SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
October 15, 1998
Date of Report (Date of earliest event reported)
Supertel Hospitality, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-23536 47-0774097
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
309 North 5th Street, Norfolk, NE 68701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(402) 371-2520
<PAGE>
ITEM 5. OTHER EVENTS.
On October 15, 1998, Supertel Hospitality, Inc. and PMC Commercial Trust
mutually terminated the Agreement and Plan of Merger dated June 3, 1998. Copies
of the termination agreement and related press release, each incorporated by
this reference, are attached as exhibits hereto.
ITEM 7. EXHIBITS
Exhibit 99.1 Termination and Release Agreement dated October 15, 1998.
Exhibit 99.2 Supertel Press Release.
SIGNATURES
Pursuant to the requirements 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.
SUPERTEL HOSPITALITY, INC.
By: /s/ Paul J. Schulte
Date: October 15, 1998 __________________________
Paul J. Schulte
President and Chief Executive Officer
TERMINATION AND RELEASE AGREEMENT
TERMINATION AND RELEASE AGREEMENT (the "Termination Agreement"), dated this
15th day of October, 1998, by and among SUPERTEL HOSPITALITY, INC. ("SPPR"), PMC
COMMERCIAL TRUST ("PMC") and NORFOLK HOSPITALITY MANAGEMENT CO. ("Norfolk").
RECITALS:
(a) SPPR and PMC are parties to that certain Agreement and Plan of Merger,
dated as of June 3, 1998 (the "Merger Agreement"). SPPR and Norfolk are parties
to that certain Agreement of Sale, dated June 3, 1998 (the "Sale Agreement").
PMC and Norfolk are parties to that certain Master Lease Agreement, dated as of
June 3, 1998 (the "Master Lease").
(b) By action of the Board of Directors of SPPR and Norfolk, and by action
of the Board of Trust Managers of PMC, the parties hereto desire to mutually
terminate the Merger Agreement, the Master Lease and Sale Agreement pursuant to
the terms and provisions of this Termination Agreement.
AGREEMENT:
In consideration of the foregoing Recitals, and in consideration of the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. Termination of Merger Agreement. SPPR and PMC hereby agree that,
effective as of the date of this Termination Agreement, the Merger Agreement is
hereby mutually terminated pursuant to Section 10.1 thereof and the Merger (as
defined in the Merger Agreement) is hereby abandoned. In addition, SPPR and PMC
hereby agree that, effective as of the date of this Termination Agreement, that
certain Confidentiality Agreement, dated January 26, 1998, as amended (the
"Confidentiality Agreement") is hereby terminated. Notwithstanding the
termination of the Merger Agreement, PMC and SPPR agree that Section 11.6 of the
Merger Agreement shall remain in full force and effect and each party will use
commercially reasonable efforts to promptly return all Confidential Material
relating to the Providing Party to the Providing Party or destroy the same, as
requested by the Providing Party, and will otherwise cooperate with the other
party in taking all reasonable steps necessary to carry out an orderly
termination of actions heretofore taken to carry out the transactions
contemplated by the Merger Agreement.
2. Termination of Master Lease and Sale Agreement. Norfolk and SPPR hereby
agree that, effective as of the date of this Termination Agreement, the Sale
Agreement and Master Lease are hereby mutually terminated and the transactions
contemplated therein abandoned.
3. Expenses. All costs and expenses incurred in connection with or relating
to this Termination Agreement, the Merger Agreement, the Confidentiality
Agreement, the Sale Agreement and the Master Lease (collectively, the
"Transaction Agreements") or the transactions contemplated hereby and thereby,
including, without limitation, the fees and disbursements of counsel, financial
advisors and accountants, shall be paid by the party incurring such costs and
expenses. The parties acknowledge and agree that no party shall be obligated or
responsible for any costs or expenses paid or incurred by the other party
hereto.
4. Release. Each party hereto, on behalf of itself and its respective
affiliates, subsidiaries, successors, assigns, officers, directors, employees
and representatives (collectively, the "Releasing Persons"), hereby agrees that
no party shall have any remaining obligations, liabilities or duties under the
Merger Agreement (other than the duties of PMC and SPPR pursuant to Section 11.6
thereunder), the Confidentiality Agreement, the Sale Agreement or the Master
Lease and such agreements shall, except as specifically set forth herein, be of
no further force or effect. The parties hereto fully, finally, forever and
unconditionally release, acquit and discharge each other and their respective
affiliates, subsidiaries, officers, directors, trust managers, agents,
attorneys, consultants, employees and representatives and the predecessors,
successors and assigns of each of them (collectively, the "Released Persons"),
with all Released Persons who are natural persons being so released, acquitted
and discharged in both their individual as well as their official capacities,
from any and all claims, controversies, covenants, representations, warranties,
demands, promises, contracts, agreements, causes of action, suits, liabilities,
obligations, debts or other responsibility of whatever kind or nature, whether
known or unknown, whether in law or in equity, which the Releasing Persons ever
had, now have or may have against any Released Person for any matter, thing,
event, action or omission which in any way, directly or indirectly, relates to
or arises out of or is connected to the Transaction Agreements, any of the
transactions contemplated thereby, including, without limitation by reason of or
in connection with the termination of the Transaction Agreements, or any other
acts, facts, omissions, transactions, occurrences or other subject matters
relating thereto, arising therefrom or in connection therewith; provided,
however, that nothing contained herein shall release any obligation under this
Termination Agreement or claim to enforce it. Notwithstanding the foregoing, the
parties agree that PMC and SPPR shall not be released from their respective
obligations under Section 11.6 of the Merger Agreement which Section shall
survive.
5. Publicity. The parties hereto agree that SPPR and PMC shall issue
press releases relating to the termination of the Transaction Agreements and the
abandonment of the Merger and shall, subject to their respective legal
obligations, consult with each other, and use reasonable efforts to agree upon
the text of such press releases.
6. Counterparts. This Termination Agreement may be signed in counterparts,
each of which shall constitute an original, but all of which taken together,
shall constitute one and the same instrument.
7. Governing Law. This Termination Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without regard to
its rules of conflict of laws.
8. Enforcement. The parties hereto agree that irreparable damage would
occur in the event that any provisions of this Termination Agreement were not
performed in accordance with their specific wording or were otherwise breached.
It is accordingly agreed that the parties hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Termination Agreement and
to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, such remedy being in addition to
any other remedy to which any party is entitled at law or in equity.
9. Representations and Warranties. Each of the parties hereto represents
and warrants to the other that (a) it has all requisite power and authority to
enter into this Termination Agreement and (b) this Termination Agreement
constitutes the legal, valid and binding obligations of such party and, assuming
that this Termination Agreement is the valid, binding and enforceable obligation
of the other party, is enforceable against it in accordance with its terms.
10. Entire Agreement. This Termination Agreement, together with Section
11.6 of the Merger Agreement, constitute the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings between the parties with respect thereto;
including without limitation, the other provisions of the Merger Agreement and
the other Transaction Agreements. Except for the provisions of Section 4 hereof,
this Termination Agreement is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
11. Defined Terms. Except as otherwise defined or modified herein, all
capitalized terms used in this Termination Agreement shall have the meanings set
forth in the Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SUPERTEL HOSPITALITY, INC.
By: /s/ Paul J. Schulte
Name: Paul J. Schulte
Title: President
PMC COMMERCIAL TRUST
By: /s/ Andrew S. Rosemore
Name: Andrew S. Rosemore
Title: Chairman
NORFOLK HOSPITALITY
MANAGEMENT CO.
By: /s/ Steve H. Borgmann
Name: Steve H. Borgmann
Title: President and CEO
FOR IMMEDIATE DISTRIBUTION Contact: Troy Beatty
Chief Financial Officer
(402) 371-2520
SUPERTEL HOSPITALITY AND PMC COMMERCIAL TRUST
TERMINATE MERGER AGREEMENT, CITING MARKET CONDITIONS
Norfolk, Neb. - October 15, 1998 -- Supertel Hospitality, Inc. (NASDAQ:
SPPR) announced today that Supertel and PMC Commercial Trust (AMEX: PCC) have
mutually agreed to terminate their June 3, 1998 Merger Agreement due to
unfavorable stock market conditions. The parties have executed mutual releases.
Under the terms of the Merger Agreement, Supertel stockholders would have
received 0.6 shares of PCC common stock per share of Supertel common stock.
However, Supertel had the right to terminate the Merger Agreement if the average
trading price of PCC common stock prior to the merger was less than $17.50 per
share, subject to the right of PCC to increase the exchange ratio in order to
provide value to Supertel holders equivalent to the value which would be
received by them if the average trading price of PCC common stock were $17.50.
Consequently, at current market prices, PCC would have been required to issue
substantial additional shares in order for Supertel to have been obligated to
consummate the merger.
Paul J. Schulte, president and chief executive officer of Supertel, noted
that setbacks in the stock market have led to general decline in the stock
values of real estate investment trusts over the past several months. Schulte
continued, "Unfortunately, the transaction no longer provides the intended value
to all stockholders groups. We continue to have high regard for the PCC
management team and wish them success in the future."
Supertel owns and operates limited service motel properties under Super 8,
Comfort Inn and Wingate Inn names. Supertel has 63 motels, primarily in the
Midwest and Texas.
