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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
PURSUANT TO SECTION 12, 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 15, 1998
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PMC COMMERCIAL TRUST
(Exact name of Registrant as specified in its Charter)
TEXAS 0-22148 75-6446078
(State or other jurisdiction (Commission file number) (I.R.S. Employer Identification
of incorporation or organization) Number)
17290 Preston Road
3rd Floor
Dallas, Texas 75252
(Address of principal executive offices)
Registrant's telephone number, including area code: (972) 349-3200
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On October 15, 1998, PMC Commercial Trust (the "Company") and Supertel
Hospitality, Inc. ("Supertel") announced the mutual termination of the
Agreement and Plan of Merger dated June 3, 1998, as amended, and the
transactions related thereto. A copy of the Termination and Release Agreement,
incorporated herein by this reference, is attached as an exhibit hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
99.1 Press Release, dated October 15, 1998, of PMC Commercial Trust
99.2 Termination and Release Agreement, dated October 15, 1998, by
and among Supertel Hospitality, Inc., PMC Commercial Trust and
Norfolk Hospitality Management Co.
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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 hereunto duly authorized.
Date: October 16, 1998 PMC COMMERCIAL TRUST
By: /s/ Lance B. Rosemore
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Lance B. Rosemore
President and Chief Executive Officer
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PMC COMMERCIAL TRUST
INDEX TO EXHIBITS
EXHIBIT PAGE
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99.1 Press Release, dated October 15, 1998, of PMC Commercial Trust
99.2 Termination and Release Agreement, dated October 15, 1998, by and
among Supertel Hospitality, Inc., PMC Commercial Trust and Norfolk
Hospitality Management Co.
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EXHIBIT 99.1
PRESS RELEASE
PMC COMMERCIAL TRUST AND SUPERTEL HOSPITAL, INC.
CANCEL MERGER PLANS
PMC COMMERCIAL TRUST
AMEX (SYMBOL PCC)
Dallas, Texas October 15, 1998. PMC Commercial Trust (AMEX:PCC) today announced
that the PCC Board of Trust Managers and the Supertel Hospitality, Inc.
(NASDAQ:SPPR) Board of Directors have voted to terminate the merger agreement
between the two companies. A definitive agreement had been signed in June to
merge Supertel into PCC. Each share of Superel common stock was to be
exchanged for 0.6 common shares of PCC unless PCC shares traded below $17.50,
which could have required the issuance of additional shares in order for
Supertel to have been obligated to consummate the merger.
Andrew S. Rosemore, PCC's Chairman, stated, "Adverse market conditions have led
to a general decline in the stock values of real estate investment trusts over
the past several months. When we announced the merger, we believed that this
transaction would add significant value to our shareholders' investment;
however, market conditions have changed. We continue to have the highest
regard for Paul Schulte and the management team of Supertel and wish them
continued success."
Rosemore went on to say that, "We intend to continue to diversify our
investment portfolio by taking advantage of attractive real estate acquisition
opportunities when those opportunities present themselves. PCC recently
completed the purchase of 26 Amerihost properties. This transaction was
primarily financed utilizing the proceeds from a $66.1 million, 6.37%
structured financing collateralized by a loan portfolio which was rated 'Aaa'
by Moody's."
PCC's President, Lance B. Rosemore, stated, "We believe that PCC is well
positioned to continue growth by expanding its portfolio of mortgages and
investment properties. With the payment of our $0.45 dividend earlier this
week, PCC has now increased dividends for sixteen consecutive quarters, a 7%
cumulative increase over the past twelve months. We believe that our
fundamental business and our financial position remains sound. Loan demand is
strong and delinquency remains at very low levels."
PMC Commercial Trust is a Dallas-based real estate investment trust which
originates loans to small businesses secured by real estate and owns a
portfolio of 26 Amerihost hotel properties.
Certain statements that appear in this press release can be construed as
forward-looking statements within the meaning of Section 27A of the Securities
act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These statements are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth in the
forward-looking statements. These forward-looking statements can be identified
as such because the context of the statements will include words such as
"expects," "anticipates," "believes" or "intends."
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EXHIBIT 99.2
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.
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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
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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.
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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
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Name: Paul J. Schulte
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Title: President / CEO
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PMC COMMERCIAL TRUST
By: /s/ Andrew S. Rosemore
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Name: Andrew S. Rosemore
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Title: Chairman
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NORFOLK HOSPITALITY
MANAGEMENT CO.
By: /s/ Steve H. Borgmann
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Name: Steve H. Borgmann
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Title: President / CEO
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