EXHIBIT 10.3
LEASE AGREEMENT,
dated as of January 31, 2007,
by
and among
HPT
TA PROPERTIES TRUST and HPT TA PROPERTIES LLC,
AS
LANDLORD,
AND
TA
LEASING LLC,
AS
TENANT
LEASE AGREEMENT
THIS LEASE
AGREEMENT is entered into as of January 31, 2007, by and among HPT
TA PROPERTIES TRUST, a Maryland real estate investment trust, and
HPT TA PROPERTIES LLC, a Maryland limited liability company
(collectively, “LANDLORD”), and TA LEASING LLC, a
Delaware limited liability company
(“TENANT”).
WITNESSETH:
WHEREAS, Landlord
holds fee simple title to, and/or the leasehold interest in, the
Leased Property constituting Real Property (other than the Retained
Buildings), and good title to all other Leased Property (these 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:
ARTICLE 1
DEFINITIONS
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.
1.1 “ADDITIONAL CHARGES”
shall have the meaning given such term in SECTION 3.1.3.
1.2 “ADDITIONAL RENT”
shall have the meaning given such term in SECTION
3.1.2(a).
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1.3 “AFFILIATED PERSON”
shall mean, with respect to any Person, (a) in the case of any such
Person which is a partnership, any partner in such partnership, (b)
in the case of any such Person which is a limited liability
company, any member of such company, (c) any other Person which is
a Parent, a Subsidiary, or a Subsidiary of a Parent with respect to
such Person or to one or more of the Persons referred to in the
preceding clauses (a) and (b), (d) any other Person who is an
officer, director, trustee or employee of, or partner in or member
of, such Person or any Person referred to in the preceding clauses
(a), (b) and (c), and (e) any other Person who is a member of the
Immediate Family of such Person or of any Person referred to in the
preceding clauses (a) through (d).
1.4 “AGREEMENT” shall
mean this Lease Agreement, including all exhibits attached hereto,
as it and they may be amended from time to time as herein
provided.
1.5 “ALLOWANCE” shall
have the meaning given such term in SECTION 5.1.1(c).
1.6 “APPLICABLE LAWS”
shall mean all applicable laws, statutes, regulations, rules,
ordinances, codes, licenses, permits, notices and orders, from time
to time in existence, of all courts of competent jurisdiction and
Government Agencies, and all applicable judicial and administrative
and regulatory decrees, judgments and orders, including common law
rulings and determinations, relating to injury to, conservation of,
or the protection of, real or personal property, Transferred
Trademarks or human health or the Environment, including, without
limitation, all valid and lawful requirements of courts and other
Government Agencies pertaining to reporting, licensing, permitting,
investigation, remediation and removal of underground improvements
(including, without limitation, treatment or storage tanks, or
water, natural gas or oil wells), or emissions, discharges,
releases or threatened releases of Hazardous Substances, chemical
substances, pesticides, petroleum or petroleum products,
pollutants, contaminants or hazardous or toxic substances,
materials or wastes whether solid, liquid or gaseous in nature,
into the Environment, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances, underground improvements
(including, without limitation, treatment or storage tanks, or
water, gas or oil wells), or pollutants, contaminants or hazardous
or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature.
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1.7 “AWARD” shall mean
all compensation, sums or other value awarded, paid or received by
virtue of a total or partial Condemnation of any Property (after
deduction of all reasonable legal fees and other reasonable costs
and expenses, including, without limitation, expert witness fees,
incurred by Landlord, in connection with obtaining any such
award).
1.8 “BASE FUEL GROSS
REVENUES” shall mean, with respect to any Property, the
amount of Gross Fuel Revenues for such Property for the Base Year;
PROVIDED, HOWEVER, that, with respect to any Property then subject
to a TA Franchise Agreement, Base Fuel Gross Revenues shall be the
Gross Fuel Revenues of the franchisee under the TA Franchise
Agreement for the Base Year (as reported by such franchisee
pursuant to the applicable TA Franchise Agreement) and not include
amounts otherwise payable to the franchisor under such TA Franchise
Agreement.
1.9 “BASE NON-FUEL GROSS
REVENUES” shall mean, with respect to any Property, the
amount of Gross Non-Fuel Revenues for such Property for the Base
Year; PROVIDED, HOWEVER, that, with respect to any Property then
subject to a TA Franchise Agreement, Base Non-Fuel Gross Revenues
shall be the Gross Non-Fuel Revenues of the franchisee under the TA
Franchise Agreement for the Base Year (as reported by such
franchisee pursuant to the applicable TA Franchise Agreement) and
not include amounts otherwise payable to the franchisor under such
TA Franchise Agreement.
1.10 “BASE YEAR” shall
mean the 2011 calendar year.
1.11 “BUSINESS DAY”
shall mean any day other than Saturday, Sunday, or any other day on
which banking institutions in The Commonwealth of Massachusetts are
authorized by law or executive action to close.
1.12 “CAPITAL ADDITION”
shall mean, with respect to any Property, any renovation, repair or
improvement to such Property, the cost of which constitutes a
Capital Expenditure.
1.13 “CAPITAL
EXPENDITURE” shall mean any expenditure treated as capital in
nature in accordance with GAAP.
1.14 “CAPITAL REPLACEMENTS
BUDGET” shall have the meaning given such term in SECTION
5.1.1(b).
1.15 “CHANGE IN CONTROL”
shall mean (a) the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the SEC) of 9.8% or more, or rights,
options or warrants to acquire 9.8% or more, of the outstanding
shares of voting stock or other voting interests of Tenant or any
Guarantor, as the case may be,
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or the power to direct
the management and policies of Tenant or any Guarantor, directly or
indirectly, (b) the merger or consolidation of Tenant or any
Guarantor with or into any other Person (other than the merger or
consolidation of any Person into Tenant or any Guarantor that does
not result in a Change in Control of Tenant or such Guarantor under
clauses (a), (c) or (d) of this definition), (c) any one or more
sales or conveyances to any Person of all or any material portion
of its assets (including capital stock or other equity interests)
or business of Tenant or any Guarantor, as the case may be, or (d)
the cessation, for any reason, of the individuals who at the
beginning of any twenty-four (24) consecutive month period
(commencing on the Commencement Date) constituted the board of
directors of Tenant or any Guarantor (together with any new
directors whose election by such board or whose nomination for
election by the shareholders of Tenant or such Guarantor, as the
case may be, was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of
any such period or whose election or nomination for election was
previously so approved) to constitute a majority of the board of
directors of Tenant or any Guarantor then in office.
1.16 “CLAIM” shall have
the meaning given such term in ARTICLE 8.
1.17 “CODE” shall mean
the Internal Revenue Code of 1986 and, to the extent applicable,
the Treasury Regulations promulgated thereunder, each as from time
to time amended.
1.18 “COMMENCEMENT DATE”
shall mean the date hereof.
1.19 “CONDEMNATION”
shall mean, with respect to any Property, or any portion thereof,
(a) the exercise of any governmental power with respect to such
Property, whether by legal proceedings or otherwise, by a Condemnor
of its power of condemnation, (b) a voluntary sale or transfer of
such Property by Landlord to any Condemnor, either under threat of
condemnation or while legal proceedings for condemnation are
pending, or (c) a taking or voluntary conveyance of such Property,
or any interest therein, or right accruing thereto or use thereof,
as the result or in settlement of any condemnation or other eminent
domain proceeding affecting such Property, whether or not the same
shall have actually been commenced.
1.20 “CONDEMNOR” shall
mean any public or quasi-public Person, having the power of
Condemnation.
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1.21
“CONSOLIDATED FINANCIALS” shall mean, for any Fiscal
Year or other accounting period of TCA, annual audited and
quarterly unaudited financial statements of TCA prepared on a
consolidated basis, including TCA’s consolidated balance
sheet and the related statements of income and cash flows, all in
reasonable detail, and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding
Fiscal Year, and prepared in accordance with GAAP throughout the
periods reflected.
1.22 “DATE OF TAKING”
shall mean, with respect to any Property, the date the Condemnor
has the right to possession of such Property, or any portion
thereof, in connection with a Condemnation.
1.23 “DEFAULT” shall
mean any event or condition which with the giving of notice and/or
lapse of time would be an Event of Default.
1.24 “DISBURSEMENT RATE”
shall mean an annual rate of interest, as of the date of
determination, equal to the greater of (i) the Interest Rate and
(ii) the per annum rate for ten (10) year U.S. Treasury Obligations
as published in THE WALL STREET JOURNAL plus three hundred fifty
(350) basis points.
1.25 “DISTRIBUTION”
shall mean (a) any declaration or payment of any dividend (except
ordinary cash dividends payable in common stock or other equity
interests of Tenant) on or in respect of any shares of any class of
capital stock or other equity interests of Tenant, (b) any
purchase, redemption, retirement or other acquisition of any shares
of any class of capital stock of a corporation, (c) any other
distribution on or in respect of any shares of any class of capital
stock of Tenant or (d) any return of capital to
shareholders.
1.26 “EASEMENT
AGREEMENT” shall mean any conditions, covenants and
restrictions, easements, declarations, licenses and other
agreements which are Permitted Encumbrances and such other
agreements as may be granted in accordance with SECTION
19.1.
1.27 “ENCUMBRANCE” shall
have the meaning given such term in SECTION 20.1.
1.28 “ENTITY” shall mean
any corporation, general or limited partnership, limited liability
company or partnership, stock company or association, joint
venture, association, company, trust, bank, trust company, land
trust, business trust,
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real estate investment
trust, cooperative, any government or agency, authority or
political subdivision thereof or any other entity.
1.29 “ENVIRONMENT” shall
mean soil, surface waters, ground waters, land, biota, sediments,
surface or subsurface strata and ambient air.
1.30 “ENVIRONMENTAL
OBLIGATION” shall have the meaning given such term in SECTION
4.3.1.
1.31 “ENVIRONMENTAL
NOTICE” shall have the meaning given such term in SECTION
4.3.1.
1.32 “ENVIRONMENTAL
REPORT” shall have the meaning given such term in SECTION
4.3.2.
1.33 “EVENT OF DEFAULT”
shall have the meaning given such term in SECTION 12.1.
1.34 “EXCESS FUEL GROSS
REVENUES” shall mean, with respect to any Property, with
respect to any Lease Year, or portion thereof, the amount of Gross
Fuel Revenues for such Property for such Lease Year, or portion
thereof, in excess of Base Fuel Gross Revenues for such Property
for the equivalent period during the Base Year.
1.35 “EXCESS NON-FUEL GROSS
REVENUES” shall mean, with respect to any Property, with
respect to any Lease Year, or portion thereof, the amount of Gross
Non-Fuel Revenues for such Property for such Lease Year, or portion
thereof, in excess of Base Non-Fuel Gross Revenues for such
Property for the equivalent period during the Base Year.
1.36 “EXISTING THIRD PARTY
TRADE NAMES AND SERVICE MARK RIGHTS” shall mean the rights as
set forth in any TA Franchise Agreement in effect as of the
Commencement Date licensed to third parties in the trade names,
trademarks, service marks, domain names, logos and other
brand-source indicia. including all goodwill related thereto which
constitute a part of the Transferred Trademarks.
1.37 “FAIR MARKET VALUE”
shall mean the price an unaffiliated and willing buyer would pay
for the interest of Landlord in the applicable Property (or the
interest of Tenant in the case of any Retained Buildings) in its
existing condition as of the date of determination, with all
relevant factors being
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known to both parties,
under terms and conditions customary for like transactions in the
area in which the Property is located.
1.38 “FAIR MARKET VALUE
RENT” shall mean the per annum minimum rent which would be
payable monthly in advance for the applicable Property in its then
current condition and for its then current use, on the terms and
conditions of this Agreement (including, without limitation, the
obligation to pay Additional Rent).
1.39 “FINANCIAL
OFFICER’S CERTIFICATE” shall mean, as to any Person, a
certificate of the chief executive officer, chief financial officer
or chief accounting officer (or such officers’ authorized
designee) of such Person, duly authorized, accompanying the
financial statements required to be delivered by such Person
pursuant to SECTION 17.2, in which such officer shall certify (a)
that such statements have been properly prepared in accordance with
GAAP and are true, correct and complete in all material respects
and fairly present the consolidated financial condition of such
Person at and as of the dates thereof and the results of its
operations for the periods covered thereby, and (b) in the event
that the certifying party is an officer of Tenant and the
certificate is being given in such capacity, that no Event of
Default has occurred and is continuing hereunder.
1.40 “FISCAL YEAR” shall
mean the calendar year or such other annual period designated by
Tenant and approved by Landlord.
1.41 “FIXTURES” shall
have the meaning given such term in SECTION 2.1(d).
1.42 “FUEL SALES CAP”
shall mean, for the 2012 Lease Year, three tenths of one percent
(0.3%) of the aggregate Base Fuel Gross Revenues for the Leased
Property; and, for each Lease Year thereafter, (x) the Additional
Rent on account of Excess Fuel Gross Revenues for the prior Lease
Year multiplied by (y) the greater of one, or a fraction, the
numerator of which is the Index for January of the then current
Lease Year and the denominator of which is the Index for January of
the preceding Lease Year.
1.43 “GAAP” shall mean
generally accepted accounting principles consistently
applied.
1.44 “GOVERNMENT
AGENCIES” shall mean any court, agency, authority, board
(including, without limitation, environmental
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protection, planning
and zoning), bureau, commission, department, office or
instrumentality of any nature whatsoever of any governmental or
quasi-governmental unit of the United States or any State or any
county or any political subdivision of any of the foregoing,
whether now or hereafter in existence, having jurisdiction over
Tenant or any Property, or any portion thereof, or any Travel
Center operated thereon.
1.45 “GROSS FUEL
REVENUES” shall mean, with respect to any Property, for each
Fiscal Year during the Term, all revenues and receipts (determined
on an accrual basis and in all material respects in accordance with
GAAP) of every kind derived from the provision, sale or trade of
motor fuel and gasoline at such Property; PROVIDED, HOWEVER, that
Gross Fuel Revenues shall not include the following: allowances
according to GAAP for uncollectible accounts, including credit card
accounts and other administrative discounts; federal, state or
municipal excise, sales, use, occupancy or similar taxes included
as part of the sales price of any goods or services; insurance
proceeds (other than proceeds from business interruption or other
loss of income insurance); and any amounts included in Gross
Non-Fuel Revenues; FURTHER, PROVIDED, that, with respect to any
Property subject to a TA Franchise Agreement, Gross Fuel Revenues
shall be the Gross Fuel Revenues of the franchisee under the TA
Franchise Agreement (as reported by such franchisee pursuant to the
applicable TA Franchise Agreement to the extent compliant with
Section 856(d)(2) of the Code) and not include amounts otherwise
payable to the franchisor under such TA Franchise
Agreement.
1.46 “GROSS NON-FUEL
REVENUES” shall mean, with respect to any Property, for each
Fiscal Year during the Term, all revenues and receipts (determined
on an accrual basis and in all material respects in accordance with
GAAP) of every kind derived from renting, using and/or operating
such Property and parts thereof, including, but not limited to: all
rents and revenues received or receivable for the use of or
otherwise by reason of all goods sold, services performed, space or
facilities subleased on such Property, or any portion thereof,
including, without limitation, any other arrangements with third
parties relating to the possession or use of any portion of such
Property; and proceeds, if any, from business interruption or other
loss of income insurance; PROVIDED, HOWEVER, that Gross Non-Fuel
Revenues shall not include the following: allowances according to
GAAP for uncollectible accounts, including credit card accounts and
other administrative discounts; federal, state or municipal excise,
sales, use, occupancy or similar taxes included as part of the
sales price of any goods or services; insurance proceeds (other
than proceeds from business interruption or other loss of
income
8
insurance); Award
proceeds (other than for a temporary Condemnation); any proceeds
from any sale of such Property or from the refinancing of any debt
encumbering such Property; proceeds from the disposition of
furnishings, fixture and equipment no longer necessary for the
operation of the Travel Center located thereon; any security
deposits and other advance deposits, until and unless the same are
forfeited to Tenant or applied for the purpose for which they were
collected; interest income from any bank account or investment of
Tenant; and any amounts included in Gross Fuel Revenues; FURTHER,
PROVIDED, that, with respect to any Property subject to a TA
Franchise Agreement, Gross Non-Fuel Revenues shall be the Gross
Non-Fuel Revenues of the franchisee under the TA Franchise
Agreement (as reported by such franchisee pursuant to the
applicable TA Franchise Agreement to the extent compliant with
Section 856(d)(2) of the Code) and not include amounts otherwise
payable to the franchisor under such TA Franchise
Agreement.
1.47 “GROUND LEASES”
shall mean, collectively, any and all ground leases in effect with
respect to any portion of the Real Property.
1.48 “GUARANTOR” shall
mean, collectively, TCA, Subtenant, TravelCenters of America
Holding Company LLC, and each and every other guarantor of
Tenant’s obligations under this Agreement, and each such
guarantor’s successors and assigns, jointly and
severally.
1.49 “GUARANTY” shall
mean any guaranty agreement executed by a Guarantor in favor of
Landlord pursuant to which the payment or performance of
Tenant’s obligations under this Agreement are guaranteed,
together with all modifications, amendments and supplements
thereto.
1.50 “HAZARDOUS
SUBSTANCES” shall mean any substance:
(a) the
presence of which requires or may hereafter require notification,
investigation or remediation under any Applicable Law;
or
(b) which is or becomes defined as a
“hazardous waste”, “hazardous material” or
“hazardous substance” or “pollutant” or
“contaminant” under any Applicable Law including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 ET SEQ.) and
the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
ET SEQ.) and the regulations promulgated thereunder; or
(c) which is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and is or becomes regulated by any
Governmental Agencies; or
(d) the
presence of which on any Property, or any portion thereof, causes
or materially threatens to cause an unlawful nuisance upon such
Property, or any portion thereof, or to adjacent properties or
poses or materially threatens to pose a hazard to such Property, or
any portion thereof, or to the health or safety of persons;
or
(e) without limitation, which
contains gasoline, diesel fuel or other petroleum hydrocarbons or
volatile organic compounds; or
(f) without limitation, which
contains polychlorinated biphenyls (PCBs) or asbestos or urea
formaldehyde foam insulation; or
(g) without limitation, which
contains or emits radioactive particles, waves or
material.
1.51 “IMMEDIATE FAMILY”
shall mean, with respect to any individual, such individual’s
spouse, parents, brothers, sisters, children (natural or adopted),
stepchildren, grandchildren, grandparents, parents-in-law,
brothers-in-law, sisters-in-law, nephews and nieces.
1.52 “IMPOSITIONS” shall
mean, collectively, all taxes (including, without limitation, all
taxes imposed under the laws of any State, as such laws may be
amended from time to time, and all ad valorem, sales and use,
occupancy, or similar taxes as the same relate to or are imposed
upon Landlord, Tenant or the business conducted upon the Leased
Property), assessments (including, without limitation, all
assessments for public improvements or benefit, whether or not
commenced or completed prior to the date hereof), water, sewer or
other rents and charges, excises, tax levies, fees (including,
without limitation, license, permit, inspection, authorization and
similar fees), and all other governmental charges, in each case
whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of every character in respect of the Leased Property or
the business conducted upon the Leased Property by Tenant
(including all interest and penalties thereon due to any failure in
payment
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by Tenant), which at
any time prior to, during or in respect of the Term hereof may be
assessed or imposed on or in respect of or be a lien upon (a)
Landlord’s interest in the Leased Property, (b) the Leased
Property or any part thereof or any rent therefrom or any estate,
right, title or interest therein, or (c) any occupancy, operation,
use or possession of, or sales from, or activity conducted on, or
in connection with the Leased Property or the leasing or use of the
Leased Property or any part thereof by Tenant; PROVIDED, HOWEVER,
that nothing contained herein shall be construed to require Tenant
to pay and the term “Impositions” shall not include (i)
any tax based on net income imposed on Landlord, (ii) any net
revenue tax of Landlord, (iii) any transfer fee (but excluding any
mortgage or similar tax payable in connection with a Property
Mortgage) or other tax imposed with respect to the sale, exchange
or other disposition by Landlord of the Leased Property or the
proceeds thereof, (iv) any single business, gross receipts tax,
transaction privilege, rent or similar taxes as the same relate to
or are imposed upon Landlord, (v) any interest or penalties imposed
on Landlord as a result of the failure of Landlord to file any
return or report timely and in the form prescribed by law or to pay
any tax or imposition, except to the extent such failure is a
result of a breach by Tenant of its obligations pursuant to SECTION
3.1.3, (vi) any impositions imposed on Landlord that are a result
of Landlord not being considered a “United States
person” as defined in Section 7701(a)(30) of the Code, (vii)
any impositions that are enacted or adopted by their express terms
as a substitute for any tax that would not have been payable by
Tenant pursuant to the terms of this Agreement or (viii) any
impositions imposed as a result of a breach of covenant or
representation by Landlord in any agreement governing
Landlord’s conduct or operation or as a result of the
negligence or willful misconduct of Landlord.
1.53 “INDEBTEDNESS”
shall mean (without duplication), (i) all obligations for borrowed
money, (ii) the maximum amount available to be drawn under all
surety bonds, letters of credit and bankers’ acceptances
issued or created for the account of Tenant and, without
duplication, all unreimbursed drafts drawn thereunder, (iii) all
obligations to pay the deferred purchase price of property or
services, excluding trade payables incurred in the ordinary course
of business, but including all indebtedness created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by Tenant, (iv) all leases required,
in accordance with GAAP, to be recorded as capital leases on
Tenant’s balance sheet, (v) the principal balance outstanding
and owing by Tenant
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under any synthetic
lease, tax retention operating lease or similar off-balance sheet
financing product, and (vi) all guaranties of or other liabilities
with respect to the debt of another Person.
1.54 “INDEX” shall mean
the Consumer Price Index for Urban Wage Earners and Clerical
Workers, U.S., All Items, 1982-1984=100. The Index is presently
published by the Bureau of Labor Statistics of the United States
Department of Labor. If publication of the Index ceases,
computations with respect to which the Index is to be applied shall
be computed on the basis of whatever index published by the United
States Department of Labor at that time is most nearly comparable.
If the Index ceases to use 1982-84=100 as the basis of calculation,
then the Index shall be converted to the amount(s) that would have
resulted had the manner of calculating the Index in effect at the
Commencement Date.
1.55 “INSURANCE
REQUIREMENTS” shall mean all terms of any insurance policy
required by this Agreement and all requirements of the issuer of
any such policy and all orders, rules and regulations and any other
requirements of the National Board of Fire Underwriters (or any
other body exercising similar functions) binding upon Landlord,
Tenant, any Manager or the Leased Property.
1.56 “INTEREST RATE”
shall mean eight and one half percent (8.5%) per annum.
1.57 “LAND” shall have
the meaning given such term in SECTION 2.1(a).
1.58 “LANDLORD” shall
have the meaning given such term in the preambles to this Agreement
and shall also include their respective permitted successors and
assigns.
1.59 “LANDLORD DEFAULT”
shall have the meaning given such term in ARTICLE 14.
1.60 “LANDLORD LIENS”
shall mean liens on or against the Leased Property or any payment
of Rent (a) which result from any act of, or any claim against,
Landlord or any owner of a direct or indirect interest in the
Leased Property (other than the lessor under any ground lease
affecting any portion of the Leased Property), or which result from
any violation by Landlord of any terms of this Agreement, or (b)
which result from liens in favor of any taxing authority by reason
of any tax owed by Landlord or any fee owner of a direct or
indirect interest in
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the Leased Property
(other than the lessor under any ground lease affecting any portion
of the Leased Property); PROVIDED, HOWEVER, that “LANDLORD
LIEN” shall not include any lien resulting from any tax for
which Tenant is obligated to pay or indemnify Landlord against
until such time as Tenant shall have already paid to or on behalf
of Landlord the tax or the required indemnity with respect to the
same.
1.61 “LEASE YEAR” shall
mean any Fiscal Year or portion thereof during the Term.
1.62 “LEASED
IMPROVEMENTS” shall have the meaning given such term in
SECTION 2.1(b).
1.63 “LEASED INTANGIBLE
PROPERTY” shall mean all agreements, service contracts,
equipment leases and other arrangements or agreements affecting the
ownership, repair, maintenance, management, leasing or operation of
the Leased Property, or any portion thereof, to which Landlord is a
party; all books, records and files relating to the leasing,
maintenance, management or operation of the Leased Property, or any
portion thereof, belonging to Landlord; all transferable or
assignable permits, certificates of occupancy, operating permits,
sign permits, development rights and approvals, certificates,
licenses, warranties and guarantees, rights to deposits and
telephone exchange numbers identified with the Leased Property; and
all other transferable intangible property, miscellaneous rights,
benefits and privileges of any kind or character belonging to
Landlord with respect to the Leased Property.
1.64 “LEASED PROPERTY”
shall have the meaning given such term in SECTION 2.1.
1.65 “LEGAL
REQUIREMENTS” shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions
affecting the Leased Property or the maintenance, construction,
alteration or operation thereof, whether now or hereafter enacted
or in existence, including, without limitation, (a) all permits,
licenses, authorizations and regulations necessary to operate any
Property for its Permitted Use, and (b) all covenants, agreements,
restrictions and encumbrances contained in any instruments at any
time in force affecting any Property, including those which may (i)
require material repairs, modifications or alterations in or to any
Property or (ii) in any way materially and adversely affect
the
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use and enjoyment
thereof, but excluding any requirements arising as a result of
Landlord’s status as a real estate investment
trust.
1.66 “LIEN” shall mean
any mortgage, security interest, pledge, collateral assignment, or
other encumbrance, lien or charge of any kind, or any transfer of
property or assets for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in
priority to payment of general creditors.
1.67 “MANAGER” shall
mean, with respect to any Property, the operator or manager under
any Management Agreement from time to time in effect with respect
to such Property, and its permitted successors and
assigns.
1.68 “MANAGEMENT
AGREEMENT” shall mean, with respect to any Property, any
operating, management, franchise or branding agreement from time to
time entered into by Tenant with respect to such Property in
accordance with the applicable provisions of this Agreement,
together with all amendments, modifications and supplements
thereto, excluding, however, any TA Franchise Agreement.
1.69 “MINIMUM RENT”
shall mean (a) with respect to the period commencing on the
Commencement Date and expiring on the day preceding the first
anniversary of the Commencement Date, $153,500,000 per annum; (b)
with respect to the period commencing on the first anniversary of
the Commencement Date and expiring on the day preceding the second
anniversary of the Commencement Date, $157,000,000 per annum; (c)
with respect to the period commencing on the second anniversary of
the Commencement Date and expiring on the day preceding the third
anniversary of the Commencement Date, $161,000,000 per annum; (d)
with respect to the period commencing on the third anniversary of
the Commencement Date and expiring on the day preceding the fourth
anniversary of the Commencement Date, $165,000,000 per annum; (e)
with respect to the period commencing on the fourth anniversary of
the Commencement Date and expiring on the day preceding the fifth
anniversary of the Commencement Date, $170,000,000 per annum; and
(f) with respect to the period commencing on the fifth anniversary
of the Commencement Date and thereafter, $175,000,000 per annum;
subject, in each case, to adjustment as provided in SECTION
3.1.1(b).
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1.70 “NOTICE” shall mean
a notice given in accordance with SECTION 23.10.
1.71 “OFFICER’S
CERTIFICATE” shall mean a certificate signed by an officer or
other duly authorized individual of the certifying Entity duly
authorized by the board of directors or other governing body of the
certifying Entity.
1.72 “OPERATING RIGHTS”
shall have the meaning given such term in Section 5.3.
1.73 “OVERDUE RATE”
shall mean, on any date, a per annum rate of interest equal to the
lesser of the Disbursement Rate plus four percent (4%) and the
maximum rate then permitted under applicable law.
1.74 “PARENT” shall
mean, with respect to any Person, any Person which owns directly,
or indirectly through one or more Subsidiaries or Affiliated
Persons, twenty percent (20%) or more of the voting or beneficial
interest in, or otherwise has the right or power (whether by
contract, through ownership of securities or otherwise) to control,
such Person.
1.75 “PERMITTED
ENCUMBRANCES” shall mean, with respect to any Property, all
rights, restrictions, and easements of record set forth on Schedule
B to the applicable owner’s or leasehold title insurance
policy issued to Landlord with respect to such Property, plus any
other encumbrances as may have been granted or caused by Landlord
or otherwise consented to in writing by Landlord from time to
time.
1.76 “PERMITTED LIENS”
shall mean any Liens granted in accordance with SECTION
21.8(a).
1.77
“PERMITTED USE” shall mean, with respect to any
Property, any use of such Property permitted pursuant to SECTION
4.1.1.
1.78 “PERSON” shall mean
any individual or Entity, and the heirs, executors, administrators,
legal representatives, successors and assigns of such Person where
the context so admits.
1.79 “PROPERTY” shall
have the meaning given such term in SECTION 2.1.
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1.80 “PROPERTY MORTGAGE”
shall mean any Encumbrance placed upon the Leased Property, or any
portion thereof, in accordance with ARTICLE 20.
1.81 “PROPERTY
MORTGAGEE” shall mean the holder of any Property
Mortgage.
1.82 “REAL PROPERTY”
shall have the meaning given such term in Section 2.1.
1.83 “RENT” shall mean,
collectively, the Minimum Rent, Additional Rent and Additional
Charges.
1.84 “RETAINED
BUILDINGS” shall mean all buildings, structures and other
improvements located at the addresses listed on Exhibit B attached
hereto and made a part hereof, and all equipment, machinery and
fixtures integral to the operation of such buildings, structures
and improvements.
1.85 “SARA” shall mean
the Superfund Amendments and Reauthorization Act of 1986, as the
same has been and may be amended, restated, modified or
supplemented from time to time.
1.86 “SEC” shall mean
the Securities and Exchange Commission.
1.87 “STATE” shall mean,
with respect to any Property, the state, commonwealth or district
in which such Property is located.
1.88 “SUBORDINATED
CREDITOR” shall mean any creditor of Tenant which is a party
to a Subordination Agreement in favor of Landlord.
1.89 “SUBORDINATION
AGREEMENT” shall mean any agreement (and any amendments
thereto) executed by a Subordinated Creditor pursuant to which the
payment and performance of Tenant’s obligations to such
Subordinated Creditor are subordinated to the payment and
performance of Tenant’s obligations to Landlord under this
Agreement.
1.90 “SUBSIDIARY” shall
mean, with respect to any Person, any Entity (a) in which such
Person owns directly, or indirectly through one or more
Subsidiaries, twenty percent (20%) or more of the voting or
beneficial interest or (b) which such Person otherwise has the
right or power to control (whether by contract, through ownership
of securities or otherwise).
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1.91 “SUBTENANT” shall
mean TA Operating LLC, a Delaware limited liability company, and
its permitted successors and assigns.
1.92 “SUCCESSOR
LANDLORD” shall have the meaning given such term in SECTION
20.2.
1.93 “SUPERIOR LANDLORD”
shall have the meaning given such term in SECTION 20.2.
1.94 “SUPERIOR LEASE”
shall have the meaning given such term in SECTION 20.2.
1.95 “SUPERIOR MORTGAGE”
shall have the meaning given such term in SECTION 20.2.
1.96 “SUPERIOR
MORTGAGEE” shall have the meaning given such term in SECTION
20.2.
1.97 “TA FRANCHISE
AGREEMENT” shall mean a franchise agreement and, if
applicable, any network lease agreement associated with such
franchise agreement, between TCA, or one of its Affiliated Persons,
as franchisor, and a Person who is not an Affiliated Person of TCA,
as franchisee, for the operation of a Travel Center or other
hospitality, fuel and/or service facility by such
Person.
1.98 “TCA” shall mean
TravelCenters of America LLC, a Delaware limited liability company,
and its permitted successors and assigns.
1.99 “TENANT” shall have
the meaning given such term in the preambles to this Agreement and
shall also include its permitted successors and assigns.
1.100 “TENANT’S PERSONAL
PROPERTY” shall mean all motor vehicles and consumable
inventory and supplies, furniture, furnishings, equipment, movable
walls and partitions, equipment and machinery and all other
tangible personal property of Tenant acquired by Tenant before, on
or after the Commencement Date and located at the Leased Property
or used in Tenant’s business at the Leased Property and all
modifications, replacements, alterations and additions to such
personal property installed at the expense of Tenant, other than
any items included within the definition of Fixtures which are not
located at the Retained Buildings.
1.101 “TERM” shall have
the meaning given such term in SECTION 2.3.
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1.102
“TRANSFERRED TRADEMARKS” shall mean all trade names,
trademarks, service marks, domain names, logos and other
brand-source indicia, including all goodwill related thereto, owned
by or licensed to Landlord and used in connection with any Travel
Center or any other hospitality, fuel and service facility
including without limitation trade names, trademarks, service
marks, domain names, logos and other brand-source indicia,
including all goodwill related thereto, such as
“TravelCenters of America”, “TA”,
“Goasis”, “Country Pride”, “Fork in
the Road” and “Buckhorn Family Restaurants”
whether or not used at or on the Real Property; and all other
licensable intellectual property of any kind or character belonging
to Landlord with respect to the Leased Property.
1.103 “TRAVEL CENTER”
shall mean, with respect to any Property, collectively, the
hospitality, fuel and service facilities located at such Property,
including, hotel, food and beverage services facilities, fuel
pumps, facilities for the storage and distribution of petroleum
products, retail shops and other facilities and services being
operated or proposed to be operated on such Property.
1.104 “UNSUITABLE FOR ITS
PERMITTED USE” shall mean, with respect to any Travel Center,
a state or condition such that following any damage, destruction or
Condemnation, such Travel Center cannot be operated on a
commercially practicable basis for its Permitted Use and it cannot
reasonably be expected to be restored to substantially the same
condition as existed immediately before such damage, destruction or
Condemnation, and as otherwise required by this Agreement, within
twenty-four (24) months following such damage, destruction or
Condemnation or such longer period of time as to which business
interruption insurance or Award proceeds is available to cover Rent
and other costs related to the applicable Property following such
damage, destruction or Condemnation.
1.105 “WILLINGTON RENT”
shall have the meaning given such term in
SECTION 4.4.
1.106 “WORK” shall have
the meaning given such term in SECTION 10.2.4.
ARTICLE 2
LEASED PROPERTY AND TERM
2.1 LEASED PROPERTY. Upon and
subject to the terms and conditions hereinafter set forth, Landlord
leases and licenses to Tenant and Tenant leases and licenses from
Landlord all of Landlord’s right, title and
interest
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in and to all of the
following (each of items (a) through (f) below which, as of the
Commencement Date, relates to any single Travel Center, a
“PROPERTY” and together with item (g) below,
collectively, the “LEASED PROPERTY”, and those portions
of the Leased Property described in items (a) through (d) below
being the “REAL PROPERTY”), Landlord having no right,
title or interest in the Retained Buildings:
(a) those certain tracts, pieces and
parcels of land, as more particularly described in EXHIBITS A-1
THROUGH A-146, attached hereto and made a part hereof (the
“LAND”);
(b) all
buildings, structures and other improvements of every kind
including, but not limited to, underground storage tanks, alleyways
and connecting tunnels, sidewalks, utility pipes, conduits and
lines (on-site and off-site), parking areas and roadways
appurtenant to such buildings and structures presently situated
upon the Land (collectively, the “LEASED
IMPROVEMENTS”);
(c) all
easements, rights and appurtenances relating to the Land and the
Leased Improvements;
(d) all
equipment, machinery, and fixtures integral to the operation of the
Leased Improvements and other items of property, now or hereafter
permanently affixed or integral to or incorporated into the Leased
Improvements, including, without limitation, all furnaces, boilers,
heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems
and apparatus, sprinkler systems and fire and theft protection
equipment, all of which, to the maximum extent permitted by law,
are hereby deemed by the parties hereto to constitute real estate,
together with all replacements, modifications, alterations and
additions thereto, but specifically excluding all items included
within the category of Tenant’s Personal Property
(collectively, the “FIXTURES”);
(e) all
of the Leased Intangible Property;
(f) any
and all leases of space in the Leased Improvements; and
(g) all
of the Transferred Trademarks whether or not used at or on any
Property (such rights of Tenant in the Transferred Trademarks being
nonexclusive, worldwide, non-assignable but sublicensable to the
extent expressly set forth in this Agreement).
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2.2 CONDITION OF LEASED PROPERTY.
Tenant acknowledges receipt and delivery of possession of the
Leased Property and Tenant accepts the Leased Property in its
“as is” condition, subject to the rights of parties in
possession, the existing state of title, including all covenants,
conditions, restrictions, reservations, mineral leases, easements
and other matters of record or that are visible or apparent on the
Leased Property, all applicable Legal Requirements, the lien of any
financing instruments, mortgages and deeds of trust existing prior
to the Commencement Date or permitted by the terms of this
Agreement, and such other matters which would be disclosed by an
inspection of the Leased Property and the record title thereto or
by an accurate survey thereof. TENANT REPRESENTS THAT IT HAS
INSPECTED THE LEASED PROPERTY AND ALL OF THE FOREGOING AND HAS
FOUND THE CONDITION THEREOF SATISFACTORY AND IS NOT RELYING ON ANY
REPRESENTATION OR WARRANTY OF LANDLORD OR LANDLORD’S AGENTS
OR EMPLOYEES WITH RESPECT THERETO AND TENANT WAIVES ANY CLAIM OR
ACTION AGAINST LANDLORD IN RESPECT OF THE CONDITION OF THE LEASED
PROPERTY. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF,
EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED
THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT. To the maximum
extent permitted by law, however, Landlord hereby assigns to Tenant
all of Landlord’s rights to proceed against any predecessor
in interest or insurer for breaches of warranties or
representations or for latent defects in the Leased Property.
Landlord shall fully cooperate with Tenant in the prosecution of
any such claims, in Landlord’s or Tenant’s name, all at
Tenant’s sole cost and expense. Tenant shall indemnify,
defend, and hold harmless Landlord from and against any loss, cost,
damage or liability (including reasonable attorneys’ fees)
incurred by Landlord in connection with such
cooperation.
2.3 TERM. The term of this Agreement
(the “TERM”) shall commence on the Commencement Date
and shall expire on December 31, 2022.
The term hereof
with respect to the Existing Third Party Trade Names and Service
Mark Rights shall be co-terminous with the duration of the third
party rights thereto as of the Commencement Date and may extend
beyond the Term or any earlier termination of the Term hereof (but
not later than December 31, 2027), and Tenant’s obligations
hereunder to Landlord with respect to any such Existing Third Party
Trade Names and Service
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Mark Rights shall apply
throughout such additional period as if it were part of the Term;
Tenant hereby representing that such extension for the period
beyond what would have been the Term had it expired by passage of
time does not apply to more than five (5) Travel Centers or other
hospitality, fuel and service facilities in the
aggregate.
ARTICLE 3
RENT
3.1 RENT. Tenant shall
pay, in lawful money of the United States of America which shall be
legal tender for the payment of public and private debts, without
offset, abatement, demand or deduction (unless otherwise expressly
provided in this Agreement), Minimum Rent and Additional Rent to
Landlord and Additional Charges to the party to whom such
Additional Charges are payable, during the Term. All payments to
Landlord shall be made by wire transfer of immediately available
federal funds or by other means acceptable to Landlord in its sole
discretion. Rent for any partial calendar month shall be prorated
on a per diem basis.
3.1.1 MINIMUM RENT.
(a) PAYMENTS. Minimum Rent shall be
paid in equal monthly installments in arrears on the first Business
Day of each calendar month during the Term.
(b) ADJUSTMENTS OF MINIMUM RENT
FOLLOWING DISBURSEMENTS UNDER SECTIONS 5.1.2(B), 10.2.3 AND 11.2.
Effective on the date of each disbursement to pay for the cost of
any repairs, maintenance, renovations or replacements pursuant to
SECTIONS 5.1.2(B), 10.2.3 OR 11.2, the annual Minimum Rent shall be
increased by a PER ANNUM amount equal to the Disbursement Rate
times the amount so disbursed.
3.1.2 ADDITIONAL RENT.
(a) AMOUNT. Tenant shall pay
additional rent (“ADDITIONAL RENT”) with respect to
each Lease Year during the Term subsequent to the Base Year, with
respect to each Property, in an amount equal to the sum of (x)
three-tenths of one percent (0.3%) of Excess Fuel Gross Revenues at
such Property and (y) three percent (3%) of Excess Non-Fuel Gross
Revenues at such Property; PROVIDED, HOWEVER, that in no Lease Year
shall Tenant be obligated to pay an aggregate
20
amount on account of
Excess Fuel Gross Revenues at the Leased Property in excess of the
Fuel Sales Cap.
(b) QUARTERLY INSTALLMENTS.
Installments of Additional Rent for each Lease Year during the
Term, or portion thereof, shall be calculated and paid quarterly in
arrears, on the first Business Day of the subsequent quarter,
together with an Officer’s Certificate setting forth the
calculation of Additional Rent due and payable for such
quarter.
(c) RECONCILIATION OF ADDITIONAL
RENT. In addition, within seventy-five (75) days after the end of
the Base Year and each Lease Year thereafter (or any portion
thereof occurring during the Term), Tenant shall deliver, or cause
to be delivered, to Landlord (i) a financial report setting forth
the Gross Fuel Revenues and Gross Non-Fuel Revenues for each
Property for such preceding Lease Year, or portion thereof,
together with an Officer’s Certificate from Tenant’s
chief financial or accounting officer certifying that such report
is true and correct, (ii) an audit of Gross Fuel Revenues and Gross
Non-Fuel Revenues prepared by a firm of independent certified
public accountants proposed by Tenant and approved by Landlord
(which approval shall not be unreasonably withheld, delayed or
conditioned), and (iii) a statement showing Tenant’s
calculation of Additional Rent due for such preceding Lease Year
based on the Gross Fuel Revenues and Gross Non-Fuel Revenues set
forth in such financial report, together with an Officer’s
Certificate from Tenant’s chief financial or accounting
officer certifying that such statement is true and
correct.
If
the annual Additional Rent for such preceding Lease Year as set
forth in Tenant’s 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 grant Tenant a credit against the
Additional Rent next coming due in the amount of such difference,
together with
21
interest at the
Interest Rate, which interest shall accrue from the date of payment
by Tenant until the date such credit is applied or paid, as the
case may be. If such credit cannot be made because the Term has
expired prior to application in full thereof, Landlord shall pay
the unapplied balance of such credit to Tenant, together with
interest at the Interest Rate, which interest shall accrue from the
date of payment by Tenant until the date of payment by
Landlord.
(d) CONFIRMATION OF ADDITIONAL RENT.
Tenant shall utilize, or cause to be utilized, an accounting system
for the Leased Property in accordance with its usual and customary
practices and in all material respects in accordance with GAAP,
which will accurately record all Gross Fuel Revenues and all Gross
Non-Fuel Revenues and Tenant shall retain, for at least three (3)
years after the expiration of each Lease Year, reasonably adequate
records conforming to such accounting system showing all Gross Fuel
Revenues and Gross Non-Fuel Revenues for such Lease Year. Landlord,
at its own expense, shall have the right, exercisable by Notice to
Tenant, by its accountants or representatives, to audit the
information set forth in the Officer’s Certificate referred
to in subparagraph (c) above and, in connection with any such
audit, to examine Tenant’s books and records with respect
thereto (including supporting data and sales and excise tax
returns). Landlord shall begin such audit as soon as reasonably
possible following its receipt of the applicable Officer’s
Certificate and shall complete such audit as soon as reasonably
possible thereafter. All such audits shall be performed at the
location where such books and records are customarily kept and in
such a manner so as to minimize any interference with
Tenant’s business operations. If any such audit discloses a
deficiency in the payment of Additional Rent and, either Tenant
agrees with the result of such audit or the matter is otherwise
determined, Tenant shall forthwith pay to Landlord the amount of
the deficiency, as finally agreed or determined, together with
interest at the Interest Rate, from the date such payment should
have been made to the date of payment thereof. If any such audit
discloses that Tenant paid more Additional Rent for any Lease Year
than was due hereunder, and either Landlord agrees with the result
of such audit or the matter is otherwise determined, Landlord
shall, at Landlord’s option, either grant Tenant a credit or
pay to Tenant an amount equal to the amount of such overpayment
against
22
Additional Rent next
coming due in the amount of such difference, as finally agreed or
determined, together with interest at the Interest Rate, which
interest shall accrue from the time of payment by Tenant until the
date such credit is applied or paid, as the case may be; PROVIDED,
HOWEVER, that, upon the expiration or sooner termination of the
Term, Landlord shall pay the unapplied balance of such credit to
Tenant, together with interest at the Interest Rate, which interest
shall accrue from the date of payment by Tenant until the date of
payment from Landlord. Any dispute concerning the correctness of an
audit shall be settled by arbitration pursuant to the provisions of
ARTICLE 22.
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.
3.1.3 ADDITIONAL CHARGES. In
addition to the Minimum Rent and Additional Rent payable hereunder,
Tenant shall pay (or cause to be paid) to the appropriate parties
and discharge (or cause to be discharged) as and when due and
payable the following (collectively, “ADDITIONAL
CHARGES”):
(a) IMPOSITIONS. Subject to ARTICLE
8 relating to permitted contests, Tenant shall pay, or cause to be
paid, all Impositions before any fine, penalty, interest or cost
(other than any opportunity cost as a result of a failure to take
advantage of any discount for early payment) may be added for
non-payment, such payments to be made directly to the taxing
authorities where feasible, and shall promptly, upon request,
furnish to Landlord copies of official receipts or other reasonably
satisfactory proof evidencing such payments. If any such Imposition
may, at the option of the taxpayer, lawfully be paid in
installments (whether or not interest shall accrue on the unpaid
balance of such
23
Imposition), Tenant may
exercise the option to pay the same (and any accrued interest on
the unpaid balance of such Imposition) in installments and, in such
event, shall pay, or cause to pay, such installments during the
Term as the same become due and before any fine, penalty, premium,
further interest or cost may be added thereto. Landlord, at its
expense, shall, to the extent required or permitted by Applicable
Law, prepare and file, or cause to be prepared and filed, all tax
returns and pay all taxes due in respect of Landlord’s net
income, gross receipts, sales and use, single business, transaction
privilege, rent, ad valorem, franchise taxes and taxes on its
capital stock or other equity interests, and Tenant, at its
expense, shall, to the extent required or permitted by Applicable
Laws and regulations, prepare and file all other tax returns and
reports in respect of any Imposition as may be required by
Government Agencies. If any refund shall be due from any taxing
authority in respect of any Imposition paid by or on behalf of
Tenant, the same shall be paid over to or retained by Tenant.
Landlord and Tenant shall, upon request of the other, provide such
data as is maintained by the party to whom the request is made with
respect to the Leased Property as may be necessary to prepare any
required returns and reports. In the event Government Agencies
classify any property covered by this Agreement as personal
property, Tenant shall file, or cause to be filed, all personal
property tax returns in such jurisdictions where it may legally so
file. Each party shall, to the extent it possesses the same,
provide the other, upon request, with cost and depreciation records
necessary for filing returns for any property so classified as
personal property. Where Landlord is legally required to file
personal property tax returns for property covered by this
Agreement, Landlord shall provide Tenant with copies of assessment
notices in sufficient time for Tenant to file a protest. All
Impositions assessed against such personal property shall be
(irrespective of whether Landlord or Tenant shall file the relevant
return) paid by Tenant not later than the last date on which the
same may be made without interest or penalty, subject to the
provisions of ARTICLE 8.
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 Landlord’s
failure to give any such notice shall in no way diminish
Tenant’s obligation hereunder to pay such
Impositions.
24
(b) UTILITY CHARGES. Tenant shall
pay or cause to be paid all charges for electricity, power, gas,
oil, water and other utilities used in connection with the Leased
Property.
(c) INSURANCE PREMIUMS. Tenant shall
pay or cause to be paid all premiums for the insurance coverage
required to be maintained pursuant to ARTICLE 9.
(d) OTHER CHARGES. Tenant shall pay
or cause to be paid all other amounts, liabilities and obligations,
including, without limitation, all amounts payable under any
equipment leases and all agreements to indemnify Landlord under
SECTION 9.5.
(e) REIMBURSEMENT FOR ADDITIONAL
CHARGES. If Tenant pays or causes to be paid property taxes or
similar or other Additional Charges attributable to periods after
the end of the Term, whether upon expiration or sooner termination
of this Agreement, Tenant may, within a reasonable time after the
end of the Term, provide Notice to Landlord of its estimate of such
amounts. Landlord shall promptly reimburse Tenant for all payments
of such taxes and other similar Additional Charges that are
attributable to any period after the Term of this
Agreement.
3.2 LATE PAYMENT OF RENT, ETC. If
any installment of Minimum Rent, Additional Rent or Additional
Charges (but only as to those Additional Charges which are payable
directly to Landlord) shall not be paid within ten (10) days after
its due date, Tenant shall pay Landlord, on demand, as Additional
Charges, a late charge (to the extent permitted by law) computed at
the Overdue Rate on the amount of such installment, from the due
date of such installment to the date of payment thereof. To the
extent that Tenant pays any Additional Charges directly to Landlord
or any Property Mortgagee pursuant to any requirement of this
Agreement, Tenant shall be relieved of its obligation to pay such
Additional Charges to the Entity to which they would otherwise be
due. If any payments due from Landlord to Tenant shall not be paid
within ten (10) days after its due date, Landlord shall pay to
Tenant, on demand, a late charge (to the extent permitted by law)
computed at the Overdue Rate on the amount of such installment from
the due date of such installment to the date of payment
thereof.
25
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.
3.3 NET
LEASE, ETC. The Rent shall be absolutely net to Landlord so that
this Agreement shall yield to Landlord the full amount of the
installments or amounts of the Rent throughout the Term, subject to
any other provisions of this Agreement which expressly provide
otherwise, including those provisions for adjustment or abatement
of such Rent. Landlord and Tenant acknowledge and agree that none
of the Rent provided for under this Agreement is allocable to any
personal property included in the Leased Property.
3.4 NO
TERMINATION, ABATEMENT, ETC. Except as otherwise specifically
provided in this Agreement, each of Landlord and Tenant, to the
maximum extent permitted by law, shall remain bound by this
Agreement in accordance with its terms and shall not take any
action without the consent of the other to modify, surrender or
terminate this Agreement. In addition, except as otherwise
expressly provided in this Agreement, Tenant shall not seek, or be
entitled to, any abatement, deduction, deferment or reduction of
the Rent, or set-off against the Rent, nor shall the respective
obligations of Landlord and Tenant be otherwise affected by reason
of (a) any damage to or destruction of the Leased Property, or any
portion thereof, from whatever cause or any Condemnation; (b) the
lawful or unlawful prohibition of, or restriction upon,
Tenant’s use of the Leased Property, or any portion thereof,
or the interference with such use by any Person or by reason of
eviction by paramount title; (c) any claim which Tenant may have
against Landlord by reason of any default (other than a monetary
default) or breach of any warranty by Landlord under this Agreement
or any other agreement between Landlord and Tenant, or to which
Landlord and Tenant are parties; (d) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Landlord or
any assignee or transferee of Landlord; or (e) for any other cause
whether similar or dissimilar to any of the foregoing (other than a
monetary default by Landlord). Except as otherwise specifically
provided in this Agreement, Tenant hereby waives all rights arising
from
26
and occurrence
whatsoever, which may now or hereafter be conferred upon it by law
(a) to modify, surrender or terminate this Agreement or quit or
surrender the Leased Property, or any portion thereof, or (b) which
would entitle Tenant to any abatement, reduction, suspension or
deferment of the Rent or other sums payable or other obligations to
be performed by Tenant hereunder. The obligations of Tenant
hereunder shall be separate and independent covenants and
agreements, and the Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events unless the
obligations to pay the same shall be terminated pursuant to the
express provisions of this Agreement.
ARTICLE 4
USE
OF THE LEASED PROPERTY
4.1 PERMITTED USE.
4.1.1 PERMITTED USE.
(a) Tenant shall, at all times
during the Term, and at any other time that Tenant shall be in
possession of any Property, continuously use and operate, or cause
to be used and operated, such Property as a Travel Center, as
currently operated, and any uses incidental thereto. Tenant shall
operate the Travel Centers under the name Travel Centers of America
or Goasis, or such other name as TCA shall use for all or
substantially all of the travel center locations operated by it and
its Affiliated Persons as of the Commencement Date. Tenant shall
not use (and shall not permit any Person to use) any Property, or
any portion thereof, for any other use without the prior written
consent of Landlord, which approval shall not be unreasonably
withheld, delayed or conditioned. No use shall be made or permitted
to be made of any Property and no acts shall be done thereon which
will cause the cancellation of any insurance policy covering such
Property or any part thereof (unless another adequate policy is
available) or which would constitute a default under any ground
lease affecting such Property, nor shall Tenant sell or otherwise
provide, or permit to be kept, used or sold in or about any
Property any article which may be prohibited by law or by the
standard form of fire insurance policies, or any other insurance
policies required to be carried hereunder, or fire
underwriter’s regulations. Tenant shall, at its sole cost
(except as expressly provided in
27
SECTION 5.1.2(b)),
comply or cause to be complied with all Insurance Requirements.
Tenant shall not take or omit to take, or permit to be taken or
omitted to be taken, any action, the taking or omission of which
materially impairs the value or the usefulness of any Property or
any part thereof for its Permitted Use.
(b) In
the event that, in the reasonable determination of Tenant, it shall
no longer be economically practical to operate any Property as
currently operated, Tenant shall give Landlord Notice thereof,
which Notice shall set forth in reasonable detail the reasons
therefor. Thereafter, Landlord and Tenant shall negotiate in good
faith to agree on an alternative use for such Property, appropriate
adjustments to the Additional Rent and other related matters;
PROVIDED, HOWEVER, in no event shall the Minimum Rent be reduced or
abated as a result thereof. If Landlord and Tenant fail to agree on
an alternative use for such Property within sixty (60) days after
commencing negotiations as aforesaid, Tenant may market such
Property for sale to a third party. If Tenant receives a bona fide
offer (an “OFFER”) to purchase such Property from a
Person having the financial capacity to implement the terms of such
Offer, Tenant shall give Landlord Notice thereof, which Notice
shall include a copy of the Offer executed by such third party. In
the event that Landlord shall fail to accept or reject such Offer
within thirty (30) days after receipt of such Notice, such Offer
shall be deemed to be rejected by Landlord. If Landlord shall sell
the Property pursuant to such Offer, then, effective as of the date
of such sale, this Agreement shall terminate with respect to such
Property, and the Minimum Rent shall be reduced by an amount equal
to, at Landlord’s option, (x) eight and one half percent
(8.5%) of the net proceeds of sale received by Landlord or (y) the
Fair Market Value Rent of the applicable Property on the
Commencement Date, such Fair Market Value Rent to be determined by
agreement of the parties or, absent agreement, by an appraiser
designated by Landlord. If Landlord shall reject (or be deemed to
have rejected) such Offer, then, effective as of the proposed date
of such sale, this Agreement shall terminate with respect to such
Property, and the Minimum Rent shall be reduced by an amount equal
to, at Landlord’s option, (x) eight and one half percent
(8.5%) of the projected net proceeds determined by reference to
such Offer (and, at Landlord’s request, Tenant shall cause
TCA (or its Affiliated Persons) to enter into a franchise agreement
on
28
market terms with
Landlord or Landlord’s designee providing for the operation
of such Property by Landlord or such designee as a Travel Center
under the TCA brand) or (y) the Fair Market Value Rent of the
applicable Property on the Commencement Date, such Fair Market
Value Rent to be determined by agreement of the parties or, absent
agreement, by an appraiser designated by Landlord. Notwithstanding
the foregoing, Tenant shall not have the right to invoke the
provisions of this SECTION 4.1.1(b) with respect to more than 15
Properties during the Term.
4.1.2 NECESSARY APPROVALS. Tenant
shall proceed with all due diligence and exercise reasonable
efforts to obtain and maintain, or cause to be obtained and
maintained, all approvals necessary to use and operate, for its
Permitted Use, each Property and the Travel Center located thereon
under applicable law.
4.1.3 LAWFUL USE, ETC. Tenant shall
not, and shall not permit any Person to, use or suffer or permit
the use of any Property or Tenant’s Personal Property, if
any, for any unlawful purpose. Tenant shall not, and shall not
permit any Person to, commit or suffer to be committed any waste on
any Property, or in any Travel Center, nor shall Tenant cause or
permit any unlawful nuisance thereon or therein. Tenant shall not,
and shall not permit any Person to, suffer nor permit any Property,
or any portion thereof, to be used in such a manner as (i) may
materially and adversely impair Landlord’s or Tenant’s
title thereto or to any portion thereof, or (ii) may reasonably
allow a claim or claims for adverse usage or adverse possession by
the public, as such, or of implied dedication of such Property, or
any portion thereof.
4.2 COMPLIANCE WITH LEGAL/INSURANCE
REQUIREMENTS, ETC. Subject to the provisions of SECTION 5.1.2(b)
and ARTICLE 8, Tenant, at its sole expense, shall (i) comply with
(or cause to be complied with) all material Legal Requirements and
Insurance Requirements in respect of the use, operation,
maintenance, repair, alteration and restoration of any Property and
with the terms and conditions of any ground lease affecting any
Property, (ii) perform (or cause to be performed) in a timely
fashion all of Landlord’s obligations under any ground lease
affecting any Property except as provided in Section 4.4 and
(iii) procure, maintain and comply with (or cause to be procured,
maintained and complied with) all material licenses, permits and
other authorizations and agreements required for any use of any
Property and Tenant’s Personal Property, if any, then being
made, and for the proper erection,
29
installation, operation
and maintenance of the Leased Property or any part
thereof.
4.3 ENVIRONMENTAL
MATTERS.
4.3.1 RESTRICTION ON USE, ETC.
During the Term and any other time that Tenant shall be in
possession of any Property, Tenant shall not, and shall not permit
any Person to, store on, release or spill upon, dispose of or
transfer to or from such Property any Hazardous Substance, except
in compliance with all Applicable Laws. During the Term and any
other time that Tenant shall be in possession of any Property,
Tenant shall maintain (or shall cause to be maintained) such
Property at all times free of any Hazardous Substance (except in
compliance with all Applicable Laws). Tenant shall promptly (and
shall direct any Manager to promptly): (a) upon receipt of notice
or knowledge, notify Landlord in writing of any material change in
the nature or extent of Hazardous Substances at any Property, (b)
transmit to Landlord a copy of any report which is required to be
filed by Tenant or any Manager with respect to any Property
pursuant to SARA Title III or any other Applicable Law, (c)
transmit to Landlord copies of any citations, orders, notices or
other governmental communications received by Tenant or any Manager
or their respective agents or representatives with respect to
Hazardous Substances or violations or alleged violations of
Applicable Law (each an “ENVIRONMENTAL NOTICE”), which
Environmental Notice requires a written response or any action to
be taken and/or if such Environmental Notice gives notice of and/or
presents a material risk of any material violation of any
Applicable Law and/or presents a material risk of any material
cost, expense, loss or damage (an “ENVIRONMENTAL
OBLIGATION”), (d) observe and comply with (or cause to be
observed and complied with) all Applicable Laws relating to the
use, storage, maintenance and disposal of Hazardous Substances and
all orders or directives from any official, court or agency of
competent jurisdiction relating to the use, storage or maintenance,
or requiring the removal, treatment, containment or other
disposition of Hazardous Substances, and (e) pay or otherwise
dispose (or cause to be paid or otherwise disposed) of any fine,
charge or Imposition related to Hazardous Substances or violations
of Applicable Law for which Tenant or any Person claiming by,
through or under Tenant and/or Landlord are legally liable, unless
Tenant or any Manager shall contest the same in good faith and by
appropriate proceedings and the right to use and the value of any
of the Leased Property is not materially and adversely affected
thereby.
30
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 Tenant’s 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.
4.3.2 ENVIRONMENTAL REPORT. Tenant
shall, at its sole cost and expense, provide Landlord with an
Environmental Report (as hereinafter defined), prepared by an
environmental consultant reasonably acceptable to Landlord and
dated within sixty (60) days of the expiration or sooner
termination of this Agreement concluding, subject to customary
limitations and standards, that Tenant shall have complied with all
of its obligations under SECTION 4.3 of this Agreement to date and
that the Leased Property does not contain any Hazardous Substances,
other than in compliance with Applicable Laws, and which, at
Landlord’s request, Tenant shall remove from the Leased
Property on or before the expiration or sooner termination hereof.
An “Environmental Report” shall be a so-called
“Phase I” report or such other level of investigation
which shall be the standard of diligence in the purchase or lease
of similar property at the time, together with any additional
investigation and report which would be needed to make the
conclusions required above or which would customarily follow any
discovery contained in any initial report(s), and for which the
investigation and testing on which the conclusions shall have been
based shall have been performed not earlier than thirty (30) days
prior to the date of such report.
4.3.3 SURVIVAL. The provisions of
this SECTION 4.3 shall survive the expiration or sooner termination
of this Agreement.
4.4 GROUND LEASES. Tenant shall pay
and perform all of Landlord’s obligations as tenant under the
Ground Leases except that (a) Landlord shall pay the basic and
minimum rent and percentage rent due under the Willington Travel
Center ground lease (and Tenant shall reasonably cooperate with
Landlord in providing timely information and computations for
purposes of computing such rent under such ground lease) and
(b) Tenant shall, during the term of such ground lease, pay to
Landlord, monthly in advance, the Willington Rent. The
“Willington Rent” shall be the sum o
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