**Exhibit 4.05**

 

 

NEITHER THISSECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEENREGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIESCOMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDERTHE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLEEXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATESECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TOSUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THECOMPANY.  THIS SECURITY AND THESECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTIONWITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES

 

**STOCKPURCHASE WARRANT**

 

 

To Purchase 103,226 Shares of Common Stock of

 

**U.S.Restaurant Properties, Inc.**

 

THIS STOCK PURCHASE WARRANT CERTIFIES that, for valuereceived, The Riverview Group, LLC (the “Holder”), is entitled, upon theterms and subject to the limitations on exercise and the conditions hereinafterset forth, at any time on or after June 19, 2003 (the “Initial Exercise Date”)and on or prior to the close of business on the seventh anniversary of theInitial Exercise Date (the “Termination Date”) but not thereafter, tosubscribe for and purchase from U.S. Restaurant Properties, Inc., a corporationincorporated in the State of Maryland (the “Company”), up to 103,226shares (the “Warrant Shares”) of Common Stock, par value $0.001 pershare, of the Company (the “Common Stock”).  The purchase price of one share of Common Stock (the “ExercisePrice”) under this Warrant shall be **$16.50**, subject to adjustmenthereunder.  The Exercise Price and thenumber of Warrant Shares for which the Warrant is exercisable shall be subjectto adjustment as provided herein. **Capitalized terms used and not otherwise definedherein shall have the meanings set forth (or incorporated by reference) in thatcertain Securities Purchase Agreement (the “Purchase Agreement”), datedJune 12, 2003, between the Company and the investors signatory thereto.**

 

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# 1.     Title to Warrant.  Prior to the Termination Date and subject tocompliance with applicable laws and Section 7 of this Warrant, this Warrant andall rights hereunder are transferable, in whole or in part, at the office oragency of the Company by the Holder in person or by duly authorized attorney,upon surrender of this Warrant together with the Assignment Form annexed heretoproperly endorsed.  The transferee shallsign an investment letter in form and substance reasonably satisfactory to theCompany.

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# 2.     Authorization of Shares.  The Company covenants that all WarrantShares which may be issued upon the exercise of the purchase rights representedby this Warrant will, upon exercise of the purchase rights represented by thisWarrant, be duly authorized, validly issued, fully paid and nonassessable andfree from all taxes, liens and charges in respect of the issue thereof (otherthan taxes in respect of any transfer occurring contemporaneously with suchissue or liens created or permitted to exist by the Holder).

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# 3.     Exercise of Warrant.

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(a)  Except as provided in Section 4 herein,exercise of the purchase rights represented by this Warrant may be made at anytime or times on or after the Initial Exercise Date and on or before theTermination Date by the surrender of this Warrant and the Notice of ExerciseForm annexed hereto duly executed, at the office of the Company (or such otheroffice or agency of the Company as it may designate by notice in writing to theregistered Holder at the address of such Holder appearing on the books of theCompany) and upon payment of the Exercise Price of the shares thereby purchasedby wire transfer or cashier’s check drawn on a United States bank or by meansof a cashless exercise pursuant to Section 3(d), the Holder shall be entitledto receive a certificate for the number of Warrant Shares so purchased.  Certificates for shares purchased hereundershall be delivered to the Holder within three (3) Trading Days after the dateon which this Warrant shall have been exercised as aforesaid. This Warrantshall be deemed to have been exercised and such certificate or certificatesshall be deemed to have been issued, and the Holder or any other person sodesignated to be named therein shall be deemed to have become a holder ofrecord of such shares for all purposes, as of the close of business on the datethe Warrant has been exercised by delivery of the Notice of Exercise Form andpayment to the Company of the Exercise Price and all taxes required to be paidby the Holder, if any, pursuant to Section 5 prior to the issuance of suchshares, have been paid.  If the Companyfails to deliver to the Holder a certificate or certificates representing theWarrant Shares pursuant to this Section 3(a) by the third Trading Day after thedate of exercise, then the Holder will have the right to rescind suchexercise.  In addition to any otherrights available to the Holder, if the Company fails to deliver to the Holder acertificate or certificates representing the Warrant Shares pursuant to anexercise by the third Trading Day after the date of exercise, and if after suchthird Trading Day the Holder is required by its broker to purchase (in an openmarket transaction or otherwise) shares of Common Stock to deliver insatisfaction of a sale by the Holder of the Warrant Shares which the Holderanticipated receiving upon such exercise (a “Buy-In”), then the Companyshall (1) pay in cash to the Holder the amount by which (x) the Holder’s totalpurchase price (including brokerage commissions, if any) for the shares ofCommon

 

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Stock so purchasedexceeds (y) the amount obtained by multiplying (A) the number of Warrant Sharesthat the Company was required to deliver to the Holder in connection with theexercise at issue times (B) the price at which the sell order giving rise tosuch purchase obligation was executed, and (2) at the option of the Holder,either reinstate the portion of the Warrant and equivalent number of WarrantShares for which such exercise was not honored or deliver to the Holder thenumber of shares of Common Stock that would have been issued had the Companytimely complied with its exercise and delivery obligations hereunder; provided,however, that if the Holder exercises its option to have the relevantportion of the Warrant reinstated, it shall deliver to the Company anycertificate representing such Warrant Shares if such certificate is ultimatelydelivered to the Holder.  For example,if the Holder purchases Common Stock having a total purchase price of $11,000to cover a Buy-In with respect to an attempted exercise of shares of CommonStock with an aggregate sale price giving rise to such purchase obligation of$10,000, under clause (1) of the immediately preceding sentence the Companyshall be required to pay the Holder $1,000. The Holder shall provide theCompany written notice indicating the amounts payable to the Holder in respectof the Buy-In, together with applicable confirmations and other evidencereasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remediesavailable to it hereunder, at law or in equity including, without limitation, adecree of specific performance and/or injunctive relief with respect to theCompany’s failure to timely deliver certificates representing shares of CommonStock upon exercise of the Warrant as required pursuant to the terms hereof.

 

## (b)   If thisWarrant shall have been exercised in part, the Company shall, at the time ofdelivery of the certificate or certificates representing Warrant Shares,deliver to Holder a new Warrant evidencing the rights of Holder to purchase theunpurchased Warrant Shares called for by this Warrant, which new Warrant shallin all other respects be identical with this Warrant.

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## (c)   Notwithstandinganything herein to the contrary, in no event shall the Holder be permitted toexercise this Warrant for Warrant Shares to the extent that (i) the number ofshares of Common Stock beneficially owned by such Holder, together with anyaffiliate thereof (other than Warrant Shares issuable upon exercise of thisWarrant) plus (ii) the number of Warrant Shares issuable upon exercise of thisWarrant, would be equal to or exceed 4.9999% of the number of shares of CommonStock then issued and outstanding**,** including shares issuable upon exerciseof this Warrant held by such Holder after application of thisSection 3(c).  As used herein,beneficial ownership shall be determined in accordance with Section 13(d) ofthe Exchange Act and the rules promulgated thereunder.  To the extent that the limitation containedin this Section 3(c) applies, the determination of whether this Warrant isexercisable (in relation to other securities owned by the Holder) and of whicha portion of this Warrant is exercisable shall be in the sole discretion ofsuch Holder, and the submission of a Notice of Exercise shall be deemed to besuch Holder’s determination of whether this Warrant is exercisable (in relationto other securities owned by such Holder) and of which portion of this Warrantis exercisable, in each case subject to such aggregate percentage limitation,and the Company shall have no obligation to verify or confirm the accuracy ofsuch determination.  Nothing containedherein shall be deemed to restrict the right of a Holder

 

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to exercise thisWarrant into Warrant Shares at such time as such exercise will not violate theprovisions of this Section 3(c). The provisions of this Section 3(c) may bewaived by the Holder upon, at the election of the Holder, not less than 61days’ prior notice to the Company, and the provisions of this Section 3(c)shall continue to apply until such 61st day (or such later date, as determinedby the Holder, as may be specified in such notice of waiver).  No exercise of this Warrant in violation ofthis Section 3(c) but otherwise in accordance with this Warrant shall affectthe status of the Warrant Shares as validly issued, fully-paid andnonassessable.

 

# (d) If at any time after one year from the date ofissuance of this Warrant there is no effective Registration Statementregistering the resale of the Warrant Shares by the Holder, this Warrant mayalso be exercised at such time by means of a “cashless exercise” in which theHolder shall be entitled to receive a certificate for the number of WarrantShares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

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(A) = the VWAP on the Trading Day preceding the dateof such election;

 

(B) =  theExercise Price of the Warrants, as adjusted; and

 

(X) = the number of Warrant Shares issuable uponexercise of the Warrants in accordance with the terms of this Warrant.

 

# 4.     No Fractional Shares or Scrip.  No fractional shares or scrip representingfractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holderwould otherwise be entitled to purchase upon such exercise, the Company shallpay a cash adjustment in respect of such final fraction in an amount equal tosuch fraction multiplied by the Exercise Price.

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# 5.     Charges, Taxes and Expenses.  Issuance of certificates for Warrant Sharesshall be made without charge to the Holder for any issue or transfer tax orother incidental expense in respect of the issuance of such certificate, all ofwhich taxes and expenses shall be paid by the Company, and such certificatesshall be issued in the name of the Holder or in such name or names as may bedirected by the Holder; provided, however, that in the eventcertificates for Warrant Shares are to be issued in a name other than the nameof the Holder, this Warrant when surrendered for exercise shall be accompaniedby the Assignment Form attached hereto duly executed by the Holder; and theCompany may require, as a condition thereto, the payment of a sum sufficient toreimburse it for any transfer tax incidental thereto.

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# 6.     Closing of Books.  The Company will not close its stockholderbooks or records in any manner which prevents the timely exercise of thisWarrant, pursuant to the terms hereof.

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# 7.     Transfer, Division and Combination.

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## (a)   Subject tocompliance with any applicable securities laws and the conditions set forth inSections 1 and 7(e) hereof and to the provisions of Section 4.1 of the PurchaseAgreement, this Warrant and all rights hereunder are transferable, in whole

 

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## or in part, upon surrender of this Warrant at the principal office ofthe Company, together with the written Assignment Form of this Warrantsubstantially in the form attached hereto duly executed by the Holder or itsagent or attorney and funds sufficient to pay any transfer taxes payable uponthe making of such transfer.  Upon suchsurrender and, if required, such payment, the Company shall execute and delivera new Warrant or Warrants in the name of the assignee or assignees and in thedenomination or denominations specified in such instrument of assignment, andshall issue to the assignor a new Warrant evidencing the portion of thisWarrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may beexercised by a new holder for the purchase of Warrant Shares without having a newWarrant issued.

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## (b)   ThisWarrant may be divided or combined with other Warrants upon presentation hereofat the aforesaid office of the Company, together with a written noticespecifying the names and denominations in which new Warrants are to be issued,signed by the Holder or its agent or attorney. Subject to compliance with Section 7(a), as to any transfer which may beinvolved in such division or combination, the Company shall execute and delivera new Warrant or Warrants in exchange for the Warrant or Warrants to be dividedor combined in accordance with such notice.

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## (c)   The Companyshall prepare, issue and deliver at its own expense (other than transfer taxes)the new Warrant or Warrants under this Section 7.

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## (d)   The Companyagrees to maintain, at its aforesaid office, books for the registration and theregistration of transfer of the Warrants.

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## (e)   If, at thetime of the surrender of this Warrant in connection with any transfer of thisWarrant, the transfer of this Warrant shall not be registered pursuant to aneffective registration statement under the Securities Act and under applicablestate securities or blue sky laws, the Company may require, as a condition ofallowing such transfer (i) that the Holder or transferee of this Warrant, asthe case may be, furnish to the Company a written opinion of counsel (whichopinion shall be in form, substance and scope customary for opinions of counselin comparable transactions) to the effect that such transfer may be madewithout registration under the Securities Act and under applicable state securitiesor blue sky laws, (ii) that the holder or transferee execute and deliver to theCompany an investment letter in form and substance acceptable to the Companyand (iii) that the transferee be an “accredited investor” as defined in Rule501(a) promulgated under the Securities Act.

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# 8.     No Rights as Shareholder until Exercise.  This Warrant does not entitle the Holder toany voting rights or other rights as a shareholder of the Company prior to theexercise hereof.  Upon the surrender ofthis Warrant and the payment of the aggregate Exercise Price (or by means of acashless exercise), the Warrant Shares so purchased shall be and be deemed tobe issued to such Holder as the record owner of such shares as of the close ofbusiness on the later of the date of such surrender or payment.

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# 9.     Loss, Theft, Destruction or Mutilationof Warrant.  The Company covenantsthat upon receipt by the Company of evidence reasonably satisfactory to it ofthe loss, theft,

 

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destruction or mutilation of this Warrant or any stock certificaterelating to the Warrant Shares, and in case of loss, theft or destruction, ofindemnity or security reasonably satisfactory to it (which, in the case of theWarrant, shall not include the posting of any bond), and upon surrender andcancellation of such Warrant or stock certificate, if mutilated, the Companywill make and deliver a new Warrant or stock certificate of like tenor anddated as of such cancellation, in lieu of such Warrant or stock certificate.

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# 10.   Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the takingof any action or the expiration of any right required or granted herein shallbe a Saturday, Sunday or a legal holiday, then such action may be taken or suchright may be exercised on the next succeeding day not a Saturday, Sunday orlegal holiday.

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# 11.   Adjustments of Exercise Price and Numberof Warrant Shares.

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## (a)   StockSplits, etc. The number and kind of securities purchasable upon theexercise of this Warrant and the Exercise Price shall be subject to adjustmentfrom time to time upon the happening of any of the following.  In case the Company shall (i) pay a dividendin shares of Common Stock or make a distribution in shares of Common Stock toholders of its outstanding Common Stock, (ii) subdivide its outstanding sharesof Common Stock into a greater number of shares, (iii) combine its outstandingshares of Common Stock into a smaller number of shares of Common Stock, or (iv)issue any shares of its capital stock in a reclassification of the CommonStock, then the number of Warrant Shares purchasable upon exercise of thisWarrant at the opening of business on the day following the date fixed for thedetermination of stockholders entitled to receive such dividend or distributionor at the opening of business on the day following the day on which suchsubdivision, combination or reclassification becomes effective, as the case maybe, shall be adjusted so that the Holder shall be entitled to receive the numberof shares of Common Stock (or fraction of a share of Common Stock) or suchother shares of capital stock that such Holder would have owned or have beenentitled to receive after the happening of any of the events described abovehad this Warrant been exercised immediately prior to the record date in thecase of a dividend or distribution or the effective date in the case of asubdivision, combination or reclassification. Any adjustment made pursuant to this Section shall become effectiveimmediately after the record date for the determination of stockholdersentitled to receive such dividend or distribution and shall become effectiveimmediately after the effective date in the case of a subdivision, combinationor reclassification.

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## (b)   Anti-DilutionProvisions.   During the ExercisePeriod, the Exercise Price and the number of Warrant Shares issuable hereunderand for which this Warrant is then exercisable pursuant to Section 1 hereofshall be subject to adjustment from time to time as provided in this Section11(b).

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(i)    Adjustment of Exercise Price.  Except as set forth in Section 11(b)(ii)(E),if and whenever the Company issues or sells, or in accordance with Section11(b) hereof is deemed to have issued or sold, any shares of Common Stock foran effective consideration per share of less than **[87%]** of the then ExercisePrice or for no consideration (such lower price, the “Base Share Price”

 

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and such issuances collectively, a “DilutiveIssuance”), then, the Exercise Price shall be reduced to equal **[115%](1)**(reduced by any market premium included in the Base Share Price)  the Base Share Price, provided, thatfor purposes hereof, all shares of Common Stock that are issuable uponconversion, exercise or exchange of Capital Share Equivalents shall be deemedoutstanding immediately after the issuance of such Common Stock.  Such adjustment shall be made whenever suchshares of Common Stock or Capital Share Equivalents are issued.

 

(ii)           Effecton Exercise Price of Certain Events. For purposes of determining the adjusted Exercise Price under Section11(b) hereof, the following will be applicable:

 

(A)          Issuanceof Rights or Options.  If theCompany in any manner issues or grants any warrants, rights or options, whetheror not immediately exercisable, to subscribe for or to purchase Common Stock orother securities exercisable, convertible into or exchangeable for Common Stock(“Convertible Securities”) (such warrants, rights and options topurchase Common Stock or Convertible Securities are hereinafter referred to as“Options”) and the effective price per share for which Common Stock isissuable upon the exercise of such Options is less than the Exercise Price (“BelowBase Price Options”), then the maximum total number of shares of CommonStock issuable upon the exercise of all such Below Base Price Options (assumingfull exercise, conversion or exchange of Convertible Securities, if applicable)will, as of the date of the issuance or grant of such Below Base Price Options,be deemed to be outstanding and to have been issued and sold by the Company forsuch price per share and the maximum consideration payable to the Company uponsuch exercise (assuming full exercise, conversion or exchange of ConvertibleSecurities, if applicable) will be deemed to have been received by theCompany.  For purposes of the precedingsentence, the “effective price per share for which Common Stock is issuableupon the exercise of such Below Base Price Options” is determined by dividing (i)the total amount, if any, received or receivable by the Company asconsideration for the issuance or granting of all such Below Base PriceOptions, plus the minimum aggregate amount of additional consideration, if any,payable to the Company upon the exercise of all such Below Base Price Options,plus, in the case of Convertible Securities issuable upon the exercise of suchBelow Base Price Options, the minimum aggregate amount of additionalconsideration payable upon the exercise, conversion or exchange thereof at thetime such Convertible Securities first become exercisable, convertible orexchangeable, by (ii) the maximum total number of shares of Common Stockissuable upon the exercise of all such Below Base Price Options (assuming fullconversion of Convertible Securities, if applicable).  No further adjustment to the Exercise Price will be made upon theactual issuance of such Common Stock upon the

 

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(1)           Subject to changedepending on market price at time of issuance. Determined as premium to market.

 

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exercise of such Below Base Price Options or upon theexercise, conversion or exchange of Convertible Securities issuable uponexercise of such Below Base Price Options.

 

(B)           Issuanceof Convertible Securities. If the Company in any manner issues or sells anyConvertible Securities, whether or not immediately convertible (other thanwhere the same are issuable upon the exercise of Options) and the effectiveprice per share for which Common Stock is issuable upon such exercise,conversion or exchange is less than the Exercise Price, then the maximum totalnumber of shares of Common Stock issuable upon the exercise, conversion orexchange of all such Convertible Securities will, as of the date of the issuanceof such Convertible Securities, be deemed to be outstanding and to have beenissued and sold by the Company for such price per share and the maximumconsideration payable to the Company upon such exercise (assuming fullexercise, conversion or exchange of Convertible Securities, if applicable) willbe deemed to have been received by the Company.  For the purposes of the preceding sentence, the “effective priceper share for which Common Stock is issuable upon such exercise, conversion orexchange” is determined by dividing (i) the total amount, if any, receivedor receivable by the Company as consideration for the issuance or sale of allsuch Convertible Securities, plus the minimum aggregate amount of additionalconsideration, if any, payable to the Company upon the exercise, conversion orexchange thereof at the time such Convertible Securities first becomeexercisable, convertible or exchangeable, by (ii) the maximum total number ofshares of Common Stock issuable upon the exercise, conversion or exchange ofall such Convertible Securities.  Nofurther adjustment to the Exercise Price will be made upon the actual issuanceof such Common Stock upon exercise, conversion or exchange of such ConvertibleSecurities.

 

(C)           Changein Option Price or Conversion Rate. If there is a change at any time in (i) the amount of additionalconsideration payable to the Company upon the exercise of any Options; (ii) theamount of additional consideration, if any, payable to the Company upon theexercise, conversion or exchange of any Convertible Securities; or (iii) therate at which any Convertible Securities are convertible into or exchangeablefor Common Stock (in each such case, other than under or by reason ofprovisions designed to protect against dilution), the Exercise Price in effectat the time of such change will be readjusted to the Exercise Price which wouldhave been in effect at such time had such Options or Convertible Securitiesstill outstanding provided for such changed additional consideration or changedconversion rate, as the case may be, at the time initially granted, issued orsold.

 

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(D)          Calculationof Consideration Received.  If anyCommon Stock, Options or Convertible Securities are issued, granted or sold forcash, the consideration received therefor for purposes of this Warrant will bethe amount received by the Company therefor, before deduction of reasonablecommissions, underwriting discounts or allowances or other reasonable expensespaid or incurred by the Company in connection with such issuance, grant orsale.  In case any Common Stock, Optionsor Convertible Securities are issued or sold for a consideration part or all ofwhich shall be other than cash, the amount of the consideration other than cashreceived by the Company will be the fair market value of such consideration,except where such consideration consists of securities, in which case theamount of consideration received by the Company will be the fair market value(closing bid price, if traded on any market) thereof as of the date ofreceipt.  In case any Common Stock,Options or Convertible Securities are issued in connection with any merger orconsolidation in which the Company is the surviving corporation, the amount ofconsideration therefor will be deemed to be the fair market value of suchportion of the net assets and business of the non-surviving corporation as isattributable to such Common Stock, Options or Convertible Securities, as thecase may be.  The fair market value ofany consideration other than cash or securities will be determined in goodfaith by an investment banker or other appropriate expert of nationalreputation selected by the Company and reasonably acceptable to the holderhereof, with the costs of such appraisal to be borne by the Company.

 

(E)           Exceptionsto Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will be made under thisSection 11(b) in respect of (1) the granting of options to employees, officersand directors of the Company pursuant to any stock option plan duly adopted bya majority of the non-employee members of the Board of Directors of the Companyor a majority of the members of a committee of non-employee directorsestablished for such purpose, (2) upon the exercise of the Preferred Stock orof any other series or security issued by the Company in connection with theoffer and sale of this Company’s securities pursuant to the Purchase Agreement,or (3) upon the exercise of or conversion of any convertible securities,options or warrants issued and outstanding on the Original Issue Date, providedthat the securities have not been amended since the date of the PurchaseAgreement, or (4) acquisitions or strategic investments, the primary purpose ofwhich is not to raise capital.

 

(iii)          Minimum Adjustment of ExercisePrice.  In the event that anyadjustment of the Exercise Price as required herein results in a fraction of acent, such Exercise Price shall be rounded up or down to the nearest cent.  No adjustment of the Exercise Price shall bemade in an amount of less than 1% of the Exercise Price in effect at the timesuch adjustment is otherwise required to be

 

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made, but any such lesser adjustment shall be carriedforward and shall be made at the time and together with the next subsequentadjustment which, together with any adjustments so carried forward, shallamount to not less than 1% of such Exercise Price.

 

# 12.   Reorganization, Reclassification, Merger,Consolidation or Disposition of Assets. In case the Company shall reorganize its capital, reclassify its capitalstock, consolidate or merge with or into another corporation (where the Companyis not the surviving corporation or where there is a change in or distributionwith respect to the Common Stock of the Company), or sell, transfer orotherwise dispose of all or substantially all its property, assets or businessto another corporation and, pursuant to the terms of such reorganization,reclassification, merger, consolidation or disposition of assets, shares ofcommon stock of the successor or acquiring corporation, or any cash, shares ofstock or other securities or property of any nature whatsoever (includingwarrants or other subscription or purchase rights) in addition to or in lieu ofcommon stock of the successor or acquiring corporation (“Other Property”),are to be received by or distributed to the holders of Common Stock of theCompany, then the Holder shall have the right thereafter to receive, at the optionof the Holder, (a) upon exercise of this Warrant, the number of shares ofCommon Stock of the successor or acquiring corporation or of the Company, if itis the surviving corporation, and Other Property receivable upon or as a resultof such reorganization, reclassification, merger, consolidation or dispositionof assets by a Holder of the number of shares of Common Stock for which thisWarrant is exercisable immediately prior to such event, or (b) cash equal tothe value of this Warrant as determined in accordance with the Black-Sholesoption pricing formula.  In case of anysuch reorganization, reclassification, merger, consolidation or disposition ofassets, the successor or acquiring corporation (if other than the Company)shall expressly assume the due and punctual observance and performance of eachand every covenant and condition of this Warrant to be performed and observedby the Company and all the obligations and liabilities hereunder, subject tosuch modifications as may be deemed appropriate (as determined in good faith byresolution of the Board of Directors of the Company) in order to provide foradjustments of Warrant Shares for which this Warrant is exercisable which shallbe as nearly equivalent as practicable to the adjustments provided for in thisSection 12.  For purposes of thisSection 12, “common stock of the successor or acquiring corporation” shallinclude stock of such corporation of any class which is not preferred as todividends or assets over any other class of stock of such corporation and whichis not subject to redemption and shall also include any evidences ofindebtedness, shares of stock or other securities which are convertible into orexchangeable for any such stock, either immediately or upon the arrival of aspecified date or the happening of a specified event and any warrants or otherrights to subscribe for or purchase any such stock.  The foregoing provisions of this Section 12 shall similarly applyto successive reorganizations, reclassifications, mergers, consolidations ordisposition of assets.

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# 13.   Voluntary Adjustment by the Company.  The Company may at any time during the termof this Warrant reduce the then current Exercise Price to any amount and forany period of time deemed appropriate by the Board of Directors of the Company.

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# 14.   Notice of Adjustment.  Whenever the number of Warrant Shares ornumber or kind of securities or other property purchasable upon the exercise ofthis Warrant or the Exercise Price is adjusted, as herein provided, the Companyshall give notice thereof to the Holder, which

 

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notice shall state the number of Warrant Shares (and other securitiesor property) purchasable upon the exercise of this Warrant and the ExercisePrice of such Warrant Shares (and other securities or property) after suchadjustment, setting forth a brief statement of the facts requiring suchadjustment and setting forth the computation by which such adjustment was made.

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# 15.   Notice of Corporate Action.  If at any time:

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(a)           theCompany shall take a record of the holders of its Common Stock for the purposeof entitling them to receive a dividend or other distribution, or any right tosubscribe for or purchase any evidences of its indebtedness, any shares ofstock of any class or any other securities or property (other than cash), or toreceive any other right, or

 

(b)           thereshall be any capital reorganization of the Company, any reclassification orrecapitalization of the capital stock of the Company or any consolidation ormerger of the Company with, or any sale, transfer or other disposition of allor substantially all the property, assets or business of the Company to,another corporation or,

 

(c)           thereshall be a voluntary or involuntary dissolution, liquidation or winding up ofthe Company;

 

then, in any oneor more of such cases, subject to the requirements of SEC Regulation FD, theCompany shall give to Holder, if in compliance with Regulation FD and ifpossible, (i) at least 20 days’ prior written notice of the date on which arecord date shall be selected for such dividend, distribution or right or fordetermining rights to vote in respect of any such reorganization,reclassification, merger, consolidation, sale, transfer, disposition,liquidation or winding up, and (ii) in the case of any suchreorganization, reclassification, merger, consolidation, sale, transfer,disposition, dissolution, liquidation or winding up, at least 20 days’ priorwritten notice of the date when the same shall take place.  Such notice in accordance with the foregoingclause also shall specify (i) the date on which any such record is to be takenfor the purpose of such dividend, distribution or right, the date on which theholders of Common Stock shall be entitled to any such dividend, distribution orright, and the amount and character thereof, and (ii) the date on which anysuch reorganization, reclassification, merger, consolidation, sale, transfer,disposition, dissolution, liquidation or winding up is to take place and thetime, if any such time is to be fixed, as of which the holders of Common Stockshall be entitled to exchange their Warrant Shares for securities or otherproperty deliverable upon such disposition, dissolution, liquidation or windingup.  Each such written notice shall besufficiently given if addressed to Holder at the last address of Holderappearing on the books of the Company and delivered in accordance with Section17(d).

 

# 16.   Authorized Shares.  The Company covenants that during the periodthe Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of theWarrant Shares upon the exercise of any purchase rights under thisWarrant.  The Company further covenantsthat its issuance of this Warrant shall constitute full authority to itsofficers who are charged with the duty of executing stock certificates toexecute and issue the necessary certificates for the Warrant Shares

 

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upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonableaction as may be necessary to assure that such Warrant Shares may be issued asprovided herein without violation of any applicable law or regulation, or ofany requirements of the Principal Market upon which the Common Stock may belisted.

#  

Except and to the extent as waived or consented to bythe Holder, the Company shall not by any action, including, without limitation,amending its articles of incorporation or through any reorganization, transferof assets, consolidation, merger, dissolution, issue or sale of securities orany other voluntary action, avoid or seek to avoid the observance orperformance of any of the terms of this Warrant, but will at all times in goodfaith assist in the carrying out of all such terms and in the taking of allsuch actions as may be necessary or appropriate to protect the rights of Holderas set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Companywill (a) not increase the par value of any Warrant Shares above the amountpayable therefor upon such exercise immediately prior to such increase in parvalue, (b) take all such action as may be necessary or appropriate in order thatthe Company may validly and legally issue fully paid and nonassessable WarrantShares upon the exercise of this Warrant, and (c) use commercially reasonableefforts to obtain all such authorizations, exemptions or consents from anypublic regulatory body having jurisdiction thereof as may be necessary toenable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in anadjustment in the number of Warrant Shares for which this Warrant isexercisable or in the Exercise Price, the Company shall obtain all suchauthorizations or exemptions thereof, or consents thereto, as may be necessaryfrom any public regulatory body or bodies having jurisdiction thereof.

 

# 17.   Miscellaneous.

#  

## (a)   Jurisdiction.  This Warrant shall constitute a contractunder the laws of Maryland, without regard to its conflict of law, principlesor rules.

##  

## (b)   Restrictions.  The Holder acknowledges that the WarrantShares acquired upon the exercise of this Warrant, if not registered, will haverestrictions upon resale imposed by state and federal securities laws.

##  

## (c)   Nonwaiverand Expenses.  No course of dealingor any delay or failure to exercise any right hereunder on the part of Holdershall operate as a waiver of such right or otherwise prejudice Holder’s rights,powers or remedies, notwithstanding all rights hereunder terminate on theTermination Date.  If the Companywillfully and knowingly fails to comply with any provision of this Warrant, whichresults in any material damages to the Holder, the Company shall pay to Holdersuch amounts as shall be sufficient to cover any costs and expenses including,but not limited to, reasonable attorneys’ fees, including those of appellateproceedings, incurred by Holder in collecting any amounts due pursuant heretoor in otherwise enforcing any of its rights, powers or remedies hereunder.

 

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## (d)   Notices.  Any notice, request or other documentrequired or permitted to be given or delivered to the Holder by the Companyshall be delivered in accordance with the notice provisions of the PurchaseAgreement.

##  

## (e)   Limitationof Liability.  No provision hereof,in the absence of any affirmative action by Holder to exercise this Warrant orpurchase Warrant Shares, and no enumeration herein of the rights or privilegesof Holder, shall give rise to any liability of Holder for the purchase price ofany Common Stock or as a stockholder of the Company, whether such liability isasserted by the Company or by creditors of the Company.

##  

## (f)    Remedies.  Holder, in addition to being entitled toexercise all rights granted by law, including recovery of damages, will beentitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damageswould not be adequate compensation for any loss incurred by reason of a breachby it of the provisions of this Warrant and hereby agrees to waive the defensein any action for specific performance that a remedy at law would be adequate.

##  

## (g)   Successorsand Assigns.  Subject to applicablesecurities laws, this Warrant and the rights and obligations evidenced herebyshall inure to the benefit of and be binding upon the successors of the Companyand the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefitof all Holders from time to time of this Warrant and shall be enforceable byany such Holder or holder of Warrant Shares.

##  

## (h)   Amendment.  This Warrant may be modified or amended orthe provisions hereof waived with the written consent of the Company and theHolder.

##  

## (i)    Severability.  Wherever possible, each provision of thisWarrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by orinvalid under applicable law, such provision shall be ineffective to the extentof such prohibition or invalidity, without invalidating the remainder of suchprovisions or the remaining provisions of this Warrant.

##  

## (j)    Headings.  The headings used in this Warrant are forthe convenience of reference only and shall not, for any purpose, be deemed apart of this Warrant.

##  

********************

 

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IN WITNESS WHEREOF, theCompany has caused this Warrant to be executed by its officer thereunto dulyauthorized.

 

 

Dated:  June    , 2003

 
|   | **U.S. RESTAURANT PROPERTIES, INC.** |   |
|--------|--------------------------------------|--------|
|   |                                 |
|   |                                 |
|   | By:                                  |   |   |
|   |                                 | Name:  |
|   |                                 | Title: |
|        |                                      |        |  |  |

 

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**NOTICEOF EXERCISE**

 

To:       U.S.Restaurant Properties, Inc.

 

(1)   The undersigned hereby elects to purchase               Warrant Shares of U.S. Restaurant Properties, Inc. pursuant to the terms of theattached Warrant (only if exercised in full), and tenders herewith payment of theexercise price in full, together with all applicable transfer taxes, if any.

 

(2)   Payment shall take the form of (checkapplicable box):

 

oin lawful money of the United States; or

 

othe cancellation of such number of Warrant Shares as is necessary, inaccordance with the formula set forth in subsection 3(d), to exercise thisWarrant with respect to the maximum number of Warrant Shares purchasablepursuant to the cashless exercise procedure set forth in subsection 3(d).

 

(3)   Please issue a certificate or certificatesrepresenting said Warrant Shares in the name of the undersigned or in suchother name as is specified below:

 

 

 

The Warrant Shares shall be delivered to the following:

 

 

 

 

 

(4)  Accredited Investor.  The undersigned is an “accredited investor”as defined in Regulation D promulgated under the Securities Act of 1933, asamended.

 
|   |   | [PURCHASER] |
|--------|--------|-------------|
|   |   |        |   |
|   |   |        |   |
|   |   | By:         |   |   |
|   |   |        | Name: |
|   |   |        | Title: |
|   |   |        |
|   |   | Dated:      |   |   |
|        |        |             |  |  |  |  |

 

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**ASSIGNMENTFORM**

 

(To assign the foregoing warrant, executethis form and supply required information. Do not use this form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, theforegoing Warrant and all rights evidenced thereby are hereby assigned to

 

 
|                                                                                                                               whose address is                                                                                                                                                                                                        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                 . |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | Dated:                   ,           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Holder’s Signature: |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Holder’s Address: |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |
| Signature Guaranteed:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |  |  |  |  |  |  |

 

 

NOTE:  The signature to this Assignment Form mustcorrespond with the name as it appears on the face of the Warrant, without alterationor enlargement or any change whatsoever, and must be guaranteed by a bank ortrust company.  Officers of corporationsand those acting in a fiduciary or other representative capacity should fileproper evidence of authority to assign the foregoing Warrant.

 

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