AGREEMENT AND PLAN OF MERGER


         AGREEMENT  AND  PLAN OF  MERGER,  dated as of  October  14,  1997  (the
"Agreement"),  by and among U.S.  RESTAURANT  PROPERTIES MASTER L.P., a Delaware
limited partnership (the  "Partnership");  U.S. RESTAURANT  PROPERTIES,  INC., a
Maryland  corporation  (the  "Company");  USRP  ACQUISITION,  L.P.,  a  Delaware
partnership  and an  indirectly  wholly-owned  subsidiary  of the  Company  (the
"Acquisition  Subsidiary");  USRP  MANAGING,  INC., a Delaware  corporation  and
wholly-owned  subsidiary to the Company and general  partner of the  Acquisition
Subsidiary  (the  "General  Partner")  and  QSV  PROPERTIES,  INC.,  a  Delaware
corporation and the managing general partner of the Partnership ("QSV").

                                    RECITALS

         WHEREAS,  Boards of Directors of QSV and of the Company have determined
that  it  is  in  the  best  interests  of  the  Partnership  and  the  Company,
respectively,  to effect the merger  provided for herein (the "Merger") upon the
terms and subject to the conditions set forth herein;

         WHEREAS,  the Company will have  ownership  rights in the assets of the
Partnership pursuant to this Agreement, and in accordance therewith, the Company
has caused to be formed and  organized the General  Partner and the  Acquisition
Subsidiary; and

         WHEREAS,  all partnership and corporate action,  as applicable,  on the
part  of the  parties  hereto  necessary  to  authorize  the  execution  of this
Agreement has been duly taken.

         NOW,  THEREFORE,  in  consideration  of  the  foregoing  premises,  the
representations, warranties, covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:

1.       THE MERGER; EFFECTIVE TIME

         1.1 The Merger.  Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.2 hereof), in order to effect the
Merger, the Acquisition Subsidiary shall be merged with and into the Partnership
and the separate existence of the Acquisition  Subsidiary shall thereupon cease.
The  Partnership  shall  be  the  surviving  entity  in  the  Merger  (sometimes
hereinafter referred to as the "Surviving Entity"),  the General Partner will be
substituted as managing general partner of the Partnership and, as a result, the
Partnership  shall become an indirectly  wholly-owned  subsidiary of the Company
and shall  continue  to be governed  by the laws of the State of  Delaware.  The
separate  existence  of  the  Partnership  with  all  its  rights,   privileges,
immunities,  powers and franchises shall continue  unaffected by the Merger. The
Merger shall be pursuant to the provisions of and shall have the effect provided
in the Delaware Revised Uniform Limited  Partnership Act (the "Delaware RULPA").

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         1.2  Effective  Time.   Provided  that  this  Agreement  has  not  been
terminated or abandoned  pursuant to Section 9 hereof, on the first business day
following the date on which the last to be fulfilled or waived of the conditions
set forth in Section 8 hereof  shall be  fulfilled  or waived,  or on such later
date as the  Partnership and the Company may agree, a certificate of merger (the
"Certificate of Merger") with respect to the  transactions  contemplated  hereby
shall be  executed,  acknowledged  and filed with the  Secretary of State of the
State of  Delaware as  provided  in Section  211 of the  Delaware  RULPA and the
Merger  provided for herein shall become  effective at 11:59 p.m. on the date of
such  filing or such other time and date as is set forth in the  Certificate  of
Merger (the "Effective Time").

2.       PARTNERSHIP AGREEMENT OF THE SURVIVING ENTITY

         The partnership agreement of the Partnership in effect at the Effective
Time shall be the  partnership  agreement of the  Surviving  Entity,  until duly
amended in accordance with the terms thereof and the Delaware RULPA.

3.       EFFECT OF THE MERGER ON PARTNERSHIP INTERESTS

         3.1 Effect on Partnership  Interests.  At the Effective Time, by virtue
of the  Merger  and  without  any  action  on the  part  of  the  holder  of any
partnership interest in the Partnership or the Acquiring Subsidiary:

                  (a)  Each  unit   representing   an   assignment   of  limited
         partnership  interest  in the  Partnership  (the  "Units")  issued  and
         outstanding  immediately  prior to the Effective  Time (an aggregate of
         8,354,354  Units) shall be exchanged for and converted into one validly
         issued,  fully paid and nonassessable  share of common stock, par value
         $.01 per share, of the Company (the "Common Stock") (or an aggregate of
         8,354,354  shares).  Each certificate  representing any such Units (the
         "Certificates")  outstanding  immediately  prior to the Effective  Date
         shall   thereafter   represent  the  right  to  receive  a  certificate
         representing  a like number of shares of Common Stock.  All Units shall
         no longer be outstanding  and shall be cancelled and returned and shall
         cease to exist;

                  (b) QSV's 1%  Percentage  Interest,  as  defined  in the Third
         Amended  and  Restated   Agreement  of  Limited   Partnership   of  the
         Partnership  dated as of June 27, 1997 (the  "Partnership  Agreement"),
         shall be exchanged for and converted into 84,388 shares of Common Stock
         and the right to receive a certificate representing such Common Stock.

                  (c) At the Effective Time, the options (the "Options") granted
         to QSV as of March 24, 1995 that remain  unexercised and outstanding as
         of the Effective Time shall remain outstanding  following the Effective
         Time. At the Effective Time, the Options shall, by virtue of the Merger
         and without any further  action on the part of QSV or the  Partnership,
         be assumed by the Company and shall be exercisable  upon the same terms
         and conditions as under the agreement establishing the Options,  except
         that each such Option shall be  exercisable  for shares of Common Stock
         in like  amount to the  number of Units  for  which  the  Options  were
         exercisable immediately prior to the Effective Time.

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         3.2      Exchange of Units for Company Shares.

                  (a) Exchange  Agent.  As of the  Effective  Time,  the Company
         shall  deposit  with  American  Stock  Transfer  & Trust  Company  (the
         "Exchange Agent"), for the benefit of holders of Units ("Unitholders"),
         for  exchange  in   accordance   with  this  Section  3,   certificates
         representing  the  shares of  Common  Stock to be  issued  pursuant  to
         Section 3.1 in exchange for outstanding Units.

                  (b) Exchange  Procedures.  Promptly after the Effective  Time,
         the  Surviving  Entity shall cause the  Exchange  Agent to mail to each
         Unitholder of record (i) a letter of  transmittal,  which shall specify
         that  delivery  shall be  effected,  and risk of loss and  title to the
         Certificates  shall pass, only upon delivery of the Certificates to the
         Exchange Agent, in such form and including such other provisions as the
         Company may  specify and (ii)  instructions  for use in  effecting  the
         surrender of the Certificates in exchange for certificates representing
         Company Shares. Upon surrender of a Certificate for cancellation to the
         Exchange Agent together with such letter of transmittal, duly executed,
         the holder of such Certificate shall be entitled to receive in exchange
         therefor a certificate  representing a number of shares of Common Stock
         equal  to the  number  of Units  represented  by the  Certificate,  the
         Certificate,  and the  Certificate  so surrendered  shall  forthwith be
         cancelled.  Declared but unpaid  distributions on Units and partnership
         interests  outstanding  as of the  applicable  record date shall be the
         obligation  of the Company and the  Company  hereby  agrees to pay such
         distributions  on the payment date specified in the  resolutions of QSV
         authorizing such distributions.  No interest will be paid or accrued on
         unpaid  distributions,  if any, payable to holders of Certificates.  In
         the event of a transfer of ownership  of Units which is not  registered
         in the transfer records of the Partnership,  a certificate representing
         the  proper  number  of  shares  of  Common  Stock may be issued to the
         transferee if the Certificate  representing  such Units is presented to
         the Exchange Agent,  accompanied by all documents  required to evidence
         and effect such transfer and to evidence that any  applicable  transfer
         taxes have been paid. If any  certificate for shares of Common Stock is
         to be  issued  in a name  other  than  that in  which  the  Certificate
         surrendered in exchange therefor is registered, it shall be a condition
         to such exchange that the person  requesting  such exchange (i) pay any
         transfer  or  other  taxes  required  by  reason  of  the  exchange  of
         certificates of shares of Common Stock in a name other than that of the
         registered  holder of the Certificate  surrendered or (ii) establish to
         the  satisfaction  of the Company that such taxes have been paid or are
         not applicable.

                  (c)  Transfers.  After the Effective  Time,  there shall be no
         transfers on the transfer  books of the  Partnership of the Units which
         were outstanding immediately prior to the Effective Time. If, after the
         Effective Time, Certificates are presented to the Company for transfer,
         they  shall be  cancelled  and  exchanged  for the  number of shares of
         Common Stock  deliverable in respect thereof pursuant to this Agreement
         in accordance with the procedures set forth in this Section 3.

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                  (d) No Liability. In the event any Certificate shall have been
         lost, stolen or destroyed, upon the making of an affidavit of that fact
         by the person claiming such Certificate to be lost, stolen or destroyed
         and, if required by the  Company,  the posting by such person of a bond
         in such amount as the Company may direct as indemnity against any claim
         that may be made  against  it with  respect  to such  Certificate,  the
         Exchange  Agent  will  issue in  exchange  for  such  lost,  stolen  or
         destroyed Certificate,  a certificate representing the shares of Common
         Stock deliverable in respect thereof pursuant to this Agreement.

4.       EFFECT OF MERGER ON PARTNERSHIP INTERESTS IN ACQUIRING SUBSIDIARY
         OUTSTANDING PRIOR TO THE EFFECTIVE TIME

         At the  Effective  Time,  by  virtue  of the  Merger,  all  partnership
interests in the Acquiring Subsidiary outstanding immediately prior thereto (all
of which,  immediately prior to the Effective time, shall have been owned by the
Company and the General Partner shall continue to be outstanding as interests in
the Partnership.

5.       REPRESENTATIONS AND WARRANTIES

         5.1 Representations and Warranties of the Company,  the General Partner
and the  Acquisition  Subsidiary.  The  Company,  the  General  Partner  and the
Acquisition  Subsidiary  hereby  represent  and  warrant to the  Partnership  as
follows:

                  (a) The Company and the General Partner are  corporations  and
         the  Acquisition  Subsidiary  is a  partnership  duly  formed,  validly
         existing and in good standing under the applicable laws of its state of
         organization.

                  (b) All action on the part of the Company, the General Partner
         and the Acquisition Subsidiary and their respective officers, trustees,
         directors,  stockholders and partners, as applicable, necessary for the
         authorization,   execution   and  delivery  of  this   Agreement,   the
         performance of all obligations of the Company,  the General Partner and
         the Acquisition  Subsidiary  hereunder and, in the case of the Company,
         the authorization,  issuance and delivery of the shares of Common Stock
         has been taken or will be taken prior to the Effective  Date,  and this
         Agreement  constitutes the valid and legally binding obligation of each
         of the Company,  the General  Partner and the  Acquisition  Subsidiary,
         enforceable  against it in  accordance  with its  terms,  except (i) as
         enforceability  may be limited by  applicable  bankruptcy,  insolvency,
         reorganization,  moratorium  and  other  laws  of  general  application
         affecting  enforcement  of  creditor's  rights  generally  and  (ii) as
         enforceability  may be limited by laws relating to the  availability of
         specific performance, injunctive relief or other equitable remedies.

                  (c)  Neither  the  Company,   the  General   Partner  nor  the
         Acquisition  Subsidiary  is  in  violation  of  or  default  under  any
         provisions of its articles or certificate of  incorporation,  bylaws or
         partnership agreement, as applicable,  or of any instrument,  judgment,
         order,  writ, decree or contract to which, it is a party or by which it
         is bound or, in any material  respect,  of any provision of any federal
         or state statute,  rule or regulation  applicable to it. The execution,
         delivery and performance of this Agreement and the  consummation of the

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         transactions  contemplated hereby will not result in any such violation
         or be in conflict  with or  constitute,  with or without the passage of
         time  or the  giving  of  notice,  either  a  default  under  any  such
         provision,  instrument, judgment, order, writ, decree or contract or an
         event which results in the creation of any lien,  charge or encumbrance
         upon any assets of the Company,  the General Partner or the Acquisition
         Subsidiary.

         5.2 Representations and Warranties of the Partnership.  The Partnership
hereby represents and warrants to the Company as follows:

                  (a) The  Partnership  is a limited  partnership  duly  formed,
         validly  existing and in good  standing  under the laws of the State of
         Delaware.

                  (b) All action on the part of the Partnership and its partners
         necessary  for  the  authorization,  execution  and  delivery  of  this
         Agreement and the  performance of all  obligations  of the  Partnership
         hereunder  has been taken or,  subject to  obtaining  the  approval  of
         Unitholders  holding a majority of the outstanding Units, will be taken
         prior to the Effective  Date, and this Agreement  constitutes the valid
         and legally binding obligation of the Partnership,  enforceable against
         it in accordance with its terms,  except (i) as  enforceability  may be
         limited   by   applicable   bankruptcy,   insolvency,   reorganization,
         moratorium and other laws of general application  affecting enforcement
         of  creditor's  rights  generally  and  (ii) as  enforceability  may be
         limited by laws relating to the  availability of specific  performance,
         injunctive relief or other equitable remedies.

                  (c) The Partnership is not in violation of or in default under
         any  provision  of the  Partnership  Agreement  or of  any  instrument,
         judgment,  order, writ, decree or contract to which it is a party or by
         which it is bound or, in any material respect,  of any provision of any
         Federal  or  state  statute,  rule  or  regulation  applicable  to  the
         Partnership. The execution,  delivery and performance of this Agreement
         and the consummation of the transactions  contemplated  hereby will not
         result in any such violation or be in conflict with or constitute, with
         or  without  the  passage  of time or the  giving of  notice,  either a
         default under any such provision,  instrument,  judgment,  order, writ,
         decree or  contract or an event  which  results in the  creation of any
         lien, charge or encumbrance upon any of the assets of the Partnership.

6.       COVENANTS

         6.1 Stock Exchange  Listing.  The Company shall use its best efforts to
obtain an approval to list on the New York Stock  Exchange,  Inc.  ("NYSE")  the
Common Stock to be issued in the Merger, subject to official notice of issuance,
prior to the Effective Time.

         6.2 Unitholder Approval.  The Partnership shall use its best efforts to
obtain the approval of this Agreement by  Unitholders  holding a majority of the
outstanding Units.


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         6.3  Indemnification.  Form and after the Effective  Time,  the Company
agrees that it will  indemnify and hold harmless,  and advance  expenses to, QSV
and, as applicable,  each officer, director, partner or other person controlling
the QSV,  and any  affiliate  of it,  against any costs or  expenses  (including
reasonable  attorneys'  fees),  judgment,  fines,  losses,  claims,  damages  or
liabilities incurred in connection with any claim,  action, suit,  proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to the transactions  contemplated hereby,  whether asserted
or claimed  prior to, at or after the  Effective  Time,  to the  fullest  extent
permitted  by law. In addition,  the Company  hereby  assumes the  Partnership's
indemnity   obligations   under  the  Partnership   Agreement  with  respect  to
liabilities to the foregoing  individuals and entities arising out of actions or
omissions occurring prior to the Effective Time.

7.       CONDITIONS

         7.1  Conditions to the  Partnership's  Obligation to Effect the Merger.
The  obligation  of the  Partnership  to  consummate  the  Merger is  subject to
satisfaction of each of the following conditions:

                  (a)  This   Agreement   shall  have  been  duly   approved  by
         Unitholders holding a majority of the Units outstanding as of April 30,
         1997 (the "Record  Date") in  accordance  with  applicable  law and the
         Partnership Agreement;

                  (b) No statute,  rule or regulation shall have been enacted or
         promulgated by any governmental authority, nor shall there be any order
         or   injunction  of  a  United  States  or  state  court  of  competent
         jurisdiction  in effect,  which  prohibits  the  exchange  of Units for
         shares of Common Stock or the consummation of the Merger;

                  (c) The Partnership  shall have received an opinion of counsel
         to the effect that the Merger will be treated as part of a  transaction
         described  in Section  351 of the  Internal  Revenue  Code of 1986,  as
         amended (the "Code");

                  (d) The  Partnership  shall have  received a favorable  letter
         ruling from the Internal  Revenue Service as to treatment of the Merger
         as part of a transaction described in Section 351 of the Code;

                  (e) The shares of Common  Stock  issuable  to the  Unitholders
         pursuant to this Agreement  shall have been approved for listing on the
         NYSE upon official notice of issuance; and

                  (f) Amendments to the Partnership  Agreement to permit,  among
         other things,  the withdrawal of QSV as managing general partner of the
         Partnership,  shall have been duly  approved by  Unitholders  holding a
         majority of the Units  outstanding  as of the Record Date in accordance
         with applicable law and the Partnership Agreement, and a certificate of
         amendment effecting such amendments shall have been duly filed with the
         Secretary of State of the State of Delaware.

         7.2  Conditions to the Company's  Obligation to Effect the Merger.  The
obligation of the Company to consummate the Merger is subject to satisfaction of
the following conditions:

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<PAGE>


                  (a) No statute,  rule or regulation shall have been enacted or
         promulgated by any governmental authority, nor shall there be any order
         or   injunction  of  a  United  States  or  state  court  of  competent
         jurisdiction  in effect,  which prohibits the exchange of the Units for
         Common Stock or consummation of the Merger; and

                  (b) The contribution of the management  compensation rights of
         QSV under the terms of the  Partnership  Agreement and the  partnership
         agreement of the Operating  Partnership  to the  Operating  Partnership
         shall have been effected.

8.       TERMINATION

         8.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective  Time,  before or
after approval by the Unitholders,  by mutual written consent of the Company and
the Partnership.

         8.2 Effect of Termination and Abandonment.  In the event of termination
of this Agreement and  abandonment of the Merger  pursuant to this Section 8, no
party  hereto (or any of its  directors,  trustees,  officers  or  partners,  or
persons  otherwise  controlling or affiliated  with any of the parties hereto or
any of their  directors,  officers  or  partners)  shall have any  liability  or
further obligation to any other party to this Agreement.

9.       MISCELLANEOUS AND GENERAL

         9.1 Modification or Amendment.  Subject to the applicable provisions of
the Maryland  General  Corporation Law and the Delaware RULPA, at any time prior
to the Effective  Time, the parties hereto may modify or amend this Agreement by
mutual written consent.

         9.2  Counterparts.  For the  convenience  of the parties  hereto,  this
Agreement may be executed in any number of  counterparts,  each such counterpart
being  deemed to be an  original  instrument,  and all such  counterparts  shall
together constitute the same Agreement.

         9.3      Governing  Law. This  Agreement  shall be governed by and 
construed in accordance  with the laws of the State of Delaware.

         9.4 No Third Party  Beneficiaries.  Except as provided in Section  6.3,
this  Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.

         9.5  Captions.  The  section  and  paragraph  captions  herein  are for
convenience  of reference  only, do not  constitute  part of this  Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.

         9.6 No Liability. No trustee, beneficiary or stockholder of the Company
shall have any personal  liability for any obligations of the Company under this
Agreement.

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<PAGE>


         IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as of the date first hereinabove written.


                                          U.S. RESTAURANT PROPERTIES, INC.
                                          By:   /s/  Fred H. Margolin
                                             ---------------------------------
                                                 Fred H. Margolin
                                                 Chairman of the Board


                                           USRP MANAGING, INC.
                                           By:  /s/ Fred H. Margolin
                                              --------------------------------
                                                 Fred H. Margolin
                                                 Chairman of the Board


                                           USRP ACQUISITION, L.P.

                                           By:  USRP Managing Inc., the General
                                                Partner


                                           By:   /s/ Fred H. Margolin
                                              --------------------------------
                                                  Fred H. Margolin
                                                  Chairman of the Board


                                           U.S. RESTAURANT PROPERTIES
                                           MASTER L.P.

                                           By:  QSV Properties, Inc.,
                                                the Managing General Partner

                                           By:  /s/ Robert J. Stetson
                                              --------------------------------
                                                 Robert J. Stetson
                                                 President and Chief Executive
                                                 Officer