<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, 2000
----------------
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 (7,018,419
shares of common stock and 1,738,420 shares of preferred stock) of the Company
was $119,886,961 as of April 18, 2000.
The registrant had outstanding 12,812,009 shares of common stock and 2,884,068
shares of preferred stock as of April 18, 2000.
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, 2000
(the "Annual Report")(pages 6 through 24). II
Definitive Proxy Statement for the 2000 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, 2000
pursuant to Regulation 14A. III
</TABLE>
================================================================================
<PAGE> 2
PART I
Item 1. Business
General
Getty Realty Corp. is the largest real estate company in the U. S. specializing
in the ownership, leasing and management of gasoline station/convenience store
properties. Prior to the 1997 spinoff of our petroleum marketing business, we
were also one of the nation's largest independent marketers of petroleum
products, serving 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.
On March 21, 1997, we completed the spinoff of our petroleum marketing business
to our stockholders (the "Spinoff"), who received a tax-free dividend of one
share of common stock of Getty Petroleum Marketing Inc. ("Marketing") for each
share of our common stock. Marketing held the assets and liabilities of our
petroleum marketing business and New York Mid-Hudson Valley home heating oil
business. Shortly thereafter, we changed our name from Getty Petroleum Corp. to
Getty Realty Corp. In December 1998, we sold our remaining heating oil business,
Aero Oil Company. As a result, we are now engaged in the ownership, leasing and
management of real estate properties, most of which are gasoline/convenience
store properties leased on a long-term net basis to Marketing. For additional
information regarding the Spinoff and the sold heating oil business, see Notes 2
and 3 to the consolidated financial statements contained in the accompanying
Annual Report.
Reorganization
On January 30, 1998, we reorganized as a Maryland corporation. At that time,
Getty Realty Corp., a Delaware corporation, changed its name to Getty Properties
Corp. and became a wholly- owned subsidiary of our new Maryland company. When we
refer to the Company, we mean Getty Realty Corp., a Maryland corporation, and
for periods prior to January 30, 1998, we mean Getty Realty Corp., a Delaware
corporation (also referred to as "Old Getty"). In connection with the
reorganization, 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.
Our Company's common stock is listed on the New York Stock Exchange under the
symbol GTY.
Merger with Power Test Investors Limited Partnership and Issuance of Preferred
Stock
On January 30, 1998, we also acquired Power Test Investors Limited Partnership
(the "Partnership"), as a result of which we acquired fee title to 295
properties which Old Getty had previously leased from the Partnership. See "Item
2. Properties" below. In that transaction, 2,888,798 shares of our Series A
Participating Convertible Redeemable Preferred Stock, $.01 par value,
("Preferred Stock") were issued to the former unitholders of the Partnership and
to CLS General Partnership Corp., the Partnership's general partner. On February
11, 1998, the
2
<PAGE> 3
Preferred Stock commenced trading on the New York Stock Exchange under the
symbol GTY PrA.
Real Estate Business
We specialize in the ownership and leasing of properties in the petroleum
industry, since we have substantial knowledge and expertise in this industry. In
view of current conditions in both the financial markets and retail gasoline
service station real estate markets, we have decided to focus primarily on
managing our existing portfolio of gasoline service stations, terminals and
related properties in a more cost effective manner, and to utilize free cash
flow and capital resources to increase dividend payments to shareholders and to
selectively repurchase our equity.
On February 1, 1997, we entered into a Master Lease Agreement with Marketing
(the "Master Lease") under which, as of January 31, 2000, 1,013 service station
and convenience store properties and 9 distribution terminals and bulk plants
were 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 a 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 property, assuming the properties were
free of certain environmental conditions for which we are responsible.
We received lease payments from Marketing aggregating approximately $56.4
million (or 96% of the $58.9 million total revenues we received from all of our
rental properties) during the fiscal year ended January 31, 2000. We are
materially dependent upon the ability of Marketing to meet its obligations under
the Master Lease. 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,
we do not anticipate that Marketing will have difficulty making all required
rental payments for the foreseeable future.
As of January 31, 2000, we owned or leased 72 additional properties not included
under the Master Lease, most of which are leased for non-petroleum use. We also
owned 24 properties being held for disposition.
Regulation
We are 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 our financial position,
although these costs may have a significant impact on our results of operations
or liquidity for any single fiscal year or interim period.
Petroleum properties are 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
3
<PAGE> 4
remediate the soil and/or groundwater contamination pursuant to governmental
order and directive, (ii) requirements to remove and replace underground storage
tanks that 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, we committed to a program to bring scheduled leased properties
to regulatory closure and, thereafter, transfer all environmental risks to
Marketing.
We believe that we are in substantial compliance with federal, state and local
provisions enacted or adopted pertaining to environmental matters. Although we
are 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 our
competitive position. See "Item 3. Legal Proceedings."
Personnel
As of January 31, 2000, we had 10 employees. Under a Services Agreement,
Marketing provides certain administrative and technical services to us and we
provide certain services to Marketing. We paid net fees to Marketing for
services performed (after deducting the fees paid by Marketing to us for
services provided) of $749,000 for the year ended January 31, 2000 and $960,000
for each of the years ended January 31, 1999 and 1998. These fees are included
in general and administrative expenses in our consolidated statements of
operations.
Special Factors Regarding Forward-Looking Statements
Certain statements in this Annual Report on Form 10-K may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. When we use the words "believes", "expects",
"plans", "estimates" and similar expressions, we intend to identify
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance and achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. These factors include, but are not limited to: risks
associated with owning and leasing real estate generally; dependence on
Marketing as a lessee and on rentals from companies engaged in the petroleum
marketing and convenience store businesses; competition for locations and
tenants; risk of tenant non-renewal; the effects of regulation; the Company's
expectations as to the cost of completing environmental remediation; and
potential effects of Year 2000 issues. For a more detailed discussion of risk
factors, see the information set forth under the caption "Risk Factors" in our
Proxy
4
<PAGE> 5
Statement/Prospectus dated January 13, 1998.
As a result of these and other factors, we may experience material fluctuations
in future operating results on a quarterly or annual basis, which could
materially and adversely effect our business, financial condition, operating
results and stock price. An investment in our preferred and common stocks
involves various risks, including those mentioned above and elsewhere in this
report and those which are detailed from time to time in our other filings with
the Securities and Exchange Commission.
You should not place undue reliance on forward-looking statements, which reflect
our view only as of the date hereof. We undertake no obligation to publicly
release revisions to these forward- looking statements that reflect future
events or circumstances or the occurrence of unanticipated events.
Item 2. Properties
The properties we owned in fee or leased for each of the five fiscal years ended
January 31, 2000 are as follows:
January 31,
--------------------------------------------
2000 1999 1998 1997 1996
----- ----- ----- ----- -----
Owned 757 740 736 441 439
Leased 361 379 404 732 734
----- ----- --- ----- -----
Total 1,118 1,119 1,140 1,173 1,173
===== ===== ===== ===== =====
The following table sets forth information regarding lease expirations for the
properties:
Fiscal Year Number of Leases Expiring (a) Percent of Total
- - - - ----------- ----------------------------- ----------------
2001 24 6.6%
2002 59 16.3
2003 52 14.4
2004 41 11.4
2005 42 11.6
Thereafter 143 39.7
--- ------
361 100.0%
=== ======
(a) The lease expiration schedule does not take give effect to lease renewal or
extension options.
5
<PAGE> 6
On January 30, 1998, we acquired the Partnership, a publicly traded real estate
limited partnership, in a transaction accounted for as a purchase. As a result
of the transaction, we acquired 295 fee properties, consisting of 290 service
station and convenience store properties and five terminals, that we previously
leased from the Partnership.
As of January 31, 2000, we owned in fee six distribution terminals and leased
three bulk plants (on a long-term net lease basis) located in New York, New
Jersey, Rhode Island and Connecticut. These terminals and bulk plants have an
aggregate storage capacity of approximately 48 million gallons. The terminals
located in East Providence (Rhode Island) and Rensselaer (New York) are
deep-water terminals, capable of handling large vessels. The nine distribution
terminals and bulk plants are leased or sub-leased to Marketing.
As of January 31, 2000, we leased approximately 32,000 square feet of office
space at 125 Jericho Turnpike, Jericho, New York, where we currently maintain
our corporate headquarters. Most of this space has been subleased to Marketing.
We believe that substantially all of our owned and leased properties are in good
condition.
For a description of our lease arrangements with Marketing, 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 Note 5 of the Notes to Consolidated Financial Statements set forth on page
17 of the Annual Report.
In 1991, the State of New York brought an action in the New York State Supreme
Court in Albany County against one of our 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 1993, the State of New York asserted a claim against us 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 against us and other
parties to recover $522,000 for cleanup costs and unspecified penalties and
interest.
In 1994, one of our subsidiaries was served with an Amended Complaint naming the
subsidiary as one of many defendants in the Keystone Superfund case pending in
the U.S. District Court for the Middle District of Pennsylvania. The Complaint
pertained 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
was brought into the same action pertaining to convenience store refuse. In
August 1997, we paid into escrow $40,000 in full settlement. The settlement has
been approved by the United States Environmental Protection Agency, but has not
yet been approved by the Court.
6
<PAGE> 7
In 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 our former construction company
subsidiary, 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. We believe that any exposure is
not material because the quantities of construction fill deposited at the waste
site were small.
In June 1998, we were sued as a third-party defendant in the Superfund case of
U.S. v. Champion Chemical Co. and Imperial Oil Co., pending in the U.S. District
Court for New Jersey. Our defense is being conducted by Texaco Inc., which has
agreed to fully indemnify us. In August 1998, we were sued as a third-party
defendant in the Superfund case of U.S. v. Manzo, pending in the U. S. District
Court for New Jersey. Our defense is also being conducted by Texaco Inc., which
has agreed to fully indemnify us. Both matters involve time periods prior to
1985, when we purchased the properties from Texaco Inc. pursuant to an agreement
under which Texaco is obligated to indemnify us for environmental matters of
this kind.
In December 1998, the New York State Department of Environmental Conservation
filed an administrative complaint against us for civil penalties for alleged
groundwater contamination and gasoline migration into a residence basement in
April 1997. The action was filed in response to a citizen's lawsuit filed
against us in the U.S. District Court for the Southern District of New York.
In September 1999, the State of New York filed a lawsuit against us in the New
York State Supreme Court in Albany County, seeking reimbursement of $1,300,000
(plus interest and penalties) spent to clean up a discharge that allegedly
occurred at a Company service station. We contend that the discharge occurred at
a contiguous service station, the owner of which is a party to the lawsuit and
against whom we asserted a cross-claim.
Two lawsuits brought by the State of New York in 1986, seeking reimbursement for
cleanup costs incurred at two service stations on Long Island, were settled
during the fourth quarter of fiscal 2000. Various parties participated in the
settlement of the two cases and we contributed $133,000 towards the settlements.
A lawsuit brought by the State of New York in 1993, seeking reimbursement for
cleanup costs incurred at a service station on Long Island, was settled during
the first quarter of fiscal 2000. We contributed $292,500 to the settlement,
together with a contribution made by the former owner of another nearby service
station.
7
<PAGE> 8
Two lawsuits brought by the State of New York in 1996, seeking reimbursement for
cleanup costs incurred at two service stations in New York City, were settled
during the fourth quarter of fiscal 2000. We paid $700,000 to settle the two
cases.
A lawsuit brought by the State of New York in 1998, seeking reimbursement for
cleanup costs incurred at a house to which our former subsidiary delivered home
heating oil, was settled in the fourth quarter of fiscal 2000 by our paying
$280,000.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during the fourth quarter
of our fiscal year ended January 31, 2000.
Executive Officers of Registrant
The following table lists the executive officers of Getty Realty as of January
31, 2000, their respective ages, the offices and positions held 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>
Leo Liebowitz 72 President and Chief Executive
Officer 1971
John J. Fitteron 58 Senior Vice President, Treasurer
and Chief Financial Officer 1986
</TABLE>
Mr. Liebowitz has been President and Chief Executive Officer and a director
since 1971. He is also the Chairman, Chief Executive Officer and a director of
Marketing. Mr. Liebowitz is a director of the Regional Banking Advisory Board of
Chase Banking Corp.
Mr. Fitteron joined Getty 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 executive
officers.
8
<PAGE> 9
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 24 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 6 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 7 through 10 of the Annual Report.
Item 7A. Market Risk
Information in response to this item is incorporated herein by reference from
Note 5 of the Notes to Consolidated Financial Statements set forth on page 17 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 11 through 24 of the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
9
<PAGE> 10
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, 5 and 14, 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
5 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 page 11 of the Proxy
Statement.
10
<PAGE> 11
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 12 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 12 is filed as part of this annual
report.
3. Exhibits
The exhibits listed in the Exhibit Index on pages 15
through 22 are filed as part of this annual report.
4. Reports on Form 8-K
None.
11
<PAGE> 12
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 2000 Annual
(pages) Report (pages)
------------------------------
<S> <C> <C>
Data incorporated by reference from attached 2000 Annual Report to Stockholders
of Getty Realty Corp.:
Report of Independent Accountants 23
Consolidated Statements of Operations for the
years ended January 31, 2000, 1999 and 1998 11
Consolidated Balance Sheets as of January 31,
2000 and 1999 12
Consolidated Statements of Cash Flows for the
years ended January 31, 2000, 1999 and 1998 13
Notes to Consolidated Financial Statements 14 - 22
Report of Independent Accountants - Supplemental Schedule 13
Schedule II - Valuation and Qualifying Accounts and
Reserves for the years ended January 31, 2000, 1999 and 1998 14
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
2000 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, 7A and 8, the 2000
Annual Report to Stockholders is not deemed filed as part of this report.
</TABLE>
12
<PAGE> 13
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders
of Getty Realty Corp.:
Our audits of the consolidated financial statements referred to in our report
dated March 9, 2000 appearing in the fiscal 2000 Annual Report to Shareholders
of Getty Realty Corp. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedule listed in Item 14(a)(2) of this Form
10-K. In our opinion, this financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
PricewaterhouseCoopers LLP
New York, New York
March 9, 2000
13
<PAGE> 14
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE II - VALUATION and QUALIFYING ACCOUNTS and RESERVES
for the years ended January 31, 2000, 1999 and 1998
(in thousands)
Balance at Balance at
beginning end of
of period Additions Deductions period
--------- --------- ---------- ------
2000:
Allowance for
doubtful accounts* $112 $ 56 $ 10 $158
==== ==== ====== ====
1999:
Allowance for
doubtful accounts* $171 $113 $ 172 $112
==== ==== ======= ====
1998:
Allowance for
doubtful accounts* $1,369 $68 $1,266(a) $171
====== === ====== ====
*Relates to accounts receivable.
(a) Includes $1,185 transferred to Marketing in connection with the Spinoff.
14
<PAGE> 15
EXHIBIT INDEX
GETTY REALTY CORP.
Annual Report on Form 10-K
for the fiscal year ended January 31, 2000
------------------------------------------
Exhibit
No. Description
- - - - ------- -----------
1.1 Agreement and Plan of Reorganization and Merger, dated as of December 16,
1997 (the "Merger Agreement") by and among Getty Realty Corp., Power Test
Investors Limited Partnership and CLS General Partnership Corp.
Filed as Exhibit 2.1 to Company's Registration Statement on Form S-4, filed
on January 12, 1998 (File No. 333-44065), included as Appendix A to the
Joint Proxy Statement/Prospectus that is a part thereof, and incorporated
herein by reference.
3.1 Articles of Incorporation of Getty Realty Holding Corp. ("Holdings"), now
known as Getty Realty Corp., filed December 23, 1997.
Filed as Exhibit 3.1 to Company's Registration Statement on Form S-4, filed
on 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.
Filed as Exhibit 3.2 to Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1998 (File No. 001-13777) and incorporated herein by
reference.
3.3 By-Laws of Holdings.
Filed as Exhibit 3.2 to Company'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.
15
<PAGE> 16
3.4 Articles of Amendment of Holdings, changing its name to Getty Realty Corp.,
filed January 30, 1998.
Filed as Exhibit 3.4 to Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1998 (File No. 001-13777) and incorporated herein by
reference.
4.1 $35,000,000 reducing revolving Loan Agreement between Leemilt's Petroleum,
Inc. and Bank of New England, N.A. dated as of December 7, 1987, and
related Guaranty Agreement, dated as of December 7, 1987, by and between
Getty Petroleum Corp. (now known as Getty Properties Corp.) and Bank of New
England, N.A.
Filed as Exhibit 4.7 to the Quarterly Report on Form 10-Q for the quarter
ended October 31, 1987 (File No. 1-8059) of Getty Petroleum Corp., and
incorporated herein by reference.
4.2 Amended and Restated Loan Agreement between Leemilt's Petroleum, Inc. and
Fleet Bank of Massachusetts, N.A., as successor to Bank of New England,
N.A., dated as of October 31, 1995 (the "Leemilt's Loan").
Filed as Exhibit 4.8 to the Annual Report on Form 10-K for the fiscal year
ended January 31, 1996 (File No. 1-8059) of Getty Petroleum Corp. and
incorporated herein by 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.
Filed as Exhibit 4.3 to Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1998 (File No. 001-13777) and incorporated herein by
reference.
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.
Filed as Exhibit 4.4 to Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1998 (File No. 001-13777) and incorporated herein by
reference.
4.5 Amended and Restated Loan Agreement between Power Test Realty Company
Limited Partnership ("PT Realty") and Fleet Bank of Massachusetts, N.A.
dated as of October 31, 1995 (the "PT Realty Loan").
Filed as Exhibit 10.27 to Power Test Investors Limited Partnership's ("PT
Investors") Annual Report on Form 10-K for the fiscal year ended December
31, 1995 (File No. 0-14557) and incorporated herein by reference.
16
<PAGE> 17
4.6 First Amendment to Amended and Restated Loan Agreement between PT Realty
and Fleet National Bank dated as of April 18, 1997.
Filed as Exhibit 4.6 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
4.7 Second Amendment to Amended and Restated Loan Agreement between PT Realty
and Fleet National Bank dated as of January 30, 1998.
Filed as Exhibit 4.7 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
4.8 Third Amendment to Amended and Restated Loan Agreement between PT Realty
and Fleet National Bank dated as of March 1, 2000.
*
4.9 Second Amended and Restated Master Note between PT Realty and Fleet
National Bank dated as of March 1, 2000.
*
10.1 Retirement and Profit Sharing Plan (amended and restated as of September
19, 1996), adopted by the Company on December 16, 1997.
Filed as Exhibit 10.2(b) to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1997 (File No. 1-8059) and incorporated
herein by reference.
10.2 1998 Stock Option Plan, effective as of January 30, 1998.
Filed as Exhibit 10.1 to Company's 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 Corp. (now known as Getty
Properties Corp.), Texaco Inc., Getty Oil Company and Getty Refining and
Marketing Company, dated as of December 21, 1984.
Filed as Exhibit 2(a) to the Current Report on Form 8-K of Power Test
Corp., filed February 19, 1985 (File No. 1-8059) and incorporated herein
by reference.
17
<PAGE> 18
10.4 Trademark License Agreement among Power Test Corp., Texaco Inc., Getty
Oil Company and Getty Refining and Marketing Company, dated as of
February 1, 1985.
Filed as Exhibit 2(b) to the Current Report on Form 8-K of Power Test
Corp., filed February 19, 1985 (File No. 1-8059) and incorporated herein
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.
Filed as Exhibit 10.5 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
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.
Filed as Exhibit 10.6 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.7 Amended and Restated Hazardous Waste and PMPA Indemnification Agreement,
dated as of October 31, 1995, among Getty Petroleum Corp. (now known as
Getty Properties Corp.), Power Test Realty Company Limited Partnership
and Fleet Bank of Massachusetts, N.A.
Filed as Exhibit 10.17 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1996 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
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.
Filed as Exhibit 10.8 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
18
<PAGE> 19
10.9 Second Affirmation and Acknowledgement of Amended and Restated Hazardous
Waste and PMPA Indemnification Agreement between the Company and Fleet
National Bank, dated as of January 30, 1998.
Filed as Exhibit 10.9 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.9A Third Affirmation and Acknowledgment of Amended and Restated Hazardous
Waste and PMPA Indemnification Agreement between the Company and Fleet
National Bank, dated as of March 1, 2000.
*
10.10 Amended and Restated Guaranty Agreement, dated as of October 31, 1995,
between Getty Petroleum Corp. and Fleet Bank of Massachusetts, N.A.
pertaining to the Leemilt's Loan.
Filed as Exhibit 10.10 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.11 Affirmation and 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.
Filed as Exhibit 10.11 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.12 Guaranty Agreement between the Company and Fleet National Bank, dated as
of January 30, 1998, pertaining to the Leemilt's Loan.
Filed as Exhibit 10.12 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.13 Guaranty Agreement between the Company and Fleet National Bank, dated as
of January 30, 1998, pertaining to the PT Realty Loan.
Filed as Exhibit 10.13 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
19
<PAGE> 20
10.14 Guaranty Agreement between Getty Properties Corp. and Fleet National Bank
dated as of January 30, 1998, pertaining to the PT Realty Loan.
Filed as Exhibit 10.14 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.15 Form of Indemnification Agreement between the Company and its directors.
Filed as Exhibit 10.15 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.16 Supplemental Retirement Plan for Executives of the Company (then known as
Getty Petroleum Corp.) and Participating Subsidiaries (adopted by the
Company on December 16, 1997).
Filed as Exhibit 10.22 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1990 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
10.17 Form of Agreement dated December 9, 1994 between Getty Petroleum Corp.
and its non-director officers and certain key employees regarding
compensation upon change in control.
Filed as Exhibit 10.23 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1995 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
10.18 Form of Agreement dated as of March 7, 1996 amending Agreement dated as
of December 9, 1994 between Getty Petroleum Corp. (now known as Getty
Properties Corp.) and its non-director officers and certain key
employees regarding compensation upon change in control (See Exhibit
10.17).
Filed as Exhibit 10.27 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1996 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
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).
Filed as Exhibit 10.19 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
20
<PAGE> 21
10.20 Form of Agreement dated March 9, 1998, from the Company 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).
Filed as Exhibit 10.20 to Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated
herein by reference.
10.21 Form of Master Lease Agreement dated February 1, 1997 between Getty
Petroleum Corp. (now known as Getty Properties Corp.) and Getty Petroleum
Marketing Inc.
Filed as Exhibit 10.28 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
10.22 Form of Reorganization and Distribution Agreement between Getty Petroleum
Corp. (now known as Getty Properties Corp.) and Getty Petroleum Marketing
Inc. dated as of February 1, 1997.
Filed as Exhibit 10.29 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
10.23 Form of Trademark License Agreement between Getty Petroleum Corp. (now
known as Getty Properties Corp.) and Getty Petroleum Marketing Inc.
Filed as Exhibit 10.30 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
10.24 Form of Services Agreement dated as of February 1, 1999 between Getty
Realty Corp. and Getty Petroleum Marketing Inc.
Filed as Exhibit 10.24A to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1999 (File No. 1-8059) of Getty Realty Corp, and
incorporated herein by reference.
10.25 Form of Tax Sharing Agreement between Getty Petroleum Corp. (now known as
Getty Properties Corp.) and Getty Petroleum Marketing Inc.
Filed as Exhibit 10.32 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
21
<PAGE> 22
10.26 Form of Stock Option Reformation Agreement made and entered into as of
March 21, 1997 by and between Getty Petroleum Corp. (now known as Getty
Properties Corp.) and Getty Petroleum Marketing Inc.
Filed as Exhibit 10.33 to the Annual Report on Form 10-K for the fiscal
year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp.
and incorporated herein by reference.
10.27 Guarantee Agreement between the Company and Fleet National Bank, dated as
of March 1, 2000, pertaining to the PT Realty Loan.
*
10.28 Guarantee Agreement between Getty Properties Corp. and Fleet National
Bank dated as of March 1, 2000, pertaining to the PT Realty Loan.
*
10.29 Third Affirmation and Acknowledgement of Amended and Restated Three Party
Lease Agreement among Getty Realty Corp., PT Realty and Fleet National
Bank dated as of March 1, 2000.
*
13 Annual Report to Stockholders for the fiscal year ended January 31, 2000.
*
21 Subsidiaries of the Company.
*
23 Consent of Independent Accountants.
*
27 Financial Data Schedule.
*
- - - - -----------------------
*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 28, 2000
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 28, 2000 Officer (Principal Financial
and Accounting Officer)
April 28, 2000
By /s/ MILTON COOPER By /s/ PHILIP E. COVIELLO
--------------------------- ------------------------------
Milton Cooper, Philip E. Coviello,
Director Director
April 28, 2000 April 28, 2000
By /s/ HOWARD SAFENOWITZ By /s/ WARREN G. WINTRUB
------------------------ ------------------------------
Howard Safenowitz, Warren G. Wintrub,
Director Director
April 28, 2000 April 28, 2000
23
<PAGE> 1
THIRD AMENDMENT
TO THE
AMENDED AND RESTATED LOAN AGREEMENT
This THIRD Amendment to the AMENDED AND RESTATED LOAN AGREEMENT (this
"THIRD AMENDMENT"), dated as of March 1, 2000, 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 100 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 further amended by that certain Second Amendment to the
Amended and Restated Loan Agreement dated as of January 30, 1998 (as so amended,
the "LOAN AGREEMENT"), pursuant to which the Bank, upon certain terms and
conditions, has made a loan to the Borrower;
WHEREAS, the Borrower has requested that certain provisions of the Loan
Agreement be amended in order, among other things, to extend the term of the
loan; 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 Third
Amendment without definition that are defined in the Loan Agreement shall have
the meanings set forth in the Loan Agreement.
<PAGE> 2
-2-
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 following definitions are hereby added to
Section 1 of the Loan Agreement in the proper alphabetical order:
Primary Stations means those Stations located
in Delaware, Pennsylvania and New York and set forth in
Schedule PS hereto.
Second Amended Master Note has the meaning set
forth in Section 2.2 hereof.
Secondary Stations means those Stations which
are not Primary Stations, as set forth in Schedule SS
hereto.
Updated Appraisal Report, an appraisal report
of Akerson & Wiley to the Bank dated February 16, 2000
Updated Appraised Value, with respect to any
Station, means the appraised value of such Station as set
forth in the Updated Appraisal Report
SECTION 2.2. The definitions of Marketing and Master Note in
Section 1 of the Loan Agreement are hereby deleted in their entirety.
SECTION 2.3. All references in the Loan Agreement to the
"Master Note" shall be deemed to be references to the "Second Amended
Master Note."
SECTION 2.4. The definition of Funded Debt to EBITDA Ratio
is hereby deleted in its entirety and the following definition is
substituted in place thereof:
Funded Debt to EBITDA Ratio means the ratio of
(i) Realty's funded indebtedness for borrowed money
(including obligations with respect to leases which would be
capitalized) as carried on the consolidated balance sheet of
Realty 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) Realty's Earnings Before
Interest, Taxes, Depreciation and Amortization, for the
period of four
<PAGE> 3
-3-
consecutive fiscal quarters, ending on the last day of the
fiscal quarter referred to in clause (i) above.
SECTION 2.5. All references to "Marketing" in the Loan
Agreement are hereby deleted. In addition, Exhibit F to the Loan
Agreement (Master Lease Agreement with Marketing) is hereby deleted.
SECTION 2.6. In the definition of Loan in Section 1 of the
Loan Agreement, the amount "$31,844,998.23" is hereby deleted and the
amount "$22,619,574.61" is substituted in place thereof.
SECTION 2.7. In the definition of Maturity Date in Section 1
of the Loan Agreement, the date "November 1, 2000" is hereby deleted
and the date "March 1, 2005" is substituted in place thereof.
SECTION 2.8. In Section 2.1 of the Loan Agreement, the
amount "$31,844,998.23" is hereby deleted and the amount
"$22,619,574.61" is substituted in place thereof.
SECTION 2.9. Section 2.2 of the Loan Agreement is hereby
deleted in its entirety and the following provision is substituted in
place thereof:
SECTION 2.2 The Master Note. The Loan shall be
evidenced by the Second Amended and Restated Master Note of
the Borrower in the principal amount of $22,619,574.61 dated
as of the date hereof (the "Second Amended Master Note").
SECTION 2.10. 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:
FUNDED DEBT TO EBITDA RATIO INTEREST RATE
--------------------------- -------------
.50x or less to 1 LIBOR Rate + 0.750%
.51x - .75x to 1 LIBOR Rate + 0.875%
.76x - 1.00x to 1 LIBOR Rate + 1.000%
1.01x - 1.24x to 1 LIBOR Rate + 1.125%
1.25x - 1.49x to 1 LIBOR Rate + 1.250%
1.50x - 1.74x to 1 LIBOR Rate + 1.375%
1.75x - 1.99x to 1 LIBOR Rate + 1.500%
2.00x - 2.49x to 1 LIBOR Rate + 1.625%
2.50x or greater to 1 LIBOR Rate + 1.750%
<PAGE> 4
-4-
SECTION 2.11. Section 2.4 of the Loan Agreement is hereby
deleted in its entirety and the following provision is substituted in
place thereof:
SECTION 2.4 Repayment of Principal. The
principal amount of the Loan shall be repaid in fifty-nine
(59) consecutive monthly installments payable on the first day
of each calendar month of each calendar year, commencing on
April 1, 2000 to and including February 1, 2005, in the amount
of $175,000 monthly, with the Balloon Payment of
$12,294,574.61 due on the Maturity Date (as reduced by any
prepayments of principal by the Borrower).
The entire principal amount of the Loan
outstanding after the payment scheduled to be made on February
1, 2005, as reduced by any prepayments of principal by the
Borrower, together with all accrued interest and any other
amounts owing to the Bank by the Borrower in connection with
the Loan, shall be paid in full on the Maturity Date (the
"Balloon Payment").
SECTION 2.12. Section 6.13 of the Loan Agreement is hereby
deleted in its entirety and the following provision is substituted in
place thereof:
SECTION 6.13. Sale of Stations. (A) The Borrower
will not sell any Primary Station except upon the election of
the Borrower of one of the following: (a) repayment of the
Loan in an amount at least equal to the Updated Appraised
Value of such Primary Station, or (b) the substitution of one
or more gasoline station properties with an Appraised Value
(such appraisal to be paid for by the Borrower in the case of
Stations that are purchased, and the Updated Appraisal Report
sets forth the value in the case of the substitution of a
Secondary Station) equal to or greater than the Updated
Appraised Value of the Primary Station sold. Prior to the sale
of any Primary Station, in the case of repayment under clause
(a) above, the Borrower shall pay to the Bank an amount at
least equal to the Updated Appraised Value for such Primary
Station. Promptly after receipt of such payment pursuant to
clause (a), the Bank will release the Mortgage relating to the
Primary Station to be sold. Any station(s) substituted for a
Primary Station in accordance with the provisions of this
Section 6.13 shall, prior to or at the time
<PAGE> 5
-5-
of such sale, be made subject to a Mortgage on terms
equivalent to those in effect with regard to the Primary
Station sold. Upon satisfaction of the conditions for
substitution hereunder, any substituted station shall become a
Primary Station hereunder and, where the Bank has not
previously released the Primary Station as provided herein,
the Bank shall release the Mortgage relating to the Primary
Station to be sold. All properties designated for substitution
shall either be (i) purchased from third parties at a price
which approximates its fair market value, provided that the
Appraised Value of such property or properties shall be equal
to or greater than the Updated Appraised Value of the Primary
Station for which it is substituted, and the Borrower shall
provide to the Bank upon its request any information relating
to the property to be purchased and any agreements or
instruments in connection therewith, or (ii) any of the
Secondary Stations which have not been released from their
Mortgages, provided that the Borrower obtains a current date
down endorsement to the existing title insurance policy for
such Secondary Station showing no new encumbrances other than
liens permitted under Section 6.2.
(B) Upon the Borrower's written request from
time to time, the Bank will discharge its Mortgage on any
Secondary Station, provided the Borrower covenants that during
the term of this Loan, as it may be extended, and so long as
the Borrower shall continue to own such Secondary Station,
such Secondary Station shall remain free of mortgage liens and
any other security interests, other than liens permitted under
Section 6.2.
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
<PAGE> 6
-6-
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 Third
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) A Second Amended Master Note executed and delivered by the
Borrower;
(b) A Third Affirmation and Acknowledgment of Amended and Restated
Hazardous Waste and PMPA Indemnification Agreement executed by Properties;
(c) A Third Affirmation and Acknowledgment of Three Party Lease
Agreement executed by Properties;
(d) A favorable opinion from Samuel M. Jones, Esq. or Randi Young
Filip, Esq., each a counsel to the Borrower, Realty and Properties, addressed to
the Bank and dated the date of the execution and delivery of this Third
Amendment, in form, scope and substance satisfactory to the Bank;
(e) Certified copies of all documents relating to the authorization and
execution of this Third Amendment and the documents contemplated hereby and
related authority and organizational documents of the Borrower, Realty and
Properties 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;
(h) The Updated Appraisal Report which the Bank can use to verify that
the ratio of the Loan to the Updated Appraisal Value of the Primary Stations
does not exceed seventy percent (70%); and
(i) Any other document or instrument the Bank may reasonably request.
SECTION 6. MISCELLANEOUS PROVISIONS.
(a) Except as otherwise expressly provided by this Third Amendment, all
of the terms, conditions and provisions of the Loan
<PAGE> 7
-7-
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 Third Amendment and the Loan Agreement
shall be read and construed as one instrument.
(b) THIS THIRD 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 Third Amendment may be executed in any number of counterparts,
and all such counterparts shall together constitute but one instrument. In
making proof of this Third 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 Third 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 Third Amendment (including legal
fees).
[Remainder of Page Intentionally Left Blank]
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Third 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 Third 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: /s/ Michael A. Palmer
-----------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
SECOND AMENDED AND
RESTATED MASTER NOTE
$22,619,574.61 Date: March 1, 2000
FOR VALUE RECEIVED, the undersigned, POWER TEST REALTY COMPANY LIMITED
PARTNERSHIP, a limited partnership organized under the laws of New York
(hereinafter, together with its successors in title and assigns, called the
"Borrower"), by this promissory note (hereinafter called this "Note"),
absolutely and unconditionally promises to pay to the order of FLEET NATIONAL
BANK, a national banking association organized under the laws of the United
States of America (successor to Fleet Bank of Massachusetts, N.A. ("Fleet"),
which was 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.) (hereinafter, together with its successors in title and assigns,
called the "Bank") at the Bank's head offices at 100 Federal Street, Boston,
Massachusetts 02110, the principal sum of Twenty-Two Million Six Hundred
Nineteen Thousand Five Hundred Seventy-Four and 61/100 Dollars ($22,619,574.61),
or, if less, the aggregate unpaid principal amount of the Loan (as defined in
the Loan Agreement) made by the Bank to the Borrower pursuant to the Third
Amendment to the Amended and Restated Loan Agreement between the Bank and the
Borrower dated as of even date herewith (hereinafter, as executed, or if further
varied, amended, modified or supplemented from time to time, as so further
varied, amended, modified or supplemented, called the "Loan Agreement").
This Note is issued in order to further amend and restate the Borrowers
Amended and Restated Master Note dated October 31, 1995 (the "Original Note"),
executed and delivered to Fleet in connection with the Loan Agreement between
the Borrower and Fleet dated as of October 31, 1995, as amended by First
Amendment to the Amended and Restated Loan Agreement dated as of April 18, 1997,
as further amended by Second Amendment to the Amended and Restated Loan
Agreement dated as of January 30, 1998, and is not issued in payment,
satisfaction or
<PAGE> 2
-2-
cancellation of the obligations evidenced by the Original Note, all of which
will be deemed to be continued and to be evidenced by this Note, and is secured
by the Bank's mortgage liens and security interests in property of the Borrower
created pursuant to the agreements and instruments executed and delivered by the
Borrower in connection with such Loan Agreement. The issuance of this Note by
the Borrower shall in no way release, impair or interrupt the continued
perfection and priority of such mortgage liens and security interests in favor
of the Bank as collateral security for the obligations of the Borrower evidenced
hereby.
The Borrower promises to pay interest on the principal sum outstanding
hereunder from time to time from the date hereof until the said principal sum or
the unpaid portion thereof shall have become due and payable at the rates and
terms in all cases in accordance with the terms of the Loan Agreement.
The entire principal amount of this Note shall be payable by the
Borrower to the holder hereof in fifty-nine (59) consecutive monthly
installments of principal on the first day of each month, commencing on April 1,
2000 to and including February 1, 2005, in the amount of $175,000 monthly, with
the Balloon Payment of $12,294,574.61 due on March 1, 2005 (the "Maturity
Date"), as reduced by any prepayments of principal by the Borrower.
On the Maturity Date, there shall become absolutely due and payable
hereunder, and the Borrower hereby promises to pay to the Bank, the balance (if
any) of the principal hereof then remaining unpaid, all of the unpaid interest
accrued hereon and all (if any) other amounts payable on or in respect of this
Note or the indebtedness evidenced hereby.
Each overdue amount (whether of principal, interest or otherwise)
payable on or in respect of this Note or the indebtedness evidenced hereby shall
(to the extent permitted by applicable law) bear interest, from the date on
which such amount shall have become due and payable in accordance with the terms
hereof to the date on which such amount shall be paid to the Bank (whether
before or after judgment), at the rate of interest in effect from time to time
in accordance with the Loan Agreement. The unpaid interest accrued on each
overdue amount in accordance with the foregoing terms of this Paragraph shall
become absolutely due and payable by the Borrower to the Bank on demand by the
Bank. Interest on each overdue amount will continue to accrue, as provided by
the foregoing terms of this Paragraph, and will (to the extent permitted by
applicable law) be compounded monthly until the obligations
<PAGE> 3
-3-
of the Borrower in respect of the payment of such overdue amount shall be
discharged (whether before or after judgment).
All computations of interest payable as provided in this Note shall be
made by the Bank on the basis of the actual number of days elapsed divided by
360.
This Note has been executed and delivered to the Bank by the Borrower
pursuant to the Loan Agreement. Under Section 3-104 of the Uniform Commercial
Code of Massachusetts, this Note is not a negotiable instrument.
Should all or any part of the indebtedness represented by this Note be
collected by action at law, or in bankruptcy, insolvency, receivership or other
court proceedings, or should this Note be placed in the hands of attorneys for
collection after default, the Borrower hereby promises to pay to the Bank, upon
demand by the holder hereof at any time, in addition to principal, interest and
all (if any) other amounts payable on or in respect of this Note or the
indebtedness evidenced hereby, all court costs and reasonable attorneys' fees
and all other reasonable collection charges and expenses incurred or sustained
by or on behalf of the holder of this Note.
The Borrower hereby irrevocably authorizes and empowers any attorney or
attorneys or the Prothonotary or Clerk of any Court of record in the
Commonwealth of Pennsylvania, or in any other jurisdiction which permits the
entry of judgment by confession, at any time after ten (10) days notice to the
Borrower, to appear for the Borrower in such Court in an appropriate action
there brought or to be brought against the Borrower at the suit of the Bank on
this Note, with or without complaint or declaration filed, as of any term or
time, and therein to CONFESS OR ENTER JUDGMENT against the Borrower for all sums
due by the Borrower to the Bank under this Note and the other Loan Documents (as
defined in the Loan Agreement), with or without acceleration of maturity,
including all costs and attorneys' fees. For so doing, this Note or a copy
hereof verified by affidavit shall be a sufficient warrant. The authority to
confess judgment granted herein shall not be exhausted by any exercise thereof
but may be exercised from time to time and at any time as of any term and for
any amount authorized herein. The Borrower expressly authorizes the entry of
repeated judgments under this Paragraph notwithstanding any prior entry of
judgment in the same or any other court for the same obligation or any part
thereof.
THE BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY COUNSEL IN
CONNECTION WITH THE
<PAGE> 4
-4-
EXECUTION AND DELIVERY OF THIS NOTE AND THAT IT UNDERSTANDS THIS PROVISION FOR
CONFESSION OF JUDGMENT, AND WAIVES ANY RIGHT TO NOTICE OR A HEARING WHICH IT
MIGHT OTHERWISE HAVE BEFORE ENTRY OF JUDGMENT.
The Borrower hereby absolutely and irrevocably waives notice of
acceptance, presentment, notice of demand, notice of nonpayment, protest, notice
of protest, notice of dishonor, suit and all other conditions precedent in
connection with the delivery, acceptance, collection and/or enforcement of this
Note or any collateral security therefor, and assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any future occasion.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.10 OF THE LOAN AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note is intended to take effect as a sealed instrument. This Note
has been executed and delivered to the Bank by the Borrower in Boston,
Massachusetts.
<PAGE> 5
IN WITNESS WHEREOF, this SECOND AMENDED AND RESTATED MASTER NOTE has
been duly executed by the undersigned, POWER TEST REALTY COMPANY LIMITED
PARTNERSHIP, on the day and in the year first above written.
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
<PAGE> 1
THIRD AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED
AND RESTATED HAZARDOUS WASTE AND PMPA
INDEMNIFICATION AGREEMENT
This THIRD AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED AND RESTATED
HAZARDOUS WASTE AND PMPA INDEMNIFICATION AGREEMENT (this "THIRD AFFIRMATION") is
made as of this 1st day of March, 2000 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, 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, Properties affirmed its obligations under the Indemnification
Agreement pursuant to a Second Affirmation and Acknowledgment of Amended and
Restated Hazardous Waste and PMPA Indemnification Agreement dated as of January
30, 1998 (the "SECOND AFFIRMATION");
WHEREAS, the execution and delivery of this Third Affirmation is a
condition precedent to the Bank's and the Borrower's agreement to enter into
that certain Third Amendment to the Amended and Restated Loan Agreement of even
date herewith (the "THIRD 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. Properties hereby affirms and acknowledges (i) the continued
validity of the Indemnification Agreement, as amended by the Affirmation and the
Second Affirmation and (ii) that the Indemnification Agreement, as amended by
the Affirmation and the Second Affirmation, 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 Second
Affirmation, and the terms and provisions of the Indemnification Agreement, as
amended by the Affirmation, the Second 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.
2. This Third Affirmation shall be construed according to and governed
by the laws of the Commonwealth of Massachusetts.
[Remainder of Page Intentionally Left Blank]
<PAGE> 3
IN WITNESS WHEREOF, Properties has caused this Third 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: /s/ Michael A. Palmer
--------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "GUARANTY"), dated as of March 1, 2000, 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 Power Test
Realty Company Limited Partnership, a New York limited partnership (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 dated as of January 30, 1998, as further
amended by that certain Third 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
<PAGE> 2
-2-
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 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 dated as of January
30, 1998, as further modified by that certain Third 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.
<PAGE> 3
-3-
"OTHER BUSINESS(ES)" has the meaning set forth in Section 16.2
hereof.
"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.
<PAGE> 4
-4-
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 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
<PAGE> 5
-5-
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
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
<PAGE> 6
-6-
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.
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
<PAGE> 7
-7-
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 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:
<PAGE> 8
-8-
(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 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,
<PAGE> 9
-9-
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.
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 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
<PAGE> 11
-11-
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 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 PricewaterhouseCoopers LLP 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
<PAGE> 13
-13-
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 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 Properties Corp., a Delaware
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
<PAGE> 15
-15-
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 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:
<PAGE> 16
-16-
(x) if to the Guarantor, at 125 Jericho Turnpike, Jericho, New York
11753, Attention: John J. Fitteron, Senior Vice President, Treasurer 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 100 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.
[Remainder of Page Intentionally Left Blank]
<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
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "GUARANTY"), dated as of March 1, 2000,
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 amend its loan arrangement with Power
Test Realty Company Limited Partnership, a New York limited partnership (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 dated as of January 30, 1998, as further
amended by that certain Third 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 thissection 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
<PAGE> 2
-2-
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 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
dated as of January 30, 1998, as further modified by that certain Third
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.
<PAGE> 3
-3-
"OTHER BUSINESS(ES)" has the meaning set forth in section
16.2 hereof.
"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.
<PAGE> 4
-4-
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 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
<PAGE> 5
-5-
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
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
<PAGE> 6
-6-
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.
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
<PAGE> 7
-7-
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 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:
<PAGE> 8
-8-
(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 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 the unaudited consolidated financial statements of the Guarantor as at
January 31, 2000. Such financial statements were prepared in accordance with
generally accepted accounting principles (except for requisite footnotes)
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 January 31, 2000, 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,
<PAGE> 15
-15-
Treasurer 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 100 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.
[Remainder of Page Intentionally Left Blank]
<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: /s/ Michael A. Palmer
------------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
THIRD AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED
AND RESTATED THREE PARTY LEASE AGREEMENT
This THIRD AFFIRMATION AND ACKNOWLEDGMENT OF AMENDED AND RESTATED THREE
PARTY LEASE AGREEMENT (this "THIRD AFFIRMATION") is made as of this 1st day of
March, 2000 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 Three Party Lease 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 "LEASE Agreement");
WHEREAS, Realty affirmed its obligations under the Lease Agreement
pursuant to an Affirmation and Acknowledgment of Amended and Restated Three
Party Lease Agreement dated as of April 18, 1997 (the "AFFIRMATION");
WHEREAS, Properties affirmed its obligations under the Lease Agreement
pursuant to a Second Affirmation and Acknowledgment of Amended and Restated
Three Party Lease Agreement dated as of January 30, 1998 (the "SECOND
Affirmation");
WHEREAS, the execution and delivery of this Third Affirmation is a
condition precedent to the Bank's and the Borrower's agreement to enter into
that certain Third Amendment to the Amended and Restated Loan Agreement of even
date herewith (the "THIRD 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 agrees as follows:
1. Properties hereby affirms and acknowledges (i) the continued
validity of the Lease Agreement, as amended by the Affirmation
and the Second Affirmation and (ii) that the Lease
<PAGE> 2
-2-
Agreement, as amended by the Affirmation and the Second
Affirmation, remains in full force and effect. Properties agrees
that the obligations of Properties to the Bank under the Lease
Agreement, as amended by the Affirmation, the Second Affirmation
and hereby, and the terms and provisions of the Lease Agreement,
as amended by the Affirmation and the Second Affirmation, 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
Third Amendment.
2. This Third Affirmation shall be construed according to and
governed by the laws of the Commonwealth of Massachusetts.
[Remainder of Page Intentionally Left Blank]
<PAGE> 3
IN WITNESS WHEREOF, Properties has caused this Third 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: /s/ Michael A. Palmer
-----------------------------
Name: Michael A. Palmer
Title: Vice President
<PAGE> 1
SELECTED FINANCIAL DATA
-------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED FINANCIAL DATA Years ended January 31,
----------------------------------------------------------------
(in thousands, except per share amounts) 2000 1999 1998 (a) 1997 (a) 1996 (a)
--------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total revenues $ 63,859 $ 61,341 $ 62,817 $ 892,456 $ 798,967
Earnings (loss) from continuing operations
before income taxes and cumulative effect
of accounting change
26,105 12,838 13,546(b) (14,395)(c) 21,058
Net earnings (loss) 15,014 10,056 7,944 (9,176) 12,634(d)
Diluted earnings (loss) per common share:
Continuing operations .73 .17 .59 (.74) .97(d)
Discontinued operations -- .19 .01 .01 .02
Net earnings (loss) .73 .36 .60 (.72) 1.00(d)
Cash dividends per share:
Preferred 1.775 1.775 -- -- --
Common .40 .40 .12 .12 .06
Total assets 260,752 261,084 265,661 290,664 275,006
Total debt 43,993 39,742 40,526 41,592 51,586
Stockholders' equity 141,811 138,031 138,593 100,472 110,574
</TABLE>
(a) Includes financial results of the petroleum marketing business prior to its
spin-off 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."
PRO FORMA SUPPLEMENTAL FINANCIAL HIGHLIGHTS AND SELECTED DATA (Unaudited)
<TABLE>
<CAPTION>
(in thousands, except number of properties) 2000 1999 1998(e) 1997(e) 1996(e)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
FISCAL YEAR ENDED JANUARY 31,
Revenues from rental properties $ 58,889 $ 58,869 $ 59,449 $ 58,653 $ 57,177
Other income 4,970 2,472 3,368 1,570 5,726
-------- -------- -------- -------- --------
Total revenues 63,859 61,341 62,817 60,223 62,903
Adjusted EBITDA (f) 41,519 39,874 41,516 45,259 41,048
Net earnings 15,014 10,056 6,213 6,049 8,970(d)
Capital expenditures 14,979 25,222 11,259 6,913 6,260
AS OF JANUARY 31,
Real estate before accumulated depreciation 316,002 307,793 284,092 190,524 183,621
Total assets 260,752 261,084 265,661 155,164 150,508
Capitalization:
Total debt 43,993 39,742 40,526 41,592 51,586
Stockholders' equity 141,811 138,031 138,593 45,931 60,263
-------- -------- -------- -------- --------
Total capitalization 185,804 177,773 179,119 87,523 111,849
NUMBER OF PROPERTIES:
Owned 757 740 736 441 439
Leased 361 379 404 732 734
-------- -------- -------- -------- --------
Total properties 1,118 1,119 1,140 1,173 1,173
</TABLE>
(e) 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 separate, stand-alone entity during such
periods nor is the information presented necessarily indicative of future
results.
(f) Adjusted EBITDA is defined as earnings from continuing operations before
interest expense, income taxes, depreciation and amortization, adjusted to
exclude environmental expense, stock option, change of control and
litigation items and other income (except mortgage receivable interest
income). Adjusted EBITDA provides additional information for evaluating
financial results and is presented solely as a supplemental measure.
Adjusted EBITDA is not intended to represent cash flow and should not be
construed as an alternative to either cash flow, net income, or any other
measure of financial performance presented in accordance with generally
accepted accounting principles.
6
<PAGE> 2
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
GENERAL
Prior to the spin-off of its petroleum marketing business to
stockholders on March 21, 1997, Getty Realty Corp. was principally engaged in
the ownership and leasing of real estate as well as the marketing and
distribution of petroleum products. In December 1998, we sold the Pennsylvania
and Maryland heating oil business. The results of operations of the heating oil
business have been reclassified as discontinued in the accompanying financial
statements for the years ended January 31, 1999 and 1998. We are now a real
estate company specializing in service stations, convenience stores and
petroleum marketing terminals. We lease most of our properties on a long-term
net basis to the spun-off company, Getty Petroleum Marketing Inc. ("Marketing").
In order to make the following discussion of our results of operations
more meaningful, the financial results of the spun-off petroleum marketing
business and the sold heating oil business, which is shown as a discontinued
operation, have been excluded from the narrative presented below. The net
earnings of Marketing included in the accompanying consolidated statement of
operations for the period prior to its spin-off, February 1, 1997 to March 21,
1997, were $1.7 million. The net earnings of the discontinued heating oil
business were $2.6 million and $0.1 million for the fiscal years ended January
31, 1999 and 1998, respectively. See Notes 2 and 3 to the consolidated financial
statements for separate financial information relating to the spun-off petroleum
marketing business and the discontinued heating oil business.
Our financial results largely depend on rental income from Marketing
and other lessees and sublessees. Our financial results are materially dependent
upon the ability of Marketing to meet its obligations under the master lease
entered into on February 1, 1997 (the "Master Lease"); however, we do not
anticipate that Marketing will have difficulty in making all required rental
payments in the foreseeable future.
RESULTS OF OPERATIONS
FISCAL YEAR ENDED JANUARY 31, 2000 COMPARED TO FISCAL YEAR ENDED JANUARY 31,
1999
Revenues from rental properties for each of the years ended January 31,
2000 ("fiscal 2000") and 1999 ("fiscal 1999") were $58.9 million. Approximately
$56.4 million of these rentals for each fiscal year were from properties leased
to Marketing under the Master Lease.
Other income was $5.0 million for fiscal 2000 as compared with $2.5
million for fiscal 1999. The $2.5 million increase was primarily due to higher
gains on dispositions of real estate of $1.8 million and the settlement of a
lawsuit resulting in the elimination of a $1.2 million reserve, partially offset
by lower investment income.
Rental property expenses, which are principally comprised of rent
expense and real estate taxes, decreased from fiscal 1999 by $0.8 million (6.1%)
to $12.1 million for fiscal 2000 due to a reduction in the number of properties
leased.
Environmental and maintenance expenses for fiscal 2000 were $6.8
million, a decrease of $10.5 million from the prior year. The current year
included an environmental charge of $6.6 million, of which $4.4 million
represented a change in estimated remediation costs associated with
contamination discovered during work performed to meet certain federal
underground storage tank standards and revisions to estimates at other sites
where remediation is ongoing. The prior year included an environmental charge of
$16.9 million, of which $14.8 million represented a change in estimated
remediation costs or revisions to prior estimates.
General and administrative expenses for fiscal 2000 were $5.6 million,
a decrease of $0.5 million from the prior year. The decrease was principally due
to lower legal and professional fees, partially offset by a higher retrospective
insurance charge relating to the spun-off petroleum marketing business. Included
in general and administrative expenses for fiscal 2000 and 1999 are $749
thousand and $960 thousand, respectively, of net fees paid by the Company to
Marketing for certain administrative and technical services performed under a
services agreement.
Depreciation and amortization for fiscal 2000 was $10.4 million, an
increase of $1.0 million over the prior year as a result of capital expenditures
and property acquisitions.
Interest expense for fiscal 2000 was $2.7 million, comparable to fiscal
1999.
7
<PAGE> 3
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
----------------------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
FISCAL YEAR ENDED JANUARY 31, 1999 COMPARED TO FISCAL YEAR ENDED JANUARY 31,
1998
Revenues from rental properties for fiscal 1999 were $58.9 million, a
1.0% decrease from the $59.4 million realized for the year ended January 31,
1998 ("fiscal 1998"). Approximately $56.4 million and $57.0 million of these
rentals for fiscal 1999 and 1998, respectively, were from properties leased to
Marketing under the Master Lease.
Other income was $2.5 million for fiscal 1999 as compared with $3.4
million for fiscal 1998. The $0.9 million decrease was primarily due to $0.7
million of management fees for administrative and other services provided to
Power Test Investors Limited Partnership ("PTI") in fiscal 1998, which were
eliminated as a result of the merger of PTI into the Company on January 30,
1998.
Rental property expenses, which are principally comprised of rent
expense and real estate taxes, decreased from fiscal 1998 by $0.7 million (5.0%)
to $12.9 million for fiscal 1999 due to a decrease in the number of properties
leased.
Environmental and maintenance expenses for fiscal 1999 were $17.3
million, an increase of $8.7 million from the prior year. Fiscal 1999 included
an environmental charge of $16.9 million, of which $14.8 million represented a
change in estimated remediation costs associated with contamination discovered
during work performed to meet the federal underground storage tank standards and
revisions to estimates on previously identified sites where remediation is
ongoing. The prior year included an environmental charge of $8.3 million, of
which $6.2 million represented a change in estimated remediation costs or
revisions to prior estimates.
General and administrative expenses for fiscal 1999 were $6.1 million,
a decrease of $7.2 million from the prior year. The decrease was principally due
to a charge of $8.7 million recorded during fiscal 1998 for stock compensation
resulting from a change in the Company's stock price, partially offset by higher
insurance costs, legal and other professional fees during fiscal 1999.
Depreciation and amortization for fiscal 1999 was $9.4 million,
comparable to fiscal 1998.
Interest expense for fiscal 1999 was $2.7 million, a decrease of $2.3
million from the prior year. The decrease was principally due to the elimination
of capitalized lease obligations as a result of the merger of PTI into the
Company on January 30, 1998.
During fiscal 1998, the Company recorded a charge of $2.2 million
related to change of control agreements in connection with the spin-off of
Marketing.
LIQUIDITY AND CAPITAL RESOURCES
Our principal sources of liquidity are cash flows from our business and
short-term uncommitted lines of credit with two banks. Management believes that
cash requirements for our business, including capital expenditures and debt
service can be met by cash flows from operations, available cash and equivalents
and credit lines. As of January 31, 2000, we had lines of credit amounting to
$25 million, which may be utilized for working capital borrowings and letters of
credit. As of January 31, 2000, we were utilizing $14.8 million of the lines of
credit for short-term borrowings and $3.1 million in connection with outstanding
letters of credit. Borrowings under the lines of credit are unsecured and bear
interest at the prime rate or, at our option, LIBOR plus 1.0% or 1.1%. The lines
of credit are subject to renewal at the discretion of the banks. Although we
expect that the existing sources of liquidity will be sufficient to meet our
expected business and debt service requirements, we may be required to obtain
additional sources of capital in the future, which we believe are available.
In order to improve cash flow for fiscal 2001, we recently negotiated
an extension of the maturity date of a $23 million mortgage loan from November
1, 2000 to March 1, 2005. The mortgage loan calls for monthly principal payments
of $175,000 with the balance payable on maturity in 2005.
During fiscal 2000 and 1999, we declared quarterly cash common stock
dividends of $.10 per share and quarterly preferred stock dividends of $.44375
per share. These dividends aggregated $10.6 million for each of fiscal 2000 and
1999. During the first quarter of fiscal 2001, the Board increased the quarterly
cash common stock dividend to $.15 per share.
8
<PAGE> 4
continued
---------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
In December 1999, the Board of Directors authorized the purchase, from
time to time, in the open market or in private transactions, of up to an
aggregate of 300,000 shares of Common Stock and Series A Participating
Convertible Redeemable Preferred Stock. As of January 31, 2000, we had
repurchased 60,016 shares of common stock and 700 shares of preferred stock at
an aggregate cost of $0.7 million. In February 2000, we completed this stock
buyback program, which resulted in the repurchase of 295,600 shares of common
stock and 4,400 shares of preferred stock at an aggregate cost of $3.6 million.
In March 2000, the Board approved the purchase of up to an aggregate of 500,000
additional shares of the Company's common and preferred stock. As of April 18,
2000, we had repurchased 460,186 shares of common and preferred stock at an
aggregate cost of $5.8 million.
Capital expenditures, including acquisitions, for fiscal 2000, 1999 and
1998 were $15.0 million, $25.2 million and $11.3 million, respectively,
including $4.7 million, $17.9 million and $8.0 million, respectively, for the
replacement of underground storage tanks and vapor recovery facilities at
gasoline stations. These expenditures and certain environmental liabilities and
obligations continue to be our responsibility after the spin-off.
ENVIRONMENTAL MATTERS
We are subject to numerous 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.
Under the Master Lease with Marketing, we committed to a program to
bring the leased properties with known environmental problems to regulatory
closure and, thereafter, transfer all future environmental risks to Marketing.
Upon achieving closure of each individual site, our environmental liability
under the Master Lease for that site will be satisfied, and future remediation
obligations will be the responsibility of Marketing.
We have 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, and all other environmental liabilities and
obligations arising out of discharges with respect to properties containing USTs
that had not been upgraded to meet the 1998 federal standards that were
discovered prior to the date the USTs were upgraded to meet the 1998 federal
standards (collectively, the "Realty Environmental Liabilities"). We collect
recoveries from state UST remediation funds related to the Realty Environmental
Liabilities.
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, we consider, among other things, enacted laws
and regulations, assessments of contamination, currently available technologies
for treatment, alternative methods of remediation and prior experience. These
estimates are subject to change as these contingencies become more clearly
defined and remediation treatment progresses. For fiscal 2000, 1999 and 1998,
net environmental expenses included in our consolidated statements of operations
were $6.6 million, $16.9 million and $8.3 million, respectively, which amounts
were net of probable recoveries from state UST remediation funds.
9
<PAGE> 5
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
As of January 31, 2000 and 1999, we had accrued $26.4 million and $34.3
million, respectively, as management's best estimate for environmental
remediation costs. As of January 31, 2000 and 1999, we had also recorded $9.9
million and $10.4 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, we believe it is possible that such expenditures could be
substantially higher. Any additional amounts will be reflected in our 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, we believe that these costs will not have a material adverse
effect on our financial position.
We 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 our financial position or operations or our lessees
and could require us to make substantial additional expenditures for future
remediation or the installation and operation of required environmental or
pollution control systems and equipment.
YEAR 2000
We implemented a comprehensive program to address the Year 2000 issues
which was completed as of December 31, 1999. As a result of these efforts, we
have not experienced any disruptions to our systems or operations. The cost of
these Year 2000 efforts was not material since most of the work was performed by
Marketing personnel pursuant to the administrative services agreement. Although
unlikely, the possibility still exists that interruptions to our systems could
occur from the Year 2000 issue.
SPECIAL FACTORS REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. When we use the words "believes," "expects,"
"plans," "estimates" and similar expressions, we intend to identify
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance and achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. These factors include, but are not limited to: risks
associated with owning and leasing real estate generally; dependence on
Marketing as a lessee and on rentals from companies engaged in the petroleum
marketing and convenience store businesses; competition for locations and
tenants; risk of tenant non-renewal; the effects of regulation; our expectations
as to the cost of completing environmental remediation; and potential effects of
Year 2000 issues.
As a result of these and other factors, we may experience material
fluctuations in future operating results on a quarterly or annual basis, which
could materially and adversely affect our business, financial condition,
operating results and stock price. An investment in our stock involves various
risks, including those mentioned above and elsewhere in this report and those
which are detailed from time to time in our other filings with the Securities
and Exchange Commission.
You should not place undue reliance on forward-looking statements,
which reflect our view only as of the date hereof. We undertake no obligation to
publicly release revisions to these forward-looking statements that reflect
future events or circumstances or reflect the occurrence of unanticipated
events.
10
<PAGE> 6
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
For the years ended January 31,
-------------------------------------
(in thousands, except per share amounts) 2000 1999 1998(*)
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Revenues from rental properties $ 58,889 $ 58,869 $ 59,449
Other income 4,970 2,472 3,368
---------- ---------- ----------
63,859 61,341 62,817
Equity in earnings of Getty Petroleum Marketing Inc. -- -- 2,931
---------- ---------- ----------
63,859 61,341 65,748
---------- ---------- ----------
Rental property expenses 12,126 12,910 13,583
Environmental and maintenance expenses 6,813 17,320 8,634
General and administrative expenses 5,642 6,129 13,297
Depreciation and amortization 10,425 9,418 9,514
Interest expense 2,748 2,726 5,008
Change of control charge -- -- 2,166
---------- ---------- ----------
37,754 48,503 52,202
---------- ---------- ----------
Earnings from continuing operations before provision for income taxes 26,105 12,838 13,546
Provision for income taxes 11,091 5,337 5,697
---------- ---------- ----------
Net earnings from continuing operations 15,014 7,501 7,849
---------- ---------- ----------
Discontinued operations:
Earnings (loss) from operations, net of income taxes -- (119) 95
Gain on disposal, net of income taxes -- 2,674 --
---------- ---------- ----------
Net earnings from discontinued operations -- 2,555 95
---------- ---------- ----------
Net earnings 15,014 10,056 7,944
Preferred stock dividends 5,128 5,128 --
---------- ---------- ----------
Net earnings applicable to common stockholders $ 9,886 $ 4,928 $ 7,944
========== ========== ==========
Basic earnings per common share:
Continuing operations $ .73 $ .17 $ .60
Discontinued operations -- .19 .01
Net earnings .73 .36 .60
Diluted earnings per common share:
Continuing operations .73 .17 .59
Discontinued operations -- .19 .01
Net earnings .73 .36 .60
Weighted average common shares outstanding:
Basic 13,563 13,566 13,152
Diluted 13,565 13,571 13,348
</TABLE>
(*) Includes financial results of the petroleum marketing business prior to its
spin-off to the Company's stockholders on March 21, 1997.
See accompanying notes.
11
<PAGE> 7
CONSOLIDATED BALANCE SHEETS
---------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
January 31,
----------------------
(in thousands, except share data) 2000 1999
--------- ---------
<S> <C> <C>
ASSETS:
Real Estate:
Land $ 136,039 $ 131,976
Buildings and improvements 179,963 175,817
--------- ---------
316,002 307,793
Less--accumulated depreciation and amortization 74,502 68,045
--------- ---------
Real estate, net 241,500 239,748
Cash and equivalents 651 657
Mortgages and accounts receivable, net 6,024 6,975
Recoveries from state underground storage tank funds 9,883 10,369
Prepaid expenses and other assets 2,694 3,335
--------- ---------
Total assets $ 260,752 $ 261,084
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Borrowings under credit lines $ 14,800 $ 4,500
Mortgages payable 29,193 35,242
Accounts payable and accrued expenses 12,440 18,042
Environmental remediation costs 26,424 34,251
Deferred income taxes 36,084 30,210
Income taxes payable -- 808
--------- ---------
Total liabilities 118,941 123,053
--------- ---------
Commitments and contingencies (Notes 4 and 5)
Stockholders' equity:
Preferred stock, par value $.01 per share; authorized
20,000,000 shares for issuance in series of which 3,000,000 shares
are classified as Series A Participating Convertible Redeemable
Preferred; issued 2,888,798 at January 31, 2000 and 1999 72,220 72,220
Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 13,567,335 at January 31, 2000
and 13,566,233 at January 31, 1999 136 136
Paid-in capital 67,036 67,021
Retained earnings (deficit) 3,114 (1,346)
Preferred stock held in treasury, at cost (700 shares at January 31, 2000) (14) --
Common stock held in treasury, at cost (59,916 shares at January 31, 2000) (681) --
--------- ---------
Total stockholders' equity 141,811 138,031
--------- ---------
Total liabilities and stockholders' equity $ 260,752 $ 261,084
========= =========
</TABLE>
See accompanying notes.
12
<PAGE> 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
---------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
For the years ended January 31,
--------------------------------
(in thousands) 2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 15,014 $ 10,056 $ 7,944
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 10,425 9,418 9,514
Deferred income taxes 5,874 491 (1,061)
Net earnings from discontinued operations -- (2,555) (95)
Gain on dispositions of real estate (3,255) (1,495) (730)
Equity in net earnings of Getty Petroleum Marketing Inc. -- -- (1,731)
Change of control charge -- -- 2,166
Stock option (credit) charge -- (110) 6,432
Changes in assets and liabilities, net of effect of
acquisitions and dispositions:
Mortgages and accounts receivable 951 547 (940)
Recoveries from state underground storage tank funds 486 5,018 830
Prepaid expenses and other assets 478 327 (1,184)
Accounts payable and accrued expenses (5,602) (484) (1,878)
Environmental remediation costs (7,827) (4,046) (7,837)
Income taxes payable (808) 808 (1,426)
-------- -------- --------
Net cash provided by continuing operating activities 15,736 17,975 10,004
Net cash provided by (used in) discontinued operations -- (1,916) 1,636
-------- -------- --------
Net cash provided by operating activities 15,736 16,059 11,640
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,817) (18,860) (8,057)
Property acquisitions (10,162) (6,362) (3,202)
Proceeds from disposition of discontinued operations -- 7,661 --
Proceeds from dispositions of real estate 6,220 3,419 2,234
Cash from acquisition of Power Test
Investors Limited Partnership, net -- -- 1,757
-------- -------- --------
Net cash used in investing activities (8,759) (14,142) (7,268)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit lines 10,300 4,500 --
Mortgage borrowings -- -- 306
Repayment of mortgages payable (6,049) (5,284) (5,287)
Payments under capital lease obligations -- -- (6,373)
Cash dividends (10,554) (10,554) (1,577)
Stock options, common and treasury stock, net (680) 46 7,208
-------- -------- --------
Net cash used in financing activities (6,983) (11,292) (5,723)
-------- -------- --------
Net decrease in cash and equivalents (6) (9,375) (1,351)
Cash and equivalents at beginning of year 657 10,032 11,383
-------- -------- --------
Cash and equivalents at end of year $ 651 $ 657 $ 10,032
======== ======== ========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 2,438 $ 2,794 $ 5,009
Income taxes, net 6,628 4,653 3,834
</TABLE>
See accompanying notes.
13
<PAGE> 9
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. and its wholly-owned subsidiaries (the
"Company"). The Company is a real estate company specializing in the ownership
and leasing of service stations, convenience stores and petroleum marketing
terminals. All significant intercompany accounts and transactions have been
eliminated.
Prior to the spin-off of its petroleum marketing business to its
stockholders on March 21, 1997, the Company was principally engaged in the
ownership and leasing of real estate as well as the marketing and distribution
of petroleum products. In December 1998, the Company sold its heating oil
business, Aero Oil Company. The Company now leases most of its properties on a
long-term net basis to the spun-off company, Getty Petroleum Marketing Inc.
("Marketing"). 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. For additional
information regarding the spin-off, see Note 2. The results of operations of the
heating oil business have been reclassified as discontinued in the accompanying
financial statements for the years ended January 31, 1999 and 1998. For
additional information regarding the sold heating oil business, see Note 3.
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 range from 16 to 25 years for buildings and improvements.
Insurance: Prior to the spin-off, the Company was self-insured for
workers' compensation, general liability and vehicle liability up to
predetermined amounts above which third-party insurance applies. Since the
spin-off, the Company has maintained insurance coverage subject to modest
deductibles. Accruals are based on 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.
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. 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.
Earnings per Common Share: Basic earnings per common share is computed
by dividing net earnings less preferred dividends by the weighted average number
of common shares outstanding during the year. Diluted earnings per common share
also gives effect to the potential dilution from the exercise of stock options
in the amounts of 2,000 shares, 5,000 shares and 196,000 shares for the years
ended January 31, 2000, 1999 and 1998, respectively.
For the years ended January 31, 2000 and 1999, conversion of the Series
A Participating Convertible Redeemable Preferred stock (which was issued on
January 30, 1998) into common stock utilizing the if-converted method would have
been antidilutive and therefore conversion was not assumed for purposes of
computing diluted earnings per common share.
14
<PAGE> 10
continued
---------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
2. SPIN-OFF
On March 21, 1997, the Company spun-off its petroleum marketing
business to its stockholders. The Company retained its real estate business and
leased most of its properties on a long-term net basis to Marketing.
As part of the separation of the petroleum marketing business from the
real estate business, the Company and Marketing entered into various agreements
which addressed the allocation of assets and liabilities between them and govern
future relationships. These agreements include the Reorganization and
Distribution Agreement, Master Lease Agreement, Tax Sharing Agreement and
Trademark License Agreement.
Under the Services Agreement, Marketing provides certain administrative
and technical services to the Company and the Company provides certain 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 $749,000 for the year ended January 31,
2000 and $960,000 for each of the years ended January 31, 1999 and 1998 and are
included in general and administrative expenses in the consolidated statements
of operations.
The following is a summary of the financial results of the Marketing
business included in the accompanying consolidated statement of operations for
the fiscal 1998 period from February 1, 1997 to March 21, 1997. 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 that period.
<TABLE>
<CAPTION>
Year ended January 31,
----------------------
(in thousands) 1998
------
<S> <C>
Earnings before income taxes $2,931
Provision for income taxes 1,200
------
Net earnings $1,731
======
</TABLE>
3. DISCONTINUED OPERATIONS
In December 1998, the Company sold its heating oil and propane
business, Aero Oil Company. Proceeds from the sale were $7,661,000 and resulted
in a pre-tax gain of $4,576,000 ($2,674,000 after-tax).
Summary operating results of the discontinued heating oil operations is
as follows:
<TABLE>
<CAPTION>
Years ended January 31,
-----------------------
(in thousands) 1999 1998
-------- --------
<S> <C> <C>
Revenues $ 18,169 $ 27,022
======== ========
Earnings before income taxes $ 4,373(a) $ 164
Provision for income taxes 1,818 69
-------- --------
Net earnings $ 2,555 $ 95
========= ========
</TABLE>
(a) Includes pre-tax gain of $4,576 on disposal of the business.
4. LEASES
Effective February 1, 1997, the Company and Marketing entered into the
Master Lease Agreement (the "Master Lease") under which, as of January 31, 2000,
1,013 retail outlets and 9 terminal facilities (the "Properties") were 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 requires the Company's consent. The Master Lease is a
"triple-net" lease, under which Marketing is responsible 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, the Master Lease has been
accounted for as an operating lease.
15
<PAGE> 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
Rent for each of the Properties was set using the fair market value of
each Property, assuming the USTs had been upgraded to meet the 1998 federal
standards and the Properties were free of known environmental contamination,
since the Company is responsible for these items known at the date of the
spin-off. Rent for each Property will increase at the end of each five-year
period, commencing February 1, 2002, by the net increase in the Consumer Price
Index for all items in the Northeast Region during the period, but not more than
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 up 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, a shorter period as provided in the
underlying lease), 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. However, prior to the commencement of any sublease term,
Marketing must remove any USTs on the Property and thereafter perform all
requisite environmental investigations and/or remediations. Marketing has this
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 facilities and the premises subject to third-party
leases.
Revenues from rental properties for the years ended January 31, 2000,
1999 and 1998, were $58,889,000, $58,869,000 and $59,449,000, respectively, of
which $56,363,000, $56,411,000 and $57,001,000, respectively, was received from
Marketing under the Master Lease.
Future minimum annual rentals receivable from Marketing under the
Master Lease and from other lessees, which have initial terms in excess of one
year as of January 31, 2000, are as follows (in thousands):
<TABLE>
<CAPTION>
Other
Years ending January 31, Marketing Lessees Total
- - - - ------------------------ --------- --------- --------
<S> <C> <C> <C>
2001 $ 56,103 $ 2,289 $ 58,392
2002 55,696 1,878 57,574
2003 55,121 1,494 56,615
2004 54,297 1,209 55,506
2005 53,661 930 54,591
Thereafter 359,177 4,563 363,740
--------- --------- --------
$ 634,055 $ 12,363 $646,418
========= ========= ========
</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 (in thousands):
<TABLE>
<CAPTION>
Years ending January 31,
- - - - ------------------------
<S> <C>
2001 $10,936
2002 9,775
2003 8,228
2004 6,958
2005 5,663
Thereafter 15,313
-------
$56,873
=======
</TABLE>
16
<PAGE> 12
CONTINUED
-----------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
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 claims
relating to Marketing's business. These 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.
Prior to the spin-off, the Company was self-insured for workers'
compensation, general liability and vehicle liability up to predetermined
amounts above which third-party insurance applies. Since the spin-off, the
Company has maintained insurance coverage subject to modest deductibles. The
Company's consolidated statements of operations for the fiscal years ended
January 31, 2000, 1999 and 1998 included, in general and administrative expense,
charges of $1,362,000, $518,000 and $161,000, respectively, for insurance. As of
January 31, 2000 and 1999, the Company's consolidated balance sheets included,
in accounts payable and accrued expenses, $2,269,000 and $4,361,000,
respectively, relating to insurance obligations arising prior to the spin-off of
the Marketing business.
The Company's financial results largely depend on rental income from
Marketing and to a lesser extent on other lessees and sublessees, and are
therefore materially dependent upon the ability of Marketing to meet its
obligations under the Master Lease. 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, however, does not anticipate that Marketing will have difficulty in
making all required rental payments for the foreseeable future.
6. DEBT
Mortgages payable consists of (in thousands):
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
Mortgage loan due through November 1, 2000 $ 4,184 $ 8,344
Mortgage loan due through March 1, 2005 22,970 24,730
Real estate mortgages, bearing interest at a weighted average interest
rate of 8.11%, due in varying amounts through May 1, 2019 2,039 2,168
-------- --------
$ 29,193 $ 35,242
======== ========
</TABLE>
Aggregate principal payments in subsequent fiscal years are as follows
(in thousands): 2001--$6,409; 2002--$2,230; 2003--$2,680; 2004--$2,211;
2005--$2,539 and $13,124 thereafter.
As of January 31, 2000, the mortgage loan due through November 1, 2000
provides for interest at LIBOR plus .875% to 1.75% per annum, depending on the
ratio of Funded Debt, as defined. Based on such ratio as of January 31, 2000,
the interest rate is LIBOR plus 1.0% which amounted to 6.86%. Principal payments
are $218,000 per month through October 1, 2000 with the balance of $2,222,000
due on November 1, 2000.
The mortgage loan due March 1, 2005, as amended on March 1, 2000,
provides for interest at LIBOR plus .75% to 1.75% per annum, depending on the
ratio of Funded Debt, as defined. Based on such ratio as of January 31, 2000,
the interest rate would have been LIBOR plus 1.125% which amounts to 6.98%.
Principal payments are $175,000 per month through February 1, 2005, with the
balance of $12,295,000 due on March 1, 2005.
Certain mortgages payable are collateralized by real estate having an
aggregate net book value of approximately $73,890,000 as of January 31, 2000.
As of January 31, 2000, the Company had uncommitted lines of credit
with two banks in the aggregate amount of $25,000,000, of which $14,800,000 was
utilized for short-term borrowings and $3,053,000 was utilized in the form of
outstanding letters of credit relating to insurance obligations. Borrowings
under the 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. The lines of credit
are subject to renewal at the discretion of each bank.
17
<PAGE> 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
7. ENVIRONMENTAL REMEDIATION COSTS
The Company is subject to numerous 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, 2000, 1999
and 1998, net environmental expenses included in the Company's consolidated
statements of operations were $6,648,000, $16,905,000 and $8,255,000,
respectively, which amounts were net of probable recoveries from state UST
remediation funds.
Under the Master Lease, 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 to Marketing. 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, and all other environmental liabilities and obligations arising
out of discharges with respect to properties containing USTs that had not been
upgraded to meet the 1998 federal standards that were discovered prior to the
date the USTs were upgraded to meet the 1998 federal standards. The Company
collects recoveries from state UST remediation funds related to these
environmental obligations.
As of January 31, 2000 and 1999, the Company had accrued $26,424,000
and $34,251,000, respectively, as management's best estimate for environmental
remediation costs. As of January 31, 2000 and 1999, the Company had also
recorded $9,883,000 and $10,369,000, 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
future environmental expenditures may have a significant impact on results of
operations for any single fiscal year or interim period, the Company currently
believes that these costs will not have a material adverse effect on the
Company's financial position.
8. INCOME TAXES
The provision for income taxes is summarized as follows (in thousands):
<TABLE>
<CAPTION>
2000 1999 1998
------- ------ ------
<S> <C> <C> <C>
Continuing operations $11,091 $5,337 $5,697
Discontinued operations:
Operations -- (84) 69
Disposal -- 1,902 --
------- ------ ------
-- 1,818 69
------- ------ ------
Provision for income taxes $11,091 $7,155 $5,766
======= ====== ======
</TABLE>
The provision for income taxes is comprised as follows (in thousands):
<TABLE>
<CAPTION>
2000 1999 1998
------- ------ ------
<S> <C> <C> <C>
Federal:
Current $ 2,260 $5,314 $2,697
Deferred 5,817 (120) 1,557
State and local:
Current 735 966 990
Deferred 2,279 995 522
------- ------ ------
Provision for income taxes $11,091 $7,155 $5,766
======= ====== ======
</TABLE>
18
<PAGE> 14
CONTINUED
-----------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
The tax effects of temporary differences which comprise the deferred
tax assets and liabilities are as follows (in thousands):
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
Real estate $(46,893) $(44,028)
Environmental remediation costs, net 11,080 13,257
Other accruals 2,723 1,576
Other (2,994) (1,015)
-------- --------
Net deferred tax liabilities $(36,084) $(30,210)
======== ========
</TABLE>
The following is a reconciliation of the expected statutory federal
income tax provision and the actual provision for income taxes (in thousands):
<TABLE>
<CAPTION>
2000 1999 1998
------- ------ ------
<S> <C> <C> <C>
Expected provision at statutory federal income tax rate $ 9,137 $5,910 $4,661
State and local income taxes, net of federal benefit 1,959 1,288 994
Other (5) (43) 111
------- ------ ------
Provision for income taxes $11,091 $7,155 $5,766
======= ====== ======
</TABLE>
9. STOCKHOLDERS' EQUITY
A summary of the changes in stockholders' equity for the three years
ended January 31, 2000 is as follows:
<TABLE>
<CAPTION>
Preferred Stock
Held in Treasury,
Preferred Stock Common Stock Retained at Cost
------------------- ------------------- Paid-In Earnings -----------------
(in thousands, except per share amounts) Shares Amount Shares Amount Capital (Deficit) Shares Amount
-------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, February 1, 1997 -- $ -- 13,583 $ 1,358 $120,293 $ (7,215) -- $ --
Net earnings 7,944
Spin-off of Marketing (56,272)
Cash dividends--
Common--$.12 per share (1,577)
Issuance of treasury stock, net (1)
Stock options 863 87 15,679
Merger transaction 2,889 72,220 (883) (1,309) (12,614)
-------- -------- -------- -------- -------- --------- -------- --------
Balance, January 31, 1998 2,889 72,220 13,563 136 67,085 (848) -- --
Net earnings 10,056
Cash dividends:
Common--$.40 per share (5,426)
Preferred--$1.775 per share (5,128)
Issuance of common stock 2 33
Stock options 1 (97)
-------- -------- -------- -------- -------- --------- -------- --------
Balance, January 31, 1999 2,889 72,220 13,566 136 67,021 (1,346) -- --
Net earnings 15,014
Cash dividends:
Common--$.40 per share (5,426)
Preferred--$1.775 per share (5,128)
Purchase of preferred stock
for treasury (1) (14)
Purchase of common stock
for treasury, net
Stock options 1 15
-------- -------- -------- -------- -------- --------- -------- --------
Balance, January 31, 2000 2,889 $ 72,220 13,567 $ 136 $ 67,036 $ 3,114(a) (1) $ (14)
======== ======== ======== ======== ======== ========= ======== ========
<CAPTION>
Common Stock
Held in Treasury,
at Cost
------------------
(in thousands, except per share amounts) Shares Amount Total
-------- -------- --------
<S> <C> <C> <C>
Balance, February 1, 1997 (886) $(13,964) $100,472
Net earnings 7,944
Spin-off of Marketing (56,272)
Cash dividends--
Common--$.12 per share (1,577)
Issuance of treasury stock, net 3 41 40
Stock options 15,766
Merger transaction 883 13,923 72,220
-------- -------- --------
Balance, January 31, 1998 -- -- 138,593
Net earnings 10,056
Cash dividends:
Common--$.40 per share (5,426)
Preferred--$1.775 per share (5,128)
Issuance of common stock 33
Stock options (97)
-------- -------- --------
Balance, January 31, 1999 -- -- 138,031
Net earnings 15,014
Cash dividends:
Common--$.40 per share (5,426)
Preferred--$1.775 per share (5,128)
Purchase of preferred stock
for treasury (14)
Purchase of common stock
for treasury, net (60) (681) (681)
Stock options 15
-------- -------- --------
Balance, January 31, 2000 (60) $ (681) $141,811
======== ======== ========
</TABLE>
(a) Net of $103,803 transferred from retained earnings to common stock and
paid-in capital as a result of accumulated stock dividends.
19
<PAGE> 15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
On January 30, 1998, the Company and Power Test Investors Limited
Partnership (the "Partnership"), a publicly traded real estate limited
partnership, completed a merger transaction to combine their assets and
operations. In connection with the merger, unitholders of the Partnership
received 2,888,798 shares of Series A Participating Convertible Redeemable
Preferred Stock of the Company in exchange for their Partnership units. Each
share of preferred stock has voting rights of and is convertible into 1.1312
shares of common stock of the Company and pays stated cumulative dividends of
$1.775 per annum, or if greater, the per share dividends paid on 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 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.
10. EMPLOYEE BENEFIT PLANS
The Company has a retirement and profit sharing plan with deferred
401(k) savings plan provisions (the "Retirement Plan") for 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 compensation, reduced by the
amount of any contributions allocated to such executive under the Retirement
Plan. Contributions, net of forfeitures, under the plans were approximately
$102,000, $126,000 and $89,000 for the years ended January 31, 2000, 1999 and
1998, respectively. These 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 common stock which may be made the
subject of options under the Plan may 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,
each 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 held. The
"Aggregate Spread" was 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
the option. 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 the year ended January 31, 1998,
the Company recognized a charge to earnings of $2,166,000 at the date of the
spin-off equal to the product of the number of these options and the difference
between their exercise price and the then market price.
20
<PAGE> 16
CONTINUED
-------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
The following is a schedule of stock option prices and activity
relating to the Company's stock option plan for the three years ended January
31, 2000:
<TABLE>
<CAPTION>
2000 1999 1998
---------------------- ----------------------- -----------------------
Weighted Weighted Weighted
Number Average Number Average Number Average
of Exercise of Exercise of Exercise
Shares Price Shares Price Shares Price (a)
--------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 358,119 $ 22.63 363,553 $ 23.15 1,014,226 $ 10.28
Granted 41,750 11.13 --(b) -- 349,236 23.65
Exercised (1,102) 13.23 (1,215) 10.89 (864,535) 10.15
Cancelled (25,027) 24.06 (4,219) 22.43 (135,374) 11.06
--------- ---------- --------- ---------- ---------- ----------
Outstanding at end of year 373,740 $ 21.27 358,119 $ 22.63 363,553 $ 23.15
========= ========== ========= ========== ========== ==========
Exercisable at end of year 287,336 $ 22.91 277,706 $ 23.14 242,779 $ 23.29
========= ========== ========= ========== ========== ==========
Available for grant at end of year 723,943 740,666 736,447
========= ========== ========= ========== ========== ==========
</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 represents 77.29% of the
original exercise price.
(b) On December 14, 1998, the Company repriced 50,000 options granted in fiscal
1998 with an exercise price of $21.313 per share to $17.188 per share, as
compared to the then market price of $13.063 per share.
The following table summarizes information concerning options
outstanding and exercisable at January 31, 2000:
<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 53,750 9 $ 11.05 12,000 $ 10.81
17.19 50,000 8 17.19 25,000 17.19
24.06 269,990 5 24.06 250,336 24.06
----------- ------------ -------- ----------- ---------
373,740 287,336
=========== ===========
</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 (credit) of
($199,000) and $8,683,000 for the years ended January 31, 1999 and 1998,
respectively, since certain options required variable plan accounting treatment.
Had compensation cost for the Company's Plan been determined based upon
the fair value methodology prescribed under SFAS No. 123, "Accounting for
Stock-Based Compensation," the Company's net earnings and net earnings per
common share on a diluted basis would have been reduced as follows:
<TABLE>
<CAPTION>
2000 1999 1998
------------------------ ------------------------ -----------------------
As Reported Pro Forma As Reported Pro Forma As Reported Pro Forma
----------- --------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net earnings (in thousands) $ 15,014 $ 14,190 $ 10,056 $ 9,054 $ 7,944 $ 7,513
Net earnings per common share .73(a) .67(a) .36(a) .29(a) .60 .56
</TABLE>
(a) After giving effect to preferred stock dividends of $5,128.
21
<PAGE> 17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
The fair value of the options granted during the years ended January
31, 2000 and 1998 were estimated as $3.57 and $10.32 per share, respectively, on
the date of grant using the Black-Scholes option-pricing model with the
following weighted average assumptions:
<TABLE>
<CAPTION>
2000 1998
------ ------
<S> <C> <C>
Expected dividend yield 3.6% 0.5%
Expected volatility 34% 35%
Risk-free interest rate 6.7% 5.5%
Expected life of options (years) 7 7
</TABLE>
11. QUARTERLY FINANCIAL DATA
The following is a summary of the quarterly results of operations for
the years ended January 31, 2000 and 1999 (unaudited as to quarterly
information):
<TABLE>
<CAPTION>
Three months ended Year ended
----------------------------------------------------------------
Fiscal 2000: April 30 July 31 October 31 January 31 January 31
-------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share amounts)
Revenues from rental properties $ 14,760 $ 14,666 $ 14,628 $ 14,835 $ 58,889
Earnings before income taxes 5,759 6,350 7,710 6,286 26,105
Net earnings 3,343 3,686 4,460 3,525 15,014
Diluted earnings per common share (a) .15 .18 .23 .17 .73
</TABLE>
<TABLE>
<CAPTION>
Three months ended Year ended
----------------------------------------------------------------
Fiscal 1999: April 30 July 31 October 31 January 31 January 31
-------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share amounts)
Revenues from rental properties $ 14,795 $ 14,733 $ 14,711 $ 14,630 $ 58,869
Earnings from continuing operations
before income taxes 5,769 3,505 1,486 2,078 12,838
Net earnings from continuing operations 3,306 2,048 861 1,286 7,501
Net earnings (loss) from discontinued operations 223 (147) (137) 2,616 2,555
Net earnings 3,529 1,901 724 3,902 10,056
Diluted earnings (loss) per common share:
Continuing operations (a) .15 .06 (.03) -- .17
Discontinued operations .02 (.01) (.01) .19 .19
-------- --------- ---------- ---------- ----------
Net earnings (loss) .17 .05 (.04) .19 .36
======== ========= ========== ========== ==========
</TABLE>
(a) After giving effect to preferred stock dividends of $1,282 for each of the
four quarters, aggregating $5,128 for each of the years ended January 31, 2000
and 1999.
22
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
-----------------------------
To the Board of Directors
and Stockholders of Getty Realty Corp.:
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations and cash flows present fairly, in
all material respects, the financial position of Getty Realty Corp. and
Subsidiaries (the "Company") at January 31, 2000 and 1999, and the results of
their operations and their cash flows for each of the three years in the period
ended January 31, 2000, in conformity with accounting principles generally
accepted in the United States. 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 of these
statements in accordance with auditing standards generally accepted in the
United States, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
New York, New York
March 9, 2000
23
<PAGE> 19
CAPITAL STOCK
---------------------------
GETTY REALTY CORP. AND SUBSIDIARIES
Our common stock is traded on the New York Stock Exchange (symbol:
"GTY"). At April 18, 2000, there were approximately 2,700 holders of record of
our common stock. The price range of our 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, 2000 $ 13 $ 10 13/16 $.10
October 31, 1999 14 7/16 12 1/16 .10
July 31, 1999 14 7/8 13 5/16 .10
April 30, 1999 15 5/8 12 1/2 .10
January 31, 1999 16 1/2 12 1/8 .10
October 31, 1998 18 11/16 13 1/4 .10
July 31, 1998 22 5/16 18 1/2 .10
April 30, 1998 24 3/4 22 1/4 .10
</TABLE>
Our Series A preferred stock commenced trading in February 1998 on the
New York Stock Exchange (symbol: "GTY PrA"). At April 18, 2000, there were
approximately 400 holders of record of our Series A preferred stock. The price
range of our Series A preferred stock and cash dividends paid with respect to
each share of our Series A preferred 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, 2000 $ 20 1/4 $19 1/16 $.44375
October 31, 1999 20 5/8 19 3/4 .44375
July 31, 1999 20 1/8 19 1/8 .44375
April 30, 1999 21 19 3/8 .44375
January 31, 1999 22 20 .44375
October 31, 1998 24 18 1/4 .44375
July 31, 1998 27 23 1/2 .44375
April 30, 1998 29 26 1/2 .44375
</TABLE>
24
<PAGE> 1
Exhibit 21. Subsidiaries of the Company.
- - - - -----------------------------------------
STATE OF
SUBSIDIARY INCORPORATION
---------- -------------
GETTY PROPERTIES CORP. Delaware
AOC TRANSPORT, INC. Delaware
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 Company, representing the limited partner units, and 1% owned
by Getty Properties Corp., representing the general partner interest.
24
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-45249 and 333-45251) of Getty Realty Corp. of
our report dated March 9, 2000 relating to the financial statements, which
appears in the Annual Report to Shareholders, which is incorporated in this
Annual Report on Form 10-K. We also consent to the incorporation by reference of
our report dated March 9, 2000 relating to the financial statement schedule,
which appears in this Form 10-K.
PricewaterhouseCoopers LLP
New York, New York
March 9, 2000
<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, 2000 AND FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS ENTRIETY BY
REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> JAN-31-2000
<CASH> 651
<SECURITIES> 0
<RECEIVABLES> 6,182
<ALLOWANCES> 158
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 316,002
<DEPRECIATION> 74,502
<TOTAL-ASSETS> 260,752
<CURRENT-LIABILITIES> 0
<BONDS> 43,993
136
0
<COMMON> 72,220
<OTHER-SE> 69,455
<TOTAL-LIABILITY-AND-EQUITY> 260,752
<SALES> 0
<TOTAL-REVENUES> 63,859
<CGS> 0
<TOTAL-COSTS> 29,364
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 48
<INTEREST-EXPENSE> 2,748
<INCOME-PRETAX> 26,105
<INCOME-TAX> 11,091
<INCOME-CONTINUING> 15,014
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,014
<EPS-BASIC> .73
<EPS-DILUTED> .73
</TABLE>
