Deferral Agreement (2008)Full Document 

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DEFERRAL AGREEMENT

 

This Deferral Agreement (this “Agreement”) is made August 11, 2008, among Hospitality Properties Trust (the “Trust”), HPT TA Properties Trust (“HPT TA Trust”), HPT TA Properties LLC (“HPT TA LLC”), HPT PSC Properties Trust (“HPT PSC Trust”), HPT PSC Properties LLC (“HPT PSC LLC” and together with the Trust, HPT TA Trust, HPT TA LLC, HPT PSC Trust, “HPT”), TravelCenters of America LLC (“TravelCenters”), TA Leasing LLC (“TA Leasing”) and Petro Stopping Centers, L.P. (“Petro” and together with TravelCenters and TA Leasing, “TA”).

 

RECITAL

 

The parties are parties to a lease dated January 31, 2007, as amended, and a lease dated May 30, 2007, as amended, and certain related and/or incidental documents and agreements (collectively, the “Lease Documents”).

 

As a result of material and unforeseen changes in the market conditions in which TA operates since the Lease Documents were entered into, the parties wish to defer certain rental obligations thereunder.

 

Now, therefore, the parties agree:

 

1.             Deferral.  TA shall have the right to defer up to $5,000,000 of Minimum Rent (this and other capitalized terms used with the meanings ascribed to such terms in the Lease Documents) due each month under the Lease Documents beginning with the Minimum Rent payable for July 2008 and continuing through the Minimum Rent payable for December, 2010, which is payable January 1, 2011 (all such rent so deferred, the “Deferred Rent”).  The right to defer Minimum Rent shall not be cumulative if less than $5,000,000 is deferred in any calendar month, provided that TA, having paid Minimum Rent for July 2008, may defer up to $10,000,000 of Minimum Rent payable for August 2008.  Any Minimum Rent deferred shall be in multiples of $1,000,000.

 

2.             Interest.  No interest shall be payable on the Deferred Rent prior to December 31, 2009.  Beginning January 1, 2010, interest shall accrue at the rate of 1% per month on the Deferred Rent and shall be paid by TA to HPT, monthly, in arrears, at the time and in the manner provided in the Lease Documents for the payment of Minimum Rent, beginning with the payment of Minimum Rent due on the first Business Day of February 2010.

 

3.             Payment and Prepayment.  The Deferred Rent, together with any accrued and unpaid interest, shall be due on the first Business Day of July 2011. The Deferred Rent may be prepaid at any time without premium or penalty, in whole or part, provided any partial prepayment shall be made in multiples of $1,000,000, together with accrued and unpaid interest, if any.

 

4.             TravelCenters Shares.  In consideration for the right to defer Minimum Rent under the Lease Documents as provided in this Agreement, contemporaneously with the execution of this Agreement TravelCenters will issue 1,540,000 common shares, no par value (together with any shares of TravelCenters issued in respect of such common shares as a result of

 

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any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization, the “Common Shares”), representing common limited liability company interests in TravelCenters subject to the restrictions set forth in this Section 4, to HPT and will provide registration rights under the Securities Act of 1933 for the Common Shares pursuant to a Registration Rights Agreement attached as Exhibit A.  On January 1, 2010, if TA has exercised its right to defer Minimum Rent in an aggregate amount less than that permitted pursuant to Section 1 prior to that date, a number of the Common Shares shall thereupon be subject to repurchase by TravelCenters for consideration of $0.01/share by notice given to HPT on or before March 1, 2010, such number being equal to 1,540,000 multiplied by a fraction, the numerator of which is

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