<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended JANUARY 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 001-13777
GETTY REALTY CORP.
(Exact name of registrant as specified in its charter)
Maryland 11-3412575
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
125 Jericho Turnpike, Jericho, New York 11753
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 516-338-2600
Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $.01 par value New York Stock Exchange
Series A Participating Convertible
Redeemable Preferred Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act:
None
(Title of Class)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates (7,929,034
shares of common stock and 1,514,219 shares of preferred stock) of the Company
was $221,035,417 as of April 22, 1998.
The registrant had outstanding 13,564,873 shares of common stock and 2,888,799
shares of preferred stock as of April 22, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
Document Part of Form 10-K
-------- -----------------
<S> <C>
Annual Report to Stockholders for the fiscal year
ended January 31, 1998 (the "Annual Report")(pages 9 through 28). II
Definitive Proxy Statement for the 1998 Annual Meeting of Stockholders (the
"Proxy Statement") which will be filed by the registrant on or prior to 120
days following the end of the registrant's fiscal year ended January 31, 1998
pursuant to Regulation 14A. III
</TABLE>
<PAGE> 2
PART I
Item 1. Business
General
Prior to the spin-off of its petroleum marketing business on March 21, 1997 (as
described below), Getty Realty Corp., known prior to March 31, 1997 as Getty
Petroleum Corp., (hereinafter, together with its subsidiaries, called "Getty" or
the "Company") was one of the nation's largest independent marketers of
petroleum products. Prior to the spin-off, the Company served retail and
wholesale customers through a distribution and marketing network of Getty(R) and
other branded retail outlets (also referred to as service stations) located in
12 Northeastern and Middle-Atlantic states. The Company purchased gasoline, fuel
oil and related petroleum products from a number of Northeast suppliers. These
products were delivered by cargo ship, barge, pipeline and truck to the
Company's distribution terminals and bulk plants located in the Company's
marketing region for distribution and sale throughout the 12 state region. The
Company also sold on a wholesale basis gasoline, fuel oil, diesel fuel and
kerosene from distribution terminals and bulk plants in truckload and barge
quantities and sold fuel oil, kerosene and propane to residential, commercial
and governmental customers in Maryland, Pennsylvania and upstate New York.
On March 21, 1997, the Company effected the spin-off (the "spin-off") of its
petroleum marketing business to its stockholders, and stockholders of record on
that date received a tax-free dividend of one share of common stock of Marketing
(as defined below) for each share of common stock of the Company. The Company
retained its real estate assets and leased most of its properties on a long-term
net basis to the spun-off company, which is named Getty Petroleum Marketing Inc.
("Marketing"), and the Company is now principally engaged in the ownership,
leasing and management of real estate. The Company also retained the
Pennsylvania and Maryland home heating oil business. The Company transferred to
Marketing the assets and liabilities of the petroleum marketing business and the
New York Mid-Hudson Valley home heating oil business. For additional information
regarding the spin-off, see Note 2 to the accompanying consolidated financial
statements.
The Company and its predecessors had been in the petroleum marketing business
for over 40 years. Mr. Leo Liebowitz, President and Chief Executive Officer and
a director of the Company, and Mr. Milton Safenowitz, a director and former
Executive Vice President of the Company, founded the business in 1955 with one
service station and pursued a strategy of expanding the business principally
through acquisitions. By 1985, the Company had expanded into five states under
various brand names, principally Power Test(R). On February 1, 1985, the Company
acquired the marketing and distribution assets of Getty Oil Company in the
Northeastern and Middle-Atlantic states from a subsidiary of Texaco Inc. The
Getty acquisition added service stations, distribution terminals and a wholesale
heating oil and middle distillate marketing network in six additional states.
From 1985 until the time of the spin-off, the Company's operations expanded to a
marketing region encompassing 12 Northeastern and Middle-Atlantic states through
additional acquisitions of numerous small regional distributors,
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service stations and convenience food stores.
Reorganization
On January 30, 1998, the Company was reorganized as a Maryland corporation
pursuant to an Agreement and Plan of Reorganization and Merger dated as of
December 16, 1997. See Item 4. "Submission of Matters to a Vote of Security
Holders" below and the Joint Proxy Statement/Prospectus of Getty Realty Corp.
and Power Test Investors Limited Partnership filed as part of the Company's
Registration Statement on Form S-4 dated January 12, 1998 (Registration No.
333-44065). Also on January 30, 1998, Getty Realty Corp., a Delaware
corporation, changed its name to Getty Properties Corp. and became a
wholly-owned subsidiary of the Company. As used herein, the Company means Getty
Realty Corp., a Maryland corporation, and with respect to periods prior to
January 30, 1998, it means Getty Realty Corp., a Delaware corporation (also
referred to as "Old Getty"). In connection with the transaction, stockholders of
Old Getty received one share of common stock of the Company for each share of
Old Getty's common stock tendered for exchange. The Company's common stock is
listed on the New York Stock Exchange.
Merger with Power Test Investors Limited Partnership and Issuance of Preferred
Stock
Also on January 30, 1998, the Company merged with Power Test Investors Limited
Partnership (the "Partnership"), as a result of which the Company acquired fee
title to 295 properties which Old Getty had previously leased from the
Partnership. See Item 2. "Properties" below. In connection with the transaction,
2,888,799 shares of Series A Participating Convertible Redeemable Preferred
Stock, ($.01 par value), ("Preferred Stock") of the Company were issued to the
former limited partnership unitholders of the Partnership and to CLS General
Partnership Corp., the Partnership's general partner. On February 11, 1998, the
Preferred Stock commenced trading on the New York Stock Exchange.
Operating Strategy
As a result of the spin-off, the Company is now an independent real estate
company which will utilize its skills and knowledge of the petroleum industry to
make acquisitions and enter into lease transactions nationwide. The Company
intends to specialize in the ownership of properties in the petroleum industry
since it has substantial knowledge and expertise in this industry.
The Company has divided the United States into five regions, each to be managed
by experienced regional real estate directors with acquisition responsibility,
reporting to the national real estate director. The acquisition program includes
acquiring properties outright, acquiring properties and leasing them back to the
existing operators, building to suit for qualified operators and providing
financial resources to qualified operators for expansion. In addition to the
acquisition of the Partnership's 295 properties, the Company also acquired 15
individual fee properties during the year ended January 31, 1998.
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Real Estate Business
Effective February 1, 1997, the Company and Marketing entered into a Master
Lease Agreement (the "Master Lease") under which, as of January 31, 1998, 1,024
service station and convenience store properties and 10 distribution terminals
and bulk plants are leased or subleased by the Company as the lessor to
Marketing as the lessee. The initial term of the Master Lease is 15 years, with
four ten-year renewal options (or with respect to leased properties, such
shorter period as the underlying lease may provide). The Master Lease is a
"triple-net" lease, so Marketing is responsible for the cost of all taxes,
maintenance, repairs, insurance and other operating expenses. Rent for each of
the properties was set using the then fair market value of each such property,
assuming the properties were free of certain environmental conditions for which
the Company is responsible.
The Company received net lease payments from Marketing aggregating approximately
$57 million (of the $59.6 million total revenues from rental properties) for the
fiscal year ended January 31, 1998 and is therefore materially dependent upon
the ability of Marketing to meet its obligations under the Master Lease with the
Company. Marketing's financial results depend largely on retail marketing
margins and rental income from its dealers. The petroleum marketing industry has
been and continues to be volatile and highly competitive; however, the Company
does not anticipate that Marketing will have difficulty making all required
rental payments for the foreseeable future.
As of January 31, 1998, the Company had additional properties not under the
Master Lease, most of which are leased for non-petroleum use, for which there
are 153 tenants. The Company also had 32 properties being held for disposition.
Heating Oil Business
During the year ended January 31, 1998, the Company's retained heating oil
business in Pennsylvania and Maryland sold heating oil, propane (LPG) and
related services directly to approximately 19,100 retail and commercial
customers.
Regulation
The Company is subject to numerous federal, state and local laws and
regulations. The costs related to compliance with those laws and regulations
have not had and are not expected to have a material adverse effect on the
competitive or financial position of the Company, although such costs may have a
significant impact on the Company's results of operations or liquidity for any
single fiscal year or interim period.
The Company's operations have been governed by numerous federal, state and local
environmental laws and regulations. These laws have included (i) requirements to
report to governmental authorities discharges of petroleum products into the
environment and, under certain circumstances, to remediate the soil and/or
groundwater contamination pursuant to
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governmental order and directive, (ii) requirements to remove and replace
underground storage tanks which have exceeded governmental-mandated age
limitations and (iii) the requirement to provide a certificate of financial
responsibility with respect to claims relating to underground storage tank
failures.
Environmental expenses have been attributable to remediation, monitoring, soil
disposal and governmental agency reporting (collectively, "Remediation Costs")
incurred in connection with contaminated sites and the replacement or upgrading
of underground storage tanks, related piping, underground pumps, wiring and
monitoring devices (collectively, "USTs") to meet federal, state and local
environmental standards, as well as routine monitoring and tank testing. Under
the Master Lease, the Company committed to a program to bring scheduled leased
properties to regulatory closure and, thereafter, transfer all environmental
risks from the Company to Marketing. In order to establish the Remediation Costs
obligation and estimate the incremental cost of accelerated remediation, the
Company in fiscal 1997 commissioned a detailed property-by-property
environmental study of all retail outlets, with the objective of achieving
closure in approximately five years. As a result, the Company revised its
estimate of future Remediation Costs in the fourth quarter of fiscal 1997 and
recorded a pre-tax charge in such quarter for Remediation Costs of $21.2
million. The pre-tax charge resulted from the acceleration of remediation
activities to be paid by the Company through more aggressive means of treating
contaminated sites to bring them to closure in approximately five years, which
resulted in significant incremental Remediation Costs, changes in estimated
Remediation Costs at previously identified properties, including costs to be
incurred in connection with UST upgrades, and additional charges to comply with
AICPA Statement of Position 96-1, "Environmental Remediation Liabilities".
The Company believes that it is in substantial compliance with federal, state
and local provisions enacted or adopted pertaining to environmental matters.
Although the Company is unable to predict what legislation or regulations may be
adopted in the future with respect to environmental protection and waste
disposal, existing legislation and regulations have had no material adverse
effect on its competitive position. See "Item 3. Legal Proceedings".
Personnel
As of January 31, 1998, the Company had 154 employees, of which 79 employees,
consisting of truck drivers and service technicians at its heating oil business,
were represented by Amalgamated Local Union 355. The Company considers its
relationships with its employees and the union to be satisfactory.
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Item 2. Properties
The properties owned in fee or leased by the Company for each of the five fiscal
years ended January 31, 1998 are as follows:
<TABLE>
<CAPTION>
January 31,
--------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Owned 736 441 439 444 457
Leased 404 732 734 752 772
----- --- ----- ----- -----
Total 1,140 1,173 1,173 1,196 1,229
===== ===== ===== ===== =====
</TABLE>
The following table sets forth certain information regarding lease expirations
for the properties:
<TABLE>
<CAPTION>
Fiscal Year Number of Leases Expiring(a) Percent of Total
- ----------- ------------------------- ----------------
<S> <C> <C>
1999 46 11.4%
2000 43 10.6%
2001 55 13.6%
2002 59 14.6%
2003 55 13.6%
Thereafter 146 36.2%
--- -----
404 100.0%
=== ======
</TABLE>
- ----------
(a) The lease expiration schedule does not include lease extension options.
On January 30, 1998, the Company merged with the Partnership, a publicly traded
real estate limited partnership, in a transaction accounted for as a purchase.
As a result of the transaction, the Company acquired 295 fee properties,
consisting of 290 service station and convenience store properties and five
terminals, which were previously leased by the Partnership to the Company.
Prior to the merger, the Partnership was managed by the then general partner,
CLS General Partnership Corp. ("CLS"). The directors and stockholders of CLS are
also directors and the principal stockholders of the Company. As a result of the
merger, CLS received 28,890 shares of Preferred Stock of the Company in
consideration for its general and limited partnership interest in the
Partnership and its general partnership interest in Power Test Realty Company
Limited Partnership. See "Merger with Power Test Investors Limited Partnership
and Issuance of Preferred Stock" above. During the fiscal years ended January
31, 1998, 1997 and 1996, the Company made net lease payments to the Partnership
of $10,032,000, $10,061,000 and $10,553,000, respectively. In addition, during
the fiscal years ended January 31, 1998, 1997 and 1996, the Company billed the
Partnership and reflected in other income $672,000, $672,000 and $648,000,
respectively, for administrative and other services rendered to the Partnership.
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As of January 31, 1998, the Company also owned in fee 15 distribution terminals
and bulk plants and leased 3 distribution terminals and bulk plants (on a
long-term net lease basis) located in New York, New Jersey, Rhode Island,
Pennsylvania, Connecticut and Maryland. The terminals and bulk plants owned or
leased by the Company have an aggregate storage capacity of approximately 59
million gallons. The terminals located in East Providence (Rhode Island) and
Rensselaer (New York) are deep-water terminals, capable of handling large
vessels. Some of the Company's terminals have excess capacity and land that
could be developed or adapted to handle products, such as residual fuel, jet
fuel and lube blending. Ten of the distribution terminals and bulk plants are
leased or sub-leased to Marketing with the remaining eight bulk plants utilized
in the Company's retained heating oil business.
As of January 31, 1998, the Company leases approximately 30,500 square feet of
office space at 125 Jericho Turnpike, Jericho, New York, where it currently
maintains its corporate headquarters, most of which has been subleased to
Marketing.
The Company believes that substantially all of its owned and leased properties
are in good condition.
For a description of the Company's lease arrangements with Marketing after the
spin-off, see discussion above under the caption "Real Estate Business".
Item 3. Legal Proceedings
(a) Information in response to this item is incorporated herein by reference
from Notes 5 and 12 of the Notes to Consolidated Financial Statements set forth
on pages 22 and 23, and page 27, respectively, of the Annual Report. The
Company's legal proceedings have been appropriately reserved for in the
Company's consolidated financial statements.
In 1986, the State of New York brought an action against the Company which was
filed in New York State Supreme Court in Albany County for an alleged
underground discharge of petroleum products at a service station. The State is
seeking reimbursement in the amount of $179,000 for cleanup costs, plus interest
and a penalty of $10,000 for the alleged discharge. On March 23, 1998, the
insurance carrier, who had been defending the Company under a reservation of
rights, advised the Company that it will continue to defend the Company but will
not indemnify it.
In 1991, the State of New York brought an action in the New York State Supreme
Court in Albany County against one of the Company's former subsidiaries seeking
reimbursement in the amount of $189,000 for cleanup costs incurred at a service
station. The State is also seeking penalties of $200,000 and interest. There has
been no activity in this proceeding in the past several years.
In 1992, the State of New York asserted a claim for reimbursement of cleanup
costs against the Company and another petroleum company, in the amount of
$121,000, together with statutory penalties of $100,000, pertaining to an
alleged spill at a service station in 1984. In 1996, the
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State of New York brought an action in the New York State Supreme Court in
Albany County against the Company and the other petroleum company seeking
cleanup costs of $209,000, together with interest and penalties of $200,000.
In 1993, the State of New York asserted a claim against the Company for cleanup
costs incurred at a service station and for statutory penalties. In 1994, an
action was filed in New York State Supreme Court in Albany County to recover
$522,000 for cleanup costs and unspecified penalties and interest.
In 1994, a subsidiary of the Company was served with an Amended Complaint naming
the Company's subsidiary as one of many defendants in the Keystone Superfund
case pending in the U.S. District Court for the Middle District of Pennsylvania,
pertaining to the subsidiary's miscellaneous office refuse and used furnace air
and oil filters which were disposed of at the site. In 1995, another subsidiary
of the Company was brought into the same action pertaining to convenience store
refuse. In August 1997, the Company and its subsidiaries paid into escrow
$40,000 in full settlement. The settlement, which has been approved by the U. S.
EPA, has not yet been approved by the Court.
In December 1995, Pennsauken Solid Waste Management Authority, its
successor-in-interest, the Pollution Control Financing Authority of Camden
County and the Township of Pennsauken, New Jersey commenced an action for
unspecified amounts against certain defendants for all costs and damages
incurred for the remediation of the Pennsauken Sanitary Landfill. In November
1996, one of the defendants filed a third party complaint in the Superior Court
of New Jersey, Camden County, against its former customers, including a former
construction company subsidiary of the Company, seeking indemnification from the
third party defendants for all costs it incurred or will incur in response to
the release of hazardous substances in the landfill plus attorneys' fees. The
Company believes that the exposure is not material inasmuch as the quantities of
construction fill deposited at the waste site were small.
In 1996, the State of New York asserted three separate claims against the
Company for reimbursement of cleanup costs incurred at service stations in the
amount of (i) $291,000, plus statutory penalties of $150,000, (ii) $112,000,
plus interest and (iii) $463,000, plus interest.
On April 1, 1998, the State of New York asserted a claim against a former
subsidiary of the Company for reimbursement in the amount of $185,000 for
cleanup costs that were incurred at a heating oil customer's home in 1991.
Item 4. Submission of Matters to a Vote of Security Holders
On January 30, 1998, a Special Meeting of Stockholders was held to vote on
proposals to approve and adopt (i) an Agreement and Plan of Reorganization and
Merger, dated as of December 16, 1997, by and between Getty Realty Corp., a
Delaware corporation, Power Test Investors Limited Partnership, a New York
limited partnership and CLS General Partnership Corp., a Delaware corporation,
and (ii) the Company's 1998 Stock Option Plan. Both of the
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aforementioned proposals were approved and adopted by the Company with the
following votes:
<TABLE>
<CAPTION>
Proposal (i): Proposal (ii):
- ------------- --------------
<S> <C> <C> <C>
For 10,874,949 For 9,852,123
Against 55,106 Against 1,008,074
Abstain 2,822 Abstain 72,680
</TABLE>
See "Reorganization".
Executive Officers of Registrant
The following table lists the executive officers of the Company as of January
31, 1998, their respective ages, the offices and positions held with the Company
and the year in which each was elected an officer of the Company or its
predecessor.
<TABLE>
<CAPTION>
Name Age Position Officer Since
---- --- -------- -------------
<S> <C> <C> <C>
Leo Liebowitz 70 President and Chief Executive
Officer 1971
John J. Fitteron 56 Senior Vice President, Treasurer
and Chief Financial Officer 1986
</TABLE>
Mr. Liebowitz has been President and Chief Executive Officer and a director of
the Company or its predecessor since 1971. He is also the Chairman, Chief
Executive Officer and a director of Marketing. He is also a director of the
Regional Banking Advisory Board of Chase Banking Corp.
Mr. Fitteron joined the Company's predecessor in 1986 as Senior Vice President
and Chief Financial Officer and assumed the additional position of Treasurer in
1994. Prior to joining Getty, he was a Senior Vice President at Beker Industries
Corp., a chemical and natural resource company.
Management is not aware of any family relationships between the foregoing
executive officers.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Information in response to this item is incorporated herein by reference from
material under the heading "Capital Stock" on page 28 of the Annual Report.
Item 6. Selected Financial Data
Information in response to this item is incorporated herein by reference from
material under the heading "Selected Financial Data" on page 9 of the Annual
Report.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Information in response to this item is incorporated herein by reference from
material under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 10 through 13 of the Annual
Report.
Item 8. Financial Statements and Supplementary Data
Information in response to this item is incorporated herein by reference from
the financial information set forth on pages 14 through 28 of the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
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PART III
Item 10. Directors and Executive Officers of the Registrant
Information with respect to directors in response to this item is incorporated
herein by reference from material under the headings "Election of Directors" and
"Compliance with Section 16(a) of the Securities Exchange Act of 1934" on pages
2 and 5, and page 18, respectively, of the Proxy Statement.
Information regarding executive officers is included in Part I hereof.
Item 11. Executive Compensation
Information in response to this item is incorporated herein by reference from
material under the headings "Directors' Meetings, Committees and Executive
Officers" and "Compensation" through, and including the material under the
heading, "Compensation Committee Interlocks and Insider Participation" on pages
6 through 9 of the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information in response to this item is incorporated herein by reference from
material under the heading "Beneficial Ownership of Capital Stock" on pages 3
and 4 of the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
Information in response to this item is incorporated herein by reference from
material under the heading "Certain Transactions" on pages 11 and 12 of the
Proxy Statement.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. Financial statements
The financial statements listed in the Index to
Financial Statements and Financial Statement
Schedules on page 13 are filed as part of this annual
report.
2. Financial statement schedule
The financial statement schedule listed in the Index
to Financial Statements and Financial Statement
Schedules on page 13 is filed as part of this annual
report.
3. Exhibits
The exhibits listed in the Exhibit Index on pages 16
through 22 are filed as part of this annual report.
4. Reports on Form 8-K
Old Getty and the Partnership each filed Current
Reports on Form 8-K dated December 17, 1997 reporting
under Item 5, Other Events, that on December 16,
1997, Old Getty, the Partnership and CLS General
Partnership Corp., a Delaware corporation and the
general partner of the Partnership, entered into an
Agreement and Plan of Reorganization and Merger. The
registrant also filed on February 9, 1998, a Current
Report on Form 8-K dated January 30, 1998 reporting
under Item 5, Other Events, that the transactions
contemplated by the Agreement and Plan of
Reorganization and Merger had been consummated.
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GETTY REALTY CORP.
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT ACCOUNTANTS
Items 14(a) 1 & 2
<TABLE>
<CAPTION>
Reference
---------------------------
Form 10-K 1998 Annual
(pages) Report (pages)
---------------------------
<S> <C> <C>
Data incorporated by reference from attached
1998 Annual Report to Stockholders of Getty
Realty Corp.:
Report of Independent Accountants 28
Consolidated Statements of Operations for the
years ended January 31, 1998, 1997 and 1996 14
Consolidated Balance Sheets as of January 31,
1998 and 1997 15
Consolidated Statements of Cash Flows for the
years ended January 31, 1998, 1997 and 1996 16
Notes to Consolidated Financial Statements 17-27
Report of Independent Accountants - Supplemental Schedule 14
Schedule II - Valuation and Qualifying Accounts and
Reserves for the years ended January 31, 1998, 1997 and 1996 15
</TABLE>
All other schedules are omitted for the reason that they are either not
required, not applicable, not material or the information is included in the
consolidated financial statements or notes thereto.
The financial statements listed in the above index which are included in the
1998 Annual Report to Stockholders are hereby incorporated by reference. With
the exception of the pages listed in the above index and the information
incorporated by reference included in Part II, Items 5, 6, 7 and 8, the 1998
Annual Report to Stockholders is not deemed filed as part of this report.
13
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Getty Realty Corp.:
Our report on the consolidated financial statements of Getty Realty Corp. and
Subsidiaries has been incorporated by reference in this Form 10-K from page 28
of the 1998 Annual Report to Stockholders of Getty Realty Corp. and
Subsidiaries. In connection with our audits of such financial statements, we
have also audited the related financial statement schedule listed in the index
on page 13 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
Coopers & Lybrand L.L.P.
New York, New York
March 12, 1998
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GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE II - VALUATION and QUALIFYING ACCOUNTS and RESERVES
for the years ended January 31, 1998, 1997 and 1996
(in thousands)
<TABLE>
<CAPTION>
Balance at Balance at
beginning end of
of period Additions Deductions period
--------- --------- ---------- ------
<S> <C> <C> <C> <C>
1998:
Allowance for
doubtful accounts* $1,369 $ 68 $1,266(a) $ 171
====== ==== ====== ======
1997:
Allowance for
doubtful accounts* $1,409 $485 $ 525 $1,369
====== ==== ====== ======
1996:
Allowance for
doubtful accounts* $1,509 $561 $ 661 $1,409
====== ==== ====== ======
</TABLE>
*Relates to accounts receivable.
(a) Includes $1,185 transferred to Marketing in connection with the spin-off.
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EXHIBIT INDEX
GETTY REALTY CORP.
Annual Report on Form 10-K
for the fiscal year ended January 31, 1998
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<S> <C> <C>
1.1 Agreement and Plan of Reorganization Filed as Exhibit 2.1 to registrant's
and Merger, dated as of December 16, Registration Statement on Form S-4,
1997 (the "Merger Agreement") by and filed on January 12, 1998 (File No.
among Getty Realty Corp., Power Test 333-44065), included as Appendix A to
Investors Limited Partnership and CLS the Joint Proxy Statement/Prospectus
General Partnership Corp. that is a part thereof, and incorporated
herein by reference.
3.1 Articles of Incorporation of Getty Realty Filed as Exhibit 3.1 to registrant's
Holding Corp. ("Holdings"), now known as Registration Statement on Form S-4, filed on
Getty Realty Corp., filed December 23, 1997. January 12, 1998 (File No. 333- 44065),
included as Appendix D to the Joint Proxy
Statement/Prospectus that is a part thereof,
and incorporated herein by reference.
3.2 Articles Supplementary to Articles of *
Incorporation of Holdings, filed January
21, 1998.
3.3 By-Laws of Holdings. Filed as Exhibit 3.2 to registrant's
Registration Statement on Form S-4, filed on
January 12, 1998 (File No. 333- 44065),
included as Appendix F to the Joint Proxy
Statement/Prospectus that is a part thereof,
and incorporated herein by reference.
3.4 Articles of Amendment of Holdings, *
changing its name to Getty Realty
Corp., filed January 30, 1998.
4.1 $35,000,000 reducing revolving Loan Filed as Exhibit 4.7 to the Quarterly Report
Agreement between Leemilt's Petroleum, Inc. on Form 10-Q for the quarter ended October
and Bank of New England, N.A. dated as of 31, 1987 (File No. 1- 8059) of Getty
December 7, 1987, and related Guaranty Petroleum Corp., and incorporated herein by
Agreement, dated as of December 7, 1987, by reference.
and between Getty Petroleum Corp. (now known
as Getty
</TABLE>
16
<PAGE> 17
<TABLE>
<S> <C>
Properties Corp.) and Bank of New
England, N.A.
4.2 Amended and Restated Loan Agreement between Filed as Exhibit 4.8 to the Annual Report on
Leemilt's Petroleum, Inc. and Fleet Bank of Form 10-K for the fiscal year ended January
Massachusetts, N.A., as successor to Bank of 31, 1996 (File No. 1- 8059) of Getty
New England, N.A., dated as of October 31, Petroleum Corp. and incorporated herein by
1995 (the "Leemilt's Loan"). reference.
4.3 First Amendment to Amended and Restated Loan *
Agreement between Leemilt's Petroleum, Inc.
and Fleet National Bank (formerly known as
Fleet Bank of Massachusetts, N.A.) dated as
of April 18, 1997.
4.4 Second Amendment to Amended and Restated *
Loan Agreement between Leemilt's Petroleum,
Inc. and Fleet National Bank dated as of
January 30, 1998.
4.5 Amended and Restated Loan Agreement between Filed as Exhibit 10.27 to Power Test
Power Test Realty Company Limited Investors Limited Partnership's ("PT
Partnership ("PT Realty") and Fleet Bank of Investors") Annual Report on Form 10- K for
Massachusetts, N.A. dated as of October 31, the fiscal year ended December 31, 1995
1995 (the "PT Realty Loan"). (File No. 0-14557) and incorporated herein
by reference.
4.6 First Amendment to Amended and Restated Loan *
Agreement between PT Realty and Fleet
National Bank dated as of April 18, 1997.
4.7 Second Amendment to Amended and Restated *
Loan Agreement between PT Realty and Fleet
National Bank dated as of
</TABLE>
17
<PAGE> 18
<TABLE>
<S> <C> <C>
January 30, 1998.
10.1 Retirement and Profit Sharing Plan (amended Filed as Exhibit 10.2(b) to registrant's
and restated as of September 19, 1996), Annual Report on Form 10-K for the fiscal
adopted by the registrant on December 16, year ended January 31, 1998 (File No.
1997. 1-8059) and incorporated herein by
reference.
10.2 1998 Stock Option Plan, effective as of Filed as Exhibit 10.1 to registrant's
January 30, 1998. Registration Statement on Form S-4, filed on
January 12, 1998 (File No. 333- 44065),
included as Appendix H to the Joint Proxy
Statement/Prospectus that is a part thereof,
and incorporated herein by reference.
10.3 Asset Purchase Agreement among Power Test Filed as Exhibit 2(a) to the Current Report
Corp. (now known as Getty Properties Corp.), on Form 8-K of Power Test Corp., filed
Texaco Inc., Getty Oil Company and Getty February 19, 1985 (File No. 1-8059) and
Refining and Marketing Company, dated as of incorporated herein by reference.
December 21, 1984.
10.4 Trademark License Agreement among Power Test Filed as Exhibit 2(b) to the Current Report
Corp., Texaco Inc., Getty Oil Company and on Form 8-K of Power Test Corp., filed February 19,
Getty Refining and Marketing Company, dated 1985 (File No. 1-8059) and incorporated herein
as of February 1, 1985. by reference.
10.5 Three Party Lease Agreement among Getty *
Realty Corp. (now known as Getty Properties
Corp.), Leemilt's Petroleum, Inc. and Fleet
National Bank dated as of April 18, 1997,
amending and restating the Lease dated
February 1, 1985 between Leemilt's
Petroleum, Inc., as lessor, and Getty
Petroleum Corp. (now known as Getty
Properties Corp.), as lessee.
</TABLE>
18
<PAGE> 19
<TABLE>
<S> <C> <C>
10.6 Amendment to Three Party Lease Agreement *
among Getty Properties Corp., Leemilt's
Petroleum, Inc. and Fleet National Bank
dated as of January 30, 1998.
10.7 Amended and Restated Hazardous Waste and Filed as Exhibit 10.17 to the Annual Report
PMPA Indemnification Agreement, dated as of on Form 10-K for the fiscal year ended
October 31, 1995, among Getty Petroleum January 31, 1996 (File No. 1- 8059) of Getty
Corp.(now known as Getty Properties Corp.), Petroleum Corp. and incorporated herein by
Power Test Realty Company Limited reference.
Partnership and Fleet Bank of Massachusetts,
N.A.
10.8 Affirmation and Acknowledgement of Amended *
and Restated Hazardous Waste and PMPA
Indemnification Agreement, between Getty
Realty Corp. and Fleet National Bank dated
as of April 18, 1997.
10.9 Second Affirmation and Acknowledgement of *
Amended and Restated Hazardous Waste and
PMPA Indemnification Agreement between the
registrant and Fleet National Bank, dated as
of January 30, 1998.
10.10 Amended and Restated Guaranty Agreement, *
dated as of October 27, 1995, between Getty
Petroleum Corp. and Fleet Bank of
Massachusetts, N.A. pertaining to the
Leemilt's Loan.
10.11 Affirmation and *
</TABLE>
19
<PAGE> 20
<TABLE>
<S> <C> <C>
Acknowledgment of Amended and Restated
Guaranty Agreement between Getty Realty
Corp. and Fleet National Bank, dated as of
April 18, 1997, pertaining to the Leemilt's
Loan.
10.12 Guaranty Agreement between the registrant *
and Fleet National Bank, dated as of January
30, 1998, pertaining to the Leemilt's Loan.
10.13 Guaranty Agreement between the registrant *
and Fleet National Bank, dated as of January
30, 1998, pertaining to the PT Realty Loan.
10.14 Guaranty Agreement between Getty Properties *
Corp. and Fleet National Bank dated as of
January 30, 1998, pertaining to the PT
Realty Loan.
10.15 Form of Indemnification Agreement between *
the registrant and its directors.
10.16 Supplemental Retirement Plan for Executives Filed as Exhibit 10.22 to the Annual Report
of the registrant (then known as Getty on Form 10-K for the fiscal year ended
Petroleum Corp.) and Participating January 31, 1990 (File No. 1- 8059) of Getty
Subsidiaries (adopted by the registrant on Petroleum Corp. and incorporated herein by
December 16, 1997). reference.
10.17 Form of Agreement dated December 9, 1994 Filed as Exhibit 10.23 to the Annual Report
between Getty Petroleum Corp. and its non- on Form 10-K for the fiscal year ended
director officers and certain key employees January 31, 1995 (File No. 1- 8059) of Getty
regarding compensation upon change in Petroleum Corp. and incorporated herein by
control. reference.
</TABLE>
20
<PAGE> 21
<TABLE>
<S> <C> <C>
10.18 Form of Agreement dated as of March 7, 1996 Filed as Exhibit 10.27 to the Annual
amending Agreement dated as of December 9, Report on Form 10-K for the fiscal year
1994 between Getty Petroleum Corp. (now ended January 31, 1996 (File No. 1- 8059) of
known as Getty Properties Corp.) and its Getty Petroleum Corp. and incorporated
non-director officers and certain key herein by reference.
employees regarding compensation upon change
in control (See Exhibit 10.17).
10.19 Form of letter from Getty Petroleum Corp. *
dated April 8, 1997, confirming that a
change of control event had occurred
pursuant to the change of control
agreements. (See Exhibits 10.17 and 10.18).
10.20 Form of Agreement dated March 9, 1998, from *
the registrant to certain officers and key
employees, adopting the prior change of
control agreements, as amended, and further
amending those agreements. (See Exhibits
10.17, 10.18 and 10.19).
10.21 Form of Master Lease Agreement dated Filed as Exhibit 10.28 to the Annual Report
February 1, 1997 between Getty Petroleum on Form 10-K for the fiscal year ended
Corp. (now known as Getty Properties Corp.) January 31, 1997 (File No. 1- 8059) of Getty
and Getty Petroleum Marketing Inc. Petroleum Corp. and incorporated herein by
reference.
10.22 Form of Reorganization and Distribution Filed as Exhibit 10.29 to the Annual Report
Agreement between Getty Petroleum Corp. (now on Form 10-K for the fiscal year ended
known as Getty Properties Corp.) and Getty January 31, 1997 (File No. 1-8059) of Getty
Petroleum Marketing Inc. dated as of Petroleum Corp. and incorporated herein by
February 1, 1997. reference.
10.23 Form of Trademark License Filed as Exhibit 10.30 to the Annual
</TABLE>
21
<PAGE> 22
<TABLE>
<S> <C> <C>
Agreement between Getty Petroleum Corp. (now Report on Form 10-K for the fiscal year
known as Getty Properties Corp.) and Getty ended January 31, 1997 (File No. 1- 8059) of
Petroleum Marketing Inc. Getty Petroleum Corp. and incorporated
herein by reference.
10.24 Form of Services Agreement dated as of Filed as Exhibit 10.31 to the Annual Report
February 1, 1997 between Getty Petroleum on Form 10-K for the fiscal year ended
Corp. (now known as Getty Properties Corp.) January 31, 1997 (File No. 1- 8059) of Getty
and Getty Petroleum Marketing Inc. Petroleum Corp. and incorporated herein by
reference.
10.25 Form of Tax Sharing Agreement between Getty Filed as Exhibit 10.32 to the Annual Report
Petroleum Corp. (now known as Getty on Form 10-K for the fiscal year ended
Properties Corp.) and Getty Petroleum January 31, 1997 (File No. 1- 8059) of Getty
Marketing Inc. Petroleum Corp. and incorporated herein by
reference.
10.26 Form of Stock Option Reformation Agreement Filed as Exhibit 10.33 to the Annual Report
made and entered into as of March 21, 1997 on Form 10-K for the fiscal year ended
by and between Getty Petroleum Corp. (now January 31, 1997 (File No. 1- 8059) of Getty
known as Getty Properties Corp.) and Getty Petroleum Corp. and incorporated herein by
Petroleum Marketing Inc. reference.
13 Annual Report to Stockholders for the fiscal *
year ended January 31, 1998.
22 Subsidiaries of the registrant. *
24 Consent of Independent Accountants. *
27 Financial Data Schedule. *
</TABLE>
- -----------------------
*Filed herewith
22
<PAGE> 23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Getty Realty Corp.
(Registrant)
By /s/ John J. Fitteron
------------------------------
John J. Fitteron,
Senior Vice President,
Treasurer and Chief Financial
Officer
April 30, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
By /s/ Leo Liebowitz By /s/ John J. Fitteron
------------------------------ ------------------------------
Leo Liebowitz, President, John J. Fitteron,
Chief Executive Officer Senior Vice President,
and Director Treasurer and Chief Financial
April 30, 1998 Officer (Principal Financial
and Accounting Officer)
April 30, 1998
By /s/ Milton Cooper By /s/ Philip E. Coviello
------------------------------ ------------------------------
Milton Cooper, Philip E. Coviello,
Director Director
April 30, 1998 April 30, 1998
By /s/ Milton Safenowitz By /s/ Warren G. Wintrub
------------------------------ ------------------------------
Milton Safenowitz, Warren G. Wintrub,
Director Director
April 30, 1998 April 30, 1998
23
<PAGE> 1
EXHIBIT 3.2
STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION
APPROVED FOR RECORD
01/21/98 AT 2:17P.M.
GETTY REALTY HOLDING CORP.
ARTICLES SUPPLEMENTARY
3,000,000 SHARES
SERIES A PARTICIPATING CONVERTIBLE REDEEMABLE PREFERRED STOCK
Getty Realty Holding Corp., a Maryland corporation (the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Under a power contained in Section 6.3 of the charter of the
Corporation (the "Charter"), the Board of Directors of the Corporation (the
"Board of Directors"), by unanimous written consent dated January 9, 1998,
classified and designated 3,000,000 shares (the "Shares") of Preferred Stock (as
defined in the Charter) as shares of Series A Participating Convertible
Redeemable Preferred Stock, $.01 par value per share (the "Series A Preferred
Stock"), with the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption as set forth as follows,
which upon any restatement of the Charter shall be made part of Article VI, with
any necessary or appropriate changes to the enumeration or lettering of sections
or subsections hereof.
SERIES A PREFERRED STOCK
Section (1) Number of Shares and Designation. 3,000,000 shares of
Preferred Stock shall be designated as Series A Participating Convertible
Redeemable Preferred Stock (the "Series A Preferred Stock"), subject, however,
to increase or decrease upon further action of the Board of Directors in the
future as permitted by the Charter and applicable law.
Section (2) Definitions. For purposes of the Series A Preferred
Stock, the following terms shall have the meanings indicated:
"Affiliate" of a person means a person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the person specified.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to perform
any of its responsibilities with respect to the Series A Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York, New
York are not required to be open.
- -----------------------------------------------------------------------------
STATE OF MARYLAND
I hereby certify that this is a true and complete copy of the 19
/s/ ------------ 1/21/98
[ILLEGIBLE]
this stamp replaces our previous certification system. Effective 6/95
- -----------------------------------------------------------------------------
<PAGE> 2
"Call Date" shall have the meaning set forth in paragraph (b) of
Section 5 hereof.
"Common Stock" shall mean the Common Stock, $.0l par value per
share, of the Corporation.
"Conversion Rate" shall initially mean 1.1312, subject to adjustment
pursuant to paragraph (d) of Section 7 hereof.
"Cumulative Dividends" shall mean all accumulated, accrued and
unpaid dividends.
"Current Market Price" of publicly traded shares of Common Stock or
any other class or series of stock or other security of the Corporation or of
any similar security of any other issuer for any day shall mean the last
reported sales price, regular way on such day, or, if no sale takes place on
such day, the average of the reported closing, bid and asked prices regular way
on such day, in either case as reported on the New York Stock Exchange ("NYSE")
or, if such security is not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange, on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if such
security is not quoted on such National Market, the average of the closing bid
and asked prices on such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for such security on such day shall not have
been reported through NASDAQ, the average of the bid and asked prices on such
day as furnished by any NYSE member firm regularly making a market in such
security selected for such purpose by the Chief Executive Officer or the Board
of Directors or if any class or series of securities are not publicly traded,
the fair value of the shares of such class as determined reasonably and in good
faith by the Board of Directors of the Corporation.
"Distribution" shall have the meaning set forth in paragraph (d)
(iii) of Section 7 hereof.
"Dividend Payment Date" shall have the meaning set forth in Section
3 hereof.
"Fair Market Value" shall mean the average of the daily Current
Market Prices of a share of Common Stock during five (5) consecutive Trading
Days selected by the Corporation commencing not more than twenty (20) Trading
Days before, and ending not later than, the earlier of the day in question and
the day before the "ex" date with respect to the issuance or distribution
requiring such computation The term "`ex' date", when used with respect to any
issuance or distribution, means the first day on which the share of Common Stock
trades regular way, without the right to receive such issuance or distribution,
on the exchange or in the
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<PAGE> 3
market, as the case may be, used to determine that day's Current Market Price.
"Issue Date" shall mean the date that the Certificate of Merger of
Power Test Investors Limited Partnership and PTI Merger L.L.C. into Power Test
Investors Limited Partnership is filed with and accepted by the Department of
State of the State of New York.
"Junior Stock" shall mean the Common Stock and any other class or
series of stock of the Corporation designated by the Board of Directors over
which the shares of Series A Preferred Stock have preference or priority in the
payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
"MGCL" shall mean the Maryland General Corporation Law, as amended
from time to time.
"Parity Stock" shall have the meaning set forth in paragraph (a) of
Section 8 hereof.
"Permitted Common Stock Cash Distributions" shall mean cash
dividends or cash distributions out of current or accumulated funds from
operations (as determined by the Board of Directors on a basis consistent with
the policies and practices adopted by the Corporation for reporting publicly its
results of operations and financial condition), and cash dividends which result
in a payment of an equal cash dividend to holders of the Series A Preferred
Stock and Parity Stock pursuant to clause (ii) of paragraph (a) of Section 3
hereof.
"Person" shall mean any individual, firm, partnership, corporation
or other entity and shall include any successor (by merger or otherwise) of such
entity.
"Series A Preferred Stock" shall have the meaning set forth in
Section 1 hereof.
"set apart for payment" shall be deemed to include, without any
action other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to an authorization of dividends or other distribution by the Board of
Directors, the allocation of funds to be so paid on any series or class of stock
of the Corporation.
"Trading Day", as to any securities, shall mean any day on which
such securities are traded on the NYSE or, if such securities are not listed or
admitted for trading on the NYSE, on the principal national securities exchange
on which such securities are listed or admitted or, if such securities are not
listed or admitted for trading on any national securities exchange, on the
National Market of NASDAQ or, if such securities are not quoted on
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<PAGE> 4
such National Market, in the securities market in which such securities are
traded.
"Transfer Agent" means American Stock Transfer and Trust Company or
such other entity as may be designated by the Board of Directors or their
designee as the transfer agent for the Series A Preferred Stock.
Section (3) Dividends.
(a) The holders of Series A Preferred Stock shall be entitled
to receive, when, as and if authorized and declared by the Board of Directors
out of assets legally available for that purpose, cumulative dividends in cash
in an amount per share of Series A Preferred Stock equal to the greater of (i)
$l.775 per annum (measured by the fiscal year of the Corporation) or (ii) the
cash dividends declared on the number of shares of Common Stock, or portion
thereof, into which a share of Series A Preferred Stock is convertible, during
any fiscal year of the Corporation or portion thereof that the Series A
Preferred Stock was outstanding, on such date as may be set by the Board of
Directors (a "Dividend Payment Date") to holders of record on such date, not
more than sixty nor less than ten days preceding such Dividend Payment Date,
fixed for such purpose by the Board of Directors (a "Dividend Record Date").
Such dividends shall be cumulative from the Issue Date, whether or not such
dividends shall be authorized or there shall be assets of the Corporation
legally available for the payment of such dividends. Each such dividend shall be
payable to the holders of record of the Series A Preferred Stock, as they appear
on the stock records of the Corporation at the close of business on the Dividend
Record Date. The amount of Cumulative Dividends on any share of Series A
Preferred Stock, or fraction thereof, at any date shall be the amount of any
dividends thereon calculated at the applicable rate to and including such date,
whether or not earned or authorized, which have not been paid in cash.
(b) If the Series A Preferred Stock is outstanding for less
than any full fiscal year of the Corporation, the holders shall be entitled to
receive the greater of the amount set forth in clause (i) or (ii) of paragraph
(a) of this Section 3 multiplied by a fraction the numerator of which equals the
number of days during such fiscal year that such shares of Series A Preferred
Stock were outstanding and the denominator of which is 360. Holders of Series A
Preferred Stock shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of cumulative dividends, as herein provided, on the
Series A Preferred Stock. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series A
Preferred Stock that may be in arrears.
(c) So long as any of the shares of Series A Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of or options, warrants or rights to subscribe for or purchase shares of
Junior Stock) shall be
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<PAGE> 5
authorized or paid or set apart for payment by the Corporation or other
distribution of cash or other property authorized or made directly or indirectly
by the Corporation with respect to any shares of Junior Stock, nor shall any
shares of Junior Stock be redeemed, purchased or otherwise acquired (other than
a redemption, purchase or other acquisition of Common Stock made for purposes of
an employee incentive or benefit plan of the Corporation or any subsidiary) for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) directly or indirectly by
the Corporation (except by conversion into or exchange for Junior Stock), nor
shall any other cash or other property otherwise be paid or distributed to or
for the benefit of any holder of shares of Junior Stock in respect thereof,
directly or indirectly, by the Corporation unless in each case (i) the full
Cumulative Dividends on all outstanding shares of Series A Preferred Stock and
any other Parity Stock of the Corporation shall have been paid or such dividends
have been authorized and set apart for payment with respect to the Series A
Preferred Stock and all past dividend periods with respect to such Parity Stock
and (ii) sufficient funds shall have been paid or set apart for the payment of
the full dividend for the current fiscal year of the Corporation (including any
required pursuant to clause (ii) of paragraph (a) of this Section 3) with
respect to the Series A Preferred Stock and the current dividend period with
respect to such Parity Stock.
Section (4) Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or involuntary, before any
assets of the Corporation shall be distributed, paid or set aside for the
holders of Junior Stock, the Corporation shall pay to the holders of shares of
Series A Preferred Stock $25.00 per share of Series A Preferred Stock plus an
amount equal to all Cumulative Dividends (whether or not earned or authorized)
to the date of final distribution to such holders; but such holders shall not be
entitled to any further payment. Until the holders of the Series A Preferred
Stock and holders of Parity Stock have been paid this liquidation preference in
full, no payment will be made to any holder of Junior Stock upon the
liquidation, dissolution or winding up of the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of Series A
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series of
Parity Stock, then such assets, or the proceeds thereof, shall be distributed
among the holders of Series A Preferred Stock and any such other Parity Stock
ratably in the same proportion as the respective amounts that would be payable
on such Series A Preferred Stock and any such other Parity Stock if all amounts
payable thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or more corporations, (ii) a
sale or transfer of all or substantially all
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<PAGE> 6
of the Corporation's assets, or (iii) a statutory share exchange shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or involuntary,
of the Corporation.
(b) Subject to the rights of the holders of any shares of
Parity Stock, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Series
A Preferred Stock and any Parity Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series A Preferred Stock and any Parity
Stock shall not be entitled to share therein.
(c) In determining whether a distribution (other than upon
voluntary or involuntary liquidation) by dividend, redemption or other
acquisition of shares of stock of the Corporation or otherwise is permitted
under the MGCL, no effect shall be given to amounts that would be needed, if the
Corporation were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of holders of shares of stock of the
Corporation whose preferential rights upon dissolution are superior to those
receiving the distribution.
Section (5) Redemption at the Option of the Corporation.
(a) Shares of Series A Preferred Stock shall not be redeemable
by the Corporation prior to January 31, 2001. On and after January 31, 2001, the
Corporation, at its option, may redeem shares of Series A Preferred Stock as set
forth herein. Shares of Series A Preferred Stock may be redeemed, in whole or in
part, at the option of the Corporation at any time on or after January 31, 2001
out of assets legally available therefor at a redemption price payable in cash
equal to $25.00 per share of Series A Preferred Stock (plus an amount equal to
all Cumulative Dividends, if any, to the Call Date, whether or not earned or
authorized, as provided below), so long as the closing price of Common Stock
exceeds $22.10 for a period of ten cumulative Trading Days within 90 days prior
to the date on which notice of redemption is mailed to holders of Series A
Preferred Stock.
(b) Shares of Series A Preferred Stock shall be redeemed by
the Corporation on the date specified in the notice to holders required under
paragraph (d) of this Section 5 (the "Call Date"). The Call Date shall be
selected by the Corporation, shall be specified in the notice of redemption and
shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation. Upon any redemption of shares of Series A
Preferred Stock pursuant to paragraph (a) of this Section 5, the Corporation
shall pay in cash to the holder of such shares an amount equal to all Cumulative
Dividends, if any, to the Call Date, whether or not earned or authorized.
Immediately prior to authorizing any redemption of the Series A Preferred Stock,
and as
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<PAGE> 7
a condition precedent for such redemption, the Company, by resolution of its
Board of Directors, shall authorize a mandatory dividend on the Series A
Preferred Stock payable in cash on the Call Date in an amount equal to all
Cumulative Dividends as of the Call Date on the Series A Preferred Stock to be
redeemed, which amount shall be added to the redemption price. If the Call Date
falls after a dividend payment record date and prior to the corresponding
Dividend Payment Date, then each holder of Series A Preferred Stock at the close
of business on such dividend payment record date shall be entitled to the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares prior to such Dividend Payment
Date. Except as provided above, the Corporation shall make no payment or
allowance for accumulated or accrued dividends on shares of Series A Preferred
Stock called for redemption or on the shares of Common Stock issued upon such
redemption.
(c) If full Cumulative Dividends on all outstanding shares of
Series A Preferred Stock and any other class or series of Parity Stock of the
Corporation have not been paid or authorized and set apart for payment, no
shares of Series A Preferred Stock may be redeemed unless all outstanding shares
of Series A Preferred Stock and Parity Stock are simultaneously redeemed.
(d) If the Corporation shall redeem shares of Series A
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be redeemed.
Such notice shall be provided by first class mail, postage prepaid, at such
holder's address as the same appears on the stock records of the Corporation not
less than 30 days nor more than 60 days prior to the Call Date. If the
Corporation elects to provide such notice by publication, it shall also promptly
mail notice of such redemption to the holders of the shares of Series A
Preferred Stock to be redeemed. Neither the failure to mail any notice required
by this paragraph (d), nor any defect therein or in the mailing thereof, to any
particular holder, shall affect the sufficiency of the notice or the validity of
the proceedings for redemption with respect to the other holders. Any notice
which was mailed in the manner herein provided shall be conclusively presumed to
have been duly given on the date mailed whether or not the holder receives the
notice. Each such mailed or published notice shall state, as appropriate: (1)
the Call Date; (2) the number of shares of Series A Preferred Stock to be
redeemed and, if fewer than all such shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (3) the
place or places at which certificates for such shares are to be surrendered for
certificates representing shares of Common Stock; (4) the then-current
Conversion Rate; and (5) that dividends on the shares of Series A Preferred
Stock to be redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been published or mailed as aforesaid, from and
after the Call Date (unless the Corporation shall fail to issue and make
available the amount of cash necessary to effect such redemption, including all
Cumulative Dividends to
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<PAGE> 8
the Call Date, whether or not earned or authorized), (i) except as otherwise
provided herein, dividends on the shares of Series A Preferred Stock so called
for redemption shall cease to accumulate or accrue on the shares of Series A
Preferred Stock called for redemption (except that, in the case of a Call Date
after a dividend record date and prior to the related Dividend Payment Date,
holders of Series A Preferred Stock on the dividend record date will be entitled
on such Dividend Payment Date to receive the dividend payable on such shares),
(ii) said shares shall no longer be deemed to be outstanding, and (iii) all
rights of the holders thereof as holders of Series A Preferred Stock of the
Corporation shall cease (except the rights to receive the cash payable upon such
redemption, without interest thereon, upon surrender and endorsement of their
certificates if so required and to receive any dividends payable thereon). The
Corporation's obligation to provide cash in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the Call Date, the
Corporation shall deposit with a bank or trust company (which may be an
affiliate of the Corporation) that has an office in the Borough of Manhattan,
The City of New York, and that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of
cash as is necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the shares of Series
A Preferred Stock so called for redemption. No interest shall accrue for the
benefit of the holders of shares of Series A Preferred Stock to be redeemed on
any cash so set aside by the Corporation. Subject to applicable escheat laws,
any such cash unclaimed at the end of two years from the Call Date shall revert
to the general funds of the Corporation, after which reversion the holders of
shares of Series A Preferred Stock so called for redemption shall look only to
the general funds of the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance
with said notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and if
the notice shall so state), such certificates shall be exchanged for cash
(without interest thereon) for which such shares have been redeemed in
accordance with such notice. If fewer than all the outstanding shares of Series
A Preferred Stock are to be redeemed, shares to be redeemed shall be selected by
the Corporation from outstanding shares of Series A Preferred Stock not
previously called for redemption by lot or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Series A Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.
Section (6) Status of Shares. All shares of Series A Preferred Stock
which shall have been issued and redeemed, converted or reacquired in any manner
by the Corporation shall be restored to the status of authorized, but unissued
shares of Preferred Stock, without designation as to series.
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<PAGE> 9
Section (7) Conversion. Holders of shares of Series A Preferred
Stock shall have the right to convert all or a portion of such shares into
shares of Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Series A Preferred Stock shall have the right,
at such holder's option, at any time to convert such shares, in whole or in
part, into the number of fully paid and nonassessable shares of authorized but
previously unissued shares of Common Stock obtained by multiplying the number of
shares of Series A Preferred Stock to be converted and the Conversion Rate (as
in effect at the time and on the date provided for in the last clause of
paragraph (b) of this Section 7) by surrendering such shares to be converted,
such surrender to be made in the manner provided in paragraph (b) of this
Section 7; provided, however, that the right to convert shares of Series A
Preferred Stock called for redemption pursuant to Section 5 shall terminate at
the close of business on the Call Date fixed for such redemption, unless the
Corporation shall default in making payment upon such redemption under Section 5
hereof.
(b) In order to exercise the conversion right, the holder of
each share of Series A Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied by
written notice to the Corporation that the holder thereof elects to convert such
share of Series A Preferred Stock. Unless the shares issuable on conversion are
to be issued in the same name as the name in which such share of Series A
Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or such holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
Holders of shares of Series A Preferred Stock at the close of
business on a dividend payment record date shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment record
date and prior to such Dividend Payment Date. However, shares of Series A
Preferred Stock surrendered for conversion during the period between the close
of business on any dividend payment record date and the opening of business on
the corresponding Dividend Payment Date (except shares converted after the
issuance of notice of redemption with respect to a Call Date during such period,
such shares of Series A Preferred Stock being entitled to such dividend on the
Dividend Payment Date) must be accompanied by payment of an amount equal to the
dividend payable on such shares on such Dividend Payment Date. A holder of
shares of Series A Preferred Stock on a dividend payment record date who (or
whose transferee) tenders any such shares for conversion into shares of Common
Stock on such
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<PAGE> 10
Dividend Payment Date will receive the dividend payable by the Corporation on
such shares of Series A Preferred Stock on such date, and the converting holder
need not include payment of the amount of such dividend upon surrender of shares
of Series A Preferred Stock for conversion. Except as provided above, the
Corporation shall make no payment or allowance for unpaid dividends, whether or
not in arrears, on converted shares or for dividends on the shares of Common
Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates
for shares of Series A Preferred Stock as aforesaid, the Corporation shall issue
and shall deliver at such office to such holder, or send on such holder's
written order, a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such shares of Series A Preferred
Stock in accordance with provisions of this Section 7, and any fractional share
of Common Stock arising upon such conversion shall be settled as provided in
paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of Series A Preferred Stock shall have been surrendered and such
notice received by the Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the holder
or holders of record of the shares represented thereby at such time on such date
and such conversion shall be at the Conversion Rate in effect at such time on
such date unless the stock transfer books of the Corporation shall be closed on
that date, in which event such person or persons shall be deemed to have become
such holder or holders of record at the close of business on the next succeeding
day on which such stock transfer books are open, but such conversion shall be at
the Conversion Rate in effect on the date on which such shares shall have been
surrendered and such notice received by the Corporation.
(c) No fractional share of Common Stock or scrip representing
fractions of a share of Common Stock shall be issued upon conversion of the
shares of Series A Preferred Stock. Instead of any fractional interest in a
share of Common Stock that would otherwise be deliverable upon the conversion of
shares of Series A Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash based upon the Current Market Price of the Common
Stock on the Trading Day immediately preceding the date of conversion. If more
than one share shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Series A Preferred Stock so surrendered.
(d) The Conversion Rate shall be adjusted from time to time as
follows:
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<PAGE> 11
(i) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution on its shares of Common Stock in shares of
Common Stock, (B) subdivide its outstanding Common Stock into a greater
number of shares, (C) combine its outstanding Common Stock into a smaller
number of shares or (D) issue any shares of stock by reclassification of
its Common Stock, the Conversion Rate in effect at the opening of business
on the day following the date fixed for the determination of stockholders
entitled to receive such dividend or distribution or at the opening of
business on the day following the day on which such subdivision,
combination or reclassification becomes effective, as the case may be,
shall be adjusted so that the holder of any share of Series A Preferred
Stock thereafter surrendered for conversion shall be entitled to receive
the number of shares of Common Stock (or fraction of a share of Common
Stock) that such holder would have owned or have been entitled to receive
after the happening of any of the events described above had such share of
Series A Preferred Stock been converted immediately prior to the record
date in the case of a dividend or distribution or the effective date in
the case of a subdivision, combination or reclassification. An adjustment
made pursuant to this paragraph (d) (i) of this Section 7 shall become
effective immediately after the opening of business on the day next
following the record date (except as provided in paragraph (h) below) in
the case of a dividend or distribution and shall become effective
immediately after the opening of business on the day next following the
effective date in the case of a subdivision, combination or
reclassification.
(ii) If the Corporation shall issue after the Issue Date
rights, options or warrants to all holders of Common Stock entitling them
(for a period expiring within 45 days after the record date described
below in this paragraph (d) (ii) of this Section 7) to subscribe for or
purchase Common Stock at a price per share less than the Fair Market Value
per share of the Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants, then the
Conversion Rate in effect at the opening of business on the day next
following such record date shall be adjusted to equal the rate determined
by multiplying (A) the Conversion Rate in effect immediately prior to the
opening of business on the day following the date fixed for such
determination by (B) a fraction, the numerator of which shall be the sum
of (X) the number of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (Y) the number of
additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and the denominator of which shall be
the sum
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<PAGE> 12
of (XX) the number of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (YY) the number of
shares that the aggregate proceeds to the Corporation from the exercise of
such rights or warrants for Common Stock would purchase at such Fair
Market Value. Such adjustment shall become effective immediately after the
opening of business on the day next following such record date (except as
provided in paragraph (h) below). In determining whether any rights or
warrants entitle the holders of Common Stock to subscribe for or purchase
Common Stock at less than such Fair Market Value, there shall be taken
into account any consideration received by the Corporation upon issuance
and upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined in good faith by the
Board of Directors.
(iii) If the Corporation shall distribute to all holders of
its Common Stock any shares of stock of the Corporation (other than Common
Stock) or evidence of its indebtedness or assets (including cash, but
excluding Permitted Common Stock Cash Distributions) or rights or warrants
to subscribe for or purchase any of its securities (excluding those rights
and warrants issued to all holders of Common Stock entitling them for a
period expiring within 45 days after the record date referred to in
paragraph (d) (ii) of this Section 7 above to subscribe for or purchase
Common Stock, which rights and warrants are referred to in and treated
under such paragraph (d) (ii) above) (any of the foregoing being
hereinafter in this paragraph (d) (iii) called the "Distribution"), then
in each such case the Conversion Rate shall be adjusted so that it shall
equal the rate determined by multiplying (A) the Conversion Rate in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such Distribution by (B)
a fraction, the numerator of which shall be the Fair Market Value per
share of Common Stock on the record date mentioned below, and the
denominator of which shall be the Fair Market Value per share of Common
Stock on the record date mentioned below less the then fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board resolution), of the portion of the
stock or assets or evidences of indebtedness so distributed or of such
rights or warrants applicable to one share of Common Stock. Such
adjustment shall become effective immediately at the opening of business
on the Business Day next following (except as provided in paragraph (h)
below) the record date for the determination of stockholders entitled to
receive such Distribution. For the purposes of this paragraph (d) (iii),
the distribution of a right or warrant to
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<PAGE> 13
subscribe or purchase any of the Corporation's securities, which is
distributed not only to the holders of the Common Stock on the date fixed
for the determination of stockholders entitled to such Distribution of
such right or warrant, but also is distributed with shares of Common Stock
delivered to a Person converting shares of Series A Preferred Stock after
such determination date, shall not require an adjustment of the Conversion
Rate pursuant to this paragraph (d) (iii); provided that if on the date,
if any, on which a person converting shares of Series A Preferred Stock
such person would no longer be entitled to receive such right or warrant
with shares of Common Stock (other than as a result of the termination of
all such right or warrant), a distribution of such rights or warrants
shall be deemed to have occurred and the Conversion Rate shall be adjusted
as provided in this paragraph (d) (iii) and such day shall be deemed to be
"the date fixed for the determination of the stockholders entitled to
receive such distribution" and "the record date" within the meaning of the
two preceding sentences.
(iv) No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of
at least 1% in such rate; provided, however, that any adjustments that by
reason of this paragraph (d) (iv) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment until
made; and provided, further, that any adjustment shall be required and
made in accordance with the provisions of this Section 7 (other than this
paragraph (d) (iv)) not later than such time as may be required in order
to preserve the tax-free nature of a distribution to the holders of shares
of Common Stock. Notwithstanding any other provisions of this Section 7,
the Corporation shall not be required to make any adjustment of the
Conversion Rate for the issuance of any shares of Common Stock pursuant to
any plan providing for the reinvestment of dividends or interest payable
on securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All calculations under
this Section 7 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this paragraph (d) of
this Section 7 to the contrary notwithstanding, the Corporation shall be
entitled, to the extent permitted by law, to make such reductions in the
Conversion Rate, in addition to those required by this paragraph (d), as
it in its discretion shall determine to be advisable in order that any
stock dividends, subdivision of shares, reclassification or combination of
shares, distribution of rights or warrants to purchase stock or
securities, or
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<PAGE> 14
a distribution of other assets (other than cash dividends) hereafter made
by the Corporation to its stockholders shall not be taxable, or if that is
not possible, to diminish any taxes that are otherwise payable because of
such event.
(e) If:
(i) the Corporation shall authorize a dividend (or any other
distribution) on the Common Stock (other than cash dividends and cash
distributions to the extent the same constitute Permitted Common Stock
Cash Distributions); or
(ii) the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of any class or series of stock or any other rights or
warrants; or
(iii) there shall be any reclassification of the Common Stock
or any consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation is required, or a
statutory share exchange, or an issuer or self tender offer by the
Corporation for all or a substantial portion of its outstanding shares of
Common Stock (or an amendment thereto changing the maximum number of
shares sought or the amount or type of consideration being offered
therefor) or the sale or transfer of all or substantially all of the
assets of the Corporation as an entirety; or
(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Series A Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, but at least 15 days prior to the applicable date hereinafter
specified, a notice stating (A) the record date for the payment of such
dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Common Stock of record to be
entitled to such dividend; distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory share
exchange, sale, transfer,
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<PAGE> 15
liquidation, dissolution or winding up or (C) the date on which such tender
offer commenced, the date on which such tender offer is scheduled to expire
unless extended, the consideration offered and the other material terms thereof
(or the material terms of any amendment thereto). Failure to give or receive
such notice or any defect therein shall not affect the legality or validity of
the proceedings described in this Section 7.
(f) Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Rate after such adjustment
and setting forth a brief statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the date such adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Rate
to each holder of shares of Series A Preferred Stock at such holder's last
address as shown on the stock records of the Corporation.
(g) In any case in which paragraph (d) of this Section 7
provides that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence of such
event (A) issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of such event the
additional Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (b) paying to such
holder any amount of cash in lieu of any fraction pursuant to paragraph (c) of
this Section 7.
(h) There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this Section 7. If any action or transaction would require adjustment of the
Conversion Rate pursuant to more than one paragraph of this Section 7, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.
(i) If the Corporation shall take any action affecting the
Common Stock, other than action described in this Section 7, that in the opinion
of the Board of Directors would materially adversely affect the conversion
rights of the holders of Series A Preferred Stock, the Conversion Rate for the
Series A Preferred Stock may be adjusted, to the extent permitted by law, in
such manner, if any, and at such time as the Board of Directors, in its sole
discretion, may determine to be equitable under the circumstances.
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<PAGE> 16
(j) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion or
redemption of shares of Series A Preferred Stock pursuant hereto; provided,
however, that the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock or other securities or property in a name other than that of the
holder of the shares of Series A Preferred Stock to be converted or redeemed,
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the amount of any
such tax or established, to the reasonable satisfaction of the Corporation, that
such tax has been paid.
Section (8) Ranking. So long as any shares of Series A Preferred
stock are outstanding, the Corporation shall not issue any class or series of
stock which would entitle the holders thereof to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of Series A Preferred Stock.
Any class or series of stock of the Corporation shall be deemed to rank:
(a) on a parity with the Series A Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Series A Preferred Stock, if the holders of such class of stock or
series and the Series A Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid dividends per
share or liquidation preferences, without preference or priority one over the
other ("Parity Stock"); and
(b) junior to the Series A Preferred Stock, as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such stock or series shall be Common Stock or if the holders
of Series A Preferred Stock shall be entitled to receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of shares of such class or
series ("Junior Stock")
Section (9) Voting Rights.
(a) The holders of Series A Preferred Stock shall be entitled
to vote together with the holders of Common Stock on any matter upon which the
holders of Common Stock are entitled to vote. For the purposes of this
paragraph, each share of Series A Preferred Stock shall have one vote per share
multiplied by the Conversion Rate in effect at the time of the vote.
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<PAGE> 17
(b) So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by the Charter of the Corporation or required by the MGCL, the affirmative vote
of at least two-thirds of the votes entitled to be cast by the holders of the
Series A Preferred Stock given in person or by proxy, at any meeting, called for
the purpose, or the affirmative vote of all such holders delivered by unanimous
written consent, shall be necessary for effecting or validating any amendment,
alteration or repeal of any of the provisions of the Charter of the Corporation
(including the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption of the Series A Preferred
Stock) that materially adversely affects the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of the
holders of the Series A Preferred Stock; provided, however, that the amendment
of the provisions of the Charter so as to authorize or create, or to increase
the authorized amount of, any Parity Stock or Junior Stock shall not be deemed
to materially adversely affect the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of the
holders of Series A Preferred Stock, and provided further, that if any such
amendment, alteration or repeal would materially adversely affect any
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption of the Series A Preferred Stock that are not
enjoyed by some or all of the Series A Preferred Stock or other series which
otherwise would be entitled to vote in accordance herewith, the affirmative vote
of at least a majority of the votes entitled to be cast by the holders of all
series similarly affected given in person or by proxy at a meeting duly called
for the purpose, or the affirmative vote of all such holders delivered by
unanimous written consent, shall be required in lieu of the affirmative vote of
at least two-thirds of the votes entitled to be cast by the holders of the
shares of Series A Preferred Stock, or the affirmative vote of all such holders
by unanimous written consent, which otherwise would be entitled to vote in
accordance herewith.
For purposes of the foregoing provisions of this paragraph (b), each
share of Series A Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the right to vote with the
Series A Preferred Stock as a single class on any matter, then the Series A
Preferred Stock and such other series shall have with respect to such matters
one vote per $25.00 of stated liquidation preference, and fractional votes shall
be ignored.
(c) Nothing contained in paragraph (b) of this Section 9 shall
require a vote of the holders of the Series A Preferred Stock (i) in connection
with any merger or consolidation
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<PAGE> 18
in which the Corporation is the surviving entity if, immediately after the
merger or consolidation, there are outstanding no shares and no securities
convertible into shares of any class ranking as to distribution rights or
liquidation preference senior to the Series A Preferred Stock or (ii) in
connection with any merger or consolidation in which the Corporation is not the
surviving entity if, as result of the merger or consolidation, the holders of
Series A Preferred Stock receive shares of stock or beneficial interest or other
equity securities with preferences, rights and privileges not materially
inferior to the preferences, rights and privileges of the Series A Preferred
Stock.
Section (10) Severability of Provisions. If any preference,
conversion or other right, voting power, restriction, limitation as to dividends
or other distributions, qualification or term or condition of redemption of the
Series A Preferred Stock set forth herein is invalid, unlawful or incapable of
being enforced by reason of any rule of law or public policy, all other
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of the Series A Preferred Stock set forth herein which
can be given effect without the invalid, unlawful or unenforceable provision
thereof shall, nevertheless, remain in full force and effect, and no
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of the Series A Preferred Stock herein set forth shall
be deemed dependent upon any other provision thereof unless so expressed
therein.
SECOND: The Shares have been classified and designated by the Board
of Directors under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the Board
of Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation acknowledges
these Articles Supplementary to be the corporate act of the Corporation and, as
to all matters or facts required to be verified under oath, the undersigned
President acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
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<PAGE> 19
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 20th day of January, 1998.
ATTEST: GETTY REALTY HOLDING CORP.
/S/ Randi Young Filip By: /s/ Leo Liebowitz
- --------------------- -------------------------
Randi Young Filip Leo Liebowitz
Secretary President
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<PAGE> 20
State of Maryland [LOGO] PARRIS N. GLENDENIN
DEPARTMENT OF ASSESSMENTS Governor
AND TAXATION
Charter Division RONALD W. WINEHOL
Director
PAUL M. ANDERSON
Administrator
- -------------------------------------------------------------------------------
DOCUMENT CODE ____16 BUSINESS CODE __________ COUNTY _______ 74
# D4868915 ______P.A. _________ Religious ___ Close _____ Stock ___ Nonstock
Merging (Transferor) __________________
_______________________________________
_______________________________________
_______________________________________
CODE AMOUNT FEE REMITTED
____ ______ ____________
10 50 Expedited Fee
_____
61 _____ Rec. Fee (Arts. of Inc.)
20 _____ Organ. & Capitalization
62 20 Rec. Fee (Amendment)
_____
63 _____ Rec. Fee (Merger, Consol.)
64 _____ Rec. Fee (Transfer)
66 _____ Rec. Fee (Revival)
65 _____ Rec. Fee (Dissolution)
75 _____ Special Fee
73 _____ Certificate of Conveyance
______________________________________
______________________________________
______________________________________
21 _____ Recordation Tax
22 _____ State Transfer Tax
23 _____ Local Transfer Tax
70 _____ Change of P.O., R.A. or R.A.A.
31 _____ ________ Corp. Good Standing
600 Returns
___________________________________________________
52 _____ Foreign Qualification
NA _____ Foreign Registration
51 _____ Foreign Name Registration
53 _____ Foreign Resolution
54 _____ For. Supplemental Cert.
56 _____ Penalty
50 Cert. of Oral. or Reg.
___________________________________________________
83 _____ Cert. Limited Partnership
84 _____ Amendment to Limited Partnership
85 _____ Termination of Limited Partnership
80 _____ For. Limited Partnership
91 _____ Amend/Cancellation, For. Limited Part.
87 Limited Part. Good Standing.
___________________________________________________
67 _____ Cert. Limited Liability Partnership
68 _____ LIP Amendment - Domestic
69 _____ Foreign Limited Liability Partnership
74 LLP Amendment - Foreign
___________________________________________________
99 _____ Art. of Organization (LLC)
98 _____ LLC Amend, Diss, Continuation
97 _____ LLC Cancellation.
96 _____ Registration Foreign LLC
94 _____ Foreign LLC Supplemental
92 LLC Good Standing (short)
___________________________________________________
<PAGE> 21
13 25 1 Certified Copy 19pgs
_____ _________ ___________
Other ________________________________
TOTAL
FEES 95
______ ______ Credit Card
x Check Cash
________ _______
__________Documents ____________checks
Approved by: ________[ILLEGIBLE]
Surviving (Transferee)_________________
_______________________________________
_______________________________________
_______________________________________
(New Name)_____________________________
_______________________________________
_______________________________________
_____ Change of Name
_____ Change of Principal Office
_____ Change of Resident Agent
_____ Change of Resident Agent
Address
_____ Resignation of Resident Agent
_____ Designation of Resident Agent
and Resident Agent's Address
_____ Change of Business Code
____________________________
_____ Adoption of Assumed Name
____________________________
____________________________
____________________________
x Other Change(s) Classifying authorized
_____ stock and designating same
CODE 193
______
ATTENTION:___ABC___________
___________________________
___________________________
MAIL TO ADDRESS:___________
___________________________
___________________________
___________________________
___________________________
NOTE:
TELEPHONE (410) 767-1350
Room 809 - 301 West Preston Street - Baltimore, Maryland 21201
MRS (Maryland Relay Service) 1-800-735-2258 TT/Voice
FAX (410) 333-7097
web site: http://www.dat.state.md.us
<PAGE> 1
EXHIBIT 3.4
DEPARTMENT OF ASSESSMENTS
AND TAXATION
APPROVED FOR RECORD
1.30.98 at 2.30p.m.
GETTY REALTY HOLDING CORP.
ARTICLES OF AMENDMENT
THIS IS TO CERTIFY THAT:
FIRST: The charter of Getty Realty Holding Corp., a Maryland corporation
(the "Corporation"), is hereby amended by deleting existing Article II in its
entirety and adding a new article to read as follows:
"ARTICLE II
NAME
The name of the corporation (the "Corporation") is:
Getty Realty Corp."
SECOND: The amendment to the charter of the Corporation as set
forth above has been duly advised by the Board of Directors and approved by the
stockholders of the Corporation as required by law.
THIRD: The undersigned President acknowledges these Articles of
Amendment to be the corporate act of the Corporation and as to all matters or
facts required to be verified under oath, the undersigned President acknowledges
that to the best of his knowledge, information and belief, these matters and
facts are true in all material respects and that this statement is made under
the penalties for perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be
signed in its name and on its behalf by its President and attested to by its
Secretary on this 29th day of January, 1998.
ATTEST: GETTY REALTY HOLDING CORP.
/s/ Randi Young Filip By: /s/ Leo Liebowitz
- ------------------------------ -----------------------(SEAL)
Randi Young Filip Leo Liebowitz
Secretary President
- -----------------------------------------------------------------------------
STATE OF MARYLAND
I hereby certify that this is a true and complete copy of the 2
page document on file in this [ILLEGIBLE] DATED: 2-11-98.
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
BY: _________________________________________ , Custodian
[ILLEGIBLE]
This stamp replaces our previous certification system. Effective: 6/95
- -----------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 4.3
FIRST AMENDMENT
to the
AMENDED AND RESTATED LOAN AGREEMENT
This FIRST AMENDMENT to the AMENDED AND RESTATED LOAN AGREEMENT (this
"Amendment"), dated as of April 18, 1997, is by and between LEEMILT'S PETROLEUM,
INC., a New York corporation having its principal office at 125 Jericho
Turnpike, Jericho, New York 11753 (the "Borrower") and FLEET NATIONAL BANK
(successor in interest to Fleet Bank of Massachusetts, N.A.), a national banking
association having its principal place of business at One Federal Street,
Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Borrower and the Bank are parties to that certain Amended and
Restated Loan Agreement, dated as of October 27, 1995 (the "Loan Agreement"),
pursuant to which the Bank, upon certain terms and conditions, has made a loan
to the Borrower;
WHEREAS, Getty Petroleum Corp., a Delaware corporation ("Getty"), the
parent corporation of the Borrower and the guarantor of the Loans (as defined in
the Loan Agreement), has decided to spin-off its petroleum marketing business to
its shareholders on a tax-free basis effective as of March 21, 1997, so as to
separate Getty's real estate business from its petroleum marketing business;
WHEREAS, Getty has formed Getty Petroleum Marketing Inc., a Maryland
corporation ("Marketing"), to hold and operate its petroleum marketing and
related businesses;
WHEREAS, the Board of Directors of Getty has declared a special
distribution of the common stock of Marketing to the shareholders of Getty which
was effectuated on March 31, 1997;
WHEREAS, Getty will retain its real estate business and lease the Stations
(as defined in the Loan Agreement) on a long-term net basis to
<PAGE> 2
-2-
Marketing pursuant to a Master Lease Agreement dated as of February 1, 1997;
WHEREAS, effective as of March 31, 1997, Getty Realty Corp., a Delaware
corporation, merged with and into Getty and Getty in turn changed its name to
"Getty Realty Corp." ("Realty");
WHEREAS, the Borrower has requested that certain provisions of the Loan
Agreement be amended in order, among other things, to provide for certain
changes; and
WHEREAS, the Bank, subject to the terms and provisions hereof, has agreed
to amend the Loan Agreement in order to provide for the foregoing matters;
NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:
Section 1. Defined Terms. Capitalized terms used in this Amendment without
definition that are defined in the Loan Agreement shall have the meanings set
forth in the Loan Agreement.
Section 2. Amendment to Loan Agreement. Subject to the satisfaction of the
conditions precedent set forth in Section 5 hereof, the Loan Agreement is hereby
amended as follows:
Section 2.1. The definition of Getty set forth in Section 1 of the
Loan Agreement is hereby deleted in its entirety.
Section 2.2. The following definitions are hereby added to Section 1
of the Loan Agreement in the alphabetically appropriate order:
Lease means the Lease Agreement dated as of February 1, 1985,
covering the Stations, between the Borrower and Realty, as amended
and in effect on the date hereof, and as amended, modified or
supplemented from time to time in accordance with the terms hereof
and thereof.
Marketing means Getty Petroleum Marketing Inc., a Maryland
corporation.
<PAGE> 3
-3-
Master Lease means the Master Lease Agreement dated as
February 1, 1997 between Realty (f/k/a Getty Petroleum Corp.) and
Marketing.
Realty means Getty Realty Corp., a Delaware corporation,
successor by name change to Getty Petroleum Corp.
Three Party Lease Agreement means the Three Party Lease
Agreement of even date herewith by and among Realty, the Borrower
and the Bank relating to the Stations.
Section 2.3. All references in the Loan Agreement to "Getty" shall
be deemed to be references to "Realty".
Section 2.4. In line 1 of the definition of Bank in Section 1 of the
Loan Agreement, the words "Fleet National Bank, a national banking
association, as successor in interest to" shall be inserted after the word
"means".
Section 2.5. In line 3 of the definition of Earnings Before
Interest, Taxes, Depreciation and Amortization in Section 1 of the Loan
Agreement, the words "Getty and its Subsidiaries" are hereby deleted and
the words "Realty and Marketing and their Subsidiaries" are substituted in
place thereof.
Section 2.6. The definition of Funded Debt to EBITDA Ratio as set
forth in Section 1 of the Loan Agreement is hereby deleted in its entirety
and replaced with the following definition:
Funded Debt to EBITDA Ratio means the ratio of (i) the sum of
Realty's and Marketing's combined total funded indebtedness for
borrowed money (including obligations with respect to leases which
would be capitalized) as carried on the respective balance sheets of
Realty and Marketing in accordance with generally accepted
accounting principles, other than trade debt or similar obligations
incurred in the ordinary course of business, on the last day of each
fiscal quarter to (ii) the combined amount of Realty's and
Marketing's Earnings Before Interest, Taxes, Depreciation and
Amortization, for the period of four consecutive fiscal
<PAGE> 4
-4-
quarters, ending on the last day of the fiscal quarter referred to
in clause (i) above.
Section 2.7. Section 2.4.1(b) of the Loan Agreement is hereby
amended by deleting the table set forth therein in its entirety and
replacing it with the following new table:
<TABLE>
<CAPTION>
Funded Debt to EBITDA Ratio Interest Rate
--------------------------- -------------
<S> <C> <C>
.50x or less to 1 LIBOR Rate + 1.00%
.51x - .75x to 1 LIBOR Rate + 1.125%
.76x - 1.00x to 1 LIBOR Rate + 1.25%
1.01x - 1.24x to 1 LIBOR Rate + 1.375%
1.25x - 1.49x to 1 LIBOR Rate + 1.50%
1.50x - 1.74x to 1 LIBOR Rate + 1.625%
1.75x - 1.99x to 1 LIBOR Rate + 1.75%
2.00x - or greater to 1 LIBOR Rate + 1.875%
</TABLE>
Section 2.8 Section 2.15 of the Loan Agreement is hereby deleted in
its entirety.
Section 2.9 Section 3.7 and 3.8 of the Loan Agreement are hereby
deleted in their entirety and are replaced with the following:
Section 3.7. Financial Statements. The Borrower has furnished to the
Bank the unaudited financial statements of the Borrower as at
January 31, 1997. Such financial statements were prepared in
accordance with generally accepted accounting principles applied on
a consistent basis and fairly present the financial position of the
Borrower as at the date thereof and its results of operations for
the periods covered thereby.
Section 3.8. No Material Changes. Since January 31, 1997, there has
been no material adverse change in the assets, liabilities,
condition (financial or otherwise), operations, properties
(including intangible properties) or business of the Borrower except
for the conveyance of certain underground storage tanks and other
personal property of the Borrower to Marketing as disclosed in that
certain pro forma balance sheet as of January 31, 1997 and statement
of income for the fiscal year ended on such date, which pro forma is
attached hereto as Schedule 3.8.
<PAGE> 5
-5-
Section 2.10. In line 2 of Section 3.18 of the Loan Agreement, the
words ", including the Lease," are hereby inserted after the word
"Station".
Section 2.11. A new Section 3.23 is hereby added to the Loan
Agreement:
Section 3.23. Leases.
(a) The Lease has been duly authorized and validly executed
and is a legal, valid and binding instrument enforceable against
Realty in accordance with its terms without any defense,
counterclaim or setoff, and the Lease is presently in full force and
effect and has not been assigned by Realty, modified, supplemented
or amended in any way. The Lease, together with the Three Party
Lease Agreement, represents the entire agreement between the
Borrower and Realty with respect to the Stations, and taken as a
whole, the Lease, together with the Three Party Lease Agreement,
represents all the agreements between the Borrower and Getty with
respect to the Stations taken as a whole.
(b) All installments of rent and other payments due and
payable and all obligations required to be performed as of the date
hereof under the Lease have been paid or performed.
(c) There does not presently exist any event of default under
the Lease or the Master Lease or any event which, with the giving of
notice or the passage of time or both, would result in a default
under the Lease or the Master Lease.
(d) The interest of the Borrower in the Lease is free and
clear from all Liens of whatever kind or nature whatsoever.
(e) Realty is not in default under any obligation to the
Borrower under the Lease and there are no disputes between Realty
and the Borrower existing as of the date hereof which affect the
Lease or which may be asserted as a defense or setoff to any
payments payable thereunder.
(f) The Borrower has attached hereto as Exhibit E a copy of
the Lease in effect on the date hereof.
<PAGE> 6
-6-
(g) Any sublease, including the Master Lease, of any kind with
respect to any station is and will be subject and subordinate to the
Mortgage relating to such Stations, and is and will be substantially
in the form of one or more of the attachments included in Exhibit D
annexed hereto, except for leases for uses other than as gasoline
service stations, as indicated on Exhibit D-1.
(h) There are no judicial proceedings pending or, to the best
knowledge of the Borrower, threatened against the Borrower or Realty
which would materially impair the rights of the Borrower under the
Lease or the ability of Realty to perform the covenants and
obligations required to be performed under the Lease.
(i) Realty is not the subject of any bankruptcy or insolvency
proceeding nor has Realty made an assignment for the benefit of its
creditors and there has been no material adverse change in the
financial condition of Realty which would materially impair the
capacity of Realty to respond to its obligations under the Lease.
Section 2.12. In line 3 of Section 5.8(c) of the Loan Agreement, the
words ", or Marketing" are hereby inserted after the word "Getty".
Section 2.13. In lines 2, 3, 5 and 8 of Section 5.8(d) of the Loan
Agreement, the words "and Marketing" are hereby inserted after the word
"Getty".
Section 2.14. A new section Section 5.19 is hereby added to the Loan
Agreement:
Section 5.19. Minimum Ownership. Leo Liebowitz, during his
lifetime, shall at all times own, directly or indirectly, not less
than 1.8 million shares of the issued and outstanding stock of
Realty having ordinary voting power (other than stock having such
voting power only by reason of the happening of a contingency)
("Voting Stock"). For purposes hereof, the term "own, directly or
indirectly" shall be deemed to include all Voting Stock owned by Leo
Liebowitz or by any member of his immediate family or by any trust
for the benefit of Leo Liebowitz or any member of his immediate
family (a "Member"), which Voting Stock is held by a Member during
the lifetime of Leo Liebowitz.
<PAGE> 7
-7-
Section 2.15. A new Section 6.5 is hereby added to the Loan
Agreement:
Section 6.5. Modifications to Lease. The Borrower will not,
without the prior written consent of the Bank, make any waivers or
agreements respecting, or enter into any amendments, modifications
or alterations relating to any provision of the Lease, nor will it
declare the Lease in default, exercise any of the rights or remedies
of lessor under the Lease, settle or compromise any claims relating
to the Lease, or exercise or grant any approval under the Lease,
whether verbal or in writing.
Section 2.16. In line 3 of Section 7(h) of the Loan Agreement, the
words ", or the Lease," shall be shall be inserted after the words "Power
Test". In line 8 of Section 7(h) of the Loan Agreement, the words "the
Lease or in" are hereby inserted after the words "contained in".
Section 2.17. In Section 2.10 and Section 10(ii) of the Loan
Agreement, the address "75 State Street, Boston, Massachusetts 02109" is
hereby deleted and the address "One Federal Street, Boston, Massachusetts
02110" is substituted in place thereof.
Section 2.18. Exhibit D to the Loan Agreement is hereby amended by
adding thereto the Master Lease Agreement between Realty and Marketing
attached hereto as Exhibit D.
Section 3. Affirmation of Borrower. The Borrower hereby affirms its
absolute and unconditional promise to pay to the Bank the Loans and all other
amounts due under the Notes and the Loan Agreement, as amended hereby, at the
times and in the amounts provided for therein. The Borrower confirms and agrees
that the obligations of the Borrower to the Bank under the Loan Agreement, as
amended hereby, remain secured by and entitled to the benefits of the Loan
Documents as amended and in effect from time to time.
Section 4. Representations and Warranties. The Borrower hereby represents
and warrants to the Bank that the representations and warranties of the Borrower
set forth in the Loan Agreement were true and correct when made with respect to
the Loan Agreement as in effect as of such time and, as such representations and
warranties are amended herein, continue to be true and correct on and as of the
date hereof as if made on the date hereof.
<PAGE> 8
-8-
Section 5. Conditions to Effectiveness. The effectiveness of this
Amendment shall be subject to the delivery to the Bank by (or on behalf of) the
Borrower, contemporaneously with the execution hereof, of the following, in form
and substance satisfactory to the Bank:
(a) This Amendment executed and delivered by the Borrower and the Bank;
(b) An amendment fee in an amount equal to .125% of the outstanding amount
of the Loans;
(c) An Affirmation and Acknowledgment of Amended and Restated Hazardous
Waste Indemnification Agreement executed by Realty;
(d) An Affirmation and Acknowledgment of Guaranty Agreement executed by
Realty;
(e) The Three Party Lease Agreement executed by the Borrower and Realty;
(f) A favorable opinion from Samuel M. Jones, Esq., counsel to the
Borrower, Realty and Marketing, addressed to the Bank and dated the date of the
execution and delivery of this Amendment, in form, scope and substance
satisfactory to the Bank;
(g) Certified copies of all documents relating to the authorization and
execution of the Amendment and the documents contemplated hereby and related
authority and organizational documents of the Borrower, Realty and Marketing as
the Bank may request; and
(h) Any other document or instrument the Bank may reasonably request.
Section 6. Miscellaneous Provisions.
(a) Except as otherwise expressly provided by this Amendment, all of the
terms, conditions and provisions of the Loan Agreement shall remain the same. It
is declared and agreed by each of the parties hereto that the Loan Agreement, as
amended hereby, shall continue in full force and effect, and that this Amendment
and the Loan Agreement shall be read and construed as one instrument.
(b) THIS AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER SEAL
AND SHALL BE CONSTRUED
<PAGE> 9
-9-
ACCORDING TO AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
(c) This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument. In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
(d) Headings or captions used in this Amendment are for convenience of
reference only and shall not define or limit the provisions hereof.
(e) The Borrower hereby agrees to pay to the Bank, on demand by the Bank,
all out-of-pocket costs and expenses incurred or sustained by any Person in
connection with the preparation of this Amendment (including legal fees).
<PAGE> 10
-10-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
made by their duly authorized officers as a sealed instrument as of the date
first set forth at the beginning of this Amendment.
LEEMILT'S PETROLEUM, INC.
By: /s/ John J. Fitteron
-----------------------------------
John J. Fitteron
Senior Vice President
FLEET NATIONAL BANK,
successor in interest to Fleet Bank of
Massachusetts, N.A.
By:
-----------------------------------
Name:
---------------------------------
Title: Vice President
<PAGE> 11
-11-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
made by their duly authorized officers as a sealed instrument as of the date
first set forth at the beginning of this Amendment.
LEEMILT'S PETROLEUM, INC.
By:
-----------------------------------
John J. Fitteron
Senior Vice President
FLEET NATIONAL BANK,
successor in interest to Fleet Bank of
Massachusetts, N.A.
By: /s/ Michael A. Palmer
-----------------------------------
Name: Michael A. Palmer
---------------------------------
Title: Vice President
<PAGE> 12
SCHEDULE 3.8
Pro Forma Balance Sheet and Statement of Income
<PAGE> 13
LEEMILT'S PETROLEUM. INC.
CONSOLIDATED BALANCE SHEET
JANUARY 31, 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRIOR TO
ASSETS SPIN-OFF ADJUSTMENTS ADJUSTED
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $6 $6
Current portion of loan receivable
from Getty Petroleum Corp. 2,617 2,617
Receivables 243 243
Prepaid expenses and other
current assets 276 (168)(A) 108
--------------------------------------
Total current assets 3,142 (168) 2,974
Loan receivable from Getty Realty Corp. 10,844 10,844
Property, plant and equipment, net 78,379 (15,269)(B) 63,110
Other assets 3,672 (631)(C) 3,041
--------------------------------------
Total assets $96,037 ($16,068) $79,969
======================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of:
Long-term debt 3,614 $3,614
Accounts payable and accrued expenses 1,169 1,169
Income taxes payable 2,404 2,404
--------------------------------------
Total current liabilities 7,187 0 7,187
Long-term debt 14,315 14,315
Intercompany loans and advances, net 17,221 17,221
Deferred income taxes 9,068 (8,140)(D) 928
Other liabilities 160 160
Stockholders' equity 48,086 (7,928)(E) 40,158
--------------------------------------
Total liabilities and
stockholders' equity $96,037 ($16,068) $79,969
======================================
</TABLE>
(A) Represents goodwill of $20 and prepaid real estate taxes of $148 which
will be transferred to Getty Marketing.
(B) Equipment, including underground storage tanks, which will be transferred
to Getty Marketing.
(C) Amount represents goodwill of $631 which will be transferred as Getty
Marketing.
(D) Impact on transfer of property, plant and equipment.
(E) Adjusted to give effect of transfers to Getty Marketing.
<PAGE> 14
LEEMILT'S PETROLEUM, INC
PROFORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 1997
<TABLE>
<CAPTION>
Revenues: HISTORICAL ADJUSTMENTS PRO FORMA
<S> <C> <C> <C>
Rental income $18,430 $150(A) $18,580
Other income 2,029 2,029
------------------------------------------
20,459 150 20,609
------------------------------------------
Costs and expenses:
Repairs and Maintenance 265 (265)(B) 0
Rent 1,846 1,846
Real Estate Taxes 4,163 (3,500)(C) 663
Other Operating Expenses 26 26
Interest expense 1,400 1,400
Depreciation and amortization 6,677 (3,000)(D) 3,677
------------------------------------------
14,377 (6,765) 7,612
------------------------------------------
Income before provision for
income taxes 6,082 6,915 12,997
Provision for income taxes 2,490 2,831 5,321
------------------------------------------
Net income $3,592 $4,084 $7,676
==========================================
</TABLE>
(A) Adjusted go give effect to rentals under she Lease Agreement with Getty
Marketing.
(B) Repairs and maintenance charged to Marketing.
(C) Real estate taxes are the responsibility of Getty Marketing except for
non-leased locations.
(D) Equipment, including underground storage tanks, were transferred to Getty
Marketing.
<PAGE> 1
EXHIBIT 4.4
SECOND AMENDMENT
to the
AMENDED AND RESTATED LOAN AGREEMENT
This SECOND AMENDMENT to the AMENDED AND RESTATED LOAN AGREEMENT (this
"Second Amendment"), dated as of January 30, 1998, is by and between LEEMILT'S
PETROLEUM, INC., a New York corporation having its principal office at 125
Jericho Turnpike, Jericho, New York 11753 (the "Borrower") and FLEET NATIONAL
BANK (successor in interest to Fleet Bank of Massachusetts, N.A.), a national
banking association having its principal place of business at One Federal
Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Borrower and the Bank are parties to that certain Amended and
Restated Loan Agreement, dated as of October 27, 1995, as amended by that
certain First Amendment to the Amended and Restated Loan Agreement, dated as of
April 18, 1997 (as amended, the "Loan Agreement"), pursuant to which the Bank,
upon certain terms and conditions, has made a loan to the Borrower;
WHEREAS, Getty Realty Corp., a Delaware corporation ("Getty"), the parent
corporation of the Borrower and the guarantor of the Loans (as defined in the
Loan Agreement), changed its name to Getty Properties Corp. ("Properties")
effective January 30, 1998;
WHEREAS, Getty Realty Corp., a Maryland corporation (f/k/a Getty Realty
Holding Corp.) ("Realty"), an affiliate of Properties, has become a guarantor of
the Loans;
WHEREAS, the Borrower has requested that certain provisions of the Loan
Agreement be amended in order, among other things, to provide for certain
changes; and
WHEREAS, the Bank, subject to the terms and provisions hereof, has agreed
to amend the Loan Agreement in order to provide for the foregoing matters;
<PAGE> 2
-2-
NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:
Section 1. Defined Terms. Capitalized terms used in this Second Amendment
without definition that are defined in the Loan Agreement shall have the
meanings set forth in the Loan Agreement.
Section 2. Amendment to Loan Agreement. Subject to the satisfaction of the
conditions precedent set forth in Section 5 hereof, the Loan Agreement is hereby
amended as follows:
Section 2.1. Prior to giving effect to any other changes in this
Second Amendment, all references in the Loan Agreement to "Realty" shall
be deemed to be references to "Properties".
Section 2.2. The definition of Realty set forth in Section 1 of the
Loan Agreement is hereby deleted in its entirety and the following
definition is substituted in place thereof:
Realty means Getty Realty Corp., a Maryland corporation,
successor by name change to Getty Realty Holding Corp.
Section 2.3. The following definitions are hereby added to Section 1
of the Loan Agreement in the alphabetically appropriate order:
Properties means Getty Properties Corp., a Delaware
corporation, successor by name change to Getty Realty Corp.
Realty Guaranty means that certain Guaranty Agreement dated as
of January 30, 1998 by and between Realty and the Bank.
Section 2.4. The definition of Agreement is hereby deleted in its
entirety and the following definition is substituted in place thereof:
Agreement means the Amended and Restated Loan Agreement dated
as of October 27, 1995 between the Bank and the Borrower, as amended
by First Amendment to the Amended and Restated Loan Agreement dated
as of April 18, 1997, as further amended by the Second Amendment to
the Amended and Restated Loan Agreement dated as of January 30,
1998, including the Exhibits and Schedules thereto, as such may be
further amended, modified or supplemented.
<PAGE> 3
-3-
Section 2.5. In line 1 of the definition of Bank's Special Counsel
in Section 1 of the Loan Agreement, the name "Bingham, Dana & Gould" is
hereby replaced with the name "Bingham Dana LLP".
Section 2.6. In line 3 of the definition of Loan Documents in
Section 1 of the Loan Agreement, the words ", the Realty Guaranty" are
hereby inserted after "Guaranty Agreement."
Section 2.7. Section 2.4.1(b) of the Loan Agreement is hereby
amended by deleting the table set forth therein in its entirety and
replacing it with the following new table:
<TABLE>
<CAPTION>
Funded Debt to EBITDA Ratio Interest Rate
--------------------------- -------------
<S> <C>
.50x or less to 1 LIBOR Rate + 0.875%
.51x - .75x to 1 LIBOR Rate + 1.00%
.76x - 1.00x to 1 LIBOR Rate + 1.125%
1.01x - 1.24x to 1 LIBOR Rate + 1.25%
1.25x - 1.49x to 1 LIBOR Rate + 1.375%
1.50x - 1.74x to 1 LIBOR Rate + 1.50%
1.75x - 1.99x to 1 LIBOR Rate + 1.625%
2.00x or greater to 1 LIBOR Rate + 1.75%
</TABLE>
Section 2.8. In line 4 of Section 2.13 of the Loan Agreement, the
words "and the Realty Guaranty" are hereby inserted immediately before the
comma.
Section 2.9. In Section 3.7 and Section 3.8 of the Loan Agreement,
each reference to the date "January 31, 1997" is hereby replaced with
"October 31, 1997."
Section 2.10. Section 5.8 of the Loan Agreement is deleted in its
entirety and the following is substituted in place thereof:
Section 5.8. Financial Statements, Certificates and Other
Information. The Borrower will furnish or cause to be furnished to
the Bank with regard to the Borrower, Marketing, Properties and
Realty, as the case may be:
(a) as soon as available but in any event within
forty-five (45) days after the end of each of the first three
fiscal quarters in any fiscal year of Realty and Marketing,
unaudited consolidated balance sheets for Realty and its
Subsidiaries (including the Borrower)
<PAGE> 4
-4-
and for Marketing as at the end of such quarter, and unaudited
consolidated statements of income and summaries of changes in
financial position for Realty and its subsidiaries (including
the Borrower) and for Marketing for the period commencing with
the end of the preceding fiscal year and ending with the end
of such quarter, prepared in accordance with generally
accepted accounting principles consistently applied, in each
case the financial statements for Realty and its Subsidiaries
(including the Borrower) shall be certified by the chief
financial officer of Realty, subject, however to audit and
year-end adjustments;
(b) as soon as available but in any event within ninety
(90) days after the end of each fiscal year of Realty and
Marketing, audited consolidated balance sheets for Realty and
its Subsidiaries (including the Borrower) and for Marketing as
at the end of such fiscal year and audited consolidated
statements of income and summaries of changes in financial
position for Realty and its Subsidiaries (including the
Borrower) and for Marketing for such fiscal year, prepared in
accordance with generally accepted accounting principles
consistently applied, in each case accompanied by the opinion
of and report by Coopers & Lybrand or other independent
certified public accountants of nationally recognized standing
selected by Realty or Marketing, as the case may be, and
acceptable to the Bank, such opinion to be unqualified as to
scope limitations imposed by Realty or Marketing and otherwise
without qualification except as therein noted;
(c) to the extent available, if at all, as soon as
available but in any event within one hundred eighty (180)
days after the end of each fiscal year of Realty or Marketing,
any CPA management letters prepared for Realty or any of its
Subsidiaries (including the Borrower) relating to the annual
audit;
(d) as soon as available but in any event within
forty-five (45) days after the end of each fiscal quarter of
Realty and ninety (90) days after the end of each fiscal year
of Realty, a statement from the
<PAGE> 5
-5-
Borrower of the Funded Debt to EBITDA Ratio as of the end of
the most recent fiscal quarter of Realty and Marketing,
together with a certificate of the chief financial officer of
the Borrower stating that such statement fairly and accurately
reflects the Funded Debt to EBITDA Ratio as of the end of the
most recent fiscal quarter of Realty and is prepared in
accordance with generally accepted accounting principles
consistently applied; and
(e) with reasonable promptness, such other information
relating to the business or financial affairs of the Borrower,
Marketing, Properties or Realty as the Bank may reasonably
request.
Section 3. Affirmation of Borrower. The Borrower hereby affirms its
absolute and unconditional promise to pay to the Bank the Loan and all other
amounts due under the Notes and the Loan Agreement, as amended hereby, at the
times and in the amounts provided for therein. The Borrower confirms and agrees
that the obligations of the Borrower to the Bank under the Loan Agreement, as
amended hereby, remain secured by and entitled to the benefits of the Loan
Documents as amended and in effect from time to time.
Section 4. Representations and Warranties. The Borrower hereby represents
and warrants to the Bank that the representations and warranties of the Borrower
set forth in the Loan Agreement were true and correct when made with respect to
the Loan Agreement as in effect as of such time and continue to be true and
correct on and as of the date hereof as if made on the date hereof.
Section 5. Conditions to Effectiveness. The effectiveness of this Second
Amendment shall be subject to the delivery to the Bank by (or on behalf of) the
Borrower, contemporaneously with the execution hereof, of the following, in form
and substance satisfactory to the Bank:
(a) This Second Amendment executed and delivered by the Borrower and the
Bank;
(b) A Second Affirmation and Acknowledgment of Amended and Restated
Hazardous Waste Indemnification Agreement executed by Properties;
(c) An Amendment to Three Party Lease Agreement executed by Properties;
<PAGE> 6
-6-
(d) A favorable opinion from Samuel M. Jones, Esq., counsel to the
Borrower, Realty, Marketing and Properties, addressed to the Bank and dated the
date of the execution and delivery of this Second Amendment, in form, scope and
substance satisfactory to the Bank;
(e) Certified copies of all documents relating to the authorization and
execution of this Second Amendment and the documents contemplated hereby and
related authority and organizational documents of the Borrower, Realty, and
Properties and related organizational documents of Marketing as the Bank may
request;
(f) A Guaranty Agreement executed and delivered by Realty in form, scope
and substance satisfactory to the Bank;
(g) A First Amendment to Amended and Restated Guaranty Agreement executed
and delivered by Properties in form, scope and substance satisfactory to the
Bank; and
(h) Any other document or instrument the Bank may reasonably request.
Section 6. Miscellaneous Provisions.
(a) Except as otherwise expressly provided by this Second Amendment, all
of the terms, conditions and provisions of the Loan Agreement shall remain the
same. It is declared and agreed by each of the parties hereto that the Loan
Agreement, as amended hereby, shall continue in full force and effect, and that
this Second Amendment and the Loan Agreement shall be read and construed as one
instrument.
(b) THIS SECOND AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER
SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
(c) This Second Amendment may be executed in any number of counterparts,
and all such counterparts shall together constitute but one instrument. In
making proof of this Second Amendment it shall not be necessary to produce or
account for more than one counterpart signed by each party hereto by and against
which enforcement hereof is sought.
(d) Headings or captions used in this Second Amendment are for convenience
of reference only and shall not define or limit the provisions hereof.
<PAGE> 7
-7-
(e) The Borrower hereby agrees to pay to the Bank, on demand by the Bank,
all out-of-pocket costs and expenses incurred or sustained by any Person in
connection with the preparation of this Second Amendment (including legal fees).
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be made by their duly authorized officers as a sealed instrument as of the
date first set forth at the beginning of this Second Amendment.
LEEMILT'S PETROLEUM, INC.
By: /s/ John J. Fitteron
-------------------------------
Name: John J. Fitteron
Title: Senior Vice President
FLEET NATIONAL BANK,
successor in interest to Fleet Bank of
Massachusetts, N.A.
By:
-------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be made by their duly authorized officers as a sealed instrument as of the
date first set forth at the beginning of this Second Amendment.
LEEMILT'S PETROLEUM, INC.
By:
-------------------------------
Name: John J. Fitteron
Title: Senior Vice President
FLEET NATIONAL BANK,
successor in interest to Fleet Bank of
Massachusetts, N.A.
By: /s/ Michael A. Palmer
-------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
EXHIBIT 4.6
FIRST AMENDMENT
to the
AMENDED AND RESTATED LOAN AGREEMENT
This FIRST AMENDMENT to the AMENDED AND RESTATED LOAN AGREEMENT (this
"Amendment"), dated as of April 18, 1997, is by and between POWER TEST REALTY
COMPANY LIMITED PARTNERSHIP, a New York limited partnership having its principal
office at 125 Jericho Turnpike, Jericho, New York 11753 (the "Borrower") and
FLEET NATIONAL BANK (successor in interest to Fleet Bank of Massachusetts,
N.A.), a national banking association having its principal place of business at
One Federal Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Borrower and the Bank are parties to that certain Amended and
Restated Loan Agreement, dated as of October 31, 1995 (the "Loan Agreement"),
pursuant to which the Bank, upon certain terms and conditions, has made a loan
to the Borrower;
WHEREAS, Getty Petroleum Corp., a Delaware corporation ("Getty"), an
affiliate of the Borrower, has decided to spin-off its petroleum marketing
business to its shareholders on a tax-free basis effective as of March 21, 1997,
so as to separate Getty's real estate business from its petroleum marketing
business;
WHEREAS, Getty has formed Getty Petroleum Marketing Inc., a Maryland
corporation ("Marketing"), to hold and operate its petroleum marketing and
related businesses;
WHEREAS, the Board of Directors of Getty has declared a special
distribution of the common stock of Marketing to the shareholders of Getty which
was effectuated on March 31, 1997;
WHEREAS, Getty will retain its real estate business and lease the Stations
(as defined in the Loan Agreement) on a long-term net basis to
<PAGE> 2
-2-
Marketing pursuant to a Master Lease Agreement dated as of February 1, 1997;
WHEREAS, effective as of March 31, 1997, Getty Realty Corp., a Delaware
corporation, has merged with and into Getty and Getty in turn has changed its
name to "Getty Realty Corp." ("Realty");
WHEREAS, the Borrower has requested that certain provisions of the Loan
Agreement be amended in order, among other things, to provide for certain
changes; and
WHEREAS, the Bank, subject to the terms and provisions hereof, has agreed
to amend the Loan Agreement in order to provide for the foregoing matters;
NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:
Section 1. Defined Terms. Capitalized terms used in this Amendment without
definition that are defined in the Loan Agreement shall have the meanings set
forth in the Loan Agreement.
Section 2. Amendment to Loan Agreement. Subject to the satisfaction of the
conditions precedent set forth in Section 5 hereof, the Loan Agreement is hereby
amended as follows:
Section 2.1. The definition of Getty set forth in Section 1 of the
Loan Agreement is hereby deleted in its entirety.
Section 2.2. The following definitions are hereby added to Section 1
of the Loan Agreement in the alphabetically appropriate order:
Marketing means Getty Petroleum Marketing Inc., a Maryland
corporation.
Realty means Getty Realty Corp., a Delaware corporation,
successor by name change to Getty Petroleum Corp.
Section 2.3. All references in the Loan Agreement to "Getty" shall
be deemed to be references to "Realty".
Section 2.4. In line 4 of the definition of Affiliate in Section 1
of the Loan Agreement, the word "Marketing," is hereby inserted after the
word "PTI,".
<PAGE> 3
-3-
Section 2.5. In line 1 of the definition of Bank in Section 1 of the
Loan Agreement, the words "Fleet National Bank, a national banking
association, as successor in interest to" shall be inserted after the word
"means".
Section 2.6. The definition of Funded Debt to EBITDA Ratio as set
forth in Section 1 of the Loan Agreement is hereby deleted in its entirety
and replaced with the following definition:
Funded Debt to EBITDA Ratio means the ratio of (i) the sum of
Realty's and Marketing's combined total funded indebtedness for
borrowed money (including obligations with respect to leases which
would be capitalized) as carried on the respective balance sheets of
Realty and Marketing in accordance with generally accepted
accounting principles, other than trade debt or similar obligations
incurred in the ordinary course of business, on the last day of each
fiscal quarter to (ii) the combined amount of Realty's and
Marketing's Earnings Before Interest, Taxes, Depreciation and
Amortization, for the period of four consecutive fiscal quarters,
ending on the last day of the fiscal quarter referred to in clause
(i) above.
Section 2.7. The reference to "Section 2.11" in the definition of
Operating Account set forth in Section 1 of the Loan Agreement is hereby
changed to "Section 2.12".
Section 2.8. Section 2.3(b) of the Loan Agreement is hereby amended
by deleting the table set forth therein in its entirety and replacing it
with the following new table:
<TABLE>
<CAPTION>
Funded Debt to EBITDA Ratio Interest Rate
--------------------------- -------------
<S> <C>
.50x or less to 1 LIBOR Rate + 1.125%
.51x - .75x to 1 LIBOR Rate + 1.25%
.76x - 1.00x to 1 LIBOR Rate + 1.375%
1.01x - 1.24x to 1 LIBOR Rate + 1.50%
1.25x - 1.49x to 1 LIBOR Rate + 1.625%
1.50x - 1.74x to 1 LIBOR Rate + 1.75%
1.75x - 1.99x to 1 LIBOR Rate + 1.875%
2.00x - or greater to 1 LIBOR Rate + 2.00%
</TABLE>
<PAGE> 4
-4-
Section 2.9. Section 2.13 of the Loan Agreement is hereby deleted in
its entirety.
Section 2.10. In line 3 of Section 3.25 of the Loan Agreement, the
word "Marketing," is hereby inserted after the word "PTI,".
Section 2.11. In line 3 of Section 5.8 of the Loan Agreement, the
word "Marketing," is hereby inserted after the word "Borrower,".
Section 2.12. In line 3 of Section 5.8(a) of the Loan Agreement, the
words ", of Marketing" are hereby inserted after the word "Getty".
Section 2.13. In lines 4 and 6 of Section 5.8(a) of the Loan
Agreement, the word ", Marketing" is hereby inserted after the word
"Getty".
Section 2.14. In lines 3, 5 and 12 of Section 5.8(c) of the Loan
Agreement, the word ", Marketing" is hereby inserted after the word
"Getty".
Section 2.15. In lines 2 and 4 of Section 5.8(g) of the Loan
Agreement, the word "Marketing" is hereby inserted after the word
"Getty,".
Section 2.16. In line 3 of Section 5.8(h) of the Loan Agreement, the
word "Marketing," is hereby inserted after the word "Getty,".
Section 2.17. In lines 2, 5 and 8 of Section 5.8(i) of the Loan
Agreement, the words "and Marketing" are hereby inserted after the word
"Getty".
Section 2.18. In line 2 of Section 5.8(k) of the Loan Agreement the
word "Marketing, " is hereby inserted after the word "Getty,".
Section 2.19. In Section 2.8 and Section 1 (ii) of the Loan
Agreement, the address "75 State Street, Boston, Massachusetts 02109" is
hereby deleted and the address "One Federal Street, Boston, Massachusetts
02110" is substituted in place thereof.
Section 2.20. Exhibit F to the Loan Agreement is hereby amended by
adding thereto the Master Lease Agreement between Realty and Marketing
attached hereto as Exhibit F.
Section 3. Affirmation of Borrower. The Borrower hereby affirms its
absolute and unconditional promise to pay to the Bank the Loan and all other
amounts due under the Notes and the Loan Agreement, as amended hereby, at the
times and in the amounts provided for therein. The Borrower confirms and agrees
that the obligations of the Borrower to the Bank under the Loan Agreement, as
amended hereby, remain secured by
<PAGE> 5
-5-
and entitled to the benefits of the Loan Documents as amended and in effect from
time to time.
Section 4. Representations and Warranties. The Borrower hereby represents
and warrants to the Bank that the representations and warranties of the Borrower
set forth in the Loan Agreement were true and correct when made with respect to
the Loan Agreement as in effect as of such time and continue to be true and
correct on and as of the date hereof as if made on the date hereof.
Section 5. Conditions to Effectiveness. The effectiveness of this
Amendment shall be subject to the delivery to the Bank by (or on behalf of) the
Borrower, contemporaneously with the execution hereof, of the following, in form
and substance satisfactory to the Bank:
(a) This Amendment executed and delivered by the Borrower and the Bank;
(b) An amendment fee in an amount equal to .125% of the outstanding amount
of the Loan;
(c) An Affirmation and Acknowledgment of Amended and Restated Hazardous
Waste and PMPA Indemnification Agreement executed by Realty;
(d) An Affirmation and Acknowledgment of Three Party Lease Agreement
executed by Realty;
(e) A favorable opinion from Samuel M. Jones, Esq., counsel to the
Borrower, Realty and Marketing, addressed to the Bank and dated the date of the
execution and delivery of this Amendment, in form, scope and substance
satisfactory to the Bank;
(f) Certified copies of all documents relating to the authorization and
execution of the Amendment and the documents contemplated hereby and related
authority and organizational documents of the Borrower, Realty and Marketing as
the Bank may request; and
(g) Any other document or instrument the Bank may reasonably request.
Section 6. Miscellaneous Provisions.
(a) Except as otherwise expressly provided by this Amendment, all of the
terms, conditions and provisions of the Loan Agreement shall remain the same. It
is declared and agreed by each of the parties hereto
<PAGE> 6
-6-
that the Loan Agreement, as amended hereby, shall continue in full force and
effect, and that this Amendment and the Loan Agreement shall be read and
construed as one instrument.
(b) THIS AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER SEAL
AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS.
(c) This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument. In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
(d) Headings or captions used in this Amendment are for convenience of
reference only and shall not define or limit the provisions hereof.
(e) The Borrower hereby agrees to pay to the Bank, on demand by the Bank,
all out-of-pocket costs and expenses incurred or sustained by any Person in
connection with the preparation of this Amendment (including legal fees).
<PAGE> 7
-7-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
made by their duly authorized officers as a sealed instrument as of the date
first set forth at the beginning of this Amendment.
POWER TEST REALTY COMPANY
LIMITED PARTNERSHIP
By: CLS General Partnership Corp.,
its General Partner
By: /s/ Leo Liebowitz
----------------------------
Leo Liebowitz
President
FLEET NATIONAL BANK, successor in
interest to Fleet Bank of Massachusetts,
N.A.
By:
----------------------------
Name:
----------------------------
Vice President
<PAGE> 8
-7-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
made by their duly authorized officers as a sealed instrument as of the date
first set forth at the beginning of this Amendment.
POWER TEST REALTY COMPANY
LIMITED PARTNERSHIP
By: CLS General Partnership Corp.,
its General Partner
By:
----------------------------
Leo Liebowitz
President
FLEET NATIONAL BANK, successor in
interest to Fleet Bank of Massachusetts,
N.A.
By: /s/ Michael A. Palmer
----------------------------
Name: Michael A. Palmer
--------------------------
Vice President
<PAGE> 9
EXHIBIT F
Master Lease
<PAGE> 1
EXHIBIT 4.7
SECOND AMENDMENT
to the
AMENDED AND RESTATED LOAN AGREEMENT
This SECOND AMENDMENT to the AMENDED AND RESTATED LOAN AGREEMENT (this
"Second Amendment"), dated as of January 30, 1998, is by and between POWER TEST
REALTY COMPANY LIMITED PARTNERSHIP, a New York limited partnership having its
principal office at 125 Jericho Turnpike, Jericho, New York 11753 (the
"Borrower") and FLEET NATIONAL BANK (successor in interest to Fleet Bank of
Massachusetts, N.A.), a national banking association having its principal place
of business at One Federal Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Borrower and the Bank are parties to that certain Amended and
Restated Loan Agreement, dated as of October 31, 1995, as amended by that
certain First Amendment to the Amended and Restated Loan Agreement, dated as of
April 18, 1997 (as amended, the "Loan Agreement"), pursuant to which the Bank,
upon certain terms and conditions, has made a loan to the Borrower;
WHEREAS, pursuant to tax-free reorganization and exchange transactions
more particularly described in that certain Registration Statement on Form S-4
filed by Getty Realty Corp., a Delaware corporation ("Getty"), and Power Test
Investors Limited Partnership, a New York limited partnership ("PTI"), on
January 12, 1998 with the Securities and Exchange Commission (the "Form S-4"),
Getty Realty Holding Corp., a Maryland corporation ("Holdings"), has issued (a)
shares of common stock (the "Common Shares"), $0.01 par value per share, of
Holdings to the shareholders of Getty in exchange for their interest in Getty,
and (b) shares of Series A Preferred Stock, $0.01 par value per share, of
Holdings (the "Preferred Shares"), to (i) the holders of units of partnership
interests in PTI and (ii) CLS General Partnership Corp., a Delaware corporation
("CLS"), in exchange for the general partnership interest in the Borrower;
WHEREAS, the Common Shares and the Preferred Shares were issued pursuant
to the Agreement and Plan of Reorganization and Merger
<PAGE> 2
-2-
by and among Getty, PTI and CLS, dated as of December 16, 1997, as described in
the Form S-4;
WHEREAS, effective January 30, 1998, Getty changed its name to Getty
Properties Corp., a Delaware corporation ("Properties");
WHEREAS, effective January 30, 1998, Holdings changed its name to Getty
Realty Corp., a Maryland corporation ("Realty");
WHEREAS, effective January 30, 1998, PTI dissolved as a matter of law;
WHEREAS, the general partnership interest in the Borrower has been
transferred to Properties;
WHEREAS, the Borrower has requested that certain provisions of the Loan
Agreement be amended in order, among other things, to provide for certain
changes; and
WHEREAS, the Bank, subject to the terms and provisions hereof, has agreed
to amend the Loan Agreement in order to provide for the foregoing matters;
NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:
Section 1. Defined Terms. Capitalized terms used in this Second Amendment
without definition that are defined in the Loan Agreement shall have the
meanings set forth in the Loan Agreement.
Section 2. Amendment to Loan Agreement. Subject to the satisfaction of the
conditions precedent set forth in Section 5 hereof, the Loan Agreement is hereby
amended as follows:
Section 2.1. Prior to giving effect to any other changes in this
Second Amendment, all references in the Loan Agreement to "Realty" shall
be deemed to be references to "Properties".
Section 2.2. The definition of Realty set forth in Section 1 of the
Loan Agreement is hereby deleted in its entirety and the following
definition is substituted in place thereof:
<PAGE> 3
-3-
Realty means Getty Realty Corp., a Maryland corporation,
successor by name change to Getty Realty Holding Corp.
Section 2.3. The following definitions are hereby added to Section 1
of the Loan Agreement in the alphabetically appropriate order:
Properties means Getty Properties Corp., a Delaware
corporation, successor by name change to Getty Realty Corp.
Properties Guaranty means that certain Guaranty Agreement
dated as of January 30, 1998 by and between Properties and the Bank.
Realty Guaranty means that certain Guaranty Agreement dated as
of January 30, 1998 by and between Realty and the Bank.
Section 2.4. In lines 4 and 5 of the definition of Affiliate in
Section 1 of the Loan Agreement, the words "Realty, PTI, Marketing, CLS,
Milton Cooper, Leo Liebowitz and Milton Safenowitz" are hereby deleted and
the words "Realty and Properties" are substituted in place thereof.
Section 2.5. The definition of Agreement is hereby deleted in its
entirety and the following definition is substituted in place thereof:
Agreement means the Amended and Restated Loan Agreement dated
as of October 31, 1995 between the Bank and the Borrower, as amended
by First Amendment to the Amended and Restated Loan Agreement dated
as of April 18, 1997, as further amended by the Second Amendment to
the Amended and Restated Loan Agreement dated as of January 30,
1998, including the Exhibits and Schedules thereto, as such may be
further amended, modified or supplemented.
Section 2.6. In line 1 of the definition of Bank's Special Counsel
in Section 1 of the Loan Agreement, the name "Bingham, Dana & Gould" is
hereby replaced with the name "Bingham Dana LLP".
Section 2.7. Lines 4 and 5 of the definition of Loan Documents in
Section 1 of the Loan Agreement are hereby deleted in their entirety and
the following lines are substituted in place thereof:
<PAGE> 4
-4-
Agreement, the Realty Guaranty, the Properties Guaranty and all
other agreements or documents under which the Borrower, Realty or
Properties create or assume liabilities or obligations owed the Bank
with respect to
Section 2.8. In line 1 of the definition of Partners in Section 1 of
the Loan Agreement, the words "CLS, PTI" are hereby deleted and the words
"Realty, Properties" are substituted in place thereof.
Section 2.9. In the definition of Security Documents in Section 1 of
the Loan Agreement, after the word "Mortgages" the words ", the Realty
Guaranty, the Properties Guaranty" are hereby inserted.
Section 2.10. In the definition of Subsidiary in Section 1 of the
Loan Agreement, the following sentence is hereby added to the end of such
definition: "For the purposes of this Loan Agreement, the Borrower shall
be deemed to be a Subsidiary of Realty."
Section 2.11. The following words are hereby added at the end of the
definition of Three Party Lease Agreement in Section 1 of the Loan
Agreement: "as such may be amended, modified, varied or supplemented from
time to time".
Section 2.12. Section 2.3(b) of the Loan Agreement is hereby amended
by deleting the table set forth therein in its entirety and replacing it
with the following new table:
<TABLE>
<CAPTION>
Funded Debt to EBITDA Ratio Interest Rate
--------------------------- -------------
<S> <C>
.50x or less to 1 LIBOR Rate + 0.875%
.51x - .75x to 1 LIBOR Rate + 1.00%
.76x - 1.00x to 1 LIBOR Rate + 1.125%
1.01x - 1.24x to 1 LIBOR Rate + 1.25%
1.25x - 1.49x to 1 LIBOR Rate + 1.375%
1.50x - 1.74x to 1 LIBOR Rate + 1.50%
1.75x - 1.99x to 1 LIBOR Rate + 1.625%
2.00x or greater to 1 LIBOR Rate + 1.75%
</TABLE>
Section 2.13. Section 2.13 of the Loan Agreement is hereby deleted
in its entirety.
Section 2.14. In Section 3.2 of the Loan Agreement, all references
to "CLS" shall be deemed to be references to "Properties" and all
references to "PTI" shall be deemed to be references to "Realty".
<PAGE> 5
-5-
Section 2.15. In line 3 of Section 3.25 of the Loan Agreement, the
words "PTI, Marketing, Realty, CLS, Milton Cooper, Leo Liebowitz and
Milton Safenowitz" are hereby deleted and the words "Realty and
Properties" are substituted in place thereof.
Section 2.16. Section 5.8 of the Loan Agreement is deleted in its
entirety and the following is substituted in place thereof:
Section 5.8. Financial Statements, Certificates and Other
Information. The Borrower will furnish or cause to be furnished to
the Bank with regard to the Borrower, Marketing, Properties and
Realty, as the case may be:
(a) as soon as available but in any event within
forty-five (45) days after the end of each of the first three
fiscal quarters in any fiscal year of Realty and Marketing,
unaudited consolidated balance sheets for Realty and its
Subsidiaries and for Marketing as at the end of such quarter,
and unaudited consolidated statements of income and summaries
of changes in financial position for Realty and its
Subsidiaries and for Marketing for the period commencing with
the end of the preceding fiscal year and ending with the end
of such quarter, prepared in accordance with generally
accepted accounting principles consistently applied, in each
case the financial statements for Realty and its Subsidiaries
shall be certified by the chief financial officer of Realty,
subject, however to audit and year-end adjustments;
(b) as soon as available but in any event within ninety
(90) days after the end of each fiscal year of Realty and
Marketing, audited consolidated balance sheets for Realty and
its Subsidiaries and for Marketing as at the end of such
fiscal year and audited consolidated statements of income and
summaries of changes in financial position for Realty and its
Subsidiaries and for Marketing for such fiscal year, prepared
in accordance with generally accepted accounting principles
consistently applied, in each case accompanied by the opinion
of and report by Coopers & Lybrand or other independent
certified public accountants of nationally recognized standing
selected by Realty or Marketing, as the case may be, and
<PAGE> 6
-6-
acceptable to the Bank, such opinion to be unqualified as to
scope limitations imposed by Realty or Marketing and otherwise
without qualification except as therein noted;
(c) to the extent available, if at all, as soon as
available but in any event within one hundred eighty (180)
days after the end of each fiscal year of Realty or Marketing,
any CPA management letters prepared for Realty or any of its
Subsidiaries relating to the annual audit;
(d) as soon as available but in any event within
forty-five (45) days after the end of each fiscal quarter of
Realty and ninety (90) days after the end of each fiscal year
of Realty, a statement from the Borrower of the Funded Debt to
EBITDA Ratio as of the end of the most recent fiscal quarter
of Realty and Marketing, together with a certificate of the
chief financial officer of the Borrower stating that such
statement fairly and accurately reflects the Funded Debt to
EBITDA Ratio as of the end of the most recent fiscal quarter
of Realty and is prepared in accordance with generally
accepted accounting principles consistently applied; and
(e) with reasonable promptness, such other information
relating to the business or financial affairs of the Borrower,
Marketing, Properties or Realty as the Bank may reasonably
request.
Section 2.17. In Section 5.9 of the Loan Agreement, the reference to
"PTI" shall be deemed to be a reference to "Realty".
Section 2.18. In line 3 of Section 5.18 of the Loan Agreement, all
words after "Bank" to the end of the paragraph are hereby deleted.
Section 2.19. Section 6.1 of the Loan Agreement is hereby deleted in
its entirety.
Section 2.20. Section 6.3 of the Loan Agreement is hereby deleted in
its entirety.
Section 2.21. In line 1 of Section 6.4 of the Loan Agreement, the
word "The" is hereby deleted and the words "Other than the tax-free
<PAGE> 7
-7-
reorganization and exchange transactions effected in accordance with that
certain Agreement and Plan of Reorganization and Merger dated as of
December 16, 1997, to which the Bank has expressly consented, the" are
substituted in place thereof.
Section 2.22. Sections 6.6, 6.7, 6.8, 6.9, 6.10, 6.17, and 6.20 of
the Loan Agreement are hereby deleted in their entirety.
Section 2.23. In each of Section 8(i) and Section 8(j) of the Loan
Agreement, the words ",PTI or CLS" are hereby deleted and "or Realty" is
substituted in place thereof.
Section 3. Affirmation of Borrower. The Borrower hereby affirms its
absolute and unconditional promise to pay to the Bank the Loan and all other
amounts due under the Notes and the Loan Agreement, as amended hereby, at the
times and in the amounts provided for therein. The Borrower confirms and agrees
that the obligations of the Borrower to the Bank under the Loan Agreement, as
amended hereby, remain secured by and entitled to the benefits of the Loan
Documents as amended and in effect from time to time.
Section 4. Representations and Warranties. The Borrower hereby represents
and warrants to the Bank that the representations and warranties of the Borrower
set forth in the Loan Agreement were true and correct when made with respect to
the Loan Agreement as in effect as of such time and continue to be true and
correct on and as of the date hereof as if made on the date hereof.
Section 5. Conditions to Effectiveness. The effectiveness of this Second
Amendment shall be subject to the delivery to the Bank by (or on behalf of) the
Borrower, contemporaneously with the execution hereof, of the following, in form
and substance satisfactory to the Bank:
(a) This Second Amendment executed and delivered by the Borrower and the
Bank;
(b) A Second Affirmation and Acknowledgment of Amended and Restated
Hazardous Waste and PMPA Indemnification Agreement executed by Properties;
(c) A Second Affirmation and Acknowledgment of Three Party Lease Agreement
executed by Properties;
(d) A favorable opinion from Samuel M. Jones, Esq., counsel to the
Borrower, Realty, Marketing and Properties, addressed to the Bank
<PAGE> 8
-8-
and dated the date of the execution and delivery of this Second Amendment, in
form, scope and substance satisfactory to the Bank;
(e) Certified copies of all documents relating to the authorization and
execution of this Second Amendment and the documents contemplated hereby and
related authority and organizational documents of the Borrower, Realty and
Properties and related organizational documents of Marketing as the Bank may
request;
(f) A Guaranty Agreement executed and delivered by Realty in form, scope
and substance satisfactory to the Bank;
(g) A Guaranty Agreement executed and delivered by Properties in form,
scope and substance satisfactory to the Bank; and
(h) Any other document or instrument the Bank may reasonably request.
Section 6. Miscellaneous Provisions.
(a) Except as otherwise expressly provided by this Second Amendment, all
of the terms, conditions and provisions of the Loan Agreement shall remain the
same. It is declared and agreed by each of the parties hereto that the Loan
Agreement, as amended hereby, shall continue in full force and effect, and that
this Second Amendment and the Loan Agreement shall be read and construed as one
instrument.
(b) THIS SECOND AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER
SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
(c) This Second Amendment may be executed in any number of counterparts,
and all such counterparts shall together constitute but one instrument. In
making proof of this Second Amendment it shall not be necessary to produce or
account for more than one counterpart signed by each party hereto by and against
which enforcement hereof is sought.
(d) Headings or captions used in this Second Amendment are for convenience
of reference only and shall not define or limit the provisions hereof.
(e) The Borrower hereby agrees to pay to the Bank, on demand by the Bank,
all out-of-pocket costs and expenses incurred or sustained by
<PAGE> 9
-9-
any Person in connection with the preparation of this Second Amendment
(including legal fees).
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be made by their duly authorized officers as a sealed instrument as of the
date first set forth at the beginning of this Second Amendment.
POWER TEST REALTY COMPANY
LIMITED PARTNERSHIP
By: Getty Properties Corp., its
General Partner
By: /s/ John J. Fitteron
-------------------------------
Name: John J. Fitteron
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK, successor in
interest to Fleet Bank of Massachusetts,
N.A.
By:
-------------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be made by their duly authorized officers as a sealed instrument as of the
date first set forth at the beginning of this Second Amendment.
POWER TEST REALTY COMPANY
LIMITED PARTNERSHIP
By: Getty Properties Corp., its
General Partner
By:
---------------------------------
Name: John J. Fitteron
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK, successor in
interest to Fleet Bank of Massachusetts,
N.A.
By: /s/ Michael A. Palmer
--------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
EXHIBIT 10.5
THREE PARTY LEASE AGREEMENT
This THREE PARTY LEASE AGREEMENT made this 18th day of April, 1997, among
GETTY REALTY CORP., a Delaware corporation and successor by name change to Getty
Petroleum Corp., having a principal place of business at 125 Jericho Turnpike,
Jericho, New York 11753 ("Realty" or "Lessee"), LEEMILT'S PETROLEUM, INC. a New
York corporation having a principal place of business at 125 Jericho Turnpike,
Jericho, New York 11753 ("Leemilt's" or "Lessor") and FLEET NATIONAL BANK, a
national banking association having a principal place of business at One Federal
Street, Boston, Massachusetts 02110 (the "Bank" or "Fee Mortgagee").
WITNESSETH:
WHEREAS, it is an express condition precedent to the Bank's and Borrower's
agreement to enter into that certain First Amendment to Amended and Restated
Loan Agreement of even date herewith (the "First Amendment", together with the
Amended and Restated Loan Agreement between the Bank and Leemilt's dated as of
October 27, 1995, as such may be further amended, the "Loan Agreement") that
Realty and Leemilt's shall agree to abide by the following provisions in the
performance of its duties and obligations as Lessee and Lessor, respectively,
under that certain Lease Agreement with respect to the Stations dated as of
February 1, 1985 (the "Lease") notwithstanding anything under the Lease to the
contrary;
WHEREAS, in order to induce the Bank to enter into the First Amendment,
Realty and the Borrower have agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of these premises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Realty and Leemilt's agree with the Bank as follows:
1. The General Covenants and Conditions of Lease (the "Lease Rider")
attached hereto as Schedule A shall be incorporated by reference herein into the
Lease and shall become and is a part of the Lease. In the event of any
inconsistency or conflict between the Lease and the Lease Rider, the terms and
conditions of the Lease Rider shall govern.
<PAGE> 2
-2-
2. The Lease is hereby amended as follows:
2.1. All references in the Lease to "Premises" shall be deemed to
be references to "Demised Premises".
2.2. All references in the Lease to "Landlord" shall be deemed to
be references to "Lessor".
2.3. All references in the Lease to "Tenant" shall be deemed to be
references to "Lessee".
2.4. Paragraph 2 of the Lease is hereby deleted in its entirety and
the following is substituted in place thereof: "The term of
the Lease is set forth in Section 1.03 of the Lease Rider."
2.5. Paragraph 3 of the Lease is hereby amended by adding the
following sentence at the end of such paragraph:
"The fixed annual rent payable during the Demised Term in
monthly installments on the first day of each month for each
of the Demised Premises is set forth on Schedule B attached
hereto and made a part hereof."
2.6. The second and third paragraphs of Paragraph 6 of the Lease
are hereby deleted in their entirety.
2.7. Paragraph 8 of the Lease is hereby deleted in its entirety.
2.8. In Paragraph 9 of the Lease, the word "Landlord" is deleted
and the word "Lessee" is substituted in place thereof.
2.9. Paragraphs 10, 12, 13 and 14 of the Lease are hereby deleted
in their entirety.
3. All capitalized terms not defined herein shall have the meanings
ascribed to them in the Lease Rider. All section references herein shall refer
to the Lease Rider unless the context clearly indicates to the contrary.
<PAGE> 3
-3-
4. All installments of rent shall be paid when due notwithstanding the ten
day grace period provided for in Section 2.04 of the Lease Rider.
5. Lessee shall provide notice of contests of taxes or payments to the
Lessor at the same time that Lessor is required to furnish such information
pursuant to the Fee Mortgage. Lessee agrees that any bond which it is required
to furnish to the Lessor as security for the contest of taxes or charges shall
be satisfactory to the Fee Mortgagee as well as to the Lessor.
6. Lessee agrees and understands that the Fee Mortgagee shall not be
subject to any liability for the payment of any costs or expenses in connection
with proceedings brought by the Lessee to contest any Tax and Lessee shall
indemnify and save harmless the Fee Mortgagee from any such costs or expenses.
7. Lessee shall, throughout the Demised Term, and at no expense whatsoever
to Lessor, promptly comply or cause compliance, with (i) all terms of any
insurance policies covering or applicable to the Demised Premises or any part or
parts thereof, all requirements of the issuer of any such policies, and all
orders, rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to the
Demised Premises or any part or parts thereof, whether or not such compliance
with any of the foregoing involves repairs or changes that are interior or
exterior, structural, foreseen or unforeseen, ordinary or extraordinary, whether
or not such compliance is required on account of any particular use to which the
Demised Premises, or any part or parts thereof, may be put, and whether or not
any such statute, law, ordinance, requirement, regulation or order be of a kind
now within the contemplation of the parties hereto, and (ii) all provisions of
applicable hazardous waste laws. Lessee shall provide the Lessor and Fee
Mortgagee notice, concurrently with any written notice given to governmental
authorities, of any release of oil or hazardous materials or substances on, upon
or into the Demised Premises which would have a material adverse effect on the
Stations as a whole and to promptly undertake and diligently pursue to
completion appropriate containment and clean-up action in the event of any such
release.
8. Lessee shall have the right to contest given in Section 4.03 of the
Lease Rider provided that non-compliance with any contested law, ordinance,
order, rule, regulation, or requirement shall not constitute a crime or an
offense punishable by fine or imprisonment or risk the imposition of a penalty
against Lessor or any Fee Mortgagee or (during
<PAGE> 4
-4-
the period of contest as therein provided) result in a lien against the Demised
Premises or affect the use of the Demised Premises.
9. Lessee agrees that any counsel retained for actions described in
Section 6.01 of the Lease Rider shall be satisfactory to the Fee Mortgagee as
well as the Lessor.
10. Lessee agrees to abstain from and shall not permit the commission of
waste in or about the Demised Premises, and shall not remove or demolish any
portion of the Demised Premises, or alter the Demised Premises without the prior
written consent of the Lessor and any Fee Mortgagee, if required by the terms of
any Fee Mortgage, provided however, that Lessee shall have the right, at any
time and from time to time to make alterations and additions which (i) shall not
change the character (the addition of car washing facilities or convenience,
food, or specialty stores is expressly allowed) of the Demised Premises if such
changes reduce the fair market value thereof below such value immediately before
the alteration or addition, or impair the usefulness of the Demised Premises,
(ii) are effected in a good and workmanlike manner utilizing new or
reconditioned materials of like quality and grade as those utilized in the
original construction of the Demised Premises, in compliance with all Legal
Requirements and Insurance Requirements, and (iii) are consistent with the
present business of Realty, provided, however, that those Stations reasonably
determined by Realty to be uneconomical for the sale of gasoline may be
subleased to third parties for lawful purposes on terms and conditions typical
in such arm's length subleases. Lessee shall also have the right to remove and
dispose of fixtures or personal property which are included in the definition of
the Demised Premises if said fixtures or personal property have become obsolete
or unfit for use or which are no longer useful in the operation of the building
now or hereafter constituting a portion of the Demised Premises. Lessee agrees
promptly to replace same with other fixtures or personal property, free of
superior title liens or claims, not necessarily of the same character but of at
least equal usefulness and quality, as such fixtures or personal property so
removed or disposed of; except that, if by reason of technological or other
developments in the operation and maintenance of buildings of the general
character of the building constituting a portion of Demised Premises no
replacement of the fixtures or personal property so removed or disposed of is
necessary or desirable in the proper operation or maintenance of said building,
then Lessee shall not be required to replace same. Lessee shall not permit the
Demised Premises to become abandoned, and shall not use the Demised Premises for
any purpose other than those purposes allowed by this Agreement, without the
prior consent of the Lessor and any Fee Mortgagee.
<PAGE> 5
-5-
11. Lessee shall permit the Fee Mortgagee and its authorized
representatives to enter the Demised Premises at all reasonable times during
usual business hours for the purpose of inspecting the same.
12. Lessee agrees to maintain insurance as set forth in Article Ten of the
Lease Rider such that the policies, types and amounts of coverage as well as all
other parameters of the insurance coverage are in such form as Fee Mortgagee may
reasonably require. All such policies maintained by Lessee shall include any Fee
Mortgagee as an insured as its interest may appear and shall be in amounts
sufficient to prevent any Fee Mortgagee from becoming a co-insurer within the
terms of the policies.
13. Lessee agrees that losses covered by the insurance provided for in
clauses (i) through (iii) of paragraph (a) of Section 10.01 of the Lease Rider
shall be adjusted at the cost of Lessee if the loss exceeds 20% of the Initial
Appraised Value (as defined in the Loan Agreement). In the case of a loss,
insurance proceeds shall be paid directly to the Fee Mortgagee to be applied as
provided in the Fee Mortgage.
14. Except as otherwise permitted by the Loan Agreement, Lessee and Lessor
shall not terminate any Lease pursuant to Section 10.03(b) of the Lease Rider
unless the Fee Mortgagee consents in writing.
15. Lessee agrees to give prompt notice to the Fee Mortgagee with respect
to all fires or other perils occurring upon the Demised Premises which result in
a loss which exceeds 20% of the Initial Appraised Value (as defined in the Loan
Agreement).
16. Lessee agrees at Lessor's option that for purposes of the
determination of an event of default in Section 13.01(i) and (ii) of the Lease
Rider there shall be no grace period for the payments described therein.
17. Lessee agrees that for purposes of the determination of an event of
default in Section 13.01(vi) of the Lease Rider the grace period shall be ten
(10) days.
18. Lessee agrees that in the event of a termination, re-entry or
dispossession as described in Section 13.03 of the Lease Rider, at Lessor's
option, all damages (rent, other charges and net proceeds) shall be immediately
due and owing in full.
<PAGE> 6
-6-
19. Leasehold Mortgagees shall have ten (10) days instead of thirty (30)
days to cure defaults pursuant to Section 13.05(b) of the Lease Rider.
20. If any Leasehold Mortgagee diligently engaged in curing a default
pursuant to Section 13.05(c) of the Lease Rider ceases to do so, Lessor may
terminate the Lease without any further notice to any other Leasehold Mortgagee.
21. The notice by a Leasehold Mortgagee called for by the second sentence
of Section 13.05(d) of the Lease Rider shall be accompanied by an instrument in
writing wherein such Leasehold Mortgagee agrees that:
(a) during the period that such Leasehold Mortgagee shall be in possession
of the Demised Premises and so long as it remains in possession and/or during
the pendency of any such foreclosure or other proceedings and until the interest
of Lessee in this Lease shall terminate or such proceeding shall be
discontinued, it will pay or cause to be paid to Lessor all sums from time to
time becoming due hereunder for rent; and
(b) if delivery of possession of the Demised Premises shall be made to
such Leasehold Mortgagee, whether voluntarily or pursuant to any foreclosure or
other proceedings or otherwise, such Leasehold Mortgagee shall, promptly
following such delivery of possession perform all the covenants and agreements
herein contained on Lessee's part to be performed (including, but not limited to
payment of rent) and to the extent that Lessee shall have failed to perform the
same to the date of delivery of possession, as aforesaid, except such covenants
and agreements which cannot with the exercise of due diligence be performed by
such Leasehold Mortgagee. Nothing in this subclause (b) shall be construed to
require such Leasehold Mortgagee to perform any of the Lessee's obligations
hereunder accruing after such Leasehold Mortgagee ceases to be in possession.
22. Any possession of the Demised Premises delivered pursuant to Section
13.06 of the Lease Rider shall be subject to the rights of possession of all
other parties including any Fee Mortgagee.
23. The references to "twenty (20)" and "sixty (60)" days in the last
sentence of Section 13.06 of the Lease Rider are hereby deemed to be "ten (10)"
and "thirty (30)" respectively.
24. The cure rights given to Leasehold Mortgagees pursuant to the first
sentence of Section 13.07 of the Lease Rider shall not extend the
<PAGE> 7
-7-
cure periods of Section 13.06 of the Lease Rider as agreed to in this Agreement.
25. Lessor shall have the right to terminate any sublease if the Lease has
terminated as though the second paragraph of Section 13.07 of the Lease Rider
did not exist.
26. Lessee may sublease the Demised Premises but only if the sublease
entered into is in substantially the same form as the sublease attached to the
Loan Agreement as Exhibit D or Exhibit E, except for leases for uses other than
as gasoline service stations, as indicated on Exhibit D-1 to the Loan Agreement.
Lessee may sublease to third parties those Stations reasonably determined by
Realty to be uneconomical for the sale of gasoline on terms and conditions
typical in such arm's length subleases. Except as otherwise provided for in the
Loan Agreement or agreed to by the Fee Mortgagee, Lessee shall not mortgage,
sell, assign or transfer any leasehold estate created by the Lease.
27. During the Demised Term, Lessee shall continuously operate or use
reasonable efforts to have the sublessee continuously operate the Demised
Premises as a gasoline service station. The Demised Premises shall not be used
for any other purpose except as set forth in paragraph 8 hereof.
28. Except as otherwise provided for in the Loan Agreement, no termination
of the Lease pursuant to Section 28.02 of the Lease Rider shall take place
unless the Fee Mortgagee shall have consented in writing.
29. This Agreement shall be binding upon the successors and assigns of
Realty and Leemilt's and shall inure to the benefit of Leemilt's and the Bank
and their respective successors and assigns.
30. The terms of this Agreement and all rights and obligations of the
parties hereto shall be governed by the laws of the Commonwealth of
Massachusetts. Such terms, rights and obligations may not be changed, modified
or amended except by an agreement in writing signed by the party against whom
enforcement of such change is sought. This Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts, but
all of such counterparts shall together constitute a single instrument.
31. This Agreement shall terminate and be of no further force and effect
on the date of the Lessor's payment in full to the Bank of all amounts owing
under the Loan Agreement and the promissory notes to
<PAGE> 8
-8-
which such Loan Agreement relates, except for those obligations of the Lessee
and Lessor and provisions of this Agreement which by their express terms survive
repayment of such amounts, and provided, however, that the obligations and
liabilities of Lessee and Lessor under this Agreement shall be reinstated with
full force and effect if at any time on or after such repayment date all or any
portion of the repayment amounts paid to the Bank is voided or rescinded or must
otherwise be returned by the Bank to the Lessor upon the Lessor's insolvency,
bankruptcy or reorganization or otherwise, all as though such repayment had not
been made.
IN WITNESS WHEREOF, this Three Party Lease Agreement has been duly
executed as an instrument under seal as of the date first above written.
LEEMILT'S PETROLEUM, INC.
By: /s/ John J. Fitteron
-------------------------------
Name: JOHN J. FITTERON
Title: Senior Vice President,
Treasurer and
Chief Financial Officer
GETTY REALTY CORP.
By: /s/ Leo Liebowitz
-------------------------------
Name: LEO LIEBOWITZ
Title: President and
Chief Executive Officer
FLEET NATIONAL BANK
By:
-------------------------------
Name:
-----------------------------
Title: Vice President
<PAGE> 9
-8-
which such Loan Agreement relates, except for those obligations of the Lessee
and Lessor and provisions of this Agreement which by their express terms survive
repayment of such amounts, and provided, however, that the obligations and
liabilities of Lessee and Lessor under this Agreement shall be reinstated with
full force and effect if at any time on or after such repayment date all or any
portion of the repayment amounts paid to the Bank is voided or rescinded or must
otherwise be returned by the Bank to the Lessor upon the Lessor's insolvency,
bankruptcy or reorganization or otherwise, all as though such repayment had not
been made.
IN WITNESS WHEREOF, this Three Party Lease Agreement has been duly
executed as an instrument under seal as of the date first above written.
LEEMILT'S PETROLEUM, INC.
By:
-------------------------------
Name:
------------------------------
Title:
------------------------------
GETTY REALTY CORP.
By:
-------------------------------
Name:
------------------------------
Title:
------------------------------
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
-------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 10
LEASE RIDER
SCHEDULE A
General Covenants and Conditions of Lease
ARTICLE ONE
Lease Proper: Demised Premises: Lease Term
SECTION 1.01. These General Covenants and Conditions of Lease are
incorporated by reference and are a part of the Lease attached hereto between
Leemilt's Petroleum, Inc. (herein called "Lessor") and Getty Realty Corp.
(herein called "Lessee"). In these General Covenants and Conditions of Lease
said Lease is referred to as the "Lease Proper" and the Lease Proper and these
General Covenants and Conditions of Lease are together referred to herein as
"this Lease".
SECTION 1.02. The Demised Premises are leased subject to existing
tenancies and to all existing liens, encumbrances, covenants, restrictions,
easements, agreements and reservations, if any, any state of facts an accurate
survey might show, and zoning rules, restrictions and regulations now in effect
or hereafter adopted by any governmental authority having jurisdiction which
relate to the Demised Premises. This Lease and the leasehold estate created by
this Lease are subject to the lien of all mortgages placed by Lessor at any time
and from time to time upon the fee title to the Demised Premises, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Any such mortgages which are at any time in effect are herein called "Fee
Mortgages" and the holders thereof "Fee Mortgagees".
SECTION 1.03. Unless this Lease shall sooner end and terminate as
hereinafter provided, this Lease shall consist of an Interim Term and an Initial
Term (as such terms are defined below); said Interim Term and Initial Term are
herein collectively called the "Demised Term". As used herein, the term "Interim
Term" shall mean a period which commences on the date Lessor shall acquire the
Demised Premises through payment of the purchase price and acceptance of
delivery of a deed therefor and continues until, but not including, the first
day of the first month thereafter, provided, however, that if such date of
acquisition shall be the first day of a month there shall be no Interim Term. As
used herein, the term "Initial Term" shall mean period which commences on the
first day after the Interim Term or, if there is no Interim Term, on the date
hereof and, for purposes of the Three Party Lease Agreement among Lessor, Lessee
and Fleet National Bank (the "Bank") of even date herewith, continues until the
earlier to occur of (i) the fifteenth anniversary of the date hereof or (ii) the
date of the Lessor's payment in full to the Bank of all amounts owing to the
Bank under that certain Amended and Restated Loan
<PAGE> 11
-2-
Agreement dated as of October 27, 1995, as amended by that certain First
Amendment to Amended and Restated Loan Agreement dated as of April 4, 1997, and
as further amended, restated or supplemented from time to time (the "Loan
Agreement") and the promissory notes to which such Loan Agreement relates,
except for those obligations of the Lessee and Lessor and provisions of this
Lease which by their express terms survive repayment of such amounts, and
provided, however, that the obligations and liabilities of Lessee and Lessor
under this Lease shall be reinstated with full force and effect if at any time
on or after such repayment date all or any portion of the repayment amounts paid
to the Bank is voided or rescinded or must otherwise be returned by the Bank to
the Lessor upon the Lessor's insolvency, bankruptcy or reorganization or
otherwise, all as though such repayment had not been made.
ARTICLE TWO
Rent During Demised Term
SECTION 2.01. Lessee covenants and agrees to pay to Lessor promptly
when due without notice or demand and without deduction or offset of any amount
for any reason whatsoever as rent for the Demised Premises during the Demised
Term the amounts specified in the Lease Proper. If any rent date shall fall on a
Saturday, Sunday or holiday the rental payment will be made on the next
succeeding business day.
SECTION 2.02. All amounts payable under Section 2.01 of this Article
Two, as well as all other amounts payable by Lessee to Lessor under the terms of
this Lease, shall be payable in lawful money of the United States which shall be
legal tender, each payment of fixed rent to be paid to Lessor at its address set
forth in the Lease Proper, or at such other place as Lessor shall from time to
time designate by notice to Lessee.
SECTION 2.03. It is intended that the rent provided for in the Lease
Proper shall be absolutely net to Lessor throughout the Demised Term, free of
any taxes (except as provided in Section 3.07) costs, expenses, liabilities,
charges or other deductions whatsoever with respect to the Demised Premises
and/or the ownership, leasing, operation, maintenance, repair, rebuilding, use
or occupation thereof, or with respect to any interest of Lessor therein; it
being the intention of the parties hereto that by the execution of this Lease,
Lessee shall assume with respect to the Demised Premises every obligation
relating thereto which the ownership thereof would entail.
SECTION 2.04. All instalments of rent which shall not be paid within
ten days after the same shall have become due and payable shall bear interest at
2% above the Prime Rate (as defined below), but in no event more then the
maximum legal rate of the jurisdiction in which the Demised Premises are located
(the Involuntary Rate"), from the dates that the same
<PAGE> 12
become due and payable until paid, whether or not demand be made therefor. As
used herein, the term "Prime Rate" shall mean the prime commercial lending rate
from time to time as announced by Fleet National Bank at its principal office in
Boston, Massachusetts (any chance in said prime rate shall effect an adjustment
of interest payable as of the day of such change) to be computed on an
actual/360-day basis (i.e., interest for each day during which any amount as
outstanding shall be computed at the aforesaid rate divided by 360), provided
however, that if said prime commercial lending rate is unavailable from Fleet
National Bank, the comparable prime or base rate of another bank selected by
Lessor shall be substituted therefor, and if such comparable prime or base rate
is not available, the substitute rate shall be any rate reasonably selected by
Lessor.
ARTICLE THREE
Expenses, Taxes and Other Charges and Obligations
SECTION 3.01. Lessee agrees that it will pay and discharge, as
additional rent, punctually as and when the same shall become due and payable,
each and every cost and expense of every kind and nature whatsoever, for the
payment of which Lessor is, or shall or may be or become, liable by reason of
any rights or interest of Lessor in or under this Lease, or by reason of or in
any manner connected with or arising out of the operation, maintenance,
alteration, repair, rebuilding, use or occupancy of the Demised Premises, or for
any other reason whether similar or dissimilar to the foregoing, foreseen or
unforeseen, connected with or arising out of the Demised Premises or this Lease.
Subject to the provisions of Section 3.04 hereof, Lessee further agrees that it
will pay and discharge, as additional rent during the period in which the same
shall be payable without penalty, all real estate taxes, taxes upon or measured
by rents, personal property taxes, water charges, sewer charges, assessments
(including, but not limited to, assessments for public improvements or benefits)
and all other governmental taxes, impositions and charges of every kind and
nature whatsoever, whether or not now customary or within the contemplation of
the parties hereto and regardless of whether the same shall be extraordinary or
ordinary, general or special, unforeseen or foreseen (each such tax, water
charge, sewer charge, assessment and other governmental imposition and charge
which Lessee is obligated to pay hereunder being herein sometimes termed a
"Tax"), which, at any time during the Demised Term shall be or become due and
payable by Lessor and which shall be levied, assessed or imposed:
(i) upon or with respect to, or shall be or become liens upon, the
Demised Premises or any portion thereof or any interest of Lessor therein
or under this Lease; or
<PAGE> 13
(ii) upon or with respect to Lessor by reason of any actual or
asserted engagement by Lessor, directly or indirectly, in any business,
occupation or other activity in connection with the Demised Premises or
any portion thereof; or
(iii) upon or against, or which shall be measured by, or shall be or
become liens upon, any rents or rental income, as such, payable to or on
behalf of Lessor, in connection with the Demised Premises or any portion
thereof or any interest of Lessor therein; or
(iv) upon or with respect to the ownership, possession, leasing,
operation, management, maintenance, alteration, repair, rebuilding, use or
occupancy of the Demised Premises or any portion thereof; or
(v) upon this transaction or any document to which Lessee is a party
creating or transferring an interest or an estate in the Demised Premises;
or
(vi) upon or against Lessor or any interest of Lessor in the Demised
Premises, in any manner and for any reason whether similar or dissimilar
to the foregoing;
under or by virtue of any present or future law, statute, ordinance, regulation
or other requirement of any governmental authority whatsoever, whether federal,
state, county, city, municipal or otherwise, it being the intention of the
parties hereto that, insofar as the same may lawfully be done, Lessor shall be
free from all such costs and expenses, and all the Taxes, and that this Lease
shall yield to Lessor not less than the rent reserved hereunder throughout the
Demised Term.
SECTION 3.02. If by law any assessment for public improvement with
respect to the Demised Premises Is payable, or may at the option of the taxpayer
be paid, in instalments, Lessee may, whether or not Interest shall accrue on the
unpaid balance thereof, pay the same, and any accrued interest or any unpaid
balance thereof, in instalments as each instalment becomes due and payable, but
in any event before any fine, penalty, interest or cost may be added thereto for
non-payment of any instalment or interest; provided, however, that Lessee shall
not be required to pay any such instalment which becomes due and payable after
the expiration of the Demised Term.
Upon the expiration or earlier termination of this Lease (except for
a termination pursuant to the provisions of Article Thirteen hereof), Taxes and
other charges which shall
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be levied, assessed or become due upon the Demised Premises or any part thereof
shall be prorated to the date of such expiration or earlier termination.
SECTION 3.03. Lessee covenants to furnish to Lessor, promptly upon
request, official receipts of the appropriate taxing authorities evidencing the
payment of Taxes on the Demised Premises.
SECTION 3.04. Notwithstanding anything to the contrary herein
contained, if Lessee deems any Tax relating to the Demised Premises excessive or
illegal, Lessee may defer payment thereof so long as the validity or the amount
thereof is contested by Lessee with diligence and in good faith; provided
however, that Lessee, upon request by Lessor, shall furnish to Lessor a bond in
form, and issued by a surety company, reasonably satisfactory to Lessor, in an
amount equal to the amount of the Tax so contested, which bond shall guarantee
the payment thereof with interest and penalties thereon; and provided further,
that if at any time payment of the whole of such Tax shall become necessary to
prevent the delivery of a tax deed conveying the Demised Premises or
Improvements, or any portion thereof, because of non-payment, then Lessee shall
pay the same in sufficient time to prevent the delivery of such tax deed.
SECTION 3.05. Any contest as to the validity or amount of any Tax,
whether before or after payment, may be made by Lessee, in the name of Lessor or
of Lessee, or both, as Lessee shall determine, and Lessor agrees that it will,
at Lessee's expense, cooperate with Lessee in any such contest to such extent as
Lessee may reasonably request. It is understood, however, that Lessor shall not
be subject to any liability for the payment of any costs or expenses in
connection with any such proceeding brought by Lessee, and Lessee covenants to
pay, and to indemnify and save harmless Lessor from, any such costs or expenses.
Lessee shall be entitled to any refund of any such Tax and penalties or interest
thereon which have been paid by Lessee or which have been paid by Lessor and
reimbursed to Lessor by Lessee.
SECTION 3.06. The certificate, advice or bill of the appropriate
official designated by law to make or issue the same or to receive payment of
any such Tax, of the non-payment of any such Tax, shall be prima facie evidence
that such Tax was due and unpaid at the time of the making or issuance of such
certificate, advice or bill.
SECTION 3.07. It is expressly understood and agreed that Lessee
shall not be required to pay, or reimburse Lessor
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<PAGE> 15
for (i) any federal capital levy, franchise tax, revenue tax, income tax or
profits tax of Lessor, or any such tax imposed after the date hereof, by the
state in which the Demised Premises are located, or (ii) any estate,
inheritance, devolution, succession, transfer, stamp, legacy or gift tax which
may be imposed upon or with respect to any transfer (other than stamp taxes in
connection with a conveyance by Lessor to Lessee) of Lessor's interest in the
Demised Premises.
ARTICLE FOUR
Compliance with Laws, Etc.
SECTION 4.01. Lessee agrees that it will not use the Demised
Premises, nor shall it suffer or permit the same to be used, for any unlawful
purpose.
SECTION 4.02. Lessee shall, throughout the Demised Term, and at no
expense whatsoever to Lessor, promptly comply or cause compliance, with all laws
and ordinances and the orders, rules, regulations and requirements of duly
constituted public authorities which may be applicable to the Demised Premises.
Lessee accepts the Demised Premises in the actual condition in which the same
are as of the date of this Lease, and assumes all risks, if any, resulting from
any present or future latent or patent defects therein or from the failure of
the Demised Premises to comply with all legal requirements applicable thereto,
and Lessee acknowledges that Lessor has made no representations as to the
condition or manner of construction of the Improvements on the Land. Lessee
further agrees that it will, at its own cost and expense, fully and faithfully
perform and observe all requirements and conditions of all instruments recorded
at the date of the commencement of the Demised Term and in any instrument
recorded thereafter with with the consent of Lessee, insofar as the same shall
affect or be applicable to the Demised Premises or any portion thereof or any
easement appurtenant thereto and also insofar as the same shall impose any
obligation upon Lessor as owner of the Demised Premises.
SECTION 4.03. Lessee shall have the right to contest by appropriate
legal proceedings, without cost or expense to Lessor, the validity of any law,
ordinance, order, rule, regulation or requirement of the nature herein referred
to and to postpone compliance with the same, provided such contest shall be
promptly and diligently prosecuted by and at the expense of Lessee, that Lessor
shall not thereby suffer any civil, or be subjected to any criminal, penalties
or sanctions, and provided further, that, if requested so to do by Lessor,
Lessee shall first furnish to Lessor a bond, in form and
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<PAGE> 16
amount, and issued by a surety company reasonably satisfactory to Lessor,
guaranteeing to Lessor compliance by Lessee with such law, ordinance, order,
rule, regulation or requirement, and indemnify in a Lessor against any and all
liability, loss and damage which Lessor may sustain by reason of Lessee's
failure or delay in complying therewith. Lessor shall have the right, but shall
be under no obligation, to contest by appropriate legal proceedings, at Lessor's
expense, any such law, ordinance, rule, regulation or requirement.
SECTION 4.04. Except to the extent otherwise provided in Sections
10.03 and 11.01 hereof, this Lease shall not terminate, nor shall Lessee be
entitled to any abatement of rent or reduction thereof, nor shall the respective
obligations of Lessor and Lessee be otherwise affected, by reason of damage to
or destruction of all or any part of the Demised Premises from whatever cause,
the taking of the Demised Premises or any portion thereof, by expropriation or
otherwise, the lawful prohibition of Lessee's use of the Demised Premises, the
interference with such use by any private person or corporation, or by reason of
any eviction by paramount title, or for any other cause whether similar or
dissimilar to the foregoing, any present or future law to the contrary
notwithstanding, it being the intention of the parties hereto that the rent and
additional rent and charges payable by Lessee shall continue to be payable in
all events unless the obligation to pay the same shall be terminated pursuant to
the express provisions of this Lease.
SECTION 4.05. Lessee is fully familiar with the state of the title
of the Demised Premises and accepts the same subject to all matters and
conditions of the type enumerated in this Lease. Lessee shall, at Lessee's
expense, defend Lessor's title to the Demised Premises and Lessee's right to
possession of the Demised Premised hereunder. Lessor will join in any such
proceeding insofar as the same may be required to permit the successful defense
thereof and Lessee will reimburse Lessor for the expense of the proceeding,
including the legal expenses of Lessor.
ARTICLE FIVE
Permits, Licenses, Etc.
SECTION 5.01. Lessee shall at its sole cost and expense procure or
cause to be procured any and all necessary permits, licenses or other
authorizations required for the lawful and proper use, occupation, operation and
management of the Demised Premises, including but not limited to, the use as a
gasoline service station, and to permit the storage, han-
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<PAGE> 17
dling, advertising and sale of motor fuels, lubricants, other petroleum products
and automobile accessories and for any and all business usually conducted in
connection with gasoline service stations. Lessee expressly agrees that Lessor
is not, nor shall it be, required to furnish to Lessee or any other occupant of
the Demised Premises, during the Demised Term, any water, sewer, gas, heat,
electricity, light, power or any other facilities, equipment, labor, materials
or services of any kind whatsoever.
ARTICLE SIX
Indemnification and Non-Liability of Lessor
SECTION 6.01. Lessee covenants and agrees, it its sole cost and
expense, to indemnify and save harmless Lessor against and from any and all
claims by or on behalf of any person, firm, corporation or governmental
authority ("Person") arising from the occupation, operation, maintenance,
alteration, repair, use, possession, conduct or management of the Demised
Premises during the Demised Term, and further to indemnify and save Lessor
harmless against and from any and all claims arising from any condition of any
Improvement, or of any vaults, passageways, or spaces therein or appurtenant
thereto, or arising from any breach or default on the part of Lessee in the
performance of any covenant or agreement on the part of Lessee to be performed,
pursuant to the terms of this Lease, or arising from any act or negligence of
Lessee or Lessor, or any of their respective agents, contractors, servants,
employees or licensees, or arising from any accident, injury or damage
whatsoever caused to any person, occurring during the Demised Term, in or about
the Demised Premises (including any portion thereof which has been made the
subject of an easement pursuant to Section 20.02 hereof) or upon or under the
sidewalks and the land adjacent thereto, and from and against all costs,
reasonable counsel fees, expense and liabilities incurred in or about any such
claim, action or proceeding brought thereon; and in case any action or
proceeding be brought against Lessor by reason of any such claim, Lessee upon
notice from Lessor covenants to resist or defend such action or proceeding by
counsel satisfactory to Lessor, unless such action or proceeding is resisted or
defended by counsel for any carrier of public liability insurance referred to in
Section 10.01 hereof as authorized by the provisions of any policy of public
liability insurance maintained pursuant to said Section 10.01.
SECTION 6.02. Lessee covenants and agrees to pay, and to indemnify
Lessor against, all costs and charges, including reasonable counsel fees,
lawfully and reasonably incurred in obtaining possession of the Demised Premises
after default of Lessee or upon expiration or earlier termination of the
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<PAGE> 18
Demised Term, or in enforcing any covenant or agreement of Lessee herein
contained.
SECTION 6.03. Lessee further covenants and agrees that Lessor shall
not be responsible or liable to Lessee, or any Person, claiming by, through or
under Lessee for, or by reason, of any defect in any Improvement or part
thereof, or for any failure or defect of water, heat, electric light or power
supply, or of any apparatus or appliance in connection therewith, or from any
injury or loss or damage to person or property resulting therefrom, and Lessor
shall not be responsible or liable to Lessee, or any Person, claiming by,
through or under Lessee, for any injury, loss or damage to any Person or to the
Demised Premises or to any property of Lessee, or of any other Person, contained
in or upon the Demised Premises, caused by or arising or resulting from any
cause whatsoever.
ARTICLE SEVEN
Maintenance and Repairs, Covenant Against Waste
and Right of Inspection
SECTION 7.01. Lessee shall, throughout the Demised Term, at no
expense whatsoever to Lessor, take good care or cause good care to be taken of
the Demised Premises and, subject to the provisions of Article Ten hereof, shall
promptly make or cause to be made all repairs so as to keep the Improvements in
good and lawful order and condition, wear and tear from reasonable use excepted.
When used in this Article, the term "repairs" as applied to building equipment
shall include replacements, restoration and/or renewals when necessary. The
provisions and conditions of Article Nine applicable to changes or alterations
shall similarly apply to repairs required to be done by Lessee under this
Article.
SECTION 7.02. Lessee shall permit Lessor and the authorized
representatives of Lessor to enter the Demised Premises at all reasonable times
during usual business hours for the purpose of inspecting the same.
ARTICLE EIGHT
Liens
SECTION 8.01. Lessee shall not suffer or permit any mechanic's,
laborer's or materialman's liens to stand against the Demised Premises or any
part thereof, or against the interest of Lessee in the Demised Premises by
reason of any work, labor, services or materials done for, or supplied to, or
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<PAGE> 19
claimed to have been done for, or supplied to, Lessor's grantor, Lessee or
anyone holding the Demised Premises or any part thereof through or under Lessee.
If any such lien shall at any time be filed against the Demised Premises, or any
part thereof, or against the interest of Lessee therein, Lessee shall take such
action as may be necessary to discharge such lien of record within thirty (30)
days after the date of filing the same.
ARTICLE NINE
Alterations
SECTION 9.01. Lessee may move, remove, alter or add to any building,
structure, tank, curbing, pavement, driveway, machinery and other equipment now
or hereafter placed on the Demised Premises and may construct, build and place
upon the Demised Premises such buildings, structures, tanks, curbings, pavement,
driveways, machinery and other equipment as shall in its opinion be necessary or
desirable to use and operate the Demised Premises and may perform any and all
acts necessary to the conduct of its business, provided that such work and acts
do not diminish the aggregate fair market value of the Improvements. Lessee
shall promptly pay and discharge all costs, expenses, damages and other
liabilities which may arise in connection with or by reason of such work.
SECTION 9.02. All alterations, replacements, and additions made by
Lessee on the Demised Premises shall be and become part of the Improvements and
belong to Lessor.
SECTION 9.03. All material salvaged in connection with any work
which Lessee is permitted to do hereunder shall belong to Lessee.
ARTICLE TEN
Insurance and Damage
Section 10.01. (a) Without limiting any other obligations hereunder,
Lessee shall at all times maintain at its expense the following insurance
covering the Improvements or activities on or about the Land with insurance
companies which have received a financial rating of at least A+-14 from A.M.
Best Company and which are duly licensed to do business in the state in which
the Improvements are located:
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(i) All-risk coverage written on a policy form equivalent to
Insurance Service Organization special building form FOO13 (ED-l0/79).
(ii) Public liability insurance covering all activities in or about
the Demised Premises or adjoining streets, sidewalks and passageways in
amounts not less than $5,000,000 combined single limit bodily injury
property damage coverage, such insurance to include blanket contractual
liability coverage for liabilities assumed by Lessee under this Lease,
including specifically those set forth in Section 6.01 hereof.
(iii) Such other insurance as any Fee Mortgagee may reasonably
require from time to time.
All of the above insurance shall be written subject to terms and conditions, and
by companies, reasonably satisfactory to Lessor and any Fee Mortgagee.
(b) Policies required in clauses (i) through (iii) of paragraph (a)
above shall include Lessor, Lessee or any Fee Mortgagee as insureds as their
interests may appear and shall be in amounts sufficient to prevent Lessor or
Lessee from becoming a co-insurer within the terms of the policy(ies). Each
policy shall provide that losses shall be adjusted and paid as hereinafter
provided. Each policy shall further provide that, as to the interest of Lessor,
coverage shall not be invalidated or adversely affected by an act or omission of
Lessor, Lessee, any Fee Mortgagee, any Leasehold Mortgagee or their respective
employees or agents or any occupant of the Demised Premises, which might
otherwise result in forfeiture.
(c) Policies required in clause (i) of paragraph (a) above shall
provide for full repair and replacement coverage without allowance for
depreciation.
(d) Policies required in clause (ii) of paragraph (a) above shall
include Lessor, Lessee and any Fee Mortgagee as insureds, shall be primary and
without any right of contribution as to any other insurance carried by or for
Lessor and shall be endorsed to state that all terms and conditions except for
limits of liability shall operate in the same manner as if they were a separate
policy covering each insured.
(e) Policies required in clauses (i) through (iii) of paragraph (a)
above shall provide that they may not be can-
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celled or materially changed so as adversely to affect the protection of Lessor
and any Fee Mortgagee until sixty (60) days after Lessor and any Fee Mortgagee
shall have received written notice of intent so to cancel or materially change
the policy. Except for public liability insurance policies, each policy shall
provide that the insurer(s) waive any right of subrogation against Lessor and
any Fee Mortgagee, and their respective agents or employees.
(f) Lessee shall pay the premium on each policy when due and shall
furnish Lessor, upon request, with satisfactory evidence of such payment. Upon
request of Lessor, Lessee shall furnish evidence of all insurance required
hereunder on such forms as may be approved from time to time by Lessor.
SECTION 10.02. Losses covered by the insurance provided for in
clauses (i) through (iii) of paragraph (a) of Section 10.01 hereof shall be
adjusted with the carriers thereof by and at the cost of Lessee.
SECTION 10.03. If the Improvements shall be damaged or destroyed by
fire or any other peril whatsoever Lessee shall restore the Demised Premises or
shall cause the same to be restored to such extent that, upon the completion of
such restoration work, the value of the Demised Premises as so restored shall at
least be substantially equal to the value thereof immediately prior to such
damage or destruction, irrespective of the availability or sufficiency of any
fire or other insurance proceeds payable with respect thereto. Lessee's
obligations hereunder are subject to the following further understandings and
agreements:
(a) All insurance moneys, if any, paid to Lessor on account of such
damage or destruction, shall be applied in the following manner:
(i) There shall be paid to Lessee from said insurance moneys
such part thereof as shall equal the cost to Lessee of doing such
temporary work as in Lessee's opinion may be necessary in order to
protect the Demised Premises pending adjustment of the insurance
loss or the restoration of such Demised Premises.
(ii) There shall be paid to Lessee from said insurance moneys
such part thereof as shall equal the cost to Lessee of restoring
such Demised Premises as required above. If said insurance moneys
shall not equal the cost to Lessee of such restoration, Lessee
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shall nevertheless complete the same without expense to Lessor and
all the work undertaken by Lessee in connection with such
restoration shall be free of liens.
(iii) Payments to Lessee pursuant to clause (i) or (ii) of
this paragraph (a) from such insurance moneys shall be made to
Lessee from time to time as the work progresses, in amounts equal to
the cost of labor and material incorporated into and used in such
work plus builders', architects' and engineers' fees and other
charges in connection with such work, upon delivery to Lessor of a
certificate of a responsible officer of Lessee certifying that the
amounts so to be paid to Lessee are payable to Lessee in accordance
with the provisions of this Section 10.03 and that such amounts are
then due and payable by Lessee or have theretofore been paid by
Lessee.
(b) In the event that any of the insurance moneys paid by the
insurance companies to either Lessor or Lessee, with respect to the
Demised Premises, as hereinabove provided, shall remain after the
completion of such restoration, the excess shall be retained by or paid to
Lessee or as it may direct.
If such fire or other casualty occurs during the Demised Term and
Lessee does not desire to restore the Improvements and provided that not less
than 20% of the Improvements shall have been damaged and rendered untenantable,
Lessee may terminate this Lease by giving notice to Lessor of Lessee's intention
so to terminate. Said notice shall be delivered to Lessor at least sixty (60)
days prior to the effective date of such termination specified in said notice
and shall be accompanied by a certificate of an officer of Lessee, to the effect
that the Improvements have been damaged to the extent provided in this paragraph
and that Lessee has determined that the Improvements will not be rebuilt,
replaced or repaired. Said notice of termination shall be deemed to constitute
an agreement by Lessor to sell to Lessee, and by Lessee to purchase from Lessor,
Lessor's interest in the Demised Premises for a sum equal to the Termination
Price (as defined below). On such effective date of termination, Lessor shall
transfer and convey the Demised Premises to Lessee in the manner provided in
Article Twenty-Six hereof. Upon consummation of such purchase by Lessee all
insurance monies paid or payable as a result of such fire at casualty shall be
paid to and/or retained by Lessee. As used herein, the term "Termination Price"
means, as of any time, an amount equal to the value at such time of Lessor's
interest in Total Condemnation or Constructive Total Condemnation as defined in
Section 11.03(a) hereof.
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Subject to the provisions of the preceding paragraph, in the event
of any such damage or destruction by fire or other casualty, the provisions of
this Lease shall be unaffected and Lessee shall remain and continue liable for
the payment of all instalments of rent, additional rent, real estate taxes,
assessments and all other taxes, charges and other impositions required
hereunder to be paid by Lessee, as though no damage or destruction by fire or
other casualty had occurred, until this Lease terminates as provided above or
otherwise in accordance with the terms of this Lease.
SECTION 10.04. Lessee shall be free to obtain any insurance required
by this Article by endorsements on blanket insurance policies, if any.
SECTION 10.05. Lessor and Lessee each agree that it will cooperate
with the other, to such extent as such other party may reasonably require, in
connection with the prosecution or defense of any action or proceeding arising
out of, or for the collection of any insurance moneys that may be due in the
event of, any loss or damage, and that it will execute and deliver to such other
party such instruments as may be required to facilitate the recovery of any
insurance moneys, but the costs and expenses of all such actions and proceedings
shall be paid by Lessee.
SECTION 10.06. Lessee agrees to give prompt notice to Lessor with
respect to all fires or other perils occurring upon the Demised Premises, where
the apparent damage to the Improvements resulting therefrom shall equal or
exceed $20,000.
ARTICLE ELEVEN
Condemnation
SECTION 11.01. If, during the Demised Term, the whole of the Demised
Premises shall be taken or condemned in eminent domain proceedings for any
public or quasi-public use, or if less than the whole is so taken or condemned
with the result that the remainder of the Demised Premises is insufficient to
permit the reconstruction of economically feasible improvements and Lessee so
certifies to Lessor (hereinafter called "Total Condemnation" and "Constructive
Total Condemnation", respectively), the total award made with respect to
Lessor's and Lessee's respective interests in the Demised Premises shall be paid
to Lessor, or if any Fee Mortgage is then in existence to the Fee Mortgagee
holding the Fee Mortgage most senior in lien. In case of a Total Condemnation or
a Constructive Total Condemnation, this Lease shall terminate on
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<PAGE> 24
the date of Constructive Total Condemnation or the date of delivery of Lessee's
certificate referred to above (in the case of Constructive Total Condemnation),
except with respect to obligations and liabilities of Lessee under this Lease,
actual or contingent, which have arisen on or prior to such date.
SECTION 11.02. If, during the Demised Term, a portion of any of the
property comprising the Demised Premises shall be taken or condemned under the
right of eminent domain, and if Lessee does not notify Lessor that the property
remaining is insufficient to permit the reconstruction of economically feasible
improvements in accordance with Section 11.01 above (hereinafter called a
"Partial Condemnation"), then Lessee shall, at Lessee's expense, restore the
Improvements on the property remaining so that they will constitute an
architectural unit of the same general character, value and condition (as nearly
as may be possible in the circumstances) as the previous Improvements and this
Lease will remain in full force and effect with regard to the remaining portion
of such property. In such event the condemnation award shall be apportioned
between Lessor and Lessee in accordance with the value of their respective
interests in the Demised Premises at the time of the vesting of title in such
proceedings.
SECTION 11.03. (a) The value of Lessor's interest in Total
Condemnation or Constructive Total Condemnation shall be the greater of (i) the
appraised value, as of the applicable termination date provided for in Section
11.01 above, of the Demised Premises considered as improved and encumbered by
this Lease, or (ii) the product of the Original Rent Amount multiplied by 4.674.
(b) In Partial Condemnation the value of Lessor's interest for
purposes of this Article Eleven shall equal the value determined in accordance
with paragraph (a) of this Section 11.03, multiplied by a fraction, the
numerator of which shall be the amount of the Land taken and the denominator of
which shall be the amount of the Land originally subject to this Lease.
(c) In each case there shall be added to the value of Lessor's
interest all expenses including reasonable attorneys' fees paid or incurred by
Lessor in or as a result of such condemnation.
(d) The balance of the award shall equal Lessee's interest.
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SECTION 11.04. In the case of any Partial Condemnation, each fixed
rent payment payable thereafter under this Lease shall be reduced in the same
proportion as the area of the Land taken in such taking bears to the area of the
Land originally subject to this Lease.
SECTION 11.05. If, at any time after the date hereof, the whole or
any part of the Demised Premises or of Lessee's interest under this Lease shall
be taken or condemned by any governmental body or officer or other competent
authority for its or their temporary use or occupancy the foregoing provisions
of this Article shall not apply and Lessee shall continue to pay, in the manner
and at the times herein specified, the full amounts of the rent and all
additional rent and other charges payable by Lessee hereunder, and, except only
to the extent that Lessee may be prevented from so doing pursuant to the terms
of the order of the condemning authority, to perform and observe all of the
other terms, covenants, conditions and obligations hereof upon the part of
Lessee to be performed and observed, as though such taking had not occurred. In
the event of any such taking as in this Section 11.05 referred to, Lessee shall
be entitled to receive the entire amount of any award made for such taking,
whether paid by way of damages, rent or otherwise, unless such period of
temporary use or occupancy shall extend beyond the Demised Term in which case
such award shall be apportioned between Lessor and Lessee as of such date of
expiration. Lessee covenants that, upon the termination of any such period of
temporary use or occupancy (whether prior to or subsequent to the termination of
this Lease), it will, at its sole cost and expense, restore the Demised
Premises, as nearly as may be reasonably possible, to the condition in which the
same were immediately prior to such taking. To the extent that Lessor receives,
by way of such apportionment or otherwise, any award or payment to pay or
compensate for the restoration of the Demised Premises, Lessor will pay such sum
to Lessee.
ARTICLE TWELVE
Rights of Other Parties to Perform Covenants
SECTION 12.01. Lessee covenants and agrees that if it shall at any
time fail (a) to pay any expense, Tax, charge or obligation pursuant to the
provisions of Article Three hereof, or (b) to take out, pay for, maintain or
deliver any of the insurance policies provided for in Article Ten hereof, or (c)
to make any other payment or perform any other act which Lessee is obligated to
make or perform under this Lease, then Lessor may but shall not be obligated so
to do, after ten (10) days' notice to Lessee and to any Leasehold Mortgagee (but
without notice in the event of an emergency) and without waiving, or releasing
Lessee from, any obligation of Lessee in this
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Lease contained, pay any such expense, Tax, charge or obligation or effect such
insurance coverage and pay premiums therefor, or make any other payment or
perform any other act which Lessee is obligated to make or perform under this
Lease, in such manner and to such extent as shall be necessary, and, in
exercising any such rights, pay necessary and incidental costs and expenses,
employ counsel and incur and pay reasonable attorneys' fees, provided, however,
that Lessor may not perform any act referred to in clause (c) above which is not
reasonably susceptible of performance within said 10-day period if Lessee shall
have commenced performance of said act within said 10-day period and prosecutes
the same diligently to completion. All sums so paid by Lessor and all necessary
and incidental costs and expenses in connection with the performance of any such
act by Lessor, together with interest thereon at the Involuntary Rate from the
date of the making of such expenditure by Lessor, shall be deemed additional
rent hereunder and, except as otherwise in this Lease expressly provided, shall
be payable to Lessor as additional rent on the next rent payment date, and
Lessee covenants to pay any such sum or sums with interest as aforesaid and
Lessor shall have the same rights and remedies in the event of the nonpayment
thereof by Lessee as in the case of default by Lessee in the payment of the
rent.
SECTION 12.02. At any time when a Leasehold Mortgage shall be in
effect, any Leasehold Mortgagee may make any payment or perform any act required
hereunder to be made or performed by Lessee with the same effect as if made or
performed by Lessee.
SECTION 12.03. Any one or more Fee Mortgagees shall have the right
to cure any default of Lessor. Lessee shall accept such performance by Fee
Mortgagees with the same effect as if the default had been cured by Lessor. Any
Fee Mortgagee or its designee may become the transferee of Lessor's interest in
this Lease, whether by purchase at a foreclosure or assignment in lieu of
foreclosure or otherwise. The foregoing shall not limit the rights of any Fee
Mortgagee under any Non-Disturbance Agreement.
ARTICLE THIRTEEN
Conditional Limitations -- Default Provisions
SECTION 13.01. This Lease and the Demised Term are subject to the
limitation that if, at any time during the Demised Term, any one or more of the
following events (herein called an "event of default") shall occur, that is to
say:
(i) if Lessee shall fail to pay any instalment of the rent provided
for herein, or any part thereof, when
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the same shall become due and payable, and such failure shall continue for
ten (10) days after notice thereof from Lessor to Lessee; or
(ii) if Lessee shall fail to pay any item of additional rent or any
other charge or sum required to be paid by Lessee hereunder, and such
failure shall continue for thirty (30) days after notice thereof from
Lessor to Lessee; or
(iii) if Lessee shall make an assignment for the benefit of its
creditors; or
(iv) if any petition shall be filed against Lessee in any court,
whether or not pursuant to any statute of the United States or of any
State, in any bankruptcy, reorganization, composition, extension,
arrangement or insolvency proceedings, and Lessee shall thereafter be
adjudicated bankrupt, or if such proceedings shall not be dismissed within
ninety (90) days after the institution of the same; or if any such
petition shall be so filed by Lessee or liquidator; or
(v) if, in any proceeding, a receiver, receiver and manager, trustee
or liquidator be appointed for all or any portion of Lessee's property,
and such receiver, receiver and manager, trustee or liquidator shall not
be discharged within ninety (9O) days after the appointment of such
receiver, receiver and manager, trustee or liquidator; or
(vi) if Lessee shall fail to perform or observe any other of its
obligations under this Lease (unless Lessee is then diligently engaged in
the fulfillment thereof) and such failure shall continue for thirty (30)
days after notice thereof from Lessor to Lessee;
then upon the happening of any one or more of the aforementioned events of
default, and the expiration of the period of time prescribed in any such notice,
Lessor shall have the right, then or at any time thereafter, and while such
default or defaults shall continue, to give Lessee written notice of Lessor's
intention to terminate this Lease on a date specified in such notice, which date
shall not be less than ten (10) days after the date of giving of such notice,
and on the date specified in such notice Lessee's right to possession of the
premises shall cease and Lessee shall peaceably and quietly yield to and
surrender to Lessor the Demised Premises and this Lease shall thereupon be
terminated and all of the right, title
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and interest of Lessee hereunder shall wholly cease and expire in the same
manner and with the same force and effect as if the date of expiration of such
ten (10) day period were the date originally specified herein for the expiration
of this Lease and the Demised Term, and Lessee shall then quit and surrender the
Demised Premises to Lessor, but Lessee shall remain liable as hereinafter
provided.
SECTION 13.02. In the event of any termination of this Lease as in
Section 13.01 above provided or as otherwise permitted by law, or if an event of
default shall continue beyond the expiration of any grace period above provided
for, Lessor may enter upon the Demised Premises, and have, repossess and enjoy
the same by summary proceedings, ejectment or otherwise, and in any such event
neither Lessee nor any person claiming through or under Lessee by virtue of any
statute or of an order of any court shall be entitled to possession or to remain
in possession of the Demised Premises but shall forthwith quit and surrender the
Demised Premises. Lessor shall incur no liability to any person for or by reason
of any such entry, repossession or removal of Lessee or any person claiming
through or under Lessee.
SECTION 13.03. In case of any such termination, re-entry or
dispossession by summary proceedings, ejectment or otherwise, Lessee will pay
Lessor all the rent and all other charges required to be paid by Lessee
hereunder up to the time of such termination, re-entry or dispossession; and
thereafter, Lessee shall, until the end of what would have been the Demised Term
of this Lease in the absence of such termination, re-entry or dispossession, and
whether or not the Demised Premises shall have been relet, be liable to Lessor
for, and shall pay to Lessor, as liquidated and agreed current damages: (i) all
rent which would accrue, additional rent and other charges which would be
payable under this Lease by Lessee in the absence of such termination, re-entry
or dispossession, and all costs (including reasonable attorneys' fees) incurred
by Lessor because of Lessee's default (payable on demand) less (ii) the net
proceeds, if any, of any reletting of the Demised Premises, after deducting from
such proceeds all Lessor's expenses In connection with such reletting
(including, but not limited to, all, dispossession costs, brokerage commissions,
reasonable attorneys' fees and expenses, alteration costs and expenses of
preparation for such reletting). Lessee will pay such current damages on the
days on which the rent would be payable under this lease in the absence of such
termination, re-entry or dispossession, and Lessor shall be entitled to recover
the same from Lessee on each such day.
SECTION 13.04. The right of Lessor to recover from Lessee the
amounts hereinabove provided for shall survive the issuance of any order for
possession or other cancellation or
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termination hereof, and Lessee hereby expressly waives any defense that might be
predicated upon the issuance of such order for possession or other cancellation
or termination hereof. Lessee hereby expressly waives service of any notice of
intention to re-enter that may be required by law. Lessee, for itself and any
and all persons claiming through or under Lessee, including its creditors, upon
the termination of this Lease and of the Demised Term in accordance with the
terms hereof, or in the event of entry of judgment for the recovery of the
possession of the Demised Premises in any action or proceeding, or if Lessor
shall enter the Demised Premises by process of law or otherwise, hereby waives
any right of redemption provided or permitted by any statute, law or decision
now or hereafter in force, and does hereby waive, surrender and give up all
rights or privileges which Lessee may or might have under and by reason of any
present or future law or decision, to redeem the Demised Premises or for a
continuation of this Lease for the term hereby demised after having been
dispossessed or ejected therefrom by process of law, or otherwise. Lessee waives
all right to trial by jury in any summary or other judicial proceedings
hereafter instituted by Lessor against Lessee in respect to the Demised
Premises. The words "re-entry" and "re-enter" as used in this Lease shall not be
construed as limited to their strict legal meaning.
SECTION 13.05. The following provisions shall apply to Leasehold
Mortgages and Leasehold Mortgagees:
(a) Any one or more Leasehold Mortgagees shall have the right to
cure any default of Lessee. Lessor shall accept such performance by
Leasehold Mortgagees with the same effect as if the default had been cured
by Lessee. Any Leasehold Mortgagee or its designee may become the
transferee of Lessee's interest in this Lease, whether by purchase at a
foreclosure or assignment in lieu of foreclosure or otherwise.
(b) If an event of default occurs which is susceptible of being
cured by paying a sum of money without taking any other action, Lessor
shall so notify each Leasehold Mortgagee. Each Leasehold Mortgagee shall
have thirty (30) days after the giving of such notice within which to make
such payment. Lessor shall not have the right to terminate this Lease or
to interfere with the occupancy, use or enjoyment of the Demised Premises
by reason of such event of default if such payment is made within such
period of thirty (30) days.
(c) If an event of default occurs which is not susceptible of being
cured by paying a sum of money without taking any other action but which
is susceptible of being cured by a Leasehold Mortgagee before it obtains
possession of the Demised Premises, Lessor shall so notify
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each Leasehold Mortgagee. Each Leasehold Mortgagee shall have thirty (30)
days after the giving of such notice within which to cure such default.
Lessor shall not have the right to terminate this Lease or to interfere
with the occupancy, use or enjoyment of the Demised Premises by reason of
such default if it is cured within such period of thirty (30) days. If
such default cannot in the exercise of diligence be cured within such
period and any Leasehold Mortgagee commences with diligence to cure such
default within such period, then, so long as any Leasehold Mortgagee is
diligently engaged in curing the default, and after the default is cured,
Lessor shall not have the right to terminate this Lease or to interfere
with the occupancy, use or enjoyment of the Demised Premises by reason of
such default. If any Leasehold Mortgagee so diligently engaged in curing
such default ceases to do so, Lessor shall so notify each other Leasehold
Mortgagee and shall not have the right to terminate this Lease by reason
of such default unless none of such other Leasehold Mortgagees engages in
curing such default during the period of fifteen (15) days following the
giving of such notice.
(d) If any other event of default occurs, Lessor shall take no
action to terminate this Lease without first notifying each Leasehold
Mortgagee of the event of default and that it has a reasonable time within
which either (i) to obtain possession of the Demised Premises (including
possession by a receiver) and to cure such default after obtaining
possession in the case of a default susceptible of being cured by a
Leasehold Mortgagee after obtaining possession, or (ii) to institute,
prosecute and complete foreclosure proceedings, or otherwise cause
Lessee's interest in this Lease to be transferred with diligence, in the
case of a default not susceptible of being cured by a Leasehold Mortgage
even after it obtains possession. If a Leasehold Mortgagee intends to
proceed in accordance with clause (i) or (ii) of the immediately preceding
sentence, it shall furnish, within thirty (30) days after Lessor gives
notice under such paragraph, notice to Lessor of such Leasehold
Mortgagee's intention to so proceed. However, any Leasehold Mortgagee
which gives the notice described in the immediately preceding sentence may
at any time notify Lessor that it does not intend to acquire or continue
possession or to institute or continue foreclosure proceedings or other
action to cause a transfer of Lessee's interest in this Lease. After the
giving of such notice by such Leasehold Mortgagee, Lessor shall again be
obligated to give notice under the first sentence of this Section 13.05(d)
to each other Leasehold Mortgagee (other than a Leasehold Mortgagee which,
with respect to such default, has theretofore given notice under the
immediately preceding sentence of its ceasing to take action). If no
Leasehold Mortgagee furnishes a notice of its intention to proceed in
accordance with the immediately preced-
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ing sentence within thirty (30) days after the giving of notice pursuant
to the first sentence of this Section 13.05(d), Lessor may exercise any
right it may then have to terminate this Lease or to interfere with the
occupancy, use or enjoyment of the Demised Premises by reason of such
default. If the Leasehold Mortgagee completes the foreclosure proceedings
or otherwise causes a transfer of Lessee's interest in this Lease as
provided in this Section 13.06(d), any event of default not susceptible of
being cured by the transferee shall be deemed to have been waived, but
such waiver shall not abrogate the foreclosure or transfer.
SECTION 13.06. In case of the termination of this Lease by reason of
the happening of any event of default, Lessor shall give prompt notice thereof
to any Leasehold Mortgagee. Lessor shall, on written request of any such
Leasehold Mortgagee, made at any time within forty (40) days after the giving of
such notice by Lessor, enter into a new lease of the Demised Premises with such
Leasehold Mortgagee, or its designee, within twenty (20) days after receipt of
such request, which new lease shall be effective as of the date of such
termination of this Lease for the remainder of the term of this Lease, at the
rent provided for herein, and upon the same terms, covenants, conditions and
agreements as are herein contained; provided that such Leasehold Mortgagee shall
(a) contemporaneously with the delivery of such request pay to Lessor all the
instalments of rent and all items of additional rent and other charges payable
by Lessee hereunder which are then due whether or not Lessor has specified them
as due in any notice to such holder given as provided in this Article; (b) pay
to Lessor at the time of the execution and delivery of said new lease any and
all sums for rent and additional rent and other charges payable by Lessee
hereunder to and and including the date thereof, together with all expenses,
including reasonable attorneys' fees, incurred by Lessor in connection with the
termination of this Lease and with the execution and delivery of such new lease,
less the net amount of all sums received by Lessor from any sublessees in
occupancy of any part or parts of the Demised Premises up to the date of
commencement of such new lease; and (c) on or prior to the execution and
delivery of said new lease, agree in writing that promptly following the
delivery of such new lease, such Leasehold Mortgagee or its designee will
perform or cause to be performed all of the other covenants and agreements
herein contained on Lessee's part to be performed to the extent that Lessee
shall have failed to perform the same to the date of delivery of such new lease
except such covenants and agreements which are not susceptible of performance by
such Leasehold Mortgagee. Nothing herein contained shall be deemed to impose any
obligation on the part of Lessor to deliver physical possession of the Demised
Premises to such Leasehold Mortgagee unless Lessor at the time of the execution
and delivery of such new lease shall have obtained physical possession thereof.
If more than one Lease-
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hold Mortgagee shall make written request upon Lessor for a new lease in
accordance with the provisions of this Section 13.06, then such new lease shall
be entered into pursuant to the request of the Leasehold Mortgagee whose
mortgage shall be junior in lien provided (i) all holders of Leasehold Mortgages
senior in lien thereto shall have been paid all instalments of interest and
amortization of principal then due and owing to such Leasehold Mortgagees plus
all expenses, including reasonable attorneys' fees, incurred by such senior
Leasehold Mortgagees in connection with the termination of this Lease and with
the execution and delivery of such new lease, (ii) the new lessee will assume,
in writing, all of the covenants, agreements and obligations on the part of the
mortgagor under such senior Leasehold Mortgages to be kept, observed and
performed on the part of such mortgagor, subject nevertheless to the terms and
conditions of such senior Leasehold Mortgage (which may contain exculpatory
provisions which shall inure to the benefit of such new lessee), (iii) such new
lease shall contain all of the same provisions and rights in favor of and for
the benefit of Leasehold Mortgagees thereof, as are contained in this Lease,
including but not limited to the right to obtain a new lease in the event of the
termination of said lease, and the right to receive notices of default, and to
cure the same, in the same manner as provided in this Lease and (iv) the holders
of Leasehold Mortgages senior in lien (at no expense to such holders) shall have
received from the respective title insurance companies insuring the respective
Leasehold Mortgages senior in lien assurances satisfactory to such senior
Leasehold Mortgagees that said Leasehold Mortgages senior in lien and any
assignment of rents and other security instruments executed in connection
therewith will continue, with respect to such new lease in the same manner and
order of priority of lien as was in existence with respect to this Lease; and
thereupon the leasehold estate of the new lessee created by such new lease shall
be subject to the lien of the senior Leasehold Mortgages in the same manner and
order of priority of lien as was in existence with respect to this Lease. In the
event not all of the foregoing provisos shall have been satisfied by or with
respect to any such Leasehold Mortgagee junior in lien, the Leasehold Mortgagee
immediately senior in lien to such junior Leasehold Mortgagee shall have
paramount rights to the benefits set forth in this Section 13.06 subject
nevertheless to the provisions hereof respecting any senior Leasehold
Mortgagees. In the event of any dispute as to the respective senior and junior
priorities of any such Leasehold Mortgages, the certification of such priorities
by a title company doing business in the state where the Demised Premises are
located, satisfactory to the Lessor, shall be conclusively binding on all
parties concerned. Lessor's obligation to enter into a new lease with any junior
Leasehold Mortgagee shall be subject to the receipt by Lessor of evidence
reasonably satisfactory to it that the conditions of clauses (i), (ii), and (iv)
above have been satisfied with respect to each holder of a Leasehold Mortgage
senior in lien thereto.
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The right of a Leasehold Mortgagee under this Section 13.06 to
request a new lease may, notwithstanding any limitation of time set forth above
in. this Section, be exercised by the holder of the senior Leasehold Mortgage
within twenty (20) days following the failure of the holder of a junior
Leasehold Mortgage to have exercised such right, but not more than sixty (60)
days after the giving of notice by Lessor of termination of this Lease as in
this Section provided.
SECTION 13.07. Except as provided in Section 13.06 hereof, if the
holder of a Leasehold Mortgage junior in lien to any other Leasehold Mortgage
shall fail or refuse to exercise the rights set forth in this Article Thirteen,
each holder of a Leasehold Mortgage in the inverse order of the seniority of
their respective liens shall have the right to exercise such rights subject to
the provisions of this Lease.
After the termination of this Lease and during the period thereafter
during which any Leasehold Mortgagee shall be entitled to enter into a new lease
of the Demised Premises, Lessor will not terminate any sublease and the rights
of the subtenant thereunder unless such subtenant shall be in default under such
sublease. During such period Lessor shall receive all rent and additional rent
and other payments due from subtenants, including subtenants whose attornment it
shall have agreed to accept, as agent of such Leasehold Mortgagee and shall
deposit such rents and payments in a separate and segregated account in trust
for the Demised Premises, but may withdraw such sums, from time to time, to pay
necessary operating expenses and carrying charges of the Demised Premises; and,
upon the execution and delivery of such new lease, shall account to the lessee
under the said new lease for the balance, if any (after application as
aforesaid) of the rent, additional rents and other payments made under said
subleases, and said lessee shall thereupon assign the rent, additional rents,
and other payments due under said subleases to any Leasehold Mortgagees of the
new lease in the same manner as such rentals and other payments had been
assigned to the Leasehold Mortgagees under this Lease. The collection of rent by
Lessor acting as an agent pursuant to this Section shall not be deemed an
acceptance by Lessor for its own account of the attornment of any subtenant
unless Lessor shall have agreed in writing with such subtenant that its tenancy
shall be continued following the expiration of any period during which a
Leasehold Mortgagee may be granted a new lease in which case such attornment
shall take place upon such expiration but not before.
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ARTICLE FOURTEEN
Cumulative Remedies -- Waiver -- Oral Change
SECTION 14.01. The specified remedies to which Lessor may resort
under the terms of this Lease are cumulative and are not intended to be
exclusive of any other remedies or means of regress to which Lessor may be
lawfully entitled in case of any breach or threatened breach by Lessee of any
provision of this Lease.
SECTION 14.02. The failure of Lessor to insist in any one or more
cases upon the strict performance of any of the terms, covenants, conditions,
provisions or agreements of this Lease or to exercise any option herein
contained shall not be construed as a waiver or a relinquishment for the future
of any such term, covenant, condition, provision, agreement or option. A receipt
and acceptance by Lessor of rent or any other payment, or the acceptance of
performance of anything required by this Lease to be performed, with knowledge
of the breach of any term, covenant, condition, provision or agreement of this
Lease, shall not be deemed a waiver of such breach, nor shall any such
acceptance of rent in a lesser amount than is herein provided for (regardless of
any endorsement on any check, or any statement in any letter accompanying any
payment of rent) operate or be construed either as an accord and satisfaction or
in any manner other than as payment on account of the earliest rent then unpaid
by Lessee, and no waiver by Lessor of any term, covenant, condition, provision
or agreement of this Lease shall be deemed to have been made unless expressed in
writing and signed by Lessor.
SECTION 14.03. In addition to the other remedies in this Lease
provided, Lessor shall be entitled to the restraint by injunction of any
violation or attempted or threatened violation, of any of the terms, covenants,
conditions, provisions or agreements of this Lease.
SECTION 14.04. This Lease shall not be affected by any laws,
ordinances or regulations, whether federal, state, county, city, municipal or
otherwise, which may be enacted or become effective from and after the date of
this Lease affecting or regulating or attempting to affect or regulate the rent
herein reserved or continuing in occupancy Lessee or any sublessees or assignees
of Lessee's interest in the Demised Premises beyond the dates of termination of
their respective leases, or otherwise.
SECTION 14.05. This Lease may not be changed orally, but only by
agreement in writing signed by the party against whom enforcement of the change,
modification or discharge is sought or by its agent.
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ARTICLE FIFTEEN
Quiet Enjoyment
SECTION 15.0l. Lessor covenants that so long as Lesser shall pay the
rent provided for herein and shall keep, observe and perform all of the other
covenants of this Lease, and subject to the provisions of Sections 4.05 and
4.06, Lessee shall and may peaceably and quietly have, hold and enjoy the
Demised Premises for the Demised Term aforesaid free of interference from Lessor
or those claiming through or under Lessor. This covenant shall be construed as
running with the land to and against subsequent owners and successors in
interest, and is not, nor shall it operate or be construed as, a personal
covenant of Lessor, except to the extent of Lessor's interest in the Demised
Premises and only so long as such interest shall continue, and thereafter this
covenant shall be binding only upon such subsequent owners and successors in
interest, to the extent of their respective interests, as and when they shall
acquire the same, and only so long as they shall retain such interest.
ARTICLE SIXTEEN
Surrender of Premises
SECTION 16.01. Except as otherwise provided in this Lease, Lessee
shall, upon the expiration or termination of this Lease for any reason
whatsoever, surrender to Lessor the Demised Premises, together with all
alterations and replacements thereof then on the Demised Premises, in good
order, condition and repair, except for reasonable wear and tear. Title to all
trade fixtures, furniture and equipment (other than building equipment) of
Lessee and its sublessees installed in the Demised Premises during the Demised
Term shall remain in Lessee and in such sublessee, and, upon the expiration or
other termination of this Lease, the same may and, upon demand of Lessor, shall
be removed and any resultant damage to the Demised Premises shall be repaired,
by and at the expense of Lessee.
ARTICLE SEVENTEEN
Assignments, Subletting and Leasehold Mortgages
SECTION 17.01. Lessee shall have the right at any time during the
Demised Term to sublet the Demised Premises or any portion thereof and may, if
there is no default hereunder existing at the time, sell, assign or transfer its
leasehold interest therein, provided that any such sublease, sale, assignment or
transfer shall be subject to this Lease; and
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provided further, that Lessee shall remain liable to Lessor for the performance
of all the terms hereof.
SECTION 17.02. Lessee, without Lessor's consent, may mortgage the
leasehold estate under this Lease under a leasehold mortgage and/or deed of
trust at any time and from time to time, without limitation as to amount and on
any terms Lessee may deem desirable and in connection therewith may assign the
leasehold estate to the holder of such mortgage and/or deed of trust. Any such
mortgage and/or deed of trust at the time in effect, or if more than one such
mortgage and/or deed of trust shall at the time be in effect, is herein called a
"Leasehold Mortgage" and the holder thereof a "Leasehold Mortgagee", provided,
however, that said holder shall have notified Lessor and any Fee Mortgagee in
writing that it is the holder of a mortgage on the leasehold and of the name and
post office address to which all notices, requests, demands, consents,
certificates and other communications hereunder to it may be addressed. Lessor
and Lessee shall not agree between themselves to any cancellation, surrender or
modification of this Lease without the prior written consent of each Leasehold
Mortgagee. Lessor will give to each Leasehold Mortgagee a copy of any notice of
default from Lessor to Lessee hereunder at the time of giving such notice to
Lessee and will give notice of any rejection of this Lease by any trustee in
bankruptcy of Lessee.
SECTION 17.03. Lessee covenants that each sublease shall provide
that:
(a) It shall be subject to this Lease, the rights of Lessor therein,
and any modifications and extensions thereof; and
(b) In the event of termination of this Lease, and provided that
such sublease is in full force and effect, such sublease shall, at
Lessor's election, become a lease of the space and Improvements covered
thereby between the sublessee and Lessor upon all the terms and conditions
set forth in such sublease, including the options to renew the term
thereof; in such event, Lessor shall not be liable to the sublessee for
any defaults theretofore committed by Lessee.
SECTION 17.04. Lessee will deliver to Lessor and the holder of the
Fee Mortgage which is most senior in lien, with reasonable promptness after the
execution and deliver thereof, a copy of subleases of the Demised Premises, and,
with respect to assignments of Lessee's leasehold interest herein a copy of
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the assignment and assumption agreement entered into by assignee.
ARTICLE EIGHTEEN
Entire Agreement
SECTION 18.01. It is expressly understood and agreed by and between
the parties hereto that this Lease sets forth all the promises, agreements,
conditions and understandings between Lessor and Lessee with respect to the
Demised Premises, and that there are no promises, agreements, conditions or
understandings, either oral or written, between them other than are herein set
forth. It is further understood and agreed that no subsequent alteration,
amendment, change or addition to this Lease shall be binding upon Lessor or
Lessee unless reduced to writing and signed by them.
ARTICLE NINETEEN
Excavations on Adjoining Property
SECTION 19.01. If any excavation or other building operation shall
be about to be made or shall be made upon any adjoining premises or streets,
Lessee shall permit any third persons obligated by law to protect the Demised
Premises and their respective representatives, to enter upon the Demises
Premises and shore the foundations and walls thereof and to do any other act or
thing necessary for the safety or preservation of the Demised Premises, subject
to such reasonable conditions, including insurance and indemnities, as Leesee
shall impose upon such third persons.
ARTICLE TWENTY
Space In Areas Used for Highway or Other Public Purposes;
Grants of Easements in Certain Circumstances
SECTION 20.01. Any space or improvement now or hereafter built
projecting beyond the Demised Premises and on any highway or other area devoted
to public use may be occupied and used by Lessee during the Demised Term,
subject only to such laws, rules and regulations as may be imposed by the
appropriate governmental authorities with respect thereto. No revocation of the
license to maintain and use such areas shall in any way affect this Lease or the
amount of the rent or any other charge payable by Lessee hereunder. If any such
license so to maintain and use such areas shall be revoked, then Lessee will, at
its sole cost and expense, do and perform all such
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work as may be necessary to comply with any order revoking the same.
Section 20.02. Lessee is hereby authorized and empowered, for and in
behalf of Lessor, and as the attorney in fact of Lessor to make, execute,
acknowledge and deliver instruments in the form usually used for the purpose in
the state in which the instrument in question is to be effective, granting a
license or easement, with respect to the Demised Premises, to any person, and
the successors and assigns of such person, provided that the license or easement
fulfills the conditions set forth in clauses (vi), (vii) and (viii) and at least
one of the conditions set forth in clauses (i) through (v) below: (i) a license
or easement to lay mains, pipes, sewers, gas and electrical conduits along any
one of the boundaries of the Demised Premises, within a distance of not more
than 10 feet measured from the boundary in question and at a depth of not less
than 3 feet below the surface; (ii) a license or easement to locate telephone or
electrical supply poles, wires and supports along any one of the boundaries of
the Demised Premises, provided that no pole, wire or support shall encroach more
than 10 feet upon the property measured from such boundary; (iii) a license or
easement for one or more of the purposes described in clauses (i) and (ii) where
the encroachment upon the Demised Premises is to the extent of not more than 20
feet, provided that the grantee shall agree in the license or easement that the
grantee will, at the grantee's expense, relocate whatever property or
installation is placed or made on the Demised Premises pursuant to the license
or easement insofar as necessary and whenever required to avoid interference
with the construction or alteration of any building or improvement on the
Demised Premises; (iv) any license or easement which is terminable by Lessor or
Lessee, their respective successors or assigns, on not more than 90 days'
notice; (v) any license or easement which by its terms shall come to an end upon
the expiration, or any earlier termination of this Lease; (vi) any such license
or easement shall contain the agreement of the grantee thereof, at such
grantee's expense (a) to keep and maintain any property or installation which is
placed on the Demised Premises in good and safe repair at all times and in a
condition which complies with all legal requirements, (b) to pay and discharge
any tax of any name or nature imposed on such property or Installation, or the
license or easement, (c) to indemnify and hold Lessor and Lessee harmless for
and in respect of any claims, liabilities or responsibilities of any name or
nature which may be imposed on Lessor or Lessee or upon the Demised Premises by
reason of the granting of the license or easement, the maintenance of the
property or installations thereon or by reason of any other exercise of the
license or easement, and shall provide (d) that upon any default by the grantee
thereof, such license or easement may be terminated by the tenant or owner of
the Demised Premises on 30 days' written notice, and (e) that on any termination
or the expiration of the license or easement, the grantee will, at the
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grantee's expense, remove all property and installations and restore and repair
any damage or defacements of the Demised Premises or the Improvements, in
default whereof Lessor or Lessee or the tenant or owner of the Demised Premises
may do so for the grantee's account; (vii) no such license or easement shall
contain any obligation of any kind or nature whatever binding upon Lessor or
grantor thereof; and (viii) any such license or easement shall recite that the
same is made with the consent and approval of Lessee. Upon the granting of any
such license or easement Lessee shall notify Lessor thereof, shall furnish
Lessor with a duplicate original of the instrument in question and an opinion
from the office of Lessee's counsel to the effect that the license or easements
fulfills the conditions of this Section and is enforceable in accordance with
its terms and, with respect to any license or easement of the type described in
clauses (i), (ii) and (iii) above, the certificate of on authorized
representative of Lessee, to the effect that the granting of such license or
easement does not substantially impair the value or usefulness of the Demised
Premises.
SECTION 20.03. Lessee is hereby authorized and empowered, for and on
behalf of Lessor and as the attorney in fact of Lessor, to execute on Lessor's
behalf a consent or petition for any zoning change relating to the Demised
Premises where the zoning change is required for the purpose of authorizing the
operation of the Demised Premises for any purpose not inconsistent with the
terms of this Lease, or to join in any petition for a release from restrictive
covenants which interfere with the operation or improvement of the Demised
Premises for such purpose.
ARTICLE TWENTY-ONE
Estoppel Certificates
Section 21.01. Lessor and Lessee agree at any time and from time to
time, but not more frequently than twice each calendar year, upon not less than
ten (10) days' prior request by either, to execute, acknowledge and deliver to
the party requesting the same a statement in writing certifying that this Lease
is unmodified and is in full force and effect (or if there have been
modifications that the same is in full force and effect as modified and stating
the modifications), and the dates to which the rent and other charges have been
paid in advance, if any, it being intended that such statement delivered
pursuant to this Article may be relied upon by any prospective purchaser or
mortgagee of the Demised Premises or Lessee's interest in this Lease.
30
<PAGE> 40
ARTICLE TWENTY-TWO
Lessee's Options to Extend Term of Lease
SECTION 22.01. Lessor agrees that, provided no event of default
exists under this Lease at the time when any such option shall be exercised by
Lessee hereunder or at the expiration of the then current term of this Lease,
Lessee shall have the right and option to extend the term of this Lease for five
(5) successive, separate and additional terms of ten (10) years each, after the
expiration of the Demised Term, upon the same terms and conditions as are
contained in this Lease, as then amended or modified, except that, the rental
during such extended terms shall in such event be an amount equal to (x) in the
case of the first extended term, 110% of the Original Rent Amount (as defined in
the Lease Proper), and (y) in the case of each subsequent extended term, 110% of
the rental during the immediately preceding extended term; payable in each case
in equal instalments on the first day of each month during such extended terms,
and except that the number of extended terms permitted hereunder shall be
reduced by one upon each such extension, so that the entire term of this Lease
as so extended shall in no event exceed sixty-five (65) years (excluding any
Interim Term).
Each such extension option shall be exercised by written notice
given by Lessee to Lessor not less than nine (9) months prior to the date of
commencement of the extended term in question, and upon the giving of such
notice, the Demised Term shall thereupon be so extended without further act by
Lessor or Lessee. The failure of Lessee to exercise any option granted by this
Article Twenty-Two to extend the term of this Lease, shall automatically render
null and void any subsequent option herein granted to Lessee to extend the term
of this Lease.
ARTICLE TWENTY-THREE
Notices
Section 23.01. All notices, demands and requests by either party to
the other shall be in writing. All notices, demands and requests by Lessor to
Lessee shall be sent by United States registered or certified mail, postage
prepaid, addressed to Lessee at Its address set forth in the Lease Proper, or at
such other place as Lessee may from time to time designate in a written notice
to Lessor. All notice, demands and requests by Lessee to Lessor shall be sent by
Lessee by United States registered or certified mail, postage prepaid, addressed
to Lessor at its address set forth in the Lease Proper, or at such other place
within the continental limits of
31
<PAGE> 41
the United States as Lessor may from time to time designate in a written notice
to Lessee. Notices, demands and requests which shall be served upon Lessor or
Lessee in the manner aforesaid shall be deemed to have been served or given for
all purposes hereunder at the time such notice, demand or request shall be
mailed by United States registered or certified mail as aforesaid, in any post
office or branch post office regularly maintained by the United States
Government.
ARTICLE TWENTY-FOUR
Invalidity; Counterparts
SECTION 24.01. If any term or provision of this Lease or the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Lease, or the application of such term
or provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be effected thereby, and each term of this
Lease shall be valid and be enforced to the fullest extent permitted by law.
SECTION 24.02. This Lease may be signed by Lessor and Lessee upon
separate copies, in which event a copy signed by Lessor and a copy signed by
Lessee shall collectively constitute a single counterpart of this Lease. Only
one counterpart need be produced or accounted for in making proof of this Lease.
ARTICLE TWENTY-FIVE
Appraisal
SECTION 25.01. Whenever in this Lease it is provided that any
question shall be determined by appraisers, such questions shall be submitted to
a board of appraisers, three in number, each of whom shall be a qualified member
of the American Institute of Real Estate Appraisers, or any successor of such
Institute, or if such organization or successor shall no longer be in existence,
a recognized national association or institute of appraisers, and the decision
of a majority of said appraisers shall be final and conclusive upon the parties
hereto. Each party hereto shall designate one of said appraisers and the two
appraisers so designated shall select the third appraiser. The appraisers shall
make their determination as promptly as possible. Subject to the foregoing, the
appraisal shall be conducted in accordance with the laws, if any, of the state
in which the Demised Premises are located, applicable to arbitration. Lessee
agrees to pay all fees and expenses of appraisers relating to each such
determination.
32
<PAGE> 42
ARTICLE TWENTY-SIX
Provisions Upon Conveyance
Section 26.01. In the event of any purchase by Lessee or Lessee's
nominee of the Demised Premises under any provision of this Lease, Lessor shall
be obligated to convey to Lessee or Lessee's nominee, as the case may be, such
title as was conveyed to Lessor immediately prior to the execution of this
Lease, free and clear of all liens, encumbrances and defects except those in
existence on the date hereof or those caused, created or suffered to attach by
Lessee or by Lessor with the consent of Lessee and subject to real estate taxes,
assessments and other charges referred to in Section 3.01 hereof and any other
matter for which Lessor is not responsible; and Lessee or Lessee's nominee shall
accept such title or interest subject to zoning rules, restrictions,
regulations, resolutions, ordinances, building restrictions and governmental
regulations in effect at the time of purchase and to any violations of building
codes, fire laws, and other laws and regulations, and Lessee or Lessee's nominee
shall pay all charges, taxes; stamp and transfer taxes, expenses and fees
incident to the conveyance including reasonable counsel fees of Lessor, escrow
fees, if any, recording fees, title insurance premiums and any other applicable
federal, state and local taxes of any character or description. The deed shall
be in the same form as the deed used to convey title to the Demised Premises to
Lessor immediately prior to the execution of this Lease, provided, however, that
if Lessor is not the original Lessor hereunder and acquired the Demised Premises
in the exercise of any of its rights under a mortgage or deed of trust or in
lieu of such exercise, then the deed shall be a quitclaim deed. The delivery of
the consideration shall be made in New York funds by official bank check or
certified checks of the grantee in such conveyance, payable to Lessor or its
nominee, provided, however, if there is a Fee Mortgage in effect, the
consideration shall be payable to the holder of the Fee Mortgage which is most
senior in lien. Upon the completion of such purchase and the payment of the
purchase price this Lease, if it shall not theretofore have expired or
terminated pursuant to any provision hereof, shall terminate, except with
respect to obligations and liabilities of Lessee under this Lease, actual or
contingent, which have arisen prior thereto.
ARTICLE TWENTY-SEVEN
Covenants to Bind and Benefit Respective Parties
SECTION 27.01. Subject to the provisions of Article Twenty, the
terms, conditions, covenants, provisions and agreements herein contained shall
be binding upon and inure to the
33
<PAGE> 43
benefit of Lessor, their successors and assigns, and Lessee, its successors and
assigns.
ARTICLE TWENTY-EIGHT
Covenant to Operate: Economic Abandonment
SECTION 28.01. During the Demised Term, Lessee shall continuously
operate the Demised Premises for any lawful purpose provided that a portion of
the Demised Premises is used for the sale of gasoline.
SECTION 28.02. If, during the Demised Term, Lessee determines that
the Demised Premises have become uneconomic or unsuitable for their then use and
occupancy and Lessee has discontinued use of the Demised Premises or intends to
discontinue use of the Demised Premises for a period of not less than one year
from the date of said determination, Lessee may terminate this Lease by giving
notice to Lessor of Lessee's intention so to terminate. Said notice shall be
delivered to Lessor at least sixty (60) days prior to the effective date of such
termination specified in said notice and shall be accompanied by a certificate
of an officer of Lessee to the effect that Lessee has determined that the
Demised Premises have become uneconomic or unsuitable for their then use and
occupancy and that Lessee has discontinued or intends to discontinue use of the
Demised Premises for a period of not less than one year from the date of said
determination. Said notice of termination shall be deemed to constitute an
agreement by Lessor to sell to Lessee, and by Lessee to purchase from Lessor,
Lessor's interest in the Demised Premises for a sum equal to the greater of (x)
the product of the rent then in effect multiplied by eleven (11) or (y) 110% of
the appraised fair market value of the Demised Premises considered as encumbered
by this Lease. On the applicable date of termination of this Lease provided for
in said notice, Lessor shall transfer and convey the Demised Premises to Lessee
in the manner provided in Article Twenty-Six hereof.
34
<PAGE> 44
SCHEDULE B
List of Fixed Rent Amounts for each Station
<PAGE> 45
Leemilt's Properties
<TABLE>
<CAPTION>
F/Y 1998 F/Y 1999 F/Y 2000 F/Y 2001 F/Y 2002 F/Y 2003 F/Y 2004
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
102 F 6 Brooklyn NY 38,861 38,864 38,864 38,864 38,864 38,864 38,864
102 F 7 Jamaica NY 26,361 28,384 28,384 28,384 28,384 28,384 28,384
102 F 8 Rego Park NY 32,748 32,744 32,744 32,744 32,744 32,744 32,744
102 F 17 Brooklyn NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
103 F 20 Bronx NY 38,861 38,864 38,864 38,864 38,864 38,864 38,864
102 F 22 Corona NY 42,354 42,352 42,352 42,352 42,352 42,352 42,352
103 F 24 Bronx NY 20,762 25,760 25,760 25,760 25,760 25,760 25,760
102 F 38 Oceanside NY 34,058 34,056 34,056 34,054 34,054 34,054 34,054
102 F 43 Bluepoint NY 32,748 32,744 32,744 32,744 32,744 32,744 32,744
102 F 53 Brentwood NY 37,114 37,112 37,112 37,112 37,112 37,112 37,112
102 F 61 Middle Island NY 32,748 32,744 32,744 32,744 32,744 32,744 32,744
102 F 65 E. Islip NY 35,804 35,808 35,808 35,006 35,006 35,006 35,006
102 F 70 W. Islip NY 42,791 42,792 42,792 42,792 42,792 42,792 42,792
102 F 72 Albertson NY 36,678 34,680 34,680 34,660 34,660 34,660 34,660
103 F 82 Ossining NY 86,018 84,016 84,016 84,016 84,016 84,016 84,016
103 F 93 Pelham Manor NY 52,397 52,400 52,400 52,400 52,400 52,400 52,400
103 F 100 Mahwah NY 118,329 118,328 118,328 110,328 110,328 110,328 110,328
103 F 101 Valley Cottage NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 110 Medford NY 45,410 46,408 46,408 46,408 46,408 46,408 46,408
103 F 146 Mahopac NY 99,563 99,552 99,552 99,552 99,552 99,552 99,552
103 F 157 Poughkeepsie NY 48,467 48,464 48,464 48,464 48,464 48,464 48,464
103 F 159 Carmel NY 45,847 45,848 45,848 45,849 45,849 45,849 45,849
103 F 160 Marlboro NY 25,325 25,328 25,328 25,326 25,326 25,326 25,326
103 F 163 Lake Katrine NY 13,972 13,976 13,976 13,971 13,971 13,971 13,971
103 F 169 Wappingers Falls NY 45,847 45,548 45,548 45,548 45,548 45,548 45,548
103 F 174 Stony Point NY 49,777 49,776 49,776 49,716 49,716 49,716 49,716
103 F 178 Kingston NY 25,762 25,760 25,760 25,760 25,760 25,760 25,760
103 F 179 Poughkeepsie NY 20,959 20,960 20,960 20,960 20,960 20,960 20,960
103 F 182 Lagrangeville NY 34,494 34,496 34,496 34,494 34,494 34,494 34,494
103 F 186 Bronx NY 46,720 46,720 46,720 46,720 46,720 46,720 46,720
104 F 190 Rahway NY 30,565 30,568 30,568 30,568 30,568 30,568 30,568
104 F 195 S. Island NY 31,875 31,872 31,872 31,672 31,672 31,672 31,672
103 F 210 Bronx NY 56,763 56,760 56,760 54,160 54,160 54,160 54,160
103 F 212 New York NY 91,694 91,696 91,696 91,691 91,691 91,691 91,691
102 F 214 Jamaica NY 32,748 32,744 32,744 32,744 32,744 32,744 32,744
102 F 218 Middle Village NY 73,792 73,792 73,792 73,192 73,192 73,192 73,192
102 F 219 LIC NY 68,116 68,112 68,112 66,112 66,112 66,112 66,112
102 F 223 Brooklyn NY 38,424 38,424 38,424 38,424 38,424 38,424 38,424
102 F 225 Rockaway Bch NY 32,748 32,744 32,744 32,744 32,744 32,744 32,744
102 F 228 Brooklyn NY 37,501 37,552 37,552 37,552 37,552 37,552 37,552
102 F 229 Brooklyn NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
104 F 234 S. Island NY 47,594 47,592 47,592 47,592 47,592 47,592 47,592
F 252 Mt. Vernon NY 143,251 143,251 143,251 143,251 143,251 143,251 143,251
103 F 257 Bronx NY 25,762 25,760 25,760 25,760 25,760 25,760 25,760
103 F 258 Bronx NY 52,397 52,400 52,400 52,400 52,400 52,400 52,400
103 F 261 Bronx NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
103 F 264 Bronx NY 35,804 35,808 35,808 35,808 35,808 35,808 35,808
103 F 266 Bronx NY 29,255 29,266 29,266 29,266 29,266 29,266 29,266
103 F 268 Bronx NY 52,833 52,832 52,832 52,832 52,832 52,832 52,832
103 F 270 Bronx NY 27,508 77,512 77,512 77,512 77,512 77,512 77,512
103 F 272 Bronx NY 30,565 30,568 30,568 30,568 30,568 30,568 30,568
103 F 275 Bronx NY 25,325 25,328 25,328 25,328 25,328 25,328 25,328
103 F 276 Bronx NY 18,775 18,776 18,776 18,776 18,776 18,776 18,776
103 F 277 Bronx NY 41,594 47,592 47,592 47,592 47,592 47,592 47,592
103 F 278 Yonkers KY 83,398 83,400 83,400 83,400 83,400 83,400 83,400
104 F 288 Atlantic High. NJ 26,635 24,632 24,632 24,632 24,632 24,632 24,632
102 F 299 Westbury NY 29,255 29,256 29,256 29,256 29,256 29,256 29,256
103 F 301 N. Tarrytown NY 35,368 35,368 35,368 35,368 35,368 35,368 35,368
104 F 303 Middlesex NJ 53,706 53,704 53,704 53,704 53,704 53,704 53,704
<CAPTION>
F/Y 2005 F/Y 2006 F/Y 2007 F/Y 2008 F/Y 2009 F/Y 2010 F/Y 2011
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
102 F 6 Brooklyn NY 38,864 38,864 38,864 38,864 38,864 38,864 38,864
102 F 7 Jamaica NY 28,384 28,384 28,384 28,384 28,384 28,384 28,384
102 F 8 Rego Park NY 32,744 32,744 32,744 32,744 32,744 32,744 32,744
102 F 17 Brooklyn NY 37,552 37,552 37,552 37,552 37,552 37,552 37,552
103 F 20 Bronx NY 38,864 38,864 38,864 38,864 38,864 38,864 38,864
102 F 22 Corona NY 42,352 42,352 42,352 42,352 42,352 42,352 42,352
103 F 24 Bronx NY 25,760 25,760 25,760 25,760 25,760 25,760 25,760
102 F 38 Oceanside NY 34,054 34,054 34,054 34,054 34,054 34,054 34,054
102 F 43 Bluepoint NY 32,744 32,744 32,744 32,744 32,744 32,744 32,744
102 F 53 Brentwood NY 37,112 37,112 37,112 37,112 37,112 37,112 37,112
102 F 61 Middle Island NY 32,744 32,744 32,744 32,744 32,744 32,744 32,744
102 F 65 E. Islip NY 35,006 35,006 35,006 35,006 35,006 35,006 35,006
102 F 70 W. Islip NY 42,792 42,792 42,792 42,792 42,792 42,792 42,792
102 F 72 Albertson NY 34,660 34,660 34,660 34,660 34,660 34,660 34,660
103 F 82 Ossining NY 84,016 84,016 84,016 84,016 84,016 84,016 84,016
103 F 93 Pelham Manor NY 52,400 52,400 52,400 52,400 52,400 52,400 52,400
103 F 100 Mahwah NY 110,328 110,328 110,328 110,328 110,328 110,328 110,328
103 F 101 Valley Cottage NY 37,552 37,552 37,552 37,552 37,552 37,552 37,552
102 F 110 Medford NY 46,408 46,408 46,408 46,408 46,408 46,408 46,408
103 F 146 Mahopac NY 99,552 99,552 99,552 99,552 99,552 99,552 99,552
103 F 157 Poughkeepsie NY 48,464 48,464 48,464 48,464 48,464 48,464 48,464
103 F 159 Carmel NY 45,849 45,849 45,849 45,849 45,849 45,849 45,849
103 F 160 Marlboro NY 25,326 25,326 25,326 25,326 25,326 25,326 25,326
103 F 163 Lake Katrine NY 13,971 13,971 13,971 13,971 13,971 13,971 13,971
103 F 169 Wappingers Falls NY 45,548 45,548 45,548 45,548 45,548 45,548 45,548
103 F 174 Stony Point NY 49,716 49,716 49,716 49,716 49,716 49,716 49,716
103 F 178 Kingston NY 25,760 25,760 25,760 25,760 25,760 25,760 25,760
103 F 179 Poughkeepsie NY 20,960 20,960 20,960 20,960 20,960 20,960 20,960
103 F 182 Lagrangeville NY 34,494 34,494 34,494 34,494 34,494 34,494 34,494
103 F 186 Bronx NY 46,720 46,720 46,720 46,720 46,720 46,720 46,720
104 F 190 Rahway NY 30,568 30,568 30,568 30,568 30,568 30,568 30,568
104 F 195 S. Island NY 31,672 31,672 31,672 31,672 31,672 31,672 31,672
103 F 210 Bronx NY 54,160 54,160 54,160 54,160 54,160 54,160 54,160
103 F 212 New York NY 91,691 91,691 91,691 91,691 91,691 91,691 91,691
102 F 214 Jamaica NY 32,744 32,744 32,744 32,744 32,744 32,744 32,744
102 F 218 Middle Village NY 73,192 73,192 73,192 73,192 73,192 73,192 73,192
102 F 219 LIC NY 66,112 66,112 66,112 66,112 66,112 66,112 66,112
102 F 223 Brooklyn NY 38,424 38,424 38,424 38,424 38,424 38,424 38,424
102 F 225 Rockaway Bch NY 32,744 32,744 32,744 32,744 32,744 32,744 32,744
102 F 228 Brooklyn NY 37,552 37,552 37,552 37,552 37,552 37,552 37,552
102 F 229 Brooklyn NY 37,552 37,552 37,552 37,552 37,552 37,552 37,552
104 F 234 S. Island NY 47,592 47,592 47,592 47,592 47,592 47,592 47,592
F 252 Mt. Vernon NY 143,251 143,251 143,251 143,251 143,251 143,251 143,251
103 F 257 Bronx NY 25,760 25,760 25,760 25,760 25,760 25,760 25,760
103 F 258 Bronx NY 52,400 52,400 52,400 52,400 52,400 52,400 52,400
103 F 261 Bronx NY 37,552 37,552 37,552 37,552 37,552 37,552 37,552
103 F 264 Bronx NY 35,808 35,808 35,808 35,808 35,808 35,808 35,808
103 F 266 Bronx NY 29,266 29,266 29,266 29,266 29,266 29,266 29,266
103 F 268 Bronx NY 52,832 52,832 52,832 52,832 52,832 52,832 52,832
103 F 270 Bronx NY 77,512 77,512 77,512 77,512 77,512 77,512 77,512
103 F 272 Bronx NY 30,568 30,568 30,568 30,568 30,568 30,568 30,568
103 F 275 Bronx NY 25,328 25,328 25,328 25,328 25,328 25,328 25,328
103 F 276 Bronx NY 18,776 18,776 18,776 18,776 18,776 18,776 18,776
103 F 277 Bronx NY 47,592 47,592 47,592 47,592 47,592 47,592 47,592
103 F 278 Yonkers KY 83,400 83,400 83,400 83,400 83,400 83,400 83,400
104 F 288 Atlantic High. NJ 24,632 24,632 24,632 24,632 24,632 24,632 24,632
102 F 299 Westbury NY 29,256 29,256 29,256 29,256 29,256 29,256 29,256
103 F 301 N. Tarrytown NY 35,368 35,368 35,368 35,368 35,368 35,368 35,368
104 F 303 Middlesex NJ 53,704 53,704 53,704 53,704 53,704 53,704 53,704
<CAPTION>
F/Y 2012 Total
Reg Prop. Loc. Rent Rent
# Type # Town State Expense Expense
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
102 F 6 Brooklyn NY 38,864 582,957
102 F 7 Jamaica NY 28,384 423,737
102 F 8 Rego Park NY 32,744 491,164
102 F 17 Brooklyn NY 37,552 563,279
103 F 20 Bronx NY 38,864 582,957
102 F 22 Corona NY 42,352 635,282
103 F 24 Bronx NY 25,760 381,402
102 F 38 Oceanside NY 34,054 510,818
102 F 43 Bluepoint NY 32,744 491,164
102 F 53 Brentwood NY 37,112 556,682
102 F 61 Middle Island NY 32,744 491,164
102 F 65 E. Islip NY 35,006 527,492
102 F 70 W. Islip NY 42,792 641,879
102 F 72 Albertson NY 34,660 521,958
103 F 82 Ossining NY 84,016 1,262,242
103 F 93 Pelham Manor NY 52,400 785,997
103 F 100 Mahwah NY 110,328 1,678,921
103 F 101 Valley Cottage NY 37,552 563,279
102 F 110 Medford NY 46,408 695,122
103 F 146 Mahopac NY 99,552 1,493,291
103 F 157 Poughkeepsie NY 48,464 726,963
103 F 159 Carmel NY 45,849 687,731
103 F 160 Marlboro NY 25,326 379,893
103 F 163 Lake Katrine NY 13,971 209,576
103 F 169 Wappingers Falls NY 45,548 683,519
103 F 174 Stony Point NY 49,716 745,921
103 F 178 Kingston NY 25,760 386,402
103 F 179 Poughkeepsie NY 20,960 314,399
103 F 182 Lagrangeville NY 34,494 517,414
103 F 186 Bronx NY 46,720 700,800
104 F 190 Rahway NY 30,568 458,517
104 F 195 S. Island NY 31,672 475,683
103 F 210 Bronx NY 54,160 820,203
103 F 212 New York NY 91,691 1,375,378
102 F 214 Jamaica NY 32,744 491,164
102 F 218 Middle Village NY 73,192 1,099,680
102 F 219 LIC NY 66,112 997,684
102 F 223 Brooklyn NY 38,424 576,360
102 F 225 Rockaway Bch NY 32,744 491,164
102 F 228 Brooklyn NY 37,552 563,229
102 F 229 Brooklyn NY 37,552 563,279
104 F 234 S. Island NY 47,592 713,882
F 252 Mt. Vernon NY 143,251 2,148,765
103 F 257 Bronx NY 25,760 386,402
103 F 258 Bronx NY 52,400 785,997
103 F 261 Bronx NY 37,552 563,279
103 F 264 Bronx NY 35,808 537,116
103 F 266 Bronx NY 29,266 438,979
103 F 268 Bronx NY 52,832 792,481
103 F 270 Bronx NY 77,512 1,112,676
103 F 272 Bronx NY 30,568 458,517
103 F 275 Bronx NY 25,328 379,917
103 F 276 Bronx NY 18,776 281,639
103 F 277 Bronx NY 47,592 707,882
103 F 278 Yonkers KY 83,400 1,250,998
104 F 288 Atlantic High. NJ 24,632 371,483
102 F 299 Westbury NY 29,256 438,839
103 F 301 N. Tarrytown NY 35,368 530,520
104 F 303 Middlesex NJ 53,704 805,562
</TABLE>
Page 1 of 6
<PAGE> 46
Leemilt's Properties
<TABLE>
<CAPTION>
F/Y 1998 F/Y 1999 F/Y 2000 F/Y 2001 F/Y 2002 F/Y 2003 F/Y 2004
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
104 F 304 Old Bridge NJ 71,603 71,608 71,608 71,608 71,608 71,608 71,608
103 F 307 Brewster NY 59,382 59,384 59,384 59,384 59,384 59,384 59,384
102 F 312 Flushing NY 28,381 29,384 29,384 29,384 29,384 29,384 29,384
103 F 322 Valley Cottage NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
104 F 324 S Is1and NY 42,354 42,352 42,352 42,352 42,352 42,352 42,352
103 F 325 Briarcliff Manor NY 87,328 87,328 87,328 87,328 87,328 87,328 87,328
103 F 324 Bronx NY 38,424 38,424 38,424 38,424 38,424 38,424 38,424
103 F 329 Bronx NY 38,424 38,424 38,424 38,424 38,424 38,424 38,424
103 F 331 Bronx NY 69,819 59,816 59,816 59,816 59,816 59,816 59,816
103 F 332 Bronx NY 34,931 34,928 34,928 34,928 34,928 34,928 34,928
102 F 334 Brooklyn NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 336 Brooklyn NY 28,381 26,384 26,384 26,384 26,384 26,384 26,384
103 F 339 New York NY 79,905 79,904 79,904 79,904 79,904 79,904 79,904
103 F 340 New York NY 100,427 100,424 100,424 100,424 100,424 100,424 100,424
103 F 341 New York NY 47,157 47,160 41,160 41,160 41,160 41,160 41,160
102 F 342 Glendale NY 67,242 67,240 67,240 67,240 67,240 67,240 67,240
102 F 343 Ozone Park NY 63,749 63,752 63,752 63,752 63,752 63,752 63,752
102 F 344 LIC NY 35,368 35,368 35,368 35,368 35,368 35,368 35,368
102 F 360 Smithtown NY 48,030 48,032 48,032 48,032 48,032 48,032 48,032
104 F 370 Keyport NJ 60,256 60,256 60,256 60,256 60,256 60,256 60,256
103 F 379 W. Haverstraw NJ 33,184 33,184 31,184 31,184 31,184 31,184 31,184
102 F 411 Brooklyn NY 56,326 56,328 56,328 56,328 56,328 56,328 56,328
102 F 421 Brooklyn NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 425 W. Islip NY 116,562 116,584 116,304 116,304 116,304 116,304 116,304
102 F 427 W. Babylon NY 45,410 45,408 45,408 45,408 45,408 45,408 45,408
102 F 429 Ronkonkoma NY 67,679 67,680 67,680 67,680 67,680 67,680 67,680
102 F 432 Stony Brook NY 96,934 96,936 96,936 96,936 96,936 96,936 96,936
102 F 437 Miller Place NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 444 Bayshore NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 448 E. Patchogue NY 30,368 35,368 35,368 35,368 35,368 35,368 35,368
102 F 454 Amityville NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 460 Bethpage NY 44,974 44,976 44,976 44,976 44,976 44,976 44,976
102 F 462 Hunt. Stat. NY 25,762 25,760 25,760 25,760 25,760 25,760 25,760
102 F 464 Baldwin NY 37,988 37,984 37,984 37,984 37,984 37,984 37,984
102 F 468 Elmont NY 65,016 65,016 65,016 65,016 65,016 65,016 65,016
104 F 498 Edison NJ 34,058 34,056 34,056 34,056 34,056 34,056 34,056
103 F 501 Ridgefield NJ 45,847 45,848 45,848 45,848 45,848 45,848 45,848
102 F 931 N. Babylon NY 47,157 47,160 47,160 47,160 47,160 47,160 47,160
102 F 511 C. Islip NY 47,157 47,160 47,160 47,160 47,160 47,160 47,160
102 F 552 Port. Wash. NY 44,974 44,976 44,976 44,974 44,974 44,974 44,974
102 F 564 Brooklyn NY 23,576 23,576 23,576 23,676 23,676 23,676 23,676
102 F 568 LIC NY 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 569 Bayshore NY 56,326 56,328 56,328 56,328 56,328 56,328 56,328
102 F 581 Bridgeport CT 27,945 27,944 27,944 27,944 27,944 27,944 27,944
102 F 582 Bristol CT 34,494 34,496 34,496 34,496 34,496 34,496 34,496
102 F 585 East Hartford CT 20,522 20,520 20,520 20,520 20,520 20,520 20,520
102 F 587 Franklin CT 48,467 48,464 48,464 48,464 48,464 48,464 48,464
102 F 589 Miochester CT 32,748 32,744 32,744 32,744 32,744 32,744 32,744
102 F 590 Meriden CT 28,381 28,384 28,384 28,384 28,384 28,384 28,384
102 F 591 Montville CT 43,227 43,224 43,224 43,224 43,224 43,224 43,224
102 F 597 Norwalk CT 40,607 40,608 40,608 40,408 40,408 40,408 40,408
102 F 598 Norwich CT 49,777 49,776 49,776 49,776 49,776 49,776 49,776
102 F 600 Wauregan CT 41,044 41,040 41,040 41,040 41,040 41,040 41,040
102 F 601 Southington CT 37,551 37,552 37,552 37,552 37,552 37,552 37,552
102 F 602 South Windsor CT 32,311 32,312 32,312 32,312 32,312 32,312 32,312
102 F 603 Stafford Spgs. CT 35,368 35,368 35,368 35,368 35,368 35,368 35,368
102 F 604 Terryville CT 19,649 19,648 19,648 19,648 19,648 19,648 19,648
102 F 606 Totland CT 31,875 31,872 31,872 31,872 31,872 31,872 31,872
102 F 607 Union City CT 47,594 47,592 47,592 47,592 47,592 47,592 47,592
<CAPTION>
F/Y 2005 F/Y 2006 F/Y 2007 F/Y 2008 F/Y 2009 F/Y 2010
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
104 F 304 Old Bridge NJ 71,608 71,608 71,608 71,608 71,608 71,608
103 F 307 Brewster NY 59,384 59,384 59,384 59,384 59,384 59,384
102 F 312 Flushing NY 29,384 29,384 29,384 29,384 29,384 29,384
103 F 322 Valley Cottage NY 37,552 37,552 37,552 37,552 37,552 37,552
104 F 324 S Is1and NY 42,352 42,352 42,352 42,352 42,352 42,352
103 F 325 Briarcliff Manor NY 87,328 87,328 87,328 87,328 87,328 87,328
103 F 324 Bronx NY 38,424 38,424 38,424 38,424 38,424 38,424
103 F 329 Bronx NY 38,424 38,424 38,424 38,424 38,424 38,424
103 F 331 Bronx NY 59,816 59,816 59,816 59,816 59,816 59,816
103 F 332 Bronx NY 34,928 34,928 34,928 34,928 34,928 34,928
102 F 334 Brooklyn NY 37,552 37,552 37,552 37,552 37,552 37,552
102 F 336 Brooklyn NY 26,384 26,384 26,384 26,384 26,384 26,384
103 F 339 New York NY 79,904 79,904 79,904 79,904 79,904 79,904
103 F 340 New York NY 100,424 100,424 100,424 100,424 100,424 100,424
103 F 341 New York NY 41,160 41,160 41,160 41,160 41,160 41,160
102 F 342 Glendale NY 67,240 67,240 67,240 67,240 67,240 67,240
102 F 343 Ozone Park NY 63,752 63,752 63,752 63,752 63,752 63,752
102 F 344 LIC NY 35,368 35,368 35,368 35,368 35,368 35,368
102 F 360 Smithtown NY 48,032 48,032 48,032 48,032 48,032 48,032
104 F 370 Keyport NJ 60,256 60,256 60,256 60,256 60,256 60,256
103 F 379 W. Haverstraw NJ 31,184 31,184 31,184 31,184 31,184 31,184
102 F 411 Brooklyn NY 56,328 56,328 56,328 56,328 56,328 56,328
102 F 421 Brooklyn NY 37,552 37,552 37,552 37,552 37,552 37,552
102 F 425 W. Islip NY 116,304 116,304 116,304 116,304 116,304 116,304
102 F 427 W. Babylon NY 45,408 45,408 45,408 45,408 45,408 45,408
102 F 429 Ronkonkoma NY 67,680 67,680 67,680 67,680 67,680 67,680
102 F 432 Stony Brook NY 96,936 96,936 96,936 96,936 96,936 96,936
102 F 437 Miller Place NY 37,552 37,552 37,552 37,552 37,552 37,552
102 F 444 Bayshore NY 37,552 37,552 37,552 37,552 37,552 37,552
102 F 448 E. Patchogue NY 35,368 35,368 35,368 35,368 35,368 35,368
102 F 454 Amityville NY 37,552 37,552 37,552 37,552 37,552 37,552
102 F 460 Bethpage NY 44,976 44,976 44,976 44,976 44,976 44,976
102 F 462 Hunt. Stat. NY 25,760 25,760 25,760 25,760 25,760 25,760
102 F 464 Baldwin NY 37,984 37,984 37,984 37,984 37,984 37,984
102 F 468 Elmont NY 65,016 65,016 65,016 65,016 65,016 65,016
104 F 498 Edison NJ 34,056 34,056 34,056 34,056 34,056 34,056
103 F 501 Ridgefield NJ 45,848 45,848 45,848 45,848 45,848 45,848
102 F 931 N. Babylon NY 47,160 47,160 47,160 47,160 47,160 47,160
102 F 511 C. Islip NY 47,160 47,160 47,160 47,160 47,160 47,160
102 F 552 Port. Wash. NY 44,974 44,974 44,974 44,974 44,974 44,974
102 F 564 Brooklyn NY 23,676 23,676 23,676 23,676 23,676 23,676
102 F 568 LIC NY 37,552 37,552 37,552 37,552 37,552 37,552
102 F 569 Bayshore NY 56,328 56,328 56,328 56,328 56,328 56,328
102 F 581 Bridgeport CT 27,944 27,944 27,944 27,944 27,944 27,944
102 F 582 Bristol CT 34,496 34,496 34,496 34,496 34,496 34,496
102 F 585 East Hartford CT 20,520 20,520 20,520 20,520 20,520 20,520
102 F 587 Franklin CT 48,464 48,464 48,464 48,464 48,464 48,464
102 F 589 Miochester CT 32,744 32,744 32,744 32,744 32,744 32,744
102 F 590 Meriden CT 28,384 28,384 28,384 28,384 28,384 28,384
102 F 591 Montville CT 43,224 43,224 43,224 43,224 43,224 43,224
102 F 597 Norwalk CT 40,408 40,408 40,408 40,408 40,408 40,408
102 F 598 Norwich CT 49,776 49,776 49,776 49,776 49,776 49,776
102 F 600 Wauregan CT 41,040 41,040 41,040 41,040 41,040 41,040
102 F 601 Southington CT 37,552 37,552 37,552 37,552 37,552 37,552
102 F 602 South Windsor CT 32,312 32,312 32,312 32,312 32,312 32,312
102 F 603 Stafford Spgs. CT 35,368 35,368 35,368 35,368 35,368 35,368
102 F 604 Terryville CT 19,648 19,648 19,648 19,648 19,648 19,648
102 F 606 Totland CT 31,872 31,872 31,872 31,872 31,872 31,872
102 F 607 Union City CT 47,592 47,592 47,592 47,592 47,592 47,592
<CAPTION>
F/Y 2011 F/Y 2012 Total
Reg Prop. Loc. Rent Rent Rent
# Type # Town State Expense Expense Expense
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
104 F 304 Old Bridge NJ 71,608 71,608 1,074,115
103 F 307 Brewster NY 59,384 59,384 890,758
102 F 312 Flushing NY 29,384 29,384 439,757
103 F 322 Valley Cottage NY 37,552 37,552 563,279
104 F 324 S Is1and NY 42,352 42,352 635,282
103 F 325 Briarcliff Manor NY 87,328 87,328 1,309,920
103 F 324 Bronx NY 38,424 38,424 576,360
103 F 329 Bronx NY 38,424 38,424 576,360
103 F 331 Bronx NY 59,816 59,816 907,243
103 F 332 Bronx NY 34,928 34,928 523,923
102 F 334 Brooklyn NY 37,552 37,552 563,279
102 F 336 Brooklyn NY 26,384 26,384 397,757
103 F 339 New York NY 79,904 79,904 1,198,561
103 F 340 New York NY 100,424 100,424 1,506,363
103 F 341 New York NY 41,160 41,160 629,397
102 F 342 Glendale NY 67,240 67,240 1,008,602
102 F 343 Ozone Park NY 63,752 63,752 956,277
102 F 344 LIC NY 35,368 35,368 530,520
102 F 360 Smithtown NY 48,032 48,032 720,478
104 F 370 Keyport NJ 60,256 60,256 903,840
103 F 379 W. Haverstraw NJ 31,184 31,184 471,760
102 F 411 Brooklyn NY 56,328 56,328 844,918
102 F 421 Brooklyn NY 37,552 37,552 563,279
102 F 425 W. Islip NY 116,304 116,304 1,745,098
102 F 427 W. Babylon NY 45,408 45,408 681,122
102 F 429 Ronkonkoma NY 67,680 67,680 1,015,199
102 F 432 Stony Brook NY 96,936 96,936 1,454,038
102 F 437 Miller Place NY 37,552 37,552 563,279
102 F 444 Bayshore NY 37,552 37,552 563,279
102 F 448 E. Patchogue NY 35,368 35,368 525,520
102 F 454 Amityville NY 37,552 37,552 563,279
102 F 460 Bethpage NY 44,976 44,976 674,638
102 F 462 Hunt. Stat. NY 25,760 25,760 386,402
102 F 464 Baldwin NY 37,984 37,984 569,764
102 F 468 Elmont NY 65,016 65,016 975,240
104 F 498 Edison NJ 34,056 34,056 510,842
103 F 501 Ridgefield NJ 45,848 45,848 687,719
102 F 931 N. Babylon NY 47,160 47,160 707,397
102 F 511 C. Islip NY 47,160 47,160 707,397
102 F 552 Port. Wash. NY 44,974 44,974 674,614
102 F 564 Brooklyn NY 23,676 23,676 354,840
102 F 568 LIC NY 37,552 37,552 563,279
102 F 569 Bayshore NY 56,328 56,328 844,918
102 F 581 Bridgeport CT 27,944 27,944 419,161
102 F 582 Bristol CT 34,496 34,496 517,438
102 F 585 East Hartford CT 20,520 20,520 307,802
102 F 587 Franklin CT 48,464 48,464 726,963
102 F 589 Miochester CT 32,744 32,744 491,164
102 F 590 Meriden CT 28,384 28,384 425,757
102 F 591 Montville CT 43,224 43,224 648,363
102 F 597 Norwalk CT 40,408 40,408 606,719
102 F 598 Norwich CT 49,776 49,776 746,641
102 F 600 Wauregan CT 41,040 41,040 615,604
102 F 601 Southington CT 37,552 37,552 563,279
102 F 602 South Windsor CT 32,312 32,312 484,679
102 F 603 Stafford Spgs. CT 35,368 35,368 530,520
102 F 604 Terryville CT 19,648 19,648 294,721
102 F 606 Totland CT 31,872 31,872 478,083
102 F 607 Union City CT 47,592 47,592 713,882
</TABLE>
Page 2 of 6
<PAGE> 47
Leemilt's Properties
<TABLE>
<CAPTION>
F/Y 1998 F/Y 1999 F/Y 2000 F/Y 2001 F/Y 2002 F/Y 2003 F/Y 2004
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
102 F 609 Waterbury CT 27,945 27,944 27,944 27,944 27,944 27,944 27,944
102 F 612 West Haven CT 65,059 65,056 65,056 65,056 65,056 65,056 65,056
101 F 618 Feeding Hills MA 39,297 39,296 39,296 39,296 39,296 39,296 39,296
101 F 624 Granby MA 27,945 27,944 27,944 27,944 27,944 27,944 27,944
101 F 625 G. Barrington MA 65,932 65,936 65,936 65,936 65,936 65,936 65,936
101 F 626 Hadley MA 42,354 42,352 42,352 42,352 42,352 42,352 42,352
101 F 627 Lanesboro MA 37,551 37,552 37,552 37,552 37,552 37,552 37,552
101 F 628 Monson MA 54,143 54,144 54,144 54,144 54,144 54,144 54,144
101 F 629 North Adams MA 36,678 36,680 36,680 36,680 36,680 36,680 36,680
101 F 630 North Adams MA 25,762 25,760 25,760 25,760 25,760 25,760 25,760
101 F 632 Pittsfield MA 52,397 52,400 52,400 52,400 52,400 52,400 52,400
101 F 633 Pittsfield MA 41,481 41,480 41,480 41,480 41,480 41,480 41,480
101 F 635 So. Hadley MA 45,847 45,848 45,848 45,848 45,848 45,848 45,848
101 F 637 Spingfield MA 34,058 34,056 84,056 84,056 84,056 84,056 84,056
101 F 638 Spingfield MA 47,594 41,592 41,592 41,592 41,592 41,592 41,592
101 F 640 Spingfield MA 27,072 27,072 27,072 27,072 27,072 27,072 27,072
101 F 641 Spingfield MA 20,959 20,960 20,960 20,960 20,960 20,960 20,960
101 F 643 Westfield MA 36,424 38,424 38,424 38,424 38,424 38,424 38,424
103 F 647 Ossining NY 78,596 78,592 78,592 78,592 78,592 78,592 78,592
102 F 649 Brooklyn NY 25,762 25,760 25,760 25,760 25,760 25,760 25,760
104 F 658 Howell NJ 60,693 60,696 60,696 60,696 60,696 60,696 60,696
104 F 660 Lakewood NJ 23,578 23,576 23,576 23,576 23,576 23,576 23,576
104 F 670 South Amboy NJ 61,960 61,960 61,960 61,960 61,960 61,960 61,960
103 F 675 Andover NJ 58,073 58,072 58,072 58,072 58,072 58,072 58,072
102 F 676 Glen Head NY 65,932 65,936 65,936 65,936 65,936 65,936 65,936
103 F 677 New Rochelle NY 57,200 57,200 57,200 57,200 57,200 57,200 57,200
102 F 678 Elmont NY 38,861 38,864 38,064 38,064 38,064 38,064 38,064
102 F 680 N. Branford CT 42,354 42,352 42,352 42,352 42,352 42,352 42,352
102 F 683 Meriden CT 28,818 28,816 28,816 28,816 28,816 28,816 28,816
102 F 689 Plainville CT 2,620 2,616 2,616 2,616 2,616 2,616 2,616
102 F 707 Brooklyn NY 45,410 46,404 46,404 46,404 46,404 46,404 46,404
102 F 6777 Milford CT 37,561 37,562 37,562 37,562 37,562 37,562 37,562
102 F 6813 Brookfield CT 37,986 37,984 37,984 37,984 37,984 37,984 37,984
102 F 6822 Manchester CT 28,678 28,676 28,676 28,676 28,676 28,676 28,676
102 F 6834 Ridgefield CT 56,326 56,326 54,326 54,326 54,326 54,326 54,326
102 F 6836 Bridgeport CT 54,143 54,144 54,144 54,144 54,144 54,144 54,144
102 F 6852 Middletown CT 70,299 70,296 70,296 70,296 70,296 70,296 70,296
102 F 6862 Stratford CT 33,621 33,624 33,624 33,624 33,624 33,624 33,624
101 F 28206 Lisbon ME 49,340 49,344 49,344 49,344 49,344 49,344 49,344
101 F 28207 Lisbon Falls ME 22,706 22,704 22,704 22,704 22,704 22,704 22,704
101 F 28208 Portland ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28210 Rockland ME 24,888 24,888 24,888 24,888 24,888 24,888 24,888
101 F 28212 Saco ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28213 Sanford ME 84,706 84,704 84,704 84,704 84,704 84,704 84,704
101 F 28215 Westbrook ME 22,269 22,272 22,272 22,272 22,272 22,272 22,272
101 F 28216 Wiscasset ME 23,578 23,576 23,576 23,576 23,576 23,576 23,576
101 F 28220 Auburn ME 36,678 36,680 36,680 36,680 36,680 36,680 36,680
101 F 28222 S. Portland ME 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 28223 Lewiston ME 23,142 23,144 23,144 23,144 23,144 23,144 23,144
101 F 28226 N. Windham ME 26,381 28,384 28,384 28,384 28,384 28,384 28,384
101 F 30374 Dedham MA 36,241 36,240 36,240 36,240 36,240 36,240 36,240
101 F 30375 Hingham MA 83,835 83,832 83,832 83,832 83,832 83,832 83,832
101 F 30468 Foxboro MA 86,018 86,016 86,016 86,016 86,016 86,016 86,016
101 F 30524 Falmouth MA 94,750 94,752 94,752 94,752 94,752 94,752 94,752
101 F 30600 Lowell MA 62,876 62,872 62,872 62,872 62,872 62,872 62,872
101 F 30602 Auburn MA 52,397 52,400 52,400 52,400 52,400 52,400 52,400
101 F 30603 Methuen MA 66,805 66,808 66,808 66,808 66,808 66,808 66,808
101 F 30604 Arnesbury MA 69,425 69,424 69,424 69,424 69,424 69,424 69,424
101 F 30605 Georgetown MA 61,129 61,128 61,128 61,128 61,128 61,128 61,128
<CAPTION>
F/Y 2005 F/Y 2006 F/Y 2007 F/Y 2008 F/Y 2009 F/Y 2010 F/Y 2011
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
102 F 609 Waterbury CT 27,944 27,944 27,944 27,944 27,944 27,944 27,944
102 F 612 West Haven CT 65,056 65,056 65,056 65,056 65,056 65,056 65,056
101 F 618 Feeding Hills MA 39,296 39,296 39,296 39,296 39,296 39,296 39,296
101 F 624 Granby MA 27,944 27,944 27,944 27,944 27,944 27,944 27,944
101 F 625 G. Barrington MA 65,936 65,936 65,936 65,936 65,936 65,936 65,936
101 F 626 Hadley MA 42,352 42,352 42,352 42,352 42,352 42,352 42,352
101 F 627 Lanesboro MA 37,552 37,552 37,552 37,552 37,552 37,552 37,552
101 F 628 Monson MA 54,144 54,144 54,144 54,144 54,144 54,144 54,144
101 F 629 North Adams MA 36,680 36,680 36,680 36,680 36,680 36,680 36,680
101 F 630 North Adams MA 25,760 25,760 25,760 25,760 25,760 25,760 25,760
101 F 632 Pittsfield MA 52,400 52,400 52,400 52,400 52,400 52,400 52,400
101 F 633 Pittsfield MA 41,480 41,480 41,480 41,480 41,480 41,480 41,480
101 F 635 So. Hadley MA 45,848 45,848 45,848 45,848 45,848 45,848 45,848
101 F 637 Spingfield MA 84,056 84,056 84,056 84,056 84,056 84,056 84,056
101 F 638 Spingfield MA 41,592 41,592 41,592 41,592 41,592 41,592 41,592
101 F 640 Spingfield MA 27,072 27,072 27,072 27,072 27,072 27,072 27,072
101 F 641 Spingfield MA 20,960 20,960 20,960 20,960 20,960 20,960 20,960
101 F 643 Westfield MA 38,424 38,424 38,424 38,424 38,424 38,424 38,424
103 F 647 Ossining NY 78,592 78,592 78,592 78,592 78,592 78,592 78,592
102 F 649 Brooklyn NY 25,760 25,760 25,760 25,760 25,760 25,760 25,760
104 F 658 Howell NJ 60,696 60,696 60,696 60,696 60,696 60,696 60,696
104 F 660 Lakewood NJ 23,576 23,576 23,576 23,576 23,576 23,576 23,576
104 F 670 South Amboy NJ 61,960 61,960 61,960 61,960 61,960 61,960 61,960
103 F 675 Andover NJ 58,072 58,072 58,072 58,072 58,072 58,072 58,072
102 F 676 Glen Head NY 65,936 65,936 65,936 65,936 65,936 65,936 65,936
103 F 677 New Rochelle NY 57,200 57,200 57,200 57,200 57,200 57,200 57,200
102 F 678 Elmont NY 38,064 38,064 38,064 38,064 38,064 38,064 38,064
102 F 680 N. Branford CT 42,352 42,352 42,352 42,352 42,352 42,352 42,352
102 F 683 Meriden CT 28,816 28,816 28,816 28,816 28,816 28,816 28,816
102 F 689 Plainville CT 2,616 2,616 2,616 2,616 2,616 2,616 2,616
102 F 707 Brooklyn NY 46,404 46,404 46,404 46,404 46,404 46,404 46,404
102 F 6777 Milford CT 37,562 37,562 37,562 37,562 37,562 37,562 37,562
102 F 6813 Brookfield CT 37,984 37,984 37,984 37,984 37,984 37,984 37,984
102 F 6822 Manchester CT 28,676 28,676 28,676 28,676 28,676 28,676 28,676
102 F 6834 Ridgefield CT 54,326 54,326 54,326 54,326 54,326 54,326 54,326
102 F 6836 Bridgeport CT 54,144 54,144 54,144 54,144 54,144 54,144 54,144
102 F 6852 Middletown CT 70,296 70,296 70,296 70,296 70,296 70,296 70,296
102 F 6862 Stratford CT 33,624 33,624 33,624 33,624 33,624 33,624 33,624
101 F 28206 Lisbon ME 49,344 49,344 49,344 49,344 49,344 49,344 49,344
101 F 28207 Lisbon Falls ME 22,704 22,704 22,704 22,704 22,704 22,704 22,704
101 F 28208 Portland ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28210 Rockland ME 24,888 24,888 24,888 24,888 24,888 24,888 24,888
101 F 28212 Saco ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28213 Sanford ME 84,704 84,704 84,704 84,704 84,704 84,704 84,704
101 F 28215 Westbrook ME 22,272 22,272 22,272 22,272 22,272 22,272 22,272
101 F 28216 Wiscasset ME 23,576 23,576 23,576 23,576 23,576 23,576 23,576
101 F 28220 Auburn ME 36,680 36,680 36,680 36,680 36,680 36,680 36,680
101 F 28222 S. Portland ME 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 28223 Lewiston ME 23,144 23,144 23,144 23,144 23,144 23,144 23,144
101 F 28226 N. Windham ME 28,384 28,384 28,384 28,384 28,384 28,384 28,384
101 F 30374 Dedham MA 36,240 36,240 36,240 36,240 36,240 36,240 36,240
101 F 30375 Hingham MA 83,832 83,832 83,832 83,832 83,832 83,832 83,832
101 F 30468 Foxboro MA 86,016 86,016 86,016 86,016 86,016 86,016 86,016
101 F 30524 Falmouth MA 94,752 94,752 94,752 94,752 94,752 94,752 94,752
101 F 30600 Lowell MA 62,872 62,872 62,872 62,872 62,872 62,872 62,872
101 F 30602 Auburn MA 52,400 52,400 52,400 52,400 52,400 52,400 52,400
101 F 30603 Methuen MA 66,808 66,808 66,808 66,808 66,808 66,808 66,808
101 F 30604 Arnesbury MA 69,424 69,424 69,424 69,424 69,424 69,424 69,424
101 F 30605 Georgetown MA 61,128 61,128 61,128 61,128 61,128 61,128 61,128
<CAPTION>
F/Y 2012 Total
Reg Prop. Loc. Rent Rent
# Type # Town State Expense Expense
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
102 F 609 Waterbury CT 27,944 419,161
102 F 612 West Haven CT 65,056 975,843
101 F 618 Feeding Hills MA 39,296 589,441
101 F 624 Granby MA 27,944 419,161
101 F 625 G. Barrington MA 65,936 989,036
101 F 626 Hadley MA 42,352 635,282
101 F 627 Lanesboro MA 37,552 563,279
101 F 628 Monson MA 54,144 812,159
101 F 629 North Adams MA 36,680 550,198
101 F 630 North Adams MA 25,760 386,402
101 F 632 Pittsfield MA 52,400 785,997
101 F 633 Pittsfield MA 41,480 622,201
101 F 635 So. Hadley MA 45,848 687,719
101 F 637 Spingfield MA 84,056 1,160,842
101 F 638 Spingfield MA 41,592 629,882
101 F 640 Spingfield MA 27,072 406,080
101 F 641 Spingfield MA 20,960 314,399
101 F 643 Westfield MA 38,424 574,360
103 F 647 Ossining NY 78,592 1,178,884
102 F 649 Brooklyn NY 25,760 386,402
104 F 658 Howell NJ 60,696 910,437
104 F 660 Lakewood NJ 23,576 353,642
104 F 670 South Amboy NJ 61,960 929,400
103 F 675 Andover NJ 58,072 871,081
102 F 676 Glen Head NY 65,936 989,036
103 F 677 New Rochelle NY 57,200 858,000
102 F 678 Elmont NY 38,064 572,557
102 F 680 N. Branford CT 42,352 635,282
102 F 683 Meriden CT 28,816 432,242
102 F 689 Plainville CT 2,616 39,244
102 F 707 Brooklyn NY 46,404 695,066
102 F 6777 Milford CT 37,562 563,429
102 F 6813 Brookfield CT 37,984 569,762
102 F 6822 Manchester CT 28,676 430,142
102 F 6834 Ridgefield CT 54,326 818,890
102 F 6836 Bridgeport CT 54,144 812,159
102 F 6852 Middletown CT 70,296 1,054,443
102 F 6862 Stratford CT 33,624 504,357
101 F 28206 Lisbon ME 49,344 740,156
101 F 28207 Lisbon Falls ME 22,704 340,562
101 F 28208 Portland ME 16,592 248,880
101 F 28210 Rockland ME 24,888 373,320
101 F 28212 Saco ME 16,592 248,880
101 F 28213 Sanford ME 84,704 1,270,562
101 F 28215 Westbrook ME 22,272 334,077
101 F 28216 Wiscasset ME 23,576 353,642
101 F 28220 Auburn ME 36,680 550,198
101 F 28222 S. Portland ME 35,368 530,520
101 F 28223 Lewiston ME 23,144 347,158
101 F 28226 N. Windham ME 28,384 423,757
101 F 30374 Dedham MA 36,240 543,601
101 F 30375 Hingham MA 83,832 1,257,483
101 F 30468 Foxboro MA 86,016 1,290,242
101 F 30524 Falmouth MA 94,752 1,421,278
101 F 30600 Lowell MA 62,872 943,084
101 F 30602 Auburn MA 52,400 785,997
101 F 30603 Methuen MA 66,808 1,002,117
101 F 30604 Arnesbury MA 69,424 1,041,361
101 F 30605 Georgetown MA 61,128 916,921
</TABLE>
Page 3 of 6
<PAGE> 48
Leemilt's Properties
<TABLE>
<CAPTION>
F/Y 1998 F/Y 1999 F/Y 2000 F/Y 2001 F/Y 2002 F/Y 2003 F/Y 2004
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
101 F 30606 Ipswich MA 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 30607 Salisbury MA 34,058 34,056 34,056 34,056 34,056 34,056 34,056
101 F 30609 Beverly MA 11,789 11,792 11,792 11,792 11,792 11,792 11,792
101 F 30610 Buerica MA 69,862 69,864 69,864 69,864 69,864 69,864 69,864
101 F 30611 Branford MA 31,875 31,872 31,872 31,872 31,872 31,872 31,872
101 F 30612 Chatham MA 31,875 31,872 31,872 31,872 31,872 31,872 31,872
105 F 30615 Hanwich MA 62,003 62,000 62,000 62,000 62,000 62,000 62,000
101 F 30616 Ipswich MA 37,651 37,552 37,552 37,552 37,552 37,552 37,552
101 F 30617 Leominister MA 37,114 37,112 37,112 37,112 37,112 37,112 37,112
101 F 30618 Lowell MA 31,436 31,440 31,440 31,440 31,440 31,440 31,440
101 F 30619 Methuen MA 57,200 57,200 57,200 57,200 57,200 57,200 57,200
101 F 30621 Newburyport MA 24,015 24,016 24,016 24,016 24,016 24,016 24,016
101 F 30622 Orange MA 15,262 15,280 15,280 15,280 15,280 15,280 15,280
101 F 30623 Orleans MA 48,903 48,904 48,904 48,904 48,904 48,904 48,904
101 F 30624 Peabody MA 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 30625 Quincy MA 81,215 81,216 81,216 81,216 81,216 81,216 81,216
101 F 30626 Revere MA 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 30627 Salem MA 72,919 72,920 72,920 72,920 72,920 72,920 72,920
101 F 30629 Tewlesbury MA 35,804 35,806 35,806 35,806 35,806 35,806 35,806
101 F 30630 Twin Mill MA 48,903 48,904 48,904 48,904 48,904 48,904 48,904
101 F 30631 Falmouth MA 40,171 40,168 40,168 40,168 40,168 40,168 40,168
101 F 30632 W. Yarmouth MA 42,354 42,362 42,362 42,362 42,362 42,362 42,362
101 F 30633 Westford MA 72,462 72,480 72,480 72,480 72,480 72,480 72,480
101 F 30634 Woburn MA 67,679 67,680 67,680 67,680 67,680 67,680 67,680
101 F 30635 Yarmouth MA 46,284 46,200 46,200 46,200 46,200 46,200 46,200
101 F 30636 Bridgewater MA 77,722 77,720 77,720 77,720 77,720 77,720 77,720
101 F 30704 Oxbridge MA 54,580 54,576 54,576 54,576 54,576 54,576 54,576
101 F 55211 Derry NH 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 55234 Platstow NH 60,693 60,696 60,696 60,696 60,696 60,696 60,696
101 F 55235 Oxford NH 39,734 39,736 39,736 39,736 39,736 39,736 39,736
101 F 55241 Hampton NH 36,678 36,680 36,680 36,680 36,680 36,680 36,680
101 F 55244 Merrinack NH 44,100 44,104 44,104 44,104 44,104 44,104 44,104
101 F 55245 Nashua NH 37,966 37,964 37,964 37,964 37,964 37,964 37,964
101 F 55246 Pelham NH 61,566 61,568 61,568 61,568 61,568 61,568 61,568
101 F 55247 Pembroke NH 21,832 21,832 21,832 21,832 21,832 21,832 21,832
101 F 55249 Rochester NH 31,438 31,440 31,440 31,440 31,440 31,440 31,440
101 F 55250 Rochester NH 41,044 41,040 41,040 41,040 41,040 41,040 41,040
101 F 55251 Salem NH 24,866 24,868 24,868 24,868 24,868 24,868 24,868
101 F 55253 Somersworth NH 30,565 30,566 30,566 30,566 30,566 30,566 30,566
101 F 55254 Exeter NH 33,184 33,184 33,184 33,184 33,184 33,184 33,184
101 F 55256 Candia NH 64,186 64,184 64,184 64,184 64,184 64,184 64,184
101 F 55257 Epping NH 68,116 68,112 68,112 68,112 68,112 68,112 68,112
101 F 55258 Epsom NH 40,171 40,168 40,168 40,168 40,168 40,168 40,168
101 F 55259 Exeter NH 28,381 26,384 26,384 26,384 26,384 26,384 26,384
101 F 55261 Milford NH 54,143 54,144 54,144 54,144 54,144 54,144 54,144
101 F 55264 Portsmouth NH 55,016 55,016 55,016 55,016 55,016 55,016 55,016
101 F 55265 Portsmouth NH 40,607 40,608 40,608 40,608 40,608 40,608 40,608
101 F 55267 Salem NH 49,340 49,344 49,344 49,344 49,344 49,344 49,344
101 F 55268 Seabrook NH 46,030 48,032 48,032 48,032 48,032 48,032 48,032
104 F 56051 Wall Township NJ 76,848 76,848 76,848 76,848 76,848 76,848 76,848
104 F 56063 Hillside NJ 46,720 46,720 46,720 46,720 46,720 46,720 46,720
104 F 56081 Piscataway NJ 43,664 43,664 43,664 43,664 43,664 43,664 43,664
104 F 56097 Williamstown NJ 39,297 39,296 39,296 39,296 39,296 39,296 39,296
103 F 56139 Midland Park NJ 47,157 41,160 41,160 41,160 41,160 41,160 41,160
104 F 56157 Whiting NJ 51,087 51,088 51,088 51,088 51,088 51,088 51,088
104 F 56250 Oakhurst NJ 44,537 44,536 44,536 44,536 44,536 44,536 44,536
103 F 56252 Belleville NJ 98,680 98,680 98,680 98,680 98,680 98,680 98,680
104 F 56253 Pine Hill NJ 50,213 50,216 50,216 50,216 50,216 50,216 50,216
104 F 56258 Tuckerton NJ 58,509 58,512 58,512 58,512 58,512 58,512 58,512
<CAPTION>
F/Y 2005 F/Y 2006 F/Y 2007 F/Y 2008 F/Y 2009 F/Y 2010 F/Y 2011
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
101 F 30606 Ipswich MA 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 30607 Salisbury MA 34,056 34,056 34,056 34,056 34,056 34,056 34,056
101 F 30609 Beverly MA 11,792 11,792 11,792 11,792 11,792 11,792 11,792
101 F 30610 Buerica MA 69,864 69,864 69,864 69,864 69,864 69,864 69,864
101 F 30611 Branford MA 31,872 31,872 31,872 31,872 31,872 31,872 31,872
101 F 30612 Chatham MA 31,872 31,872 31,872 31,872 31,872 31,872 31,872
105 F 30615 Hanwich MA 62,000 62,000 62,000 62,000 62,000 62,000 62,000
101 F 30616 Ipswich MA 37,552 37,552 37,552 37,552 37,552 37,552 37,552
101 F 30617 Leominister MA 37,112 37,112 37,112 37,112 37,112 37,112 37,112
101 F 30618 Lowell MA 31,440 31,440 31,440 31,440 31,440 31,440 31,440
101 F 30619 Methuen MA 57,200 57,200 57,200 57,200 57,200 57,200 57,200
101 F 30621 Newburyport MA 24,016 24,016 24,016 24,016 24,016 24,016 24,016
101 F 30622 Orange MA 15,280 15,280 15,280 15,280 15,280 15,280 15,280
101 F 30623 Orleans MA 48,904 48,904 48,904 48,904 48,904 48,904 48,904
101 F 30624 Peabody MA 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 30625 Quincy MA 81,216 81,216 81,216 81,216 81,216 81,216 81,216
101 F 30626 Revere MA 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 30627 Salem MA 72,920 72,920 72,920 72,920 72,920 72,920 72,920
101 F 30629 Tewlesbury MA 35,806 35,806 35,806 35,806 35,806 35,806 35,806
101 F 30630 Twin Mill MA 48,904 48,904 48,904 48,904 48,904 48,904 48,904
101 F 30631 Falmouth MA 40,168 40,168 40,168 40,168 40,168 40,168 40,168
101 F 30632 W. Yarmouth MA 42,362 42,362 42,362 42,362 42,362 42,362 42,362
101 F 30633 Westford MA 72,480 72,480 72,480 72,480 72,480 72,480 72,480
101 F 30634 Woburn MA 67,680 67,680 67,680 67,680 67,680 67,680 67,680
101 F 30635 Yarmouth MA 46,200 46,200 46,200 46,200 46,200 46,200 46,200
101 F 30636 Bridgewater MA 77,720 77,720 77,720 77,720 77,720 77,720 77,720
101 F 30704 Oxbridge MA 54,576 54,576 54,576 54,576 54,576 54,576 54,576
101 F 55211 Derry NH 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 55234 Platstow NH 60,696 60,696 60,696 60,696 60,696 60,696 60,696
101 F 55235 Oxford NH 39,736 39,736 39,736 39,736 39,736 39,736 39,736
101 F 55241 Hampton NH 36,680 36,680 36,680 36,680 36,680 36,680 36,680
101 F 55244 Merrinack NH 44,104 44,104 44,104 44,104 44,104 44,104 44,104
101 F 55245 Nashua NH 37,964 37,964 37,964 37,964 37,964 37,964 37,964
101 F 55246 Pelham NH 61,568 61,568 61,568 61,568 61,568 61,568 61,568
101 F 55247 Pembroke NH 21,832 21,832 21,832 21,832 21,832 21,832 21,832
101 F 55249 Rochester NH 31,440 31,440 31,440 31,440 31,440 31,440 31,440
101 F 55250 Rochester NH 41,040 41,040 41,040 41,040 41,040 41,040 41,040
101 F 55251 Salem NH 24,868 24,868 24,868 24,868 24,868 24,868 24,868
101 F 55253 Somersworth NH 30,566 30,566 30,566 30,566 30,566 30,566 30,566
101 F 55254 Exeter NH 33,184 33,184 33,184 33,184 33,184 33,184 33,184
101 F 55256 Candia NH 64,184 64,184 64,184 64,184 64,184 64,184 64,184
101 F 55257 Epping NH 68,112 68,112 68,112 68,112 68,112 68,112 68,112
101 F 55258 Epsom NH 40,168 40,168 40,168 40,168 40,168 40,168 40,168
101 F 55259 Exeter NH 26,384 26,384 26,384 26,384 26,384 26,384 26,384
101 F 55261 Milford NH 54,144 54,144 54,144 54,144 54,144 54,144 54,144
101 F 55264 Portsmouth NH 55,016 55,016 55,016 55,016 55,016 55,016 55,016
101 F 55265 Portsmouth NH 40,608 40,608 40,608 40,608 40,608 40,608 40,608
101 F 55267 Salem NH 49,344 49,344 49,344 49,344 49,344 49,344 49,344
101 F 55268 Seabrook NH 48,032 48,032 48,032 48,032 48,032 48,032 48,032
104 F 56051 Wall Township NJ 76,848 76,848 76,848 76,848 76,848 76,848 76,848
104 F 56063 Hillside NJ 46,720 46,720 46,720 46,720 46,720 46,720 46,720
104 F 56081 Piscataway NJ 43,664 43,664 43,664 43,664 43,664 43,664 43,664
104 F 56097 Williamstown NJ 39,296 39,296 39,296 39,296 39,296 39,296 39,296
103 F 56139 Midland Park NJ 41,160 41,160 41,160 41,160 41,160 41,160 41,160
104 F 56157 Whiting NJ 51,088 51,088 51,088 51,088 51,088 51,088 51,088
104 F 56250 Oakhurst NJ 44,536 44,536 44,536 44,536 44,536 44,536 44,536
103 F 56252 Belleville NJ 98,680 98,680 98,680 98,680 98,680 98,680 98,680
104 F 56253 Pine Hill NJ 50,216 50,216 50,216 50,216 50,216 50,216 50,216
104 F 56258 Tuckerton NJ 58,512 58,512 58,512 58,512 58,512 58,512 58,512
<CAPTION>
F/Y 2012 Total
Reg Prop. Loc. Rent Rent
# Type # Town State Expense Expense
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
101 F 30606 Ipswich MA 35,368 530,520
101 F 30607 Salisbury MA 34,056 510,842
101 F 30609 Beverly MA 11,792 176,877
101 F 30610 Buerica MA 69,864 1,047,958
101 F 30611 Branford MA 31,872 478,083
101 F 30612 Chatham MA 31,872 478,083
105 F 30615 Hanwich MA 62,000 930,003
101 F 30616 Ipswich MA 37,552 563,379
101 F 30617 Leominister MA 37,112 556,682
101 F 30618 Lowell MA 31,440 471,596
101 F 30619 Methuen MA 57,200 858,000
101 F 30621 Newburyport MA 24,016 360,239
101 F 30622 Orange MA 15,280 229,182
101 F 30623 Orleans MA 48,904 733,559
101 F 30624 Peabody MA 35,368 530,520
101 F 30625 Quincy MA 81,216 1,218,239
101 F 30626 Revere MA 16,592 248,880
101 F 30627 Salem MA 72,920 1,093,799
101 F 30629 Tewlesbury MA 35,806 537,088
101 F 30630 Twin Mill MA 48,904 733,559
101 F 30631 Falmouth MA 40,168 602,523
101 F 30632 W. Yarmouth MA 42,362 635,422
101 F 30633 Westford MA 72,480 1,087,182
101 F 30634 Woburn MA 67,680 1,015,199
101 F 30635 Yarmouth MA 46,200 693,084
101 F 30636 Bridgewater MA 77,720 1,165,802
101 F 30704 Oxbridge MA 54,576 818,644
101 F 55211 Derry NH 35,368 530,520
101 F 55234 Platstow NH 60,696 910,437
101 F 55235 Oxford NH 39,736 596,038
101 F 55241 Hampton NH 36,680 550,198
101 F 55244 Merrinack NH 44,104 661,556
101 F 55245 Nashua NH 37,964 569,462
101 F 55246 Pelham NH 61,568 923,518
101 F 55247 Pembroke NH 21,832 327,480
101 F 55249 Rochester NH 31,440 471,598
101 F 55250 Rochester NH 41,040 615,604
101 F 55251 Salem NH 24,868 373,018
101 F 55253 Somersworth NH 30,566 458,489
101 F 55254 Exeter NH 33,184 497,760
101 F 55256 Candia NH 64,184 962,762
101 F 55257 Epping NH 68,112 1,021,684
101 F 55258 Epsom NH 40,168 602,523
101 F 55259 Exeter NH 26,384 397,757
101 F 55261 Milford NH 54,144 812,159
101 F 55264 Portsmouth NH 55,016 825,240
101 F 55265 Portsmouth NH 40,608 609,119
101 F 55267 Salem NH 49,344 740,156
101 F 55268 Seabrook NH 48,032 718,478
104 F 56051 Wall Township NJ 76,848 1,152,720
104 F 56063 Hillside NJ 46,720 700,800
104 F 56081 Piscataway NJ 43,664 654,960
104 F 56097 Williamstown NJ 39,296 589,441
103 F 56139 Midland Park NJ 41,160 623,397
104 F 56157 Whiting NJ 51,088 766,319
104 F 56250 Oakhurst NJ 44,536 668,041
103 F 56252 Belleville NJ 98,680 1,480,200
104 F 56253 Pine Hill NJ 50,216 753,237
104 F 56258 Tuckerton NJ 58,512 877,677
</TABLE>
Page 4 of 6
<PAGE> 49
Leemilt's Properties
<TABLE>
<CAPTION>
F/Y 1998 F/Y 1999 F/Y 2000 F/Y 2001 F/Y 2002 F/Y 2003 F/Y 2004
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
102 F 609 Waterbury CT 27,945 27,944 27,944 27,944 27,944 27,944 27,944
102 F 612 West Haven CT 65,059 65,056 65,056 65,056 65,056 65,056 65,056
101 F 618 Feeding Hills MA 39,297 39,296 39,296 39,296 39,296 39,296 39,296
101 F 624 Granby MA 27,945 27,944 27,944 27,944 27,944 27,944 27,944
101 F 625 G. Barrington MA 65,932 65,936 65,936 65,936 65,936 65,936 65,936
101 F 626 Hadley MA 42,354 42,352 42,352 42,352 42,352 42,352 42,352
101 F 627 Lanesboro MA 37,551 37,552 37,552 37,552 37,552 37,552 37,552
101 F 628 Monson MA 54,143 54,144 54,144 54,144 54,144 54,144 54,144
101 F 629 North Adams MA 36,678 36,680 36,680 36,680 36,680 36,680 36,680
101 F 630 North Adams MA 25,762 25,760 25,760 25,760 25,760 25,760 25,760
101 F 632 Pittsfield MA 52,397 52,400 52,400 52,400 52,400 52,400 52,400
101 F 633 Pittsfield MA 41,481 41,480 41,480 41,480 41,480 41,480 41,480
101 F 635 So. Hadley MA 45,847 45,848 45,848 45,848 45,848 45,848 45,848
101 F 637 Spingfield MA 34,058 34,056 84,056 84,056 84,056 84,056 84,056
101 F 638 Spingfield MA 47,594 41,592 41,592 41,592 41,592 41,592 41,592
101 F 640 Spingfield MA 27,072 27,072 27,072 27,072 27,072 27,072 27,072
101 F 641 Spingfield MA 20,959 20,960 20,960 20,960 20,960 20,960 20,960
101 F 643 Westfield MA 36,424 38,424 38,424 38,424 38,424 38,424 38,424
103 F 647 Ossining NY 78,596 78,592 78,592 78,592 78,592 78,592 78,592
102 F 649 Brooklyn NY 25,762 25,760 25,760 25,760 25,760 25,760 25,760
104 F 658 Howell NJ 60,693 60,696 60,696 60,696 60,696 60,696 60,696
104 F 660 Lakewood NJ 23,578 23,576 23,576 23,576 23,576 23,576 23,576
104 F 670 South Amboy NJ 61,960 61,960 61,960 61,960 61,960 61,960 61,960
103 F 675 Andover NJ 58,073 58,072 58,072 58,072 58,072 58,072 58,072
102 F 676 Glen Head NY 65,932 65,936 65,936 65,936 65,936 65,936 65,936
103 F 677 New Rochelle NY 57,200 57,200 57,200 57,200 57,200 57,200 57,200
102 F 678 Elmont NY 38,861 38,864 38,064 38,064 38,064 38,064 38,064
102 F 680 N. Branford CT 42,354 42,352 42,352 42,352 42,352 42,352 42,352
102 F 683 Meriden CT 28,818 28,816 28,816 28,816 28,816 28,816 28,816
102 F 689 Plainville CT 2,620 2,616 2,616 2,616 2,616 2,616 2,616
102 F 707 Brooklyn NY 45,410 46,404 46,404 46,404 46,404 46,404 46,404
102 F 6777 Milford CT 37,561 37,562 37,562 37,562 37,562 37,562 37,562
102 F 6813 Brookfield CT 37,986 37,984 37,984 37,984 37,984 37,984 37,984
102 F 6822 Manchester CT 28,678 28,676 28,676 28,676 28,676 28,676 28,676
102 F 6834 Ridgefield CT 56,326 56,326 54,326 54,326 54,326 54,326 54,326
102 F 6836 Bridgeport CT 54,143 54,144 54,144 54,144 54,144 54,144 54,144
102 F 6852 Middletown CT 70,299 70,296 70,296 70,296 70,296 70,296 70,296
102 F 6862 Stratford CT 33,621 33,624 33,624 33,624 33,624 33,624 33,624
101 F 28206 Lisbon ME 49,340 49,344 49,344 49,344 49,344 49,344 49,344
101 F 28207 Lisbon Falls ME 22,706 22,704 22,704 22,704 22,704 22,704 22,704
101 F 28208 Portland ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28210 Rockland ME 24,888 24,888 24,888 24,888 24,888 24,888 24,888
101 F 28212 Saco ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28213 Sanford ME 84,706 84,704 84,704 84,704 84,704 84,704 84,704
101 F 28215 Westbrook ME 22,269 22,272 22,272 22,272 22,272 22,272 22,272
101 F 28216 Wiscasset ME 23,578 23,576 23,576 23,576 23,576 23,576 23,576
101 F 28220 Auburn ME 36,678 36,680 36,680 36,680 36,680 36,680 36,680
101 F 28222 S. Portland ME 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 28223 Lewiston ME 23,142 23,144 23,144 23,144 23,144 23,144 23,144
101 F 28226 N. Windham ME 26,381 28,384 28,384 28,384 28,384 28,384 28,384
101 F 30374 Dedham MA 36,241 36,240 36,240 36,240 36,240 36,240 36,240
101 F 30375 Hingham MA 83,835 83,832 83,832 83,832 83,832 83,832 83,832
101 F 30468 Foxboro MA 86,018 86,016 86,016 86,016 86,016 86,016 86,016
101 F 30524 Falmouth MA 94,750 94,752 94,752 94,752 94,752 94,752 94,752
101 F 30600 Lowell MA 62,876 62,872 62,872 62,872 62,872 62,872 62,872
101 F 30602 Auburn MA 52,397 52,400 52,400 52,400 52,400 52,400 52,400
101 F 30603 Methuen MA 66,805 66,808 66,808 66,808 66,808 66,808 66,808
101 F 30604 Arnesbury MA 69,425 69,424 69,424 69,424 69,424 69,424 69,424
101 F 30605 Georgetown MA 61,129 61,128 61,128 61,128 61,128 61,128 61,128
<CAPTION>
F/Y 2005 F/Y 2006 F/Y 2007 F/Y 2008 F/Y 2009 F/Y 2010 F/Y 2011
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
102 F 609 Waterbury CT 27,944 27,944 27,944 27,944 27,944 27,944 27,944
102 F 612 West Haven CT 65,056 65,056 65,056 65,056 65,056 65,056 65,056
101 F 618 Feeding Hills MA 39,296 39,296 39,296 39,296 39,296 39,296 39,296
101 F 624 Granby MA 27,944 27,944 27,944 27,944 27,944 27,944 27,944
101 F 625 G. Barrington MA 65,936 65,936 65,936 65,936 65,936 65,936 65,936
101 F 626 Hadley MA 42,352 42,352 42,352 42,352 42,352 42,352 42,352
101 F 627 Lanesboro MA 37,552 37,552 37,552 37,552 37,552 37,552 37,552
101 F 628 Monson MA 54,144 54,144 54,144 54,144 54,144 54,144 54,144
101 F 629 North Adams MA 36,680 36,680 36,680 36,680 36,680 36,680 36,680
101 F 630 North Adams MA 25,760 25,760 25,760 25,760 25,760 25,760 25,760
101 F 632 Pittsfield MA 52,400 52,400 52,400 52,400 52,400 52,400 52,400
101 F 633 Pittsfield MA 41,480 41,480 41,480 41,480 41,480 41,480 41,480
101 F 635 So. Hadley MA 45,848 45,848 45,848 45,848 45,848 45,848 45,848
101 F 637 Spingfield MA 84,056 84,056 84,056 84,056 84,056 84,056 84,056
101 F 638 Spingfield MA 41,592 41,592 41,592 41,592 41,592 41,592 41,592
101 F 640 Spingfield MA 27,072 27,072 27,072 27,072 27,072 27,072 27,072
101 F 641 Spingfield MA 20,960 20,960 20,960 20,960 20,960 20,960 20,960
101 F 643 Westfield MA 38,424 38,424 38,424 38,424 38,424 38,424 38,424
103 F 647 Ossining NY 78,592 78,592 78,592 78,592 78,592 78,592 78,592
102 F 649 Brooklyn NY 25,760 25,760 25,760 25,760 25,760 25,760 25,760
104 F 658 Howell NJ 60,696 60,696 60,696 60,696 60,696 60,696 60,696
104 F 660 Lakewood NJ 23,576 23,576 23,576 23,576 23,576 23,576 23,576
104 F 670 South Amboy NJ 61,960 61,960 61,960 61,960 61,960 61,960 61,960
103 F 675 Andover NJ 58,072 58,072 58,072 58,072 58,072 58,072 58,072
102 F 676 Glen Head NY 65,936 65,936 65,936 65,936 65,936 65,936 65,936
103 F 677 New Rochelle NY 57,200 57,200 57,200 57,200 57,200 57,200 57,200
102 F 678 Elmont NY 38,064 38,064 38,064 38,064 38,064 38,064 38,064
102 F 680 N. Branford CT 42,352 42,352 42,352 42,352 42,352 42,352 42,352
102 F 683 Meriden CT 28,816 28,816 28,816 28,816 28,816 28,816 28,816
102 F 689 Plainville CT 2,616 2,616 2,616 2,616 2,616 2,616 2,616
102 F 707 Brooklyn NY 46,404 46,404 46,404 46,404 46,404 46,404 46,404
102 F 6777 Milford CT 37,562 37,562 37,562 37,562 37,562 37,562 37,562
102 F 6813 Brookfield CT 37,984 37,984 37,984 37,984 37,984 37,984 37,984
102 F 6822 Manchester CT 28,676 28,676 28,676 28,676 28,676 28,676 28,676
102 F 6834 Ridgefield CT 54,326 54,326 54,326 54,326 54,326 54,326 54,326
102 F 6836 Bridgeport CT 54,144 54,144 54,144 54,144 54,144 54,144 54,144
102 F 6852 Middletown CT 70,296 70,296 70,296 70,296 70,296 70,296 70,296
102 F 6862 Stratford CT 33,624 33,624 33,624 33,624 33,624 33,624 33,624
101 F 28206 Lisbon ME 49,344 49,344 49,344 49,344 49,344 49,344 49,344
101 F 28207 Lisbon Falls ME 22,704 22,704 22,704 22,704 22,704 22,704 22,704
101 F 28208 Portland ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28210 Rockland ME 24,888 24,888 24,888 24,888 24,888 24,888 24,888
101 F 28212 Saco ME 16,592 16,592 16,592 16,592 16,592 16,592 16,592
101 F 28213 Sanford ME 84,704 84,704 84,704 84,704 84,704 84,704 84,704
101 F 28215 Westbrook ME 22,272 22,272 22,272 22,272 22,272 22,272 22,272
101 F 28216 Wiscasset ME 23,576 23,576 23,576 23,576 23,576 23,576 23,576
101 F 28220 Auburn ME 36,680 36,680 36,680 36,680 36,680 36,680 36,680
101 F 28222 S. Portland ME 35,368 35,368 35,368 35,368 35,368 35,368 35,368
101 F 28223 Lewiston ME 23,144 23,144 23,144 23,144 23,144 23,144 23,144
101 F 28226 N. Windham ME 28,384 28,384 28,384 28,384 28,384 28,384 28,384
101 F 30374 Dedham MA 36,240 36,240 36,240 36,240 36,240 36,240 36,240
101 F 30375 Hingham MA 83,832 83,832 83,832 83,832 83,832 83,832 83,832
101 F 30468 Foxboro MA 86,016 86,016 86,016 86,016 86,016 86,016 86,016
101 F 30524 Falmouth MA 94,752 94,752 94,752 94,752 94,752 94,752 94,752
101 F 30600 Lowell MA 62,872 62,872 62,872 62,872 62,872 62,872 62,872
101 F 30602 Auburn MA 52,400 52,400 52,400 52,400 52,400 52,400 52,400
101 F 30603 Methuen MA 66,808 66,808 66,808 66,808 66,808 66,808 66,808
101 F 30604 Arnesbury MA 69,424 69,424 69,424 69,424 69,424 69,424 69,424
101 F 30605 Georgetown MA 61,128 61,128 61,128 61,128 61,128 61,128 61,128
<CAPTION>
F/Y 2012 Total
Reg Prop. Loc. Rent Rent
# Type # Town State Expense Expense
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
102 F 609 Waterbury CT 27,944 419,161
102 F 612 West Haven CT 65,056 975,843
101 F 618 Feeding Hills MA 39,296 589,441
101 F 624 Granby MA 27,944 419,161
101 F 625 G. Barrington MA 65,936 989,036
101 F 626 Hadley MA 42,352 635,282
101 F 627 Lanesboro MA 37,552 563,279
101 F 628 Monson MA 54,144 812,159
101 F 629 North Adams MA 36,680 550,198
101 F 630 North Adams MA 25,760 386,402
101 F 632 Pittsfield MA 52,400 785,997
101 F 633 Pittsfield MA 41,480 622,201
101 F 635 So. Hadley MA 45,848 687,719
101 F 637 Spingfield MA 84,056 1,160,842
101 F 638 Spingfield MA 41,592 629,882
101 F 640 Spingfield MA 27,072 406,080
101 F 641 Spingfield MA 20,960 314,399
101 F 643 Westfield MA 38,424 574,360
103 F 647 Ossining NY 78,592 1,178,884
102 F 649 Brooklyn NY 25,760 386,402
104 F 658 Howell NJ 60,696 910,437
104 F 660 Lakewood NJ 23,576 353,642
104 F 670 South Amboy NJ 61,960 929,400
103 F 675 Andover NJ 58,072 871,081
102 F 676 Glen Head NY 65,936 989,036
103 F 677 New Rochelle NY 57,200 858,000
102 F 678 Elmont NY 38,064 572,557
102 F 680 N. Branford CT 42,352 635,282
102 F 683 Meriden CT 28,816 432,242
102 F 689 Plainville CT 2,616 39,244
102 F 707 Brooklyn NY 46,404 695,066
102 F 6777 Milford CT 37,562 563,429
102 F 6813 Brookfield CT 37,984 569,762
102 F 6822 Manchester CT 28,676 430,142
102 F 6834 Ridgefield CT 54,326 818,890
102 F 6836 Bridgeport CT 54,144 812,159
102 F 6852 Middletown CT 70,296 1,054,443
102 F 6862 Stratford CT 33,624 504,357
101 F 28206 Lisbon ME 49,344 740,156
101 F 28207 Lisbon Falls ME 22,704 340,562
101 F 28208 Portland ME 16,592 248,880
101 F 28210 Rockland ME 24,888 373,320
101 F 28212 Saco ME 16,592 248,880
101 F 28213 Sanford ME 84,704 1,270,562
101 F 28215 Westbrook ME 22,272 334,077
101 F 28216 Wiscasset ME 23,576 353,642
101 F 28220 Auburn ME 36,680 550,198
101 F 28222 S. Portland ME 35,368 530,520
101 F 28223 Lewiston ME 23,144 347,158
101 F 28226 N. Windham ME 28,384 423,757
101 F 30374 Dedham MA 36,240 543,601
101 F 30375 Hingham MA 83,832 1,257,483
101 F 30468 Foxboro MA 86,016 1,290,242
101 F 30524 Falmouth MA 94,752 1,421,278
101 F 30600 Lowell MA 62,872 943,084
101 F 30602 Auburn MA 52,400 785,997
101 F 30603 Methuen MA 66,808 1,002,117
101 F 30604 Arnesbury MA 69,424 1,041,361
101 F 30605 Georgetown MA 61,128 916,921
</TABLE>
Page 5 of 6
<PAGE> 50
Leemilt's Properties
<TABLE>
<CAPTION>
F/Y 1998 F/Y 1999 F/Y 2000 F/Y 2001 F/Y 2002 F/Y 2003 F/Y 2004
Reg Prop. Loc. Rent Rent Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
104 F 67618 Eldns's Park PA 32,748 32,744 32,744 32,744 32,744 32,744 32,744
101 F 68001 N. Kingston RI 58,073 58,072 58,072 58,072 58,072 58,072 58,072
101 F 68002 Middletown RI 39,297 39,296 39,296 39,296 39,296 39,296 39,296
101 F 68003 Warwick RI 72,045 72,048 72,048 72,048 72,048 72,048 72,048
101 F 68611 Pawtucket RI 37,114 37,112 37,112 37,112 37,112 37,112 37,112
104 F 69004 Ephrata PA 17,902 17,904 17,904 17,904 17,904 17,904 17,904
104 F 69006 Douglasville PA 36,678 36,680 36,680 36,680 36,680 36,680 36,680
104 F 69010 York PA 40,171 40,168 40,168 40,168 40,168 40,168 40,168
512 F 69407 Lancaster PA 24,452 24,448 24,448 24,448 24,448 24,448 24,448
512 F 69408 Bethlehem PA 24,452 24,448 24,448 24,448 24,448 24,448 24,448
512 F 69416 Lancaster PA 75,538 75,536 75,536 75,536 75,536 75,536 75,536
512 F 69417 Scafferstow PA 21,395 21,392 21,392 21,392 21,392 21,392 21,392
512 F 69419 Hamburg PA 24,452 24,448 24,448 24,448 24,448 24,448 24,448
512 F 69420 Reading PA 21,395 21,392 21,392 21,392 21,392 21,392 21,392
512 F 69424 Mountville PA 23,142 23,144 23,144 23,144 23,144 23,144 23,144
512 F 69425 Ebenezer PA 18,339 18,336 18,336 18,336 18,336 18,336 18,336
512 F 69426 Bethlehem PA 15,282 15,280 15,280 15,280 15,280 15,280 15,280
512 F 69427 Royersford PA 17,029 17,032 17,032 17,032 17,032 17,032 17,032
512 F 69429 York PA 17,029 17,032 17,032 17,032 17,032 17,032 17,032
512 F 69439 Oxford PA 21,395 21,392 21,392 21,392 21,392 21,392 21,392
512 F 69466 Kenhorst PA 17,029 17,032 17,032 17,032 17,032 17,032 17,032
512 F 69467 Neffsville PA 27,508 27,512 27,512 27,512 27,512 27,512 27,512
512 F 69470 Lancaster PA 24,452 24,448 24,448 24,448 24,448 24,448 24,448
512 F 69476 Shrewsbury PA 24,015 24,016 24,016 24,016 24,016 24,016 24,016
512 F 69483 Red Lion PA 26,198 26,200 26,200 26,200 26,200 26,200 26,200
512 F 69485 Rothsville PA 20,085 20,086 20,086 20,086 20,086 20,086 20,086
512 F 69491 Laureldale PA 17,466 17,464 17,464 17,464 17,464 17,464 17,464
512 F 69494 Lancaster PA 18,339 18,336 18,336 18,336 18,336 18,336 18,336
512 F 69502 Mount Joy PA 18,339 18,336 18,336 18,336 18,336 18,336 18,336
512 F 69503 Lancaster PA 35,368 35,368 35,368 35,368 35,368 35,368 35,368
512 F 69504 New Holland PA 37,114 37,112 37,112 37,112 37,112 37,112 37,112
512 F 69505 Christiana PA 21,395 21,392 21,392 21,392 21,392 21,392 21,392
512 F 69672 Reading PA 10,916 10,912 10,912 10,912 10,912 10,912 10,912
512 F 69673 Wyomissing Hills PA 47,594 47,592 47,592 47,592 47,592 47,592 47,592
512 F 69676 St. Clair PA 9,168 9,168 9,168 9,168 9,168 9,168 9,168
512 F 69680 Reifton PA 44,974 44,976 44,976 44,976 44,976 44,976 44,976
104 F 69681 W. Reading PA 52,397 52,400 52,400 52,400 52,400 52,400 52,400
512 F 69682 Ardentsville PA 20,522 20,520 20,520 20,520 20,520 20,520 20,520
512 F 69683 Hohnton PA 37,551 37,552 37,552 37,552 37,552 37,552 37,552
512 F 69692 Chambersburg PA 41,917 41,920 41,920 41,920 41,920 41,920 41,920
512 F 71091 Roanoke VA 22,269 22,272 22,272 22,272 22,272 22,272 22,272
512 F 71270 Portsmouth VA 65,496 65,496 65,496 65,496 65,496 65,496 65,496
512 F 71321 Chesapeake VA 108,286 108,288 108,288 108,288 108,288 108,288 108,288
512 F 71706 Chesapeake VA 120,075 120,072 120,072 120,072 120,072 120,072 120,072
14,328,748 14,328,739 14,328,739 14,328,739 14,328,739 14,328,739 14,328,739
<CAPTION>
F/Y 2005 F/Y 2006 F/Y 2007 F/Y 2008 F/Y 2009
Reg Prop. Loc. Rent Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense Expense
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
104 F 67618 Eldns's Park PA 32,744 32,744 32,744 32,744 32,744
101 F 68001 N. Kingston RI 58,072 58,072 58,072 58,072 58,072
101 F 68002 Middletown RI 39,296 39,296 39,296 39,296 39,296
101 F 68003 Warwick RI 72,048 72,048 72,048 72,048 72,048
101 F 68611 Pawtucket RI 37,112 37,112 37,112 37,112 37,112
104 F 69004 Ephrata PA 17,904 17,904 17,904 17,904 17,904
104 F 69006 Douglasville PA 36,680 36,680 36,680 36,680 36,680
104 F 69010 York PA 40,168 40,168 40,168 40,168 40,168
512 F 69407 Lancaster PA 24,448 24,448 24,448 24,448 24,448
512 F 69408 Bethlehem PA 24,448 24,448 24,448 24,448 24,448
512 F 69416 Lancaster PA 75,536 75,536 75,536 75,536 75,536
512 F 69417 Scafferstow PA 21,392 21,392 21,392 21,392 21,392
512 F 69419 Hamburg PA 24,448 24,448 24,448 24,448 24,448
512 F 69420 Reading PA 21,392 21,392 21,392 21,392 21,392
512 F 69424 Mountville PA 23,144 23,144 23,144 23,144 23,144
512 F 69425 Ebenezer PA 18,336 18,336 18,336 18,336 18,336
512 F 69426 Bethlehem PA 15,280 15,280 15,280 15,280 15,280
512 F 69427 Royersford PA 17,032 17,032 17,032 17,032 17,032
512 F 69429 York PA 17,032 17,032 17,032 17,032 17,032
512 F 69439 Oxford PA 21,392 21,392 21,392 21,392 21,392
512 F 69466 Kenhorst PA 17,032 17,032 17,032 17,032 17,032
512 F 69467 Neffsville PA 27,512 27,512 27,512 27,512 27,512
512 F 69470 Lancaster PA 24,448 24,448 24,448 24,448 24,448
512 F 69476 Shrewsbury PA 24,016 24,016 24,016 24,016 24,016
512 F 69483 Red Lion PA 26,200 26,200 26,200 26,200 26,200
512 F 69485 Rothsville PA 20,086 20,086 20,086 20,086 20,086
512 F 69491 Laureldale PA 17,464 17,464 17,464 17,464 17,464
512 F 69494 Lancaster PA 18,336 18,336 18,336 18,336 18,336
512 F 69502 Mount Joy PA 18,336 18,336 18,336 18,336 18,336
512 F 69503 Lancaster PA 35,368 35,368 35,368 35,368 35,368
512 F 69504 New Holland PA 37,112 37,112 37,112 37,112 37,112
512 F 69505 Christiana PA 21,392 21,392 21,392 21,392 21,392
512 F 69672 Reading PA 10,912 10,912 10,912 10,912 10,912
512 F 69673 Wyomissing Hills PA 47,592 47,592 47,592 47,592 47,592
512 F 69676 St. Clair PA 9,168 9,168 9,168 9,168 9,168
512 F 69680 Reifton PA 44,976 44,976 44,976 44,976 44,976
104 F 69681 W. Reading PA 52,400 52,400 52,400 52,400 52,400
512 F 69682 Ardentsville PA 20,520 20,520 20,520 20,520 20,520
512 F 69683 Hohnton PA 37,552 37,552 37,552 37,552 37,552
512 F 69692 Chambersburg PA 41,920 41,920 41,920 41,920 41,920
512 F 71091 Roanoke VA 22,272 22,272 22,272 22,272 22,272
512 F 71270 Portsmouth VA 65,496 65,496 65,496 65,496 65,496
512 F 71321 Chesapeake VA 108,288 108,288 108,288 108,288 108,288
512 F 71706 Chesapeake VA 120,072 120,072 120,072 120,072 120,072
14,328,739 14,328,739 14,328,739 14,328,739 14,328,739
<CAPTION>
F/Y 2010 F/Y 2011 F/Y 2012 Total
Reg Prop. Loc. Rent Rent Rent Rent
# Type # Town State Expense Expense Expense Expense
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
104 F 67618 Eldns's Park PA 32,744 32,744 32,744 491,164
101 F 68001 N. Kingston RI 58,072 58,072 58,072 871,081
101 F 68002 Middletown RI 39,296 39,296 39,296 589,441
101 F 68003 Warwick RI 72,048 72,048 72,048 1,080,717
101 F 68611 Pawtucket RI 37,112 37,112 37,112 556,682
104 F 69004 Ephrata PA 17,904 17,904 17,904 268,558
104 F 69006 Douglasville PA 36,680 36,680 36,680 550,198
104 F 69010 York PA 40,168 40,168 40,168 602,523
512 F 69407 Lancaster PA 24,448 24,448 24,448 366,724
512 F 69408 Bethlehem PA 24,448 24,448 24,448 366,724
512 F 69416 Lancaster PA 75,536 75,536 75,536 1,133,042
512 F 69417 Scafferstow PA 21,392 21,392 21,392 320,883
512 F 69419 Hamburg PA 24,448 24,448 24,448 366,724
512 F 69420 Reading PA 21,392 21,392 21,392 320,883
512 F 69424 Mountville PA 23,144 23,144 23,144 347,158
512 F 69425 Ebenezer PA 18,336 18,336 18,336 275,043
512 F 69426 Bethlehem PA 15,280 15,280 15,280 229,202
512 F 69427 Royersford PA 17,032 17,032 17,032 255,477
512 F 69429 York PA 17,032 17,032 17,032 255,477
512 F 69439 Oxford PA 21,392 21,392 21,392 320,883
512 F 69466 Kenhorst PA 17,032 17,032 17,032 255,477
512 F 69467 Neffsville PA 27,512 27,512 27,512 412,676
512 F 69470 Lancaster PA 24,448 24,448 24,448 366,724
512 F 69476 Shrewsbury PA 24,016 24,016 24,016 360,239
512 F 69483 Red Lion PA 26,200 26,200 26,200 392,998
512 F 69485 Rothsville PA 20,086 20,086 20,086 301,289
512 F 69491 Laureldale PA 17,464 17,464 17,464 261,962
512 F 69494 Lancaster PA 18,336 18,336 18,336 275,043
512 F 69502 Mount Joy PA 18,336 18,336 18,336 275,043
512 F 69503 Lancaster PA 35,368 35,368 35,368 530,520
512 F 69504 New Holland PA 37,112 37,112 37,112 556,682
512 F 69505 Christiana PA 21,392 21,392 21,392 320,883
512 F 69672 Reading PA 10,912 10,912 10,912 163,684
512 F 69673 Wyomissing Hills PA 47,592 47,592 47,592 713,882
512 F 69676 St. Clair PA 9,168 9,168 9,168 137,520
512 F 69680 Reifton PA 44,976 44,976 44,976 674,638
104 F 69681 W. Reading PA 52,400 52,400 52,400 785,997
512 F 69682 Ardentsville PA 20,520 20,520 20,520 307,802
512 F 69683 Hohnton PA 37,552 37,552 37,552 563,279
512 F 69692 Chambersburg PA 41,920 41,920 41,920 628,797
512 F 71091 Roanoke VA 22,272 22,272 22,272 334,077
512 F 71270 Portsmouth VA 65,496 65,496 65,496 982,440
512 F 71321 Chesapeake VA 108,288 108,288 108,288 1,624,318
512 F 71706 Chesapeake VA 120,072 120,072 120,072 1,801,083
14,328,739 14,328,739 14,328,739 214,931,097
</TABLE>
Page 6 of 6
<PAGE> 1
EXHIBIT 10.6
AMENDMENT TO
THREE PARTY LEASE AGREEMENT
This AMENDMENT TO THREE PARTY LEASE AGREEMENT (this "Amendment") is made
as of this 30th day of January, 1998 by Getty Properties Corp., a Delaware
corporation ("Properties"), successor by merger and name change to Getty Realty
Corp. ("Realty"), Fleet National Bank (the "Bank") and Leemilt's Petroleum, Inc.
(the "Borrower").
WITNESSETH:
WHEREAS, Realty duly authorized, executed and delivered that certain Three
Party Lease Agreement dated as of April 18, 1997 by and among Realty, the Bank
and the Borrower (the "Lease Agreement");
WHEREAS, Getty Merger Sub, Inc. merged with and into Realty and Realty
changed its name to "Getty Properties Corp." effective as of January 30, 1998;
WHEREAS, the execution and delivery of this Amendment is a condition
precedent to the Bank's and the Borrower's agreement to enter into that certain
Second Amendment to Amended and Restated Loan Agreement of even date herewith
(the "Second Amendment");
NOW, THEREFORE, for good and valuable consideration paid and in
consideration of the promises herein, the receipt and sufficiency of which are
hereby acknowledged, Properties, the Bank and the Borrower agree as follows:
1. All references in the Lease Agreement to "Realty" or "Lessee" shall
be changed to be references to "Properties".
2. In line 4 of paragraph 27 of the Lease Agreement, the number "8" is
hereby deleted and the number "26" is substituted in place thereof.
3. Properties hereby affirms and acknowledges (i) the continued
validity of the Lease Agreement and (ii) that the Lease Agreement,
except as expressly amended hereby, remains in full force and
effect. Properties agrees that the obligations of
<PAGE> 2
-2-
Properties to the Bank under the Lease Agreement, and the terms and
provisions of the Lease Agreement as amended hereby, are hereby
ratified, affirmed and incorporated herein by reference, with the
same force and effect as if set forth herein in their entirety.
Properties consents to the amendments set forth in the Second
Amendment.
4. This Amendment shall be construed according to and governed by the
laws of the Commonwealth of Massachusetts.
<PAGE> 3
IN WITNESS WHEREOF, Properties, the Bank and the Borrower have caused
this Amendment to be made by their respective duly authorized officers as a
sealed instrument as of the date first set forth above.
GETTY PROPERTIES CORP.
By: /s/ John J. Fitteron
-------------------------------
Name: John J. Fitteron
Title: Senior Vice President
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK
By:
-------------------------------
Name: Michael A. Palmer
Title: Vice President
LEEMILT'S PETROLEUM, INC.
By: /s/ John J. Fitteron
-------------------------------
Name: John J. Fitteron
Title: Senior Vice President
<PAGE> 4
IN WITNESS WHEREOF, Properties, the Bank and the Borrower have caused
this Amendment to be made by their respective duly authorized officers as a
sealed instrument as of the date first set forth above.
GETTY PROPERTIES CORP.
By:
-------------------------------
Name: John J. Fitteron
Title: Senior Vice President
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
-------------------------------
Name: Michael A. Palmer
Title: Vice President
LEEMILT'S PETROLEUM, INC.
By:
-------------------------------
Name: John J. Fitteron
Title: Senior Vice President
<PAGE> 1
EXHIBIT 10.8
AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED AND
RESTATED HAZARDOUS WASTE AND PMPA INDEMNIFICATION
AGREEMENT
This AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED AND RESTATED HAZARDOUS
WASTE AND PMPA INDEMNIFICATION AGREEMENT (this "Agreement") is made as of this
18th day of April, 1997 by Getty Realty Corp., a Delaware corporation
("Realty"), successor by merger and name change to Getty Petroleum Corp.
("Getty").
WITNESSETH:
WHEREAS, Getty duly authorized, executed and delivered that certain
Amended and Restated Hazardous Waste and PMPA Indemnification Agreement dated as
of October 31, 1995 by and among Getty, Fleet Bank of Massachusetts, N.A.,
predecessor in interest to Fleet National Bank (the "Bank"), and Power Test
Realty Company Limited Partnership (the "Borrower") (the "Indemnification
Agreement");
WHEREAS, Realty has merged with and into Getty and Getty in turn has
changed its name to "Getty Realty Corp." effective as of March 31, 1997;
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the Bank's and the Borrower's agreement to enter into that certain
First Amendment to Amended and Restated Loan Agreement of even date herewith
(the "First Amendment");
NOW, THEREFORE, for good and valuable consideration paid and in
consideration of the promises herein, the receipt and sufficiency of which are
hereby acknowledged, Realty agrees as follows:
1. All references in the Indemnification Agreement to "Getty" shall be
changed to be references to "Realty".
2. Realty hereby affirms and acknowledges (i) the continued validity of
the Indemnification Agreement and (ii) that the Indemnification
Agreement, except as expressly amended
<PAGE> 2
-2-
hereby, remains in full force and effect. Realty agrees that the
obligations of Realty to the Bank under the Indemnification
Agreement and the terms and provisions of the Indemnification
Agreement, as amended hereby, are hereby ratified, affirmed and
incorporated herein by reference, with the same force and effect as
if set forth herein in their entirety. Realty consents to the
amendments set forth in the First Amendment.
3. This Agreement shall be construed according to and governed by the
laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Realty has caused this Agreement to be made by its
duly authorized officer as a sealed instrument as of the date first set forth at
the beginning of this Agreement.
GETTY REALTY CORP.
By: /s/ John J. Fitteron
-------------------------------
Name: JOHN J. FITTERON
------------------------
Title: Senior Vice President,
------------------------
Treasurer and
Chief Financial Officer
Agreed and Accepted:
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
---------------------------
Name: Michael A. Palmer
------------------------
Title: Vice President
<PAGE> 1
EXHIBIT 10.9
SECOND AFFIRMATION AND ACKNOWLEDGMENT OF
AMENDED AND RESTATED HAZARDOUS WASTE AND PMPA
INDEMNIFICATION AGREEMENT
This SECOND AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED AND RESTATED
HAZARDOUS WASTE AND PMPA INDEMNIFICATION AGREEMENT (this "Second Affirmation")
is made as of this 30th day of January, 1998 by Getty Properties Corp., a
Delaware corporation ("Properties"), successor by merger and name change to
Getty Realty Corp. ("Realty"), which was successor by merger and name change to
Getty Petroleum Corp. ("Getty").
WITNESSETH:
WHEREAS, Getty duly authorized, executed and delivered that certain
Amended and Restated Hazardous Waste and PMPA Indemnification Agreement dated as
of October 31, 1995 by and among Getty, Fleet Bank of Massachusetts, N.A.,
predecessor in interest to Fleet National Bank (the "Bank"), and Power Test
Realty Company Limited Partnership (the "Borrower") (the "Indemnification
Agreement");
WHEREAS, a subsidiary of Realty merged with and into Getty and Getty
changed its name to "Getty Realty Corp." effective as of March 31, 1997;
WHEREAS, Realty affirmed its obligations under the Indemnification
Agreement pursuant to an Affirmation and Acknowledgment of Amended and Restated
Hazardous Waste and PMPA Indemnification Agreement dated as of April 18, 1997
(the "Affirmation");
WHEREAS, Getty Merger Sub, Inc. merged with and into Realty and Realty
changed its name to "Getty Properties Corp." effective as of January 30, 1998;
WHEREAS, the execution and delivery of this Second Affirmation is a
condition precedent to the Bank's and the Borrower's agreement to enter into
that certain Second Amendment to Amended and Restated Loan Agreement of even
date herewith (the "Second Amendment");
<PAGE> 2
-2-
NOW, THEREFORE, for good and valuable consideration paid and in
consideration of the promises herein, the receipt and sufficiency of which are
hereby acknowledged, Properties agrees as follows:
1. All references in the Indemnification Agreement, as amended by the
Affirmation, to "Realty" shall be changed to be references to "Properties".
2. Properties hereby affirms and acknowledges (i) the continued validity
of the Indemnification Agreement, as amended by the Affirmation and (ii) that
the Indemnification Agreement, as amended by the Affirmation, except as
expressly amended hereby, remains in full force and effect. Properties agrees
that the obligations of Properties to the Bank under the Indemnification
Agreement, as amended by the Affirmation, and the terms and provisions of the
Indemnification Agreement, as amended by the Affirmation and hereby, are hereby
ratified, affirmed and incorporated herein by reference, with the same force and
effect as if set forth herein in their entirety. Properties consents to the
amendments set forth in the Second Amendment.
3. This Second Affirmation shall be construed according to and governed by
the laws of the Commonwealth of Massachusetts.
<PAGE> 3
IN WITNESS WHEREOF, Properties has caused this Second Affirmation to be
made by its duly authorized officer as a sealed instrument as of the date first
set forth above.
GETTY PROPERTIES CORP.
By: /s/ John J. Fitteron
--------------------------------
Name: John J. Fitteron
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
Agreed and Accepted:
FLEET NATIONAL BANK
By:
------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 4
IN WITNESS WHEREOF, Properties has caused this Second Affirmation to be
made by its duly authorized officer as a sealed instrument as of the date first
set forth above.
GETTY PROPERTIES CORP.
By:
--------------------------------
Name: John J. Fitteron
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
Agreed and Accepted:
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
EXHIBIT 10.10
AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of October 27, 1995,
by and between GETTY PETROLEUM CORP., a Delaware corporation having its
principal place of business at 125 Jericho Turnpike, Jericho, New York 11753
(the "Guarantor") and FLEET BANK OF MASSACHUSETTS, N.A. (the "Bank").
This Amended and Restated Guaranty Agreement amends and restates the
Guaranty Agreement dated as of December 7, 1987 between the Guarantor and Bank
of New England, N.A. The Bank is the successor by name change to Fleet National
Bank of Boston, which was the successor in interest to the Federal Deposit
Insurance Corporation, as Receiver for New Bank of New England, N.A., which was
the successor in interest to the Federal Deposit Insurance Corporation, as
Receiver for Bank of New England, N.A.
In order to induce the Bank to refinance loans in the principal amount
of $18,319,521.00 to Leemilt's Petroleum, Inc., a New York corporation and a
wholly owned Subsidiary of the Guarantor (the "Borrower"), pursuant to an
Amended and Restated Loan Agreement dated as of the date hereof by and between
the Borrower and the Bank (the "Loan Agreement"), the Guarantor is entering into
this Agreement with the Bank pursuant to which the Guarantor guarantees the
payment and performance in full of all of the Obligations (as that term is
hereinafter defined).
Accordingly, in consideration of the Bank's commitment to refinance
loans to the Borrower pursuant to the Loan Agreement and in consideration of the
premises and of the covenants herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Definitions. The following terms shall have the meanings set
forth in this Section 1 hereof or elsewhere in the provisions of this Agreement
referred to below:
Agreement means this Amended and Restated Guaranty Agreement as
originally executed, or, if this Amended and Restated Guaranty Agreement is
amended, modified or supplemented, as so amended, modified or supplemented.
Bank means Fleet Bank of Massachusetts, N.A.
<PAGE> 2
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Borrower means Leemilt's Petroleum, Inc., a New York corporation.
Contingent Liabilities means any guaranties, endorsements, agreements
to purchase or provide funds for the payment of obligations of others, or other
liabilities which would be classified as contingent in accordance with generally
accepted accounting principles consistently applied, excluding, however,
endorsements of checks or other negotiable instruments for deposit or collection
in the ordinary course of business.
Guarantor means Getty Petroleum Corp., a Delaware corporation.
Loans means the loans from the Bank to the Borrower pursuant to the
terms of the Loan Agreement.
Loan Agreement means the Amended and Restated Loan Agreement dated as
of the date hereof between the Borrower and the Bank, as originally executed, or
if amended, modified or supplemented, as so amended, modified or supplemented.
Notes means, collectively, the Amended and Restated Master Note and the
Collateral Note(s), or if amended, modified or supplemented, as so amended,
modified or supplemented, and any note issued in exchange for or replacement of
any such note pursuant to the terms of the Loan Agreement.
Obligations means all indebtedness, obligations and liabilities, direct
or indirect, matured or unmatured, primary or secondary, certain or contingent,
of the Borrower to the Bank for the payment of money now or hereafter owing or
incurred (including, without limitation, reasonable costs and expenses incurred
by the Bank in attempting to collect or enforce any of the foregoing) which are
chargeable to the Borrower and which arise under or pursuant to the Loan
Agreement or the Notes, accrued in each case to the date of payment hereunder,
and Obligation means any one of the Obligations.
Other Business(es) has the meaning set forth in Section 16.2 hereof.
Subsidiary means, with respect to any Person that is not an individual,
any other present or future corporation or other legal entity a majority of
whose outstanding capital stock or other
<PAGE> 3
-3-
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions is at the time
owned directly or indirectly by such Person.
All other capitalized terms used herein which are defined in the Loan
Agreement have the meanings ascribed to them therein, unless they are expressly
otherwise defined herein.
Section 2. Guaranty of Payment.
Section 2.1. Guaranty of Payment of Obligations. The Guarantor hereby
unconditionally guarantees to the Bank the payment in full of each Obligation,
when and as such Obligation becomes due and payable in accordance with the terms
of the Loan Agreement and the Notes, whether such Obligation is outstanding on
the date hereof or arises or is incurred hereafter. The guaranty hereby made by
the Guarantor is an absolute, unconditional and continuing guaranty of the full
and punctual payment by the Borrower of all of the Obligations in accordance
with the terms of the Loan Agreement and not of their collectibility only and is
in no way conditioned upon any requirement that the Bank first attempt to
collect any of the Obligations from the Borrower or resort to any other
security, collateral or other means of obtaining payment of any of the
Obligations which the Bank now has or may acquire after the date hereof, or upon
any other contingency whatsoever.
Section 2.2. Payments. If the Borrower shall fail to make any payment
of any Obligation punctually when and as such obligation shall become due and
payable and such failure shall continue beyond the period of grace, if any,
applicable thereto, then the Guarantor hereby agrees to make such payment of
such Obligation, in funds immediately available to the Bank, upon written demand
by the Bank.
Section 2.3. Continuing Security of this Agreement. This Agreement and
the rights, remedies, powers and privileges of the Bank hereunder shall not in
any way be prejudiced or affected by an intermediate payment by the Borrower of
any part of the Obligations. This Agreement and the obligations of the Guarantor
hereunder shall be in addition to and shall not in any way be prejudiced or
affected by any other collateral or other security or guarantees now or
hereafter held by the Bank for all or any part of the Obligations, and every
right, remedy, power or privilege given to the Bank hereunder shall be in
addition to and not a limitation of any and every other right, remedy, power or
privilege vested in the Bank under any other collateral. No assurances, security
or payment of any of
<PAGE> 4
-4-
the Obligations which is avoided under any enactment relating to bankruptcy,
liquidation or insolvency, and no release, settlement or discharge given or made
by the Bank on the faith of any such assurance, security or payment shall
prejudice or affect the right of the Bank to recover from the Guarantor to the
full extent of the guaranty hereby made by the Guarantor as if such assurance,
security, payment, release, settlement or discharge (as the case may be) had
never been given or made.
Section 3. Demands for Payment. Each demand for payment pursuant to Section
2.2 hereof shall be made in accordance with the terms of Section 18 hereof.
Demands for payment hereunder may be made on any number of occasions. A dated
statement signed by an officer of the Bank and setting forth the amount of the
Obligations at the time owing to the Bank, or (as the case may be) setting forth
the amount of the obligations at the time owing by the Guarantor to the Bank
pursuant to Section 9 hereof, shall, save for manifest error, be prima facie
evidence thereof as between the Guarantor and the Bank in any legal proceedings
against the Guarantor in connection with this Agreement.
Section 4. Waivers of Notice, Assent, Etc. The Guarantor hereby waives
notice of acceptance of this Agreement, notice of any and all loans or advances
made or other financial accommodations extended to the Borrower by the Bank
under the Loan Agreement, notice of the occurrence of any Default or Event of
Default or of any demand upon the Borrower for any payment under the Loan
Agreement, notice of any action at any time taken or omitted by the Bank under
or in respect of the Loan Agreement or any of the Obligations, any requirement
of diligence or to mitigate damages and, generally, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise expressly provided hereby), the Loan Agreement or any of the
Obligations. The Guarantor hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by the Bank at any time or times in respect of any
default by the Borrower in the performance or satisfaction of any term,
covenant, condition or provision of the Loan Agreement, any amendment,
modification or waiver to the Loan Agreement, the Notes or any other Loan
Document, any and all other indulgences whatsoever by the Bank in respect of any
of the Obligations or otherwise, the taking, addition, substitution or release,
in whole or in part, at any time or times, of any security for any of the
Obligations, the addition, substitution or release, in whole or in part, of any
person or persons (other than the Borrower) primarily or secondarily liable in
respect of any of the Obligations or any
<PAGE> 5
-5-
other events or circumstances which might constitute a legal or equitable
discharge of a surety or guaranty. Without limitation of the generality of the
foregoing, the Guarantor assents to any other action or delay in acting or
failure to act on the part of the Bank, including, without limitation, any
failure strictly or diligently to assert any right or pursue any remedy or to
mitigate damages or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 4 hereof, afford
grounds for terminating, discharging or relieving the Guarantor, in whole or in
part, from any of its absolute and unconditional obligations hereunder, it being
the intention of the Guarantor that, so long as any of the Obligations remains
unsatisfied, the obligations of the Guarantor hereunder shall not be discharged
except by payment and then only to the extent of such payment. The obligations
of the Guarantor hereunder shall not be diminished or rendered unenforceable by
any bankruptcy, winding up, reorganization, arrangement, liquidation or similar
proceeding with respect to the Borrower, the Guarantor or the Bank. The guaranty
hereby made by the Guarantor shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of the
Borrower, the Guarantor or the Bank.
Section 5. Place and Mode of Payments. Each payment by the Guarantor
under or in respect of this Agreement shall be made to the Bank in immediately
available and freely transferable funds at the Bank's office at 75 State Street,
Boston, Massachusetts 02109, Attention: Thomas F. McNamara, Vice President.
Section 6. Set-off. Regardless of the adequacy of any collateral or
other means of obtaining prepayment of the Obligations, the Bank may at any time
and without prior notice to the Guarantor set-off the whole or any portion or
portions of any or all deposits and other sums credited by or due from the Bank
to the Guarantor against amounts payable under this Agreement, whether or not
any other person or persons could also withdraw money therefrom. The Bank will
promptly thereafter notify the Guarantor of any such set-off.
Section 7. Freedom to Deal with Borrower and Other Banks. The Bank
shall be at liberty, without giving notice to or obtaining the assent of the
Guarantor and without relieving the Guarantor of any liability hereunder, to
deal with the Borrower and with each other party who now is or after the date
hereof becomes liable in any manner for any of the Obligations, in such manner
as the Bank in its sole discretion deems fit, and to this end the Guarantor
agrees that the Bank may in its sole discretion do any or all of the following
things: (a) extend credit, make loans and afford
<PAGE> 6
-6-
other financial accommodations to the Borrower at such times, in such amounts
and on such terms as the Bank may approve, (b) vary the terms and grant
extensions or renewals of any present or future indebtedness or obligation to
the Bank of the Borrower or of any such other party, (c) grant time, waivers and
other indulgences in respect thereto, (d) vary, exchange, release or discharge,
wholly or partially, or delay in or abstain from perfecting and enforcing any
security or guaranty or other means of obtaining payment of any of the
Obligations which the Bank now have or acquire after the date hereof, (e) accept
partial payments from the Borrower or any such other party, (f) release or
discharge, wholly or partially, any endorser or guarantor, and (g) compromise or
make any settlement or other arrangement with the Borrower or any such other
party.
Section 8. Election of Remedies. This Agreement may be enforced by the
Bank from time to time as often as occasion therefor may arise and without any
requirement on the part of the Bank first to exercise any rights against the
Borrower or any other person or to exhaust any remedies available to the Bank
against the Borrower or any other person or to resort to any collateral or
security for any of the Obligations which is in the possession or under the
control of the Bank or to resort to any other source or means of obtaining
payment or enforcing payment of the Obligations or any of them.
Section 9. Expenses. The Guarantor hereby agrees to pay upon demand by
the Bank all reasonable out-of-pocket costs and expenses, including, but not
limited to, court costs and expenses and the fees and disbursements of lawyers,
incurred or expended by the Bank in connection with the enforcement of this
Agreement, together with interest on amounts recoverable under this Section 9
hereof from the time such amounts become due until payment at the rate
applicable to amounts overdue under the Loan Agreement. The covenant contained
in this Section 9 hereof shall survive the payment in full of all of the
Obligations.
Section 10. Further Assurances. The Guarantor will, at any time and
from time to time, upon request by the Bank, take or cause to be taken any
action and execute and deliver such, if any, further documents as, in the
reasonable opinion of the Bank, are necessary in order to give full effect to
this Agreement and to preserve the rights, powers, privileges and remedies of
the Bank hereunder.
Section 11. Waiver of Certain Defenses. The Guarantor hereby absolutely
and irrevocably waives, to the fullest extent permitted by law, any and all
defenses which may now or hereafter exist in respect of its
<PAGE> 7
-7-
obligations hereunder by virtue of any statute of limitations, stay or
moratorium law or other similar law now or hereafter in effect.
Section 12. Unenforceability of Obligations Against Borrower, Etc. It
is hereby agreed as a separate and independent stipulation that, if for any
reason the Borrower ceases to have any legal obligation to discharge the
Obligations or any of them, or if any of the moneys included in the Obligations
have become irrecoverable from the Borrower by operation of law or for any other
reason, or if any of the Obligations become unenforceable against the Borrower
by operation of law or for any other reason, this Agreement and the obligations
of the Guarantor hereunder shall nevertheless be binding on the Guarantor to the
same extent as if the Guarantor at all times prior to demand by the Bank for
payment hereunder had been, and at the time of, such demand was, the principal
debtor on all of such Obligations.
Section 13. Amendments and Waivers. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by the Bank and the Guarantor expressly referring to this
Agreement and to the provisions so changed, waived, discharged or terminated. No
such waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing by the Bank and no
delay or omission on the part of the Bank in exercising any right or remedy
hereunder shall operate as a waiver of that or any other right or remedy
hereunder or otherwise be prejudicial thereto.
Section 14. Representations and Warranties of the Guarantor. The
Guarantor represents and warrants to the Bank that on and as of the date hereof:
(a) Organization: Good Standing. The Guarantor (i) is a
corporation duly organized, validly existing and in good standing under
the laws of Delaware, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing and is duly authorized to
do business in each jurisdiction where the nature of its properties or
its business requires such qualification and in which failure so to
qualify would materially adversely affect its business or financial
condition.
(b) Authorization. The execution, delivery and performance of
this Agreement and the transactions contemplated hereby (i) are within
the corporate authority of the Guarantor, (ii)
<PAGE> 8
-8-
have been duly authorized by all proper corporate proceedings required to
make this Agreement the valid and enforceable obligation it purports to be,
(iii) will not contravene any provision of law, the charter documents or
by-laws of the Guarantor or any other material agreement, instrument or
undertaking binding upon the Guarantor, and (iv) do not require any
approval or consent of, or filing with, any governmental agency or
authority.
(c) Enforceability. Upon execution by the parties hereto, this
Agreement will be the valid and legally binding obligation of the
Guarantor, enforceable against it in accordance with the terms hereof,
except to the extent that the enforcement of the rights and remedies of the
Bank may be subject to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting generally the enforcement of creditors' rights
and remedies, and the availability of equitable remedies may be subject to
the discretion of the court before which any proceeding thereof is brought.
Section 14.2. Governmental Approvals. No approval or consent or filing with
any governmental agency or authority is required to make valid and legally
binding the execution, delivery or performance by the Guarantor of this
Agreement.
Section 14.3. Financial Statements. The Guarantor has furnished to the Bank
(a) the audited consolidated financial statements of the Guarantor as at January
31, 1995 and (b) the unaudited consolidated financial statements of the
Guarantor as at July 31, 1995. Such financial statements were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and fairly present the financial position of the Guarantor as at the
respective dates thereof and its respective results of operations for the fiscal
year or quarter then ended.
Section 14.4. No Material Changes. Since July 31, 1995, there has been no
materially adverse change in the assets, liabilities, financial condition or
business of the Guarantor.
Section 14.5. Compliance With Other Instruments, Laws, Etc. The Guarantor
is not in violation of any provision of its charter documents or by-laws or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, or any statute, license,
rule or regulation, in any of the foregoing cases in a manner which could result
in the imposition of
<PAGE> 9
-9-
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Guarantor.
Section 14.6. Governmental Approvals. The execution, delivery and
performance by the Guarantor of this Agreement and the transactions contemplated
hereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
Section 14.7. Litigation. There is no action, suit or proceeding at law
or in equity or by or before any governmental instrumentality or other agency
now pending or, to the knowledge of the Guarantor, threatened against or
affecting the Guarantor, or any properties or rights of the Guarantor, which, if
adversely determined, would materially impair the ability of the Guarantor to
carry on its business substantially as now conducted or would materially
adversely affect the financial condition of the Guarantor.
Section 14 8. Chief Executive Offices. Until the Bank receives notice
of a change, the chief executive offices of the Guarantor and the offices where
all the records and books of account of the Guarantor are kept shall be located
at 125 Jericho Turnpike, Jericho, New York 11753.
Section 14.9. Indebtedness. No instrument evidencing or relating to any
Indebtedness of the Guarantor contains any restriction prohibiting the Guarantor
from incurring any other Indebtedness or Contingent Liabilities or any provision
requiring the Guarantor to maintain any minimum level of net worth or comply
with any other financial covenants except for the Loan Agreement dated as of
June 13, 1994 among Getty, Chemical Bank and National Westminster Bank USA.
Section 14.10. True Copies of Charter Documents. The Guarantor has
furnished or caused to be furnished to the Bank true and complete copies of the
charter documents and by-laws of the Guarantor, together with any amendments
thereto.
Section 14.11. Guaranteed Pension Plans. The Guarantor does not
contribute to any Guaranteed Pension Plans. The Guarantor does not contribute to
any multiemployer pension plans.
Section 14.12. Disclosure. No material representation or warranty made
by the Guarantor in any Loan Document or in any agreement, instrument, document,
certificate, statement or letter furnished to the Bank by or on behalf of the
Guarantor in connection with any of the transactions contemplated by any of the
Loan Documents contains any untrue
<PAGE> 10
-10-
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein not misleading in light of the
circumstances in which they are made. There is no fact known to any officer of
the Guarantor which materially adversely affects, or which, in the best judgment
of any officer of the Guarantor, would in the future materially adversely
affect, the financial position, business, operations or affairs of the
Guarantor.
Section 15. Affirmative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any Obligations are outstanding:
Section 15.1. Conduct of Business. The Guarantor will:
(a) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights
(charter and statutory), and franchises, licenses, material trademarks
and service marks, and copyrights; and
(b) keep true and accurate records and books of account,
prepared in accordance with generally accepted accounting principles,
consistently applied;
(c) cause all of its properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Guarantor may be
necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times, and continue to
engage primarily in the business now conducted by it and in related
businesses, except as may be otherwise permitted under Section 16.2
hereof.
Section 15.2. Compliance with Agreements and Contracts. The Guarantor
will observe, conform to and comply with the provisions of its charter documents
and by-laws, all leases, and all agreements and instruments by which it or any
of its properties may be bound.
Section 15.3. Compliance with Law. The Guarantor will (a) comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, noncompliance with which would have a
materially adverse effect on the business, operations or financial condition of
the Guarantor or the ability of the Guarantor to fulfill its
<PAGE> 11
-11-
obligations under this Agreement and (b) promptly obtain, maintain, apply for
renewal, and not allow to lapse, any authorization, consent, approval, license
or order, and accomplish any filing or registration with, any court or judicial,
administrative or governmental authority, which may be or may become necessary
in order that it perform all of its obligations under this Agreement and in
order that the same may be valid and binding and effective in accordance with
its terms and in order that the Bank may be able freely to exercise and enforce
any and all of its rights under this Agreement.
Section 15.4. Notification of Material Litigation, Default, Etc. The
Guarantor will promptly notify the Bank of (a) the commencement of any
litigation or administrative proceeding initiated against it (if it has
knowledge of the same) which is likely to involve any material risk of any
material judgment or liability not substantially covered by insurance or which
may otherwise result in a materially adverse change in the assets, financial
condition or business of the Guarantor, and (b) the occurrence of any Default or
Event of Default. The Guarantor will promptly give notice to the Bank of the
occurrence of any material default under any material instrument or agreement to
which the Guarantor (if it has knowledge of the same) is a party, and if any
person shall give any written notice or take any other action in respect of a
claimed default under any other material evidence of Indebtedness, indenture,
note or other obligation as to which the Guarantor is a party or obligor,
whether as principal or surety, the Guarantor shall promptly give written notice
thereof to the Bank, describing the notice or action and the nature of the
claimed default.
Section 15.5. Financial Statements, Certificates and Other Information.
The Guarantor will furnish to the Bank:
(a) as soon as available but in any event within forty-five
(45) days after the end of each of the first three fiscal quarters in
any fiscal year of the Guarantor, an unaudited consolidated balance
sheet for the Guarantor and its Subsidiaries as at the end of such
quarter, and an unaudited consolidated statement of income and
statement of changes in financial position for the Guarantor and its
Subsidiaries for the period commencing with the end of the preceding
fiscal year and ending with the end of such quarter, together with a
certificate of the chief financial officer of the Guarantor stating
that such financial statements fairly present the financial condition
of the Guarantor and its Subsidiaries as of the date thereof and have
been prepared in accordance with generally
<PAGE> 12
-12-
accepted accounting principles consistently applied, subject, however,
to audit and year-end adjustments;
(b) as soon as available but in any event within ninety (90)
days after the end of each fiscal year, an audited consolidated balance
sheet for the Guarantor and its Subsidiaries as at the end of such
fiscal year, and an audited consolidated statement of income and
statement of changes in financial position for the Guarantor and its
Subsidiaries for such fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied, in each
case accompanied by the opinion of and report by Coopers & Lybrand or
other independent certified public accountants of nationally recognized
standing selected by the Guarantor and acceptable to the Bank, such
opinion to be unqualified as to scope limitations imposed by the
Guarantor, and otherwise, without qualification except as therein
noted;
(c) accompanying each set of financial statements of the
Guarantor furnished pursuant to paragraph (a) or (b) above, an
Officer's Certificate stating that a review of the activities of the
Guarantor and the Borrower during the period covered by such financial
statements has been made under the supervision of the signer with a
view to determining whether, during such period, each of the Guarantor
and the Borrower has kept, observed, performed and fulfilled each and
every covenant and condition of each of the Loan Documents to which it
is a party and either (i) stating that, to the best of his knowledge
and belief, there neither exists on the date of such certificate, nor
existed during such period, any default under any existing loan or
credit agreement to which the Guarantor or the Borrower is a party, or
(ii) if any such default under any existing loan or credit agreement to
which the Guarantor or the Borrower is a party existed or exists,
specifying the nature thereof, the period of existence thereof and what
action the Guarantor or the Borrower, as appropriate, has taken, is
taking or proposes to take with respect thereto;
(d) accompanying each set of financial statements of the
Guarantor set forth in paragraph (b) above, a certificate of the
accounting firm stating that they have read a copy of this Agreement
and that, in the course of their regular audit of the business of the
Guarantor, which was conducted in accordance with generally accepted
auditing standards, nothing has come to their attention that caused
them to believe that any default under any existing loan or credit
agreement to which the Guarantor or the
<PAGE> 13
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Borrower is a party has occurred during the fiscal year in question or
exists at the date of such certificate or, if in the opinion of such
firm a default under any existing loan or credit agreement to which the
Guarantor or the Borrower is a party has so existed or exists, a
statement as to the nature thereof;
(e) contemporaneously with the filing or mailing thereof,
copies of such other financial statements or reports as the Guarantor
shall send to its stockholders, and copies of all regular, and periodic
and other reports which the Guarantor may be required to file with the
Securities and Exchange Commission or any other governmental
commission, department, board, bureau or agency, federal or state
(including without limitation all reports on Forms 10-K, 10-Q and 8-K);
and
(f) with reasonable promptness, such other information
relating to the business or financial affairs of the Guarantor as the
Bank may reasonably request.
Section 15.6. Notice of Material Change. The Guarantor will promptly
notify the Bank of any materially adverse change in its financial condition,
business or operations.
Section 15.7. Inspection of Properties and Books. The Bank or any of
its designated representatives shall have the right to visit and inspect any of
the properties of the Guarantor, to examine the books of account of the
Guarantor, and to discuss the affairs, finances and accounts of the Guarantor
with, and to be advised as to the same by, its officers, all at such reasonable
times and intervals as the Bank may desire.
Section 15.8. ERISA. The Guarantor will promptly notify the Bank of any
Reportable Event (other than a Reportable Event as to which the Pension Benefit
Guaranty Corporation has waived the applicable 30-day notice requirement
pursuant to the provisions of ERISA) or any notice of termination of any Plan
under Sections 4041 or 4042 of ERISA. The Guarantor shall not permit any
employee pension benefit plan (as that term is defined in Section 3 of ERISA)
maintained by the Guarantor to (a) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the Code which might result in a
material liability for the Guarantor, or (b) incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
waived, or (c) terminate any such benefit plan in a manner which could result in
the imposition of any material lien or encumbrance on the assets of the
Guarantor under Section 4068 of ERISA.
<PAGE> 14
-14-
Section 15.9. Maintenance of Office. The Guarantor will maintain its
chief executive office in Jericho, New York, or at such other place in the
United States of America as the Guarantor shall designate upon written notice to
the Bank, where notices, presentations and demands to or upon the Guarantor in
respect of this Agreement may be made.
Section 15.10. Further Assurances. The Guarantor shall at any time or
from time to time execute and deliver such further instruments and take such
further action as may reasonably be requested by the Bank, in each case further
and more perfectly to effect the purposes of this Agreement.
Section 16. Negative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any Obligations are outstanding:
Section 16.1. Merger or Sale of Assets. The Guarantor will not:
(a) consolidate or merge with or into any other Person unless
(i) after giving effect to such consolidation or merger, no Default or
Event of Default exists and (ii) the Guarantor is the surviving
corporation of such consolidation or merger; or
(b) sell, lease, transfer or otherwise dispose of all or any
substantial portion of its assets;
(c) permit its ownership of the issued and outstanding capital
stock of the Borrower to be less than 80%; or
(d) cause the Borrower to have outstanding any commitments,
options, warrants, calls or other agreements or obligations (whether
written or oral) binding on the Borrower or which require or could
require the Borrower to issue, sell, grant, transfer, assign, mortgage,
pledge or otherwise dispose of more than 19% of (i) any securities
exchangeable for or convertible into or carrying any rights to acquire
any other right of any kind in the capital of the Borrower or (ii) any
options, warrants, or any other rights to acquire any right of any kind
in the capital of the Borrower.
Section 16.2. Lines of Business. The Guarantor will not directly or
indirectly through a Subsidiary engage in any business other than the retail and
wholesale distribution of petroleum products and the operation of convenience
stores or other retail businesses related to the operation of
<PAGE> 15
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gasoline service Stations or other businesses which can reasonably be conducted
at gasoline service stations, except that the Guarantor may engage in any other
business (each an "Other Business" and collectively "Other Businesses")
(including the ownership and operation of petroleum refineries) acquired by the
Guarantor if the aggregate purchase price (including any direct or contingent
liabilities assumed by the Guarantor in connection with such acquisition) for
such Other Business, plus the aggregate purchase prices (including assumed
liabilities) for all Other Businesses previously acquired by the Guarantor, does
not exceed $25,000,000. The Bank shall have the right to approve all purchase
price allocations made in connection with any such acquisition of an Other
Business or Other Businesses as the same relate to compliance with this
Section 16.2 hereof.
Section 16.3. Acquisitions. The Guarantor will provide the Bank with
reasonable advance notice of any proposed acquisitions of assets or stock
(whether directly by the Guarantor or indirectly through a Subsidiary of the
Guarantor) with respect to which the aggregate purchase price (including any
assumption of liabilities) is $25,000,000 or more and will provide to the Bank
all information relating to such transactions as may be reasonably requested by
the Bank.
Section 16.4. Interest Rate Protection Arrangements. The Guarantor will
not and will not permit the Borrower to enter into any interest rate protection
arrangements with respect to the Loans with any Person other than the Bank,
unless the Guarantor shall have first requested the Bank to enter into an
interest rate protection arrangement on terms and conditions proposed in good
faith by the Borrower and the Bank shall have declined such request.
Section 17. Survival of Covenants. All covenants, agreements,
representations and warranties made herein shall be deemed to have been relied
on by the Bank notwithstanding any investigation made by the Bank or on its
behalf and shall survive the execution and delivery of this Agreement.
Section 18. Notices. Etc. (a) The Bank shall provide the Guarantor with
a copy of each notice sent to the Borrower pursuant to Section 7 of the Loan
Agreement. No failure of the Bank to provide any such notice shall operate to
relieve the Guarantor of any of its obligations hereunder.
(b) Except as otherwise expressly provided herein, all notices and
other communications made or required to be given pursuant to this Agreement
shall be deemed delivered if in writing (or in the form of a
<PAGE> 16
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telecopy confirmed by letter) addressed as provided below and if either (i)
actually delivered at said address, or (ii) in the case of a letter, five
Business Days shall have elapsed after the same shall have been deposited in the
United States mails, postage prepaid and registered or certified:
(x) if to the Guarantor, at 125 Jericho Turnpike, Jericho, New York
11753, Attention: John J. Fitteron, Senior Vice President and Chief Financial
Officer, or at such other address for notice as the Guarantor shall last have
furnished in writing to the Person giving the notice; or
(y) if to the Bank, at 75 State Street, Boston, Massachusetts 02109,
Attention: Thomas F. McNamara, Vice President, or at such other address for
notice as the Bank shall last have furnished in writing to the Person giving the
notice.
Section 19. Governing Law: Miscellaneous. This Agreement is intended to
take effect as a sealed instrument to be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts and shall inure to the
benefit of the Bank and its successors and assigns, and shall be binding on the
Guarantor and the Guarantor's successors, assigns and legal representatives. The
descriptive headings of the sections hereof have been inserted herein for
convenience of reference only and shall not define or limit the provisions
hereof.
Section 20. Counterparts. This Agreement may be executed in any number
of counterparts, but all of such counterparts together shall constitute one and
the same agreement. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one counterpart hereof executed by each of
the parties hereto.
<PAGE> 17
-17-
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
the parties hereto as an instrument under seal as of the day first above
written.
GENTS PETROLEUM CORP.
By: /s/ John J. Fitterton
---------------------------------
Name: John J. Fitteron
Title: Senior Vice President and Chief
Financial Officer
FLEET BANK OF MASSACHUSETTS, N.A.
By: /s/ Thomas F. McNamara
--------------------------------
Name: Thomas F. McNamara
Title: Vice President
<PAGE> 1
EXHIBIT 10.11
AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED AND
RESTATED GUARANTY AGREEMENT
This AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED AND RESTATED GUARANTY
AGREEMENT (this "Agreement") is made as of this 18th day of April, 1997 by Getty
Realty Corp., a Delaware corporation ("Realty"), successor by merger and name
change to Getty Petroleum Corp. ("Getty").
WITNESSETH:
WHEREAS, Getty duly authorized, executed and delivered that certain
Amended and Restated Guaranty Agreement dated as of October 27, 1995 by and
among Getty, Fleet Bank of Massachusetts, N.A., predecessor in interest to Fleet
National Bank (the "Bank"), and Leemilt's Petroleum, Inc. (the "Borrower") (the
"Guaranty Agreement");
WHEREAS, Realty has merged with and into Getty and Getty in turn has
changed its name to "Getty Realty Corp." effective as of March 31, 1997;
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the Bank's and the Borrower's agreement to enter into that certain
First Amendment to Amended and Restated Loan Agreement of even date herewith
(the "First Amendment");
NOW, THEREFORE, for good and valuable consideration paid and in
consideration of the promises herein, the receipt and sufficiency of which are
hereby acknowledged, Realty agrees as follows:
1. All references in the Guaranty Agreement to "Getty" or
"Guarantor" shall be changed to be references to "Realty".
2. The Bank's office address set forth in Section 5 of the
Guaranty Agreement shall be changed to "One Federal Street,
Boston, Massachusetts 02110".
3. Realty hereby affirms and acknowledges (i) the continued
validity of the Guaranty Agreement and its absolute,
<PAGE> 2
-2-
continuing and unconditional guaranty of the payment and
performance of the Obligations (as defined in the Guaranty
Agreement) and (ii) that the Guaranty Agreement, except as
expressly amended hereby, remains in full force and effect.
Realty agrees that the obligations of Realty to the Bank under
the Guaranty Agreement and the terms and provisions of the
Guaranty Agreement, as amended hereby, are hereby ratified,
affirmed and incorporated herein by reference, with the same
force and effect as if set forth herein in their entirety.
Realty consents to the amendments set forth in the First
Amendment.
4. This Agreement shall be construed according to and governed by
the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Realty has caused this Agreement to be made by its
duly authorized officer as a sealed instrument as of the date first set forth at
the beginning of this Agreement.
GETTY REALITY CORP.
By: /s/ John J. Fitteron
---------------------
Name: John J. Fitteron
---------------------
Title: Senior Vice President,
Treasurer and
Chief Financial Officer
Agreed and Accepted:
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
--------------------------
Name: Michael A. Palmer
------------------------
Title: Vice President
<PAGE> 1
EXHIBIT 10.12
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "GUARANTY"), dated as of January 30,
1998, by and between GETTY REALTY CORP., a Maryland corporation having its
principal place of business at 125 Jericho Turnpike, Jericho, New York 11753
(the "GUARANTOR") and FLEET NATIONAL BANK (the "BANK").
In order to induce the Bank to amend its loan arrangement with
Leemilt's Petroleum, Inc., a New York corporation (the "BORROWER"), which loan
arrangement is set forth in an Amended and Restated Loan Agreement dated as of
October 27, 1995 by and between the Borrower and Fleet Bank of Massachusetts,
N.A., predecessor in interest to the Bank, as amended by that certain First
Amendment to the Amended and Restated Loan Agreement dated as of April 18, 1997,
as further amended by that certain Second Amendment to the Amended and Restated
Loan Agreement of even date herewith (as amended, the "LOAN AGREEMENT"), the
Guarantor is entering into this Guaranty with the Bank pursuant to which the
Guarantor guarantees the payment and performance in full of all of the
Obligations (as that term is hereinafter defined).
Accordingly, in consideration of the Bank's amendment of its loan
arrangement with the Borrower and in consideration of the premises and of the
covenants herein contained and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. Definitions. The following terms shall have the meanings set
forth in this Section 1 hereof or elsewhere in the provisions of this Guaranty
referred to below:
"BANK" means Fleet National Bank.
"BORROWER" means Leemilt's Petroleum, Inc., a New York corporation.
"CONTINGENT LIABILITIES" means any guaranties, endorsements,
agreements to purchase or provide funds for the payment of obligations
of others, or other liabilities which would be classified as contingent
in accordance with generally accepted accounting principles consistently
applied, excluding, however,
<PAGE> 2
-2-
endorsements of checks or other negotiable instruments for deposit or
collection in the ordinary course of business.
"GUARANTOR" means Getty Realty Corp., a Maryland corporation.
"GUARANTY" means this Guaranty Agreement as originally executed, or,
if this Guaranty Agreement is amended, modified or supplemented, as so
amended, modified or supplemented.
"LOAN" means the loan from the Bank to the Borrower pursuant to the
terms of the Loan Agreement.
"LOAN AGREEMENT" means the Amended and Restated Loan Agreement dated
as of October 27, 1995 between the Borrower and Fleet Bank of
Massachusetts, N.A., predecessor in interest to the Bank, as amended by
that certain First Amendment to the Amended and Restated Loan Agreement
dated as of April 18, 1997, as further amended by that certain Second
Amendment to the Amended and Restated Loan Agreement of even date
herewith, or if further amended, modified or supplemented, as so further
amended, modified or supplemented.
"NOTES" means, collectively, the Amended and Restated Master Note
and the Collateral Note(s), or if amended, modified or supplemented, as
so amended, modified or supplemented, and any note issued in exchange
for or replacement of any such note pursuant to the terms of the Loan
Agreement.
"OBLIGATIONS" means all indebtedness, obligations and liabilities,
direct or indirect, matured or unmatured, primary or secondary, certain
or contingent, of the Borrower to the Bank for the payment of money now
or hereafter owing or incurred (including, without limitation,
reasonable costs and expenses incurred by the Bank in attempting to
collect or enforce any of the foregoing) which are chargeable to the
Borrower and which arise under or pursuant to the Loan Agreement or the
Notes, accrued in each case to the date of payment hereunder, and
"OBLIGATION" means any one of the Obligations.
"OTHER BUSINESS(ES)" has the meaning set forth in Section 16.2
hereof.
<PAGE> 3
-3-
"Person" means any individual, corporation, partnership, trust,
unincorporated association, joint stock company or other legal entity or
organization and any government or agency or political subdivision
thereof.
"Subsidiary" means, with respect to any Person that is not an
individual, any other present or future corporation or other legal
entity a majority of whose outstanding capital stock or other ownership
interests having ordinary voting power to elect a majority of the board
of directors or other persons performing similar functions is at the
time owned directly or indirectly by such Person.
All other capitalized terms used herein which are defined in the Loan
Agreement have the meanings ascribed to them therein, unless they are expressly
otherwise defined herein.
Section 2. Guarantv of Payment.
Section 2.1. Guaranty of Payment of Obligations. The Guarantor hereby
unconditionally guarantees to the Bank the payment in full of each Obligation,
when and as such Obligation becomes due and payable in accordance with the terms
of the Loan Agreement and the Notes, whether such Obligation is outstanding on
the date hereof or arises or is incurred hereafter. The guaranty hereby made by
the Guarantor is an absolute, unconditional and continuing guaranty of the full
and punctual payment by the Borrower of all of the Obligations in accordance
with the terms of the Loan Agreement and not of their collectibility only and is
in no way conditioned upon any requirement that the Bank first attempt to
collect any of the Obligations from the Borrower or resort to any other
security, collateral or other means of obtaining payment of any of the
Obligations which the Bank now has or may acquire after the date hereof, or upon
any other contingency whatsoever.
Section 2.2. Payments. If the Borrower shall fail to make any payment
of any Obligation punctually when and as such obligation shall become due and
payable and such failure shall continue beyond the period of grace, if any,
applicable thereto, then the Guarantor hereby agrees to make such payment of
such Obligation, in funds immediately available to the Bank, upon written demand
by the Bank.
Section 2.3. Continuing Security of this Guaranty. This Guaranty and
the rights, remedies, powers and privileges of the Bank hereunder shall not in
any way be prejudiced or affected by an intermediate payment by the
<PAGE> 4
-4-
Borrower of any part of the Obligations. This Guaranty and the obligations of
the Guarantor hereunder shall be in addition to and shall not in any way be
prejudiced or affected by any other collateral or other security or guarantees
now or hereafter held by the Bank for all or any part of the Obligations, and
every right, remedy, power or privilege given to the Bank hereunder shall be in
addition to and not a limitation of any and every other right, remedy, power or
privilege vested in the Bank under any other collateral. No assurances, security
or payment of any of the Obligations which is avoided under any enactment
relating to bankruptcy, liquidation or insolvency, and no release, settlement or
discharge given or made by the Bank on the faith of any such assurance, security
or payment shall prejudice or affect the right of the Bank to recover from the
Guarantor to the full extent of the guaranty hereby made by the Guarantor as if
such assurance, security, payment, release, settlement or discharge (as the case
may be) had never been given or made.
Section 3. Demands for Payment. Each demand for payment pursuant to
Section 2.2 hereof shall be made in accordance with the terms of Section 18
hereof. Demands for payment hereunder may be made on any number of occasions. A
dated statement signed by an officer of the Bank and setting forth the amount of
the Obligations at the time owing to the Bank, or (as the case may be) setting
forth the amount of the obligations at the time owing by the Guarantor to the
Bank pursuant to Section 9 hereof, shall, save for manifest error, be prima
facie evidence thereof as between the Guarantor and the Bank in any legal
proceedings against the Guarantor in connection with this Guaranty.
Section 4. Waivers of Notice, Assent. Etc. The Guarantor hereby waives
notice of acceptance of this Guaranty, notice of any and all loans or advances
made or other financial accommodations extended to the Borrower by the Bank
under the Loan Agreement, notice of the occurrence of any default or of any
demand upon the Borrower for any payment under the Loan Agreement, notice of any
action at any time taken or omitted by the Bank under or in respect of the Loan
Agreement or any of the Obligations, any requirement of diligence or to mitigate
damages and, generally, all demands, notices and other formalities of every kind
in connection with this Guaranty (except as otherwise expressly provided
hereby), the Loan Agreement or any of the Obligations. The Guarantor hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the Bank at any
time or times in respect of any default by the Borrower in the performance or
satisfaction of any term, covenant,
<PAGE> 5
-5-
condition or provision of the Loan Agreement, any amendment, modification or
waiver to the Loan Agreement, the Notes or any other Loan Document, any and all
other indulgences whatsoever by the Bank in respect of any of the Obligations or
otherwise, the taking, addition, substitution or release, in whole or in part,
at any time or times, of any security for any of the Obligations, the addition,
substitution or release, in whole or in part, of any person or persons (other
than the Borrower) primarily or secondarily liable in respect of any of the
Obligations or any other events or circumstances which might constitute a legal
or equitable discharge of a surety or guaranty. Without limitation of the
generality of the foregoing, the Guarantor assents to any other action or delay
in acting or failure to act on the part of the Bank, including, without
limitation, any failure strictly or diligently to assert any right or pursue any
remedy or to mitigate damages or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 4
hereof, afford grounds for terminating, discharging or relieving the Guarantor,
in whole or in part, from any of its absolute and unconditional obligations
hereunder, it being the intention of the Guarantor that, so long as any of the
Obligations remains unsatisfied, the obligations of the Guarantor hereunder
shall not be discharged except by payment and then only to the extent of such
payment. The obligations of the Guarantor hereunder shall not be diminished or
rendered unenforceable by any bankruptcy, winding up, reorganization,
arrangement, liquidation or similar proceeding with respect to the Borrower, the
Guarantor or the Bank. The guaranty hereby made by the Guarantor shall continue
in full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, membership, constitution or place of
formation of the Borrower, the Guarantor or the Bank.
Section 5. Place and Mode of Payments. Each payment by the Guarantor
under or in respect of this Guaranty shall be made to the Bank in immediately
available and freely transferable funds at the Bank's office at One Federal
Street, Boston, Massachusetts 02110, Attention: Michael A. Palmer, Vice
President.
Section 6. Set-off. Regardless of the adequacy of any collateral or
other means of obtaining prepayment of the Obligations, the Bank may at any time
and without prior notice to the Guarantor set-off the whole or any portion or
portions of any or all deposits and other sums credited by or due from the Bank
to the Guarantor against amounts payable under this Guaranty, whether or not any
other person or persons could also withdraw money therefrom. The Bank will
promptly thereafter notify the Guarantor of any such set-off.
<PAGE> 6
-6-
Section 7. Freedom to Deal with Borrower and Other Banks. The Bank
shall be at liberty, without giving notice to or obtaining the assent of the
Guarantor and without relieving the Guarantor of any liability hereunder, to
deal with the Borrower and with each other party who now is or after the date
hereof becomes liable in any manner for any of the Obligations, in such manner
as the Bank in its sole discretion deems fit, and to this end the Guarantor
agrees that the Bank may in its sole discretion do any or all of the following
things: (a) extend credit, make loans and afford other financial accommodations
to the Borrower at such times, in such amounts and on such terms as the Bank may
approve, (b) vary the terms and grant extensions or renewals of any present or
future indebtedness or obligation to the Bank of the Borrower or of any such
other party, (c) grant time, waivers and other indulgences in respect thereto,
(d) vary, exchange, release or discharge, wholly or partially, or delay in or
abstain from perfecting and enforcing any security or guaranty or other means of
obtaining payment of any of the Obligations which the Bank now have or acquire
after the date hereof, (e) accept partial payments from the Borrower or any such
other party, (f) release or discharge, wholly or partially, any endorser or
guarantor, and (g) compromise or make any settlement or other arrangement with
the Borrower or any such other party.
Section 8. Election of Remedies. This Guaranty may be enforced by the
Bank from time to time as often as occasion therefor may arise and without any
requirement on the part of the Bank first to exercise any rights against the
Borrower or any other person or to exhaust any remedies available to the Bank
against the Borrower or any other person or to resort to any collateral or
security for any of the Obligations which is in the possession or under the
control of the Bank or to resort to any other source or means of obtaining
payment or enforcing payment of the Obligations or any of them.
Section 9. Expenses. The Guarantor hereby agrees to pay upon demand by
the Bank all reasonable out-of-pocket costs and expenses, including, but not
limited to, court costs and expenses and the fees and disbursements of lawyers,
incurred or expended by the Bank in connection with the enforcement of this
Guaranty, together with interest on amounts recoverable under this Section 9
hereof from the time such amounts become due until payment at the rate
applicable to amounts overdue under the Loan Agreement. The covenant contained
in this Section 9 hereof shall survive the payment in full of all of the
Obligations.
Section 10. Further Assurances. The Guarantor will, at any time and
from time to time, upon request by the Bank, take or cause to be taken
<PAGE> 7
-7-
any action and execute and deliver such, if any, further documents as, in the
reasonable opinion of the Bank, are necessary in order to give full effect to
this Guaranty and to preserve the rights, powers, privileges and remedies of the
Bank hereunder.
Section 11. Waiver of Certain Defenses. The Guarantor hereby absolutely
and irrevocably waives, to the fullest extent permitted by law, any and all
defenses which may now or hereafter exist in respect of its obligations
hereunder by virtue of any statute of limitations, stay or moratorium law or
other similar law now or hereafter in effect.
Section 12. Unenforceability of Obligations Against Borrower. Etc. It
is hereby agreed as a separate and independent stipulation that, if for any
reason the Borrower ceases to have any legal obligation to discharge the
Obligations or any of them, or if any of the moneys included in the Obligations
have become irrecoverable from the Borrower by operation of law or for any other
reason, or if any of the Obligations become unenforceable against the Borrower
by operation of law or for any other reason, this Guaranty and the obligations
of the Guarantor hereunder shall nevertheless be binding on the Guarantor to the
same extent as if the Guarantor at all times prior to demand by the Bank for
payment hereunder had been, and at the time of, such demand was, the principal
debtor on all of such Obligations.
Section 13. Amendments and Waivers. Neither this Guaranty nor any term
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by the Bank and the Guarantor expressly referring to this
Guaranty and to the provisions so changed, waived, discharged or terminated. No
such waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing by the Bank and no
delay or omission on the part of the Bank in exercising any right or remedy
hereunder shall operate as a waiver of that or any other right or remedy
hereunder or otherwise be prejudicial thereto.
Section 14. Representations and Warranties of the Guarantor. The
Guarantor represents and warrants to the Bank that on and as of the date hereof:
(a) Organization: Good Standing. The Guarantor (i) is a
corporation duly organized, validly existing and in good standing under
the laws of Maryland, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing and is duly
<PAGE> 8
-8-
authorized to do business in each jurisdiction where the nature of its
properties or its business requires such qualification and in which
failure so to qualify would materially adversely affect its business or
financial condition.
(b) Authorization. The execution, delivery and performance of
this Guaranty and the transactions contemplated hereby (i) are within
the corporate authority of the Guarantor, (ii) have been duly
authorized by all proper corporate proceedings required to make this
Guaranty the valid and enforceable obligation it purports to be, (iii)
will not contravene any provision of law, the charter documents or
by-laws of the Guarantor or any other material agreement, instrument or
undertaking binding upon the Guarantor, and (iv) do not require any
approval or consent of, or filing with, any governmental agency or
authority.
(c) Enforceability. Upon execution by the parties hereto, this
Guaranty will be the valid and legally binding obligation of the
Guarantor, enforceable against it in accordance with the terms hereof,
except to the extent that the enforcement of the rights and remedies of
the Bank may be subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting generally the enforcement of
creditors' rights and remedies, and the availability of equitable
remedies may be subject to the discretion of the court before which any
proceeding thereof is brought.
Section 14.2. Governmental Approvals. No approval or consent or filing
with any governmental agency or authority is required to make valid and legally
binding the execution, delivery or performance by the Guarantor of this
Guaranty.
Section 14.3. INTENTIONALLY DELETED
Section 14.4. INTENTIONALLY DELETED
Section 14.5. Compliance With Other Instruments, Laws, Etc. The
Guarantor is not in violation of any provision of its charter documents or
by-laws or any agreement or instrument to which it may be subject or by which it
or any of its properties may be bound or any decree, order, judgment, or any
statute, license, rule or regulation, in any of the foregoing cases in a manner
which could result in the imposition of substantial penalties or materially and
adversely affect the financial condition, properties or business of the
Guarantor.
<PAGE> 9
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Section 14.6. Governmental Approvals. The execution, delivery and
performance by the Guarantor of this Guaranty and the transactions contemplated
hereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
Section 14.7. Litigation. There is no action, suit or proceeding at law
or in equity or by or before any governmental instrumentality or other agency
now pending or, to the knowledge of the Guarantor, threatened against or
affecting the Guarantor, or any properties or rights of the Guarantor, which, if
adversely determined, would materially impair the ability of the Guarantor to
carry on its business substantially as now conducted or would materially
adversely affect the financial condition of the Guarantor.
Section 14.8. Chief Executive Offices. Until the Bank receives notice
of a change, the chief executive offices of the Guarantor and the offices where
all the records and books of account of the Guarantor are kept shall be located
at 125 Jericho Turnpike, Jericho, New York 11753.
Section 14.9. Indebtedness. No instrument evidencing or relating to any
indebtedness of the Guarantor contains any restriction prohibiting the Guarantor
from incurring any other indebtedness or Contingent Liabilities or any provision
requiring the Guarantor to maintain any minimum level of net worth or comply
with any other financial covenants.
Section 14.10. True Copies of Charter Documents. The Guarantor has
furnished or caused to be furnished to the Bank true and complete copies of the
charter documents and by-laws of the Guarantor, together with any amendments
thereto.
Section 14.11. Guaranteed Pension Plans. The Guarantor does not
contribute to any Guaranteed Pension Plans. The Guarantor does not contribute to
any multiemployer pension plans.
Section 14.12. Disclosure. No material representation or warranty made
by the Guarantor in any Loan Document or in any agreement, instrument, document,
certificate, statement or letter furnished to the Bank by or on behalf of the
Guarantor in connection with any of the transactions contemplated by any of the
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which they are made.
There is no fact known to any officer of the Guarantor which materially
adversely affects, or which, in the best judgment of any officer of the
Guarantor, would in the future
<PAGE> 10
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materially adversely affect, the financial position, business, operations or
affairs of the Guarantor.
Section 15. Affirmative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loan, the Master Note, any Collateral Note or the
Chase Note is outstanding, or any Obligations are outstanding:
Section 15.1. Conduct of Business. The Guarantor will:
(a) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights
(charter and statutory), and franchises, licenses, material trademarks
and service marks, and copyrights; and
(b) keep true and accurate records and books of account,
prepared in accordance with generally accepted accounting principles,
consistently applied;
(c) cause all of its properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Guarantor may be
necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times, and continue to
engage primarily in the business now conducted by it and in related
businesses, except as may be otherwise permitted under Section 16.2
hereof.
Section 15.2. Compliance with Agreements and Contracts. The Guarantor
will observe, conform to and comply with the provisions of its charter documents
and by-laws, all leases, and all agreements and instruments by which it or any
of its properties may be bound.
Section 15.3. Compliance with Law. The Guarantor will (a) comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, noncompliance with which would have a
materially adverse effect on the business, operations or financial condition of
the Guarantor or the ability of the Guarantor to fulfill its obligations under
this Guaranty and (b) promptly obtain, maintain, apply for renewal, and not
allow to lapse, any authorization, consent, approval, license or order, and
accomplish any filing or registration with, any court or judicial,
administrative or governmental authority, which may be or may become necessary
in order that it perform all of its obligations under
<PAGE> 11
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this Guaranty and in order that the same may be valid and binding and effective
in accordance with its terms and in order that the Bank may be able freely to
exercise and enforce any and all of its rights under this Guaranty.
Section 15.4. Notification of Material Litigation, Default, Etc. The
Guarantor will promptly notify the Bank of (a) the commencement of any
litigation or administrative proceeding initiated against it (if it has
knowledge of the same) which is likely to involve any material risk of any
material judgment or liability not substantially covered by insurance or which
may otherwise result in a materially adverse change in the assets, financial
condition or business of the Guarantor, and (b) the occurrence of any default.
The Guarantor will promptly give notice to the Bank of the occurrence of any
material default under any material instrument or agreement to which the
Guarantor (if it has knowledge of the same) is a party, and if any person shall
give any written notice or take any other action in respect of a claimed default
under any other material evidence of indebtedness, indenture, note or other
obligation as to which the Guarantor is a party or obligor, whether as principal
or surety, the Guarantor shall promptly give written notice thereof to the Bank,
describing the notice or action and the nature of the claimed default.
Section 15.5. Financial Statements, Certificates and Other Information.
The Guarantor will furnish to the Bank:
(a) as soon as available but in any event within forty-five
(45) days after the end of each of the first three fiscal quarters in
any fiscal year of the Guarantor, an unaudited consolidated balance
sheet for the Guarantor and its Subsidiaries as at the end of such
quarter, and an unaudited consolidated statement of income and
statement of changes in financial position for the Guarantor and its
Subsidiaries for the period commencing with the end of the preceding
fiscal year and ending with the end of such quarter, together with a
certificate of the chief financial officer of the Guarantor stating
that such financial statements fairly present the financial condition
of the Guarantor and its Subsidiaries as of the date thereof and have
been prepared in accordance with generally accepted accounting
principles consistently applied, subject, however, to audit and
year-end adjustments;
(b) as soon as available but in any event within ninety (90)
days after the end of each fiscal year, an audited consolidated balance
sheet for the Guarantor and its Subsidiaries as at the end of such
fiscal year, and an audited consolidated statement of income
<PAGE> 12
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and statement of changes in financial position for the Guarantor and
its Subsidiaries for such fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied, in each
case accompanied by the opinion of and report by Coopers & Lybrand or
other independent certified public accountants of nationally recognized
standing selected by the Guarantor and acceptable to the Bank, such
opinion to be unqualified as to scope limitations imposed by the
Guarantor, and otherwise, without qualification except as therein
noted;
(c) accompanying each set of financial statements of the
Guarantor furnished pursuant to paragraph (a) or (b) above, an
Officer's Certificate stating that a review of the activities of the
Guarantor and the Borrower during the period covered by such financial
statements has been made under the supervision of the signer with a
view to determining whether, during such period, each of the Guarantor
and the Borrower has kept, observed, performed and fulfilled each and
every covenant and condition of each of the Loan Documents to which it
is a party and either (i) stating that, to the best of his knowledge
and belief, there neither exists on the date of such certificate, nor
existed during such period, any default under any existing loan or
credit agreement to which the Guarantor or the Borrower is a party, or
(ii) if any such default under any existing loan or credit agreement to
which the Guarantor or the Borrower is a party existed or exists,
specifying the nature thereof, the period of existence thereof and what
action the Guarantor or the Borrower, as appropriate, has taken, is
taking or proposes to take with respect thereto;
(d) accompanying each set of financial statements of the
Guarantor set forth in paragraph (b) above, a certificate of the
accounting firm stating that they have read a copy of this Guaranty and
that, in the course of their regular audit of the business of the
Guarantor, which was conducted in accordance with generally accepted
auditing standards, nothing has come to their attention that caused
them to believe that any default under any existing loan or credit
agreement to which the Guarantor or the Borrower is a party has
occurred during the fiscal year in question or exists at the date of
such certificate or, if in the opinion of such firm a default under any
existing loan or credit agreement to which the Guarantor or the
Borrower is a party has so existed or exists, a statement as to the
nature thereof;
<PAGE> 13
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(e) contemporaneously with the filing or mailing thereof,
copies of such other financial statements or reports as the Guarantor
shall send to its stockholders, and copies of all regular, and periodic
and other reports which the Guarantor may be required to file with the
Securities and Exchange Commission or any other governmental
commission, department, board, bureau or agency, federal or state
(including without limitation all reports on Forms 10-K, 10-Q and 8-K);
and
(f) with reasonable promptness, such other information
relating to the business or financial affairs of the Guarantor as the
Bank may reasonably request.
Section 15.6. Notice of Material Change. The Guarantor will promptly
notify the Bank of any materially adverse change in its financial condition,
business or operations.
Section 15.7. Inspection of Properties and Books. The Bank or any of
its designated representatives shall have the right to visit and inspect any of
the properties of the Guarantor, to examine the books of account of the
Guarantor, and to discuss the affairs, finances and accounts of the Guarantor
with, and to be advised as to the same by, its officers, all at such reasonable
times and intervals as the Bank may desire.
Section 15.8. ERISA. The Guarantor will promptly notify the Bank of any
Reportable Event (other than a Reportable Event as to which the Pension Benefit
Guaranty Corporation has waived the applicable 30-day notice requirement
pursuant to the provisions of ERISA) or any notice of termination of any Plan
under Sections 4041 or 4042 of ERISA. The Guarantor shall not permit any
employee pension benefit plan (as that term is defined in Section 3 of ERISA)
maintained by the Guarantor to (a) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the Code which might result in a
material liability for the Guarantor, or (b) incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
waived, or (c) terminate any such benefit plan in a manner which could result in
the imposition of any material lien or encumbrance on the assets of the
Guarantor under Section 4068 of ERISA.
Section 15.9. Maintenance of Office. The Guarantor will maintain its
chief executive office in Jericho, New York, or at such other place in the
United States of America as the Guarantor shall designate upon written notice to
the Bank, where notices, presentations and demands to or upon the Guarantor in
respect of this Guaranty may be made.
<PAGE> 14
-14-
Section 15.10. Further Assurances. The Guarantor shall at any time or
from time to time execute and deliver such further instruments and take such
further action as may reasonably be requested by the Bank, in each case further
and more perfectly to effect the purposes of this Guaranty.
Section 16. Negative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any Obligations are outstanding:
Section 16.1. Merger or Sale of Assets. The Guarantor will not:
(a) consolidate or merge with or into any other Person unless
(i) after giving effect to such consolidation or merger, no default
exists and (ii) the Guarantor is the surviving corporation of such
consolidation or merger; or
(b) sell, lease, transfer or otherwise dispose of all or any
substantial portion of its assets; or
(c) at any time transfer, assign or hypothecate any of its
partnership interests or rights in respect of the Borrower.
Section 16.2. Lines of Business. The Guarantor will not directly or
indirectly through a Subsidiary engage in any business other than the
acquisition, management, leasing, financing and disposition of petroleum and
convenience store related real estate, the retail and wholesale distribution of
petroleum products, the operation of convenience stores or other retail
businesses related to the operation of gasoline service stations and convenience
stores or other businesses which can reasonably be conducted at gasoline service
stations or convenience stores, except that the Guarantor may engage in any
other business (each an "Other Business" and collectively "Other Businesses")
acquired by the Guarantor if the aggregate purchase price (including any direct
or contingent liabilities assumed by the Guarantor in connection with such
acquisition) for such Other Business, plus the aggregate purchase prices
(including assumed liabilities) for all Other Businesses previously acquired by
the Guarantor, does not exceed $25,000,000. The Bank shall have the right to
approve all purchase price allocations made in connection with any such
acquisition of an Other Business or Other Businesses as the same relate to
compliance with this Section 16.2.
Section 16.3. Acquisitions. The Guarantor will provide the Bank with
reasonable advance notice of any proposed acquisitions of assets or stock
<PAGE> 15
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of Other Businesses (whether directly by the Guarantor or indirectly through a
Subsidiary of the Guarantor) with respect to which the aggregate purchase price
(including any assumption of liabilities) is $25,000,000 or more as set forth in
Section 16.2 hereof and will provide to the Bank all information relating to
such transactions as may be reasonably requested by the Bank.
Section 16.4. Interest Rate Protection Arrangements. The Guarantor will
not, and will not permit the Borrower to, enter into any interest rate
protection arrangements with respect to the Loans with any Person other than the
Bank, unless the Guarantor shall have first requested the Bank to enter into an
interest rate protection arrangement on terms and conditions proposed in good
faith by the Borrower and the Bank shall have declined such request.
Section 17. Survival of Covenants. All covenants, agreements,
representations and warranties made herein shall be deemed to have been relied
on by the Bank notwithstanding any investigation made by the Bank or on its
behalf, and shall survive the execution and delivery of this Guaranty.
Section 18. Notices, Etc. (a) The Bank shall provide the Guarantor with
a copy of each notice sent to the Borrower pursuant to Section 7 of the Loan
Agreement. No failure of the Bank to provide any such notice shall operate to
relieve the Guarantor of any of its obligations hereunder.
(b) Except as otherwise expressly provided herein, all notices and
other communications made or required to be given pursuant to this Guaranty
shall be deemed delivered if in writing (or in the form of a telecopy confirmed
by letter) addressed as provided below and if either (i) actually delivered at
said address, or (ii) in the case of a letter, five Business Days shall have
elapsed after the same shall have been deposited in the United States mails,
postage prepaid and registered or certified:
(x) if to the Guarantor, at 125 Jericho Turnpike, Jericho, New York
11753, Attention: John J. Fitteron, Senior Vice President and Chief Financial
Officer, or at such other address for notice as the Guarantor shall last have
furnished in writing to the Person giving the notice; or
(y) if to the Bank, at One Federal Street, Boston, Massachusetts
02110, Attention: Michael A. Palmer, Vice President, or at
<PAGE> 16
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such other address for notice as the Bank shall last have furnished in writing
to the Person giving the notice.
Section 19. Governing Law: Miscellaneous. This Guaranty is intended to
take effect as a sealed instrument to be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts and shall inure to the
benefit of the Bank and its successors and assigns, and shall be binding on the
Guarantor and the Guarantor's successors, assigns and legal representatives. The
descriptive headings of the sections hereof have been inserted herein for
convenience of reference only and shall not define or limit the provisions
hereof.
Section 20. Counterparts. This Guaranty may be executed in any number
of counterparts, but all of such counterparts together shall constitute one and
the same agreement. In making proof of this Guaranty, it shall not be necessary
to produce or account for more than one counterpart hereof executed by each of
the parties hereto.
<PAGE> 17
IN WITNESS WHEREOF, this Guaranty has been executed by or on behalf of
the parties hereto as an instrument under seal as of the day first above
written.
GETTY REALTY CORP.
By: /s/ John J. Fitteron
---------------------------------
Name: John J. Fitteron
Title: Senior Vice President, Treasurer
and Chief Financial Officer
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
-----------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
EXHIBIT 10.13
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "GUARANTY"), dated as of January 30,
1998, by and between GETTY REALTY CORP., a Maryland corporation having its
principal place of business at 125 Jericho Turnpike, Jericho, New York 11753
(the "Guarantor") and FLEET NATIONAL BANK (the "BANK").
In order to induce the Bank to consent to a modification of the
partnership structure of Power Test Realty Company Limited Partnership, a New
York limited partnership (the "BORROWER") and to amend its loan arrangement with
the Borrower, which loan arrangement is set forth in an Amended and Restated
Loan Agreement dated as of October 31, 1995 by and between the Borrower and
Fleet Bank of Massachusetts, N.A., predecessor in interest to the Bank, as
amended by that certain First Amendment to the Amended and Restated Loan
Agreement dated as of April 18, 1997, as further amended by that certain Second
Amendment to the Amended and Restated Loan Agreement of even date herewith (as
amended, the "LOAN AGREEMENT"), the Guarantor is entering into this Guaranty
with the Bank pursuant to which the Guarantor guarantees the payment and
performance in full of all of the Obligations (as that term is hereinafter
defined).
Accordingly, in consideration of the Bank's consent as aforesaid and
its amendment of its loan arrangement with the Borrower and in consideration of
the premises and of the covenants herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Definitions. The following terms shall have the meanings set
forth in this Section 1 hereof or elsewhere in the provisions of this Guaranty
referred to below:
"BANK" means Fleet National Bank.
"BORROWER" means Power Test Realty Company Limited
Partnership, a New York limited partnership.
"CONTINGENT LIABILITIES" means any guaranties, endorsements,
agreements to purchase or provide funds for the payment of obligations
of others, or other liabilities which would be
<PAGE> 2
2
classified as contingent in accordance with generally accepted
accounting principles consistently applied, excluding, however,
endorsements of checks or other negotiable instruments for deposit or
collection in the ordinary course of business.
"GUARANTOR" means Getty Realty Corp., a Maryland
corporation.
"GUARANTY" means this Guaranty Agreement as originally
executed, or, if this Guaranty Agreement is amended, modified or
supplemented, as so amended, modified or supplemented.
"LOAN" means the loan from the Bank to the Borrower pursuant
to the terms of the Loan Agreement.
"LOAN AGREEMENT" means the Amended and Restated Loan Agreement
dated as of October 31, 1995 between the Borrower and Fleet Bank of
Massachusetts, N.A., predecessor in interest to the Bank, as amended by
that certain First Amendment to the Amended and Restated Loan Agreement
dated as of April 18, 1997, as further amended by that certain Second
Amendment to the Amended and Restated Loan Agreement of even date
herewith, or if further amended, modified or supplemented, as so
further amended, modified or supplemented.
"NOTES" means, collectively, the Master Note and the
Collateral Note(s), or if amended, modified or supplemented, as so
amended, modified or supplemented, and any note issued in exchange for
or replacement of any such note pursuant to the terms of the Loan
Agreement.
"OBLIGATIONS" means all indebtedness, obligations and
liabilities, direct or indirect, matured or unmatured, primary or
secondary, certain or contingent, of the Borrower to the Bank for the
payment of money now or hereafter owing or incurred (including, without
limitation, reasonable costs and expenses incurred by the Bank in
attempting to collect or enforce any of the foregoing) which are
chargeable to the Borrower and which arise under or pursuant to the
Loan Agreement or the Notes, accrued in each case to the date of
payment hereunder, and "OBLIGATION" means any one of the Obligations.
"OTHER BUSINESS(ES)" has the meaning set forth in Section 16.2
hereof.
<PAGE> 3
3
"Person" means any individual, corporation, partnership,
trust, unincorporated association, joint stock company or other legal
entity or organization and any government or agency or political
subdivision thereof.
"Subsidiary" means, with respect to any Person that is not an
individual, any other present or future corporation or other legal
entity a majority of whose outstanding capital stock or other
ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions is
at the time owned directly or indirectly by such Person.
All other capitalized terms used herein which are defined in the Loan
Agreement have the meanings ascribed to them therein, unless they are expressly
otherwise defined herein.
Section 2. Guaranty of Payment.
Section 2.1. Guaranty of Payment of Obligations. The Guarantor hereby
unconditionally guarantees to the Bank the payment in full of each Obligation,
when and as such Obligation becomes due and payable in accordance with the terms
of the Loan Agreement and the Notes, whether such Obligation is outstanding on
the date hereof or arises or is incurred hereafter. The guaranty hereby made by
the Guarantor is an absolute, unconditional and continuing guaranty of the full
and punctual payment by the Borrower of all of the Obligations in accordance
with the terms of the Loan Agreement and not of their collectibility only and is
in no way conditioned upon any requirement that the Bank first attempt to
collect any of the Obligations from the Borrower or resort to any other
security, collateral or other means of obtaining payment of any of the
Obligations which the Bank now has or may acquire after the date hereof, or upon
any other contingency whatsoever.
Section 2.2. Payments. If the Borrower shall fail to make any payment
of any Obligation punctually when and as such obligation shall become due and
payable and such failure shall continue beyond the period of grace, if any,
applicable thereto, then the Guarantor hereby agrees to make such payment of
such Obligation, in funds immediately available to the Bank, upon written demand
by the Bank.
Section 2.3. Continuing Security of this Guaranty. This Guaranty and
the rights, remedies, powers and privileges of the Bank hereunder shall not in
<PAGE> 4
4
any way be prejudiced or affected by an intermediate payment by the Borrower of
any part of the Obligations. This Guaranty and the obligations of the Guarantor
hereunder shall be in addition to and shall not in any way be prejudiced or
affected by any other collateral or other security or guarantees now or
hereafter held by the Bank for all or any part of the Obligations, and every
right, remedy, power or privilege given to the Bank hereunder shall be in
addition to and not a limitation of any and every other right, remedy, power or
privilege vested in the Bank under any other collateral. No assurances, security
or payment of any of the Obligations which is avoided under any enactment
relating to bankruptcy, liquidation or insolvency, and no release, settlement or
discharge given or made by the Bank on the faith of any such assurance, security
or payment shall prejudice or affect the right of the Bank to recover from the
Guarantor to the full extent of the guaranty hereby made by the Guarantor as if
such assurance, security, payment, release, settlement or discharge (as the case
may be) had never been given or made.
Section 3. Demands for Payment. Each demand for payment pursuant to
Section 2.2 hereof shall be made in accordance with the terms of Section 18
hereof. Demands for payment hereunder may be made on any number of occasions. A
dated statement signed by an officer of the Bank and setting forth the amount of
the Obligations at the time owing to the Bank, or (as the case may be) setting
forth the amount of the obligations at the time owing by the Guarantor to the
Bank pursuant to Section 9 hereof, shall, save for manifest error, be prima
facie evidence thereof as between the Guarantor and the Bank in any legal
proceedings against the Guarantor in connection with this Guaranty.
Section 4. Waivers of Notice, Assent, Etc. The Guarantor hereby waives
notice of acceptance of this Guaranty, notice of any and all loans or advances
made or other financial accommodations extended to the Borrower by the Bank
under the Loan Agreement, notice of the occurrence of any default or of any
demand upon the Borrower for any payment under the Loan Agreement, notice of any
action at any time taken or omitted by the Bank under or in respect of the Loan
Agreement or any of the Obligations, any requirement of diligence or to mitigate
damages and, generally, all demands, notices and other formalities of every kind
in connection with this Guaranty (except as otherwise expressly provided
hereby), the Loan Agreement or any of the Obligations. The Guarantor hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the Bank at any
time or times in respect of any default by
<PAGE> 5
5
the Borrower in the performance or satisfaction of any term, covenant, condition
or provision of the Loan Agreement, any amendment, modification or waiver to the
Loan Agreement, the Notes or any other Loan Document, any and all other
indulgences whatsoever by the Bank in respect of any of the Obligations or
otherwise, the taking, addition, substitution or release, in whole or in part,
at any time or times, of any security for any of the Obligations, the addition,
substitution or release, in whole or in part, of any person or persons (other
than the Borrower) primarily or secondarily liable in respect of any of the
Obligations or any other events or circumstances which might constitute a legal
or equitable discharge of a surety or guaranty. Without limitation of the
generality of the foregoing, the Guarantor assents to any other action or delay
in acting or failure to act on the part of the Bank, including, without
limitation, any failure strictly or diligently to assert any right or pursue any
remedy or to mitigate damages or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 4
hereof, afford grounds for terminating, discharging or relieving the Guarantor,
in whole or in part, from any of its absolute and unconditional obligations
hereunder, it being the intention of the Guarantor that, so long as any of the
Obligations remains unsatisfied, the obligations of the Guarantor hereunder
shall not be discharged except by payment and then only to the extent of such
payment. The obligations of the Guarantor hereunder shall not be diminished or
rendered unenforceable by any bankruptcy, winding up, reorganization,
arrangement, liquidation or similar proceeding with respect to the Borrower, the
Guarantor or the Bank. The guaranty hereby made by the Guarantor shall continue
in full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, membership, constitution or place of
formation of the Borrower, the Guarantor or the Bank.
Section 5. Place and Mode of Payments. Each payment by the Guarantor
under or in respect of this Guaranty shall be made to the Bank in immediately
available and freely transferable funds at the Bank's office at One Federal
Street, Boston, Massachusetts 02110, Attention: Michael A. Palmer, Vice
President.
Section 6. Set-off. Regardless of the adequacy of any collateral or
other means of obtaining prepayment of the Obligations, the Bank may at any time
and without prior notice to the Guarantor set-off the whole or any portion or
portions of any or all deposits and other sums credited by or due from the Bank
to the Guarantor against amounts payable under this Guaranty, whether or not any
other person or persons could also withdraw money therefrom. The Bank will
promptly thereafter notify the Guarantor of any such set-off.
<PAGE> 6
6
Section 7. Freedom to Deal with Borrower and Other Banks. The Bank
shall be at liberty, without giving notice to or obtaining the assent of the
Guarantor and without relieving the Guarantor of any liability hereunder, to
deal with the Borrower and with each other party who now is or after the date
hereof becomes liable in any manner for any of the Obligations, in such manner
as the Bank in its sole discretion deems fit, and to this end the Guarantor
agrees that the Bank may in its sole discretion do any or all of the following
things: (a) extend credit, make loans and afford other financial accommodations
to the Borrower at such times, in such amounts and on such terms as the Bank may
approve, (b) vary the terms and grant extensions or renewals of any present or
future indebtedness or obligation to the Bank of the Borrower or of any such
other party, (c) grant time, waivers and other indulgences in respect thereto,
(d) vary, exchange, release or discharge, wholly or partially, or delay in or
abstain from perfecting and enforcing any security or guaranty or other means of
obtaining payment of any of the Obligations which the Bank now have or acquire
after the date hereof (e) accept partial payments from the Borrower or any such
other party, (f) release or discharge, wholly or partially, any endorser or
guarantor, and (g) compromise or make any settlement or other arrangement with
the Borrower or any such other party.
Section 8. Election of Remedies. This Guaranty may be enforced by the
Bank from time to time as often as occasion therefor may arise and without any
requirement on the part of the Bank first to exercise any rights against the
Borrower or any other person or to exhaust any remedies available to the Bank
against the Borrower or any other person or to resort to any collateral or
security for any of the Obligations which is in the possession or under the
control of the Bank or to resort to any other source or means of obtaining
payment or enforcing payment of the Obligations or any of them.
Section 9. Expenses. The Guarantor hereby agrees to pay upon demand by
the Bank all reasonable out-of-pocket costs and expenses, including, but not
limited to, court costs and expenses and the fees and disbursements of lawyers,
incurred or expended by the Bank in connection with the enforcement of this
Guaranty, together with interest on amounts recoverable under this Section 9
hereof from the time such amounts become due until payment at the rate
applicable to amounts overdue under the Loan Agreement. The covenant contained
in this Section 9 hereof shall survive the payment in full of all of the
Obligations.
<PAGE> 7
7
Section 10. Further Assurances. The Guarantor will, at any time and
from time to time, upon request by the Bank, take or cause to be taken any
action and execute and deliver such, if any, further documents as, in the
reasonable opinion of the Bank, are necessary in order to give full effect to
this Guaranty and to preserve the rights, powers, privileges and remedies of the
Bank hereunder.
Section 11. Waiver of Certain Defenses. The Guarantor hereby
absolutely and irrevocably waives, to the fullest extent permitted by law, any
and all defenses which may now or hereafter exist in respect of its obligations
hereunder by virtue of any statute of limitations, stay or moratorium law or
other similar law now or hereafter in effect.
Section 12. Unenforceability of Obligations Against Borrower, Etc. It
is hereby agreed as a separate and independent stipulation that, if for any
reason the Borrower ceases to have any legal obligation to discharge the
Obligations or any of them, or if any of the moneys included in the Obligations
have become irrecoverable from the Borrower by operation of law or for any other
reason, or if any of the Obligations become unenforceable against the Borrower
by operation of law or for any other reason, this Guaranty and the obligations
of the Guarantor hereunder shall nevertheless be binding on the Guarantor to the
same extent as if the Guarantor at all times prior to demand by the Bank for
payment hereunder had been, and at the time of, such demand was, the principal
debtor on all of such Obligations.
Section 13. Amendments and Waivers. Neither this Guaranty nor any term
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by the Bank and the Guarantor expressly referring to this
Guaranty and to the provisions so changed, waived, discharged or terminated. No
such waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing by the Bank and no
delay or omission on the part of the Bank in exercising any right or remedy
hereunder shall operate as a waiver of that or any other right or remedy
hereunder or otherwise be prejudicial thereto.
Section 14. Representations and Warranties of the Guarantor. The
Guarantor represents and warrants to the Bank that on and as of the date hereof:
(a) Organization: Good Standing. The Guarantor (i) is a
corporation duly organized, validly existing and in good standing under
the laws of Maryland, (ii) has all requisite corporate power to
<PAGE> 8
8
own its property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing and is duly authorized to do
business in each jurisdiction where the nature of its properties or its business
requires such qualification and in which failure so to qualify would materially
adversely affect its business or financial condition.
(b) Authorization. The execution, delivery and performance of this
Guaranty and the transactions contemplated hereby (i) are within the corporate
authority of the Guarantor, (ii) have been duly authorized by all proper
corporate proceedings required to make this Guaranty the valid and enforceable
obligation it purports to be, (iii) will not contravene any provision of law,
the charter documents or by-laws of the Guarantor or any other material
agreement, instrument or undertaking binding upon the Guarantor, and (iv) do not
require any approval or consent of, or filing with, any governmental agency or
authority.
(c) Enforceability. Upon execution by the parties hereto, this Guaranty
will be the valid and legally binding obligation of the Guarantor, enforceable
against it in accordance with the terms hereof, except to the extent that the
enforcement of the rights and remedies of the Bank may be subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting generally the
enforcement of creditors' rights and remedies, and the availability of equitable
remedies may be subject to the discretion of the court before which any
proceeding thereof is brought.
Section 14.2. Governmental Approvals. No approval or consent or filing
with any governmental agency or authority is required to make valid and legally
binding the execution, delivery or performance by the Guarantor of this
Guaranty.
Section 14.3. Intentionally Deleted.
Section 14.4. Intentionally Deleted.
Section 14.5. Compliance With Other Instruments, Laws, Etc. The
Guarantor is not in violation of any provision of its charter documents or
by-laws or any agreement or instrument to which it may be subject or by which it
or any of its properties may be bound or any decree, order, judgment, or any
statute, license, rule or regulation, in any of the foregoing cases in a manner
which could result in the imposition of
<PAGE> 9
9
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Guarantor.
Section 14.6. Governmental Approvals. The execution, delivery and
performance by the Guarantor of this Guaranty and the transactions contemplated
hereby do not require the approval or consent of or filing with, any
governmental agency or authority other than those already obtained.
Section 14.7. Litigation. There is no action, suit or proceeding at law
or in equity or by or before any governmental instrumentality or other agency
now pending or, to the knowledge of the Guarantor, threatened against or
affecting the Guarantor, or any properties or rights of the Guarantor, which, if
adversely determined, would materially impair the ability of the Guarantor to
carry on its business substantially as now conducted or would materially
adversely affect the financial condition of the Guarantor.
Section 14.8. Chief Executive Offices. Until the Bank receives notice
of a change, the chief executive offices of the Guarantor and the offices where
all the records and books of account of the Guarantor are kept shall be located
at 125 Jericho Turnpike, Jericho, New York 11753.
Section 14.9. Indebtedness. No instrument evidencing or relating to any
indebtedness of the Guarantor contains any restriction prohibiting the Guarantor
from incurring any other indebtedness or Contingent Liabilities or any provision
requiring the Guarantor to maintain any minimum level of net worth or comply
with any other financial covenants.
Section 14.10. True Copies of Charter Documents. The Guarantor has
furnished or caused to be furnished to the Bank true and complete copies of the
charter documents and by-laws of the Guarantor, together with any amendments
thereto.
Section 14.11. Guaranteed Pension Plans. The Guarantor does not
contribute to any Guaranteed Pension Plans. The Guarantor does not contribute to
any multiemployer pension plans.
Section 14.12. Disclosure. No material representation or warranty made
by the Guarantor in any Loan Document or in any agreement, instrument, document,
certificate, statement or letter furnished to the Bank by or on behalf of the
Guarantor in connection with any of the transactions contemplated by any of the
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading in light of
<PAGE> 10
10
the circumstances in which they are made. There is no fact known to any officer
of the Guarantor which materially adversely affects, or which, in the best
judgment of any officer of the Guarantor, would in the future materially
adversely affect, the financial position, business, operations or affairs of the
Guarantor.
Section 15. Affirmative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loan, the Master Note, any Collateral Note or the
Chase Note is outstanding, or any Obligations are outstanding:
Section 15.1. Conduct of Business. The Guarantor will:
(a) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights
(charter and statutory), and franchises, licenses, material trademarks
and service marks, and copyrights; and
(b) keep true and accurate records and books of account,
prepared in accordance with generally accepted accounting principles,
consistently applied;
(c) cause all of its properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof all as in the judgment of the Guarantor may be
necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times, and continue to
engage primarily in the business now conducted by it and in related
businesses, except as may be otherwise permitted under Section 16.2
hereof.
Section 15.2. Compliance with Agreements and Contracts. The Guarantor
will observe, conform to and comply with the provisions of its charter documents
and by-laws, all leases, and all agreements and instruments by which it or any
of its properties may be bound.
Section 15.3. Compliance with Law. The Guarantor will (a) comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, noncompliance with which would have a
materially adverse effect on the business, operations or financial condition of
the Guarantor or the ability of the Guarantor to fulfill its obligations under
this Guaranty and (b) promptly obtain, maintain, apply for renewal, and not
allow to lapse, any authorization, consent, approval,
<PAGE> 11
11
license or order, and accomplish any filing or registration with, any court or
judicial, administrative or governmental authority, which may be or may become
necessary in order that it perform all of its obligations under this Guaranty
and in order that the same may be valid and binding and effective in accordance
with its terms and in order that the Bank may be able freely to exercise and
enforce any and all of its rights under this Guaranty.
Section 15.4. Notification of Material Litigation, Default, Etc. The
Guarantor will promptly notify the Bank of (a) the commencement of any
litigation or administrative proceeding initiated against it (if it has
knowledge of the same) which is likely to involve any material risk of any
material judgment or liability not substantially covered by insurance or which
may otherwise result in a materially adverse change in the assets, financial
condition or business of the Guarantor, and (b) the occurrence of any default.
The Guarantor will promptly give notice to the Bank of the occurrence of any
material default under any material instrument or agreement to which the
Guarantor (if it has knowledge of the same) is a party, and if any person shall
give any written notice or take any other action in respect of a claimed default
under any other material evidence of indebtedness, indenture, note or other
obligation as to which the Guarantor is a party or obligor, whether as principal
or surety, the Guarantor shall promptly give written notice thereof to the Bank,
describing the notice or action and the nature of the claimed default.
Section 15.5. Financial Statements, Certificates and Other Information.
The Guarantor will furnish to the Bank:
(a) as soon as available but in any event within forty-five
(45) days after the end of each of the first three fiscal quarters in
any fiscal year of the Guarantor, an unaudited consolidated balance
sheet for the Guarantor and its Subsidiaries as at the end of such
quarter, and an unaudited consolidated statement of income and
statement of changes in financial position for the Guarantor and its
Subsidiaries for the period commencing with the end of the preceding
fiscal year and ending with the end of such quarter, together with a
certificate of the chief financial officer of the Guarantor stating
that such financial statements fairly present the financial condition
of the Guarantor and its Subsidiaries as of the date thereof and have
been prepared in accordance with generally accepted accounting
principles consistently applied, subject, however, to audit and
year-end adjustments;
<PAGE> 12
12
(b) as soon as available but in any event within ninety (90)
days after the end of each fiscal year, an audited consolidated balance
sheet for the Guarantor and its Subsidiaries as at the end of such
fiscal year, and an audited consolidated statement of income and
statement of changes in financial position for the Guarantor and its
Subsidiaries for such fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied, in each
case accompanied by the opinion of and report by Coopers & Lybrand or
other independent certified public accountants of nationally recognized
standing selected by the Guarantor and acceptable to the Bank, such
opinion to be unqualified as to scope limitations imposed by the
Guarantor, and otherwise, without qualification except as therein
noted;
(c) accompanying each set of financial statements of the
Guarantor furnished pursuant to paragraph (a) or (b) above, an
Officer's Certificate stating that a review of the activities of the
Guarantor and the Borrower during the period covered by such financial
statements has been made under the supervision of the signer with a
view to determining whether, during such period, each of the Guarantor
and the Borrower has kept, observed, performed and fulfilled each and
every covenant and condition of each of the Loan Documents to which it
is a party and either (i) stating that, to the best of his knowledge
and belief, there neither exists on the date of such certificate, nor
existed during such period, any default under any existing loan or
credit agreement to which the Guarantor or the Borrower is a party, or
(ii) if any such default under any existing loan or credit agreement to
which the Guarantor or the Borrower is a party existed or exists,
specifying the nature thereof, the period of existence thereof and what
action the Guarantor or the Borrower, as appropriate, has taken, is
taking or proposes to take with respect thereto;
(d) accompanying each set of financial statements of the
Guarantor set forth in paragraph (b) above, a certificate of the
accounting firm stating that they have read a copy of this Guaranty and
that, in the course of their regular audit of the business of the
Guarantor, which was conducted in accordance with generally accepted
auditing standards, nothing has come to their attention that caused
them to believe that any default under any existing loan or credit
agreement to which the Guarantor or the Borrower is a party has
occurred during the fiscal year in question or exists at the date of
such certificate or, if in the opinion of such firm a default under any
existing loan or credit agreement to which the Guarantor
<PAGE> 13
13
or the Borrower is a party has so existed or exists, a statement as to
the nature thereof;
(e) contemporaneously with the filing or mailing thereof,
copies of such other financial statements or reports as the Guarantor
shall send to its stockholders, and copies of all regular, and periodic
and other reports which the Guarantor may be required to file with the
Securities and Exchange Commission or any other governmental
commission, department, board, bureau or agency, federal or state
(including without limitation all reports on Forms 10-K, 10-Q and 8-K);
and
(f) with reasonable promptness, such other information
relating to the business or financial affairs of the Guarantor as the
Bank may reasonably request.
Section 15.6. Notice of Material Change. The Guarantor will promptly
notify the Bank of any materially adverse change in its financial condition,
business or operations.
Section 15.7. Inspection of Properties and Books. The Bank or any of
its designated representatives shall have the right to visit and inspect any of
the properties of the Guarantor, to examine the books of account of the
Guarantor, and to discuss the affairs, finances and accounts of the Guarantor
with, and to be advised as to the same by, its officers, all at such reasonable
times and intervals as the Bank may desire.
Section 15.8. ERISA The Guarantor will promptly notify the Bank of any
Reportable Event (other than a Reportable Event as to which the Pension Benefit
Guaranty Corporation has waived the applicable 30-day notice requirement
pursuant to the provisions of ERISA) or any notice of termination of any Plan
under Sections 4041 or 4042 of ERISA. The Guarantor shall not permit any
employee pension benefit plan (as that term is defined in Section 3 of ERISA)
maintained by the Guarantor to (a) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the Code which might result in a
material liability for the Guarantor, or (b) incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
waived, or (c) terminate any such benefit plan in a manner which could result in
the imposition of any material lien or encumbrance on the assets of the
Guarantor under Section 4068 of ERISA.
Section 15.9. Maintenance of Office. The Guarantor will maintain its
chief executive office in Jericho, New York, or at such other place in the
<PAGE> 14
14
United States of America as the Guarantor shall designate upon written notice to
the Bank, where notices, presentations and demands to or upon the Guarantor in
respect of this Guaranty may be made.
Section 15.10. Further Assurances. The Guarantor shall at any time or
from time to time execute and deliver such further instruments and take such
further action as may reasonably be requested by the Bank, in each case further
and more perfectly to effect the purposes of this Guaranty.
Section 16. Negative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any Obligations are outstanding:
Section 16.1. Merger or Sale f Assets. The Guarantor will not:
(a) consolidate or merge with or into any other Person unless
(i) after giving effect to such consolidation or merger, no default
exists and (ii) the Guarantor is the surviving corporation of such
consolidation or merger; or
(b) sell, lease, transfer or otherwise dispose of all or any
substantial portion of its assets; or
(c) at any time transfer, assign or hypothecate any of its
partnership interests or rights in respect of the Borrower.
Section 16.2. Lines of Business. The Guarantor will not directly or
indirectly through a Subsidiary engage in any business other than the
acquisition, management, leasing, financing and disposition of petroleum and
convenience store related real estate, the retail and wholesale distribution of
petroleum products, the operation of convenience stores or other retail
businesses related to the operation of gasoline service stations and convenience
stores or other businesses which can reasonably be conducted at gasoline service
stations or convenience stores, except that the Guarantor may engage in any
other business (each an "Other Business" and collectively "Other Businesses")
acquired by the Guarantor if the aggregate purchase price (including any direct
or contingent liabilities assumed by the Guarantor in connection with such
acquisition) for such Other Business, plus the aggregate purchase prices
(including assumed liabilities) for all Other Businesses previously acquired by
the Guarantor, does not exceed $25,000,000. The Bank shall have the right to
approve all purchase price allocations made in connection with any such
acquisition of an Other Business or Other Businesses as the same relate to
compliance with this Section 16.2.
<PAGE> 15
15
Section 16.3. Acquisitions. The Guarantor will provide the Bank with
reasonable advance notice of any proposed acquisitions of assets or stock of
Other Businesses (whether directly by the Guarantor or indirectly through a
Subsidiary of the Guarantor) with respect to which the aggregate purchase price
(including any assumption of liabilities) is $25,000,000 or more as set forth in
Section 16.2 hereof and will provide to the Bank all information relating to
such transactions as may be reasonably requested by the Bank.
Section 16.4. Interest Rate Protection Arrangements. The Guarantor will
not, and will not permit the Borrower to, enter into any interest rate
protection arrangements with respect to the Loans with any Person other than the
Bank, unless the Guarantor shall have first requested the Bank to enter into an
interest rate protection arrangement on terms and conditions proposed in good
faith by the Borrower and the Bank shall have declined such request.
Section 17. Survival of Covenants. All covenants, agreements,
representations and warranties made herein shall be deemed to have been relied
on by the Bank notwithstanding any investigation made by the Bank or on its
behalf and shall survive the execution and delivery of this Guaranty.
Section 18. Notices, Etc. (a) The Bank shall provide the Guarantor with
a copy of each notice sent to the Borrower pursuant to Section 7 of the Loan
Agreement. No failure of the Bank to provide any such notice shall operate to
relieve the Guarantor of any of its obligations hereunder.
(b) Except as otherwise expressly provided herein, all notices
and other communications made or required to be given pursuant to this
Guaranty shall be deemed delivered if in writing (or in the form of a
telecopy confirmed by letter) addressed as provided below and if either
(i) actually delivered at said address, or (ii) in the case of a
letter, five Business Days shall have elapsed after the same shall have
been deposited in the United States mails, postage prepaid and
registered or certified:
(x) if to the Guarantor, at 125 Jericho Turnpike,
Jericho, New York 11753, Attention: John J. Fitteron, Senior Vice
President and Chief Financial Officer, or at such other address for
notice as the Guarantor shall last have furnished in writing to the
Person giving the notice; or
<PAGE> 16
16
(y) if to the Bank, at One Federal Street, Boston,
Massachusetts 02110, Attention: Michael A. Palmer, Vice President, or
at such other address for notice as the Bank shall last have furnished
in writing to the Person giving the notice.
Section 19. Governing Law; Miscellaneous. This Guaranty is intended to
take effect as a sealed instrument to be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts and shall inure to the
benefit of the Bank and its successors and assigns, and shall be binding on the
Guarantor and the Guarantor's successors, assigns and legal representatives. The
descriptive headings of the Section s hereof have been inserted herein for
convenience of reference only and shall not define or limit the provisions
hereof.
Section 20. Counterparts. This Guaranty may be executed in any number
of counterparts, but all of such counterparts together shall constitute one and
the same agreement. In making proof of this Guaranty, it shall not be necessary
to produce or account for more than one counterpart hereof executed by each of
the parties hereto.
<PAGE> 17
IN WITNESS WHEREOF, this Guaranty has been executed by or on behalf of
the parties hereto as an instrument under seal as of the day first above
written.
GETTY REALTY CORP.
By: /s/ John J. Fitteron
------------------------
Name: John J. Fitteron
Title: Senior Vice President
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK
By:
Name: Michael A. Palmer
Title: Vice President
<PAGE> 18
IN WITNESS WHEREOF, this Guaranty has been executed by or on behalf of
the parties hereto as an instrument under seal as of the day first above
written.
GETTY REALTY CORP.
By:
------------------------
Name: John J. Fitteron
Title: Senior Vice President
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
EXHIBIT 10.14
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty"), dated as of January 30, 1998,
by and between GETTY PROPERTIES CORP., a Delaware corporation having its
principal place of business at 125 Jericho Turnpike, Jericho, New York 11753
(the "Guarantor") and FLEET NATIONAL BANK (the "Bank").
In order to induce the Bank to consent to a modification of the
partnership structure of Power Test Realty Company Limited Partnership, a New
York limited partnership (the "Borrower") and to amend its loan arrangement with
the Borrower, which loan arrangement is set forth in an Amended and Restated
Loan Agreement dated as of October 31, 1995 by and between the Borrower and
Fleet Bank of Massachusetts, N.A., predecessor in interest to the Bank, as
amended by that certain First Amendment to the Amended and Restated Loan
Agreement dated as of April 18, 1997, as further amended by that certain Second
Amendment to the Amended and Restated Loan Agreement of even date herewith (as
amended, the "Loan Agreement"), the Guarantor is entering into this Guaranty
with the Bank pursuant to which the Guarantor guarantees the payment and
performance in full of all of the Obligations (as that term is hereinafter
defined).
Accordingly, in consideration of the Bank's consent as aforesaid and its
amendment of its loan arrangement with the Borrower and in consideration of the
premises and of the covenants herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Definitions. The following terms shall have the meanings set
forth in this Section 1 hereof or elsewhere in the provisions of this Guaranty
referred to below:
"Bank" means fleet National Bank.
"Borrower" means Power Test Realty Company Limited Partnership, a
New York limited partnership.
"Contingent Liabilities" means any guaranties, endorsements,
agreements to purchase or provide funds for the payment of obligations of
others, or other liabilities which would be
<PAGE> 2
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classified as contingent in accordance with generally accepted accounting
principles consistently applied, excluding, however, endorsements of
checks or other negotiable instruments for deposit or collection in the
ordinary course of business.
"Guarantor" means Getty Properties Corp., a Delaware corporation.
"Guaranty" means this Guaranty Agreement as originally executed, or,
if this Guaranty Agreement is amended, modified or supplemented, as so
amended, modified or supplemented.
"Loan" means the loan from the Bank to the Borrower pursuant to the
terms of the Loan Agreement.
"Loan Agreement" means the Amended and Restated Loan Agreement dated
as of October 31, 1995 between the Borrower and Fleet Bank of
Massachusetts, N.A., predecessor in interest to the Bank, as amended by
that certain First Amendment to the Amended and Restated Loan Agreement
dated as of April 18, 1997, as further amended by that certain Second
Amendment to the Amended and Restated Loan Agreement of even date
herewith, or if further amended, modified or supplemented, as so further
amended, modified or supplemented.
"Notes" means, collectively, the Master Note and the Collateral
Note(s), or if amended, modified or supplemented, as so amended, modified
or supplemented, and any note issued in exchange for or replacement of any
such note pursuant to the terms of the Loan Agreement.
"Obligations" means all indebtedness, obligations and liabilities,
direct or indirect, matured or unmatured, primary or secondary, certain or
contingent, of the Borrower to the Bank for the payment of money now or
hereafter owing or incurred (including, without limitation, reasonable
costs and expenses incurred by the Bank in attempting to collect or
enforce any of the foregoing) which are chargeable to the Borrower and
which arise under or pursuant to the Loan Agreement or the Notes, accrued
in each case to the date of payment hereunder, and "Obligation" means any
one of the Obligations.
"Other Business(es)" has the meaning set forth in Section 16.2
hereof.
<PAGE> 3
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"Person" means any individual, corporation, partnership, trust,
unincorporated association, joint stock company or other legal entity or
organization and any government or agency or political subdivision
thereof.
"Subsidiary" means, with respect to any Person that is not an
individual, any other present or future corporation or other legal entity
a majority of whose outstanding capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors
or other persons performing similar functions is at the time owned
directly or indirectly by such Person.
All other capitalized terms used herein which are defined in the Loan
Agreement have the meanings ascribed to them therein, unless they are expressly
otherwise defined herein.
Section 2. Guaranty of Payment.
Section 2.1. Guaranty of Payment of Obligations. The Guarantor hereby
unconditionally guarantees to the Bank the payment in full of each Obligation,
when and as such Obligation becomes due and payable in accordance with the terms
of the Loan Agreement and the Notes, whether such Obligation is outstanding on
the date hereof or arises or is incurred hereafter. The guaranty hereby made by
the Guarantor is an absolute, unconditional and continuing guaranty of the full
and punctual payment by the Borrower of all of the Obligations in accordance
with the terms of the Loan Agreement and not of their collectibility only and is
in no way conditioned upon any requirement that the Bank first attempt to
collect any of the Obligations from the Borrower or resort to any other
security, collateral or other means of obtaining payment of any of the
Obligations which the Bank now has or may acquire after the date hereof, or upon
any other contingency whatsoever.
Section 2.2. Payments. If the Borrower shall fail to make any payment of
any Obligation punctually when and as such obligation shall become due and
payable and such failure shall continue beyond the period of grace, if any,
applicable thereto, then the Guarantor hereby agrees to make such payment of
such Obligation, in funds immediately available to the Bank, upon written demand
by the Bank.
Section 2.3. Continuing Security of this Guaranty. This Guaranty and the
rights, remedies, powers and privileges of the Bank hereunder shall not in
<PAGE> 4
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any way be prejudiced or affected by an intermediate payment by the Borrower of
any part of the Obligations. This Guaranty and the obligations of the Guarantor
hereunder shall be in addition to and shall not in any way be prejudiced or
affected by any other collateral or other security or guarantees now or
hereafter held by the Bank for all or any part of the Obligations, and every
right, remedy, power or privilege given to the Bank hereunder shall be in
addition to and not a limitation of any and every other right, remedy, power or
privilege vested in the Bank under any other collateral. No assurances, security
or payment of any of the Obligations which is avoided under any enactment
relating to bankruptcy, liquidation or insolvency, and no release, settlement or
discharge given or made by the Bank on the faith of any such assurance, security
or payment shall prejudice or affect the right of the Bank to recover from the
Guarantor to the full extent of the guaranty hereby made by the Guarantor as if
such assurance, security, payment, release, settlement or discharge (as the case
may be) had never been given or made.
Section 3. Demands for Payment. Each demand for payment pursuant to
Section 2.2 hereof shall be made in accordance with the terms of Section 18
hereof. Demands for payment hereunder may be made on any number of occasions. A
dated statement signed by an officer of the Bank and setting forth the amount of
the Obligations at the time owing to the Bank, or (as the case may be) setting
forth the amount of the obligations at the time owing by the Guarantor to the
Bank pursuant to Section 9 hereof, shall, save for manifest error, be prima
facie evidence thereof as between the Guarantor and the Bank in any legal
proceedings against the Guarantor in connection with this Guaranty.
Section 4. Waivers of Notice, Assent, Etc. The Guarantor hereby waives
notice of acceptance of this Guaranty, notice of any and all loans or advances
made or other financial accommodations extended to the Borrower by the Bank
under the Loan Agreement, notice of the occurrence of any default or of any
demand upon the Borrower for any payment under the Loan Agreement, notice of any
action at any time taken or omitted by the Bank under or in respect of the Loan
Agreement or any of the Obligations, any requirement of diligence or to mitigate
damages and, generally, all demands, notices and other formalities of every kind
in connection with this Guaranty (except as otherwise expressly provided
hereby), the Loan Agreement or any of the Obligations. The Guarantor hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the Bank at any
time or times in respect of any default by
<PAGE> 5
-5-
the Borrower in the performance or satisfaction of any term, covenant, condition
or provision of the Loan Agreement, any amendment, modification or waiver to the
Loan Agreement, the Notes or any other Loan Document, any and all other
indulgences whatsoever by the Bank in respect of any of the Obligations or
otherwise, the taking, addition, substitution or release, in whole or in part,
at any time or times, of any security for any of the Obligations, the addition,
substitution or release, in whole or in part, of any person or persons (other
than the Borrower) primarily or secondarily liable in respect of any of the
Obligations or any other events or circumstances which might constitute a legal
or equitable discharge of a surety or guaranty. Without limitation of the
generality of the foregoing, the Guarantor assents to any other action or delay
in acting or failure to act on the part of the Bank, including, without
limitation, any failure strictly or diligently to assert any right or pursue any
remedy or to mitigate damages or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 4
hereof, afford grounds for terminating, discharging or relieving the Guarantor,
in whole or in part, from any of its absolute and unconditional obligations
hereunder, it being the intention of the Guarantor that, so long as any of the
Obligations remains unsatisfied, the obligations of the Guarantor hereunder
shall not be discharged except by payment and then only to the extent of such
payment. The obligations of the Guarantor hereunder shall not be diminished or
rendered unenforceable by any bankruptcy, winding up, reorganization,
arrangement, liquidation or similar proceeding with respect to the Borrower, the
Guarantor or the Bank. The guaranty hereby made by the Guarantor shall continue
in full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, membership, constitution or place of
formation of the Borrower, the Guarantor or the Bank.
Section 5. Place and Mode of Payments. Each payment by the Guarantor under
or in respect of this Guaranty shall be made to the Bank in immediately
available and freely transferable funds at the Bank's office at One Federal
Street, Boston, Massachusetts 02110, Attention: Michael A. Palmer, Vice
President.
Section 6. Set-off. Regardless of the adequacy of any collateral or other
means of obtaining prepayment of the Obligations, the Bank may at any time and
without prior notice to the Guarantor set-off the whole or any portion or
portions of any or all deposits and other sums credited by or due from the Bank
to the Guarantor against amounts payable under this Guaranty, whether or not any
other person or persons could also withdraw money therefrom. The Bank will
promptly thereafter notify the Guarantor of any such set-off.
<PAGE> 6
-6-
Section 7. Freedom to Deal with Borrower and Other Banks. The Bank shall
be at liberty, without giving notice to or obtaining the assent of the Guarantor
and without relieving the Guarantor of any liability hereunder, to deal with the
Borrower and with each other party who now is or after the date hereof becomes
liable in any manner for any of the Obligations, in such manner as the Bank in
its sole discretion deems fit, and to this end the Guarantor agrees that the
Bank may in its sole discretion do any or all of the following things: (a)
extend credit, make loans and afford other financial accommodations to the
Borrower at such times, in such amounts and on such terms as the Bank may
approve, (b) vary the terms and grant extensions or renewals of any present or
future indebtedness or obligation to the Bank of the Borrower or of any such
other party, (c) grant time, waivers and other indulgences in respect thereto,
(d) vary, exchange, release or discharge, wholly or partially, or delay in or
abstain from perfecting and enforcing any security or guaranty or other means of
obtaining payment of any of the Obligations which the Bank now have or acquire
after the date hereof, (e) accept partial payments from the Borrower or any such
other party, (f) release or discharge, wholly or partially, any endorser or
guarantor, and (g) compromise or make any settlement or other arrangement with
the Borrower or any such other party.
Section 8. Election of Remedies. This Guaranty may be enforced by the Bank
from time to time as often as occasion therefor may arise and without any
requirement on the part of the Bank first to exercise any rights against the
Borrower or any other person or to exhaust any remedies available to the Bank
against the Borrower or any other person or to resort to any collateral or
security for any of the Obligations which is in the possession or under the
control of the Bank or to resort to any other source or means of obtaining
payment or enforcing payment of the Obligations or any of them.
Section 9. Expenses. The Guarantor hereby agrees to pay upon demand by the
Bank all reasonable out-of-pocket costs and expenses, including, but not limited
to, court costs and expenses and the fees and disbursements of lawyers, incurred
or expended by the Bank in connection with the enforcement of this Guaranty,
together with interest on amounts recoverable under this Section 9 hereof from
the time such amounts become due until payment at the rate applicable to amounts
overdue under the Loan Agreement. The covenant contained in this Section 9
hereof shall survive the payment in full of all of the Obligations.
<PAGE> 7
-7-
Section 10. Further Assurances. The Guarantor will, at any time and from
time to time, upon request by the Bank, take or cause to be taken any action and
execute and deliver such, if any, further documents as, in the reasonable
opinion of the Bank, are necessary in order to give full effect to this Guaranty
and to preserve the rights, powers, privileges and remedies of the Bank
hereunder.
Section 11. Waiver of Certain Defenses. The Guarantor hereby absolutely
and irrevocably waives, to the fullest extent permitted by law, any and all
defenses which may now or hereafter exist in respect of its obligations
hereunder by virtue of any statute of limitations, stay or moratorium law or
other similar law now or hereafter in effect.
Section 12. Unenforceability of Obligations Against Borrower, Etc. It is
hereby agreed as a separate and independent stipulation that, if for any reason
the Borrower ceases to have any legal obligation to discharge the Obligations or
any of them, or if any of the moneys included in the Obligations have become
irrecoverable from the Borrower by operation of law or for any other reason, or
if any of the Obligations become unenforceable against the Borrower by operation
of law or for any other reason, this Guaranty and the obligations of the
Guarantor hereunder shall nevertheless be binding on the Guarantor to the same
extent as if the Guarantor at all times prior to demand by the Bank for payment
hereunder had been, and at the time of, such demand was, the principal debtor on
all of such Obligations.
Section 13. Amendments and Waivers. Neither this Guaranty nor any term
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by the Bank and the Guarantor expressly referring to this
Guaranty and to the provisions so changed, waived, discharged or terminated. No
such waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing by the Bank and no
delay or omission on the part of the Bank in exercising any right or remedy
hereunder shall operate as a waiver of that or any other right or remedy
hereunder or otherwise be prejudicial thereto.
Section 14. Representations and Warranties of the Guarantor. The Guarantor
represents and warrants to the Bank that on and as of the date hereof:
(a) Organization: Good Standing. The Guarantor (i) is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware, (ii) has all requisite corporate power to
<PAGE> 8
-8-
own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing and is duly
authorized to do business in each jurisdiction where the nature of its
properties or its business requires such qualification and in which
failure so to qualify would materially adversely affect its business or
financial condition.
(b) Authorization. The execution, delivery and performance of this
Guaranty and the transactions contemplated hereby (i) are within the
corporate authority of the Guarantor, (ii) have been duly authorized by
all proper corporate proceedings required to make this Guaranty the valid
and enforceable obligation it purports to be, (iii) will not contravene
any provision of law, the charter documents or by-laws of the Guarantor or
any other material agreement, instrument or undertaking binding upon the
Guarantor, and (iv) do not require any approval or consent of, or filing
with, any governmental agency or authority.
(c) Enforceability. Upon execution by the parties hereto, this
Guaranty will be the valid and legally binding obligation of the
Guarantor, enforceable against it in accordance with the terms hereof,
except to the extent that the enforcement of the rights and remedies of
the Bank may be subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting generally the enforcement of
creditors' rights and remedies, and the availability of equitable remedies
may be subject to the discretion of the court before which any proceeding
thereof is brought.
Section 14.2. Governmental Approvals. No approval or consent or filing
with any governmental agency or authority is required to make valid and legally
binding the execution, delivery or performance by the Guarantor of this
Guaranty.
Section 14.3. Financial Statements. The Guarantor has furnished to the
Bank (a) the audited consolidated financial statements of the Guarantor as at
January 31, 1997 and (b) the unaudited consolidated financial statements of the
Guarantor as at October 31, 1997. Such financial statements were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and fairly present the financial position of the Guarantor as at the
respective dates thereof and its respective results of operations for the fiscal
year or quarter then ended.
<PAGE> 9
-9-
Section 14.4. No Material Changes. Since October 31, 1997, there has been
no materially adverse change in the assets, liabilities, financial condition or
business of the Guarantor.
Section 14.5. Compliance With Other Instruments, Laws, Etc. The Guarantor
is not in violation of any provision of its charter documents or by-laws or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, or any statute, license,
rule or regulation, in any of the foregoing cases in a manner which could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of the Guarantor.
Section 14.6. Governmental Approvals. The execution, delivery and
performance by the Guarantor of this Guaranty and the transactions contemplated
hereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
Section 14.7. Litigation. There is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or other agency now
pending or, to the knowledge of the Guarantor, threatened against or affecting
the Guarantor, or any properties or rights of the Guarantor, which, if adversely
determined, would materially impair the ability of the Guarantor to carry on its
business substantially as now conducted or would materially adversely affect the
financial condition of the Guarantor.
Section 14.8. Chief Executive Offices. Until the Bank receives notice of a
change, the chief executive offices of the Guarantor and the offices where all
the records and books of account of the Guarantor are kept shall be located at
125 Jericho Turnpike, Jericho, New York 11753.
Section 14.9. Indebtedness. No instrument evidencing or relating to any
indebtedness of the Guarantor contains any restriction prohibiting the Guarantor
from incurring any other indebtedness or Contingent Liabilities or any provision
requiring the Guarantor to maintain any minimum level of net worth or comply
with any other financial covenants.
Section 14.10. True Copies of Charter Documents. The Guarantor has
furnished or caused to be furnished to the Bank true and complete copies of the
charter documents and by-laws of the Guarantor, together with any amendments
thereto.
<PAGE> 10
-10-
Section 14.11. Guaranteed Pension Plans. The Guarantor does not contribute
to any Guaranteed Pension Plans. The Guarantor does not contribute to any
multiemployer pension plans.
Section 14.12. Disclosure. No material representation or warranty made by
the Guarantor in any Loan Document or in any agreement, instrument, document,
certificate, statement or letter furnished to the Bank by or on behalf of the
Guarantor in connection with any of the transactions contemplated by any of the
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which they are made.
There is no fact known to any officer of the Guarantor which materially
adversely affects, or which, in the best judgment of any officer of the
Guarantor, would in the future materially adversely affect, the financial
position, business, operations or affairs of the Guarantor.
Section 15. Affirmative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loan, the Master Note, any Collateral Note or the
Chase Note is outstanding, or any Obligations are outstanding:
Section 15.1. Conduct of Business. The Guarantor will:
(a) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights (charter and
statutory), and franchises, licenses, material trademarks and service
marks, and copyrights; and
(b) keep true and accurate records and books of account, prepared in
accordance with generally accepted accounting principles, consistently
applied;
(c) cause all of its properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Guarantor may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times, and continue to engage primarily in
the business now conducted by it and in related businesses, except as may
be otherwise permitted under Section 16.2 hereof.
<PAGE> 11
-11-
Section 15.2. Compliance with Agreements and Contracts. The Guarantor will
observe, conform to and comply with the provisions of its charter documents and
by-laws, all leases, and all agreements and instruments by which it or any of
its properties may be bound.
Section 15.3. Compliance with Law. The Guarantor will (a) comply with all
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, noncompliance with which would have a
materially adverse effect on the business, operations or financial condition of
the Guarantor or the ability of the Guarantor to fulfill its obligations under
this Guaranty and (b) promptly obtain, maintain, apply for renewal, and not
allow to lapse, any authorization, consent, approval, license or order, and
accomplish any filing or registration with, any court or judicial,
administrative or governmental authority, which may be or may become necessary
in order that it perform all of its obligations under this Guaranty and in order
that the same may be valid and binding and effective in accordance with its
terms and in order that the Bank may be able freely to exercise and enforce any
and all of its rights under this Guaranty.
Section 15.4. Notification of Material Litigation, Default, Etc. The
Guarantor will promptly notify the Bank of (a) the commencement of any
litigation or administrative proceeding initiated against it (if it has
knowledge of the same) which is likely to involve any material risk of any
material judgment or liability not substantially covered by insurance or which
may otherwise result in a materially adverse change in the assets, financial
condition or business of the Guarantor, and (b) the occurrence of any default.
The Guarantor will promptly give notice to the Bank of the occurrence of any
material default under any material instrument or agreement to which the
Guarantor (if it has knowledge of the same) is a party, and if any person shall
give any written notice or take any other action in respect of a claimed default
under any other material evidence of indebtedness, indenture, note or other
obligation as to which the Guarantor is a party or obligor, whether as principal
or surety, the Guarantor shall promptly give written notice thereof to the Bank,
describing the notice or action and the nature of the claimed default.
Section 15.5. Financial Statements, Certificates and Other Information.
The Guarantor will furnish to the Bank:
(a) as soon as available but in any event within ninety (90) days
after the end of each fiscal year, an unaudited consolidated balance sheet
for the Guarantor and its Subsidiaries as at the end of such fiscal year,
and an unaudited consolidated statement of
<PAGE> 12
-12-
income and statement of changes in financial position for the Guarantor
and its Subsidiaries for such fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied (except for
the exclusion of footnotes related thereto), together with a certificate
of the chief financial officer of the Guarantor stating that such
financial statements fairly present the financial condition of the
Guarantor and its Subsidiaries as of the date thereof and have been
prepared in accordance with generally accepted accounting principles
consistently applied (except for the exclusion of footnotes related
thereto); and
(b) with reasonable promptness, such other information relating to
the business or financial affairs of the Guarantor as the Bank may
reasonably request.
Section 15.6. Notice of Material Change. The Guarantor will promptly
notify the Bank of any materially adverse change in its financial condition,
business or operations.
Section 15.7. Inspection of Properties and Books. The Bank or any of its
designated representatives shall have the right to visit and inspect any of the
properties of the Guarantor, to examine the books of account of the Guarantor,
and to discuss the affairs, finances and accounts of the Guarantor with, and to
be advised as to the same by, its officers, all at such reasonable times and
intervals as the Bank may desire.
Section 15.8. ERISA. The Guarantor will promptly notify the Bank of any
Reportable Event (other than a Reportable Event as to which the Pension Benefit
Guaranty Corporation has waived the applicable 30-day notice requirement
pursuant to the provisions of ERISA) or any notice of termination of any Plan
under Sections 4041 or 4042 of ERISA. The Guarantor shall not permit any
employee pension benefit plan (as that term is defined in Section 3 of ERISA)
maintained by the Guarantor to (a) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the Code which might result in a
material liability for the Guarantor, or (b) incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
waived, or (c) terminate any such benefit plan in a manner which could result in
the imposition of any material lien or encumbrance on the assets of the
Guarantor under Section 4068 of ERISA.
Section 15.9. Maintenance of Office. The Guarantor will maintain its chief
executive office in Jericho, New York, or at such other place in the United
States of America as the Guarantor shall designate upon written
<PAGE> 13
-13-
notice to the Bank, where notices, presentations and demands to or upon the
Guarantor in respect of this Guaranty may be made.
Section 15.10. Further Assurances. The Guarantor shall at any time or from
time to time execute and deliver such further instruments and take such further
action as may reasonably be requested by the Bank, in each case further and more
perfectly to effect the purposes of this Guaranty.
Section 16. Negative Covenants. The Guarantor covenants and agrees that,
so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any Obligations are outstanding:
Section 16.1. Merger or Sale of Assets. The Guarantor will not:
(a) consolidate or merge with or into any other Person unless (i)
after giving effect to such consolidation or merger, no default exists and
(ii) the Guarantor is the surviving corporation of such consolidation or
merger; or
(b) sell, lease, transfer or otherwise dispose of all or any
substantial portion of its assets; or
(c) at any time transfer, assign or hypothecate any of its
partnership interests or rights in respect of the Borrower;
provided, however, the Guarantor shall have the right at any time to
consolidate or merge with or into Getty Realty Corp., a Maryland
corporation, without having to obtain the consent of the Bank.
Section 16.2. Lines of Business. The Guarantor will not directly or
indirectly through a Subsidiary engage in any business other than the
acquisition, management, leasing, financing and disposition of petroleum and
convenience store related real estate, the retail and wholesale distribution of
petroleum products, the operation of convenience stores or other retail
businesses related to the operation of gasoline service stations and convenience
stores or other businesses which can reasonably be conducted at gasoline service
stations or convenience stores, except that the Guarantor may engage in any
other business (each an "Other Business" and collectively "Other Businesses")
acquired by the Guarantor if the aggregate purchase price (including any direct
or contingent liabilities assumed by the Guarantor in connection with such
acquisition) for such Other Business, plus the aggregate purchase prices
(including assumed liabilities) for all Other Businesses previously
<PAGE> 14
-14-
acquired by the Guarantor, does not exceed $25,000,000. The Bank shall have the
right to approve all purchase price allocations made in connection with any such
acquisition of an Other Business or Other Businesses as the same relate to
compliance with this Section 16.2.
Section 16.3. Acquisitions. The Guarantor will provide the Bank with
reasonable advance notice of any proposed acquisitions of assets or stock of
Other Businesses (whether directly by the Guarantor or indirectly through a
Subsidiary of the Guarantor) with respect to which the aggregate purchase price
(including any assumption of liabilities) is $25,000,000 or more as set forth in
Section 16.2 hereof and will provide to the Bank all information relating to
such transactions as may be reasonably requested by the Bank.
Section 16.4. Interest Rate Protection Arrangements. The Guarantor will
not, and will not permit the Borrower to, enter into any interest rate
protection arrangements with respect to the Loans with any Person other than the
Bank, unless the Guarantor shall have first requested the Bank to enter into an
interest rate protection arrangement on terms and conditions proposed in good
faith by the Borrower and the Bank shall have declined such request.
Section 17. Survival of Covenants. All covenants, agreements,
representations and warranties made herein shall be deemed to have been relied
on by the Bank notwithstanding any investigation made by the Bank or on its
behalf, and shall survive the execution and delivery of this Guaranty.
Section 18. Notices, Etc. (a) The Bank shall provide the Guarantor with a
copy of each notice sent to the Borrower pursuant to Section 7 of the Loan
Agreement. No failure of the Bank to provide any such notice shall operate to
relieve the Guarantor of any of its obligations hereunder.
(b) Except as otherwise expressly provided herein, all notices and other
communications made or required to be given pursuant to this Guaranty shall be
deemed delivered if in writing (or in the form of a telecopy confirmed by
letter) addressed as provided below and if either (i) actually delivered at said
address, or (ii) in the case of a letter, five Business Days shall have elapsed
after the same shall have been deposited in the United States mails, postage
prepaid and registered or certified:
(x) if to the Guarantor, at 125 Jericho Turnpike, Jericho, New York
11753, Attention: John J. Fitteron, Senior Vice President and
<PAGE> 15
-15-
Chief Financial Officer, or at such other address for notice as the Guarantor
shall last have furnished in writing to the Person giving the notice; or
(y) if to the Bank, at One Federal Street, Boston, Massachusetts
02110, Attention: Michael A. Palmer, Vice President, or at such other address
for notice as the Bank shall last have furnished in writing to the Person giving
the notice.
Section 19. Governing Law; Miscellaneous. This Guaranty is intended to
take effect as a sealed instrument to be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts and shall inure to the
benefit of the Bank and its successors and assigns, and shall be binding on the
Guarantor and the Guarantor's successors, assigns and legal representatives. The
descriptive headings of the sections hereof have been inserted herein for
convenience of reference only and shall not define or limit the provisions
hereof.
Section 20. Counterparts. This Guaranty may be executed in any number of
counterparts, but all of such counterparts together shall constitute one and the
same agreement. In making proof of this Guaranty, it shall not be necessary to
produce or account for more than one counterpart hereof executed by each of the
parties hereto.
<PAGE> 16
IN WITNESS WHEREOF, this Guaranty has been executed by or on behalf of the
parties hereto as an instrument under seal as of the day first above written.
GETTY PROPERTIES CORP.
By: /s/ John J. Fitteron
--------------------------------
Name: John J. Fitteron
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK
By:
--------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 17
IN WITNESS WHEREOF, this Guaranty has been executed by or on behalf of the
parties hereto as an instrument under seal as of the day first above written.
GETTY PROPERTIES CORP.
By:
--------------------------------
Name: John J. Fitteron
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
FLEET NATIONAL BANK
By: /s/ Michael A. Palmer
--------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
EXHIBIT 10.15
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of January 30, 1998 between GETTY REALTY CORP., a
Maryland corporation (the "Company"), and ______________________ (the
"Director"), a director of the Company;
WHEREAS, in recognition of Director's need for substantial protection
against personal liability in order to enhance Director's continued service to
the Company in an effective manner and Director's reliance on the provisions of
the By-Laws requiring indemnification of the Director under certain
circumstances, and in part to provide Director with specific contractual
assurance that the protection promised by such By-Laws will be available to
Director (regardless of, among other things, any amendment to or revocation of
such By-Laws or any change in the composition of the Company's Board of
Directors or acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and the advancing
of expenses to Director to the full extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained, for the continued coverage of Director under the
Company's directors' and officers' liability insurance policies.
NOW, THEREFORE, in consideration of the premises and of Director agreeing
to serve or continuing to serve the Company directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Basic Indemnification Agreement.
(a) In the event Director was, is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim (as hereinafter defined) by reason of (or arising
in part out of) an Indemnifiable Event (as hereinafter defined), the Company
shall indemnify Director to the fullest extent permitted by law as soon as
practicable but in any event no later than 30 days after written demand is
presented to the Company, against any and all Expenses (as hereinafter defined),
judgment, fines, penalties and amounts paid in settlement of such Claim. If so
requested by Director, the Company shall advance (within ten business days of
such written request) any and all Expenses to Director (an "Expense Advance").
Notwithstanding anything in this Agreement to the contrary, and except as
provided in Section 3, prior to a Change in Control (as hereinafter defined)
Director shall not be entitled to indemnification pursuant to this Agreement in
connection with any Claim initiated by Director against the Company or any
director or officer of the Company unless the Company has joined in or consented
to the initiation of such Claim.
(b) Notwithstanding the foregoing, (i) the obligations of the Company
under Section 1(a) shall be subject to the condition that the Reviewing Party
(as hereinafter defined) shall not have determined (in a written opinion, in any
case in which the special independent counsel referred to in Section 2 is
involved) that Director would not be permitted to be indemnified under
applicable law, and (ii) the obligation of the Company to make an Expense
Advance pursuant to Section 1(a) shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Director would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Director (who hereby agrees to reimburse the
1
<PAGE> 2
Company) for all such amounts theretofore paid; provided, however, that if
Director has commenced legal proceedings in a court of competent jurisdiction to
secure a determination that Director should be indemnified under applicable law,
any determination made by the Reviewing Party that Director would not be
permitted to be indemnified under applicable law shall not be binding and
Director shall not be required to reimburse the Company for any Expense Advance
until a final judicial determination that Director shall reimburse the Company
for any Expense Advance is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed). If there has not been a Change
in Control, the Reviewing Party shall be selected by the Board of Directors, and
if there has been such a Change in Control, the Reviewing Party shall be the
special independent counsel referred to in Section 2. The Board of Directors
will appoint the Reviewing Party no later than 10 days after receipt of a demand
for indemnification (including, without limitation, a demand for Expense
Advance). The Reviewing Party shall make his determination no later than 20 days
after his appointment. If after 30 days there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Director substantively
would not be permitted to be indemnified in whole or in part under applicable
law, Director shall have the right to commence litigation in any court in the
states of New York or Maryland having subject matter jurisdiction thereof and in
which venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party of any aspect thereof,
and the Company hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Director.
2. Change in Control. The Company agrees that, if there is a Change in
Control of the Company (other than a Change in Control which has been approved
by a majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control) then with respect to all matters thereafter
arising concerning the rights of Director to indemnity payments and Expense
Advances under this Agreement or any other agreement or Company By-Law now or
hereafter in effect relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from special independent counsel selected by
Director and approved by the Company (which approval shall not be unreasonably
withheld), and who has not otherwise performed services for the Company within
the last five years (other than in connection with such matters) or for
Director. Such counsel, among other things, shall render a written opinion to
the Company and Director as to whether and to what extent Director would be
permitted to be indemnified under applicable law. The Company agrees to pay the
reasonable fees of the special, independent counsel referred to above and to
fully indemnify such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
3. Indemnification for Additional Expenses. The Company shall indemnify
Director against any and all expenses (including attorneys' fees) and, if
requested by Director, shall (within ten business days of such written request)
advance such expenses to Director, which are incurred by Director in connection
with any claim asserted against or action brought by Director for (i)
indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company By-Law now or hereafter in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers liability insurance policies maintained by the Company,
regardless of whether Director ultimately is determined to
2
<PAGE> 3
be entitled to such indemnification, advance expense payment or insurance
recovery, as the case may be.
4. Partial Indemnity, Etc. If Director is entitled under any provision of
this Agreement to indemnification by the Company of some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Director for the portion thereof to which Director is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Director has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemniflable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Director shall be indemnified against all Expenses incurred in
connection therewith. In connection with any determination by the Reviewing
Party or otherwise as to whether Director is entitled to be indemnified
hereunder the burden of proof shall be on the Company to establish that Director
is not so entitled.
5. No Presumption. For purposes of this Agreement, the termination of any
action, suit or proceeding by judgment, order, settlement (whether with or
without court approval) or conviction, shall not create a presumption that
Director did not meet any particular standard of conduct or have any particular
belief or that a court has determined that indemnification is not permitted by
applicable law.
6. Non-exclusivity, Etc. The rights of Director hereunder shall be in
addition to any other rights Director may have under the Company's By-Laws or
the Maryland General Corporation Law or otherwise. To the extent that a change
in the Maryland General Corporation Law (whether by statute or judicial
decision), or the Company's By-Laws, permits greater indemnification by
agreement than would be afforded currently under the Company's By-Laws and this
Agreement, it is the intent of the parties hereto that Director shall enjoy by
this Agreement the greater benefits so afforded by such change.
7. Liability Insurance. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance,
Director shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage reasonably and economically
available (as solely determined by the Board of Directors) for any Company
director.
8. Certain Definitions:
(a) "Change in Control" shall be deemed to have occurred if (i) any
"person (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 20% or more of
the total voting power represented by the Company's then outstanding Voting
Securities, or (ii) during any period of two consecutive years, individuals who
at the beginning of such two-year period constitute the Board of Directors of
the
3
<PAGE> 4
Company and any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of such two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors, or (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
(b) Claim" shall mean any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation whether conducted by the
Company or any other party, whether civil, criminal, administrative or
investigative.
(c) "Expenses" include attorneys' fees and all other costs, expenses
and obligations paid or incurred in connection with investigating, defending,
being a witness in or participating in (including on appeal), or preparing to
defend, be a witness in or participate in any Claim relating to any
Indemnifiable Event.
(d) "Indemnifiable Event" is any event or occurrence related to the
fact that Director is or was a director, officer, employee, agent or fiduciary
of the Company, or is or was serving at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
arising by reason of anything done or not done by Director in any such capacity.
(e) Reviewing Party" is any appropriate person or body consisting of
a member or members of the Company's Board of Directors or any other person or
body appointed by the Board (including the special independent counsel referred
to in Section 2) who is not a party to the particular Claim for which Director
is seeking indemnification.
(f) "Voting Securities" are any securities of the Company which vote
generally in the election of directors.
9. Amendments and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
10. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Director, who shall execute all papers required and shall do
everything that may be necessary to secure such rights,
4
<PAGE> 5
including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
11. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against Director
to the extent Director has otherwise actually received payment (under any
insurance policy, By-Law or otherwise) of the amounts otherwise indemnifiable
hereunder.
12. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns, including any (i) direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, and (ii) spouses, heirs, and personal and
legal representatives. This Agreement shall continue in effect regardless of
whether Director continues to serve as a director (or in one of the capacities
enumerated in Section 8(d) hereof) of the Company or of any other enterprise at
the Company's request.
13.Severabi1ity. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provisions within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
14. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: GETTY REALTY CORP.
By: (SEAL)
- ----------------------------- -----------------------------
Secretary Leo Liebowitz, President
WITNESS DIRECTOR
- ----------------------------- -----------------------------
-----------------------------
5
<PAGE> 1
EXHIBIT 10.19
[LOGO] Getty
- --------------------------------------------------------------------------------
GETTY REALTY CORP. o 125 JERICHO TURNPIKE o JERICHO, NY 11753 o (516) 338-6000
April 8, 1997
125 Jericho Turnpike
Jericho, New York 11753
Dear _______________:
I am writing to confirm to you that the "change of control" Agreement
between you and Getty Petroleum Corp. dated December 9, 1994, as amended on
March 7, 1996 (the "Agreement"), became effective on March 21, 1997, which was
the date of the distribution of the stock of Getty Petroleum Marketing Inc.
("Marketing") to the Getty Petroleum Corp. stockholders. All capitalized terms
not specifically defined herein shall have the same meaning as set forth in the
Agreement.
Accordingly, the 36-month period referred to in paragraph 1 of the
Agreement will commence on March 21, 1997 and shall remain in full force and
effect until it terminates on March 20, 2000. During this 36-month period the
Company will continue to pay you biweekly not less than your base salary in
effect on March 21, 1997, which amount is set forth in paragraph 1 of the
attached Schedule ("Base Salary"). In addition, at the end of each of the next
three 12-month periods beginning March 21, 1997 (each an "Agreement Year") the
Company will pay to you on or prior to March 21 an additional amount which shall
not be less than the difference between (1) the Guaranteed Salary set forth in
paragraph 2 of the attached Schedule and (2) the sum of(a) the Base Salary paid
to you, (b) the amount paid by the Company on your behalf to the 401-K Plan, (c)
the bonus paid to you pursuant to the ICP, and (d) the amount paid on your
behalf pursuant to the Supplemental Deferred Compensation Plan, in each case
during the Agreement Year (the sum of all the payments described m the foregoing
clause (2) being hereinafter referred to as "Actual Compensation"). The
foregoing obligations for the third Agreement Year shall be payable by March 21,
2000 and, accordingly, such Agreement shall survive in the event the
aforementioned payments are not made before March 20, 2000--the date of
termination of the Agreement.
Notwithstanding the preceding paragraph, in the event that you leave the
employment of the Company the balance of your Guaranteed Salary (in excess of
the Actual Compensation previously paid to you in the then current Agreement
Year) prorated through the last day of your employment for the then current
Agreement Year, shall be paid to you (and/or any payee you designate) on the
last day of your employment (For example, if you leave the Company on September
21, 1997, you would be paid 50% of your Guaranteed Salary for this Agreement
Year, less the Actual Compensation you received prior to September 21, 1997 for
such six-month period.) Thereafter, the Guaranteed Salary for the remainder of
the Agreement Year and for the remainder
<PAGE> 2
April 8, 1997
Page 2
of the term of the Agreement shall be paid on a biweekly basis to you and/or to
payees whom you may select; provided, however, such payments shall be reduced by
any amounts of similar compensation you may receive from another employer as
provided in paragraph 3 of the Agreement.
Attached hereto is a Schedule setting forth your current Base Salary, and
your Guaranteed Salary and how it was calculated, using the prior 36-month
period ended March 21, 1997 as the base period. Should the Company in its sole
discretion elect during any Agreement Year to pay to you (or the appropriate
payee on your behalf) more than your Guaranteed Salary for such period, the
Company's obligation to you under the Agreement for subsequent Agreement Years
shall continue to be to pay you your Guaranteed Salary for each Agreement Year,
without giving effect to prior payments in excess of the Guaranteed Salary.
The amount owed to you under paragraph 2A of the Agreement is set forth in
paragraph 3 on the attached Schedule and will be paid to you on or before April
15, 1997. The ICP Award to be paid under Paragraph 2A of the Agreement and the
Supplemental Deferred Compensation paid on March 25, 1997 relate to the fiscal
year ended January 31, 1997, and such amounts shall not be included for the
purpose of determining the Guaranteed Salary or Actual Compensation received
during any Agreement Year. The ICP Awards and Supplemental Deferred Compensation
paid for fiscal years ended January 31, 1998, 1999 and 2000 shall be included in
determining the Actual Compensation for each related Agreement Year during the
36-month period following March 21, 1997. Such ICP Awards shall be computed in
accordance with the ICP Plan (including goals and formula) adopted for each such
fiscal year by the Compensation Committee of the Board of Directors. Your ICP
Award to be paid pursuant to Paragraph 2A of the Agreement consists of $___,
reflecting the compensation formula adopted by a majority of the Compensation
Committee of the Board, and $___, reflecting the Board's recognition of your
efforts in effecting the "Spin-Off' of Marketing.
Finally, in the event there is a subsequent "change of control", the
Agreement, as implemented hereunder, shall remain in full force and effect for
the 36-month term set forth herein and any subsequent "change of control" shall
not result in the amendment or extension of the Agreement.
Very truly yours,
GETTY REALTY CORP.
LEO LIEBOWITZ
President
Accepted and Agreed to this
____ day of April 1997:
- -----------------------------
<PAGE> 3
SCHEDULE
TO
CHANGE of CONTROL
CONFIRMATION LETTER
For _______________
1. Base Salary: Base salary as of March 21, 1997 is defined as $________________
per annum, payable in biweekly installments of $_______________ each.
- -----------------------------------------------------------
2. Guaranteed Salary:
<TABLE>
<CAPTION>
Three 12 month periods ended:
(3/21/95) (3/21/96) (3/21/97)
--------- --------- ---------
<S> <C> <C> <C>
BASE SALARY
--------- --------- ---------
SUPPLEMENTAL
DEFERRED
COMPENSATION
--------- --------- ---------
401-K PLAN
--------- --------- ---------
ICP
--------- --------- ---------
TOTAL $ $ $
========= ========= =========
</TABLE>
Total Compensation for prior 36 months equals
$____________/3 equals your Guaranteed Salary of $______________
- -----------------------------------------------------------
3. ICP Award:
ICP Award for fiscal year 1997 per paragraph 2A of the Agreement shall be not
less than $____________.
<PAGE> 1
EXHIBIT 10.20
[LOGO] Getty
- --------------------------------------------------------------------------------
GETTY REALTY CORP. o 125 JERICHO TURNPIKE o JERICHO, NY 11753 o (516) 338-6000
March 9, 1998
Getty Realty Corp.
125 Jericho Turnpike
Jericho, New York 11753
Dear _____________:
With reference to the Letter Agreement dated December 9,1994, as amended on
March 7, 1996, and confirmed by letter dated April 8, 1997 (the "Agreement"),
Getty Realty Corp., a Maryland corporation ("Realty") as assignee of Getty
Properties Corp.'s obligations under the Agreement, and you hereby agree to
further amend the Agreement as follows:
For the duration of your employment at Realty, you shall continue to receive at
least your Guaranteed Salary and Guaranteed Benefits. Except as described in the
next paragraph below, upon your termination of employment your entitlement to
receive each of your Guaranteed Salary and Guaranteed Benefits shall cease.
Realty reserves the right to terminate your employment at any time with or
without Cause. Upon the first to occur of (i) termination of your employment by
Realty other than for Cause, (ii) termination of your employment by Realty or
its successor (but not by you) following a Change, or (iii) termination of your
employment by Realty or by you following assignment of materially different (as
defined below) employment by Realty (each an "Event"), you shall be entitled to
receive severance compensation for a period of 12 months following the date of
such Event, in an amount equal to (x) your Guaranteed Salary and Guaranteed
Benefits minus (y) any amount of similar compensation you may receive from any
other employer during such period as described in Section 3 of the Letter
Agreement. For purposes hereof, employment shall be "materially different" if
your job responsibilities or duties are materially less favorable than those in
effect on the date hereof.
The Agreement, as amended herein, is hereby ratified and affirmed. Except as
amended herein, all other provisions of the Agreement shall remain in full force
and effect. All defined terms herein shall have the same meanings as set forth
in the Agreement.
<PAGE> 2
March 6, 1998
Page 2
Getty Properties Corp., a Delaware corporation (formerly known as Getty Realty
Corp.), hereby assigns the Agreement to Realty and Realty hereby assumes all of
Getty Properties' obligations under the Agreement.
Very truly yours,
GETTY REALTY CORP.
By:
--------------------------
President
Accepted and Agreed To:
By:
--------------------------
Date:
------------------------
For purposes of the assignment set forth in the last paragraph above:
GETTY PROPERTIES CORP.
By:
--------------------------
President
<PAGE> 3
SCHEDULE
TO
CHANGE of CONTROL
CONFIRMATION LETTER
For _______________
1. Base Salary: Base salary as of March 21, 1997 is defined as $________________
per annum, payable in biweekly installments of $_______________ each.
- -----------------------------------------------------------
2. Guaranteed Salary:
<TABLE>
<CAPTION>
Three 12 month periods ended:
(3/21/95) (3/21/96) (3/21/97)
--------- --------- ---------
<S> <C> <C> <C>
BASE SALARY
--------- --------- ---------
SUPPLEMENTAL
DEFERRED
COMPENSATION
--------- --------- ---------
401-K PLAN
--------- --------- ---------
ICP
--------- --------- ---------
TOTAL $ $ $
========= ========= =========
</TABLE>
Total Compensation for prior 36 months equals
$____________/3 equals your Guaranteed Salary of $______________
- -----------------------------------------------------------
3. ICP Award:
ICP Award for fiscal year 1997 per paragraph 2A of the Agreement shall be not
less than $____________.
<PAGE> 1
EXHIBIT 13
[GETTY REALTY LOGO]
GETTY REALTY CORP. FISCAL 1998 ANNUAL REPORT
<PAGE> 2
SPECIALTY
------------------------------------------------------------------
WHO WE ARE
We are the largest specialty Real Estate Company with ownership of
gasoline station/convenience store properties in the United States.
We are a Company of people who have an intimate knowledge in all
aspects of the petroleum and convenience store industries.
We have the personnel and financial resources to handle any size
transaction.
We have the infrastructure necessary to expedite and efficiently close
a transaction.
We have the desire, knowledge and ability to enhance value for our
shareholders and the persons with whom we do business.
Property leased to Property leased to Property leased to Getty
a Mobil jobber. a Texaco jobber. Petroleum Marketing Inc.
<PAGE> 3
REALTY
- --------------------------------------------------------------------------------
GETTY REALTY CORP.
[UNITED STATES MAP]
ACQUISITION TEAMS ARE RESPONSIBLE FOR OPPORTUNITIES
IN FIVE REGIONS THROUGHOUT THE UNITED STATES
- --------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the years ended January 31,
--------------------------------------------
(in thousands, except per share amounts) 1998 (a) 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Revenues $ 89,839 $ 925,845 $ 826,901
Earnings (loss) before income taxes and cumulative
effect of accounting change 13,710 (b) (14,114) (c) 21,522
Net earnings (loss) 7,944 (9,176) 12,634 (d)
Net earnings (loss) per share:
Basic .60 (.72) 1.00 (d)
Diluted .60 (.72) 1.00 (d)
Cash dividends per share $ .12 $ .12 $ .06
</TABLE>
(a) Reflects the spin-off of the petroleum marketing business to the Company's
stockholders on March 21, 1997.
(b) Includes $7,918 of aggregate pre-tax charges consisting of $8,683 of stock
compensation expense and $2,166 of change of control charges, net of $2,931
of equity in earnings of petroleum marketing business for the period from
February 1, 1997 to March 21, 1997.
(c) Includes pre-tax charges aggregating $28,677 consisting of $21,182 related
to revision of estimate of future environmental remediation costs, $5,802
related to the settlement of a dispute involving the Company's former
construction company subsidiary and $1,693 of expenses related to the
spin-off transaction.
(d) Includes after-tax charge of $794 or $.06 per share from the cumulative
effect of adopting Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of."
1
<PAGE> 4
[PICTURE]
LEO LIEBOWITZ
President and Chief Executive Officer
"Our primary objective is growth as a real estate company specializing in the
ownership of gas stations, convenience stores and other petroleum marketing
properties. Our growth is accelerating as we seek to expand our reach and
acquire properties throughout the United States."
DEAR FELLOW SHAREHOLDERS
- --------------------------------------------------------------------------------
WHAT NEXT ?
We entered the fiscal year, which ended January 31, 1998, with a clear
objective to increase shareholder value. In previous years, we had been thought
of solely as just another oil company. Investors and analysts did not look
beyond our financial statements at the underlying assets and value. Therefore,
our stock price did not reflect our true market value. As a result, we elected
to travel a path which culminated in a tax-free spin-off of the petroleum
marketing assets and business, leaving the underlying real estate in the
existing NYSE listed company. This required a ruling from the IRS and review by
the SEC as well as a significant effort from our employees and investment
bankers to ensure that the transaction was fair to our shareholders. It was a
bumpy road and the trip took a year to accomplish. The cost in both expense and
effort was high, but I am sure all of our shareholders agree, it was well worth
it.
Having completed the spin-off with the resultant doubling of value to our
shareholders, some ask "What next?" It is an appropriate question. As you know,
we have changed the focus of our business to real estate, but have retained
responsibility for any previously known environmental obligations and legal
liabilities. A year has now passed and we are on plan, having completed a
substantial amount of the environmental projects with an objective to complete
the lion's share of those remaining during this year. Although legal matters
usually take longer, they are also winding down and we believe they are
appropriately reserved for in the Company's financial statements.
Further to the question of "what next." We are a specialty real estate
company in the petroleum marketing business with over 1,100 properties, 736 of
which are fee owned and the balance are principally long-term leases. We have a
highly respected reputation and a thorough understanding of real estate for the
petroleum business. Our primary objective is growth as a real estate company
specializing in the ownership of gas stations, convenience stores and other
petroleum marketing properties. Our growth is accelerating as we seek to expand
our reach and acquire properties throughout the United States.
Our business strategy has divided the United States into five regions, each
to be managed by experienced regional real estate directors with acquisition
responsibility, reporting to our national real estate director and supported at
our headquarters by an
2
<PAGE> 5
- --------------------------------------------------------------------------------
analytical team to produce prompt acquisition reviews and approvals. Our
acquisition program is designed to give great flexibility to our people in order
to acquire properties outright; to acquire properties and lease them back to the
existing operators; to build to suit for qualified operators and to provide the
financial wherewithal to qualified operators for expansion. We have acquired 15
individual fee properties during the past year and have a number of transactions
consisting of groups of properties in various stages of negotiation. We are
optimistic that agreements will be forthcoming shortly.
Further, with regard to acquisitions, on January 30, 1998 our shareholders
and the unit holders of Power Test Investors Limited Partnership overwhelmingly
approved a tax-free exchange of Partnership units for a newly created series of
Getty Realty Corp. preferred stock. Power Test had owned 290 gasoline stations
and five petroleum terminals. These properties have now been merged with Getty
Realty, significantly increasing the net worth of the Company and the number of
properties owned in fee. These transactions, as well as other financial
information, are discussed in greater detail elsewhere in this report.
At this time, I am pleased to report that our Board of Directors, at a
meeting held on March 26, 1998, in recognition of the Company's anticipated
increase in cash flow, has increased this quarter's cash dividend to common
shareholders to $0.10 per share, payable on April 21, 1998 to holders of record
on April 8, 1998 and has declared the first regular quarterly cash dividend to
shareholders of the preferred shares in the amount of $0.44375 payable on May
12, 1998 to holders of record on April 30, 1998.
In conclusion, I wish to take this opportunity to express my thanks to the
entire Getty Organization for last year's accomplishments, to the newer members
of our team for their enthusiastic pursuit of growth opportunities and to our
Board of Directors for their contribution and guidance during the past year.
Sincerely,
/s/ LEO LIEBOWITZ
Leo Liebowitz
President and Chief Executive Officer
April 22, 1998
3
<PAGE> 6
[PICTURE]
JOHN J. FITTERON
Senior Vice President,
Treasurer and
Chief Financial Officer
"With debt representing only 23 percent of year end book capitalization, the
Company is well positioned to take advantage of future opportunities."
DEAR FELLOW SHAREHOLDERS
- --------------------------------------------------------------------------------
FINANCIAL OVERVIEW
On March 21, 1997, the Company successfully completed the spin-off of the
petroleum marketing business to its stockholders. Since then, Getty Realty Corp.
has concentrated its efforts on its real estate business.
For the year ended January 31, 1998, the Company had revenues of $89.8
million as compared to $93.6 million for the prior year ended January 31, 1997,
which included revenues from rental properties of $59.6 million and $58.9
million, respectively.
Net earnings for fiscal 1998 amounted to $7.9 million or $0.60 per share as
compared to a net loss of $9.2 million or $0.72 per share for fiscal 1997.
To make the following discussion of the Company's financial results more
meaningful, we have excluded the spun-off petroleum marketing business which
contributed pre-tax earnings of $2.9 million for the fiscal 1998 period through
March 21, 1997 and a pre-tax loss of $25.3 million for the fiscal 1997 year.
After these exclusions and exclusion of the unusual items discussed below, the
Company's adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) were $45.0 million for fiscal 1998, as compared to $46.2
million for fiscal 1997. The decrease was principally due to lower gains on
asset sales. The unusual items excluded from the fiscal 1998 results are charges
of $2.2 million relating to change of control agreements, $8.7 million relating
to stock options resulting from appreciation of the Company's stock price during
the year and $8.3 million of environmental expenses. The fiscal 1997 pre-tax
results excluded $11.6 million of environmental expenses, a $5.8 million
litigation charge related to a judgment against a construction company
subsidiary sold in 1989 and $1.7 million of spin-off expenses.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a detailed review of the Company's financial
statements.
As discussed earlier in this report, the Power Test Investors merger was
completed on January 30, 1998. The transaction was valued at approximately $100
million, including the assumption of $26.6 million of debt and the issuance of
$72.2 million of Series A Participating Convertible Redeemable Preferred Stock,
which shares are listed on the New York Stock Exchange. Each share of preferred
stock is convertible into 1.1312 shares of the Company's common stock and will
pay stated cumulative dividends of $1.775 per annum, or if greater, an amount
equal to the per share dividends paid on the Company's common stock.
4
<PAGE> 7
- --------------------------------------------------------------------------------
As a result of this transaction, Getty Realty has acquired 290 service
stations and convenience store properties and five terminals, which were
previously leased to the Company. We know these properties well and are
delighted to now have fee ownership of them. Another benefit of the Power Test
Investors merger is that the Company has simplified its financial statements by
eliminating the capitalized lease accounting treatment associated with the Power
Test leases. This change has removed an element of complexity and financial
variability from the Company's future financial statements which will result in
a clearer view of the operations, cash flow and reported earnings of Getty
Realty.
At fiscal year end, Getty Realty had a total book capitalization of $179.1
million as compared to $87.5 million last year (adjusted for the spin-off of the
petroleum marketing business), an increase of more than 100 percent. With debt
representing only 23 percent of year end book capitalization, the Company is
well positioned to take advantage of future opportunities. Total market
capitalization at January 31, 1998 amounted to over $400 million, providing the
Company with even greater financial flexibility as sound business opportunities
are developed.
As part of the March 21, 1997 spin-off transaction and the resultant master
lease agreement with Getty Petroleum Marketing Inc., the Company retained
responsibility for all pre-closing liabilities including environmental
remediation and underground storage tank (UST) compliance with the 1998 federal
standards. In connection with this obligation, the Company expended $21.1
million during the year ended January 31, 1998 for associated environmental and
capital expenditures and has expended $197.8 million since the Clean Air Act
mandate in 1988. As of January 31, 1998, the Company has reserved $22.9 million,
net of expected recoveries from state underground tank funds, to cover expected
future environmental expenditures and expects to spend an additional $16.2
million for capital expenditures to upgrade USTs, most of which will be spent by
year end.
Getty Realty's free cash flow is expected to increase significantly in
future years since properties are generally leased to others on a "triple-net"
lease basis and therefore little, if any, of the Company's cash flow will be
used to maintain existing assets.
Sincerely,
/s/ John J. Fitteron
John J. Fitteron
Senior Vice President,
Treasurer and Chief Financial Officer
April 22, 1998
5
<PAGE> 8
[PICTURE]
KEVIN C. SHEA
Director of National
Real Estate Development
Mr. Shea joined Getty in 1984 and was promoted to New England Real Estate
Manager in 1994, where he managed the Company's acquisition and divestment
efforts in the Northeast. His experience within the industry gives Mr. Shea the
background to satisfy customer needs and the ability to recognize and create
growth opportunities.
[PICTURE]
E. C. "CHUCK" LEVY
Real Estate Administrative Manager
Mr. Levy joined Getty in 1983 where he served in numerous marketing positions
before moving to the Real Estate Department in 1992. He manages the
administrative activities of the Real Estate Department, including Third-Party
leases.
QA
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QUESTIONS AND ANSWERS
Why should my Company do a sale/leaseback of our properties when there appears
to be sufficient funds for financing?
A sale/leaseback will maximize the funds available at approximately 100% of
appraised value. It will give you the same degree of control as fee ownership
since Getty will structure an off-balance sheet lease which may extend beyond 65
years with options. In most cases, personal guarantees or financial covenants
are not required. History has proven that some companies have had problems
meeting financial covenants due to the volatile nature of the petroleum
industry.
If I do a transaction with Getty Realty, will I be required to sell Getty(R)
products or have any other requirements with regard to petroleum sales?
Getty Realty's interest is in the real estate aspect of the business. Getty
Realty is not in the business of selling petroleum products. Getty is a
specialist in the ownership of gas station and convenience store properties and
the leasing of such properties to others who, in turn, make independent
decisions concerning the products they wish to sell.
If I am interested in selling my business, why should I sell to Getty Realty
instead of selling directly to another marketer?
By doing a sale/leaseback with Getty Realty and selling the marketing business
to others based on a multiple of cash flow, you are likely to get more money
than you were originally seeking. Alternatively, you could sell the entire
business to Getty Realty in a quicker transaction and Getty would assume the
responsibility to seek an operator for the business.
My children have grown up in the business and want to continue in the business.
I would like to cut back and ultimately retire. Does Getty Realty have a program
that fits my needs?
With a sale/leaseback program, an operator can sell all or some of his
properties at once or in stages over a period of time. In that way, the sellers
would have an organized retirement
6
<PAGE> 9
[PICTURE]
R.H. "TOD" BUTLER JR.
Mid-Continent Regional Director
of Real Estate Development
Mr. Butler was the former President and Chief Operating Officer of Mid-States
Petroleum, Inc. Mr. Butler served as past President, Chairman of the Executive
Committee, Director of the Society of Independent Gasoline Marketers of America
and past President of the Detroit Oil Mens Club. He is a member of the Michigan,
Illinois, Ohio, Indiana and Wisconsin Petroleum Associations.
[PICTURE]
RANDI YOUNG FILIP
Assistant General Counsel
and Corporate Secretary
Ms. Filip joined Getty in 1986, specializing in real estate
law and has over 12 years
of legal experience in the handling of general corporate, petroleum marketing
and real estate matters.
Ms. Filip also serves as
the Company's Corporate Secretary.
- --------------------------------------------------------------------------------
program for themselves. In addition, family members can lease the properties
from Getty and also participate in Getty's build to suit program, which would
provide the capital to upgrade and grow the business.
Our company is in a growth mode and would like to know that it has the financial
resources to reach out for cash deals. Can Getty Realty be our financier in such
transactions?
Getty Realty has a program to work with existing operators and to assist in
acquisitions of properties or other companies by providing readily available
cash. Although Getty participates in the original evaluation, upon completing a
transaction, Getty allows the operators to run the business as they see fit.
What role does environmental assessment play in Getty Realty's programs?
Getty will take into consideration the age and construction of the UST system,
the area surrounding the subject property, whether or not the State has a
reimbursement fund and any other factor that would indicate if a release has
occurred or is likely to occur. This will allow for an appropriate decision as
to whether a Phase I or Phase II site assessment is warranted. If an
environmental cleanup is required, it can either be assumed by the operator or
by Getty Realty.
If I decide to sell my company sometime in the future and I have done a
sale/leaseback to Getty Realty, will this inhibit my ability to make such a
sale?
The operator/lessee of the locations is free to sell his company and assign the
lease with the prior written approval of Getty Realty, which approval will not
be unreasonably withheld. Therefore, a subsequent sale of the business to a
third party will not be inhibited thereby ensuring that full value for the
business is received.
7
<PAGE> 10
BOARD OF DIRECTORS
[PICTURE] MILTON COOPER has been a Director of Getty Realty Corp.
since 1971. He serves as Chairman of the Board and Chief
Executive Officer of Kimco Realty Corporation, a Real Estate
Investment Trust, which is one of the largest owners of
shopping centers in the United States and is listed on the
New York Stock Exchange. In addition, he serves as a
Director of the Blue Ridge Real Estate/Big Boulder
Corporation, MassMutual Corporate Investors and MassMutual
Participation Investors. He has also served as Chairman of
the Board of Governors of the National Association of Real
Estate Investment Trusts, Chairman of the Shopping Center
Committee of the Real Estate Board of New York, and member
of the AdvisoryBoard of the Real Estate Institute at New
York University.
[PICTURE] PHILIP E. COVIELLO has been a Director of Getty Realty Corp.
since 1996. He is Managing Partner of the New York office of
Latham & Watkins, which law firm has provided legal services
for the Company for many years. He joined the firm in 1985,
after having been a partner at Dewey Ballantine in New York
City. Mr. Coviello specializes in corporate finance, mergers
and acquisitions.
[PICTURE] LEO LIEBOWITZ, one of the founding principals of the
Company, is President, Chief Executive Officer and a
Director of Getty Realty Corp. since 1971. He is also
Chairman and Chief Executive Officer of Getty Petroleum
Marketing Inc. and a member of the Regional Advisory Board
of Chase Banking Corp. He has served the Society of
Independent Gasoline Marketers, the industry's national
trade association, in numerous capacities including
President and currently serves as a member of its Executive
Committee.
[PICTURE] MILTON SAFENOWITZ, one of the founding principals of the
Company, has been a Director of Getty Realty Corp. since
1971. He is also a Director of Getty Petroleum Marketing
Inc. Mr. Safenowitz had been Executive Vice President of
Getty until his retirement on February 1, 1990.
[PICTURE] WARREN G. WINTRUB has been a Director since 1993. He is also
a Director of Chromcraft Revington, Inc., Corporate Property
Associates 10 Incorporated and Corporate Property Associates
11 Incorporated. Mr. Wintrub is a former Partner, member of
the Executive Committee and Chairman of the Retirement
Committee of Coopers & Lybrand, an international
professional services organization, which has served as the
Company's independent auditors for many years.
8
<PAGE> 11
SELECTED FINANCIAL DATA
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
<TABLE>
<CAPTION>
CONSOLIDATED FINANCIAL DATA Years ended January 31,
------------------------------------------------------------------------------
(in thousands, except per share amounts) 1998(a) 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues $ 89,839 $ 925,845 $ 826,901 $ 787,844 $ 806,557
Earnings(loss) before income taxes,
extraordinary item and cumulative
effect of accounting changes 13,710(b) (14,114)(c) 21,522 11,329 14,476
Net earnings(loss) 7,944 (9,176) 12,634(d) 6,339(e) 10,201(f)
Net earnings(loss) per share:
Basic .60 (.72) 1.00(d) .50(e) .81(f)
Diluted .60 (.72) 1.00(d) .50(e) .81(f)
Cash dividends per common share .12 .12 .06 -- --
Total assets 268,543 292,864 277,344 278,957 292,388
Total debt 40,526 41,592 51,586 71,316 94,457
Stockholders' equity $ 138,593 $ 100,472 $ 110,574 $ 98,480 $ 92,152
</TABLE>
(a) Reflects the spin-off of the petroleum marketing business to the Company's
stockholders on March 21, 1997.
(b) Includes $7,918 of aggregate pre-tax charges consisting of $8,683 of stock
compensation expense and $2,166 of change of control charges, net of $2,931
of equity in earnings of petroleum marketing business for the period from
February 1, 1997 to March 21, 1997.
(c) Includes pre-tax charges aggregating $28,677 consisting of $21,182 related
to revision of estimate of future environmental remediation costs, $5,802
related to the settlement of a dispute involving the Company's former
construction company subsidiary and $1,693 of expenses related to the
spin-off transaction.
(d) Includes after-tax charge of $794 or $.06 per share from the cumulative
effect of adopting Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of."
(e) Includes extraordinary charge of $775 or $.06 per share in connection with
the early retirement of debt and a credit of $183 or $.01 per share from
the cumulative effect of adopting Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
(f) Includes credit of $860 or $.07 per share from the cumulative effect of
adopting Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."
PRO FORMA SUPPLEMENTAL FINANCIAL HIGHLIGHTS AND SELECTED DATA (g)
<TABLE>
<CAPTION>
(in thousands, except number of properties) 1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Fiscal year ended January 31,
Rental income $ 59,561 $ 58,862 $ 57,420 $ 57,638 $ 57,490
Heating oil sales 26,895 33,111 27,376 25,568 24,943
Other income 3,383 1,639 6,041 6,255 3,739
-------- -------- -------- -------- --------
Total revenues 89,839 93,612 90,837 89,461 86,172
Net earnings 6,213 6,049 8,970(d) 8,773(e) 8,383(f)
Depreciation and amortization 10,064 9,554 10,068 10,110 10,059
Capital expenditures 12,034 7,797 7,192 6,022 6,109
Adjusted EBITDA(h) 44,226 45,850 45,397 47,596 44,617
As of January 31,
Real estate owned, at cost 291,623 198,992 191,454 189,827 189,570
Total assets 268,543 157,364 152,846 161,860 180,873
Capitalization:
Total debt 40,526 41,592 51,586 71,316 94,457
Stockholders' equity 138,593 45,931 60,263 61,419 50,161
-------- -------- -------- -------- --------
Total capitalization $179,119 $ 87,523 $111,849 $132,735 $144,618
Other Data
Number of properties:
Owned 736 441 439 444 457
Leased 404 732 734 752 772
-------- -------- -------- -------- --------
Total properties 1,140 1,173 1,173 1,196 1,229
======== ======== ======== ======== ========
</TABLE>
(g) Excludes the petroleum marketing business which was spun-off on March 21,
1997. This data is presented for informational purposes only and is not
necessarily indicative of the financial results that would have occurred
had Realty been operated as a separate, stand-alone entity during such
periods nor is the information presented necessarily indicative of future
results.
(h) Adjusted EBITDA is defined as net earnings before interest expense, income
taxes, depreciation and amortization adjusted to exclude environmental
expenses, stock option expenses, change of control charge, litigation
charges and gains from the sales of properties. Adjusted EBITDA is not
intended to represent cash flow and does not represent the measure of cash
available for distribution. Adjusted EBITDA provides additional information
for evaluating financial results and is presented solely as a supplemental
measure. Adjusted EBITDA should not be construed as an alternative to net
income, operating income, cash flows from operating activities or any other
measure of financial performance presented in accordance with generally
accepted accounting principles.
9
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
SPIN-OFF
On March 21, 1997, Getty Realty Corp. (the "Company") effected the spin-off of
its petroleum marketing business to its stockholders. The Company retained its
real estate business and the Pennsylvania and Maryland home heating oil
business, and leased most of its properties on a long-term net basis to the
spun-off company, which is named Getty Petroleum Marketing Inc. ("Marketing").
Prior to the spin-off, the Company was principally engaged in the ownership and
leasing of real estate as well as the marketing and distribution of petroleum
products.
In order to make the following discussion of the Company's results of
operations more meaningful, the financial results of the spun-off petroleum
marketing business operated by Marketing have been excluded from the narrative
presented below. The net earnings (loss) of Marketing included in the
accompanying consolidated statements of operations, but excluded from the
following discussion, for the period from February 1, 1997 to March 21, 1997 and
the fiscal years ended January 31, 1997 and 1996 were $1.7 million, ($15.2)
million and $3.7 million, respectively. The net earnings of the retained real
estate and heating oil businesses were $6.2 million, $6.0 million and $9.0
million for the fiscal years ended January 31, 1998, 1997 and 1996,
respectively. See Note 2 to the consolidated financial statements for separate
financial information relating to the retained real estate and heating oil
businesses.
RESULTS OF OPERATIONS
Fiscal year ended January 31, 1998 compared to fiscal year ended January 31,
1997
Revenues from rental properties for the year ended January 31, 1998 ("fiscal
1998") were $59.6 million, a 1.2% increase over the $58.9 million realized for
the year ended January 31, 1997 ("fiscal 1997"). Approximately $57.0 million and
$56.3 million of such rentals for fiscal 1998 and 1997, respectively, were from
properties leased to Marketing under a master lease.
The Company's financial results largely depend on rental income from
Marketing and other lessees and sublessees. The Company's financial results are
materially dependent upon the ability of Marketing to meet its obligations under
the master lease; however, the Company does not anticipate that Marketing will
have difficulty in making all required rental payments in the foreseeable
future.
Net sales of petroleum products from the Company's retained heating oil
business for fiscal 1998 were $26.9 million as compared with $33.1 million for
fiscal 1997. The $6.2 million decrease in petroleum product sales was
principally due to 11.3% of lower gallonage sold due to a warmer than normal
winter and an 8.5% decrease in average selling prices. Gross profit from such
sales before depreciation and amortization was $2.5 million for each of fiscal
1998 and 1997 as higher product margins offset the lower sales volumes.
Other income amounted to $3.4 million for fiscal 1998 as compared with
$1.6 million for fiscal 1997. The $1.8 million increase was primarily due to
$1.7 million of expenses incurred last year related to the spin-off transaction.
Rental property expenses, which are principally comprised of rent
expense and real estate taxes, increased by $.6 million (4.7%) for fiscal 1998
over rental property expenses of $13.0 million for fiscal 1997.
Environmental and maintenance expenses for fiscal 1998 amounted to $8.6
million, a decrease of $3.3 million from the prior year. The current year
included a change in estimate of $6.2 million and related environmental legal
charges of $1.8 million.
Selling, general and administrative expenses for fiscal 1998 amounted
to $15.2 million, an increase of $10.1 million from the prior year. The increase
was principally due to $8.7 million of expense relating to stock options
resulting from appreciation of the Company's stock price and $1.0 million of
fees paid to Marketing under an administrative services agreement.
Depreciation and amortization for fiscal 1998 amounted to $10.1
million, an increase of $.5 million over the prior year as a result of capital
expenditures and property acquisitions.
Interest expense for fiscal 1998 amounted to $5.0 million, a decrease
of $1.4 million from the prior year. The decrease was principally due to reduced
capital lease obligations and debt outstanding during the current fiscal year.
During fiscal 1998, the Company recorded a charge of $2.2 million
related to change of control agreements in connection with the spin-off.
During fiscal 1997, the Company recorded a pre-tax charge of $5.8
million related to a judgment against a former construction company subsidiary
which the Company sold in 1989.
10
<PAGE> 13
- --------------------------------------------------------------------------------
Fiscal year ended January 31, 1997 compared to fiscal year ended January 31,
1996
Revenues from rental properties for fiscal 1997 were $58.9 million, a 2.5%
increase over the $57.4 million realized for the year ended January 31, 1996
("fiscal 1996"). Approximately $56.3 million and $55.1 million of such rentals
for fiscal 1997 and 1996, respectively, were from properties leased to
Marketing.
Net sales of petroleum products from the retained heating oil business
were $33.1 million for fiscal 1997 as compared with $27.4 million for fiscal
1996. Of the $5.7 million or 20.9% increase in net sales, approximately 86% was
due to an increase in average selling prices and the balance was due to an
increase in gallonage sold. Average selling prices increased by 17.9% and
gallonage sold increased by .9 million gallons or 2.6%. Gross profit from such
sales before depreciation and amortization was $2.5 million for fiscal 1997,
which was comparable to the $2.3 million for fiscal 1996.
Other income amounted to $1.6 million for fiscal 1997 as compared with
$6.0 million for fiscal 1996. The decrease was principally due to $1.7 million
of expenses related to the spin-off transaction, $1.0 million of legal reserves
recorded and $.8 million of reduced investment income.
Rental property expenses were $13.0 million for fiscal 1997, which was
comparable to the $12.9 million for fiscal 1996.
Environmental and maintenance expenses for fiscal 1997 amounted to
$11.9 million, a decrease of $1.9 million from the prior year, principally due
to higher than anticipated recoveries from state underground storage tank funds.
Selling, general and administrative expenses for fiscal 1997 amounted
to $5.1 million, which was comparable to the $4.9 million for fiscal 1996.
Depreciation and amortization for fiscal 1997 amounted to $9.6 million,
a decrease of $.5 million from the prior year primarily due to additional
depreciation recorded during fiscal 1996 as a result of the Company's adoption
of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of."
Interest expense for fiscal 1997 amounted to $6.4 million, a decrease
of $2.5 million from the prior year. The decrease was principally due to reduced
debt and capital lease obligations outstanding during fiscal 1997.
During fiscal 1997, the Company recorded a pre-tax litigation charge of
$5.8 million as previously discussed.
ACCOUNTING CHANGE
In fiscal 1996, the Company adopted SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The Statement
requires that assets used in operations be written down to fair value when
events and circumstances indicate that the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amount of those assets. The Company continually evaluates retail
outlets to determine their profitability and long-term viability, which results
in the divestment of non-strategic and uneconomic sites through sale, lease
assignment or lease termination. The Company estimates fair value and costs to
sell based on the best information available, including discounted cash flows
and comparable market values, in making whatever estimates, judgments and
projections are considered necessary.
The Company recorded a pre-tax charge of $.5 million in fiscal 1996
relating to operating assets, which is included in depreciation and amortization
expense, due to changes in local market conditions at certain retail outlets. In
addition, the Company reported the cumulative effect of the change in accounting
principle relating to assets held for disposal as an after-tax charge to
earnings of $.8 million in the fiscal 1996 consolidated statement of operations.
As of January 31, 1998, the net book value of assets held for disposal amounted
to $2.4 million. While these retail outlets are being actively marketed, the
disposal period may exceed one year for some locations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity are cash flows from operations and
its short-term uncommitted lines of credit with two banks. Management believes
that cash requirements for operations, capital expenditures and debt service can
be met by cash flows from operations, available cash and equivalents and credit
lines. As of January 31, 1998, such lines of credit amounted to $25 million, of
which $7.4 million was utilized in connection with outstanding letters of
credit. Borrowings under such lines of credit are unsecured and bear interest at
the prime rate or, at the Company's option, LIBOR plus 1.0% or 1.1%. Such lines
of credit are
11
<PAGE> 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Continued
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
subject to renewal at the discretion of the banks. Although it is expected that
the existing sources of liquidity will be sufficient to meet its expected
operating and debt service requirements, the Company may be required to obtain
additional sources of capital in the future to fund certain property
acquisitions, which capital sources it believes are available.
During fiscal 1998 and 1997, the Company paid quarterly cash common
stock dividends in the amount of $.03 per share for each of the four quarters,
or a total of $.12 per year. During fiscal 1998 and 1997, such dividends
aggregated $1.6 million and $1.5 million, respectively. During the first quarter
of fiscal 1999, the quarterly cash common stock dividend was increased to $.10
per share. In addition, the first quarterly dividend of $.44375 per share,
aggregating approximately $1.3 million, for the Series A Participating
Convertible Redeemable Preferred Stock was declared and is payable on May 12,
1998 to holders of record on April 30, 1998.
The Company's capital expenditures, including acquisitions, for the
fiscal years ended January 31, 1998, 1997 and 1996 amounted to $12.0 million,
$25.6 million and $23.1 million, respectively, which included $8.0 million,
$10.4 million and $9.3 million, respectively, for the replacement of underground
storage tanks and vapor recovery facilities at gasoline stations and terminals.
Through March 21, 1997, the date of the spin-off, capital expenditures also
included discretionary expenditures related to the spun-off petroleum marketing
business to improve the image of the service stations, to improve the terminal
facilities and for routine replacement of service station equipment at existing
and newly acquired locations. Expenditures with respect to tank replacements
required to meet the December 22, 1998 federal standards and certain
environmental liabilities and obligations continue to be the responsibility of
the Company after the spin-off. As of January 31, 1998, the Company estimates
that in connection therewith, it will expend $16.2 million in capital
expenditures and $22.9 million, net of estimated recoveries, for environmental
liabilities and obligations, most of which will be expended during the year
ended January 31, 1999.
ENVIRONMENTAL MATTERS
The Company is subject to numerous existing federal, state and local laws and
regulations, including matters relating to the protection of the environment.
Environmental expenses have been attributable to remediation, monitoring, soil
disposal and governmental agency reporting (collectively, "Remediation Costs")
incurred in connection with contaminated sites and the replacement or upgrading
of underground storage tanks, related piping, underground pumps, wiring and
monitoring devices (collectively, "USTs") to meet federal, state and local
environmental standards, as well as routine monitoring and tank testing.
Environmental exposures are difficult to assess and estimate for
numerous reasons, including the extent of contamination, alternative treatment
methods that may be applied, location of the property which subjects it to
differing local laws and regulations and their interpretations, as well as the
time it takes to remediate contamination. In developing the estimates of
environmental remediation costs, consideration is given to, among other things,
enacted laws and regulations, assessments of contamination, currently available
technologies for treatment, alternative methods of remediation and prior
experience. Estimates of such costs are subject to change as contingencies
become more clearly defined and remediation treatment progresses. For fiscal
1998, 1997 and 1996, net environmental expenses included in the Company's
consolidated statements of operations amounted to $8.3 million, $34.2 million
and $14.3 million, respectively, which amounts were net of probable recoveries
from state UST remediation funds.
Under the master lease with Marketing, the Company committed to a
program to bring the leased properties with known environmental problems to
regulatory closure and, thereafter, transfer all future environmental risks from
the Company to Marketing. In order to establish the Remediation Costs obligation
and estimate the incremental cost of accelerated remediation, in fiscal 1997 the
Company commissioned a detailed property-by-property environmental study of all
retail outlets, with the objective of achieving closure in approximately five
years. This acceleration program, utilizing new, more effective remediation
techniques, resulted in a substantial increase in environmental costs over those
that had been previously identified and accrued, as the acceleration program
contemplated the use of additional active remediation systems at many sites in
lieu of relying on periodic monitoring and natural attenuation permitted by
applicable environmental regulations. As a result, the Company revised its
estimate of future Remediation Costs in the fourth quarter of fiscal 1997 and
recorded a pre-tax charge in such quarter for Remediation Costs of $21.2
million. The pre-tax charge resulted from the acceleration of remediation
activities to be paid by the Company through more
12
<PAGE> 15
- --------------------------------------------------------------------------------
aggressive means of treating contaminated sites to bring them to closure in
approximately five years, which resulted in significant incremental Remediation
Costs, changes in estimated Remediation Costs at previously identified
properties, including costs to be incurred in connection with UST upgrades, and
additional charges to comply with AICPA Statement of Position 96-1,
"Environmental Remediation Liabilities."
The Company has agreed to pay all costs relating to, and to indemnify
Marketing for, all known pre-spin-off environmental liabilities and obligations
as scheduled in the master lease, future upgrades necessary to cause UST's to
conform to the 1998 federal standards as scheduled in the master lease and all
environmental liabilities and obligations arising out of discharges with respect
to properties containing USTs that have not been upgraded to meet the 1998
federal standards that are discovered prior to the date such USTs are upgraded
to meet the 1998 federal standards (collectively, the "Realty Environmental
Liabilities"). The Company will also collect recoveries from state UST
remediation funds related to the Realty Environmental Liabilities.
As of January 31, 1998 and 1997, the Company had accrued $38.3 million
and $46.1 million, respectively, as management's best estimate for environmental
remediation costs. As of January 31, 1998 and 1997, the Company had recorded
$15.4 million and $16.2 million, respectively, as management's best estimate for
recoveries from state UST remediation funds related to environmental obligations
and liabilities. In view of the uncertainties associated with environmental
expenditures, however, the Company believes it is possible that such
expenditures could be substantially higher. Any additional amounts will be
reflected in the Company's financial statements as they become known. Although
environmental costs may have a significant impact on results of operations for
any single fiscal year or interim period, the Company believes that such costs
will not have a material adverse effect on the Company's financial position.
The Company cannot predict what environmental legislation or
regulations may be enacted in the future or how existing laws or regulations
will be administered or interpreted with respect to products or activities to
which they have not previously been applied. Compliance with more stringent laws
or regulations as well as more vigorous enforcement policies of the regulatory
agencies or stricter interpretation of existing laws which may develop in the
future, could have an adverse effect on the financial position or operations of
the Company or its lessees and could require substantial additional expenditures
for future remediation or the installation and operation of required
environmental or pollution control systems and equipment.
MERGER WITH POWER TEST INVESTORS LIMITED PARTNERSHIP
On January 30, 1998, the Company merged with Power Test Investors Limited
Partnership (the "Partnership"), a publicly traded real estate limited
partnership, in a transaction accounted for as a purchase. As a result of the
transaction, the Company acquired 295 fee properties, consisting of 290 service
station and convenience store properties and five terminals, which were
previously leased by the Partnership to the Company.
In connection with the merger, a new Maryland holding company was
created which adopted the name Getty Realty Corp. Unitholders of the Partnership
received 2,888,799 shares of Series A Participating Convertible Redeemable
Preferred Stock of new Getty Realty Corp., valued at $72.2 million, in exchange
for their partnership units. Each share of this new issue of preferred stock is
convertible into 1.1312 shares of common stock of new Getty Realty Corp. and
will pay stated cumulative dividends of $1.775 per annum, or if greater, the per
share dividends paid on new Getty Realty Corp. common stock. Common stock of
former Getty Realty Corp., a Delaware corporation, was exchanged on a
one-for-one share basis for new Getty Realty Corp. common stock. In January
1998, former Getty Realty Corp. changed its name to Getty Properties Corp. and
is now a wholly-owned subsidiary of new Getty Realty Corp. The common and
preferred stock of new Getty Realty Corp. was listed on the New York Stock
Exchange under the symbols "GTY" and "GTY PrA," respectively, commencing on
February 2, 1998.
YEAR 2000
The Year 2000 issue has arisen because for many years some computer software
programs and systems have utilized only two digits to specify the year. As a
result, these programs and systems may not be able to recognize and process
dates beyond 1999, which may cause these programs to malfunction or not be able
to accurately process information. A comprehensive program is currently underway
to evaluate and implement changes in an attempt to ensure that the Company's
systems and key processes will remain functional. The Company does not expect
the costs of these efforts to be material. Although Year 2000 compliance by the
Company's vendors and customers may vary, the Company has not been notified of
any expected problems.
13
<PAGE> 16
CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
<TABLE>
<CAPTION>
For the years ended January 31,
-----------------------------------------
(in thousands, except per share amounts) 1998(*) 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Revenues from rental properties $ 59,561 $ 35,864 $ 34,315
Net sales of petroleum products 26,895 888,187 786,263
Other income 3,383 1,794 6,323
--------- --------- ---------
89,839 925,845 826,901
Equity in earnings of Getty Petroleum Marketing Inc. 2,931 -- --
--------- --------- ---------
92,770 925,845 826,901
Cost of sales of petroleum products
(excluding depreciation and amortization) 24,372 816,057 704,562
Rental property expenses 13,605 21,591 21,806
Environmental and maintenance expenses 8,634 40,820 20,960
Selling, general and administrative expenses 15,211 25,407 25,604
Depreciation and amortization 10,064 23,476 23,167
Interest expense 5,008 6,806 9,280
Change of control charge 2,166 -- --
Litigation charge -- 5,802 --
--------- --------- ---------
79,060 939,959 805,379
Earnings (loss) before provision (credit) for income
taxes and cumulative effect of accounting change 13,710 (14,114) 21,522
Provision (credit) for income taxes 5,766 (4,938) 8,094
--------- --------- ---------
Earnings (loss) before cumulative effect
of accounting change 7,944 (9,176) 13,428
Cumulative effect of accounting change -- -- (794)
--------- --------- ---------
Net earnings (loss) $ 7,944 $ (9,176) $ 12,634
========= ========= =========
Net earnings (loss) per share:
Basic:
Earnings (loss) before cumulative effect
of accounting change $ .60 $ (.72) $ 1.06
Cumulative effect of accounting change -- -- (.06)
--------- --------- ---------
Net earnings (loss) $ .60 $ (.72) $ 1.00
========= ========= =========
Diluted:
Earnings (loss) before cumulative effect
of accounting change $ .60 $ (.72) $ 1.06
Cumulative effect of accounting change -- -- (.06)
--------- --------- ---------
Net earnings (loss) $ .60 $ (.72) $ 1.00
========= ========= =========
Weighted average shares outstanding:
Basic 13,152 12,674 12,648
Diluted 13,348 12,674 12,669
</TABLE>
(*) Reflects the spin-off of the petroleum marketing business to the Company's
stockholders on March 21, 1997.
See accompanying notes.
14
<PAGE> 17
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
<TABLE>
<CAPTION>
January 31,
------------------------
(in thousands, except share data) 1998 1997
--------- ---------
<S> <C> <C>
Assets:
Real Estate:
Land $ 129,461 $ 40,647
Buildings and improvements 162,162 107,112
Assets recorded under capital leases -- 51,233
--------- ---------
291,623 198,992
Less--accumulated depreciation and amortization 63,600 101,058
--------- ---------
Real estate, net 228,023 97,934
Cash and equivalents 10,034 11,385
Accounts receivable, net 2,524 2,731
Mortgages receivable 6,926 6,602
Recoveries from state underground storage tank funds 15,387 16,217
Prepaid expenses and other assets 5,649 4,010
Deferred income taxes -- 18,485
Assets of Getty Petroleum Marketing Inc. -- 135,500
--------- ---------
Total assets $ 268,543 $ 292,864
========= =========
Liabilities and Stockholders' Equity:
Mortgages payable $ 40,526 $ 18,882
Obligations under capital leases -- 22,710
Accounts payable and accrued expenses 21,408 22,281
Environmental remediation costs 38,297 46,134
Deferred income taxes 29,719 --
Income taxes payable -- 1,426
Liabilities of Getty Petroleum Marketing Inc. -- 80,959
--------- ---------
Total liabilities 129,950 192,392
Commitments and contingencies (Notes 4 and 5)
Stockholders' equity:
Preferred stock, par value $1.00 per share; authorized
10,000,000 shares for issuance in series (none of which is issued) -- --
Preferred stock, Series A participating convertible redeemable preferred, par
value $.01 per share; authorized
20,000,000 shares for issuance in series, issued 2,888,799 at
January 31, 1998 72,220 --
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 14,446,929 at January 31, 1998 144 --
Common stock, par value $.10 per share; authorized
30,000,000 shares; issued 13,582,394 at January 31, 1997 -- 1,358
Paid-in capital 81,000 120,293
Accumulated deficit (848) (7,215)
Treasury stock, at cost (883,461 shares at January 31, 1998
and 885,893 shares at January 31, 1997) (13,923) (13,964)
--------- ---------
Total stockholders' equity 138,593 100,472
Total liabilities and stockholders' equity $ 268,543 $ 292,864
========= =========
</TABLE>
See accompanying notes.
15
<PAGE> 18
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
<TABLE>
<CAPTION>
For the years ended January 31,
------------------------------------
(in thousands) 1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings (loss) $ 7,944 $ (9,176) $ 12,634
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Cumulative effect of accounting change -- -- 794
Depreciation and amortization 10,064 23,476 23,167
Deferred income taxes (1,061) (11,012) 2,954
Stock option charge 6,432 -- --
Change of control charge 2,166 -- --
Gain on dispositions of real estate (729) (1,425) (1,910)
Equity in net earnings of Getty Petroleum Marketing Inc. (1,731) -- --
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable 207 (2,995) 2,984
Mortgages receivable (324) (477) (1,198)
Recoveries from state underground storage tank funds 830 (339) 1,943
Prepaid expenses and other assets (1,423) 4,002 (9,902)
Accounts payable and accrued expenses (1,196) 2,687 (13,677)
Environmental remediation costs (7,837) 26,160 (1,357)
Income taxes payable (1,426) 1,251 277
-------- -------- --------
Net cash provided by operating activities 11,916 32,152 16,709
-------- -------- --------
Cash Flows from Investing Activities:
Cash from acquisition of Power Test Investors
Limited Partnership, net 1,757 -- --
Capital expenditures (8,832) (24,797) (20,316)
Property acquisitions (3,202) (839) (2,734)
Proceeds from dispositions of real estate 2,733 2,344 3,491
Proceeds from sale of short-term investments -- 1,286 --
Cash transferred to Getty Petroleum Marketing Inc. -- (7,517) --
-------- -------- --------
Net cash used in investing activities (7,544) (29,523) (19,559)
Cash Flows from Financing Activities:
Mortgage borrowings 306 -- --
Repayment of mortgages payable (5,287) (4,660) (13,901)
Payments under capital lease obligations (6,373) (5,334) (4,441)
Cash dividends (1,577) (1,520) (760)
Stock options and treasury stock, net 7,208 462 184
-------- -------- --------
Net cash used in financing activities (5,723) (11,052) (18,918)
Net decrease in cash and equivalents (1,351) (8,423) (21,768)
Cash and equivalents at beginning of year 11,385 19,808 41,576
-------- -------- --------
Cash and equivalents at end of year $ 10,034 $ 11,385 $ 19,808
======== ======== ========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 5,009 $ 6,815 $ 9,031
Income taxes, net 3,834 3,911 5,087
Significant non-cash investing activities:
Spin-off of Marketing (see Note 2)
Merger with Partnership in exchange for preferred stock (see Note 3)
</TABLE>
See accompanying notes.
16
<PAGE> 19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation: The consolidated financial statements include the accounts of
Getty Realty Corp., known prior to March 31, 1997 as Getty Petroleum Corp., and
its wholly-owned subsidiaries (the "Company"). The Company is principally a real
estate company specializing in the ownership and leasing of service stations,
convenience stores and petroleum marketing terminals. The Company is also a
marketer of heating oil in Pennsylvania and Maryland. All significant
intercompany accounts and transactions have been eliminated.
On March 21, 1997, the Company effected the spin-off of its petroleum
marketing business to its stockholders. The Company retained its real estate
business and the Pennsylvania and Maryland home heating oil business, and leased
most of its properties on a long-term net basis to the spun-off company, which
is named Getty Petroleum Marketing Inc. ("Marketing"). Prior to the spin-off,
the Company was principally engaged in the ownership and leasing of real estate
as well as the marketing and distribution of petroleum products. The
consolidated statement of operations of the Company for the year ended January
31, 1998 includes the financial results of the Marketing business under the
caption "Equity in earnings of Getty Petroleum Marketing Inc." for the period
from February 1, 1997 to March 21, 1997. The financial results of the Marketing
business for the years ended January 31, 1997 and 1996 are included in the
consolidated financial results of the Company for the respective periods. For
additional information regarding the spin-off, see Note 2.
On January 30, 1998, the Company merged with Power Test Investors
Limited Partnership (the "Partnership"), a publicly traded real estate limited
partnership, in a transaction accounted for as a purchase. Since the transaction
occurred on January 30, 1998, the consolidated statements of operations of the
Company for the three years ended January 31, 1998 exclude the results of the
Partnership. For additional information regarding the merger, see Note 3.
Certain reclassifications have been made in the financial statements
for 1997 and 1996 to conform to the presentation for 1998.
USE OF ESTIMATES: The financial statements have been prepared in conformity with
generally accepted accounting principles and include amounts that are based on
management's best estimates and judgments. While all available information has
been considered, actual results could differ from those estimates.
CASH AND EQUIVALENTS: The Company considers highly liquid investments purchased
with an original maturity of three months or less to be cash equivalents.
REAL ESTATE: Real estate assets are stated at cost less accumulated depreciation
and amortization. When real estate is sold or retired, the cost and related
accumulated depreciation and amortization is eliminated from the respective
accounts and any gain or loss is credited or charged to income. Expenditures for
maintenance and repairs are charged to income when incurred.
DEPRECIATION AND AMORTIZATION: Depreciation of real estate is computed on the
straight-line method based upon the estimated useful lives of the assets which
generally is 16 years for buildings and improvements. Assets recorded under
capital leases are amortized on the straight-line method over the shorter of the
term of the lease or the useful life of the related asset.
SELF-INSURANCE: The Company is self-insured for workers' compensation, general
liability and vehicle liability up to predetermined amounts above which
third-party insurance applies. Accruals are based on the Company's claims
experience and actuarial assumptions followed in the insurance industry. Due to
uncertainties inherent in the estimation process, actual losses could differ
from accrued amounts.
17
<PAGE> 20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
ENVIRONMENTAL COSTS: The estimated future costs for known environmental
remediation requirements are accrued when it is probable that a liability has
been incurred and the amount of remediation costs can be reasonably estimated.
Recoveries of environmental costs, principally from state underground storage
tank remediation funds, are accrued as income when such recoveries are
considered probable. Such accruals are adjusted as further information develops
or circumstances change.
INCOME TAXES: Deferred income taxes are provided for the effect of items which
are reported for income tax purposes in years different from that in which they
are recorded for financial statement purposes.
REVENUE RECOGNITION: Revenue is recognized from rentals as earned and from
petroleum sales when product ownership is transferred to the customer.
EARNINGS (LOSS) PER SHARE: Basic earnings (loss) per share is computed by
dividing net earnings (loss) by the weighted average number of shares of common
stock outstanding during the year. Diluted earnings per share reflects the
potential dilution from the exercise of stock options in the amounts of 196,000
shares and 21,000 shares for the years ended January 31, 1998 and 1996,
respectively. For the year ended January 31, 1997, basic and diluted weighted
average shares outstanding are equal since the assumed exercise of stock options
would have been anti-dilutive.
ACCOUNTING CHANGE: In fiscal 1996, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The Statement
requires that assets used in operations be written down to fair value when
events and circumstances indicate that the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amount of those assets. The Company continually evaluates retail
outlets to determine their profitability and long-term viability, which results
in the divestment of non-strategic and uneconomic sites through sale, lease
assignment or lease termination. The Company estimates fair value and costs to
sell based on the best information available, including discounted cash flows
and comparable market values, in making whatever estimates, judgments and
projections are considered necessary.
The Company recorded a pre-tax charge of $524,000 in fiscal 1996
relating to operating assets, which is included in depreciation and amortization
expense, due to losses resulting from changes in local market or operating
conditions at certain retail outlets. In addition, the Company reported the
cumulative effect of the change in accounting principle relating to assets held
for disposal as an after-tax charge to earnings of $794,000 in the fiscal 1996
consolidated statement of operations. As of January 31, 1998, the net book value
of assets held for disposal amounted to $2,438,000. While these retail outlets
are being actively marketed, the disposal period may exceed one year for some
locations.
2. SPIN-OFF
On March 21, 1997, the Company effected the spin-off of its petroleum marketing
business to its stockholders. The Company retained its real estate business and
leases most of its properties on a long-term net basis to Marketing.
Stockholders of record of the Company on March 21, 1997 received a tax-free
dividend of one share of Marketing common stock for each share of common stock
of the Company.
Prior to the spin-off, the Company transferred to Marketing the assets
and liabilities of the petroleum marketing business and the New York Mid-Hudson
Valley home heating oil business previously conducted by a subsidiary of the
Company. After the spin-off, the Company retained its fee and leased properties,
including service stations and supply terminals, substantially all of which are
leased or subleased to Marketing, and the Pennsylvania and Maryland home heating
oil business previously conducted by another subsidiary.
18
<PAGE> 21
- --------------------------------------------------------------------------------
As part of the separation of the petroleum marketing business from the
real estate business, the Company and Marketing entered into various agreements
which address the allocation of assets and liabilities between them and govern
future relationships, including a Reorganization and Distribution Agreement, a
Master Lease Agreement, a Tax Sharing Agreement and a Trademark License
Agreement.
Under the Services Agreement, Marketing provides certain administrative
and technical services to the Company and the Company provides certain limited
services to Marketing. The net fees paid by the Company to Marketing for
services performed (after deducting the fees paid by Marketing to the Company
for services provided by the Company) were $960,000 for the year ended January
31, 1998 and are included in selling, general and administrative expenses in the
consolidated statement of operations.
The Company's results for the fiscal year ended January 31, 1997
include a pre-tax charge of $1,693,000 for expenses related to the spin-off
transaction. The charge is included in other income in the consolidated
statement of operations.
The following is a summary of the financial results of the Marketing
business included in the accompanying consolidated statements of operations for
the fiscal 1998 period from February 1, 1997 to March 21, 1997 and the fiscal
years ended January 31, 1997 and 1996. The financial information is presented
for informational purposes only and is not necessarily indicative of the
financial results that would have occurred had Marketing been operated as a
separate, stand-alone entity during such periods.
<TABLE>
<CAPTION>
Years ended January 31,
-----------------------------------------
(in thousands) 1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Revenues $ -- $ 888,543 $ 791,194
========= ========= =========
Earnings(loss) before income taxes and cumulative effect of
accounting change $ 2,931 $ (25,299)(a) $ 6,325
Provision(credit) for income taxes 1,200 (10,074) 2,379
--------- --------- ---------
Earnings(loss) before cumulative effect of accounting change 1,731 (15,225) 3,946
Cumulative effect of accounting change -- -- (282)
--------- --------- ---------
Net earnings (loss) $ 1,731 $ (15,225) $ 3,664
========= ========= =========
</TABLE>
(a) Includes charge of $21,182 related to revision of estimate of future
environmental remediation costs.
A summary of the assets and liabilities of Marketing as of January 31,
1997 is as follows:
<TABLE>
<CAPTION>
(in thousands)
--------------
<S> <C>
Current assets $ 45,215
Property and equipment, net 88,049
Other assets 2,236
--------
Assets $135,500
========
Current liabilities $ 44,115
Deferred income taxes 19,632
Other, principally deposits 17,212
--------
Liabilities $ 80,959
========
</TABLE>
19
<PAGE> 22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
The financial results of the retained real estate and heating oil
businesses for the years ended January 31, 1998, 1997 and 1996 are set forth
below. The following financial information does not include the financial
results of Marketing and is presented for informational purposes only and is not
necessarily indicative of the financial results that would have occurred had the
retained real estate and heating oil businesses been operated as separate,
stand-alone entities during such periods, nor are they necessarily indicative of
future results.
<TABLE>
<CAPTION>
(in thousands) Year ended January 31, 1998 Year ended January 31, 1997
------------------------------------ ---------------------------------
Real Heating Real Heating
Estate Oil Total Estate Oil Total
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues from rental properties $ 59,449 $ 112 $ 59,561 $ 58,653 $ 209 $ 58,862
Net sales of petroleum products -- 26,895 26,895 -- 33,111 33,111
Other income 3,368 15 3,383 1,570 69 1,639
--------- --------- --------- --------- --------- ---------
62,817 27,022 89,839 60,223 33,389 93,612
--------- --------- --------- --------- --------- ---------
Cost of sales of petroleum products
(excluding depreciation and
amortization) -- 24,372 24,372 -- 30,659 30,659
Rental property expenses 13,583 22 13,605 12,974 25 12,999
Environmental and
maintenance expenses 8,634 -- 8,634 11,933 -- 11,933
Selling, general and
administrative expenses 13,297(a) 1,914 15,211 3,218 1,882 5,100
Depreciation and amortization 9,514 550 10,064 9,012 542 9,554
Interest expense 5,008 -- 5,008 6,380 -- 6,380
Change of control charge 2,166 -- 2,166 -- -- --
Litigation charge -- -- -- 5,802 -- 5,802
--------- --------- --------- --------- --------- ---------
52,202 26,858 79,060 49,319 33,108 82,427
--------- --------- --------- --------- --------- ---------
Earnings before provision for
income taxes and cumulative
effect of accounting change 10,615 164 10,779 10,904 281 11,185
Provision for income taxes 4,497 69 4,566 5,007 129 5,136
--------- --------- --------- --------- --------- ---------
Earnings before cumulative
effect of accounting change 6,118 95 6,213 5,897 152 6,049
Cumulative effect of
accounting change -- -- -- -- -- -- )
--------- --------- --------- --------- --------- ---------
Net earnings $ 6,118 $ 95 $ 6,213 $ 5,897 $ 152 $ 6,049
========= ========= ========= ========= ========= =========
(a) Includes $8,683 of stock compensation expense.
Identifiable assets $ 262,009 $ 6,534 $ 268,543 $ 149,506 $ 7,858 $ 157,364
--------- --------- --------- --------- --------- ---------
Capital expenditures 11,259 775 12,034 6,913 884 7,797
========= ========= ========= ========= ========= =========
<CAPTION>
(in thousands) Year ended January 31, 1996
----------------------------------
Real Heating
Estate Oil Total
--------- --------- ---------
<S> <C> <C> <C>
Revenues from rental properties $ 57,177 $ 243 $ 57,420
Net sales of petroleum products -- 27,376 27,376
Other income 5,726 315 6,041
--------- --------- ---------
62,903 27,934 90,837
--------- --------- ---------
Cost of sales of petroleum products
(excluding depreciation and
amortization) -- 25,054 25,054
Rental property expenses 12,865 41 12,906
Environmental and
maintenance expenses 13,818 -- 13,818
Selling, general and
administrative expenses 2,976 1,926 4,902
Depreciation and amortization 9,619 449 10,068
Interest expense 8,892 -- 8,892
Change of control charge -- -- --
Litigation charge -- -- --
--------- --------- ---------
48,170 27,470 75,640
--------- --------- ---------
Earnings before provision for
income taxes and cumulative
effect of accounting change 14,733 464 15,197
Provision for income taxes 5,541 174 5,715
--------- --------- ---------
Earnings before cumulative
effect of accounting change 9,192 290 9,482
Cumulative effect of
accounting change (512) -- (512)
--------- --------- ---------
Net earnings $ 8,680 $ 290 $ 8,970
========= ========= =========
(a) Includes $8,683 of stock compensation expense.
Identifiable assets $ 145,670 $ 7,176 $ 152,846
--------- --------- ---------
Capital expenditures 6,260 932 7,192
========= ========= =========
</TABLE>
3. MERGER WITH POWER TEST INVESTORS LIMITED PARTNERSHIP
On January 30, 1998, the Company and the Partnership completed the merger
transaction to combine their assets and operations. As a result of the
transaction, the Company acquired 295 fee properties, consisting of 290 service
station and convenience store properties and five terminals, which were
previously leased by the Partnership to the Company.
In connection with the merger, a new Maryland holding company was
created which has adopted the name Getty Realty Corp. Unitholders of the
Partnership received 2,888,799 shares of Series A Participating Convertible
Redeemable Preferred Stock of new Getty Realty Corp. in exchange for their
partnership units. Each share of this new issue of preferred stock has voting
rights of and is convertible into 1.1312 shares of common stock of Getty Realty
Corp. and will pay stated cumulative dividends of $1.775 per annum, or if
greater, the per share dividends paid on Getty Realty Corp. common stock.
Commencing February 1, 2001, the Company may redeem all or a portion of the
preferred stock at a purchase price of $25.00 per share plus accumulated,
accrued and unpaid dividends, if the closing price of the Company's common stock
exceeds $22.10 per share for a period of ten cumulative trading days within 90
days prior to the date of notice of redemption. In the event of a liquidation,
dissolution or winding up of the Company, holders of the preferred
20
<PAGE> 23
- --------------------------------------------------------------------------------
stock will have the right to liquidation preferences in the amount of $25.00 per
share, plus accumulated, accrued and unpaid dividends, before any payment to
holders of the Company's common stock. Common stockholders of the Company
exchanged their shares of common stock on a one-for-one share basis for new
Getty Realty Corp. common stock. The former Getty Realty Corp. changed its name
to Getty Properties Corp. and is now a wholly-owned subsidiary of new Getty
Realty Corp. The common and preferred stock of Getty Realty Corp. was listed on
the New York Stock Exchange under the symbols "GTY" and "GTY PrA," respectively,
commencing on February 2, 1998.
The merger has been accounted for as a purchase with the purchase price
being assigned to the net assets acquired based on the fair value of such assets
and liabilities at the date of acquisition as follows:
<TABLE>
<CAPTION>
(in thousands)
--------------
<S> <C>
Real estate, net $ 135,633
Cash 1,757
Debt (26,625)
Deferred income taxes (44,768)
Other 6,223
---------
Net assets acquired $ 72,220
=========
</TABLE>
The following unaudited pro forma summary presents the combined results
of operations of the Company and the Partnership, after eliminating the
financial effects of the spun-off Marketing business, as if the acquisition had
occurred on February 1, 1996:
<TABLE>
<CAPTION>
Years ended January 31,
(in thousands, except per share amounts) 1998 1997
------- -------
<S> <C> <C>
Revenues $90,225 $94,055
Net earnings 7,073 7,598
Diluted earnings per common share $ .15 $ .19
</TABLE>
These unaudited pro forma results are not necessarily indicative of the
financial results that would have occurred had the acquisition been completed at
the beginning of the earliest period presented, nor do they purport to be
indicative of future results.
Prior to the merger, the Partnership was managed by the then General
Partner, CLS General Partnership Corp. The Directors and stockholders of CLS
General Partnership Corp. are also Directors and the principal stockholders of
the Company. During the fiscal years ended January 31, 1998, 1997 and 1996, the
Company made net lease payments to the Partnership of $10,032,000, $10,061,000
and $10,553,000, respectively. In addition, during the fiscal years ended
January 31, 1998, 1997 and 1996, the Company billed the Partnership and
reflected in other income $672,000, $672,000 and $648,000, respectively, for
administrative and other services rendered to the Partnership.
4. LEASES
Effective February 1, 1997, the Company and Marketing entered into a Master
Lease Agreement (the "Master Lease") under which, as of January 31, 1998, 1,024
retail outlets and 10 terminal facilities (the "Properties") are leased or
subleased by the Company as the lessor to Marketing as the lessee. The
Properties are used for gasoline sales, convenience store uses and other
complementary or related lawful uses in conjunction with the sale of petroleum
products and convenience store items, except when the provisions of any
underlying lease are more restrictive. Marketing may sublet any property,
provided that Marketing remains fully responsible for a sublessee's performance
and, except in cases of economic abandonment (as described below), a sublease
for non-petroleum purposes will require the Company's consent. The Master Lease
is a "triple-net" lease, with Marketing having responsibility for all taxes,
maintenance, repairs and insurance except for certain retained environmental
obligations, and obligations pertaining to certain underground storage tanks,
related piping, underground pumps, wiring and monitoring devices (collectively,
the "USTs"). For financial statement purposes, such Master Lease has been
accounted for as an operating lease.
Rent for each of the Properties was set using the fair market value of
each such Property, assuming the USTs had been upgraded to meet the 1998 federal
standards and such Properties were free of known environmental contamination,
since the Company is responsible for such items known at the date of the
spin-off.
21
<PAGE> 24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
Rent for each Property will increase at the end of each five-year period by the
net increase in the Consumer Price Index for all items in the Northeast Region
for such five-year period, such increase not to exceed fifteen percent (15%).
Rents for all Properties are payable in advance on the first day of the month.
The initial term of the Master Lease is (i) fifteen years with respect to
Properties owned in fee by the Company and leased to Marketing and (ii) the
length of time remaining (which ranges from one to fifteen years under the
Master Lease) with respect to Properties leased by the Company from third
parties and subleased to Marketing. The Master Lease includes four ten-year
renewal options (or, with respect to category (ii) above, such shorter period as
the underlying lease may provide), which may be exercised by Marketing with two
years advance notice on an individual property basis for all Properties then
subject to the Master Lease. For the subleased Properties, the Company has
agreed to use reasonable efforts to extend the underlying lease terms upon
conditions acceptable to Marketing. In the event that Marketing desires not to
renew the sublease upon terms (including any underlying lease term extension
negotiated by the Company) available to it, the Company may extend or renew the
lease and sublease the property to a third party after the end of Marketing's
term.
The Master Lease provides that if during the lease term, Marketing
determines that any of the leased premises have become uneconomic or unsuitable
for their use as a service station or convenience store and has discontinued use
of the property or intends to discontinue use of the property as a service
station or convenience store within one year of the date of said determination,
Marketing has the right to sublet the property for any lawful use without the
Company's consent and, prior to the commencement of any such sublease term,
Marketing shall remove any USTs on the Property and thereafter perform all
requisite environmental investigations and/or remediations. Marketing has such
right of economic abandonment with respect to no more than ten properties during
any fiscal year of the lease term. Marketing has no right of economic
abandonment for the terminal premises and the premises subject to third party
leases.
Revenues from rental properties for the year ended January 31, 1998
amounted to $59,561,000, of which $57,001,000 was from Marketing under the
Master Lease. For the years ended January 31, 1997 and 1996, revenues from
rental properties of $35,864,000 and $34,315,000, respectively, principally
represent rental income from Marketing's dealers prior to the spin-off.
Future minimum annual rentals receivable under the Master Lease, which
have terms in excess of one year as of January 31, 1998, are as follows:
<TABLE>
<CAPTION>
Years ending January 31, (in thousands)
--------------
<S> <C>
1999 $ 56,229
2000 55,508
2001 55,161
2002 54,838
2003 53,719
Thereafter 448,282
--------
$723,737
========
</TABLE>
The Company has obligations to lessors under noncancelable operating
leases which have terms (excluding options) in excess of one year, principally
for gasoline stations. Substantially all of these leases contain renewal options
and escalation clauses. Future minimum annual rentals payable under such leases
are as follows:
<TABLE>
<CAPTION>
Years ending January 31, (in thousands)
--------------
<S> <C>
1999 $12,214
2000 11,096
2001 9,512
2002 8,045
2003 5,824
Thereafter 21,633
-------
$68,324
=======
</TABLE>
5. COMMITMENTS AND CONTINGENCIES
The Company is subject to various legal proceedings and claims which arise in
the ordinary course of its business. In addition, the Company has retained
responsibility for all pre-spin-off legal proceedings and
22
<PAGE> 25
claims relating to Marketing's business. Such matters are not expected to have a
material adverse effect on the Company's financial condition or results of
operations.
In order to minimize the Company's exposure to credit risk associated
with financial instruments, the Company places its temporary cash investments
with high credit quality institutions and, by policy, limits the amount invested
with any one institution other than the U. S. Government.
The Company is self-insured for workers' compensation, general
liability and vehicle liability up to predetermined amounts above which
third-party insurance applies. The Company's consolidated statements of
operations for the fiscal years ended January 31, 1998, 1997 and 1996 included
$161,000, $2,814,000 and $1,865,000, respectively, for self-insurance. As of
January 31, 1998 and 1997, the Company's consolidated balance sheets included,
in accounts payable and accrued expenses, $4,913,000 and $6,139,000,
respectively, relating to such self-insurance.
The Company's financial results largely depend on rental income from
Marketing and other lessees and sublessees, and are therefore materially
dependent upon the ability of Marketing to meet its obligations under the
Master Lease with the Company. Marketing's financial results depend largely on
retail marketing margins and rental income from its dealers. The petroleum
marketing industry has been and continues to be volatile and highly
competitive. The Company does not anticipate that Marketing will have
difficulty in making all required rental payments for the foreseeable future.
6. DEBT
Mortgages payable consists of:
<TABLE>
<CAPTION>
(in thousands) 1998 1997
------- -------
<S> <C> <C>
Mortgage loans due through November 1, 2000 $38,015 $14,461
Real estate mortgages, bearing interest at a weighted average interest rate of 8.3%,
due in varying amounts through May 1, 2019 2,437 3,957
Other 74 464
------- -------
$40,526 $18,882
======= =======
</TABLE>
Aggregate principal payments in subsequent fiscal years relating to
mortgages are as follows (in thousands): 1999--$3,980; 2000--$4,290;
2001--$30,745; 2002--$97; 2003- $544 and $870 thereafter.
As of January 31, 1998, the mortgage loans due through November 1, 2000
provide for interest at LIBOR plus .875% to 1.75% per annum, depending on the
Company's Funded Debt Ratio, as defined. Based on such ratio as of January 31,
1998, the interest rate is LIBOR plus 1.125% which amounts to 6.8125%. Principal
payments aggregate $303,000 per month through December 1, 1999 and $393,000
thereafter through October 1, 2000 with the balance of $27,116,000 due on
November 1, 2000.
Certain mortgages payable are collateralized by real estate having an
aggregate net book value of approximately $161,371,000 as of January 31, 1998,
including the assets acquired in connection with the merger transaction on
January 30, 1998.
As of January 31, 1998, the Company had uncommitted lines of credit
with two banks in the aggregate amount of $25,000,000, of which $7,365,000 was
utilized in the form of outstanding letters of credit. Borrowings under such
lines of credit are unsecured and bear interest at the bank's prime rate or, at
the Company's option, 1.0% to 1.1% above LIBOR. Such lines of credit are
subject to renewal at the discretion of the banks.
7. ENVIRONMENTAL REMEDIATION COSTS
The Company is subject to numerous existing federal, state and local laws and
regulations, including matters relating to the protection of the environment.
Environmental expenses have been attributable to remediation, monitoring, soil
disposal and governmental agency reporting (collectively, "Remediation Costs")
incurred in connection with contaminated sites and the replacement or upgrading
of USTs to meet federal, state and local environmental standards, as well as
routine monitoring and tank testing. For the years ended January 31, 1998, 1997
and 1996, net environmental expenses included in the Company's consolidated
statements of operations amounted to $8,255,000, $34,162,000 and $14,346,000,
respectively, which amounts were net of probable recoveries from state UST
remediation funds.
23
<PAGE> 26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
Under the Master Lease with Marketing, the Company committed to a
program to bring the leased properties with known environmental problems to
regulatory closure and, thereafter, transfer all future environmental risks with
respect to such properties from the Company to Marketing. In order to establish
the Remediation Costs obligation and estimate the incremental cost of
accelerated remediation, the Company commissioned a detailed
property-by-property environmental study of all retail outlets, with the
objective of achieving closure in approximately five years. As a result, the
Company revised its estimate of future Remediation Costs in the fourth quarter
of fiscal 1997 and recorded a pre-tax charge in such quarter for Remediation
Costs of $21,182,000. The pre-tax charge resulted from the acceleration of
remediation activities to be paid by the Company through more aggressive means
of treating contaminated sites to bring them to closure in approximately five
years, which resulted in significant incremental Remediation Costs, changes in
estimated Remediation Costs at previously identified properties, including costs
to be incurred in connection with UST upgrades, and additional charges to comply
with AICPA Statement of Position 96-1, "Environmental Remediation Liabilities."
The Company has agreed to pay all costs relating to, and to indemnify
Marketing for, all known pre-spin-off environmental liabilities and obligations
as scheduled in the Master Lease, future upgrades necessary to cause USTs to
conform to the 1998 federal standards (the "1998 Standards") as scheduled in the
Master Lease, and all environmental liabilities and obligations arising out of
discharges with respect to properties containing USTs that have not been
upgraded to meet the 1998 Standards that are discovered prior to the date such
USTs are upgraded to meet the 1998 Standards (collectively, the "Realty
Environmental Liabilities"). The Company will also collect recoveries from state
UST remediation funds related to the Realty Environmental Liabilities.
As of January 31, 1998 and 1997, the Company had accrued $38,297,000
and $46,134,000, respectively, as management's best estimate for environmental
remediation costs. As of January 31, 1998 and 1997, the Company had recorded
$15,387,000 and $16,217,000, respectively, as management's best estimate for
recoveries from state UST remediation funds related to such environmental
obligations and liabilities. In view of the uncertainties associated with
environmental expenditures, however, the Company believes it is possible that
such expenditures could be substantially higher. Any additional amounts will be
reflected in the Company's financial statements as they become known. Although
future environmental expenditures may have a significant impact on results of
operations for any single fiscal year or interim period, the Company believes
that such costs will not have a material adverse effect on the Company's
financial position.
8. INCOME TAXES
The provision (credit) for income taxes is summarized as follows:
<TABLE>
<CAPTION>
(in thousands) 1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Federal:
Current $ 2,697 $ 3,880 $ 4,044
Deferred 1,557 (7,718) 3,079
State and local:
Current 990 1,487 732
Deferred 522 (2,587) 239
-------- -------- --------
Provision (credit) for income taxes $ 5,766 $ (4,938) $ 8,094
======== ======== ========
</TABLE>
The tax effects of temporary differences which comprise the deferred
tax assets and liabilities, including the effect of the merger discussed in Note
3, are as follows:
<TABLE>
<CAPTION>
(in thousands) 1998 1997
-------- --------
<S> <C> <C>
Real estate $(46,133) $ 3,533
Environmental remediation costs, net 13,322 13,709
Other accruals 1,671 1,494
Other 1,421 (251)
-------- --------
Net deferred tax assets (liabilities) $(29,719) $ 18,485
======== ========
</TABLE>
24
<PAGE> 27
- --------------------------------------------------------------------------------
The following is a reconciliation of the expected statutory federal
income tax provision (credit) and the actual provision (credit) for income
taxes:
<TABLE>
<CAPTION>
(in thousands) 1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Expected provision (credit) at statutory federal income tax rate $ 4,661 $ (4,799) $ 7,533
State and local income taxes, net of federal benefit 994 (726) 631
Nondeductible expenses -- 576 --
Other 111 11 (70)
--------- --------- ---------
Provision (credit) for income taxes $ 5,766 $ (4,938) $ 8,094
========= ========= =========
</TABLE>
9. STOCKHOLDERS' EQUITY
A summary of the changes in stockholders' equity for the three years ended
January 31, 1998 is as follows:
<TABLE>
<CAPTION>
Preferred Stock Common Stock Paid-in
---------------------------- --------------------------- ----------
(in thousands, except per share amounts) Shares Amount Shares Amount Capital
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, February 1, 1995 -- $ -- 13,545 $ 1,354 $ 119,890
Net earnings
Cash dividends--$.06 per share
Net unrealized gain on equity securities
Issuance of treasury stock, net (17)
Stock options 8 1 87
---------- ---------- ---------- ---------- ----------
Balance, January 31, 1996 -- -- 13,553 1,355 119,960
Net loss
Cash dividends--$.12 per share
Net unrealized gain on equity securities
Issuance of treasury stock, net (6)
Stock options 30 3 339
---------- ---------- ---------- ---------- ----------
Balance, January 31, 1997 -- -- 13,583 1,358 120,293
Net earnings
Spin-off of Marketing (56,272)
Cash dividends--$.12 per share
Issuance of treasury stock, net (1)
Stock options 864 87 15,679
Change in par value of common stock (1,301) 1,301
Issuance of preferred stock 2,889 72,220
---------- ---------- ---------- ---------- ----------
Balance, January 31, 1998 2,889 $ 72,220 14,447 $ 144 $ 81,000
========== ========== ========== ========== ==========
<CAPTION>
Net
Treasury Stock, Unrealized
Retained at Cost Gain (Loss)
Earnings -------------------------- on Equity
(in thousands, except per share amounts) (Deficit) Shares Amount Securities Total
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, February 1, 1995 $ (8,393) (901) $ (14,203) $ (168) $ 98,480
Net earnings 12,634 12,634
Cash dividends--$.06 per share (760) (760)
Net unrealized gain on equity securities 36 36
Issuance of treasury stock, net 7 113 96
Stock options 88
---------- ---------- ---------- ---------- ----------
Balance, January 31, 1996 3,481 (894) (14,090) (132) 110,574
Net loss (9,176) (9,176)
Cash dividends--$.12 per share (1,520) (1,520)
Net unrealized gain on equity securities 132 132
Issuance of treasury stock, net 8 126 120
Stock options 342
---------- ---------- ---------- ---------- ----------
Balance, January 31, 1997 (7,215) (886) (13,964) -- 100,472
Net earnings 7,944 7,944
Spin-off of Marketing (56,272)
Cash dividends--$.12 per share (1,577) (1,577)
Issuance of treasury stock, net 3 41 40
Stock options 15,766
Change in par value of common stock --
Issuance of preferred stock 72,220
---------- ---------- ---------- ---------- ----------
Balance, January 31, 1998 $ (848)(a) (883) $ (13,923) $ -- $ 138,593
========== ========== ========== ========== ==========
</TABLE>
(a) Net of $103,803 transferred from retained earnings to common stock and
paid-in capital as a result of accumulated stock dividends.
10. EMPLOYEE BENEFIT PLANS
The Company has a retirement and profit sharing plan with deferred 401(k)
savings plan provisions (the "Retirement Plan") for non-union employees meeting
certain service requirements and a Supplemental Plan for executives. Under the
terms of these plans, the annual discretionary contributions to the plans are
determined by the Board of Directors. Also, under the Retirement Plan, employees
may make voluntary contributions and the Company has elected to match an amount
equal to 50% of such contributions but in no event more than 3% of the
employee's eligible compensation. Under the Supplemental Plan, a participating
executive may receive an amount equal to 10% of his compensation, reduced by the
amount of any contributions allocated to such executive under the Retirement
Plan. Contributions, net of forfeitures, under the plans approximated $168,000,
$702,000 and $650,000 for the years ended January 31, 1998, 1997 and 1996,
respectively. In addition, the Company has contributed $22,000, $350,000 and
$364,000 to a union welfare plan for the years ended January 31, 1998, 1997 and
1996, respectively. Such amounts are included in the accompanying consolidated
statements of operations.
The Company has a Stock Option Plan (the "Plan") which authorizes the
Company to grant options to purchase shares of the Company's common stock. The
aggregate number of shares of the Company's
25
<PAGE> 28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
- --------------------------------------------------------------------------------
Getty Realty Corp. and Subsidiaries
common stock which may be made the subject of options under the Plan shall not
exceed 1,100,000 shares, subject to further adjustment for stock dividends and
stock splits. The Plan provides that options are exercisable starting one year
from the date of grant, on a cumulative basis at the annual rate of 25 percent
of the total number of shares covered by the option.
Immediately prior to the spin-off of its petroleum marketing business
to its stockholders, each current holder of an option to acquire shares of the
Company's common stock received, in exchange therefor, two separately
exercisable options: one to purchase shares of the Company's common stock (a
"Realty Option") and one to purchase shares of Marketing common stock (a
"Marketing Option"), each exercisable for the same number of shares and
containing substantially equivalent terms as the pre-distribution option. The
exercise price of each Realty Option and Marketing Option was set so as to
preserve the Aggregate Spread (as defined below) in value attributed to the
options currently held by such directors, officers and key employees. The
"Aggregate Spread" is an amount representing the difference between the exercise
price of an option and the price of a share of Company common stock immediately
prior to the spin-off multiplied by the number of shares underlying such option.
Certain unexercisable options covering a total of 223,587 shares became
immediately exercisable at the date of the spin-off for persons covered by
change of control agreements. Accordingly, in fiscal 1998, the Company
recognized a charge to operating results of $2,166,000 at the date of the
spin-off equal to the product of the number of such options and the difference
between their exercise price and the market price.
The following is a schedule of stock option prices and activity
relating to the Company's stock option plans for the three years ended January
31, 1998. Subsequent to the spin-off of its petroleum marketing business to its
stockholders, the exercise price of each Realty Option and Marketing Option was
set so as to preserve the Aggregate Spread in value attributed to the options
currently held by the holders:
<TABLE>
<CAPTION>
1998 1997 1996
-------------------------- -------------------------- --------------------------
Weighted Weighted Weighted
Number Average Number Average Number Average
of Exercise of Exercise of Exercise
Shares Price(a) Shares Price(a) Shares Price(a)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 1,014,226 $ 10.28 927,428 $ 10.06 811,220 $ 9.95
Granted 349,236 23.65 166,400 11.40 128,000 10.73
Exercised (864,535) 10.15 (29,519) 8.97 (8,000) 8.46
Cancelled (135,374) 11.06 (50,083) 10.78 (3,792) 10.44
----------- ----------- ----------- ----------- ----------- -----------
Outstanding at end of year 363,553 $ 23.15 1,014,226 $ 10.28 927,428 $ 10.06
=========== =========== =========== =========== =========== ===========
Exercisable at end of year 242,779 $ 23.29 687,761 $ 10.34 650,506 $ 10.14
=========== =========== =========== =========== =========== ===========
Available for grant at end of year 736,447 176,881 50,007
=========== =========== ===========
</TABLE>
(a) In connection with the spin-off, each Realty Option was reformed into
separate options for Realty common stock and Marketing common stock. The
exercise price of each reformed Realty Option shown herein, except new grants in
1998, represents 77.29% of the original exercise price.
The following table summarizes information concerning options
outstanding and exercisable at January 31, 1998:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
---------------------------- ---------------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Number Contractual Exercise Number Exercise
Exercise Prices Outstanding Life (Years) Price Exercisable Price
- --------------- ----------- ------------ ----- ----------- -----
<S> <C> <C> <C> <C> <C>
$9.56-14.40 14,317 2 $11.00 14,317 $11.00
21.31 52,500 10 21.31 -- 21.31
24.06 296,736 6 24.06 228,462 24.06
----------- ------- --- ------ ------ ------
363,553 242,779
======= =======
</TABLE>
The Company accounts for its stock-based employee compensation plans
under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees." The Company recorded a stock compensation charge of $8,683,000
for the year ended January 31, 1998 since certain options required variable plan
accounting treatment. Had compensation cost for the Company's Plans been
determined based upon the fair value of options granted during the years ended
January 31, 1998, 1997 and 1996 consistent with the
26
<PAGE> 29
- --------------------------------------------------------------------------------
methodology prescribed under SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company's net earnings (loss) and net earnings (loss) per
share on a diluted basis would have been reduced to the following pro forma
amounts:
<TABLE>
<CAPTION>
1998 1997 1996
----------------------- ----------------------- ----------------------
As Reported Pro Forma As Reported Pro Forma As Reported Pro Forma
<S> <C> <C> <C> <C> <C> <C>
Net earnings (loss) (in thousands) $7,944 $7,513 $(9,176) $(9,791) $12,634 $12,574
Net earnings (loss) per share .60 .56 (.72) (.77) 1.00 .99
</TABLE>
The fair value of the options granted during fiscal 1998, 1997 and 1996
were estimated as $10.32, $5.86 and $4.76 per share, respectively, on the date
of grant using the Black-Scholes option pricing model with the following
weighted average assumptions:
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Expected dividend yield .5% .8% .9%
Expected volatility 35% 35% 35%
Risk-free interest rate 5.5% 6.2% 5.3%
Expected life of options (years) 7 6 5
</TABLE>
11. QUARTERLY FINANCIAL DATA
The following is a summary of the quarterly results of operations for the years
ended January 31, 1998 and 1997 (unaudited as to quarterly information):
<TABLE>
<CAPTION>
Three months ended Year ended
---------------------------------------------- ---------
Fiscal 1998: April 30 July 31 October 31 January 31 January 31
-------- -------- -------- ---------- ---------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Revenues $ 23,781 $ 21,634 $ 20,932 $ 23,492 $ 89,839
Gross profit (a) 982 244 256 1,041 2,523
Earnings (loss) before income taxes 5,486(b) 3,098 5,277 (151)(c) 13,710(b)
Net earnings (loss) 3,207 1,950 3,021 (234) 7,944
Net earnings (loss) per share:
Basic .25 .15 .23 (.02) .60
Diluted $ .25 $ .15 $ .22 $ (.02) $ .60
</TABLE>
<TABLE>
<CAPTION>
Three months ended Year ended
----------------------------------------------- ----------
Fiscal 1997(d) April 30 July 31 October 31 January 31 January 31
--------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share amounts)
Revenues $ 213,968 $ 230,192 $ 224,664 $ 257,021 $ 925,845
Gross profit (loss) (a) 3,323 15,528 6,195 (15,327)(e) 9,719(e)
Earnings (loss) before income taxes (8,312) 11,773 4,421 (21,996)(e) (14,114)(e)
Net earnings (loss) (5,165) 7,169 2,553 (13,733) (9,176)
Net earnings (loss) per share:
Basic (.41) .57 .20 (1.08) (.72)
Diluted $ (.41) $ .57 $ .20 $ (1.08) $ (.72)
</TABLE>
(a) Gross profit (loss) is calculated as net sales (excluding rental and other
income) less cost of sales (excluding depreciation and amortization).
(b) Includes equity in earnings of Marketing prior to the spin-off of $2,931.
(c) Includes $4,048 of stock compensation charges.
(d) Includes financial results of Marketing for each of the quarters presented.
(e) Includes pre-tax charge of $21,182 related to revision of estimate of
future environmental remediation costs.
12. LITIGATION CHARGE
In May 1996, a federal judge in the U. S. District Court for the Eastern
District of New York entered a judgment in the amount of $8,400,000, plus
interest, against the Company's former construction company subsidiary, which
was sold in 1989. During the year ended January 31, 1997, the Company recorded a
pre-tax charge of $5,802,000 related to the settlement of this litigation which
is included under the litigation charge caption in the accompanying consolidated
statement of operations.
27
<PAGE> 30
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors
and Stockholders of Getty Realty Corp.:
We have audited the accompanying consolidated balance sheets of GETTY
REALTY CORP. and SUBSIDIARIES as of January 31, 1998 and 1997, and the related
consolidated statements of operations and cash flows for each of the three years
in the period ended January 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Getty
Realty Corp. and Subsidiaries as of January 31, 1998 and 1997, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended January 31, 1998, in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for the impairment of long-lived assets
in fiscal 1996.
/s/ COOPERS & LYBRAND L.L.P.
New York, New York
March 12, 1998
CAPITAL STOCK
The common stock of Getty Realty Corp. is traded on the New York Stock
Exchange (symbol: "GTY"). At April 22, 1998, there were approximately 2,900
holders of record of Getty Realty's common stock. The price range of common
stock and cash dividends paid with respect to each share of common stock during
the past two fiscal years were as follows:
<TABLE>
<CAPTION>
Price Range
--------------------- Cash Dividends
Quarter Ending High Low Per Share
-------- -------- ---------
<S> <C> <C> <C>
January 31, 1998 $24.3125 $18.4375 $.03
October 31, 1997 19.0625 17.125 .03
July 31, 1997 18.375 16.625 .03
April 30, 1997 21.375 15.50 .03
January 31, 1997 17.875 14.50 .03
October 31, 1996 17.25 13.625 .03
July 31, 1996 15.75 13.125 .03
April 30, 1996 $ 15.75 $13.375 $.03
</TABLE>
The preferred stock of Getty Realty Corp. commenced trading in February
1998 on the New York Stock Exchange (symbol: "GTY PrA"). At April 22, 1998,
there were approximately 500 holders of record of Getty Realty's preferred
stock.
28
<PAGE> 31
CORPORATE DATA
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
Milton Cooper
Chairman of the Board
of Kimco Realty Corporation
Philip E. Coviello
Partner of Latham & Watkins
Leo Liebowitz
President and Chief Executive Officer
of the Company
Milton Safenowitz
Former Executive Vice President
of the Company
Warren G. Wintrub
Retired Partner, former Member
of the Executive Committee and
Chairman of the Retirement
Committee of Coopers & Lybrand
EXECUTIVE OFFICERS
Leo Liebowitz
President and Chief Executive Officer
John J. Fitteron
Senior Vice President, Treasurer and
Chief Financial Officer
ANNUAL MEETING
All stockholders are cordially invited to attend the Companys annual meeting on
June 18, 1998 at 3:00 p.m. at 270 Park Avenue 11th Floor, New York, New York.
Holders of common and preferred stock of record at the close of business on
April 22, 1998, are entitled to vote at the meeting. A notice of meeting, proxy
statement and proxy were mailed to stockholders with this report.
FORM 10-K AND INVESTOR
RELATIONS INFORMATION
The Companys fiscal 1998 Annual Report on
Form 10-K filed with the Securities and Exchange Commission may be obtained by
stockholders
without charge by writing to:
INVESTOR RELATIONS
Getty Realty Corp.
125 Jericho Turnpike
Jericho, New York 11753
In addition, Getty stockholders are informed about Company news through the
issuance of press releases and quarterly reports. Investors, brokers, security
analysts and others
desiring financial information should contact Investor Relations at (516)
338-2600.
TRANSFER AGENT
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
ABOUT OUR STOCKHOLDERS
As of April 22, 1998, the Company had 13,564,873
outstanding shares of Common Stock owned by
approximately 2,900 stockholders of record
and 2,888,799 outstanding shares of Series A
Participating Convertible Redeemable Preferred
Stock owned by approximately 500 stockholders
of record.
CORPORATE HEADQUARTERS
Getty Realty Corp.
125 Jericho Turnpike
Jericho, New York 11753
Getty Realty Corp.s Common Stock and Preferred Stock
are listed on the New York Stock Exchange under the ticker symbols GTY and GTY
PrA, respectively.
STOCKHOLDER INQUIRIES
Inquiries, comments or suggestions
concerning Getty Realty Corp. are
welcome and should be directed to:
INVESTOR RELATIONS
125 Jericho Turnpike
Jericho, New York 11753
(516) 338-2600
TELEX
175061 GETTY
TELECOPIER
(516) 338-6062
<PAGE> 32
GETTY REALTY CORP.
125 Jericho Turnpike
Jericho, NY 11753
<PAGE> 1
Exhibit 22.
Subsidiaries of the Registrant.
STATE OF
SUBSIDIARY INCORPORATION
GETTY PROPERTIES CORP. Delaware
AOC TRANSPORT, INC. Delaware
AERO OIL COMPANY, INC. Pennsylvania
DONNA OIL CORP. New York
GETTYMART INC. Delaware
LEEMILT'S FLATBUSH AVENUE, INC. New York
LEEMILT'S PETROLEUM, INC. New York
RECO PETROLEUM, INC. Pennsylvania
ROSEDALE HOLDING, LLC* Delaware
SLATTERY GROUP INC. New Jersey
ENERGY RESOURCE & RECOVERY CORPORATION New York
HSCO GROUP, INC. New York
POWER TEST REALTY COMPANY LIMITED PARTNERSHIP** New York
*50% ownership
**99% owned by the registrant, representing the limited partner units, and 1%
owned by Getty Properties Corp., representing the general partner interest.
<PAGE> 1
EXHIBIT 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Getty Realty Corp. on Form S-8 (Registration Nos. 33-22653, 33-64746 and
333-23373) of our reports dated March 12, 1998, on our audits of the
consolidated financial statements and financial statement schedule of Getty
Realty Corp. and Subsidiaries as of January 31, 1998 and 1997 and for each of
the three years in the period ended January 31, 1998 which reports have been
included or incorporated by reference in this Annual Report on Form 10-K.
Coopers & Lybrand L.L.P.
New York, New York
March 12, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF GETTY REALTY CORP. AND SUBSIDIARIES AS OF
JANUARY 31, 1998 AND FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> JAN-31-1998
<CASH> 10,034
<SECURITIES> 0
<RECEIVABLES> 2,695
<ALLOWANCES> 171
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 291,623
<DEPRECIATION> 63,600
<TOTAL-ASSETS> 268,543
<CURRENT-LIABILITIES> 0
<BONDS> 40,526
0
72,220
<COMMON> 144
<OTHER-SE> 66,229
<TOTAL-LIABILITY-AND-EQUITY> 268,543
<SALES> 26,895
<TOTAL-REVENUES> 89,839
<CGS> 24,372
<TOTAL-COSTS> 56,675
<OTHER-EXPENSES> 2,166
<LOSS-PROVISION> 61
<INTEREST-EXPENSE> 5,008
<INCOME-PRETAX> 13,710
<INCOME-TAX> 5,766
<INCOME-CONTINUING> 7,944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,944
<EPS-PRIMARY> .60
<EPS-DILUTED> .60
</TABLE>
