 TX 100.00%
USRP (Ribbit), LLC 2 TX 100.00%
USRP (Central Avenue), LLC 1 TX 100.00%
USRP (Midon), LLC 31 TX 100.00%
USRP (Susi), LLC 4 TX 100.00%
USRP (Minnesota), LLC TX 100.00%
USRP (Finance), LLC TX 100.00%
USRP (Acquisition), LLC 12 TX 100.00%
USRP (Popeye's), LLC 1 TX 100.00%
USRP (Cal), LLC 5 TX 100.00%
USRP GP, LLC TX 100.00%
USRP GP1, LLC TX 100.00%
USRP GP2, LLC TX 100.00%
USRP GP3, LLC TX 100.00%
USRP GP4, LLC TX 100.00%
USRP GP5, LLC TX 100.00%
USRP (San Antonio), Ltd. 5 TX 99.00%
USRP (66), Ltd. 5 TX 99.00%
USRP (Austin), Ltd. 5 TX 99.00%
USRP (Jones), LLC 4 TX 100.00%
USRP (Bob), LLC TX 100.00%
USRP (Don), LLC TX 100.00%
USRP (Fred), LLC TX 100.00%
USRP (Illinois), LLC 6 TX 100.00%
USRP (Jennifer), LLC TX 100.00%
USRP (Missouri), LLC 4 TX 100.00%
USRP (St. Louis), LLC 2 TX 100.00%
<CAPTION>
USRP Restaurant
Restaurant USRP USRP (FAIN QSV ---------------------
Funding, GP, (CAP) 10) Properties, Contractor
OWNER --> Inc. LLC Inc. LLC Inc. Corp. TOTAL
- ------------------------------------------- ---------- ------ ----- ----- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
OWNEE
USRP Managing, Inc. 100.00%
USRP Renovation Corp. 100.00%
Restaurant Acquisition Corp. 100.00%
Restaurant Funding, Inc. 100.00%
Restaurant Contractor Corp. 100.00%
U.S. Restaurant Properties Operating L.P. 8.31% 100.00%
Restaurant Property Partners, L.P. 1.00% 100.00%
USRP (West Virginia) Partners, L.P. 100.00%
Restaurant Renovation Partners, L.P. 100.00%
U.S. Restaurant Properties Development L.P. 1.00% 100.00%
USRP (Carolina), Ltd. 100.00%
USRP (Lincoln), Ltd. 100.00%
USRP (Norman), Ltd. 100.00%
USRP (Consolidating), LLC 100.00%
USRP (DeeDee), LLC 100.00%
USRP (Sybra), LLC 100.00%
USRP (Ribbit), LLC 100.00%
USRP (Central Avenue), LLC 100.00%
USRP (Midon), LLC 100.00%
USRP (Susi), LLC 100.00%
USRP (Minnesota), LLC 100.00%
USRP (Finance), LLC 100.00%
USRP (Acquisition), LLC 100.00%
USRP (Popeye's), LLC 100.00%
USRP (Cal), LLC 100.00%
USRP GP, LLC 100.00%
USRP GP1, LLC 100.00%
USRP GP2, LLC 100.00%
USRP GP3, LLC 100.00%
USRP GP4, LLC 100.00%
USRP GP5, LLC 100.00%
USRP (San Antonio), Ltd. 1.00% 100.00%
USRP (66), Ltd. 1.00% 100.00%
USRP (Austin), Ltd. 1.00% 100.00%
USRP (Jones), LLC 100.00%
USRP (Bob), LLC 100.00%
USRP (Don), LLC 100.00%
USRP (Fred), LLC 100.00%
USRP (Illinois), LLC 100.00%
USRP (Jennifer), LLC 100.00%
USRP (Missouri), LLC 100.00%
USRP (St. Louis), LLC 100.00%
</TABLE>
Sch. A
<PAGE> 35
<TABLE>
<CAPTION>
U.S.
U.S. Restaurant
# of Restaurant USRP Properties USRP Restaurant
Props Properties, Managing Operating Renovation Acquisition
OWNER --> Owned State Inc. Inc. L.P. Corp. Corp.
- ------------------------------------------- ----- ----- ----------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
USRP (Sarah), LLC TX 100.00%
USRP (Seminole), LLC TX 100.00%
USRP (Steve), LLC TX 100.00%
USRP (Valerie), LLC TX 100.00%
USRP (Palma), LLC 3 TX 100.00%
USRP (Smyrna), LLC 5 TX 100.00%
USRP (Legend), LLC 4 TX 100.00%
USRP (Gold), LLC 3 TX 100.00%
USRP (Lavid), L.P. 3 TX 99.00%
USRP (CAP), Inc. TX 100.00%
USRP (PAC), L.P. 36 TX 99.00%
USRP (Carroll), LLC 3 TX 100.00%
USRP (BC), LLC 4 TX 100.00%
USRP (Fain 10), L.P. 7 TX 99.00%
USRP (Hollis), LLC 5 TX 100.00%
USRP (Bill), LLC 5 TX 100.00%
USRP (Chris), LLC 2 TX 100.00%
USRP (Molly), LLC 5 TX 100.00%
USRP (Sandra), LLC 5 TX 100.00%
USRP (Pat), LLC 5 TX 100.00%
USRP (Kil), LLC TX 100.00%
USRP (T&C), LLC 18 TX 99.00%
USRP (Quest), L.P. 7 TX 99.00%
USRP (Wig), LLC TX 100.00%
Oahu Terminal, LLC TX 100.00%
Oahu Convenience Stores, LLC TX 100.00%
<CAPTION>
USRP Restaurant
Restuarnat USRP USRP (FAIN QSV ---------------------
Funding, GP, (CAP) 10) Properties, Contractor
OWNER --> Inc. LLC Inc. LLC Inc. Corp. TOTAL
- ------------------------------------------- ---------- ------ ----- ----- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
USRP (Sarah), LLC 100.00%
USRP (Seminole), LLC 100.00%
USRP (Steve), LLC 100.00%
USRP (Valerie), LLC 100.00%
USRP (Palma), LLC 100.00%
USRP (Smyrna), LLC 100.00%
USRP (Legend), LLC 100.00%
USRP (Gold), LLC 100.00%
USRP (Lavid), L.P. 1.00% 100.00%
USRP (CAP), Inc. 100.00%
USRP (PAC), L.P. 1.00% 100.00%
USRP (Carroll), LLC 100.00%
USRP (BC), LLC 100.00%
USRP (Fain 10), L.P. 1.00% 100.00%
USRP (Hollis), LLC 100.00%
USRP (Bill), LLC 100.00%
USRP (Chris), LLC 100.00%
USRP (Molly), LLC 100.00%
USRP (Sandra), LLC 100.00%
USRP (Pat), LLC 100.00%
USRP (Kil), LLC 100.00%
USRP (T&C), LLC 1.00% 100.00%
USRP (Quest), L.P. 1.00% 100.00%
USRP (Wig), LLC 100.00%
Oahu Terminal, LLC 100.00%
Oahu Convenience Stores, LLC 100.00%
</TABLE>
Sch. A
<PAGE> 36
SCHEDULE B
PROPERTIES IN WHICH THE COMPANY HOLDS A LEASEHOLD INTEREST
<TABLE>
<CAPTION>
Store# Location Type Location Class Store Status Address City State LocationZip
- ------ ------------------- -------------- --------------- --------------------------- ----------------- ----- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
12708 APPLEBEES CASUAL DINING ACTIVE (C) 6301 UNIVERSITY AVE CEDAR FALLS IA 50613
12709 APPLEBEES CASUAL DINING ACTIVE (C) 105 CHESTNUT ST AMES IA 50010-8056
12711 APPLEBEES CASUAL DINING ACTIVE (C) 3805 41ST AVE DR MOLINE IL 61265-6433
12715 APPLEBEES CASUAL DINING ACTIVE (C) 2810 5TH AVENUE S FORT DODGE IA 50501-5559
12718 APPLEBEES CASUAL DINING ACTIVE (C) 200 12TH AVE CORALVILLE IA 52241-2927
12799 ARCO GAS STATION PRELIMINARY (C) 91-914 FT WEAVER RD EWA BEACH HI 96706-2246
12800 ARCO GAS STATION PRELIMINARY (C) 1701 DILLINGHAM BLVD HONOLULU HI 96819-4018
12801 ARCO GAS STATION PRELIMINARY (C) 6640 HAWAII KAI DR HONOLULU HI 96825-1108
12802 ARCO GAS STATION PRELIMINARY (C) 2105 S KING ST HONOLULU HI 96826-2223
12803 ARCO GAS STATION PRELIMINARY (C) 56-565 KAMEHAMEHA HWY KAHUKU HI 96731
12804 ARCO GAS STATION PRELIMINARY (C) 609 KAILUA RD KAILUA HI 96734-2816
12805 ARCO GAS STATION PRELIMINARY (C) 45-467 KANEOHE BAY DR KANEOHE HI 96744-2032
12806 ARCO GAS STATION PRELIMINARY (C) 47-256 HUI IWA ST KANEOHE HI 96744-4399
12807 ARCO GAS STATION PRELIMINARY (C) 92-264 FARRINGTON HWY WAIPAHU HI 96797
12808 ARCO GAS STATION PRELIMINARY (C) 92-577 MAKAKILO DR KAPOLEI HI 96707-1225
12818 ARCO GAS STATION PRELIMINARY (C) 98-189 KAMEHAMEHA HWY AIEA HI 96701-4815
12819 ARCO GAS STATION PRELIMINARY (C) 3001 E MANOA RD HONOLULU HI 96822-1503
12820 ARCO GAS STATION PRELIMINARY (C) 1602 NUUANU AVE HONOLULU HI 96817-3232
12821 ARCO GAS STATION PRELIMINARY (C) 87-720 FARRINGTON HWY WAIANAE HI 96792-3211
12822 ARCO GAS STATION PRELIMINARY (C) 2028 WILDER AVE HONOLULU HI 96822-3356
12823 ARCO GAS STATION PRELIMINARY (C) 150 N KAMEHAMEHA HWY WAHIAWA HI 96786-1827
12264 BOSTON MARKET FAST FOOD ACTIVE (C) 90 BROADHOLLOW RD FARMINGDALE NY 11735-4801
963 BURGER KING FAST FOOD ACTIVE (C) 9313 MIRA MESA BLVD SAN DIEGO CA 92126-4816
1180 BURGER KING FAST FOOD ACTIVE (C) 23904 US HIGHWAY 19 N CLEARWATER FL 33765-1563
1611 BURGER KING FAST FOOD ACTIVE (C) 575 CONNECTICUT AVE NORWALK CT 06854-1711
1966 BURGER KING FAST FOOD ACTIVE (C) 2808 N TAMIAMI TRAIL SARASOTA FL 34234-5814
2017 BURGER KING FAST FOOD ACTIVE (C) 2777 W 11TH AVE EUGENE OR 97402-3216
2102 BURGER KING FAST FOOD ACTIVE (C) 614 N MONTANA AVE HELENA MT 59601-3852
2183 BURGER KING FAST FOOD ACTIVE (C) 137 MAIN ST KINGSTON MA 02364-2246
2307 BURGER KING FAST FOOD ACTIVE (C) 23221 PACIFIC HIGHWAY S KENT WA 98032-2721
2386 BURGER KING FAST FOOD ACTIVE (C) 520 NEW RD SOMERS POINT NJ 08244
2419 BURGER KING FAST FOOD ACTIVE (C) 3000 S ISLAND AVE PHILADELPHIA PA 19153-2022
2434 BURGER KING FAST FOOD ACTIVE (C) 503 N 3RD ST (OXFORD MALL) OXFORD PA 19363-1431
2441 BURGER KING FAST FOOD ACTIVE (C) 248 CANAL ST BRATTLEBORO VT 05301-3416
2482 BURGER KING FAST FOOD ACTIVE (C) 3410 WILLIAM PENN HWY WILKINS TOWNSHIP PA 15235-5411
2508 BURGER KING FAST FOOD ACTIVE (C) 223 S LINCOLN ST SPOKANE WA 99204-4491
2523 BURGER KING FAST FOOD ACTIVE (C) 1543 W FLOYD BAKER BLVD GAFFNEY SC 29341-1203
2542 BURGER KING FAST FOOD ACTIVE (C) 310 BALTIMORE PIKE BEL AIR MD 21014-4129
2568 BURGER KING FAST FOOD ACTIVE (C) 5400 YGNACIO VALLEY RD CONCORD CA 94521-3840
2575 BURGER KING FAST FOOD ACTIVE (C) CROSSROADS SHOPPING CNTR WESTMINSTER MD 21157
PO BOX 547
2597 BURGER KING FAST FOOD ACTIVE (C) 1715 N WEST AVE EL DORADO AR 71730-3868
2640 BURGER KING FAST FOOD ACTIVE (C) 3520 E ROUTE 66 FLAGSTAFF AZ 86004-4033
2645 BURGER KING FAST FOOD ACTIVE (C) 1690 BEAVER RD BADEN PA 15005
2657 BURGER KING FAST FOOD ACTIVE (C) 6404 RINGGOLD RD CHATTANOOGA TN 37412-3836
2678 BURGER KING FAST FOOD ACTIVE (C) 130 MAIN ST MIDDLETOWN CT 06457
2718 BURGER KING FAST FOOD ACTIVE (C) 2531 N BROAD ST CAMDEN SC 29020-2237
2719 BURGER KING FAST FOOD ACTIVE (C) 2113 S FIRST ST YAKIMA WA 98903-2233
2733 BURGER KING FAST FOOD ACTIVE (C) 1020 E FIRST ST ANKENY IA 50021-2027
2800 BURGER KING FAST FOOD ACTIVE (C) US HWY 130 & 206 BORDENTOWN NJ 08505
2808 BURGER KING FAST FOOD ACTIVE (C) 1481 BLACKWOOD-CLEMENTON RD CLEMENTON NJ 08201
2854 BURGER KING FAST FOOD ACTIVE (C) 230 THREE SPRINGS DR WEIRTON WV 26062-3815
2879 BURGER KING FAST FOOD ACTIVE (C) 185 HIGH ST ELLSWORTH ME 04605
2919 BURGER KING FAST FOOD ACTIVE (C) 100 COUNTY LINE RD WEST COLUMBIANA OH 44408-9301
</TABLE>
Sch. B
<PAGE> 37
<TABLE>
<CAPTION>
Store# Location Type Location Class Store Status Address City State LocationZip
- ------ ------------------- -------------- --------------- --------------------------- ----------------- ----- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
2928 BURGER KING FAST FOOD ACTIVE (C) 403 E BROADWAY ST NORTH LITTLE ROCK AR 72114-5605
2945 BURGER KING FAST FOOD ACTIVE (C) 2120 N ARGONNE RD [@ KNOX] SPOKANE WA 99212-2499
2947 BURGER KING FAST FOOD ACTIVE (C) 15 S 8TH ST PHILADELPHIA PA 19106-2345
2955 BURGER KING FAST FOOD ACTIVE (C) 130 S WYOMING AVE KINGSTON PA 18704-3406
2968 BURGER KING FAST FOOD ACTIVE (C) 1480 86TH ST CLIVE IA 50322
2999 BURGER KING FAST FOOD ACTIVE (C) 1124 GEORGE ST WEST LA CROSSE WI 54603-1628
3073 BURGER KING FAST FOOD ACTIVE (C) 6909 ODANA RD MADISON WI 53719-1038
3079 BURGER KING FAST FOOD ACTIVE (C) 2710 GRAND AVE PHOENIX AZ 85017-5038
3109 BURGER KING FAST FOOD ACTIVE (C) 2530 N CENTRAL AVE PHOENIX AZ 85004-1335
3142 BURGER KING FAST FOOD ACTIVE (C) RD 4 - ROUTE 30 BEDFORD PA 15522
3166 BURGER KING FAST FOOD ACTIVE (C) 900 N BRIDGE ST CHILLICOTHE OH 45601-1776
3188 BURGER KING FAST FOOD ACTIVE (C) 1616 S BEAVER CREEK RD OREGON CITY OR 97045-4118
3222 BURGER KING FAST FOOD ACTIVE (C) 4641 FREDERICA ST OWENSBORO KY 42301-7439
3234 BURGER KING FAST FOOD ACTIVE (C) 4637 NE SUNSET BLVD RENTON WA 98059-4005
3323 BURGER KING FAST FOOD ACTIVE (C) 2817 S EL CAMINO REAL SAN MATEO CA 94403-2728
3344 BURGER KING FAST FOOD ACTIVE (C) 170 WEST EL MONTE WAY DINUBA CA 93618-1561
3416 BURGER KING FAST FOOD ACTIVE (C) 10 N WILMOT RD TUCSON AZ 85711-3626
3446 BURGER KING FAST FOOD ACTIVE (C) 1278 MT VERNON AVE MARION OH 43302-5625
3474 BURGER KING FAST FOOD ACTIVE (C) 123 E LANCASTER PIKE
[@ PLANK RD] PAOLI PA 19301-1421
3543 BURGER KING FAST FOOD ACTIVE (C) ROUTE 52 AIRPORT SQUARE #A BLUEFIELD WV 24701
3588 BURGER KING FAST FOOD ACTIVE (C) 755 PAGE BLVD SPRINGFIELD MA 01104-3036
3641 BURGER KING FAST FOOD ACTIVE (C) 2701 STEWART AVE SW ATLANTA GA 30315
3645 BURGER KING FAST FOOD ACTIVE (C) 2710 S SIXTH ST KLAMATH FALLS OR 97603-4604
3720 BURGER KING FAST FOOD ACTIVE (C) 805 S COLLEGE RD WILMINGTON NC 28403-4409
3732 BURGER KING FAST FOOD ACTIVE (C) 7736 STATE AVE KANSAS CITY KS 66112-2820
3758 BURGER KING FAST FOOD ACTIVE (C) 3100 DIXIE HWY ERLANGER KY 41018-1827
3777 BURGER KING FAST FOOD ACTIVE (C) 2734 N TUSTIN ST ORANGE CA 92865-2440
3779 BURGER KING FAST FOOD ACTIVE (C) 550 FAIR RD STATESBORO GA 30458-4929
[HWY 67 @ EDMOORE CT]
3830 BURGER KING FAST FOOD ACTIVE (C) 2950 W PARKER RD PLANO TX 75075-1967
3892 BURGER KING FAST FOOD ACTIVE (C) 304 HARTFORD TPKE VERNON ROCKVILLE CT 06066-4719
3925 BURGER KING FAST FOOD ACTIVE (C) 1763 E PRINCE RD TUCSON AZ 85719-1926
3978 BURGER KING FAST FOOD ACTIVE (C) 1219 PARKER ST SPRINGFIELD MA 01129-1045
4005 BURGER KING FAST FOOD ACTIVE (C) 5850 W CAMELBACK RD GLENDALE AZ 85301-7409
4115 BURGER KING FAST FOOD ACTIVE (C) 54 N GROESBECK HWY MT CLEMENS MI 48043-5427
4213 BURGER KING FAST FOOD ACTIVE (C) 4100 CENTRAL AVE SW ALBUQUERQUE NM 87105-1646
4217 BURGER KING FAST FOOD ACTIVE (C) 5530 ATLANTA HWY MONTGOMERY AL 36117-2104
[US RT 80 @ NORTH EAST
BLVD/US RTE 152]
4418 BURGER KING FAST FOOD ACTIVE (C) 1860 CENTRAL AVE ALBANY NY 12205
4482 BURGER KING FAST FOOD ACTIVE (C) 5501 RITCHIE HWY BALTIMORE MD 21225
4767 BURGER KING FAST FOOD ACTIVE (C) 2820 BRAGG BLVD FAYETTEVILLE NC 28303-4041
4808 BURGER KING FAST FOOD ACTIVE (C) 935 N WATERMAN AVE SAN BERNARDINO CA 92410-3801
5038 BURGER KING FAST FOOD ACTIVE (C) 1114-B E MAIN ST MAGNOLIA AR 71753-3713
6281 BURGER KING FAST FOOD ACTIVE (C) 4709 NC HWY 55 DURHAM NC 277132256
6625 BURGER KING FAST FOOD ACTIVE (C) 560 LEXINGTON SPRINGMILL RD MANSFIELD OH 44906
SPRINGFIELD SQUARE MALL
6630 BURGER KING FAST FOOD ACTIVE (C) 290 MAIN ST BINGHAMPTON NY 13905-2518
7149 BURGER KING FAST FOOD ACTIVE (C) 4035 ROUTE 31 LIVERPOOL NY 13090
13001 CITGO GAS STATION ACTIVE (C) 2223 N HOWARD ST
(N HOWARD ST & W 23RD ST
& MACE ST) BALTIMORE MD 21218-5610
13002 CITGO GAS STATION ACTIVE (C) 8300 BALTIMORE NATIONAL
PIKE [US RT 40] ELLICOTT CITY MD 21043-3410
12696 CLARK OIL GAS STATION ACTIVE (C) 8341 OLIVE STREET RD UNIVERSITY CITY MO 63132-2813
13039 CONOCO GAS STATION ACTIVE (C) 275 N LEE ST FORSYTH GA 31029-2164
13040 CONOCO GAS STATION ACTIVE (C) 1140 W JESSE JEWEL PKWY GAINESVILLE GA 30501
</TABLE>
Sch. B
<PAGE> 38
<TABLE>
<CAPTION>
Store# Location Type Location Class Store Status Address City State LocationZip
- ------ ------------------- -------------- --------------- --------------------------- ----------------- ----- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
12581 EL CHICO CASUAL DINING GROUND LEASE (I) 7621 BAKER BLVD RICHLAND HILLS TX 76118-5905
12060 FAZOLIS FAST FOOD ACTIVE (C) 315 S COLLEGE MALL RD BLOOMINGTON IN 47401-6407
9568 HARDEES FAST FOOD ACTIVE (C) 2405 BOUNDARY ST BEAUFORT SC 29906-7302
[HWY 21]
9569 HARDEES FAST FOOD ACTIVE (C) 4992 ALTAMA AVE BRUNSWICK GA 31525-2913
9572 HARDEES FAST FOOD ACTIVE (C) 309 W HIGHWAY 80 GARDEN CITY GA 31408-3103
9579 HARDEES FAST FOOD ACTIVE (C) HWY 144 & 17 RICHMOND HILL GA 31324
PO BOX 2094
9589 HARDEES FAST FOOD ACTIVE (C) 524 MEMORIAL DR WAYCROSS GA 31501-2909
12063 MEMPHIS BEST CASUAL DINING ACTIVE (C) 8071 MANCHESTER RD ST LOUIS MO 63144-2817
12065 PIZZA HUT FAST FOOD ACTIVE (C) 5101 W 98TH ST BLOOMINGTON MN 55437
12265 PIZZA HUT FAST FOOD ACTIVE (C) 3743 HEMPSTEAD TPKE LEVITTOWN NY 11756
[AKA 3737 HEMPSTEAD TPKE]
12942 SPAGHETTI WAREHOUSE CASUAL DINING ACTIVE (C) 40 W HULING AVE MEMPHIS TN 38103-4128
2090 TACO CABANA FAST FOOD ACTIVE (C) 882 STATE ROUTE 28 MILFORD OH 45150-1952
12363 TIPPINS RESTAURANT CASUAL DINING ACTIVE (C) 2931 S NOLAND RD INDEPENDENCE MO 64055-1323
2788 TRADE A GAME OTHER ACTIVE (C) 11519 E SPRAGUE AVE SPOKANE WA 99206-5134
2447 UNKNOWN OTHER DARK (C) 1090 SOUTH BIG "A" ROAD TOCCOA GA 30577-3814
2888 UNKNOWN OTHER DARK (C) 7278 E POINT DOUGLAS RD S COTTAGE GROVE MN 55016-3016
</TABLE>
Sch. B
<PAGE> 39
SCHEDULE C
TENANT RIGHTS OF FIRST REFUSAL/FIRST OFFER
<TABLE>
<CAPTION>
Store# Location Type Location Class Store Status Address City State Zip
------ ------------- -------------- ------------ ------- ---- ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
12058 ACAPULCOS CASUAL DINING ACTIVE (C) 2880 COON RAPIDS BLVD COON RAPIDS MN 55433
12136 ARBYS FAST FOOD ACTIVE (C) 8068 N WAYNE RD WESTLAND MI 48185-1110
12603 ARBYS FAST FOOD ACTIVE (C) 2238 ARDEN WAY SACRAMENTO CA 95825-3302
12644 ARBYS FAST FOOD ACTIVE (C) 8254 W GRAND RIVER RD BRIGHTON MI 48114-9302
12645 ARBYS FAST FOOD ACTIVE (C) 8685 BIRCH RUN RD BIRCH RUN MI 48415-9700
12646 ARBYS FAST FOOD ACTIVE (C) 299 N ROUTE 73 WEST BERLIN NJ 08009-9750
12673 ARBYS FAST FOOD ACTIVE (C) RT 11, CARLISLE PIKE SILVER SPRINGS PA 17575
12987 ARBYS FAST FOOD ACTIVE (C) 14555 TELEGRAPH RD REDFORD MI 48239-3370
12549 ARCO GAS STATION ACTIVE (C) 11254 I AVE HESPERIA CA 92345-5164
12586 ARCO GAS STATION ACTIVE (C) 777 N GLENDORA AVE LA PUENTE CA 91744-4014
12587 ARCO GAS STATION ACTIVE (C) 12726 S WESTERN AVE LOS ANGELES CA 90047-5253
12858 BJS MARKET CASUAL DINING ACTIVE (C) 8734 S STONEY ISLAND AVE CHICAGO IL 60617-2708
12258 BOARD SHOP OTHER ACTIVE (C) 320 PATCHOGUE-PORT PORT JEFFERSON NY 11777
JEFFERSON RD
2046 BURGER KING FAST FOOD ACTIVE (C) 2408 NW 9TH ST CORVALLIS OR 97330-1559
2705 BURGER KING FAST FOOD ACTIVE (C) 16901 E HIGHWAY 24 INDEPENDENCE MO 64056-1531
5230 BURGER KING FAST FOOD ACTIVE (C) 379 S LOVEKIN BLVD BLYTHE CA 92225-2709
9279 BURGER KING FAST FOOD ACTIVE (C) 102 JULIUSTOWN RD BROWNS MILLS NJ 08015-3136
12116 CHARLESTONS CASUAL DINING ACTIVE (C) 300 ED NOBLE PKWY NORMAN OK 73072-4829
12118 CHARLESTONS CASUAL DINING ACTIVE (C) 6839 S YALE AVE TULSA OK 74136-3365
12582 CHARLESTONS CASUAL DINING ACTIVE (C) 6815 E 82ND ST INDIANAPOLIS IN 46250-1507
12675 CHARLESTONS CASUAL DINING ACTIVE (C) 1040 N 54TH ST CHANDLER AZ 85226-1030
12246 CHECKERS FAST FOOD ACTIVE (C) 9014 STATE RD 52 HUDSON FL 34669-3025
12247 CHECKERS FAST FOOD ACTIVE (C) 8800 N 56TH ST TAMPA FL 33617-6204
12248 CHECKERS FAST FOOD ACTIVE (C) 3418 HOEDT RD TAMPA FL 33618-1639
12546 CHEVRON GAS STATION PRELIMINARY (C) 1110 W GLADSTONE ST SAN DIMAS CA 91740
12766 CHEVRON GAS STATION ACTIVE (C) 15933 MAIN ST HESPERIA CA 92345-3537
12768 CHEVRON GAS STATION ACTIVE (C) 1580 W REDLANDS BLVD REDLANDS CA 92373-8024
12033 CHILIS CASUAL DINING ACTIVE (C) 916 BROADWAY AVE BOISE ID 83706-3623
12034 CHILIS CASUAL DINING ACTIVE (C) 426 N TELSHOR BLVD LAS CRUCES NM 88011-8240
12035 CHILIS CASUAL DINING ACTIVE (C) 772 E MILLSAP RD FAYETTEVILLE AR 72703-4003
12036 CHILIS CASUAL DINING ACTIVE (C) 3202 S 143RD PLAZA OMAHA NE 68144-5617
12037 CHILIS CASUAL DINING ACTIVE (C) 1047 W RIVERDALE RD RIVERDALE UT 84405-3720
12038 CHILIS CASUAL DINING ACTIVE (C) 1320 DELL RANGE BLVD CHEYENNE WY 82009-4859
13001 CITGO GAS STATION ACTIVE (C) 2223 N HOWARD ST BALTIMORE MD 21218-5610
(N HOWARD ST & W
23RD ST & MACE ST)
13002 CITGO GAS STATION ACTIVE (C) 8300 BALTIMORE NATIONAL PIKE ELLICOTT CITY MD 21043-3410
[US RT 40]
12826 CONOCO GAS STATION ACTIVE (C) 832 CLAY RD SW MABELTON GA 30126-2230
12827 CONOCO GAS STATION ACTIVE (C) 1057 BANKHEAD HWY [HWY 78] MABLETON GA 30126
12828 CONOCO GAS STATION ACTIVE (C) 4321 BROWNSVILLE RD POWDER SPRINGS GA 30127-3142
12829 CONOCO GAS STATION ACTIVE (C) 3336 BANKHEAD HWY LITHIA SPRINGS GA 30122-1411
12830 CONOCO GAS STATION ACTIVE (C) 2712 POWDER SPRINGS RD SW MARIETTA GA 30064-4518
12831 CONOCO GAS STATION ACTIVE (C) 3550 POWDER SPRINGS RD POWDER SPRINGS GA 30127-2367
12832 CONOCO GAS STATION ACTIVE (C) 6990 S SWEETWATER RD LITHIA SPRINGS GA 30122-2466
13018 CONOCO GAS STATION ACTIVE (C) 4160 FULTON INDUSTRIAL BLVD ATLANTA GA 30336-1735
13019 CONOCO GAS STATION ACTIVE (C) 2832 LAWRENCEVILLE HWY TUCKER GA 30084-6921
13020 CONOCO GAS STATION ACTIVE (C) 2120 CANTON HWY MARIETTA GA 30066-5338
13021 CONOCO GAS STATION ACTIVE (C) 1417 IRIS DR SE CONYERS GA 30094
13022 CONOCO GAS STATION ACTIVE (C) 5022 OLD NATIONAL HWY COLLEGE PARK GA 30349-3258
13023 CONOCO GAS STATION ACTIVE (C) 802 THORNTON RD LITHIA SPRINGS GA 30122-2609
13024 CONOCO GAS STATION ACTIVE (C) 1836 MOUNTAIN INDUSTRIAL BLVD TUCKER GA 30084-6617
13025 CONOCO GAS STATION ACTIVE (C) 2470 WESLEY CHAPEL RD DECATUR GA 30035-3421
</TABLE>
Sch. C
<PAGE> 40
<TABLE>
<CAPTION>
Store# Location Type Location Class Store Status Address City State Zip
------ ------------- -------------- ------------ ------- ---- ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
13026 CONOCO GAS STATION ACTIVE (C) 4617 JONESBORO RD UNION CITY GA 30291-2048
13027 CONOCO GAS STATION ACTIVE (C) 4530 GLENWOOD RD DECATUR GA 30032-5112
13028 CONOCO GAS STATION ACTIVE (C) 3640 CAMPBELLTON RD ATLANTA GA 30331-5200
13029 CONOCO GAS STATION ACTIVE (C) 9420 HWY 92 WOODSTOCK GA 30188-3864
13030 CONOCO GAS STATION ACTIVE (C) 4336 FULTON INDUSTRIAL BLVD ATLANTA GA 30336-1927
13031 CONOCO GAS STATION ACTIVE (C) 6937 JONESBORO RD MORROW GA 30260-2904
13032 CONOCO GAS STATION ACTIVE (C) 1795 BEAVER RUIN RD NORCROSS GA 30093-2810
13033 CONOCO GAS STATION ACTIVE (C) 3801 FLAT SHOALS RD DECATUR GA 30034-4003
13034 CONOCO GAS STATION ACTIVE (C) 2347 CANTON HWY MARIETTA GA 30066-5378
13035 CONOCO GAS STATION ACTIVE (C) 1913 E PIEDMONT RD MARIETTA GA 30062-1887
13036 CONOCO GAS STATION ACTIVE (C) 600 S MARIETTA PKWY MARIETTA GA 30060
13037 CONOCO GAS STATION ACTIVE (C) 6692 TARA BLVD JONESBORO GA 30236-1200
13038 CONOCO GAS STATION ACTIVE (C) 3118 HWY 278 NW COVINGTON GA 30014-2304
13039 CONOCO GAS STATION ACTIVE (C) 275 N LEE ST FORSYTH GA 31029-2164
13040 CONOCO GAS STATION ACTIVE (C) 1140 W JESSE JEWEL PKWY GAINESVILLE GA 30501
13041 CONOCO GAS STATION ACTIVE (C) 6569 HWY 92 ACWORTH GA 30102-2503
13042 CONOCO GAS STATION ACTIVE (C) 1100 HWY 19 N THOMASTON GA 30286-2202
13043 CONOCO GAS STATION ACTIVE (C) 6114 COVINGTON HWY DECATUR GA 30035-3802
13044 CONOCO GAS STATION ACTIVE (C) 1744 HWY 138 NE CONYERS GA 30013-1262
12544 CRESCENT CAR
WASH OTHER ACTIVE (C) 8471 WALKER ST LA PALMA CA 90623-2126
9522 DAIRY QUEEN FAST FOOD ACTIVE (C) HIGHWAY 69 ALTO TX 75925
9523 DAIRY QUEEN FAST FOOD ACTIVE (C) 416 US HWY 96 N BUNA TX 77612
9524 DAIRY QUEEN FAST FOOD ACTIVE (C) 902 W PANOLA ST CARTHAGE TX 75633-2338
9525 DAIRY QUEEN FAST FOOD ACTIVE (C) 1001 E SABINE ST CARTHAGE TX 75633
9526 DAIRY QUEEN FAST FOOD ACTIVE (C) 515 S WASHINGTON AVE CLEVELAND TX 77327-4857
9527 DAIRY QUEEN FAST FOOD ACTIVE (C) HWY 59 S CORRIGAN TX 75939
9528 DAIRY QUEEN FAST FOOD ACTIVE (C) 104 E HWY 90 DAYTON TX 77535-2624
9529 DAIRY QUEEN FAST FOOD ACTIVE (C) 202 N TEMPLE DIBOLL TX 75941-1726
9530 DAIRY QUEEN FAST FOOD ACTIVE (C) W HWY 287 GROVETON TX 75845
9531 DAIRY QUEEN FAST FOOD ACTIVE (C) 400 SABINE HEMPHILL TX 75948
[ON HWY 87 WHERE IT
INTERSECTS FM 83]
9532 DAIRY QUEEN FAST FOOD ACTIVE (C) 24022 E LAKE HOUSTON PKWY HUFFMAN TX 77336-4439
9533 DAIRY QUEEN FAST FOOD ACTIVE (C) 209 E FIRST ST HUMBLE TX 77338
9534 DAIRY QUEEN FAST FOOD ACTIVE (C) HWY 69 HUNTINGTON TX 75949
9535 DAIRY QUEEN FAST FOOD ACTIVE (C) 3207 INTERSTATE 45 HUNTSVILLE TX 77340
9536 DAIRY QUEEN FAST FOOD ACTIVE (C) 902 11TH ST HUNTSVILLE TX 77340-3962
9537 DAIRY QUEEN FAST FOOD ACTIVE (C) 987 S WHEELER ST JASPER TX 75951-4638
9538 DAIRY QUEEN FAST FOOD ACTIVE (C) 413 N MARGARET AVE KIRBYVILLE TX 75956-1605
9539 DAIRY QUEEN FAST FOOD ACTIVE (C) HWY 69 SOUTH KOUNTZE TX 77625
9540 DAIRY QUEEN FAST FOOD ACTIVE (C) 1702 N MAIN ST LIBERTY TX 77575-3728
9541 DAIRY QUEEN FAST FOOD ACTIVE (C) 1306 N WASHINGTON AVE LIVINGSTON TX 77351-2340
9542 DAIRY QUEEN FAST FOOD ACTIVE (C) 305 S TIMBERLAND DR LUFKIN TX 75901-0459
9543 DAIRY QUEEN FAST FOOD CLOSED (C) 2207 S FIRST ST LUFKIN TX 75901-5903
9544 DAIRY QUEEN FAST FOOD ACTIVE (C) 301 S JOHN REDDITT DR LUFKIN TX 75904-3130
9545 DAIRY QUEEN FAST FOOD ACTIVE (C) 2305 ATKINSON DR LUFKIN TX 75901-2509
9546 DAIRY QUEEN FAST FOOD ACTIVE (C) 933 N UNIVERSITY DR NACOGDOCHES TX 75961-4647
9547 DAIRY QUEEN FAST FOOD ACTIVE (C) HWY 190 ONALASKA TX 77360
9548 DAIRY QUEEN FAST FOOD ACTIVE (C) 906 W 24TH ST PINELAND TX 75968
[HWY 96 @ FM HWY 83]
9549 DAIRY QUEEN FAST FOOD ACTIVE (C) US HWY 59 EAST PORTER TX 77365
9550 DAIRY QUEEN FAST FOOD ACTIVE (C) 1301 N DICKINSON DR RUSK TX 75785-1051
9551 DAIRY QUEEN FAST FOOD ACTIVE (C) 1010 NACOGDOCHES HWY SAN AUGUSTINE TX 75972
9552 DAIRY QUEEN FAST FOOD ACTIVE (C) HWY 59 N SHEPHERD TX 77371
9553 DAIRY QUEEN FAST FOOD ACTIVE (C) 1180 NORTH 5TH ST SILSBEE TX 77656-3847
9554 DAIRY QUEEN FAST FOOD ACTIVE (C) 335 HWY 105 EAST SOUR LAKE TX 77659
9555 DAIRY QUEEN FAST FOOD ACTIVE (C) INTERSTATE 20 @ SPUR 156 WASKOM TX 75692
9556 DAIRY QUEEN FAST FOOD ACTIVE (C) HWY 69 NORTH WELLS TX 75976
9557 DAIRY QUEEN FAST FOOD CLOSED (C) 1308 W BLUFF ST WOODVILLE TX 75979-4624
</TABLE>
Sch. C
<PAGE> 41
<TABLE>
<CAPTION>
Store# Location Type Location Class Store Status Address City State Zip
------ ------------- -------------- ------------ ------- ---- ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
9558 DAIRY QUEEN FAST FOOD ACTIVE (C) 1009 S MAGNOLIA ST WOODVILLE TX 75979-5609
12310 DAMONS CASUAL DINING ACTIVE (C) 3868 STONE MOUNTAIN HWY SNELLVILLE GA 30039-3935
[HWY 78 W]
12862 DENNYS CASUAL DINING ACTIVE (C) 8737 W GRAND AVE PEORIA AZ 85345-8105
12863 DENNYS CASUAL DINING ACTIVE (C) 10614 N 43RD AVE GLENDALE AZ 85304-4147
12331 EMBERS CASUAL DINING ACTIVE (C) 4805 MERLE HAY RD DES MOINES IA 50322-1966
12332 EMBERS CASUAL DINING ACTIVE (C) 3838 W MAIN AVE FARGO ND 58103-1142
12333 EMBERS CASUAL DINING ACTIVE (C) 2600 HENNEPIN AVE MINNEAPOLIS MN 55408-1149
12334 EMBERS CASUAL DINING ACTIVE (C) 2626 ROSE ST LA CROSSE WI 54603-1616
12335 EMBERS CASUAL DINING CLOSED (C) 3300 E LAKE ST MINNEAPOLIS MN 55406-2032
12337 EMBERS CASUAL DINING ACTIVE (C) 1664 UNIVERSITY AVE WEST ST PAUL MN 55104-3794
12338 EMBERS CASUAL DINING ACTIVE (C) 108 17TH AVENUE SW ROCHESTER MN 55902-0370
12340 EMBERS CASUAL DINING ACTIVE (C) 3240 W DIVISION ST ST CLOUD MN 56301-3821
12657 MIAMI SUBS FAST FOOD ACTIVE (C) 2103 N TOWN EAST BLVD MESQUITE TX 75150-4039
12669 MOBIL GAS STATION ACTIVE (C) QUEEN CITY MOBIL HOOKSETT NH 03106-3624
28 WEST RIVER ROAD (ROUTE 3A)
12999 MOBIL GAS STATION ACTIVE (C) 750 E 25TH ST BALTIMORE MD 21218-5436
12548 MURPHYS GARAGE OTHER PRELIMINARY (C) 14988 HESPERIA RD VICTORVILLE CA 92392-3924
9560 PIZZA HUT FAST FOOD ACTIVE (C) 1420 NE EVANGELINE THRUWAY LAFAYETTE LA 70501
9561 PIZZA HUT FAST FOOD ACTIVE (C) 1259 COLUMBIA AVE FRANKLIN TN 37064-3639
9562 PIZZA HUT FAST FOOD ACTIVE (C) 7224 MAYNARDVILLE PIKE KNOXVILLE TN 37918-5740
9563 PIZZA HUT FAST FOOD CLOSED (C) 1135 N MIDWEST BLVD MIDWEST CITY OK 73110
9564 PIZZA HUT FAST FOOD ACTIVE (C) 4019 N 19TH ST WACO TX 76708-1679
9595 PIZZA HUT FAST FOOD ACTIVE (C) 290 LUKE FIDLER RD SHAMOKIN PA 17866-3830
13016 POPEYES FAST FOOD ACTIVE (C) 110 S BICKETT BLVD LOUISBURG NC 27549-2671
12938 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 1815 N MARKET ST DALLAS TX 75202-1898
12939 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 901 COMMERCE ST HOUSTON TX 77002-1718
12940 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 117 W 4TH ST AUSTIN TX 78701-3914
12941 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 600 E EXCHANGE AVE FT WORTH TX 76106-8279
12942 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 40 W HULING AVE MEMPHIS TN 38103-4128
12943 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 2475 DELK RD SE MARIETTA GA 30067-6311
12944 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 101 E SHERIDAN AVE OKLAHOMA CITY OK 73104-2431
12946 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 1226 E HOUSTON ST SAN ANTONIO TX 78205-2033
12947 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 1900 MONTICELLO AVE NORFOLK VA 23517-2339
12948 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 221 E BRADY ST TULSA OK 74103-2011
12949 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 101 BUSSE RD EL GROVE VILLAGE IL 6007-1631
12950 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 60 CONGRESS ST SPRINGFIELD MA 01104-3415
12951 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 4440 OGDEN AVE AURORA IL 60504-7949
12952 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 1517 N CENTRAL EXPWY PLANO TX 75075-7022
12953 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 1255 INTERSTATE 20 WEST ARLINGTON TX 76017-5859
12954 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 12815 SOUTHWEST FRWY STAFFORD TX 77477-3808
12955 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 1612 AIRPORT FRWY BEDFORD TX 76022-6854
12956 SPAGHETTI
WAREHOUSE CASUAL DINING ACTIVE (C) 2849 W AIRPORT FRWY IRVING TX 75062-6024
12876 TACO CABANA FAST FOOD ACTIVE (C) 1827 GREENVILLE AVE DALLAS TX 75206-7436
</TABLE>
Sch. C
<PAGE> 42
<TABLE>
<CAPTION>
Store# Location Type Location Class Store Status Address City State Zip
------ ------------- -------------- ------------ ------- ---- ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
12877 TACO CABANA FAST FOOD ACTIVE (C) 12475 E NORTHWEST HWY DALLAS TX 75228-8005
12878 TACO CABANA FAST FOOD ACTIVE (C) 1505 N COLLINS ST ARLINGTON TX 76011-4941
12879 TACO CABANA FAST FOOD ACTIVE (C) 4355 CAMP WISDOM RD DALLAS TX 75237-2418
12540 WENDYS FAST FOOD ACTIVE (C) 14113 JEFFERSON DAVIS HWY [RTE WOODBRIDGE VA 22191-2104
1]
12541 WENDYS FAST FOOD ACTIVE (C) 8215 LANDOVER RD LANDOVER MD 20785-2711
153 STORES
</TABLE>
Sch. C
<PAGE> 43
SCHEDULE D
Properties Which Are Not Triple Net Leased
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
STORE # BRAND TYPE STATUS ADDRESS CITY STATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2599 UNKNOWN OTHER BEING CONVERTED (C) 745 E FOOTHILL BLVD RIALTO CA
2244 UNKNOWN OTHER DARK (C) 2426 W OWEN K GARRIOTT RD ENID OK
2447 UNKNOWN OTHER DARK (C) 1090 SOUTH BIG "A" ROAD TOCCOA GA
2888 UNKNOWN OTHER DARK (C) 7278 E POINT DOUGLAS RD S COTTAGE GROVE MN
4709 UNKNOWN OTHER DARK (C) 2720 GETWELL RD MEMPHIS TN
9504 UNKNOWN OTHER DARK (C) 2410 I-35 E SOUTH DENTON TX
9576 UNKNOWN OTHER DARK (C) 1369 HWY 40 EAST KINGSLAND GA
STATE RT 40 @ JSJ RD (NEAR I-95)
12056 UNKNOWN OTHER DARK (C) 3846 LAFAYETTE RD INDIANAPOLIS IN
12077 UNKNOWN OTHER DARK (C) 3275 W 86TH ST INDIANAPOLIS IN
12478 UNKNOWN OTHER DARK (C) 2025 NEW HAVEN AVE W MELBOURNE FL
12543 UNKNOWN OTHER DARK (C) 4311 W MAIN ST BELLEVILLE IL
12277 DEVELOPMENT OTHER UNDER CONST (C) PLANO TX
12384 SHELL OIL GAS STATION UNDER CONST (C) SAN ANTONIO TX
12416 DEVELOPMENT OTHER UNDER CONST (C) I-35 & WONDERWORLD DRIVE SAN MARCOS TX
12431 SHELL OIL GAS STATION UNDER CONST (C) I-35 AND WELLS BRANCH AUSTIN TX
12522 MEMPHIS BAR-B-Q CASUAL DINING UNDER CONST (C) BOWIE GATEWAY CENTER BOWIE MD
12525 DEVELOPMENT OTHER UNDER CONST (C) DAVIS BLVD & PRECINCT LINE RD N RICHLAND HILLS TX
12667 UNCLE BUDS RESTAURANT CASUAL DINING UNDER CONST (C) 2295 RONALD REAGAN PKWY SNELLVILLE GA
12735 UNKNOWN OTHER UNDER CONST (C) 101 E LAMBERT RD LA HABRA CA
12743 AMERICAN FRONTIER MART GAS STATION UNDER CONST (C) LOOP 363 AND I-35 TEMPLE TX
12747 AMERICAN FRONTIER MART GAS STATION UNDER CONST (C) 14000 SPRING CYPRESS RD HOUSTON TX
[@GRANT RD]
12765 DEVELOPMENT OTHER UNDER CONST (C) ONTARIO CA
12767 DEVELOPMENT OTHER UNDER CONST (C) SAN BERNADINO CA
12983 CHARLESTONS CASUAL DINING UNDER CONST (C) 14636 US 31 NORTH CARMEL IN
90003 DEVELOPMENT OTHER UNDER CONST (C) KELLER TX
90004 DEVELOPMENT OTHER UNDER CONST (C) SAN ANTONIO TX
90006 DEVELOPMENT OTHER UNDER CONST (C) FLOWER MOUND TX
90007 DEVELOPMENT OTHER UNDER CONST (C) 2107 CULEBRA RD SAN ANTONIO TX
90008 CO BRANDED STORE CO-BRANDED UNDER CONST (C) FRANKLIN & NEW ROAD WACO TX
90009 CO BRANDED STORE CO-BRANDED UNDER CONST (C) HALL JOHNSON RD & ROUTE 121 GRAPEVINE TX
90012 DEVELOPMENT OTHER UNDER CONST (C) HIGHWAY 3 AND FM 1959 HOUSTON TX
</TABLE>
Sch. D
<PAGE> 1
EXHIBIT 8.1
[LOCKE LIDDELL & SAPP LLP LETTERHEAD]
July 6, 1999
U.S. Restaurant Properties, Inc.
5310 Harvest Hill Road
Suite 270, L.B. 168
Dallas, Texas 75230
Ladies and Gentlemen:
We have acted as counsel to U.S. Restaurant Properties, Inc. (the
"Company") in connection with the Registration Statement on Form S-3 filed of
even date herewith with the Securities and Exchange Commission under
Registration No. 333-34263 and the accompanying prospectus supplement (as the
same may be amended or supplemented from time to time, the "Registration
Statement"). This opinion relates to certain federal income tax matters in
connection with the Registration Statement. Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Registration
Statement.
For the purposes of rendering our opinion, we have examined and are
relying upon such documents (including all exhibits and schedules attached
thereto) as we have deemed relevant or necessary, including:
1. The Restated Articles of Incorporation of the Company and
the Bylaws of the Company;
2. The Registration Statement and the Prospectus filed
therewith;
3. The Fourth Amended and Restated Agreement of Limited
Partnership of U.S. Restaurant Properties Operating L.P. (the
"Operating Partnership"); and
4. Such other documents, records and instruments as we have
deemed necessary in order to enable us to render the opinion referred
to in this letter, and our opinion is conditioned upon (without any
independent investigation or review thereof) the truth and accuracy, at
all relevant times, of the representations and warranties, covenants
and statements contained therein.
<PAGE> 2
U.S. Restaurant Properties, Inc.
July 6, 1999
Page 2
This opinion is also subject to and conditioned upon representations contained
in a written tax representation letter executed by officers of the Company and
the general partner of the Operating Partnership (the "Tax Representation
Letter"). The initial and continuing truth and accuracy of the representations
contained in the Tax Representation Letter constitutes an integral basis for the
opinion expressed herein and this opinion is conditioned upon the initial and
continuing truth and accuracy of these representations.
In connection with rendering this opinion, we have assumed to be true
and are relying upon (without any independent investigation or review thereof),
and our opinion is conditioned upon the correctness of, the following:
1. The authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents
submitted to us as copies, and authenticity of the originals of such
documents;
2. The genuineness of all signatures, the due authorization,
execution and delivery of all documents by all parties thereto and the
due authority of all persons executing such documents;
3. All representations and statements set forth in such
documents are true and correct;
4. All obligations imposed by any such documents on the
parties thereto have been or will be performed or satisfied in
accordance with their terms; and
5. All covenants contained in the Tax Representation Letter
will be performed without waiver or breach of any provision thereof.
We have further assumed the accuracy of the statements and descriptions of the
Company's and the Operating Partnership's intended activities as described in
the Registration Statement and the Prospectus and that the Company and the
Operating Partnership will operate in accordance with the method of operation
described in the Registration Statement and the Prospectus.
Based upon our examination of the foregoing items, subject to the
assumptions, exceptions, limitations and qualifications set forth therein, we
are of opinion that the Company qualified as a REIT under the Internal Revenue
Code of 1986, as amended (the "Code") for the taxable years ended December 31,
1997 and December 31, 1998, the Company is organized and its manner of operation
is in conformity with the requirements for qualification and taxation as a REIT
as of the date of the Registration Statement and Prospectus Supplement and that
the Company's proposed manner of operation and diversity of equity ownership
will enable the Company to continue to satisfy the requirements for
qualification as a REIT for the calendar year
<PAGE> 3
U.S. Restaurant Properties, Inc.
July 6, 1999
Page 3
1999 and subsequent taxable years if the Company operates in accordance with the
methods of operation described in the Registration Statement and the Prospectus
Supplement, including the representations in the Tax Representation Letter
concerning the Company's intended method of operation.
In addition to the assumptions set forth above, this opinion is subject
to the following exceptions, limitations and qualifications:
1. Our opinions expressed herein are based upon interpretation
of the current provisions of the Code and existing judicial decisions,
administrative regulations and published rulings and procedures. Our
opinions only represent our best judgment and are not binding upon the
Internal Revenue Service or courts and there is no assurance that the
Internal Revenue Service will not successfully challenge the
conclusions set forth herein. The Internal Revenue Service has not yet
issued regulations or administrative interpretations with respect to
various provisions of the Code relating to REIT qualification.
Consequently, no assurance can be given that future legislative,
judicial or administrative changes, on either a prospective or
retroactive basis, would not adversely affect the accuracy of the
conclusions stated herein. We undertake no obligation to advise you of
changes in law which may occur after the date hereof.
2. Our opinions are limited to the federal income tax matters
addressed herein, and no other opinions are rendered with respect to
any other matter not specifically set forth in the foregoing opinion.
3. Our opinions are limited in all respects to the federal tax
law of the United States and we express no opinion as to various state,
local or foreign tax consequences.
4. The Company's qualification and taxation as a REIT depend
upon the Company's ability to satisfy (directly and indirectly through
the Operating Partnership), through actual operating results, the
applicable asset composition, source of income, stockholder
diversification, distribution, record keeping and other requirements of
the Code necessary to qualify and be taxed as a REIT.
5. The Company's qualification and taxation as a REIT also
depends upon the Operating Partnership's ability to satisfy, through
actual operating results, source of income and other requirements of
the Code necessary to qualify and be taxed as a partnership.
6. The foregoing opinions are based upon the proposed method
of operation as described in the Registration Statement and Prospectus
and facts stated in the Tax Representation Letter and other documents
described herein. We undertake no obligation
<PAGE> 4
U.S. Restaurant Properties, Inc.
July 6, 1999
Page 4
to review at any time in the future whether the Company or the
Operating Partnership has fulfilled the requirements listed in this
paragraphs 4 and 5 and, consequently, no assurance can be given that
the actual results of the Company's or the Operating Partnership's
operations for any taxable year will satisfy the requirements of the
Code necessary to qualify or be taxed as a REIT or a partnership, as
applicable.
7. In the event any one of the statements, representations,
warranties or assumptions we have relied upon to issue this opinion is
incorrect in a material respect, our opinions might be adversely
affected and may not be relied upon.
This opinion is furnished to you for the purpose of complying with
applicable securities laws. This opinion may not be used or relied upon by any
other person or for any other purpose and may not be circulated, quoted or
otherwise referred to for any purpose without our prior written consent except
that the opinion may be delivered to and relied upon by Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") and Warburg Dillon Read LLC
(together with Merrill Lynch, the "Underwriters") in connection with the
Underwriting Agreement dated July 6, 1999, by and among the Company and the
Underwriters. We hereby consent to the reference to us under the caption
"Federal Income Tax Consequences" and "Legal Matters" in the Registration
Statement, and to the filing of this opinion as an Exhibit to the Registration
Statement, without implying or admitting that we are experts within the meaning
of the Securities Act of 1933, as amended, with respect to any part of the
Registration Statement.
Sincerely,
/s/ Locke Liddell & Sapp LLP
