Exhibit 10.3
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this
“AGREEMENT”) is made and given as of January 31, 2007
by TRAVELCENTERS OF AMERICA LLC, TRAVELCENTERS OF AMERICA HOLDING
COMPANY LLC and TA OPERATING LLC, each a Delaware limited liability
company (each a “GUARANTOR” and collectively, the
“GUARANTORS”), for the benefit of HPT TA PROPERTIES
TRUST, a Maryland real estate investment trust, and HPT TA
PROPERTIES LLC, a Maryland limited liability company (together with
each of their successors and assigns, collectively, the
“LANDLORD”).
WITNESSETH:
WHEREAS, pursuant to a Lease
Agreement, dated as of the date hereof (the “LEASE”),
the Landlord has agreed to lease to TA Leasing LLC, an affiliate of
the Guarantors (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 Landlord’s entering into the Lease that the Guarantors
guarantee 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
Guarantors;
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 Guarantors hereby agree 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. Each Guarantor, jointly and severally, represents,
warrants, covenants, and agrees that:
3.1 INCORPORATION OF
REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Tenant and its Affiliated Persons set forth in the Lease are
true and correct on and as of the date hereof in all material
respects.
3.2 PERFORMANCE OF
COVENANTS AND AGREEMENTS. Each 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.
3.3 VALIDITY OF
AGREEMENT. Each Guarantor has duly and validly executed and
delivered this Agreement; this Agreement constitutes the legal,
valid and binding obligation of such Guarantor, enforceable against
such 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 such Guarantor and
such execution, delivery and performance by such 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 such 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.
3.4 PAYMENT OF EXPENSES.
Each 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
2
forth in this SECTION 3.4 shall
survive the termination of this Agreement.
3.5 NOTICES. Each
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.
3.6 REPORTS. Each
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.
Each 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. Each
Guarantor shall permit access by the Landlord and its agents to the
books and records maintained by such Guarantor during normal
business hours and upon reasonable notice.
3.8 TAXES, ETC. Each
Guarantor shall pay and discharge promptly as they become due and
payable all taxes, assessments and other governmental charges or
levies imposed upon such Guarantor or the income of such Guarantor
or upon any of the property, real, personal or mixed, of such
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
such Guarantor; PROVIDED, HOWEVER, that such 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 such Guarantor shall have set aside on its books such reserves
of such Guarantor, if any, with respect thereto as are required by
generally accepted accounting principles.
3.9 LEGAL EXISTENCE OF
GUARANTORS. Each Guarantor shall do or cause to be done all things
necessary to preserve and keep in full force and effect its legal
existence.
3
3.10 COMPLIANCE. Each
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 statutes, rules, regulations, orders and restrictions
relating to environmental, safety and other similar standards or
controls).
3.11 INSURANCE. Each
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 such Guarantor.
3.12 FINANCIAL
STATEMENTS, ETC. The financial statements previously delivered to
the Landlord by each Guarantor, if any, fairly present the
financial condition of such 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. No Guarantor shall permit the occurrence of any direct or
indirect Change in Control of the Tenant or of such
Guarantor.
4. GUARANTEE. Each
Guarantor jointly and severally 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
collectability 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 Guarantors 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
4
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 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 each Guarantor to the same extent as if each
such 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. Each Guarantor hereby acknowledges receipt of correct and
complete copies of the Lease, and c
