UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): June 4, 2007 (May 29, 2007)
HOSPITALITY PROPERTIES TRUST
(Exact Name of Registrant as Specified in Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
1-11527 |
|
04-3262075 |
(Commission File Number) |
|
(IRS Employer Identification No.) |
400 Centre Street, Newton, Massachusetts |
|
02458 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
617-964-8389
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
In this Current Report on Form 8-K, and unless the context otherwise requires, the terms we, our and us refer to Hospitality Properties Trust and its consolidated subsidiaries; and the term TA refers to TravelCenters of America LLC and its consolidated subsidiaries.
Item 1.01. Entry into a Material Definitive Agreement.
Item 2.01. Completion of Acquisition or Disposition of Assets.
Item 8.01. Other Items.
A. The Petro Transactions
On May 30, 2007 we acquired Petro Stopping Centers Holdings, L.P., or Petro Holdings, pursuant to a Purchase Agreement, dated May 30, 2007, among us, Petro Holdings, and the partners of Petro Holdings, or the Purchase Agreement. The Purchase Agreement required us to pay approximately $630,000,000 for Petro Holdings. We also agreed to pay certain costs of this transaction associated with defeasance and prepayment of debt secured by certain of the Petro properties plus customary closing costs. We estimate that these costs may be approximately $25,000,000. The purchase price was funded with borrowings under our revolving credit facility, as further described in Item 2.03 below. As a result of the acquisition, Petro Holdings is now our wholly owned subsidiary.
In a separate transaction, on May 30, 2007 , TA acquired Petro Stopping Centers L.P., or Petro, pursuant to a purchase agreement dated May 30, 2007, among TA, Petro, Petro Holdings and the partners of Petro Holdings. Petro is now a wholly owned subsidiary of TA.
A copy of the Purchase Agreement is filed as an exhibit to this Current Report on Form 8-K . If you want more information about the Purchase Agreement, you should read the entire Purchase Agreement. You should note, however, that the Purchase Agreement is not intended as a document for investors to obtain factual information about Petro Holdings, Petro, us or any other party. For that information you should refer to the information contained in this Current Report on Form 8-K or other filings we make under the Securities Exchange Act of 1934, as amended. Representations or statements of facts in the Purchase Agreement may be qualified by schedules or materiality modifiers. Representations or statements of facts contained in the Purchase Agreement are not, and should not be construed as, representations by us to any investor or potential investor.
2
B. The Petro Business
Petro operates and franchises 69 travel centers geographically diversified in 33 states primarily along the U.S. interstate highway system. Petros customers include long haul trucking fleets and their drivers, independent truck drivers and motorists.
The average Petro facility offers fuel and non-fuel products and services and contains:
· over 25 acres of land with parking for over 250 tractor trailers and 140 cars;
· a 190 seat full service restaurant;
· a truck repair facility and parts store;
· multiple diesel and gasoline fueling points; and
· a travel and convenience store, game room, lounge and other amenities for professional truck drivers and motorists.
Following is a list of 40 Petro travel centers we acquired and leased to TA.
Location of Properties |
|
Number of Travel
|
|
Alabama |
|
1 |
|
Arizona |
|
2 |
|
Arkansas |
|
2 |
|
California |
|
1 |
|
Florida |
|
1 |
|
Georgia |
|
2 |
|
Illinois |
|
1 |
|
Indiana |
|
1 |
|
Kentucky |
|
1 |
|
Louisiana |
|
3 |
|
Missouri |
|
1 |
|
Nebraska |
|
1 |
|
Nevada |
|
2 |
|
New Jersey |
|
1 |
|
New Mexico |
|
1 |
|
New York |
|
1 |
|
North Carolina |
|
1 |
|
Ohio |
|
4 |
|
Oklahoma |
|
1 |
|
Oregon |
|
1 |
|
Pennsylvania |
|
1 |
|
Tennessee |
|
2 |
|
Texas |
|
6 |
|
Washington |
|
1 |
|
Wyoming |
|
1 |
|
|
|
|
|
Total |
|
40 |
|
3
C. Our Petro Lease with TA
Lease
Our lease agreement with TA for 40 Petro travel centers became effective on May 30, 2007. The tenant under the lease is Petro, and TravelCenters of America LLC has guaranteed Petros lease obligations. The following is a summary of material terms of this lease.
Minimum Rent. The lease requires TA to pay minimum annual rent of $62,225,000. Minimum rent may increase if we fund or reimburse the cost of renovations, improvements and equipment related to the leased travel centers as described below.
Percentage Rent . Starting in 2013, the lease requires TA to pay us additional rent with respect to each lease year in an amount equal to three percent (3%) of increases in non-fuel gross revenues and three tenths of one percent (0.3%) of increases in gross fuel revenues at each Petro leased travel center over 2012 amounts. Percentage rent attributable to fuel sales is subject to a maximum each year generally calculated by reference to changes in the consumer price index.
Operating Costs . The lease is a triple net lease, which requires TA to pay all costs incurred in the operation of the leased travel centers, including utilities, insurance, real estate and personal property taxes and certain ground lease payments, if any.
Maintenance and Alterations. TA is required to maintain, at its sole expense, the Petro leased travel centers in good order and repair, including structural and non-structural components, except for certain capital expenditures for which we decline to provide required funds following a request from TA. TA may request that we fund amounts for renovations, improvements and equipment at the Petro leased travel centers, in return for minimum annual rent increases according to a formula; generally, the amount we fund times the greater of (i) 8.5% or (ii) a benchmark U.S. Treasury interest rate plus 3.5%.
Term. The term of the Petro lease expires on June 30, 2024, subject to extension by TA for up to two additional periods of fifteen years each generally on all of the prior terms and conditions.
D. Supplemental Federal Income Tax Considerations
The following summary supplements and updates the more detailed description of the federal income tax considerations contained in the section of our Annual Report on Form 10-K for the year ended December 31, 2006, or our Annual Report, captioned Federal Income Tax Considerations. Subject to the qualifications and assumptions contained in its opinion, Sullivan & Worcester LLP, Boston, Massachusetts, has rendered a legal opinion that the discussion in our Annual Report captioned Federal Income Tax Considerations, as supplemented by this section, is accurate in all material respects and fairly summarizes the federal income tax considerations discussed therein and in this section, and the opinions of counsel referred to therein and in this section represent Sullivan & Worcester LLPs opinions on those subjects.
We have received opinions from our counsel Sullivan & Worcester LLP that (i) our underground storage tanks should constitute real estate assets, rather than personal property, for purposes of the various real estate investment trust, or REIT, qualification tests described in our Annual Report, and (ii) with respect to each of our leases with TA, although the matter is not free from doubt, for purposes of applying the 15% incidental personal property test described in our Annual Report, regarding rent attributable to incidental personal property leased in connection with real property, the test will be applied in the aggregate to all the travel center sites leased under each such lease on a lease by lease basis, rather than on a site by site basis. If the Internal Revenue Service or a court determines that one or both of these opinions is incorrect, then a portion of the rental income we receive from TA could be nonqualifying income for purposes of the 75% and 95% gross income tests, possibly jeopardizing our compliance with the 95% gross income test, all as described in our Annual Report. Under those circumstances, however, we expect we would qualify for the gross income tests relief provision described in our Annual Report, and thereby preserve our qualification as a REIT. If the relief provision were to apply to us, we would be subject to tax at a 100% rate on the amount by which we failed the 95% gross income test, with
4
adjustments, multiplied by a fraction intended to reflect our profitability for the taxable year; however, in a typical taxable year, we have little or no nonqualifying income from other sources and thus would expect to owe little tax in such circumstances.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
We borrowed approximately $655,000,000 on May 29, 2007 and May 30, 2007 under our $750,000,000 revolving credit facility with a group of institutional lenders. The maturity date of our revolving credit facility is October 24, 2010. The annual interest rate payable for drawn amounts under the facility is LIBOR plus 55 basis points, subject to adjustments based on changes in our credit ratings (5.87% per annum at June 1, 2007). Borrowings under our revolving credit facility are unsecured. Funds may be drawn, repaid and redrawn at any time until maturity, and no principal repayment is due until maturity.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS CURRENT REPORT ON FORM 8-K CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. ALSO, WHENEVER WE USE WORDS SUCH AS BELIEVE, EXPECT, ANTICIPATE, INTEND, PLAN, ESTIMATE OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.
THESE FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING OUR INTENT, BELIEF OR EXPECTATION, OR THE INTENT, BELIEF OR EXPECTATION OF OUR TRUSTEES AND OFFICERS, SUCH AS WITH RESPECT TO OUR EXPECTATION THAT WE WILL RECEIVE CERTAIN MINIMUM RENT FROM OUR PETRO LEASE WITH TA. TA MAY BECOME UNABLE TO PAY ITS CONTRACTUAL RENT OBLIGATIONS BECAUSE THE LEASED PROPERTIES DO NOT PRODUCE THE EXPECTED INCOME OR FOR OTHER REASONS.
THESE UNEXPECTED RESULTS COULD OCCUR FOR MANY DIFFERENT REASONS, SOME OF WHICH, SUCH AS NATURAL DISASTERS, TERRORIST ATTACKS OR CHANGES IN OUR MANAGERS OR TENANTS COSTS OR REVENUES OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE BEYOND OUR CONTROL.
OTHER RISKS MAY ADVERSELY IMPACT US, AS DESCRIBED MORE FULLY IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2006 UNDER ITEM 1A. RISK FACTORS.
FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
5
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
Summary Financial Information of TravelCenters of America LLC
The following table presents summary audited financial information for TravelCenters of America, Inc., or TravelCenters, the predecessor of TA, for its fiscal years ended December 31, 2006, 2005 and 2004, as reported in TAs Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and summary unaudited financial information for TA for the two months ended March 31, 2007 and TravelCenters for the month ended January 31, 2007, as reported in TAs Quarterly Report on Form 10-Q for the three months ended March 31, 2007. On September 15, 2006, we agreed to acquire TravelCenters, as more fully described in our Current Report on Form 8-K filed with the Securities and Exchange Commission, or SEC, on December 12, 2006. On January 31, 2007, we completed our acquisition of TravelCenters. Upon completion of the acquisition, we restructured the business of TravelCenters and distributed all of the common shares of our former subsidiary, TA, to our shareholders in a spin off transaction. Our acquisition, related restructuring and spin off of TA caused the assets, liabilities, financial position, results of operations and cash flows of TA to be materially different than those of its predecessor, TravelCenters. As noted above, TA has guaranteed Petros lease obligations under its triple net lease with us.
Summary Financial Information of TravelCenters of America LLC
and
TravelCenters of America, Inc.
(in thousands)
|
|
TA |
|
TravelCenters |
|
|||||||||||
|
|
As of or for
|
|
For the
|
|
As of or for the year ended December 31, |
|
|||||||||
|
|
2007 |
|
2007 |
|
2006 |
|
2005 |
|
2004 |
|
|||||
Total revenues |
|
$ |
736,670 |
|
$ |
352,682 |
|
$ |
4,783,514 |
|
$ |
4,075,296 |
|
$ |
2,677,864 |
|
Net (loss) income |
|
(11,029 |
) |
(22,048 |
) |
31,033 |
|
(2,095 |
) |
14,862 |
|
|||||
Total assets |
|
688,604 |
|
|
|
995,592 |
|
939,704 |
|
897,729 |
|
|||||
Total long term debt (net of unamortized discount) |
|
|
|
|
|
688,734 |
|
675,638 |
|
682,892 |
|
|||||
Total stockholders equity |
|
322,214 |
|
|
|
89,277 |
|
47,307 |
|
39,717 |
|
|||||
References in this report to the Annual Report on Form 10-K and Quarterly Report on Form 10-Q for TA are included as textual references only, and the information in such reports is not incorporated by reference into this report.
(b) Pro Forma Financial Information
INDEX TO FINANCIAL STATEMENTS
6
(d) Exhibits.
The following exhibits are filed herewith:
Exhibit No. |
|
Description |
|
|
|
2.1 |
|
Purchase Agreement, dated May 30, 2007, among Hospitality Properties Trust, Petro Stopping Centers Holdings, L.P. and the partners of Petro Stopping Centers Holdings, L.P. |
|
|
|
8.1 |
|
Opinion of Sullivan & Worcester LLP as to tax matters. |
|
|
|
10.1 |
|
Lease Agreement, dated as of May 30, 2007, by and among HPT PSC Properties Trust and HPT Properties PSC Properties LLC, as Landlord, and Petro Stopping Centers, L.P., as Tenant |
|
|
|
10.2 |
|
Guaranty Agreement, dated as of May 30, 2007, made by TravelCenters of America LLC, as Guarantor, for the benefit of the Landlord under the Lease Agreement |
|
|
|
23.1 |
|
Consent of Sullivan & Worcester LLP (contained in Exhibit 8.1) |
7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
HOSPITALITY PROPERTIES TRUST |
||
|
|
||
|
|
||
|
By: |
/s/ Mark L. Kleifges |
|
|
|
Mark L. Kleifges |
|
|
|
Treasurer and Chief Financial Officer |
|
|
|
|
|
|
|
|
Dated: June 4, 2007
8
Introduction to Unaudited Pro Forma Consolidated Financial Statements
(dollars in thousands)
On September 15, 2006, Hospitality Properties Trust (hereinafter referred to as HPT, we, our or us), agreed to acquire TravelCenters of America, Inc., or TravelCenters, as more fully described in our Current Report on Form 8-K filed with the Securities and Exchange Commission, or SEC, on December 12, 2006, or the TravelCenters Current Report. On January 31, 2007, we completed our acquisition of TravelCenters. Upon completion of the acquisition, we restructured the business of TravelCenters and distributed all of the common shares of our former subsidiary, TravelCenters of America LLC, or TA, to our shareholders in a spin off transaction. The book value of this distribution was $337,250. The acquisition of TravelCenters, the restructuring of the TravelCenters business and the spin off transaction are collectively referred to herein as the TA Transactions.
As a part of the restructuring of TravelCenters which occurred in connection with the TA Transactions, on January 31, 2007:
· TravelCenters became a subsidiary of our subsidiary, TA;
· certain real property interests of 146 travel centers that were operated by TravelCenters and all trademarks, tradenames and certain other assets used in connection with the travel center business with an estimated total value of $1,697,221 were transferred to subsidiaries of ours that were not owned by TA;
· TA became the owner of all of the working capital of TravelCenters, including current assets (primarily consisting of cash, receivables and inventory) and current liabilities (primarily consisting of trade payables and accrued liabilities);
· we contributed cash of $121,166 to TA so that the sum of its current assets, net of current liabilities, was $200,000;
· TA became the owner of one travel center in Ontario, Canada, the operator of two travel centers leased from owners other than us, the manager of one travel center for an owner other than us, the franchisor of 13 travel centers owned and operated by third parties and the owner of certain other assets historically owned and used by TravelCenters;
· we entered into a lease of the 146 travel centers we acquired and certain related assets to TA; and
· TA commenced operating the travel center business formerly conducted by TravelCenters.
On May 30, 2007, we acquired 40 travel centers located in 25 states, or the Petro Centers, for $630,000 plus closing costs. As more thoroughly described in this Current Report on Form 8-K, simultaneously with this acquisition, the Petro Centers were leased to TA for an initial rent of approximately $62,225 per annum.
The unaudited pro forma consolidated balance sheet as of March 31, 2007, presents our financial position as if the acquisition of the Petro Centers had been completed as of March 31, 2007.
The unaudited pro forma consolidated statements of income for the year ended December 31, 2006 and March 31, 2007, present our results of operations as if (i) our December 2006 offering of common shares and related January 2007 overallotment exercise; (ii) our February 2007 offering of common shares and related overallotment exercise; (iii) our February 2007 offering of preferred shares and related overallotment exercise; (iv) our March 2007 offering of convertible notes and related overallotment exercise; (v) our March 2007 offering of senior notes, all as more fully described in the notes appearing below, (vi) the acquisition of TravelCenters, the restructuring of the TravelCenters business and the spin off of TA, (vii) the acquisition of the Petro Centers, (viii) the financing of the
F- 1
Hospitality Properties Trust
Introduction to Unaudited Pro Forma Consolidated Financial Statements
(dollars in thousands)
Petro Centers with borrowings under our revolving credit facility, and (ix) the commencement of the leases with TA for the aggregate 186 travel centers all had been completed as of January 1, 2006.
These unaudited pro forma consolidated financial statements are based in part upon our historical financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2006, and our Quarterly Report on Form 10-Q for the three months ended March 31, 2007, filed with the SEC and should be read in conjunction with those financial statements and the notes thereto.
The allocation of the purchase price of the Petro Centers as reflected in these unaudited pro forma consolidated financial statements has been based upon preliminary estimates. A final determination of the purchase price allocation will be based upon the report of an independent valuation specialist. Consequently, amounts preliminarily allocated in these pro forma financial statements could change significantly.
The acquisition of the Petro Centers was financed with borrowings under our revolving credit facility as reflected in these unaudited pro forma consolidated financial statements. We anticipate financing the acquisition of the Petro Centers on a long term basis through the issuance of both equity and debt securities. These unaudited pro forma consolidated financial statements are provided for informational purposes only and upon completion of the planned long term financing of the Petro Centers our financial position and results of our operations will be significantly different than what is presented in these unaudited pro forma consolidated financial statements.
In the opinion of management, all adjustments necessary to reflect the effects of the transactions described above have been included in the unaudited pro forma consolidated financial statements. The unaudited pro forma consolidated financial statements are not necessarily indicative of what our actual financial position or results of operations would have been as of the date or for the periods indicated, nor does it represent our financial position or results of operations for any future date or period.
F- 2
Hospitality Properties Trust
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2007
(dollars in thousands)
|
|
Hospitality
|
|
Petro Centers
|
|
|
|
Pro Forma |
|
|||
|
|
A |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|||
Real estate properties, at cost: |
|
|
|
|
|
|
|
|
|
|||
Land |
|
$ |
1,170,301 |
|
$ |
250,439 |
|
B |
|
$ |
1,420,740 |
|
Buildings, improvements and equipment |
|
4,419,896 |
|
404,561 |
|
B |
|
4,824,457 |
|
|||
|
|
5,590,197 |
|
655,000 |
|
|
|
6,245,197 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Accumulated depreciation |
|
(734,169 |
) |
|
|
|
|
(734,169 |
) |
|||
|
|
4,856,028 |
|
655,000 |
|
|
|
5,511,028 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
27,751 |
|
|
|
|
|
27,751 |
|
|||
Restricted cash (FF&E reserve escrow) |
|
32,444 |
|
|
|
|
|
32,444 |
|
|||
Other assets, net |
|
228,957 |
|
|
|
|
|
228,957 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
5,145,180 |
|
$ |
655,000 |
|
|
|
$ |
5,800,180 |
|
|
|
|
|
|
|
|
|
|
|
|||
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|||
Revolving bank credit facility |
|
$ |
16,000 |
|
$ |
655,000 |
|
C |
|
$ |
671,000 |
|
Senior notes, net of discounts |
|
1,495,149 |
|
|
|
|
|
1,495,149 |
|
|||
Convertible notes |
|
575,000 |
|
|
|
|
|
575,000 |
|
|||
Mortgage payable |
|
3,682 |
|
|
|
|
|
3,682 |
|
|||
Security deposits |
|
185,366 |
|
|
|
|
|
185,366 |
|
|||
Accounts payable and other liabilities |
|
126,832 |
|
|
|
|
|
126,832 |
|
|||
Due to affiliate |
|
2,702 |
|
|
|
|
|
2,702 |
|
|||
Dividends payable |
|
4,383 |
|
|
|
|
|
4,383 |
|
|||
Total liabilities |
|
2,409,114 |
|
655,000 |
|
|
|
3,064,114 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Shareholders equity: |
|
|
|
|
|
|
|
|
|
|||
Preferred shares of beneficial interest |
|
390,315 |
|
|
|
|
|
390,315 |
|
|||
Common shares of beneficial interest |
|
939 |
|
|
|
|
|
939 |
|
|||
Additional paid-in capital |
|
3,048,549 |
|
|
|
|
|
3,048,549 |
|
|||
Cumulative net income |
|
1,423,483 |
|
|
|
|
|
1,423,483 |
|
|||
Cumulative preferred distributions |
|
(71,351 |
) |
|
|
|
|
(71,351 |
) |
|||
Cumulative common distributions |
|
(2,055,869 |
) |
|
|
|
|
(2,055,869 |
) |
|||
Total shareholders equity |
|
2,736,066 |
|
|
|
|
|
2,736,066 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
5,145,180 |
|
$ |
655,000 |
|
|
|
$ |
5,800,180 |
|
F- 3
Hospitality
Properties Trust
Unaudited Pro Forma Consolidated Statement of Income
For
the year ended December 31, 2006
(in thousands, except per share data)
|
|
|
|
TravelCenters of America, Inc.
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Hospitality
|
|
TravelCenters
|
|
Merger,
|
|
|
|
Petro
|
|
|
|
Pro Forma |
|
|||||
|
|
A |
|
D |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hotel operating revenues |
|
$ |
879,324 |
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
879,324 |
|
Rental income |
|
137,118 |
|
|
|
170,696 |
|
E |
|
62,225 |
|
L |
|
370,039 |
|
|||||
FF&E reserve income |
|
20,299 |
|
|
|
|
|
|
|
|
|
|
|
20,299 |
|
|||||
TA operating revenues |
|
|
|
4,783,514 |
|
(4,783,514 |
) |
F |
|
|
|
|
|
|
|
|||||
Interest income |
|
2,674 |
|
|
|
|
|
|
|
|
|
|
|
2,674 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues |
|
1,039,415 |
|
4,783,514 |
|
(4,612,818 |
) |
|
|
62,225 |
|
|
|
1,272,336 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hotel operating expenses |
|
618,334 |
|
|
|
|
|
|
|
|
|
|
|
618,334 |
|
|||||
TA operating expenses |
|
|
|
4,539,312 |
|
(4,539,312 |
) |
F |
|
|
|
|
|
|
|
|||||
Interest |
|
81,451 |
|
46,232 |
|
(6,555 |
) |
G |
|
38,983 |
|
M |
|
160,111 |
|
|||||
Depreciation and amortization |
|
144,404 |
|
71,856 |
|
(18,228 |
) |
H |
|
22,172 |
|
N |
|
220,204 |
|
|||||
General and administrative |
|
26,187 |
|
61,347 |
|
(52,851 |
) |
I |
|
3,275 |
|
O |
|
37,958 |
|
|||||
Other, net |
|
|
|
15,457 |
|
(15,457 |
) |
F |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total expenses |
|
870,376 |
|
4,734,204 |
|
(4,632,403 |
) |
|
|
64,430 |
|
|
|
1,036,607 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) before income taxes |
|
169,039 |
|
49,310 |
|
19,585 |
|
|
|
(2,205 |
) |
|
|
235,729 |
|
|||||
Income taxes |
|
|
|
(18,277 |
) |
18,277 |
|
F |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
169,039 |
|
31,033 |
|
37,862 |
|
|
|
(2,205 |
) |
|
|
235,729 |
|
|||||
Preferred distributions |
|
(7,656 |
) |
|
|
(22,225 |
) |
J |
|
|
|
|
|
(29,881 |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) available for common shareholders |
|
$ |
161,383 |
|
$ |
31,033 |
|
$ |
15,637 |
|
|
|
$ |
(2,205 |
) |
|
|
$ |
205,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common shares outstanding |
|
73,279 |
|
|
|
19,221 |
|
K |
|
|
|
|
|
92,500 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic and diluted earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income available for common shareholders |
|
$ |
2.20 |
|
|
|
|
|
|
|
|
|
|
|
$ |
2.23 |
|
F- 4
Hospitality
Properties Trust
Unaudited Pro Forma Consolidated Statement of Income
For
the three months ended March 31, 2007
(in thousands, except per share data)
|
|
|
|
TravelCenters of America, Inc.
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Hospitality
|
|
TravelCenters
|
|
Merger,
|
|
|
|
Petro
|
|
|
|
Pro Forma |
|
|||||
|
|
A |
|
P |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hotel operating revenues |
|
$ |
224,471 |
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
224,471 |
|
Rental income |
|
61,600 |
|
|
|
14,225 |
|
E |
|
15,556 |
|
L |
|
91,381 |
|
|||||
FF&E reserve income |
|
5,439 |
|
|
|
|
|
|
|
|
|
|
|
5,439 |
|
|||||
TA operating revenues |
|
|
|
352,682 |
|
(352,682 |
) |
F |
|
|
|
|
|
|
|
|||||
Interest income |
|
3,148 |
|
|
|
|
|
|
|
|
|
|
|
3,148 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues |
|
294,658 |
|
352,682 |
|
(338,457 |
) |
|
|
15,556 |
|
|
|
324,439 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hotel operating expenses |
|
160,398 |
|
|
|
|
|
|
|
|
|
|
|
160,398 |
|
|||||
TA operating expenses |
|
|
|
334,265 |
|
(334,265 |
) |
F |
|
|
|
|
|
|
|
|||||
Interest |
|
30,655 |
|
4,214 |
|
(3,681 |
) |
G |
|
9,612 |
|
M |
|
40,800 |
|
|||||
Depreciation and amortization |
|
49,071 |
|
5,810 |
|
(3,243 |
) |
H |
|
5,543 |
|
N |
|
57,181 |
|
|||||
General and administrative |
|
8,451 |
|
8,892 |
|
(8,195 |
) |
I |
|
808 |
|
O |
|
9,956 |
|
|||||
TA spin off costs |
|
2,711 |
|
|
|
(2,711 |
) |
Q |
|
|
|
|
|
|
|
|||||
Other, net |
|
|
|
62,019 |
|
(62,019 |
) |
F |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total expenses |
|
251,286 |
|
415,200 |
|
(414,114 |
) |
|
|
15,963 |
|
|
|
268,335 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) before income taxes |
|
43,372 |
|
(62,518 |
) |
75,657 |
|
|
|
(407 |
) |
|
|
56,104 |
|
|||||
Income taxes |
|
|
|
40,470 |
|
(40,470 |
) |
F |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
43,372 |
|
(22,048 |
) |
35,187 |
|
|
|
(407 |
) |
|
|
56,104 |
|
|||||
Preferred distributions |
|
(4,359 |
) |
|
|
(3,110 |
) |
J |
|
|
|
|
|
(7,469 |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) available for common shareholders |
|
$ |
39,013 |
|
$ |
(22,048 |
) |
$ |
32,077 |
|
|
|
$ |
(407 |
) |
|
|
$ |
48,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common shares outstanding |
|
90,760 |
|
|
|
3,077 |
|
K |
|
|
|
|
|
93,837 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic and diluted earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income available for common shareholders |
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
|
|
$ |
0.52 |
|
F- 5
Hospitality
Properties Trust
(dollars in thousands)
A. Represents the historical financial statements of HPT.
B. Represents adjustments to record the acquisition of the 40 Petro Centers for a total cost of $655,000 based upon a preliminary allocation of the purchase price.
C. Represents borrowings on HPTs $750,000 revolving credit facility to fund the $630,000 purchase price of the Petro Centers and the payment of $25,000 of related closing costs. Note that HPT anticipates financing the acquisition of the Petro Centers on a long term basis through the issuance of both equity and debt securities. These unaudited pro forma consolidated financial statements are provided for informational purposes only and, upon completion of the long term financing for the acquisition, the financial position and results of operations of HPT will be significantly different than what is presented in these unaudited pro forma consolidated financial statements.
D. Represents the historical financial statements of TravelCenters for the twelve months ended December 31, 2006.
E. After completion of the spin off HPT began to lease the TravelCenters real estate to TA under the terms of a long term lease as more fully described elsewhere in the TravelCenters Current Report. The terms of the lease require TA to make minimum rent payments that have scheduled increases during the term. The adjustments to rental income are calculated as follows:
|
|
Year Ended
|
|
Three Months Ended
|
|
||
Minimum rent (cash) |
|
$ |
153,500 |
|
$ |
12,792 |
|
Required straight line adjustment |
|
17,196 |
|
1,433 |
|
||
|
|
|
|
|
|
||
|
|
$ |
170,696 |
|
$ |
14,225 |
|
F. Represents elimination of the historical operating results of the TravelCenters business transferred to TA in the spin off.
G. Represents the elimination of TravelCenters historical interest expense and HPTs historical interest expense from borrowings under the bridge acquisition facility used initially to fund the TA Transactions and the recognition of interest expense to reflect the effect of HPTs March 2007 issuance of $575,000 of 3.8% convertible senior notes due 2027 and March 2007 issuance of $300,000 of 5.625% senior notes due 2017. In connection with HPTs acquisition, all of TravelCenters debt was extinguished.
|
|
Year Ended
|
|
Three Months Ended
|
|
||
Elimination of TravelCenters historical interest expense |
|
$ |
(46,232 |
) |
$ |
(4,214 |
) |
Elimination of HPTs historical interest expense |
|
|
|
(6,996 |
) |
||
Addition of interest on HPTs 3.8% convertible senior notes |
|
21,850 |
|
4,061 |
|
||
Addition of interest on HPTs 5.625% senior notes |
|
16,875 |
|
3,328 |
|
||
Addition of amortization of deferred finance fees and discount |
|
952 |
|
140 |
|
||
|
|
|
|
|
|
||
|
|
$ |
(6,555 |
) |
$ |
(3,681 |
) |
F- 6
Hospitality
Properties Trust
Notes to Unaudited Pro Forma Consolidated Financial Statements
(dollars in thousands)
H. Represents the elimination of TravelCenters historical depreciation and amortization expense and the recognition of depreciation and amortization expense of the TravelCenters real estate and intangible assets retained by HPT. Depreciation and amortization expense is calculated on a straight line basis over the estimated useful lives of the buildings, improvements and equipment and intangible assets of 7 to 40 years.
|
|
Year Ended
|
|
Three Months Ended
|
|
||
Elimination of historical depreciation and amortization expense |
|
$ |
(71,856 |
) |
$ |
(5,810 |
) |
Addition of depreciation and amortization expense |
|
53,628 |
|
2,567 |
|
||
|
|
|
|
|
|
||
|
|
$ |
(18,228 |
) |
$ |
(3,243 |
) |
I. Represents the elimination of historical general and administrative expense of the TravelCenters business transferred to TA and the expected increase in HPTs general and administrative expense under its management contract as a result of the acquisition of TravelCenters.
|
|
Year Ended
|
|
Three Months Ended
|
|
||
Elimination of historical general and administrative expense |
|
$ |
(61,347 |
) |
$ |
(8,892 |
) |
Addition of general and administrative expense |
|
8,496 |
|
697 |
|
||
|
|
|
|
|
|
||
|
|
$ |
(52,851 |
) |
$ |
(8,195 |
) |
J. Represents the effect of HPTs issuance of 12,000,000 and 700,000 7% Series C cumulative redeemable preferred shares on February 21, 2007 and February 28, 2007, respectively.
K. Represents the effect of HPTs issuance of 12,000,000, 1,800,000, 5,000,000 and 750,000 common shares on December 18, 2006, January 5, 2007, February 16, 2007 and February 23, 2007, respectively.
L. Simultaneously with the acquisition of the Petro Centers, HPT entered into a long term lease agreement with TA as more fully described in this Current Report on Form 8-K. Under the terms of the lease, TA is initially required to pay HPT rent of $62,225 per annum (or $5,185 per month).
M. Represents the effect on interest expense of HPT borrowing $655,000 under its revolving credit facility to fund the acquisition of the Petro Centers (5.87% per annum at June 1, 2007).
N. Represents the recognition of depreciation and amortization expense of the Petro Centers real estate acquired by HPT. Depreciation and amortization expense is calculated on a straight line basis over the estimated useful lives of the buildings, improvements and equipment of 7 to 40 years.
O. Represents the expected increase in HPTs general and administrative expense under its management contract as a result of the acquisition of the Petro Centers.
P. Represents the historical financial statements of TravelCenters for the period January 1, 2007 to January 31, 2007 (date of acquisition).
Q. Represents elimination of non-recurring costs associated with the spin off of TA.
F- 7
Exhibit 2.1
EXECUTION DRAFT
PURCHASE AGREEMENT
among
Hospitality Properties Trust
and
Petro Stopping Centers Holdings, L.P.
and
the Partners of
Petro Stopping Centers Holdings, L.P.
May 30 , 2007
TABLE OF CONTENTS
|
|
|
|
PAGE |
|
|
|
||
ARTICLE I DEFINITIONS |
|
1 |
||
Section 1.01 |
|
Certain Definitions. |
|
1 |
|
|
|
|
|
ARTICLE II PURCHASE AND SALE |
|
8 |
||
Section 2.01 |
|
Purchase and Sale. |
|
8 |
Section 2.02 |
|
Purchase Price |
|
9 |
Section 2.03 |
|
Escrow Agreement and Escrow Fund. |
|
10 |
Section 2.04 |
|
Tax Withholding. |
|
10 |
|
|
|
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
|
11 |
||
Section 3.01 |
|
Organization; Business of the Company. |
|
11 |
Section 3.02 |
|
Subsidiaries. |
|
12 |
Section 3.03 |
|
Capitalization. |
|
12 |
Section 3.04 |
|
Authorization. |
|
13 |
Section 3.05 |
|
No Violation. |
|
13 |
Section 3.06 |
|
Approvals. |
|
14 |
Section 3.07 |
|
Financial Statements. |
|
14 |
Section 3.08 |
|
Absence of Certain Transactions. |
|
15 |
Section 3.09 |
|
Taxes. |
|
15 |
Section 3.10 |
|
Litigation. |
|
18 |
Section 3.11 |
|
Environmental Matters. |
|
18 |
Section 3.12 |
|
Title to Property. |
|
19 |
Section 3.13 |
|
Personal Property. |
|
19 |
Section 3.14 |
|
Contracts. |
|
20 |
Section 3.15 |
|
Employee and Labor Matters and Plans. |
|
20 |
Section 3.16 |
|
Insurance Policies. |
|
21 |
Section 3.17 |
|
Compliance with Laws. |
|
21 |
Section 3.18 |
|
Brokerage Fees. |
|
21 |
Section 3.19 |
|
Certain Payments. |
|
21 |
Section 3.20 |
|
No Other Representations or Warranties. |
|
22 |
|
|
|
|
|
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS |
|
22 |
||
Section 4.01 |
|
Organization; Business of the Company. |
|
22 |
Section 4.02 |
|
Ownership of Company Interests. |
|
22 |
Section 4.03 |
|
Authorization. |
|
22 |
Section 4.04 |
|
No Violation. |
|
23 |
Section 4.05 |
|
Approvals. |
|
23 |
Section 4.06 |
|
U.S. Person. |
|
23 |
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER |
|
24 |
||
Section 5.01 |
|
Organization. |
|
24 |
Section 5.02 |
|
Authorization. |
|
24 |
Section 5.03 |
|
No Violation. |
|
24 |
Section 5.04 |
|
Approvals. |
|
25 |
Section 5.05 |
|
Litigation. |
|
25 |
Section 5.06 |
|
Available Funds. |
|
25 |
Section 5.07 |
|
Brokerage Fees. |
|
25 |
Section 5.08 |
|
No Other Representations or Warranties. |
|
25 |
|
|
|
|
|
ARTICLE VI COVENANTS |
|
25 |
||
Section 6.01 |
|
Interim Operations of the Company. |
|
25 |
Section 6.02 |
|
Access to Information. |
|
28 |
Section 6.03 |
|
Consents and Approvals. |
|
28 |
Section 6.04 |
|
Publicity. |
|
29 |
Section 6.05 |
|
Notification of Certain Matters. |
|
29 |
Section 6.06 |
|
Directors and Officers Indemnification. |
|
30 |
Section 6.07 |
|
Additional Agreements. |
|
30 |
Section 6.08 |
|
No Solicitation or Negotiation. |
|
30 |
Section 6.09 |
|
Repayment/Repurchase of Outstanding Indebtedness. |
|
31 |
Section 6.10 |
|
No Control of Other Partys Business. |
|
32 |
Section 6.11 |
|
Additional Financial Statements. |
|
32 |
Section 6.12 |
|
Transfers of Assets. |
|
33 |
Section 6.13 |
|
Real Property Matters. |
|
33 |
Section 6.14 |
|
Conduct of Business of Purchaser. |
|
33 |
Section 6.15 |
|
Section 1445 Certifications and IRS Form W-9. |
|
34 |
Section 6.16 |
|
Tax Sharing Agreements. |
|
34 |
|
|
|
|
|
ARTICLE VII CONDITIONS |
|
34 |
||
Section 7.01 |
|
Conditions to the Obligations of All Parties. |
|
34 |
Section 7.02 |
|
Conditions to the Obligations of Purchaser. |
|
34 |
Section 7.03 |
|
Conditions to the Obligations of Sellers. |
|
35 |
|
|
|
|
|
ARTICLE VIII CLOSING; TERMINATION |
|
36 |
||
Section 8.01 |
|
Closing. |
|
36 |
Section 8.02 |
|
Termination. |
|
36 |
Section 8.03 |
|
Effect of Termination. |
|
37 |
|
|
|
|
|
ARTICLE IX INDEMNIFICATION |
|
37 |
||
Section 9.01 |
|
Survival. |
|
37 |
Section 9.02 |
|
Indemnification by a Purchaser. |
|
38 |
Section 9.03 |
|
Indemnification by Sellers. |
|
38 |
Section 9.04 |
|
Exclusive Remedy. |
|
39 |
Section 9.05 |
|
Limitations on Indemnification Payments to Seller Indemnitees. |
|
39 |
Section 9.06 |
|
Limitations on Indemnification Payments to Purchaser Indemnitees. |
|
39 |
Section 9.07 |
|
Procedures. |
|
40 |
Section 9.08 |
|
Opportunity to Defend Third Party Claims. |
|
41 |
Section 9.09 |
|
Exercise of Remedies by Indemnitees. |
|
42 |
Section 9.10 |
|
Adjustment to Purchase Price. |
|
42 |
|
|
|
|
|
ARTICLE X RELEASES |
|
42 |
||
Section 10.01 |
|
Releases by Purchaser and the Company. |
|
42 |
Section 10.02 |
|
Releases by Sellers. |
|
43 |
|
|
|
|
|
ARTICLE XI TAX MATTERS |
|
43 |
||
Section 11.01 |
|
Tax Treatment. |
|
43 |
Section 11.02 |
|
Tax Returns. |
|
44 |
Section 11.03 |
|
Post-Closing Audits. |
|
44 |
Section 11.04 |
|
Transfer Taxes. |
|
46 |
Section 11.05 |
|
Tax Cooperation. |
|
46 |
Section 11.06 |
|
Conflicts. |
|
47 |
|
|
|
|
|
ARTICLE XII GENERAL PROVISIONS |
|
47 |
||
Section 12.01 |
|
Costs and Expenses. |
|
47 |
Section 12.02 |
|
Notices. |
|
47 |
Section 12.03 |
|
Sellers Representative. |
|
49 |
Section 12.04 |
|
Counterparts. |
|
50 |
Section 12.05 |
|
Entire Agreement. |
|
50 |
Section 12.06 |
|
Governing Law; Exclusive Jurisdiction. |
|
50 |
Section 12.07 |
|
Third Party Rights; Assignment. |
|
51 |
Section 12.08 |
|
Waivers and Amendments. |
|
51 |
Section 12.09 |
|
Schedules. |
|
51 |
Section 12.10 |
|
Bulk Transfer Laws |
|
51 |
Section 12.11 |
|
Enforcement. |
|
52 |
Section 12.12 |
|
Headings; Interpretation. |
|
52 |
Section 12.13 |
|
Nonliability of Trustees. |
|
52 |
EXHIBITS A AND B, ANNEX 1 AND SCHEDULES 1.01(a), 1.01(b) AND 1.01(c) HAVE BEEN OMITTED AND WILL BE SUPPLEMENTARILY FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST.
Exhibits
Exhibit A Form of Assignment of Partnership Interest
Exhibit B Form of Escrow Agreement
Annexes
Annex 1 Sellers
Schedules
Schedule 1.01(a) |
Sellers knowledge Individuals |
Schedule 1.01(b) |
Purchaser knowledge Individuals |
Schedule 1.01(c) |
Additional Permitted Liens |
2014 Indenture |
|
1 |
2014 Notes |
|
1 |
2014 Prepayment Loan |
|
31 |
Additional Financial Statements |
|
32 |
Affiliate |
|
2 |
Agreement |
|
1 |
Applicable Sellers |
|
8 |
Audit |
|
44 |
Balance Sheet Date |
|
14 |
Business Day |
|
2 |
Cardwell Group |
|
2 |
Cardwell Payment |
|
2 |
Closing |
|
36 |
Closing Date |
|
36 |
COBRA |
|
21 |
Code |
|
2 |
Company |
|
1 |
Company Balance Sheet |
|
14 |
Company Disclosure Letter |
|
11 |
Company Interests |
|
1 |
Company Material Adverse Effect |
|
2 |
Company Options |
|
12 |
Company Subsidiary |
|
2 |
Confidentiality Agreement |
|
28 |
Covenant Defeasance Loan |
|
32 |
Covered Parties |
|
30 |
Covered Party |
|
30 |
Credit Facility |
|
2 |
Credit Facility Agent |
|
3 |
Credit Facility Lenders |
|
3 |
Credit Facility Loan |
|
31 |
Debt Restructuring Costs |
|
3 |
Declaration |
|
52 |
Employee Plan |
|
20 |
End Date |
|
36 |
Environmental Law |
|
3 |
Environmental Permit |
|
3 |
ERISA |
|
3 |
ERISA Affiliate |
|
3 |
Escrow Agent |
|
10 |
Escrow Agreement |
|
10 |
Escrow Amount |
|
10 |
Escrow Fund |
|
10 |
Exchange Act |
|
3 |
Financial Statements |
|
14 |
GAAP |
|
3 |
Governmental Entity |
|
3 |
Hazardous Materials |
|
4 |
HPT Reimbursable Costs |
|
10 |
Income Taxes |
|
4 |
Indebtedness |
|
4 |
Indemnifying Party |
|
41 |
Insurance Policies |
|
21 |
Intercompany Indebtedness |
|
4 |
IRS |
|
4 |
Judgment |
|
4 |
knowledge |
|
4 |
KPMG |
|
32 |
Law |
|
5 |
Liabilities |
|
5 |
Lien |
|
5 |
LLC Subsidiary |
|
5 |
Losses |
|
38 |
Material Contracts |
|
20 |
Operating Company |
|
1 |
Operating Company Indenture |
|
5 |
Operating Company Notes |
|
5 |
Organizational Documents |
|
5 |
Partnership Tax Returns |
|
5 |
Payment Shortfall |
|
10 |
Permits |
|
5 |
Permitted Lien |
|
5 |
Permitted Operations |
|
26 |
Person |
|
6 |
Petro Financial |
|
11 |
Petro GP |
|
11 |
Petro Warrant Agreement |
|
6 |
Petro Warrants |
|
6 |
Pre-Closing Tax Period |
|
6 |
Proceeding |
|
6 |
Purchase Price |
|
9 |
Purchaser |
|
1 |
Purchaser Claim |
|
40 |
Purchaser Claims Notice |
|
40 |
Purchaser Indemnitees |
|
38 |
Purchaser/Company Released Claims |
|
42 |
Purchaser/Company Releasees |
|
42 |
Purchaser/Company Releasors |
|
42 |
Purchasers Deductible Amount |
|
40 |
Real Property Agreement |
|
7 |
Reimbursable Costs |
|
7 |
REIT Subsidiary |
|
7 |
Requisite Regulatory Approvals |
|
7 |
Reserve Fund |
|
8 |
Reserve Fund Account |
|
50 |
SEC Reports |
|
7 |
Seller Claim |
|
40 |
Seller Claims Notice |
|
40 |
Seller Indemnitees |
|
38 |
Seller Released Claims |
|
43 |
Seller Releasees |
|
43 |
Seller Releasors |
|
43 |
Sellers |
|
1 |
Sellers Deductible Amount |
|
39 |
Sellers Representative |
|
49 |
Special Purpose Subsidiary |
|
7 |
Subsidiary |
|
7 |
Tax Return |
|
7 |
Taxes |
|
7 |
TCA |
|
1 |
TCA Adjustment |
|
10 |
TCA Purchase Agreement |
|
1 |
Transfer Taxes |
|
46 |
Transferred Leased Property |
|
8 |
Transferred Owned Property |
|
8 |
TSP |
|
8 |
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (the Agreement ), dated May 30, 2007, among Hospitality Properties Trust, a Maryland real estate investment trust ( Purchaser ), Petro Stopping Centers Holdings, L.P., a Delaware limited partnership (the Company ), and the partners of the Company identified on Annex 1 (the Sellers ).
WHEREAS , Sellers own all of the limited and general partnership interests of the Company (the Company Interests ); and
WHEREAS , Sellers desire to sell, and Purchaser desires to purchase, all of the Company Interests upon the terms and subject to the conditions set forth herein; and
WHEREAS , the Company, contemporaneously with the execution of this Agreement, is entering into a Purchase Agreement ( TCA Purchase Agreement ) with TravelCenters of America LLC ( TCA ), a Delaware limited liability company, and the other partners of Petro Stopping Centers, L.P. (the Operating Company ) pursuant to which the Company and the other partners of the Operating Company will sell, and TCA will purchase, all of the limited and general partnership interests of the Operating Company on the Closing Date (hereafter defined) upon the terms and subject to the conditions set forth in the TCA Purchase Agreement;
NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements of the parties hereto contained herein, and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, and subject to the satisfaction or waiver of the conditions hereof, the parties hereto agree as follows:
Section 1.01 Certain Definitions .
Certain terms used in this Agreement and the Schedules hereto are defined as follows:
2014 Indenture shall mean that certain Indenture, dated as of February 9, 2004, by and among the Company, Petro Financial and The Bank of New York, as Trustee, as amended.
2014 Notes shall mean the Senior Third Secured Notes due 2014 issued pursuant to the 2014 Indenture.
Affiliate of a Person shall mean another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.
Business Day shall mean any day, other than Saturday, Sunday or a day on which banking institutions in the City of New York are generally closed.
Cardwell Group shall mean J. A. Cardwell, Sr. and James A. Cardwell, Jr.
Cardwell Payment shall mean Eighty-Four Million Six Hundred Thousand Dollars ($84,600,000) payable to the Cardwell Group for, among other things, their controlling interest in the Company.
Code shall mean the Internal Revenue Code of 1986, as amended.
Company Material Adverse Effect shall mean any event, change, development or occurrence that (a) has resulted, or would reasonably be expected to result, in a material adverse effect on the business, assets, financial condition or results of operations of the Company and the Company Subsidiaries taken as a whole or (b) would prevent or materially delay the consummation of the transactions contemplated by this Agreement, other than any change or effect resulting from (i) changes in general economic conditions, (ii) general changes or developments in the industries in which the Company and the Company Subsidiaries operate, including changes in refined product margin, (iii) the announcement of this Agreement and the transactions contemplated hereby, including any termination of, reduction in or similar negative impact on relationships, contractual or otherwise, with any customers, suppliers, distributors or employees of the Company and the Company Subsidiaries or the performance of this Agreement and the transactions contemplated hereby, (iv) changes in any Tax Laws or applicable accounting regulations or principles, (v) any attack on, or by, outbreak or escalation of hostilities or acts of terrorism involving, the United States, any declaration of war by the United States or any other national or international calamity, (vi) the failure by the Company or the Company Subsidiaries to take any action prohibited by this Agreement, (vii) in and of itself, any change in the Companys or the Operating Companys credit ratings, (viii) any eminent domain or condemnation proceeding with respect to the properties owned or leased by the Company or the Company Subsidiaries or (ix) the matter disclosed in Section 3.10(v) of the Company Disclosure Letter , unless, in the case of the foregoing clauses (i) and (ii), such changes referred to therein have a materially disproportionate effect on the Company and the Company Subsidiaries taken as a whole relative to other participants in the industries in which the Company and the Company Subsidiaries operate.
Company Subsidiary shall mean any Subsidiary, direct or indirect, of the Company, provided , however, for the purposes of Articles III and IV, the term Company Subsidiary shall not include either Special Purpose Subsidiary.
Credit Facility shall mean that certain Credit Agreement, dated as of February 9, 2004, as amended, by and among the Operating Company and the guarantors and financial institutions party thereto.
2
Credit Facility Agent shall mean Wells Fargo Bank, N.A. in its capacity as administrative agent pursuant to the Credit Facility.
Credit Facility Lenders shall mean those certain lenders under the Credit Facility.
Debt Restructuring Costs shall mean any (i) make-whole or similar premium (including consent fee and negative carry costs), change of control fees or premiums, breakage costs or penalty payable pursuant to the terms of the Credit Facility, the 2014 Indenture or the Operating Company Indenture, as applicable, or otherwise agreed to between the parties, in connection with or as a result of, the prepayment of the Credit Facility, discharge of the 2014 Notes or defeasance of the Operating Company Notes or otherwise extinguishing any such Indebtedness as of the Closing, whether or not then due (but excluding any principal and accrued and unpaid interest thereon) and (ii) out-of-pocket costs and expenses of the Company, the Company Subsidiaries or Purchaser incurred on or prior to the Closing Date in connection with, or as a result of or related to, prepayment of the Credit Facility, discharge of the 2014 Notes or defeasance of the Operating Company Notes, including, but not limited to, the fees and expenses of all soliciting agents, dealer-manager arrangements and legal advisors.
Environmental Law shall mean any and all applicable Laws relating to protection of natural resources, the environment or human health (as relating to exposure to Hazardous Materials) including, without limitation, laws relating to releases of Hazardous Materials and the manufacture, processing, distribution, use, treatment, storage, transport or handling of Hazardous Materials.
Environmental Permit shall mean any Permit required under any Environmental Law for the operation of business of the Company or any Company Subsidiary as currently conducted.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate shall mean each trade or business (whether or not incorporated) which together with the Company or a Company Subsidiary would be deemed to be a single employer within the meaning of Section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of Section 414 of the Code.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
GAAP shall mean United States generally accepted accounting principles consistently applied.
Governmental Entity shall mean any federal, state, local or foreign government or political subdivision thereof, or any court, administrative agency or commission, or other governmental authority or instrumentality or any subdivision thereof.
3
Hazardous Materials shall mean any substance, material, waste, pollutant, or contaminant that is regulated as toxic or hazardous or other term of similar regulatory import or that is subject to remedial, investigatory or reporting obligations under any Environmental Law including without limitation petroleum and petroleum products (including without limitation oil, gasoline and diesel fuel), friable asbestos and polychlorinated biphenyls.
Income Taxes shall mean all federal, state, local, or foreign Taxes based upon, measured by, or calculated with respect to (i) gross or net income or gross or net receipts or profits (including, but not limited to, any capital gains or minimum taxes, but not including sales, use, goods and services, fuel, real or personal property transfer or other similar Taxes); (ii) multiple bases (including, but not limited to, corporate franchise, doing business or occupation Taxes) if one or more of the bases upon which such Tax may be based upon, measured, or calculated with respect to, is described in clause (i); or (iii) any federal, state, local or foreign withholding Taxes imposed with respect to any Taxes referred to in clause (i) or (ii) or on the distribution of cash or property from a partnership to its partners.
Indebtedness shall mean, with respect to the Company and the Company Subsidiaries, without duplication and exclusive of Intercompany Indebtedness, all indebtedness for borrowed money, including purchase money financing and capitalized and synthetic lease obligations (it being understood that any obligations existing on or prior to the Balance Sheet Date will not be recharacterized as capitalized or synthetic lease obligations if not otherwise characterized as such in the Company Balance Sheet), including the aggregate principal amount thereof, and any accrued and unpaid interest thereon and any accrued and unpaid prepayment premiums, penalties, breakage costs or other similar obligations in respect thereof; provided , however , that Indebtedness shall not include any Debt Restructuring Costs, trade payables or the $100,000 Demand Promissory Note issued by the Company to the REIT Subsidiary and any accrued interest thereon. For the sake of clarity, it is acknowledged that Indebtedness does not include undrawn amounts under letters of credit outstanding under the Credit Facility.
Intercompany Indebtedness shall mean, with respect to the Company and the Company Subsidiaries, all outstanding indebtedness owed by the Company or any Company Subsidiary to the Company or any wholly owned Company Subsidiary.
IRS shall mean the United States Internal Revenue Service, or any successor thereto.
Judgment shall mean any and all judgments, orders, writs, directives, rulings, decisions, injunctions (temporary, preliminary or permanent), decrees or awards of any Governmental Entity.
knowledge in the phrase to its knowledge or a similar phrase, when used to qualify a representation of a party, shall be deemed to be the actual knowledge, after reasonable investigation of the officer or employee with primary responsibility for the applicable subject matter, of (i) the individuals listed on Schedule 1.01(a) , if the Company is making such representation, (ii) the individuals listed on Schedule 1.01(b) , if Purchaser is making such
4
representation, and (iii) the officer or employee of such Seller with primary responsibility for the applicable subject matter, if a Seller is making such representation.
LLC Subsidiary shall mean HPT PSC Properties LLC, a Maryland limited liability company.
Law shall mean all laws (whether statutory or otherwise), ordinances, codes, rules and regulations of all Governmental Entities.
Liabilities shall mean any liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, whether due or to become due.
Lien shall mean, with respect to any property or asset, any mortgage, pledge, security interest, lien (statutory or other), charge, encumbrance or other similar restrictions or limitations of any kind or nature whatsoever on or with respect to such property or asset.
Operating Company Indenture shall mean the Indenture dated as of February 9, 2004 by and among the Operating Company and Petro Financial Corporation as Issuers and the Company, Petro Financial and Petro Distributing, Inc. as Guarantors and The Bank of New York, as Trustee as amended by a First Supplemental Indenture dated as of February 9, 2004.
Operating Company Notes shall mean the Operating Companys 9% Senior Secured Notes due 2012 issued in the aggregate original principal amount of $225,000,000 on February 4, 2004 and $25,000,000 on July 25, 2005 pursuant to the Operating Company Indenture.
Organizational Documents shall mean with respect to a corporation, its charter and bylaws; with respect to a limited liability company, its certificate or articles of organization or formation and operating agreement; with respect to a partnership, its certificate of limited partnership, if any, and partnership agreement; with respect to a trust, its declaration or indenture of trust; and with respect to any other entity, such similar organizational documents.
Partnership Tax Returns shall mean the federal partnership Tax Returns (together with all schedules required to be attached thereto) filed on IRS Form 1065, Form 8308 and Form 8804, or any successor form, together with any state or local Income Tax Returns that are filed on the basis that the Company or the Operating Company, as applicable, is taxable as a pass-through entity for state or local Income Tax purposes.
Permits shall mean all franchises, licenses, authorizations, approvals, permits, consents or other rights granted by any Governmental Entity and all certificates of convenience or necessity, immunities, privileges, licenses, concessions, consents, grants, ordinances and other rights, of every character whatsoever required for the conduct of business and the use of properties by the Company and the Company Subsidiaries as currently conducted or used.
Permitted Lien shall mean Liens (i) for Taxes, assessments and other charges of Governmental Entities (a) not yet due and payable, or (b) being contested in good faith (with collection or enforcement stayed by appropriate proceedings) and reserved against on the
5
Company Balance Sheet; (ii) for mechanics, carriers, workmens, repairmens, materialmens or other Liens or security interests that secure a liquidated amount that are being contested in good faith and by appropriate proceedings; (iii) for leases, subleases and licenses which are terminable by the Company or a Company Subsidiary on 90 days notice without premium or penalty; (iv) imposed by applicable Law; (v) for pledges or deposits to secure obligations under workers compensation Laws or similar legislation or to secure public or statutory obligations, in each case, not constituting Indebtedness; (vi) for pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case, not representing Indebtedness and incurred in the ordinary course of business; (vii) for easements covenants, rights of way and other similar restrictions each of record, and zoning and building codes and ordinances, in each case that, individually or in the aggregate, do not detract or impair in any material respect from the value or continued use, in the ordinary course as currently conducted or contemplated, of the applicable property; (viii) the existence of which are specifically disclosed in the notes to the consolidated financial statements of the Company included in the SEC Reports; (ix) referred to or disclosed in any title policy, or any title report, commitment or search (but in the case of a title report, commitment or search, only to the extent no title policy was subsequently issued for the applicable Transferred Owned Property or Transferred Leased Property), and/or any survey delivered to or obtained by Purchaser or Purchasers counsel prior to the date hereof (other than Liens for Indebtedness, Taxes, mechanics liens, unrecorded leases or parties in possession); (x) not securing or representing a monetary obligation that, individually or in the aggregate, do not detract or impair in any material respect from the value or continued use in the ordinary course of business as currently conducted or contemplated by the Company or any Company Subsidiary, of any property subject to such Liens; and (xi) identified on Schedule 1.01(c) provided no such Lien shall be deemed to be a Permitted Lien if it secures a trade payable.
Person shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or other entity or government or any agency or political subdivision thereof.
Petro Warrant Agreement shall mean the Warrant Agreement dated July 23, 1999 by and between Warrant Co., the Company, Sixty Eighty, LLC, First Union Capital Markets Corp., CIBC World Markets Corporation and State Street Bank and Trust Company, as Warrant Agent.
Petro Warrants shall mean the warrants issued by Warrant Co. pursuant to the Petro Warrant Agreement.
Pre-Closing Tax Period shall mean (a) any taxable period that begins on or before the Closing Date and ends on or before the Closing Date, and (b) with respect to any other taxable period that includes the Closing Date, the portion of such taxable period prior to and including the Closing Date.
Proceeding shall mean any action, claim, suit, or legal, administrative, arbitration or other alternative dispute resolution proceeding or investigation.
6
Real Property Agreement shall mean any lease (other than a Lease), agreement, declaration, restriction, or covenant relating to the Transferred Leased Property or Transferred Owned Property.
Reimbursable Costs shall mean HPT Reimbursable Costs as defined in the TCA Purchase Agreement.
REIT Subsidiary shall mean HPT PSC Properties Trust, a Maryland real estate investment trust.
Requisite Regulatory Approvals shall mean all permits, approvals, consents and filings required to be obtained or made with or by any Governmental Entity under any Law or Judgment, and all waiting periods required to expire prior to the Closing under applicable Laws.
SEC Reports shall mean the Operating Companys Annual Report on Form 10-K for the fiscal year ending December 31, 2006 as filed with the SEC and any other reports filed or furnished by the Operating Company to the SEC pursuant to applicable statutes, regulations, policies and rules to the extent furnished or filed by the Operating Company subsequent to March 29, 2007 and prior to the date of this Agreement.
Special Purpose Subsidiary shall mean either the REIT Subsidiary or the LLC Subsidiary, each of which was formed by the Company at the request of Purchaser in connection with the transfers contemplated by Sections 6.13 and 6.14(c) of the TCA Purchase Agreement.
SPS Income Taxes shall mean any Income Taxes (taking into account all the transactions contemplated by this Agreement and the TCA Purchase Agreement) arising from the transfers pursuant to Section 6.13 of the TCA Purchase Agreement, which at the request of Purchaser are made to a Special Purpose Subsidiary instead of the Company, that would not otherwise have been incurred had the transfers pursuant to such Section 6.13 been made to the Company rather than to a Special Purpose Subsidiary.
Subsidiary shall mean, in respect of any specified Person, any company or other entity of which 50% or more of the outstanding share capital or other equity interest is owned, directly or indirectly, by such specified Person.
Tax Return shall mean any report, return, document, declaration or other information or filing required to be supplied to any Governmental Entity (foreign or domestic) with respect to Taxes, including Partnership Tax Returns.
Taxes shall mean (a) any and all taxes, charges, fees, levies or other assessments, including income, gross receipts, excise, real or personal property, lease, sales, withholding, social security, occupation, use, service, service use, value added, license, net worth, payroll, franchise, transfer and recording taxes, ad valorem , stamp, capital, environmental, employment, workers compensation, disability, social security, utility, production, unemployment compensation, windfall profits, duties, registration, business organization, alternative or add-on minimum, fees and charges, imposed by any Governmental Entity (whether domestic or foreign including any state, local or foreign government or any
7
subdivision or taxing agency thereof (including a United States possession)), whether computed on a separate, consolidated, unitary, combined or any other basis; and such term shall include any interest, penalties or additional amounts attributable to, or imposed upon, or with respect to, any such taxes, charges, fees, levies or other assessments, (b) liability for the payment of any amounts of the type described in clause (a) as a result of being or having been a member of an affiliated, consolidated, combined or unitary group, and (c) liability for the payment of any amounts as a result of being party to any Tax sharing agreement or arrangement or as a result of any obligation to indemnify any other Person with respect to the payment of any amounts of the type described in clause (a) or (b).
Transferred Leased Property shall have the same meaning as set forth in the TCA Purchase Agreement.
Transferred Owned Property shall mean all real estate the fee interest of which is to be distributed to the Company on the Closing Date pursuant to Section 6.13 of the TCA Purchase Agreement.
Section 2.01 Purchase and Sale .
8
Section 2.02 Purchase Price
9
Section 2.03 Escrow Agreement and Escrow Fund .
At or prior to the Closing, Purchaser, TCA, the Sellers Representative and The Bank of New York (the Escrow Agent ) shall enter into an Escrow Agreement substantially in the form of Exhibit B or in such other form consistent with the terms of this Agreement or as may be acceptable to the parties thereto (the Escrow Agreement ). The Escrow Agreement shall provide for the creation of an escrow fund (the Escrow Fund ) consisting of Ten Million Dollars ($10,000,000) (the Escrow Amount ) to be funded pursuant to the TCA Purchase Agreement and applied, in part, to the satisfaction of Sellers liabilities for indemnification pursuant to Article IX and the liabilities of Sellers (defined in the TCA Purchase Agreement) for indemnification under the TCA Purchase Agreement.
Section 2.04 Tax Withholding .
Except to the extent such withholding is required as a result of a change after the date of this Agreement in any Law (or the judicial or administrative interpretation thereof) relating to withholding, Purchaser will be entitled to deduct and withhold from the Purchase Price, the TSP Payment Amount and the Cardwell Payment otherwise payable pursuant to this Agreement to any Person with respect to the transfer of Operating Company Interests only to the extent permitted under Section 6.15 hereof. To the extent that amounts are so withheld, such withheld amounts will be treated for all purposes hereof as having been paid to such Person in respect of which such deduction and withholding was made. Each Seller agrees, severally, to
10
indemnify, reimburse and hold harmless Purchaser, the Company, the Operating Company and their respective Affiliates with respect to any liability for failure to withhold any amount as a result of this Section 2.04 (whether or not Purchaser was entitled to withhold under this Section 2.04), including any Taxes, interest and penalties imposed on or payable by such Persons in respect of any failure to withhold as a result of the application of this Section 2.04.
Except as set forth in the corresponding sections or subsections of the disclosure letter (the Company Disclosure Letter ) delivered by Sellers to Purchaser concurrently with the execution of this Agreement (it being understood that any matter disclosed in any section of the Company Disclosure Letter will be deemed to be disclosed in any other section of the Company Disclosure Letter to the extent that it is readily apparent on the face of such disclosure that such disclosure is applicable to such other section), or as and to the extent set forth in the SEC Reports filed prior to the date of this Agreement, the Company represents and warrants to Purchaser as follows:
Section 3.01 Organization; Business of the Company .
11
Section 3.02 Subsidiaries .
Except for the REIT Subsidiary, the Operating Company, Petro Financial and Petro GP, the Company has no directly owned Subsidiaries or direct equity interests in any other entity.
Section 3.03 Capitalization .
12
Section 3.04 Authorization .
The Company and each Seller has full power and authority or capacity (including all partnership or other entity power and authority) to execute and deliver into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement by the Company and each Seller and the consummation by them of the transactions contemplated hereby have been duly and validly authorized by all necessary action by each Seller and the Company and no other proceedings on the part of the Company or any Seller are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and each Seller, and assuming due authorization, execution and delivery by each other party hereto, constitutes a legal, valid and binding obligation of the Company and such Seller, enforceable against the Company and such Seller in accordance with its terms, except as such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to creditors rights generally, (ii) general principles of equity (whether applied in a proceeding at law or in equity) and (iii) any implied covenant of good faith and fair dealing.
Section 3.05 No Violation .
Except as set forth in Section 3.05 of the Company Disclosure Letter , the execution and delivery of this Agreement by the Company and Sellers do not, and the consummation of the transactions contemplated by this Agreement will not, (i) conflict with, or result in any violation of or default under, any provision of the Companys or any Company Subsidiarys or any Sellers Organizational Documents; (ii) assuming the consents, approvals, orders and authorizations contemplated by Section 3.06 have been obtained or made, conflict with or result in any violation of or default under, any Law or Judgment applicable to the Company or any Company Subsidiary or any Seller or to which any of their property is subject; or (iii) conflict with, or, with or without notice or the lapse of time, result in a breach, termination (or right of termination) or violation of or default under the terms of any agreement, contract, indenture or other instrument to which the Company or any Company Subsidiary or any Seller is a party or subject or to which any of their property is subject, except with respect to clauses (ii) and (iii), where the conflict, violation, default, breach, termination or right of termination would not have or reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
13
Section 3.06 Approvals .
Except as set forth in Section 3.06 the Company Disclosure Letter , the execution and delivery of this Agreement by Sellers and the Company and the consummation by them of the transactions contemplated by this Agreement do not require any consent, approval, order or authorization of any Person under any Material Contract or any Law or Judgment and, to the Companys knowledge, no declaration, filing or registration with any Governmental Entity is required by the Company or any Company Subsidiary in connection with the execution and delivery of this Agreement and the consummation of transactions contemplated by this Agreement, except for those consents, approvals, orders, authorizations, declarations, filings or registrations the failure of which to be obtained or made individually or in the aggregate would not reasonably be expected to have a Company Material Adverse Effect; provided further, however, that the Company makes no representations or warranties with respect to any consents, approvals, orders, authorizations, declarations, filings or registrations that may be required with respect to Permits.
Section 3.07 Financial Statements .
14
Section 3.08 Absence of Certain Transactions .
Section 3.09 Taxes .
15
16
17
Except as set forth in Section 3.10 of the Company Disclosure Letter and except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect; (i) there are no Proceedings pending, or to the Companys knowledge, threatened against the Company or Petro GP by or before any arbitrator or Governmental Entity; and (ii) neither the Company nor Petro GP is a party to, or, to the Companys knowledge, bound by any Judgments.
18
The representations and warranties of the Company and the Operating Company set forth in Section 3.12 of the TCA Purchase Agreement are true and correct subject to, and in accordance with the specific provisions of such Section 3.12.
19
20
Section 3.16 of the Company Disclosure Letter contains a summary description of all material insurance policies of the Company and the Company Subsidiaries (the Insurance Policies ) and each such policy is in full force and effect. The Insurance Policies are customary and adequate in all material respects for companies of similar size in the industry and locales in which the Company and the Company Subsidiaries operate. All premiums with respect to the Insurance Policies which are due and payable prior to the Closing have been paid, or will be paid prior to the Closing, and no written notice of cancellation or termination has been received by the Company with respect to any such policy. Except as set forth in Section 3.16 of the Company Disclosure Letter , to the Companys knowledge, there are no pending claims against the Insurance Policies by the Company or any Company Subsidiary (a) as to which the insurers have denied coverage or otherwise reserved rights in writing or (b) which are, individually or in the aggregate, reasonably likely to exceed the maximum amount of coverage provided by such insurance.
Except as set forth in Section 3.17 of the Company Disclosure Letter , neither the Company nor Petro GP is in violation of, or has since January 1, 2006 violated or failed to comply with any Law (other than Laws with respect to Taxes which are addressed elsewhere in Article III) applicable to its business, operations and assets, except for violations and failures to comply that would not, individually or in the aggregate, have, or be reasonably expected to have, a Company Material Adverse Effect.
None of Sellers or the Company or any Company Subsidiary has retained any financial advisor, broker, agent or finder or agreed to pay a financial advisor, broker, agent or finder on account of this Agreement or any transaction contemplated hereby or any transaction of like nature except for Banc of America Securities LLC, the fees of which will be paid by the Operating Company.
During the past five years, neither the Company nor any Company Subsidiary has made any contribution, gift, bribe, payoff, influence payment, kickback or other similar payment to any Person, private or public, regardless of form, whether in money, property or services in violation of any applicable United States or foreign Law (a) to obtain favorable treatment in securing business, (b) to pay for favorable treatment for business secured, or (c) to obtain special
21
concessions, in each case for or in respect of the Company, Petro Financial or Petro GP.
Except for the representations and warranties contained in this Article III and in Article IV, Purchaser acknowledges that none of Sellers, the Company or any other Person on their behalf makes any other express or implied representation or warranty with respect to Sellers, the Company or any Company Subsidiary and none of Sellers, the Company or any other Person on their behalf shall have any liability to Purchaser with respect to any other information provided to Purchaser (including projections, forecasts or management presentations) in connection with the transactions contemplated hereunder, and Purchaser has not relied on any other representation or warranty. Neither the Company, any Company Subsidiary nor any Seller or any of their Affiliates have any liability to Purchaser or any other Person as a result of the distribution to or use by Purchaser of any such information.
Each Seller hereby, individually and not jointly, represents and warrants to Purchaser:
Such Seller is a natural person, or if a corporation or other entity, it is duly organized, validly existing and (to the extent the concept of good standing is applicable to such entity) in good standing under the laws of the jurisdiction of its incorporation or organization and has full corporate (or other entity) power and authority to conduct its business as it is now being conducted and to own, operate or lease the properties and assets it currently owns, operates or leases.
Except as set forth in Section 3.03(a) of the Company Disclosure Letter , such Seller has legal and beneficial ownership of the Company Interests identified in Section 3.03(a) of the Company Disclosure Letter as being owned by it, free and clear of any Liens (other than Permitted Liens) or any other limitations or restrictions on such Company Interests (including any limitation or restriction on the right to vote, pledge, sell or otherwise dispose of such Interests). Upon consummation of the transactions contemplated by this Agreement, Purchaser will acquire such Company Interests, free and clear of all Liens other than those created by Purchaser.
Such Seller has full power and authority or capacity (including all corporate or other entity power and authority) to execute and deliver into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement by such Seller and the
22
consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary action by such Seller, and no other proceedings on the part of such Seller is necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by such Seller, and assuming due authorization, execution and delivery by each other party hereto, constitutes a legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, except as such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to creditors rights generally, (ii) general principles of equity (whether applied in a proceeding at law or in equity) and (iii) any implied covenant of good faith and fair dealing.
Except as set forth in Section 4.04 of the Company Disclosure Letter , the execution and delivery of this Agreement by such Seller does not, and the consummation by it of the transactions contemplated by this Agreement will not, (i) conflict with, or result in any violation of or default under, any provision of the Sellers Organizational Documents; (ii) assuming the consents, approvals, orders and authorizations contemplated by Section 4.05 have been obtained or made, conflict with or result in any violation of or default under, any Law or Judgment applicable to such Seller is a party or to which any of its property is subject; or (iii) conflict with, or, with or without notice or the lapse of time, result in a breach, termination (or right of termination) or violation of or default under the terms of any agreement, contract, indenture or other instrument to which or such Seller is a party or subject or to which any of its property is subject, except with respect to clauses (ii) and (iii), where the conflict, violation, default, breach, termination or right of termination would not reasonably be expected to prevent or materially delay the consummation of the transactions contemplated hereby.
The execution and delivery of this Agreement by such Seller, and the consummation by it of the transactions contemplated by this Agreement do not require any consent, approval, order or authorization of any Person under any agreement, contract, indenture or other instrument or Law or Judgment to which such Seller is a party or subject or any of its property is subject, and to such Sellers knowledge, other as contemplated by Section 3.06, no declaration, filing or registration with any Governmental Entity is required by such Seller in connection with the execution and delivery of this Agreement and the consummation of transactions contemplated by this Agreement, except for those consents, approvals, orders, authorizations, declarations, filings or registrations the failure of which to be obtained or made individually or in the aggregate would not reasonably be expected to have a Company Material Adverse Effect.
Such Seller is a United States person within the meaning of Section 7701(a)(30) of the Code.
23
Purchaser represents and warrants to Sellers as follows:
Purchaser is duly organized, validly existing and in good standing under the laws of the state of its formation and has full corporate power and authority to conduct its business as it is now being conducted and to own, operate or lease the properties and assets it currently owns, operates or leases.
Purchaser has all requisite trust power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement by Purchaser and the consummation by Purchaser of the transactions contemplated hereby have been duly approved by all necessary trust action by Purchaser, and no other trust proceedings on the part of Purchaser are necessary to authorize this Agreement, to perform its obligations hereunder or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Purchaser and, assuming due authorization, execution and delivery by each of the other parties, constitutes the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to creditors rights generally, (ii) general principles of equity (whether applied in a proceeding at law or in equity) and (iii) any implied covenant of good faith and fair dealing.
The execution and delivery of this Agreement by Purchaser does not, and the consummation by Purchaser of the transactions contemplated by this Agreement will not, (i) conflict with, or result in any violation of or default under, any provision of Purchasers Organizational Documents; (ii) assuming the consents, approvals, orders and authorizations contemplated by Section 5.04 have been obtained or made, conflict with or result in any violation of or default under, any Law or Judgment applicable to Purchaser or to which any of its properties are subject; or (iii) conflict with, or, with or without notice or the lapse of time, result in a breach, termination (or right of termination) or violation of or default under the terms of any agreement, contract, indenture or other instrument to which Purchaser is a party or subject or any of its property is subject except with respect to clauses (ii) and (iii) hereof, where the conflict, violation, default, termination or right of termination would not, or would not reasonably be expected to, prevent or materially delay the consummation of the transactions contemplated hereby.
24
The execution and delivery of this Agreement by Purchaser and the consummation by it of the transactions contemplated by this Agreement do not require the consent, approval, order, or authorization of any Person under any agreement, contract, indenture or other instrument or Law or Judgment to which Purchaser is a party or subject or any of its property is subject, and, to Purchasers knowledge, no declaration, filing or registration with any Governmental Entity is required by Purchaser in connection with the execution and delivery of this Agreement and the consummation by it of the transactions contemplated by this Agreement, except for (i) filings required of Purchaser under securities laws; and (ii) those the failure of which to obtain or make would not reasonably be expected to prevent or materially delay the consummation of the transactions contemplated hereby.
There are no Proceedings pending or, to the knowledge of Purchaser, threatened against Purchaser or any of its Affiliates by or before any arbitrator or Governmental Entity and neither Purchaser nor any of its Affiliates is bound by any Judgment which, in either case, would reasonably be expected, individually or in the aggregate, to prevent or materially delay the consummation of the transactions contemplated hereby.
Purchaser has sufficient funds for the payment of the Purchase Price and to perform its obligations under this Agreement.
Purchaser has not retained any financial advisor, broker, agent or finder or agreed to pay any financial advisor, broker, agent or finder on account of this Agreement or any transaction contemplated hereby or any transaction of like nature.
Except for the representations and warranties contained in this Article V, Sellers and the Company acknowledge that neither Purchaser nor any other Person on behalf of Purchaser makes any other express or implied representation or warranty with respect to Purchaser or with respect to any other information provided to Sellers or the Company in connection with the transactions contemplated by this Agreement.
25
26
27
Notwithstanding any provision contained in this Agreement, any action taken by the Company which is permitted under this Section 6.01 shall not constitute a misrepresentation or breach of any representation, warranty or covenant.
From the date of this Agreement to the earlier of the Closing or the termination of this Agreement, the Company and each Company Subsidiary shall upon reasonable notice, (a) afford to the officers, employees, accountants, counsel and other representatives of Purchaser reasonable access, during normal business hours, to all of the properties, books, contracts, commitments and records of the Company and each Company Subsidiary and to their agents, accountants and counsel ; provided that nothing herein shall require the provision of such access to the extent it would interfere unreasonably with the normal business or operations of the Company or the Company Subsidiaries and (b) furnish to the officers, employees, agents, accountants, counsel, financing sources and representatives of Purchaser such additional financial and operating data and other information regarding the assets, properties, liabilities and goodwill of the Company and the Company Subsidiaries as Purchaser may from time to time reasonably request in connection with the transactions contemplated by this Agreement. Prior to Closing, Purchaser will hold and treat and will cause its officers, employees, auditors and other authorized representatives to hold and treat in confidence all documents and information concerning the Company and the Company Subsidiaries, and provided to Purchaser in connection with the transactions contemplated by this Agreement in accordance with the provisions of the existing confidentiality agreements between the Company and Purchaser dated as of February 28, 2007 (collectively the Confidentiality Agreement ), provided public disclosure which Purchaser or any of its Affiliates are advised by counsel is required by Law or the rules of any national securities exchange or automated quotation system to be disclosed by Purchaser or any of its Affiliates shall not be deemed a violation of Purchasers obligations under this Section 6.02 or under the Confidentiality Agreement. Notwithstanding the foregoing, nothing contained herein shall require the Company or the Company Subsidiaries to disclose or otherwise provide any information if such disclosure would (i) jeopardize any attorney-client or other legal privilege, or (ii) contravene any applicable Law or any binding agreement entered into by the Company or the Company Subsidiaries (including any confidentiality agreement to which the Company or any Company Subsidiary is a party).
28
Prior to the Closing, none of the Company, Sellers or Purchaser or any of their agents or representatives shall issue or cause the publication of any press release or other public statement or announcement with respect to this Agreement or the transactions contemplated hereby without the prior written consent of Sellers and Purchaser (such consent not to be unreasonably withheld or delayed), except as may be required by Law, or by the rules of any national securities exchange or automated quotation system to which the Purchaser or any Affiliate of Purchaser is or becomes subject p rovided , that Purchaser has provided a draft to the Company and a reasonably opportunity to review and comment (not to be unreasonably delayed), Purchaser may issue such press releases or other public statements or announcements as it reasonably determines necessary and advisable in connection with its investor relations program, conducted in the normal course, without the prior approval of the Company.
From the date of this Agreement until the earlier of the Closing or termination of this Agreement:
29
Subject to the terms and conditions of this Agreement, each party hereto agrees to execute such further instruments or documents as the other parties hereto may from time to time reasonably request in order to confirm or carry out the transactions contemplated by this Agreement; provided that no such instrument or document shall expand a partys liability beyond that contemplated in this Agreement.
The Company and Sellers agree that from the date of this Agreement to the earlier of the Closing or the termination of this Agreement, none of Sellers and the Company shall, and
30
each shall use commercially reasonable efforts to cause their respective directors, officers, employees and representatives not to, directly or indirectly (i) solicit, initiate, consider, encourage or accept any other proposals or offers from any Person relating to (A) any acquisition or purchase of all or any material portion of the Companys or any Company Subsidiarys business or assets or any Interests or other equity interests of any Company Subsidiary or (B) any merger, consideration or other business combination with any of the Company or any Company Subsidiary, (ii) participate in any discussions, negotiations and other communications, regarding or furnish to any other Person any information with respect to, or otherwise cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any other Person to seek to do any of the foregoing or (iii) consider, entertain or accept any proposal from any Person to do any of the foregoing; provided that notwithstanding anything herein to the contrary, any actions taken by the Company or a Company Subsidiary in accordance with or otherwise permitted by Section 6.01 shall not be deemed to be a violation of this Section 6.08.
31
Nothing contained in this Agreement shall give Purchaser, directly or indirectly, the right to control or direct the Companys or any Company Subsidiarys operations prior to the Closing, and nothing contained in this Agreement shall give the Company, directly or indirectly, the right to control or direct Purchasers or any of its Subsidiarys operations prior to the Closing. Prior to the Closing, the Company and Purchaser shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries respective operations.
If required by the Securities Act, so long as the out-of-pocket costs and expenses of the Company in connection therewith are included in Reimbursable Costs, promptly upon request of Purchaser at any time prior to the earlier of the Closing and termination of this Agreement, (a) the Company shall request that KPMG LLP ( KPMG ), its independent accountants, prepare consolidated balance sheets and statements of income, cash flows and results of operations (the Additional Financial Statements ) for the Company (and any and all documents and consents related thereto) which comply with Regulation S-X under the Securities Act, for inclusion in any registration statement or other public filing of Purchaser or any Affiliate of Purchaser under the Securities Act or the Exchange Act, and any other offering circular or document used by Purchaser or any Affiliate of Purchaser in any other offering of securities, whether public or private, (b) the Company shall use its commercially reasonable efforts to cause KPMG to cooperate with Purchaser in connection with the foregoing (including, without
32
limitation, using commercially reasonable efforts to cause KPMG to deliver so-called comfort letters, written consents and representation letters relating to the foregoing). Without limiting the generality of the foregoing, the Company agrees that, upon reasonable notice from Purchaser at any time prior to the earlier of the Closing and termination of this Agreement, it will (y) consent to the use of such Additional Financial Statements in any such registration statement, document or circular and (z) execute and deliver, and cause its officers to execute and deliver (if required), such representation letters as are customarily delivered in connection with audits and as KPMG and Purchasers independent accountants may reasonably request under the circumstances. Purchaser shall indemnify and hold harmless the Company, the Company Subsidiaries and their respective officers, employees, representatives and advisors, including legal and accounting, from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with compliance with this Section 6.11 and any information utilized in connection therewith; provided, however, the foregoing shall not be deemed to limit any rights to indemnification any of the parties hereto may have pursuant to Article IX herein.
The Company shall cause the Operating Company to make the distributions and assignments contemplated by Section 6.13 of the TCA Purchase Agreement in accordance therewith immediately following the consummation of the transactions contemplated by Section 6.9, but prior to the TCA Closing, and contemporaneously the Company and Petro GP shall contribute to the Operating Company all of its assets other than assets that would be Transferred Assets (defined in the TCA Purchase Agreement) if owned by the Operating Company, including the Companys equity interests in Petro Financial, but excluding the Companys equity interests in Petro GP and the REIT Subsidiary.
Prior to the Closing, the Company and the Company Subsidiaries shall reasonably cooperate with Purchaser in connection with Purchasers procurement of surveys and/or title insurance policies insuring title to the Transferred Owned Properties (including the property identified in Schedule 6.14(c) of the TCA Purchase Agreement) and leasehold title to the Transferred Leased Properties (excluding the property identified in Schedule 6.14(c) of the TCA Purchase Agreement), including without limitation, executing, or causing the Company, any Company Subsidiary and any member of the Cardwell Group to execute, any reasonable and customary certificates, affidavits or other documents (such as non-imputation affidavits) required by title companies issuing such policies.
Purchaser agrees that, between the date of this Agreement and the earlier of the Closing and termination of this Agreement, it shall not, directly or indirectly, take any action (i) to cause its representations and warranties set forth in Article V to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the ability of Purchaser to consummate the
33
transactions contemplated by this Agreement.
Each Seller shall, and the Cardwell Group shall cause TSP to, prior to the Closing, deliver or cause to be delivered to Purchaser (i) a certification, in a form reasonably satisfactory to Purchaser, that such Person is not a foreign person in accordance with the Treasury Regulations under Section 1445 of the Code and (ii) a valid IRS Form W-9 indicating that no back-up withholding is required. If any such Person has not provided such certifications and IRS Form W-9 to Purchaser on or before the Closing Date, Purchaser shall be permitted to deduct and withhold from the dollar amount payable to such Person under this Agreement an amount equal to any required withholding Tax under Section 1445 of the Code or any applicable back-up withholding, which withheld amounts shall be promptly paid over to the relevant Governmental Entity and will be treated for all purposes hereof as having been paid to such Person in respect of which such deduction and withholding was made.
All Tax sharing agreements or similar agreements (including without limitation any obligation to make tax distributions) with respect to or involving the Company or any Company Subsidiary shall be terminated as of the Closing Date and, after the Closing Date, no such Person shall be bound thereby or have any liability thereunder.
The respective obligations of each Seller and Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or, if permissible, waiver by the party for whose benefit such conditions exist) at or prior to the Closing of the following condition: the re shall not be any Judgment or Law restraining, enjoining or prohibiting the consummation of the transactions contemplated by this Agreement; provided , however , that no party hereto may invoke this condition unless and until such party has complied with its obligations under Section 6.03.
The obligation of Purchaser to consummate the purchase of the Company Interests is subject to the satisfaction (or waiver by Purchaser, as applicable) at or prior to the Closing of the following further conditions:
34
The obligations of Sellers to consummate the sale of the Interests are subject to the satisfaction (or waiver by Sellers) at or prior to the Closing of the following further conditions:
35
Anything herein or elsewhere to the contrary notwithstanding, this Agreement may be terminated:
36
This Agreement shall automatically terminate if the TCA Purchase Agreement is terminated, without further action by the parties.
In the event of the termination of this Agreement as provided in Section 8.02, written notice thereof shall forthwith be given to the other parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become null and void, and there shall be no liability on the part of any of the parties hereto except (i) for fraud or for willful breach of this Agreement and (ii) the confidentiality provisions of Sections 6.02, Section 8.03 and Article XII (other than Sections 12.03 and 12.09) will survive any termination of this Agreement and Purchaser shall reimburse the Company and the Company Subsidiaries for ( x ) any Reimbursable Costs to the extent paid by the Company or any Company Subsidiary prior to such termination or which are a liability of the Company or any Company Subsidiary on the date of such termination and ( y ) to the extent Debt Restructuring Costs paid by the Company or any Company Subsidiary prior to such termination or which are a liability of the Company or any Company Subsidiary on the date of such termination exceed Debt Restructuring Costs paid by Purchaser prior to such termination or which are a liability of Purchaser on the date of such termination, 50% of such excess.
37
Subject to the terms and conditions of this Article IX, from and after the Closing, Purchaser will indemnify and hold harmless Sellers and their respective successors and permitted assigns and officers and directors and their heirs and personal representatives (collectively, the Seller Indemnitees ) from and against, and will pay to the Seller Indemnitees the amount of, any and all losses, liabilities, claims, damages, penalties, fines, judgments, awards, settlements, taxes, costs, fees (including, but not limited to, reasonable investigation fees), expenses (including, but not limited to, reasonable attorneys fees) and disbursements (collectively, Losses ) actually incurred by any of the Seller Indemnitees (a) based upon any breach of or inaccuracy in the representations and warranties of Purchaser contained in Article V of this Agreement (including the certificate delivered pursuant to Section 7.03(c)) as of the date of this Agreement and as of the Closing Date, (b) based upon any breach of the covenants or agreements of Purchaser contained in this Agreement (including the certificate delivered pursuant to Section 7.03(c)) and required to be performed by it pursuant to this Agreement and (c) for SPS Income Taxes.
Subject to the terms and conditions of this Article IX, from and after the Closing, each Seller, severally and not jointly, will indemnify and hold harmless Purchaser, the Company, their respective successors and permitted assigns and officers and directors and their heirs and personal representatives (collectively, the Purchaser Indemnitees ) from and against any and all Losses actually incurred by any of the Purchaser Indemnitees based upon (a) any breach of or inaccuracy in the representations and warranties contained in Article III or Article IV of this Agreement (including the certificates delivered pursuant to Section 7.02(c)) as of the date of this Agreement and as of the Closing Date, and (b) any breach of the covenants or agreements of any Seller or the Company or any Company Subsidiary contained in this Agreement (including the certificates delivered pursuant to Section 7.02(c)) and required to be performed by them pursuant to this Agreement.
38
Other than for breaches of Sections 2.02(b) and 2.04 and Article XI, the parties agree that from and after the Closing Date, the exclusive remedies of any Seller Indemnitee or Purchaser Indemnitee for any Losses based upon, arising out of or otherwise in respect of the matters set forth in this Agreement or the transactions contemplated hereby are the indemnification or reimbursement obligations of the parties set forth in this Article IX. The parties further agree that, except with respect to a breach of the representations contained in Sections 4.02 and 4.03 for which each Seller shall severally and not jointly be subject to a claim for personal liability in an amount not to exceed the aggregate amount received by such Seller pursuant to Article II, no Seller shall have any personal liability under this Agreement or for any indemnification of any Purchaser Indemnitee and the Purchaser Indemnitees shall be entitled to only look to the Escrow Fund for the satisfaction of any indemnity to which they are entitled. The provisions of this Section 9.04 shall not, however, prevent or limit a partys right to seek specific performance or injunctive relief in connection with another partys breach of this Agreement.
Notwithstanding anything in this Agreement to the contrary,
Notwithstanding anything herein to the contrary:
39
40
In the event of any claim by a third party against a Purchaser Indemnitee or Seller Indemnitee (each an Indemnitee ) for which indemnification is available hereunder from Purchaser or Sellers, as applicable (each an Indemnifying Party ), the Indemnifying Party has the right, exercisable by notice to the Indemnitee as applicable, within 120 days of receipt of a written notice from the Indemnitee of such claim, to assume and conduct the defense of such claim, with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnitee. If the Indemnifying Party has assumed such defense as provided in this Section 9.08, the Indemnifying Party will not be liable for any legal expenses incurred by any Indemnitee in connection with the defense of such claim unless the Indemnitee determines in good faith and upon the written advice of counsel that joint representation by the Indemnifying Partys counsel constitutes a conflict of interest. If the Indemnifying Party does not assume the defense of any third party claim in accordance with this Section 9.08, the Indemnitee may defend such claim at the sole cost of the Indemnifying Party (subject to the limitations set forth in this Article IX), and the Indemnifying Party may still participate in, but not control, the defense of such third party claim at the Indemnifying Partys sole cost and expense. For so long as the Indemnifying Party is defending such claim in good faith, the Indemnitee will not consent to a settlement of, or the entry of any judgment arising from, any such claim, without the prior written consent of the Indemnifying Party (such consent not to be unreasonably withheld or delayed). Except with the prior written consent of the Indemnitee (such consent not to be unreasonably withheld or delayed), no Indemnifying Party, in the defense of any such claim, will consent to the entry of any judgment or enter into any settlement that (i) provides for injunctive or other non-monetary relief affecting the Indemnitee, (ii) provides for an admission of violation of any Law or the rights of any Indemnitee, or (iii) does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnitee of a release from all liability with respect to such claim or litigation. In any such third party claim, the party responsible for the defense of such claim shall, to the extent reasonably requested by the other party, keep such other party informed as to the status of such claim, including, without limitation, all settlement negotiations and offers; provided, however, that neither the Indemnitee nor the Indemnifying Party shall be required to disclose any privileged information or any attorney work product in connection with the defense of any such asserted claim.
41
No Purchaser Indemnitee shall be permitted to assert any indemnification claim or exercise any other remedy under this Agreement unless Purchaser (or any successor thereto or assign thereof) shall have consented to the assertion of such indemnification claim or the exercise of such other remedy. No Seller Indemnitee shall be permitted to assert any indemnification claim or exercise any other remedy under this Agreement unless the Sellers Representative shall have consented to the assertion of such Indemnification claim or the exercise of such other remedy.
All indemnification, purchase price adjustments, reimbursement payments and other payments made pursuant to this Agreement subsequent to the date of this Agreement, as applicable, will be treated as an adjustment to the Purchase Price unless otherwise required by Law.
42
The parties shall treat the transactions contemplated by this Agreement and the TCA Purchase Agreement in accordance with Revenue Ruling 99-6, 1999-1 C.B. 432 (Situation 2) as follows (i) (A) as a sale of 100% of the Operating Company Interests (as defined in the TCA Purchase Agreement) by the partners of the Operating Company and (B) thereafter as a sale of 100% of the Company Interests by Sellers, and (ii) (A) as a purchase by TCA of all of the assets of the Operating Company and assumption by TCA of all of the Operating Companys liabilities and (B) thereafter, as a purchase by Purchaser of all of the assets of the Company and
43
assumption by Purchaser of all of the Companys liabilities. The parties shall (x) treat each such transaction as occurring after all other transactions, including those contemplated by Section 6.13 and 6.14 of the TCA Purchase Agreement, on the Closing Date and (y) treat the transactions described in Sections 11.01(i)(A) and 11.01(ii)(A) as occurring prior to the transactions described in Sections 11.01(i)(B) and 11.01(ii)(B).
44
45
Except for any Transfer Taxes (as defined below) which result from the actions taken pursuant to Section 6.13 and Section 6.14(c) of the TCA Purchase Agreement (which Transfer Taxes shall be Reimbursable Costs), all transfer, real estate transfer, excise, sales, use, documentary, stamp Taxes and all conveyance fees, recording charges and other similar Taxes (including interest, penalties and additions to any such Taxes) in each case including any such Taxes or fees levied upon the transfer of stock or other equity interests in an entity on account of such entitys direct or indirect ownership of real estate ( Transfer Taxes ) incurred in connection with the transactions contemplated by this Agreement shall be paid one-half by Purchaser and one-half by Sellers. Purchaser and Sellers agree to use commercially reasonable efforts to cooperate with respect to minimizing any such Transfer Taxes. Purchaser shall prepare and file all necessary Tax Returns and other documentation with respect to such Transfer Taxes. Sellers shall reimburse Purchaser one-half of the cost and expense of preparing and filing such Tax Returns. In addition, Purchaser shall provide any Tax forms or other information reasonably requested by the Sellers Representative for the purpose of reducing fuel excise Taxes.
From and after the Closing Date, each of Purchaser, the Sellers Representative and Sellers shall, at the cost of the requesting party, cooperate, as reasonably requested, in connection with the preparation and filing of any Tax Returns of the Company or any of its Subsidiaries and in connection with any Audits with respect to Taxes or Tax Returns. Such cooperation shall include the retention and (upon the other partys request, at the requesting partys cost and expense) the provision of records and information which are reasonably relevant to any such Audit. Purchaser and Sellers shall, upon request, use their commercially reasonable efforts to obtain any certificate or other document from any Governmental Entity or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby). Purchaser and Sellers agree that TCA may, at TCAs sole option, discretion and cost, which shall include all Tax liabilities resulting from such elections, make an election under Section 338 of the Code (and any corresponding election under state, local, or foreign Tax Law) with respect to deemed purchase of the stock of any Company Subsidiary hereunder and each Seller agrees to cooperate with respect to any such election. Purchaser, Sellers Representative and each Seller each agree to (i) treat each Special Purpose Subsidiary as a disregarded entity under Treasury Regulation Section 301.7701-2 and -3 (and as a disregarded entity for state and local Tax purposes to the maximum extent possible) for any Pre-Closing Tax Period and any Tax period that includes the Closing Date, (ii) not make any affirmative election (such as on IRS Form 8832) contrary to such disregarded entity status and (iii) take steps at Purchasers request and expense to minimize any SPS Income Taxes.
46
In the event of a conflict between the provisions of this Article XI and Article IX, this Article XI shall exclusively govern any matters relating to Taxes.
Except as otherwise specifically provided herein, each party shall bear its own expenses in connection with this Agreement and the transactions contemplated hereby.
All notices or other communications required or permitted by this Agreement shall be effective upon receipt and shall be in writing and delivered personally or by overnight courier (with proof of delivery), or sent by facsimile, as follows:
Hospitality Properties Trust
400 Centre Street
Newton, MA 02458
Attn.: President
Facsimile: (617) 332-2261
with a copy to (which shall not constitute notice):
Sullivan & Worcester LLP
One Post Office Square
23
rd
Floor
Boston, MA 02109
Attn.: Richard Teller
Facsimile: (617) 338-2880
Petro
Stopping Centers Holdings, L.P.
6080 Surety Drive
El Paso, TX 79905
Attention: Edward Escudero
Facsimile: (915) 773-7366
47
with a copy to (which shall not constitute notice):
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention:
Thomas M. Cerabino
Richard L. Reinhold
Facsimile: (212) 728-8111
Edward Escudero
3820 Hillcrest
El Paso, TX 79902
Facsimile: (915) 774-7336
with a copy to (which shall not constitute notice):
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention:
Thomas M. Cerabino
Richard L. Reinhold
Facsimile: (212) 728-8111
ExxonMobil Fuels Marketing Company, Global Planning
3225 Gallows Road, Room 5D0211
Fairfax, VA 22037
Attention: Peter A. Tunnard
Facsimile: (262) 313-5195
CT Corporation
1209 Orange Street
Wilmington, DE 19801
Attention: Michele Aacione
Facsimile: (302) 655-2480
J.A. Cardwell, Sr.
817 Rosinante
El Paso, TX 79922
Facsimile: (915) 581-7481
48
and
James A. Cardwell, Jr.
5772 Diamond Point
El Paso, TX 79912
Facsimile: (915) 581-7481
with a copy to (which shall not constitute notice):
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention:
Thomas M. Cerabino
Richard L. Reinhold
Facsimile: (212) 728-8111
or to such other address as hereafter shall be furnished as provided in this Section 12.02 by any of the parties hereto to the other parties hereto. Each such communication will be effective (a) if delivered personally or overnight courier (with proof of delivery), when such delivery is made at the address specified in this Section 12.02, or (b) if delivered by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 12.02 and appropriate confirmation is received (provided that if notice is given by facsimile, a copy of such notice, request, instruction or other communication shall also be followed-up within one (1) Business Day of such facsimile by one of the other methods described herein; notwithstanding such follow-up, however, facsimile notice shall be deemed to be given at the time set forth in this Section 12.02); provided, however, that any notice received by facsimile transmission or otherwise at the addressees location on any Business Day after 5:00 p.m. (addressees local time) shall be deemed to have been received at 9:00 a.m. (addressees local time) on the next Business Day.
49
This Agreement may be executed and delivered (including by facsimile transmission) in any number of counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute a single instrument.
This Agreement (including the Exhibits, Annexes, Schedules and the Company Disclosure Letter referred to herein) and the Confidentiality Agreement set forth the entire understanding and agreement between the parties as to the matters covered herein and supersedes and replaces any prior understanding, agreement or statement of intent, in each case, written or oral, among the parties, of any and every nature with respect thereto.
This Agreement shall be governed in all respects, by the laws of the State of Delaware including validity, interpretation and effect, without regard to principles of conflicts of law. The parties hereto irrevocably and unconditionally consent to submit to the exclusive
50
jurisdiction of the courts of the State of Delaware for any lawsuits, actions or other proceedings arising out of or related to this Agreement and agree not to commence any lawsuit, action or other proceeding except in such courts. The parties hereto further agree that service of process, summons, notice or document by mail to their addresses set forth above shall be effective service of process for any lawsuit, action or other proceeding brought against them in any such court. The parties hereto irrevocably and unconditionally waive any objection to the laying of venue of any lawsuit, action or other proceeding arising out of or related to this Agreement in the courts of the State of Delaware, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action or proceeding brought in any such court has been brought in an inconvenient forum.
Except as specified in Section 6.06, this Agreement is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any Person other than the parties hereto. This Agreement and the obligations of the Company, the Company Subsidiaries and Sellers shall not be assignable without the prior written consent of Purchaser. The rights of Purchaser under this Agreement may be assigned, in whole or in part, to any third party provided Purchaser shall remain liable for all obligations of Purchaser hereunder.
Disclosure of any fact or item in any Schedule or in any Section of the Company Disclosure Letter shall not be deemed to constitute an admission that such item or fact is material for the purposes of this Agreement. The fact that any item of information is disclosed in any Company Disclosure Letter shall not be construed to mean that such information is required to be disclosed by this Agreement.
51
The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to specific performance of the terms hereof and costs of enforcement (including attorneys fees); this being in addition to any other remedy to which such parties are entitled at law or in equity.
The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation. The words hereof, herein, hereby and hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word or shall not be exclusive. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.
THE DECLARATION OF TRUST ESTABLISHING PURCHASER, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE DECLARATION ), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME HOSPITALITY PROPERTIES TRUST REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF HPT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, HPT. ALL PERSONS DEALING WITH HPT, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF HPT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
[ signature page follows ]
52
IN WITNESS WHEREOF , this Agreement has been executed and delivered as of the date first written above.
|
HOSPITALITY PROPERTIES TRUST |
||
|
|
||
|
|
||
|
By: |
/s/ John G. Murray |
|
|
|
Name: John G. Murray |
|
|
|
Title: President |
|
|
|
||
|
|
||
|
PETRO STOPPING CENTERS
HOLDINGS,
|
||
|
|
||
|
|
||
|
By: |
/s/ J. A. Cardwell |
|
|
|
Name: J. A. Cardwell |
|
|
|
Title: C.E.O. |
|
|
|
||
|
|
||
|
PETRO, INC. |
||
|
|
||
|
|
||
|
By: |
/s/ J. A. Cardwell |
|
|
|
Name: J. A. Cardwell |
|
|
|
Title: President |
|
|
|
||
|
|
||
|
/s/ J. A. Cardwell, Sr. |
||
|
J. A. Cardwell, Sr. |
||
|
|
||
|
|
||
|
/s/ James A. Cardwell, Jr. |
||
|
James A. Cardwell, Jr. |
||
Signature Page to Purchase Agreement
|
JAJCO II, INC. |
|
|
|
|
|
|
|
|
By: |
/s/ J. A. Cardwell, Jr. |
|
|
Name: J. A. Cardwell, Jr. |
|
|
Title: President |
|
|
|
|
|
|
|
PETRO WARRANT HOLDINGS CORP. |
|
|
|
|
|
|
|
|
By: |
/s/ J. A. Cardwell |
|
|
Name: J. A. Cardwell |
|
|
Title: President |
|
|
|
|
|
|
|
MOBIL LONG HAUL, INC. |
|
|
|
|
|
|
|
|
By: |
/s/ J. M. E. Mixter |
|
|
Name: J. M. E. Mixter |
|
|
Title: President |
|
|
|
|
|
|
|
VOLVO PETRO HOLDINGS, LLC |
|
|
|
|
|
|
|
|
By: |
/s/ Eddie H. Brailsford |
|
|
Name: Eddie H. Brailsford |
|
|
Title: Chief Financial Controller |
Signature Page to Purchase Agreement
Exhibit 8.1
June 4, 2007
Hospitality Properties
Trust
400 Centre Street
Newton, Massachusetts 02458
Ladies and Gentlemen:
The following opinion is furnished to Hospitality Properties Trust, a Maryland real estate investment trust (the Company), to be filed with the Securities and Exchange Commission (the SEC) as Exhibit 8.1 to the Companys Current Report on Form 8-K to be filed within one week of the date hereof (the Form 8-K) under the Securities Exchange Act of 1934, as amended.
In connection with the opinion expressed herein, we have reviewed originals or copies of such corporate records, such certificates and statements of officers and accountants of the Company and of public officials, and such other documents as we have considered relevant and necessary in order to furnish the opinion hereinafter set forth. In doing so, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, and the authenticity of the originals of such documents. Specifically, and without limiting the generality of the foregoing, we have reviewed: (i) the amended and restated declaration of trust and the amended and restated by-laws of the Company, each as amended to date, and in the case of the declaration of trust, as supplemented; (ii) the section of Item 1 of the Companys Annual Report on Form 10-K for its fiscal year ended December 31, 2006 (the Form 10-K) captioned Federal Income Tax Considerations; and (iii) the section of Item 8.01 of the Form 8-K captioned Supplemental Federal Income Tax Considerations.
The opinion set forth below is based upon the Internal Revenue Code of 1986, as amended, the Treasury Regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, Tax Laws). No assurance can be given that Tax Laws will not change. In preparing the discussion with respect to Tax Laws matters in the section of Item 1 of the Form 10-K captioned Federal Income Tax Considerations, as supplemented by the discussion in the section of Item 8.01 of the Form 8-K captioned Supplemental Federal Income Tax Considerations, we have made certain assumptions therein and expressed certain conditions and qualifications therein, all of which assumptions, conditions and qualifications are incorporated herein by reference. With respect to all questions of fact on which our opinion is based, we have assumed the initial and continuing truth, accuracy and completeness of: (i) the information set forth in the Form 10-K, the Form 8-K, and in the documents incorporated therein by reference; and (ii) representations made to us by officers of the Company or contained in the Form 10-K, the Form 8-K and in the documents incorporated therein by reference, in each such instance without regard to qualifications such as to the best knowledge of or in the belief of. We have not independently verified such information.
We have relied upon, but not independently verified, the foregoing assumptions. If any of the foregoing assumptions are inaccurate or incomplete for any reason, or if the transactions described in the Form 10-K, the Form 8-K or the documents incorporated therein by reference have been consummated in a manner that is inconsistent with the manner contemplated therein, our opinion as expressed below may be adversely affected and may not be relied upon.
Based upon and subject to the foregoing, we are of the opinion that the discussion with respect to Tax Laws matters in the section of Item 1 of the Form 10-K captioned Federal Income Tax Considerations, as supplemented by the discussion in the section of Item 8.01 of the Form 8-K captioned Supplemental Federal Income Tax Considerations, in all material respects are accurate and fairly summarize the Tax Laws issues addressed therein, and hereby confirm that the opinions of counsel referred to in said sections represent our opinions on the subject matter thereof.
Our opinion above is limited to the matters specifically covered hereby, and we have not been asked to address, nor have we addressed, any other matters or any other transactions. Further, we disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in Tax Laws.
This opinion is intended solely for the benefit and use of the Company, and is not to be used, released, quoted, or relied upon by anyone else for any purpose (other than as required by law) without our prior written consent. We hereby consent to the filing of a copy of this opinion as an exhibit to the Form 8-K, which is incorporated by reference in the Companys Registration Statements on Form S-3, File Nos. 333-137073 and 333-141914, and the Companys Registration Statement on Form S-4, File No. 333-141923, each filed under the Securities Act of 1933, as amended (the Act), and to the references to our firm in the Form 8-K. In giving such consents, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Act or under the rules and regulations of the SEC promulgated thereunder.
Very truly yours,
/s/ SULLIVAN & WORCESTER LLP
SULLIVAN & WORCESTER LLP
2
Exhibit 10.1
LEASE AGREEMENT,
dated as of May 30, 2007,
by and among
HPT PSC PROPERTIES TRUST and HPT PSC PROPERTIES LLC
AS LANDLORD,
AND
PETRO STOPPING CENTERS, L.P. ,
AS TENANT
Table of Contents
|
|
Page |
ARTICLE 1 DEFINITIONS |
|
1 |
1.1 Additional Charges |
|
1 |
1.2 Additional Rent |
|
1 |
1.3 Affiliated Person |
|
2 |
1.4 Agreement |
|
2 |
1.5 Applicable Laws |
|
2 |
1.6 Award |
|
2 |
1.7 Base Fuel Gross Revenues |
|
3 |
1.8 Base Non-Fuel Gross Revenues |
|
3 |
1.9 Base Year |
|
3 |
1.10 Business Day |
|
3 |
1.11 Capital Addition |
|
3 |
1.12 Capital Expenditure |
|
3 |
1.13 Capital Replacements Budget |
|
3 |
1.14 Change in Control |
|
3 |
1.15 Claim |
|
4 |
1.16 Code |
|
4 |
1.17 Commencement Date |
|
4 |
1.18 Condemnation |
|
4 |
1.19 Condemnor |
|
4 |
1.20 Consolidated Financials |
|
4 |
1.21 Date of Taking |
|
4 |
1.22 Default |
|
5 |
1.23 Disbursement Rate |
|
5 |
1.24 Distribution |
|
5 |
1.25 Easement Agreement |
|
5 |
1.26 Encumbrance |
|
5 |
1.27 Entity |
|
5 |
1.28 Environment |
|
5 |
1.29 Environmental Obligation |
|
5 |
1.30 Environmental Notice |
|
6 |
1.31 Environmental Report |
|
6 |
1.32 Event of Default |
|
6 |
1.33 Excess Fuel Gross Revenues |
|
6 |
1.34 Excess Non-Fuel Gross Revenues |
|
6 |
1.35 Extended Term |
|
6 |
1.36 Fair Market Value |
|
6 |
1.37 Fair Market Value Rent |
|
6 |
1.38 Financial Officers Certificate |
|
6 |
1.39 Fiscal Year |
|
7 |
1.40 Fixed Term |
|
7 |
1.41 Fixtures |
|
7 |
1.42 Fuel Sales Cap |
|
7 |
1.43 GAAP |
|
7 |
1.44 Government Agencies |
|
7 |
1.45 Gross Fuel Revenues |
|
7 |
1.46 Gross Non-Fuel Revenues |
|
8 |
i
1.47 Ground Leases |
|
8 |
1.48 Guarantor |
|
9 |
1.49 Guaranty |
|
9 |
1.50 Hazardous Substances |
|
9 |
1.51 Immediate Family |
|
10 |
1.52 Impositions |
|
10 |
1.53 Indebtedness |
|
11 |
1.54 Index |
|
11 |
1.55 Insurance Requirements |
|
11 |
1.56 Interest Rate |
|
12 |
1.57 Land |
|
12 |
1.58 Landlord |
|
12 |
1.59 Landlord Default |
|
12 |
1.60 Landlord Liens |
|
12 |
1.61 Lease Year |
|
12 |
1.62 Leased Improvements |
|
12 |
1.63 Leased Intangible Property |
|
12 |
1.64 Leased Property |
|
13 |
1.65 Legal Requirements |
|
13 |
1.66 Lien |
|
13 |
1.67 Minimum Rent |
|
13 |
1.68 Notice |
|
13 |
1.69 Officers Certificate |
|
13 |
1.70 Overdue Rate |
|
13 |
1.71 Parent |
|
14 |
1.72 Permitted Encumbrances |
|
14 |
1.73 Permitted Liens |
|
14 |
1.74 Permitted Use |
|
14 |
1.75 Person |
|
14 |
1.76 Property |
|
14 |
1.77 Property Mortgage |
|
14 |
1.78 Property Mortgagee |
|
14 |
1.79 Rent |
|
14 |
1.80 SARA |
|
14 |
1.81 SEC |
|
15 |
1.82 State |
|
15 |
1.83 Subordinated Creditor |
|
15 |
1.84 Subordination Agreement |
|
15 |
1.85 Subsidiary |
|
15 |
1.86 Successor Landlord |
|
15 |
1.87 Superior Landlord |
|
15 |
1.88 Superior Lease |
|
15 |
1.89 Superior Mortgage |
|
15 |
1.90 Superior Mortgagee |
|
15 |
1.91 TA |
|
15 |
1.92 Tenant |
|
15 |
1.93 Tenants Personal Property |
|
16 |
1.94 Term |
|
16 |
ii
1.95 Travel Center |
|
16 |
1.96 Unsuitable for Its Permitted Use |
|
16 |
1.97 Work |
|
16 |
ARTICLE 2 LEASED PROPERTY AND TERM |
|
16 |
2.1 Leased Property. |
|
16 |
2.2 Condition of Leased Property. |
|
17 |
2.3 Fixed Term. |
|
18 |
2.4 Extended Terms. |
|
18 |
ARTICLE 3 RENT |
|
19 |
3.1 Rent. |
|
19 |
3.2 Late Payment of Rent, Etc. |
|
24 |
3.3 Net Lease, Etc. |
|
25 |
3.4 No Termination, Abatement, Etc. |
|
25 |
ARTICLE 4 USE OF THE LEASED PROPERTY |
|
26 |
4.1 Permitted Use. |
|
26 |
4.2 Compliance with Legal/Insurance Requirements, Etc. |
|
28 |
4.3 Environmental Matters. |
|
29 |
4.4 Ground Leases. |
|
31 |
ARTICLE 5 MAINTENANCE AND REPAIRS |
|
31 |
5.1 Maintenance and Repair. |
|
31 |
5.2 Tenants Personal Property. |
|
34 |
5.3 Yield Up. |
|
34 |
ARTICLE 6 IMPROVEMENTS, ETC. |
|
35 |
6.1 Improvements to the Leased Property. |
|
35 |
6.2 Salvage. |
|
36 |
ARTICLE 7 LIENS |
|
36 |
ARTICLE 8 PERMITTED CONTESTS |
|
36 |
ARTICLE 9 INSURANCE AND INDEMNIFICATION |
|
37 |
9.1 General Insurance Requirements. |
|
37 |
9.2 Waiver of Subrogation. |
|
38 |
9.3 Form Satisfactory, Etc. |
|
38 |
9.4 No Separate Insurance; Self-Insurance. |
|
39 |
9.5 Indemnification of Landlord. |
|
39 |
ARTICLE 10 CASUALTY |
|
40 |
10.1 Insurance Proceeds. |
|
40 |
10.2 Damage or Destruction. |
|
41 |
10.3 Damage Near End of Term. |
|
43 |
10.4 Tenants Personal Property. |
|
43 |
10.5 Restoration of Tenants Personal Property. |
|
43 |
10.6 No Abatement of Rent. |
|
43 |
10.7 Waiver. |
|
44 |
ARTICLE 11 CONDEMNATION |
|
44 |
11.1 Total Condemnation, Etc. |
|
44 |
11.2 Partial Condemnation. |
|
44 |
11.3 Abatement of Rent. |
|
46 |
iii
11.4 Temporary Condemnation. |
|
46 |
11.5 Allocation of Award. |
|
46 |
ARTICLE 12 DEFAULTS AND REMEDIES |
|
47 |
12.1 Events of Default. |
|
47 |
12.2 Remedies. |
|
49 |
12.3 Tenants Waiver. |
|
51 |
12.4 Application of Funds. |
|
51 |
12.5 Landlords Right to Cure Tenants Default. |
|
51 |
ARTICLE 13 HOLDING OVER |
|
51 |
ARTICLE 14 LANDLORD DEFAULT |
|
52 |
ARTICLE 15 PURCHASE OF TENANTS PERSONAL PROPERTY |
|
53 |
ARTICLE 16 SUBLETTING AND ASSIGNMENT |
|
53 |
16.1 Subletting and Assignment. |
|
53 |
16.2 Required Sublease Provisions. |
|
54 |
16.3 Permitted Sublease. |
|
55 |
16.4 Sublease Limitation. |
|
56 |
ARTICLE 17 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS |
|
56 |
17.1 Estoppel Certificates. |
|
56 |
17.2 Financial Statements. |
|
57 |
ARTICLE 18 LANDLORDS RIGHT TO INSPECT |
|
58 |
ARTICLE 19 EASEMENTS |
|
58 |
19.1 Grant of Easements. |
|
58 |
19.2 Exercise of Rights by Tenant. |
|
59 |
19.3 Permitted Encumbrances. |
|
59 |
ARTICLE 20 PROPERTY MORTGAGES |
|
59 |
20.1 Landlord May Grant Liens. |
|
59 |
20.2 Subordination of Lease. |
|
59 |
20.3 Notice to Mortgagee and Superior Landlord. |
|
61 |
ARTICLE 21 ADDITIONAL COVENANTS OF LANDLORD AND TENANT |
|
61 |
21.1 Prompt Payment of Indebtedness. |
|
61 |
21.2 Conduct of Business. |
|
62 |
21.3 Maintenance of Accounts and Records. |
|
62 |
21.4 Notice of Litigation, Etc. |
|
62 |
21.5 Indebtedness of Tenant. |
|
63 |
21.6 Distributions, Payments to Affiliated Persons, Etc. |
|
64 |
21.7 Prohibited Transactions. |
|
64 |
21.8 Liens and Encumbrances. |
|
64 |
21.9 Merger; Sale of Assets; Etc. |
|
65 |
21.10 Bankruptcy Remote Entities. |
|
65 |
21.11 Trade Area Restriction. |
|
65 |
ARTICLE 22 ARBITRATION |
|
66 |
ARTICLE 23 MISCELLANEOUS |
|
67 |
23.1 Limitation on Payment of Rent. |
|
67 |
23.2 No Waiver. |
|
67 |
23.3 Remedies Cumulative. |
|
67 |
iv
23.4 Severability. |
|
68 |
23.5 Acceptance of Surrender. |
|
68 |
23.6 No Merger of Title. |
|
68 |
23.7 Conveyance by Landlord. |
|
68 |
23.8 Quiet Enjoyment. |
|
68 |
23.9 No Recordation. |
|
69 |
23.10 Notices. |
|
69 |
23.11 Construction. |
|
70 |
23.12 Counterparts; Headings. |
|
70 |
23.13 Applicable Law, Etc. |
|
71 |
23.14 Right to Make Agreement. |
|
71 |
23.15 Attorneys Fees. |
|
72 |
23.16 Nonliability of Trustees. |
|
72 |
v
LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into as of May 30, 2007, by and among HPT PSC PROPERTIES TRUST , a Maryland real estate investment trust, and HPT PSC PROPERTIES LLC , a Maryland limited liability company (collectively, jointly and severally, Landlord ), and PETRO STOPPING CENTERS, L.P. , a Delaware limited partnership ( Tenant ).
W I T N E S S E T H :
WHEREAS, Landlord holds fee simple title to, and/or the leasehold interest in, the Leased Property (this and other capitalized terms used and not otherwise defined herein having the meanings given such terms in Article 1 ); and
WHEREAS , Landlord wishes to lease the Leased Property to Tenant and Tenant wishes to lease the Leased Property from Landlord, subject to and upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (a) the terms defined in this Article shall have the meanings assigned to them in this Article and include the plural as well as the singular, (b) all accounting terms not otherwise defined herein shall have the meanings assigned to them in accordance with GAAP, (c) all references in this Agreement to designated Articles, Sections and other subdivisions are to the designated Articles, Sections and other subdivisions of this Agreement, and (d) the words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Each Extended Term shall commence on the day succeeding the expiration of the Fixed Term or the preceding Extended Term, as the case may be. All of the terms, covenants and provisions of this Agreement shall apply to each such Extended Term, except that (x) the Minimum Rent payable during such Extended Term shall be the greater of the Prior Rent and the Fair Market Value
18
Rent for the Leased Property (such Fair Market Value Rent to be determined by agreement of the parties or, absent agreement, by an appraiser designated by Landlord) (taking into account that the Base Year shall remain unchanged) and (y) Tenant shall have no right to extend the Term beyond the expiration of the Extended Terms. For purposes of this Section 2.4 , Prior Rent shall mean an amount equal to the per annum Minimum Rent in effect on the last day of the Fixed Term or Extended Term immediately preceding such Extended Term. If Tenant shall elect to exercise either of the aforesaid options, it shall do so by giving Landlord Notice thereof not later than one (1) year prior to the scheduled expiration of the then current Term of this Agreement (Fixed or Extended, as the case may be), it being understood and agreed that time shall be of the essence with respect to the giving of such Notice. Tenant may not exercise its option for more than one such Extended Term at a time. If Tenant shall fail to give any such Notice timely, this Agreement shall automatically terminate at the end of the Term then in effect and Tenant shall have no further option to extend the Term of this Agreement. If Tenant shall give such Notice, the extension of this Agreement shall be automatically effected without the execution of any additional documents; it being understood and agreed, however, that Tenant and Landlord shall execute such documents and agreements as either party shall reasonably require to evidence the same.
19
20
If the annual Additional Rent for such preceding Lease Year as set forth in Tenants statement thereof exceeds the amount previously paid with respect thereto by Tenant, Tenant shall pay such excess to Landlord at such time as the statement is delivered, together with interest at the Interest Rate, which interest shall accrue from the close of such preceding Lease Year until the date that such statement is required to be delivered and, thereafter, such interest shall accrue at the Overdue Rate, until the amount of such difference shall be paid or otherwise discharged. If the annual Additional Rent for such preceding Lease Year as shown in such statement is less than the amount previously paid with respect thereto by Tenant, Landlord shall promptly refund such amount to Tenant, provided no Event of Default has occurred and is continuing.
21
Any proprietary information obtained by Landlord with respect to Tenant pursuant to the provisions of this Agreement shall be treated as confidential, except that such information may be disclosed or used, subject to appropriate confidentiality safeguards, pursuant to court order or in any litigation between the parties and except further that Landlord may disclose such information to its prospective lenders, provided that Landlord shall direct such lenders to maintain such information as confidential. The obligations of Tenant and Landlord contained in this Section 3.1.2 shall survive the expiration or earlier termination of this Agreement.
22
23
Landlord shall give prompt Notice to Tenant of all Impositions payable by Tenant hereunder of which Landlord at any time has knowledge; provided , however , that Landlords failure to give any such notice shall in no way diminish Tenants obligation hereunder to pay such Impositions.
24
In the event of any failure by Tenant to pay any Additional Charges when due, Tenant shall promptly pay and discharge, as Additional Charges, every fine, penalty, interest and cost which is added for non-payment or late payment of such items. Landlord shall have all legal, equitable and contractual rights, powers and remedies provided either in this Agreement or by statute or otherwise in the case of non-payment of the Additional Charges as in the case of non-payment of the Minimum Rent and Additional Rent.
25
26
27
28
29
If, at any time prior to the termination of this Agreement, Hazardous Substances (other than those maintained in accordance with Applicable Laws) are discovered on any Property, subject to Tenants right to contest the same in accordance with Article 8 , Tenant shall take (and shall cause to be taken) all actions and incur any and all expenses, as are required by any Government Agency and by Applicable Law, (i) to clean up and remove from and about such Property all Hazardous Substances thereon, (ii) to contain and prevent any further discharge, release or threat of discharge or release of Hazardous Substances on or about such Property and (iii) to use good faith efforts to eliminate any further discharge, release or threat of discharge or release of Hazardous Substances on or about such Property.
30
31
32
33
Nothing contained in this Agreement shall be deemed or construed in any way as constituting the consent or request of Landlord, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer or materialmen for the performance of any labor or the furnishing of any materials for any alteration, addition, improvement or repair to the Leased Property or any part thereof or as giving Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to the filing of any lien against the Leased Property or any part thereof nor to subject Landlords estate in the Leased Property or any part thereof to liability under any mechanics lien law of any State in any way, it being expressly understood Landlords estate shall not be subject to any such liability.
In addition, upon the expiration or earlier termination of this Agreement, Tenant shall, at Landlords sole cost and expense, use its good faith efforts to transfer and/or assign (or cause to be transferred or assigned) to Landlord or Landlords nominee, and to cooperate with Landlord or Landlords nominee in connection with, the processing of all applications for licenses, operating permits and other governmental authorizations and all contracts, including contracts with governmental or quasi-governmental entities, which may be necessary for the use and operation of the Travel Centers as then operated. If requested by Landlord, Tenant shall continue
34
to manage one or more of the Travel Centers after the expiration of the Term for up to one hundred eighty (180) days, on such reasonable terms (including receipt by Tenant of a market management fee), as Landlord shall reasonably request.
35
Subject to Article 8 , Tenant shall use its best efforts not, directly or indirectly, to create or allow to remain and shall promptly discharge (or cause to be discharged), at its expense, any lien, encumbrance, attachment, title retention agreement or claim upon the Leased Property, or any portion thereof, or Tenants leasehold interest therein or any attachment, levy, claim or encumbrance in respect of the Rent, other than (a) Permitted Encumbrances, (b) restrictions, liens and other encumbrances which are consented to in writing by Landlord, (c) liens for those taxes of Landlord which Tenant is not required to pay hereunder, (d) subleases permitted by Article 16 , (e) liens for Impositions or for sums resulting from noncompliance with Legal Requirements so long as (i) the same are not yet due and payable, or (ii) are being contested in accordance with Article 8 , (f) liens of mechanics, laborers, materialmen, suppliers or vendors incurred in the ordinary course of business that are not yet due and payable or are for sums that are being contested in accordance with Article 8 , (g) any Property Mortgages or other liens which are the responsibility of Landlord pursuant to the provisions of Article 20 and (h) Landlord Liens and any other voluntary liens created by Landlord.
Tenant shall have the right to contest the amount or validity of any Imposition, Legal Requirement, Insurance Requirement, Environmental Obligation, lien, attachment, levy, encumbrance, charge or claim (collectively, Claims ) as to the Leased Property, by appropriate legal proceedings, conducted in good faith and with due diligence, provided that (a) the foregoing shall in no way be construed as relieving, modifying
36
or extending Tenants obligation to pay (or cause to be paid) any Claims as finally determined, (b) such contest shall not cause Landlord or Tenant to be in default under any ground lease, mortgage or deed of trust encumbering the Leased Property, or any portion thereof (Landlord agreeing that any such ground lease, mortgage or deed of trust shall permit Tenant to exercise the rights granted pursuant to this Article 8 ) or any interest therein or result in or reasonably be expected to result in a lien attaching to the Leased Property, or any portion thereof, (c) no part of the Leased Property nor any Rent therefrom shall be in any immediate danger of sale, forfeiture, attachment or loss, and (d) Tenant shall indemnify and hold harmless Landlord from and against any cost, claim, damage, penalty or reasonable expense, including reasonable attorneys fees, incurred by Landlord in connection therewith or as a result thereof. Landlord agrees to join in any such proceedings if required legally to prosecute such contest, provided that Landlord shall not thereby be subjected to any liability therefor (including, without limitation, for the payment of any costs or expenses in connection therewith) unless Tenant agrees by agreement in form and substance reasonably satisfactory to Landlord, to assume and indemnify Landlord with respect to the same. Tenant shall be entitled to any refund of any Claims and such charges and penalties or interest thereon which have been paid by Tenant or paid by Landlord to the extent that Landlord has been fully reimbursed by Tenant. If Tenant shall fail (x) to pay or cause to be paid any Claims when finally determined, (y) to provide reasonable security therefor or (z) to prosecute or cause to be prosecuted any such contest diligently and in good faith, Landlord may, upon reasonable notice to Tenant (which notice shall not be required if Landlord shall reasonably determine that the same is not practicable), pay such charges, together with interest and penalties due with respect thereto, and Tenant shall reimburse Landlord therefor, upon demand, as Additional Charges.
37
38
39
40
41
42
Landlords obligation to disburse insurance proceeds under this Article 10 shall be subject to the release of such proceeds by any Property Mortgagee to Landlord.
Tenants obligation to restore the applicable Property pursuant to this Article 10 shall be subject to the release of available insurance proceeds by the applicable Property Mortgagee to Landlord or directly to Tenant and, in the event such proceeds are insufficient, Landlord electing to make such deficiency available therefor (and disbursement of such deficiency).
43
44
Subject to the terms hereof, Landlord shall contribute to the cost of restoration that part of the Award received by Landlord and necessary to complete such repair or restoration, together with severance and other damages awarded to Landlord for the taken Leased Improvements and any deficiency Landlord has agreed to disburse, to Tenant regularly during the restoration period so as to permit payment for the cost of such repair or restoration. Landlord may, at its option, condition advancement of such portion of the Award and other amounts on (a) its approval of plans and specifications of an architect satisfactory to Landlord (which approval shall not be unreasonably withheld, delayed or conditioned), (b) general contractors estimates, (c) architects certificates, (d) conditional lien waivers of general contractors, if available, (e) evidence of approval by all governmental authorities and other regulatory bodies whose approval is required, (f) if Tenant has elected to advance deficiency funds pursuant to the preceding paragraph, Tenant depositing the amount thereof with Landlord and (g) such other certificates as Landlord may, from time to time, reasonably require. Landlords obligation under this Section 11.2 to disburse the Award and such other amounts shall be subject to (x) the collection thereof by Landlord and (y) the satisfaction of any applicable requirements of any Property Mortgage, and the release of such Award by the applicable Property Mortgagee. Tenants obligation to restore the Leased Property shall be subject to the release of any portion of the Award by the applicable Property Mortgagee to Landlord.
45
46
47
then, and in any such event, Landlord, in addition to all other remedies available to it, may terminate this Agreement with respect to any or all of the Leased Property by giving Notice thereof to Tenant and upon the expiration of the time, if any, fixed in such Notice, this Agreement shall terminate with respect to all or the designated portion of the Leased Property and all rights of Tenant under this Agreement with respect thereto shall cease. Landlord shall have and may exercise all rights and remedies available at law and in equity to Landlord as a result of Tenants breach of this Agreement.
48
Upon the termination of this Agreement in connection with any Event of Default, Landlord may, in addition to any other remedies provided herein, enter upon the Leased Property, or any portion thereof and take possession of any and all of Tenants Personal Property, if any, without liability for trespass or conversion (Tenant hereby waiving any right to notice or hearing prior to such taking of possession by Landlord) and sell the same at public or private sale, after giving Tenant reasonable Notice of the time and place of any public or private sale, at which sale Landlord or its assigns may purchase all or any portion of Tenants Personal Property, if any, unless otherwise prohibited by law. Unless otherwise provided by law and without intending to exclude any other manner of giving Tenant reasonable notice, the requirement of reasonable Notice shall be met if such Notice is given at least ten (10) days before the date of sale.
49
At any time after such termination, whether or not Landlord shall have collected any such current damages, as liquidated final damages beyond the date of such termination, at Landlords election, Tenant shall pay to Landlord an amount equal to the present value (as reasonably determined by Landlord using a discount rate equal to five percent (5%) per annum) of the excess, if any, of the Rent and other charges which would be payable hereunder from the date of such termination (assuming that, for the purposes of this paragraph, annual payments by Tenant on account of Impositions and Additional Rent would be the same as payments required for the immediately preceding twelve calendar months, or if less than twelve calendar months have expired since the Commencement Date, the payments required for such lesser period projected to an annual amount) for what would be the then unexpired term of this Agreement if the same remained in effect, over the fair market rental for the same period. Nothing contained in this Agreement shall, however, limit or prejudice the right of Landlord to prove and obtain in proceedings for bankruptcy or insolvency an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, the damages are to be proved, whether or not the amount be greater than, equal to, or less than the amount of the loss or damages referred to above.
In case of any Event of Default, re-entry, expiration and dispossession by summary proceedings or otherwise, Landlord may, (a) relet the Leased Property or any part or parts thereof, either in the name of Landlord or otherwise, for a term or terms which may at Landlords option, be equal to, less than or exceed the period which would otherwise have constituted the balance of the Term and may grant concessions or free rent to the extent that Landlord considers advisable and necessary to relet the same, and (b) may make such reasonable alterations, repairs and decorations in the Leased Property, or any portion thereof, as Landlord, in its sole and absolute discretion, considers advisable and necessary for the purpose of reletting the Leased Property; and the making of such alterations, repairs and decorations shall not operate or be construed to release Tenant from liability hereunder as aforesaid. Landlord shall in no event be liable in any way whatsoever for any failure to relet all or any portion of the Leased Property, or, in the event that the Leased Property is relet, for failure to collect the rent under such reletting. To the maximum extent permitted by law, Tenant hereby expressly waives any and all rights of redemption granted under any present or future laws in the event of Tenant being evicted or dispossessed, or in the event of Landlord
50
obtaining possession of the Leased Property, by reason of the occurrence and continuation of an Event of Default hereunder.
Any holding over by Tenant after the expiration or sooner termination of this Agreement shall be treated as a daily tenancy at sufferance at a rate equal to two (2) times the Minimum Rent and other charges herein provided (prorated on a
51
daily basis). Tenant shall also pay to Landlord all damages (direct or indirect) sustained by reason of any such holding over. Otherwise, such holding over shall be on the terms and conditions set forth in this Agreement, to the extent applicable. Nothing contained herein shall constitute the consent, express or implied, of Landlord to the holding over of Tenant after the expiration or earlier termination of this Agreement.
If Landlord shall default in the performance or observance of any of its covenants or obligations set forth in this Agreement or any obligation of Landlord, if any, under any agreement affecting the Leased Property, the performance of which is not Tenants obligation pursuant to this Agreement, and any such default shall continue for a period of thirty (30) days after Notice thereof from Tenant to Landlord and any applicable Property Mortgagee, or such additional period as may be reasonably required to correct the same, Tenant may declare the occurrence of a Landlord Default by a second Notice to Landlord and to such Property Mortgagee. Thereafter, Tenant may forthwith cure the same and, subject to the provisions of the following paragraph, invoice Landlord for costs and expenses (including reasonable attorneys fees and court costs) incurred by Tenant in curing the same, together with interest thereon (to the extent permitted by law) from the date Landlord receives Tenants invoice until paid, at the Overdue Rate. Tenant shall have no right to terminate this Agreement for any default by Landlord hereunder and no right, for any such default, to offset or counterclaim against any Rent or other charges due hereunder.
If Landlord shall in good faith dispute the occurrence of any Landlord Default and Landlord, before the expiration of the applicable cure period, shall give Notice thereof to Tenant, setting forth, in reasonable detail, the basis therefor, no Landlord Default shall be deemed to have occurred and Landlord shall have no obligation with respect thereto until final adverse determination thereof. If Tenant and Landlord shall fail, in good faith, to resolve any such dispute within ten (10) days after Landlords Notice of dispute, either may submit the matter for resolution in accordance with Article 22 .
52
Landlord shall have the option to purchase Tenants Personal Property, at the expiration or sooner termination of this Agreement, for an amount equal to the then fair market value thereof (current replacement cost as determined by agreement of the parties or, in the absence of such agreement, appraisal), subject to, and with appropriate price adjustments for, all liabilities assumed such as equipment leases, conditional sale contracts and other encumbrances securing such liabilities to which such Personal Property is subject.
For purposes of this Section 16.1 , an assignment of this Agreement shall be deemed to include, without limitation, any direct or indirect Change in Control of Tenant.
If this Agreement is assigned or if the Leased Property, or any portion thereof is sublet (or occupied by anybody other than Tenant and its employees), after termination of this Agreement, Landlord may collect the rents from such assignee, subtenant or occupant, as the case may be, but no such collection shall be deemed a waiver of the provisions set forth in the first paragraph of this Section 16.1 , the acceptance by Landlord of such assignee, subtenant or occupant, as the case may be, as a tenant, or a release of Tenant from the future performance by
53
Tenant of its covenants, agreements or obligations contained in this Agreement.
Any assignment or transfer of Tenants interest under this Agreement shall be subject to such assignees or transferees delivery to Landlord of a Guaranty, which Guaranty shall be in form and substance satisfactory to Landlord in its sole discretion and which Guaranty shall constitute a Guaranty hereunder.
No subletting or assignment shall in any way impair the continuing primary liability of Tenant hereunder (unless Landlord and Tenant expressly otherwise agree that Tenant shall be released from all obligations hereunder), and no consent to any subletting or assignment in a particular instance shall be deemed to be a waiver of the prohibition set forth in this Section 16.1 . No assignment, subletting or occupancy shall affect any Permitted Use. Any subletting, assignment or other transfer of Tenants interest under this Agreement in contravention of this Section 16.1 shall be voidable at Landlords option.
54
The provisions of this Section 16.2 shall not be deemed a waiver of the provisions set forth in the first paragraph of Section 16.1 .
55
56
Landlord shall treat any non-public information which it receives from Tenant pursuant to this Section 17.2 as confidential, but Landlord may at any time, and from time to
57
time, provide any Property Mortgagee with copies of any of the foregoing statements, subject to Landlord obtaining the agreement of such Property Mortgagee to maintain such statements and the information therein as confidential.
Tenant shall permit Landlord and its authorized representatives to inspect the Leased Property, or any portion thereof, during usual business hours upon not less than forty-eight (48) hours notice and to make such repairs as Landlord is permitted or required to make pursuant to the terms of this Agreement, provided that any inspection or repair by Landlord or its representatives will not unreasonably interfere with Tenants use and operation of the Leased Property and further provided that in the event of an emergency, as determined by Landlord in its reasonable discretion, prior Notice shall not be necessary.
58
59
If any Superior Landlord or Superior Mortgagee or the nominee or designee of any Superior Landlord or Superior Mortgagee shall succeed to the rights of Landlord under this Agreement (any such person, Successor Landlord ), whether through possession or foreclosure action or delivery of a new lease or deed, or otherwise, at such Successor Landlords request, Tenant shall attorn to and recognize the Successor Landlord as Tenants landlord under this Agreement and Tenant shall promptly execute and deliver any instrument that such Successor Landlord may reasonably request to evidence such attornment (provided that such instrument does not alter the terms of this Agreement), whereupon, this Agreement shall continue in full force and effect as a direct lease between the Successor Landlord and Tenant upon all of the terms, conditions and covenants as are set forth in this Agreement, except that the Successor Landlord (unless formerly the landlord under this Agreement or its nominee or designee) shall not be (a) liable in any way to Tenant for any act or omission, neglect or default on the part of any prior Landlord under this Agreement, (b) responsible for any monies owing by or on deposit with any prior Landlord to the credit of Tenant (except to the extent actually paid or delivered to the Successor Landlord), (c) subject to any counterclaim or setoff which theretofore accrued to Tenant against any prior Landlord, (d) bound by any modification of this Agreement subsequent to such Superior Lease or Mortgage, or by any previous prepayment of Rent for more than one (1) month in advance of the date due hereunder, which was not approved in writing by the Superior Landlord or the Superior Mortgagee thereto, (e) liable to Tenant beyond the Successor Landlords interest in the Leased Property and the rents, income, receipts, revenues, issues and profits issuing from the Leased Property, (f) responsible for the performance of any work to be done by the Landlord under this Agreement to render the Leased Property ready for occupancy by Tenant (subject to Landlords obligations under Section 5.1.2(b) or with respect to any insurance or Condemnation proceeds), or (g) required to remove any Person occupying the Leased Property or any part thereof, except if such person claims by, through or under the Successor Landlord.
60
Tenant agrees at any time and from time to time to execute a suitable instrument in confirmation of Tenants agreement to attorn, as aforesaid, and Landlord agrees to provide Tenant with an instrument of nondisturbance and attornment from each such Superior Mortgagee and Superior Landlord (other than the lessors under any ground leases with respect to the Leased Property, or any portion thereof) in form and substance reasonably satisfactory to Tenant. Notwithstanding the foregoing, any Successor Landlord shall be liable (a) to pay to Tenant any amounts owed under Section 5.1.2(b) , and (b) to pay to Tenant any portions of insurance proceeds or Awards received by Landlord or the Successor Landlord required to be paid to Tenant pursuant to the terms of this Agreement, and, as a condition to any mortgage, lien or lease in respect of the Leased Property, or any portion thereof, and the subordination of this Agreement thereto, the mortgagee, lienholder or lessor, as applicable, shall expressly agree, for the benefit of Tenant, to make such payments, which agreement shall be embodied in an instrument in form reasonably satisfactory to Tenant.
61
62
63
64
65
Landlord or Tenant may elect to submit any dispute hereunder that has an amount in controversy in excess of $250,000 to arbitration hereunder. Any such arbitration shall be conducted in Boston, Massachusetts in accordance with the Commercial Arbitration Rules of the American Arbitration Association then pertaining and the decision of the arbitrators with respect to such dispute shall be binding, final and conclusive on the parties.
In the event Landlord or Tenant shall elect to submit any such dispute to arbitration hereunder, Landlord and Tenant shall each appoint and pay all fees of a fit and impartial person as arbitrator with at least ten (10) years recent professional experience in the general subject matter of the dispute. Notice of such appointment shall be sent in writing by each party to the other, and the arbitrators so appointed, in the event of their failure to agree within thirty (30) days after the appointment of the second arbitrator upon the matter so submitted, shall appoint a third arbitrator. If either Landlord or Tenant shall fail to appoint an arbitrator, as aforesaid, for a period of twenty (20) days after written notice from the other party to make such appointment, then the arbitrator appointed by the party having made such appointment shall appoint a second arbitrator and the two (2) so appointed shall, in the event of their failure to agree upon any decision within thirty (30) days thereafter, appoint a third arbitrator. If such arbitrators fail to agree upon a third arbitrator within forty five (45) days after the appointment of the second arbitrator, then such third arbitrator shall be appointed by the American Arbitration Association from its qualified panel of arbitrators, and shall be a person having at least ten (10) years recent professional experience as to the subject matter in question. The fees of the third arbitrator and the expenses incident to the proceedings shall be borne equally between Landlord and Tenant, unless the arbitrators decide otherwise. The fees of respective counsel engaged by the parties, and the fees of expert witnesses and other witnesses called for the parties, shall be paid by the respective party engaging such counsel or calling or engaging such witnesses.
The decision of the arbitrators shall be rendered within thirty (30) days after appointment of the third arbitrator. Such decision shall be in writing and in duplicate, one
66
counterpart thereof to be delivered to Landlord and one to Tenant. A judgment of a court of competent jurisdiction may be entered upon the award of the arbitrators in accordance with the rules and statutes applicable thereto then obtaining.
67
68
if to Landlord:
c/o Hospitality Properties Trust
400 Centre Street
Newton, Massachusetts 02458
Attn: Mr. John G. Murray
Telecopier No. (617) 969-5730
69
if to Tenant:
c/o TravelCenters of America LLC
24601 Center Ridge Road
Westlake, Ohio 44145
Attn: Mr. Thomas M. OBrien
Telecopier No. (440)808-3301
70
71
72
IN WITNESS WHEREOF , the parties have executed this Agreement as a sealed instrument as of the date above first written.
|
LANDLORD: |
|||
|
|
|||
|
HPT PSC PROPERTIES TRUST |
|||
|
|
|||
|
|
|||
|
By: |
/s/ John G. Murray |
|
|
|
|
John G. Murray |
||
|
|
President |
||
|
|
|
||
|
|
|
||
|
HPT PSC PROPERTIES LLC |
|||
|
|
|||
|
|
|||
|
By: |
/s/ John G. Murray |
|
|
|
|
John G. Murray |
||
|
|
President |
||
|
|
|||
|
|
|||
|
TENANT: |
|||
|
|
|||
|
PETRO STOPPING CENTERS, L.P. |
|||
|
|
|||
|
|
|||
|
By: |
/s/ Thomas M. OBrien |
|
|
|
|
Thomas M. OBrien |
||
|
|
President |
||
EXHIBITS A-1 through A-40
EXHIBITS A-1 THROUGH A-40 HAVE BEEN OMITTED AND WILL BE SUPPLEMENTALLY
FURNISHED TO
THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST.
Exhibit 10.2
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this Agreement ) is made and given as of May 30, 2007 by TRAVELCENTERS OF AMERICA LLC , a Delaware limited liability company (the Guarantor ), for the benefit of HPT PSC PROPERTIES TRUST, a Maryland real estate investment trust and HPT PSC PROPERTIES LLC, a Maryland limited liability company (collectively, the Landlord ).
W I T N E S S E T H :
WHEREAS , pursuant to a Lease Agreement, dated as of the date hereof (the Lease ), the Landlord has agreed to lease to Petro Stopping Centers, L.P., a subsidiary of the Guarantor (the Tenant ), and the Tenant has agreed to lease from the Landlord, certain real property, together with certain related improvements and other property, as more particularly described in the Lease; and
WHEREAS , it is a condition precedent to the Landlords entering into the Lease that the Guarantor guarantees all of the payment and performance obligations of the Tenant with respect to the Lease; and
WHEREAS , the transactions contemplated by the Lease are of direct material benefit to the Guarantor;
NOW, THEREFORE , in consideration of the foregoing and for other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows:
1. Certain Terms . Capitalized terms used and not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Lease.
2. Guaranteed Obligations . For purposes of this Agreement, the term Guaranteed Obligations shall mean the payment and performance of each and every obligation of the Tenant to the Landlord under the Lease or relating thereto, whether now existing or hereafter arising, and including, without limitation, the payment of the full amount of the Rent payable under the Lease.
3. Representations and Covenants . The Guarantor represents, warrants, covenants, and agrees that:
3.1 Performance of Covenants and Agreements . The Guarantor hereby agrees to take all lawful action in its power to cause the Tenant duly and punctually to perform all of the covenants and agreements set forth in the Lease.
3.2 Validity of Agreement . The Guarantor has duly and validly executed and delivered this Agreement; this Agreement constitutes the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as the enforceability thereof may be subject to bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors rights generally and subject to general equitable principles, regardless of whether enforceability is considered in a proceeding at law or in equity; and the execution, delivery and performance of this Agreement have been duly authorized by all requisite action of the Guarantor and such execution, delivery and performance by the Guarantor will not result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any of the property or assets of the Guarantor pursuant to the terms of, any indenture, mortgage, deed of trust, note, other evidence of indebtedness, agreement or other instrument to which it may be a party or by which it or any of its property or assets may be bound, or violate any provision of law, or any applicable order, writ, injunction, judgment or decree of any court or any order or other public regulation of any governmental commission, bureau or administrative agency.
3.3 Payment of Expenses . The Guarantor agrees, as principal obligor and not as guarantor only, to pay to the Landlord forthwith, upon demand, in immediately available federal funds, all costs and expenses (including reasonable attorneys fees and disbursements) incurred or expended by the Landlord in connection with the enforcement of this Agreement, together with interest on amounts recoverable under this Agreement from the time such amounts become due until payment at the Overdue Rate. The Guarantors covenants and agreements set forth in this Section 3.3 shall survive the termination of this Agreement.
3.5 Notices . The Guarantor shall promptly give notice to the Landlord of any event known to it which might reasonably result in a material adverse change in its financial condition.
2
3.6 Reports . The Guarantor shall promptly provide to the Landlord each of the financial reports, certificates and other documents required of it under the Lease.
3.7 Books and Records . The Guarantor shall at all times keep proper books of record and account in which full, true and correct entries shall be made of its transactions in accordance with generally accepted accounting principles and shall set aside on its books from its earnings for each fiscal year all such proper reserves, including reserves for depreciation, depletion, obsolescence and amortization of its properties during such fiscal year, as shall be required in accordance with generally accepted accounting principles, consistently applied, in connection with its business. The Guarantor shall permit access by the Landlord and its agents to the books and records maintained by the Guarantor during normal business hours and upon reasonable notice. The Landlord shall treat any non-public information which it receives from the Guarantor pursuant to this Agreement as confidential.
3.8 Taxes, Etc . The Guarantor shall pay and discharge promptly as they become due and payable all taxes, assessments and other governmental charges or levies imposed upon the Guarantor or the income of the Guarantor or upon any of the property, real, personal or mixed, of the Guarantor, or upon any part thereof, as well as all claims of any kind (including claims for labor, materials and supplies) which, if unpaid, might by law become a lien or charge upon any property and result in a material adverse change in the financial condition of the Guarantor; provided , however , that the Guarantor shall not be required to pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings or other appropriate actions promptly initiated and diligently conducted and if the Guarantor shall have set aside on its books such reserves of the Guarantor, if any, with respect thereto as are required by generally accepted accounting principles.
3.9 Legal Existence of the Guarantor . The Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence.
3.10 Compliance . The Guarantor shall use reasonable business efforts to comply in all material respects with all applicable statutes, rules, regulations and orders of, and all applicable restrictions imposed by, all governmental authorities in respect of the conduct of its business and the ownership of its property (including, without limitation, applicable
3
statutes, rules, regulations, orders and restrictions relating to environmental, safety and other similar standards or controls).
3.11 Insurance . The Guarantor shall maintain, with financially sound and reputable insurers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by owners of established reputation engaged in the same or similar businesses and similarly situated, in such amounts and by such methods as shall be customary for such owners and deemed adequate by the Guarantor.
3.12 Financial Statements, Etc. The financial statements previously delivered to the Landlord by the Guarantor, if any, fairly present the financial condition of the Guarantor in accordance with generally accepted accounting principles consistently applied and there has been no material adverse change from the date thereof through the date hereof.
3.13 No Change in Control . The Guarantor shall not permit the occurrence of any direct or indirect Change in Control of the Tenant or of the Guarantor.
4. Guarantee . The Guarantor hereby unconditionally guarantees that the Guaranteed Obligations which are monetary obligations shall be paid in full when due and payable, whether upon demand, at the stated or accelerated maturity thereof pursuant to the Lease, or otherwise, and that the Guaranteed Obligations which are performance obligations shall be fully performed at the times and in the manner such performance is required by the Lease. With respect to the Guaranteed Obligations which are monetary obligations, this guarantee is a guarantee of payment and not of collectibility and is absolute and in no way conditional or contingent. In case any part of the Guaranteed Obligations shall not have been paid when due and payable or performed at the time performance is required, the Guarantor shall, within five (5) Business Days after receipt of notice from the Landlord, pay or cause to be paid to the Landlord the amount thereof as is then due and payable and unpaid (including interest and other charges, if any, due thereon through the date of payment in accordance with the applicable provisions of the Lease) or perform or cause to be performed such obligations in accordance with the Lease.
5. Unenforceability of Guaranteed Obligations, Etc. If the Tenant is for any reason under no legal obligation to discharge any of the Guaranteed Obligations (other than because
4
the same have been previously discharged in accordance with the terms of the Lease), or if any other moneys included in the Guaranteed Obligations have become unrecoverable from the Tenant by operation of law or for any other reason, including, without limitation, the invalidity or irregularity in whole or in part of any Guaranteed Obligation or of the Lease or any limitation on the liability of the Tenant thereunder not contemplated by the Lease or any limitation on the method or terms of payment thereunder which may now or hereafter be caused or imposed in any manner whatsoever, the guarantees contained in this Agreement shall nevertheless remain in full force and effect and shall be binding upon the Guarantor to the same extent as if the Guarantor at all times had been the principal debtor on all such Guaranteed Obligations.
6. Additional Guarantees . This Agreement shall be in addition to any other guarantee or other security for the Guaranteed Obligations and it shall not be prejudiced or rendered unenforceable by the invalidity of any such other guarantee or security or by any waiver, amendment, release or modification thereof.
7. Consents and Waivers, Etc. The Guarantor hereby acknowledges receipt of correct and complete copies of the Lease, and consents to all of the terms and provisions thereof, as the same may be from time to time hereafter amended or changed in accordance with the terms and conditions thereof, and, except as otherwise provided herein, to the maximum extent permitted by applicable law, waives (a) presentment, demand for payment, and protest of nonpayment, of any of the Guaranteed Obligations, (b) notice of acceptance of this Agreement and of diligence, presentment, demand and protest, (c) notice of any default hereunder and any default, breach or nonperformance or Event of Default under any of the Guaranteed Obligations or the Lease, (d) notice of the terms, time and place of any private or public sale of collateral (if any) held as security for the Guaranteed Obligations, (e) demand for performance or observance of, and any enforcement of any provision of, or any pursuit or exhaustion of rights or remedies against the Tenant or any other guarantor of the Guaranteed Obligations, under or pursuant to the Lease, or any agreement directly or indirectly relating thereto and any requirements of diligence or promptness on the part of the holders of the Guaranteed Obligations in connection therewith, and (f) any and all demands and notices of every kind and description with respect to the foregoing or which may be required to be given by any statute or rule of law and any defense of any kind which it may now or hereafter have with
5
respect to this Agreement, or the Lease or the Guaranteed Obligations (other than that the same have been discharged in accordance with the Lease).
8. No Impairment, Etc. The obligations, covenants, agreements and duties of the Guarantor under this Agreement shall not be affected or impaired by any assignment or transfer in whole or in part of any of the Guaranteed Obligations without notice to the Guarantor, or any waiver by the Landlord of any of the Guaranteed Obligations or of the performance or observance by the Tenant or any other guarantor of any of the agreements, covenants, terms or conditions contained in the Guaranteed Obligations or the Lease or any indulgence in or the extension of the time for payment by the Tenant or any other guarantor of any amounts payable under or in connection with the Guaranteed Obligations or of the time for performance by the Tenant or any other guarantor of the Guaranteed Obligations or the extension or renewal thereof (except that with respect to any extension of time for payment or performance of any of the Guaranteed Obligations granted by the Landlord to the Tenant, the Guarantors obligations to pay or perform such Guaranteed Obligation shall be subject to the same extension of time for performance), or the modification or amendment (whether material or otherwise) of the Lease or any of the Guaranteed Obligations, or the voluntary or involuntary sale or other disposition of all or substantially all the assets of the Tenant or any other guarantor or insolvency, bankruptcy, or other similar proceedings affecting the Tenant or any other guarantor or any assets of the Tenant or any such other guarantor, or the release or discharge of the Tenant or any such other guarantor from the performance or observance of the Guaranteed Obligations, without the consent of the Landlord, by operation of law, or any other cause, whether similar or dissimilar to the foregoing.
9. Reimbursement, Subrogation, Etc. The Guarantor hereby covenants and agrees that it will not enforce or otherwise exercise any rights of reimbursement, subrogation, contribution or other similar rights against the Tenant (or any other person against whom the Landlord may proceed) with respect to the Guaranteed Obligations prior to the payment in full of all amounts owing with respect to the Lease, and until all such amounts shall have been paid in full, the Guarantor shall have no right of subrogation, and the Guarantor waives any defense it may have based upon any election of remedies by the Landlord which destroys its subrogation rights or its rights to proceed against the Tenant for reimbursement, including, without limitation, any loss of rights the Guarantor may suffer by
6
reason of any rights, powers or remedies of the Tenant in connection with any anti-deficiency laws or any other laws limiting, qualifying or discharging the indebtedness to the Landlord. Until all Guaranteed Obligations shall have been paid and performed in full, the Guarantor further waives any right to enforce any remedy which the Landlord now has or may in the future have against the Tenant, any other guarantor or any other person and any benefit of, or any right to participate in, any security whatsoever now or in the future held by the Landlord.
10. Defeasance . This Agreement shall terminate at such time as the Guaranteed Obligations have been paid and performed in full and all other obligations of the Guarantor to the Landlord under this Agreement have been satisfied in full; provided , however , if at any time, all or any part of any payment applied on account of the Guaranteed Obligations is or must be rescinded or returned for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of the Tenant), this Agreement, to the extent such payment is or must be rescinded or returned, shall be deemed to have continued in existence notwithstanding any such termination.
11. Notices . (a) Any and all notices, demands, consents, approvals, offers, elections and other communications required or permitted under this Agreement shall be deemed adequately given if in writing and the same shall be delivered either in hand, by telecopier with written acknowledgment of receipt, or by mail or Federal Express or similar expedited commercial carrier, addressed to the recipient of the notice, postpaid and registered or certified with return receipt requested (if by mail), or with all freight charges prepaid (if by Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall be deemed to have been given for all purposes of this Agreement upon the date of acknowledged receipt, in the case of a notice by telecopier, and, in all other cases, upon the date of receipt or refusal, except that whenever under this Agreement a notice is either received on a day which is not a Business Day or is required to be delivered on or before a specific day which is not a Business Day, the day of receipt or required delivery shall automatically be extended to the next Business Day.
(c) All such notices shall be addressed,
if to the Landlord to the Landlord:
7
c/o Hospitality Properties Trust
400 Centre Street
Newton, Massachusetts 02458
Attn: Mr. John G. Murray
Telecopier No. (617) 969-5730
if to the Guarantor to:
TravelCenters of America LLC
24601 Center Ridge Road
Westlake, Ohio 44145
Attn: Mr. Thomas M. OBrien
Telecopier No. (440)808-3301
(d) By notice given as herein provided, the parties hereto and their respective successors and assigns shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses effective upon receipt by the other parties of such notice and each shall have the right to specify as its address any other address within the United States of America.
12. Successors and Assigns . Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party, including, without limitation, the holders, from time to time, of the Guaranteed Obligations; and all representations, warranties, covenants and agreements by or on behalf of the Guarantor which are contained in this Agreement shall inure to the benefit of the Landlords successors and assigns, including, without limitation, said holders, whether so expressed or not.
13. Applicable Law . Except as to matters regarding the internal affairs of the Landlord and issues of or limitations on any personal liability of the shareholders and trustees or directors of the Landlord for obligations of the Landlord, as to which the laws of the State of Maryland shall govern, this Agreement, the Lease and any other instruments executed and delivered to evidence, complete or perfect the transactions contemplated hereby and thereby shall be interpreted, construed, applied and enforced in accordance with the laws of The Commonwealth of Massachusetts applicable to contracts between residents of Massachusetts which are to be performed entirely within Massachusetts, regardless of (i) where any such instrument is executed or delivered; or (ii) where any payment or other performance required by any such instrument is made or required to be made; or (iii) where any breach of any provision of any such instrument occurs, or any cause of action otherwise
8
accrues; or (iv) where any action or other proceeding is instituted or pending; or (v) the nationality, citizenship, domicile, principal place of business, or jurisdiction of organization or domestication of any party; or (vi) whether the laws of the forum jurisdiction otherwise would apply the laws of a jurisdiction other than The Commonwealth of Massachusetts; or (vii) any combination of the foregoing. Notwithstanding the foregoing, the laws of the State shall apply to the perfection and priority of liens upon and the disposition of any Property.
14. Arbitration . The Landlord, on the one hand, or the Guarantor, on the other hand, may elect to submit to arbitration any dispute hereunder that has an amount in controversy in excess of $250,000. Any such dispute shall be conducted in Boston, Massachusetts and be resolved in accordance with the Commercial Arbitration Rules of the American Arbitration Association then pertaining and the decision of the arbitrators with respect to such dispute shall be binding, final and conclusive on all of the parties.
In the event that any such dispute is submitted to arbitration hereunder, the Landlord, on the one hand, and the Guarantor, on the other hand, shall each appoint and pay all fees of a fit and impartial person as arbitrator with at least ten (10) years recent professional experience in the general subject matter of the dispute. Notice of such appointment shall be sent in writing by each party to the other, and the arbitrators so appointed, in the event of their failure to agree within thirty (30) days after the appointment of the second arbitrator upon the matter so submitted, shall appoint a third arbitrator. If either the Landlord or the Guarantor shall fail to appoint an arbitrator as aforesaid for a period of twenty (20) days after written notice from the other party to make such appointment, then the arbitrator appointed by the party having made such appointment shall appoint a second arbitrator and the two (2) so appointed shall, in the event of their failure to agree upon any decision within thirty (30) days thereafter, appoint a third arbitrator. If such arbitrators fail to agree upon a third arbitrator within forty five (45) days after the appointment of the second arbitrator, then such third arbitrator shall be appointed by the American Arbitration Association from its qualified panel of arbitrators, and shall be a person having at least ten (10) years recent professional experience as to the subject matter in question. The fees of the third arbitrator and the expenses incident to the proceedings shall be borne equally between the Landlord and the Guarantor, unless the arbitrators decide otherwise. The fees of respective counsel
9
engaged by the parties, and the fees of expert witnesses and other witnesses called for the parties, shall be paid by the respective party engaging such counsel or calling or engaging such witnesses.
The decision of the arbitrators shall be rendered within thirty (30) days after appointment of the third arbitrator. Such decision shall be in writing and in duplicate, one counterpart thereof to be delivered to Landlord and one to the Guarantor. A judgment of a court of competent jurisdiction may be entered upon the award of the arbitrators in accordance with the rules and statutes applicable thereto then obtaining.
15. Modification of Agreement . No modification or waiver of any provision of this Agreement, nor any consent to any departure by the Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Landlord, and such modification, waiver or consent shall be effective only in the specific instances and for the purpose for which given. No notice to or demand on the Guarantor in any case shall entitle the Guarantor to any other or further notice or demand in the same, similar or other circumstances. This Agreement may not be amended except by an instrument in writing executed by or on behalf of the party against whom enforcement of such amendment is sought.
16. Waiver of Rights by the Landlord . Neither any failure nor any delay on the Landlords part in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise or the exercise of any other right, power or privilege.
17. Severability . In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, but this Agreement shall be reformed and construed and enforced to the maximum extent permitted by applicable law.
18. Entire Contract . This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and shall supersede and take the place of any other instruments purporting to be an agreement of the parties hereto relating to the subject matter hereof.
10
19. Headings; Counterparts . Headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.
20. Remedies Cumulative . No remedy herein conferred upon the Landlord is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.
[Remainder of page intentionally left blank.]
11
WITNESS the execution hereof under seal as of the date above first written.
|
TRAVELCENTERS OF AMERICA LLC |
|
|
||
|
||
|
By: |
/s/ Thomas M. OBrien |
|
|
Thomas M. OBrien |
|
President and |
|
|
Chief Executive Officer |