EXHIBIT 3.2
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THIRD AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
PETRO STOPPING CENTERS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
BY AND AMONG
PETRO, INC.
PETRO HOLDINGS GP CORP.
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
JAJCO II, INC.
PETRO HOLDINGS LP CORP.
MOBIL LONG HAUL INC.
▇▇▇▇▇▇▇▇▇ INVESTMENTS
DATED AS OF JANUARY 30, 1997
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS............................................... 3
1.1 Definitions............................................... 3
1.2 Interpretation............................................ 30
ARTICLE II GENERAL PROVISIONS........................................ 31
2.1 Partnership Name.......................................... 31
2.2 Purpose................................................... 31
2.3 Principal Place of Business............................... 31
2.4 Term...................................................... 32
2.5 Filings................................................... 32
2.5.1 Status............................................ 32
2.5.2 Dissolution....................................... 32
2.6 Limited Partner Powers.................................... 32
2.7 Specific Authorization of Documents....................... 33
2.8 Admission................................................. 33
ARTICLE III CAPITAL................................................... 34
3.1 Capital Contributions..................................... 34
3.1.1 General........................................... 34
3.1.2 Intentionally Deleted............................. 34
3.1.3 Capital Calls..................................... 34
3.1.4 Pre-Emptive Rights................................ 35
3.2 Other Matters............................................. 36
3.2.1 No Return of Capital.............................. 36
3.2.2 No General Partner Liability...................... 36
3.2.3 No Limited Partner Liability...................... 36
3.2.4 ▇▇▇▇▇▇▇▇▇ Partner Conversion...................... 36
3.3 704(c) Distributions...................................... 37
3.4 Priority of Expenditures.................................. 38
3.4.1 First Priority.................................... 38
3.4.2 Second Priority................................... 38
3.4.3 Third Priority.................................... 38
3.4.4 Fourth Priority................................... 38
3.4.5 Fifth Priority.................................... 38
ARTICLE IV ALLOCATIONS............................................... 38
4.1 Profits................................................... 39
4.1.1 To Losses......................................... 39
4.1.2 To Preferred...................................... 39
4.1.3 To Common......................................... 39
4.2 Losses.................................................... 39
4.2.1 To Common......................................... 39
4.2.2 To Profits........................................ 39
4.2.3 To Common Unrecovered Capital..................... 40
4.2.4 To Preferred...................................... 40
4.2.5 Residual.......................................... 40
4.2.6 Limit............................................. 40
4.3 Special Allocations....................................... 40
4.3.1 Minimum Gain Chargeback........................... 40
4.3.2 Partner Nonrecourse Debt Minimum Gain
Chargeback........................................ 41
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4.3.3 Qualified Income Offset........................... 42
4.3.4 Basis Adjustments................................. 43
4.3.5 Nonrecourse Deductions............................ 44
4.3.6 Partner Nonrecourse Deductions.................... 44
4.3.7 Allocation of Self-Charged Interest............... 44
4.3.8 Sharing of Excess Nonrecourse
Liabilities....................................... 44
4.4 Other Allocation Rules.................................... 44
4.4.1 Positive Basis Partners........................... 44
4.4.2 Timing............................................ 45
4.4.3 Method............................................ 45
4.5 Tax Allocations: Code Section 704(c)...................... 45
4.5.1 Section 704(c).................................... 45
4.5.2 Election.......................................... 46
4.6 Tax Matters Partner....................................... 46
4.6.1 Appointment....................................... 46
4.6.2 Elections......................................... 47
4.6.3 Miscellaneous..................................... 47
4.6.4 Reimbursement..................................... 48
ARTICLE V DISTRIBUTIONS............................................. 48
5.1 Distributions............................................. 48
5.1.1 Authority......................................... 48
5.1.2 Priority.......................................... 48
5.1.3 Adjustment........................................ 49
5.2 Minimum Tax Distributions................................. 50
5.3 Distribution to Limited Partners.......................... 51
5.4 Redemption of Preferred Partnership Interests............. 52
5.5 Limitation of Distributions............................... 52
ARTICLE VI MANAGEMENT................................................ 53
6.1 Board of Directors........................................ 53
6.1.1 Authority......................................... 53
6.1.2 Limitations on Authority.......................... 55
6.1.3 Duties and Obligations............................ 55
6.1.4 Composition....................................... 56
6.1.5 Term; Vacancies................................... 57
6.1.6 Voting............................................ 58
6.1.7 Deadlock.......................................... 58
6.2 Executive Committee....................................... 58
6.2.1 Authority......................................... 58
6.2.2 Composition....................................... 59
6.2.3 Voting............................................ 60
6.3 Operating Committee....................................... 60
6.3.1 Authority......................................... 60
6.3.2 Composition....................................... 60
6.4 Officers.................................................. 60
6.4.1 Chairman.......................................... 61
6.4.2 Chief Executive Officer........................... 61
6.4.3 President......................................... 61
(ii)
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6.4.4 Executive Vice President and Chief
Financial Officer................................. 62
6.4.5 Senior Vice President of Strategic
Planning and Development.......................... 62
6.4.6 Senior Vice President of Operations............... 62
6.4.7 Vice President of Real Estate Services............ 63
6.4.8 Secretary......................................... 63
6.4.9 Limitation........................................ 63
6.4.10 Authority Generally............................... 64
6.5 Modifications to Control.................................. 64
6.5.1 Loan Default...................................... 64
6.5.2 EBITDA Control Remedy A........................... 64
6.5.3 EBITDA Control Remedy B........................... 64
6.5.4 Control Remedy C.................................. 65
6.5.5 No Limitation..................................... 65
6.6 Major Decisions........................................... 66
6.6.1 In General........................................ 66
6.6.2 Partner Veto Rights............................... 67
6.6.3 Additional Limitations on Actions of
the Partnership................................... 67
6.6.4 Voting............................................ 68
6.7 Right to Rely on Chairman or Secretary.................... 68
6.8 Meetings and Approval Requirements of Board of
Directors and Committees.................................. 69
6.8.1 Regular Meetings.................................. 69
6.8.2 Special Meetings.................................. 69
6.8.3 Telephonic Meetings............................... 69
6.8.4 Notices........................................... 69
6.8.5 Quorum............................................ 70
6.8.6 Approval Requirements............................. 70
6.8.7 Written Consents.................................. 70
ARTICLE VII LIABILITY AND INDEMNIFICATION............................. 71
7.1 General................................................... 71
7.2 Intentionally Deleted..................................... 72
7.3 Indemnification by Petro Partners......................... 72
7.4 Survival.................................................. 72
7.5 Indemnification Procedures................................ 72
7.5.1 Notice............................................ 72
7.5.2 Reimbursement..................................... 73
7.5.3 Defense by Indemnifying Parties................... 73
7.5.4 Defense by Indemnified Person..................... 74
7.5.5 Fees and Expenses................................. 75
7.5.6 Periodic Payments................................. 76
7.5.7 Intentionally Deleted............................. 77
7.5.8 Insurance......................................... 77
7.6 Liabilities in Exhibit D of the Participation
Agreement and Obligations................................. 78
7.7 No Personal Liability for Indemnification................. 79
(iii)
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ARTICLE VIII AMENDMENTS................................................ 79
8.1 Amendments................................................ 79
ARTICLE IX ADMISSIONS; EXITS AND TRANSFERS........................... 80
9.1 Admission of Additional Limited Partners.................. 80
9.2 Restriction on Transfers by Partners...................... 80
9.2.1 General........................................... 80
9.2.2 Chartwell Transfers............................... 81
9.2.3 ▇▇▇▇▇▇▇▇ Buy-Sell................................. 83
9.2.4 General Right of First Refusal.................... 88
9.2.5 Transfers to Affiliates........................... 91
9.2.6 Rights Upon Transfer.............................. 92
9.2.7 Change of Control Restriction..................... 92
9.3 Rights of Unadmitted Assignees............................ 93
9.4 Distributions and Allocations in Respect to
Transferred Interests..................................... 94
9.5 Employee Common Partnership Appreciation
Rights.................................................... 94
9.6 Termination of the Partnership............................ 95
ARTICLE X DISSOLUTION AND WINDING UP................................ 95
10.1 No Termination............................................ 95
10.2 Events of Dissolution..................................... 95
10.2.1 Expiration........................................ 96
10.2.2 Executive Committee............................... 96
10.2.3 Impossibility..................................... 96
10.2.4 General Partner Withdrawal........................ 96
10.2.5 Consent........................................... 96
10.2.6 Judicial Dissolution.............................. 97
10.3 Winding Up................................................ 97
10.3.1 To Creditors...................................... 97
10.3.2 To Partners....................................... 97
ARTICLE XI NONCOMPETITION AGREEMENT.................................. 98
11.1 Covenant Not to Compete................................... 98
11.1.1 Chartwell and ▇▇▇▇▇▇▇▇............................ 98
11.1.2 Mobil............................................. 99
11.1.3 ▇▇▇▇▇▇▇▇▇ Non-Compete............................. 100
11.1.4 Reformation....................................... 101
11.2 Ownership in Publicly Traded Corporation.................. 101
ARTICLE XII CONVERSION TO CORPORATION................................. 102
12.1 Conversion to Corporation for Public Offering............. 102
12.1.1 Chartwell Partners Demand......................... 102
12.1.2 Opinion........................................... 102
12.1.3 Plan.............................................. 103
12.1.4 Alternative Structures............................ 104
12.1.5 Partner Securities Exchange....................... 104
12.1.6 Objection......................................... 105
12.1.7 Purchase.......................................... 106
(iv)
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12.1.8 Security.......................................... 106
12.1.9 Assistance........................................ 107
12.1.10 Conversion Price.................................. 107
12.2 Registration Rights....................................... 108
12.2.1 Application....................................... 108
12.2.2 Piggyback Registration Rights..................... 108
12.2.3 Demand Registration Rights........................ 112
12.2.4 Registration Procedures........................... 115
12.2.5 Restrictions on Public Sale....................... 119
12.2.6 Registration Expenses............................. 120
12.2.7 Indemnification................................... 120
12.2.8 Rule 144.......................................... 123
12.2.9 Participation in Underwritten Registrations....... 124
ARTICLE XIII MISCELLANEOUS............................................. 124
13.1 Financial Reports......................................... 125
13.2 Binding Effect............................................ 125
13.3 Severability.............................................. 125
13.4 Governing Law............................................. 125
13.5 Not for Benefit of Creditors.............................. 125
13.6 Counterpart Execution..................................... 126
13.7 Sole and Absolute Discretion.............................. 126
13.8 FIRPTA.................................................... 126
13.9 Certificates.............................................. 128
SCHEDULES
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Schedule A - Capital Contributions and Sharing Percentages of the Partners
Schedule 2.6 - Affiliated Agreements
(v)
THIRD AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
PETRO STOPPING CENTERS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
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THIS THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT is entered
into and shall be effective as of the 30th day of January, 1997 (the "Effective
Date"), by and among Petro, Inc., a Texas corporation, as a General Partner and
as a Limited Partner ("Petro"), Petro Holdings GP Corp., a Delaware corporation,
as a General Partner ("Holdings GP"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇▇,
Sr."), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇▇, Jr."), JAJCO II, Inc., a Delaware
corporation ("JAJCO II" and together with ▇▇▇▇▇▇▇▇, Sr., ▇▇▇▇▇▇▇▇, Jr. and
Petro, the "▇▇▇▇▇▇▇▇ Partners"), Petro Holdings LP Corp., a Delaware corporation
("Holdings LP"), Mobil Long Haul Inc., a Delaware corporation ("Mobil") and
▇▇▇▇▇▇▇▇▇ Investments, a Pennsylvania general partnership ("▇▇▇▇▇▇▇▇▇"), as
Limited Partners, pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act, with reference to the following recitals and on the
terms and conditions set forth in this Agreement.
RECITALS
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A. On or about April 13, 1992, Roadside and Petro, as general partners,
and ▇▇▇▇▇▇▇▇, Jr., as a limited partner, formed Petro PSC Properties, L.P., a
Delaware limited partnership, pursuant to the Limited Partnership Agreement of
the Partnership dated April 13, 1992 (the "Original Agreement").
B. Effective as of April 30, 1992, Roadside and Petro, as general
partners, and Fremont, Cardwell, Sr., ▇▇▇▇▇▇▇▇, Jr. and
JAJCO II, as limited partners, amended and restated the Original Agreement by
entering into an Amended and Restated Limited Partnership Agreement of the
Partnership (the "First Amended Agreement"), together with Texas JIMCO, Inc., a
Texas corporation ("JIMCO"), JAJCO, Inc., an Ohio corporation ("JAJCO"), and
Arcadian Management Corporation, a Colorado corporation ("Arcadian"). The First
Amended Agreement was amended as of July 1, 1992, pursuant to an Amendment No. 1
to the Amended and Restated Limited Partnership Agreement of the Partnership.
The First Amended Agreement was further amended as of September 29, 1992,
pursuant to an Amendment No. 2 to the Amended and Restated Limited Partnership
Agreement of the Partnership. Effective as of January 1, 1994, the First
Amended Agreement was further amended pursuant to an Amendment No. 3 to the
Amended and Restated Limited Partnership Agreement of the Partnership.
Effective as of December 31, 1994, the First Amended Agreement was amended and
restated pursuant to a Second Amended and Restated Limited Partnership Agreement
of the Partnership (the "Second Amended Agreement"). Effective as of April 12,
1996, and pursuant to a Partnership Interest Purchase and Sale Agreement dated
April 12, 1996 and Consent and Waiver Agreement dated April 1, 1996, Fremont
Investors, Inc. transferred a .08% percentage interest in the Partnership to
Roadside and simultaneously such interest was converted from a limited partner
interest to a general partner interest in the Partnership; and, in addition,
after the foregoing transfer, Fremont sold and transferred to Sequoia the
remaining 44.17% percentage interest in the Partnership as a limited partner
interest in the Partnership. Subsequent to the
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foregoing transfers, Roadside owned a 1% general partner interest in the
Partnership and Sequoia owned a 44.17% limited partner interest in the
Partnership.
C. Pursuant to an Interest Purchase Agreement dated as of October 18,
1996 as supplemented, as the same may be amended, by and among Holdings GP,
Holdings LP, Mobil, Roadside, Sequoia and the Partnership (the "Interest
Purchase Agreement"), Roadside has sold 100% of its general partner interest in
the Partnership to Holdings GP and Sequoia has sold 100% of its limited partner
interests in the Partnership to Mobil and Holdings LP.
D. The Partners desire to amend and restate the Second Amended Agreement
in its entirety to reflect (i) the sale and transfer of the interests in the
Partnership of each of Roadside and Sequoia to Mobil, Holdings GP and Holdings
LP, (ii) the continuation of the business of the Partnership, (iii) the Sharing
Percentages of the Partners as a result of events described herein and (iv) such
other matters as are contained herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties hereto hereby amend and restate in its entirety
the Second Amended Agreement and agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. As used in this Agreement, the following terms have the
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following meanings:
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1.1.1 "Act" means the Delaware Revised Uniform Limited Partnership
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Act, as set forth in Title 6, Chapter 17 of the Delaware Code, as amended from
time to time (or any corresponding provisions of succeeding law).
1.1.2 "Adjusted Capital Account Balance" means, with respect to any
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Partner, the balance in such Partner's Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:
(a) Credit to such Capital Account any amounts which such
Partner is obligated to restore pursuant to any provision of this Agreement or
is deemed to be obligated to restore pursuant to the penultimate sentences of
Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) Debit to such Capital Account the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Balance is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
1.1.3 "Adjusted Capital Account Deficit" shall mean, with respect
--------------------------------
to any Partner, a deficit (if any) in such Partner's Adjusted Capital Account
Balance.
1.1.4 "Advice" has the meaning set forth in Section 12.2.4.
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1.1.5 "Affiliate" means, when used with reference to a specified
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Person,
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(a) any Person that directly or indirectly controls, is
controlled by or is under common control with the specified Person, or
(b) any Person that is a responsible employee of, an officer
of, a general partner in or a trustee of, or serves in a similar capacity with
respect to, the specified Person or any Person specified in clause (a) or of
which the specified Person or any Person described in clause (a) is a
responsible employee, officer, general partner or trustee, or with respect to
which the specified Person or any Person described in clause (a) serves in a
similar capacity. In the case of a Person who is an individual, Affiliate shall
include (x) any member of the immediate family of such Person, including the
spouse and lineal descendants and their spouses, of such immediate family
member, (y) any trust whose principal beneficiary is such Person or one or more
members of such immediate family, and (z) any Person controlled by such
individual's immediate family or any such trust. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
The First National Bank of Boston, Canadian Imperial Bank of Commerce and
their respective Affiliates shall not be deemed Affiliates of the Partnership or
the Chartwell Partners for any purposes of this Agreement.
1.1.6 "Agents" has the meaning set forth in Section 12.1.9.
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1.1.7 "Agreement" or "Partnership Agreement" means this Third
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Amended and Restated Agreement of Limited Partnership, as amended from time to
time.
1.1.8 "Amended and Restated Credit Agreement" means the Amended
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and Restated Credit Agreement dated as of January 30, 1997, among the
Partnership, The First National Bank of Boston, as agent, and the lenders
signatory thereto.
1.1.9 "Applicable Tax Rate" means a tax rate used for computing
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Minimum Tax Distributions consisting of the sum of (i) the greater of the
individual or corporate maximum marginal income tax rate for federal income tax
purposes, plus (ii) a reasonable overall state and local income tax rate
established from time to time by the Executive Committee.
1.1.10 "Arcadian" means Arcadian Management Corporation, a Colorado
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corporation.
1.1.11 "Article" means an Article of this Agreement.
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1.1.12 "Available Cash" means, for a Fiscal Year or quarter, all
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cash receipts of the Partnership during such period from all sources (including
amounts received as a result of any sale, exchange or other disposition, of all
or part of any Partnership asset; cash on hand at the beginning of such period
to the extent not held in reserves; proceeds of a financing or refinancing
giving rise to distributable net proceeds, recovery of a damage award or
insurance proceeds and any net reduction in the amount of reserves) less:
----
capital expenditures, repair or replacement of improvements, fixtures or
equipment; amounts used to pay or establish reserves for all Partnership
expenses and fees;
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Minimum Tax Distributions; debt payments including principal, premium and
interest, fees and expenses; maintenance capital improvements and contingencies;
and in the case of each such deduction, to the extent not funded by Capital
Contributions.
1.1.13 "Bechtel Partners" means Roadside and Sequoia.
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1.1.14 "Board of Directors" has the meaning set forth in Section
------------------
6.1 prior to the consummation of an IPO Incorporation, and thereafter means the
Board of Directors of the Corporation.
1.1.15 "Book Depreciation" means for each Fiscal Year or part
-----------------
thereof, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable for federal income tax purposes with respect to an
asset for such year or other period, except that if the Gross Asset Value of an
asset differs from its adjusted basis for federal income tax purposes at the
beginning of such year, Book Depreciation shall be an amount which bears the
same ratio to such Gross Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction for such year bears to such
adjusted basis.
1.1.16 "Book Value" shall mean the Gross Asset Value computed for
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purposes of maintaining Capital Accounts hereunder. References to "Book
----
Purposes" shall be similarly interpreted.
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1.1.17 "Business Day" means any day other than a Saturday, Sunday or
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a day on which national banking associations in the State of New York are
closed.
1.1.18 "Buy Option" has the meaning set forth in Section 9.2.3.
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1.1.19 "Capital Account" means, with respect to any Partner, the
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Capital Account maintained for such Partner in accordance with the following
provisions:
(a) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions, such Partner's distributive share
of Net Profits and any items in the nature of income or gain which are specially
allocated pursuant to Article IV, and the amount of any Partnership liabilities
assumed by such Partner or which are secured by any property distributed to such
Partner;
(b) To each Partner's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any property distributed to such
Partner pursuant to any provision of this Agreement (other than Section 704(c)
Distributions), such Partner's distributive share of Losses and any items in the
nature of expenses or losses which are specially allocated pursuant to Section
4.3 or Section 4.4 hereof, and the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership;
(c) In the event all or a portion of an interest in the
Partnership is transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to the extent
it relates to the transferred interest in accordance with Section 9.4 hereof;
and
(d) In determining the amount of any liability for purposes
of subparagraph (a) and (b) of this definition, there
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shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.
The Capital Accounts of the Partners as of the Effective Date shall be
equal to the Capital Contributions of a Partner as of the Effective Date. The
foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Sections
1.704-1(b) and 1.704-2 and shall be interpreted and applied in a manner
consistent with such Regulations. In the event the Executive Committee
determines that it is prudent to modify the manner in which the Capital
Accounts, or any debits or credits thereto, are computed in order to comply with
such Regulations, the Executive Committee may make such modification, provided
that it is not likely to have a material effect on the amounts distributed to
any Partner upon the dissolution of the Partnership. The Executive Committee
also shall (i) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the General Partners and the
Limited Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.
1.1.20 "Capital Contributions" means, with respect to any General
---------------------
Partner or Limited Partner, the amount of money and the Gross Asset Value of any
property (other than money) contributed or
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deemed contributed to the Partnership with respect to the interest in the
Partnership held by such Partner pursuant to Article III. Capital Contributions
shall be designated as "Preferred Capital Contributions" or "Ordinary Capital
Contributions," as listed on Schedule A hereto. The Capital Contributions of
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the Partners as of the Effective Date are set forth on the initial Schedule A.
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1.1.21 "Capital Partners" shall mean all Partners that have
----------------
contributed capital to the Partnership.
1.1.22 "▇▇▇▇▇▇▇▇ Buy Price" has the meaning set forth in Section
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9.2.
1.1.23 "▇▇▇▇▇▇▇▇ Buy-Sell Notice" has the meaning set forth in
------------------------
Section 9.2.
1.1.24 "▇▇▇▇▇▇▇▇, Jr." means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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1.1.25 "▇▇▇▇▇▇▇▇ Partners" means Petro, JAJCO II, ▇▇▇▇▇▇▇▇, Sr. and
-----------------
▇▇▇▇▇▇▇▇, Jr.
1.1.26 "▇▇▇▇▇▇▇▇, Sr." means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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1.1.27 "▇▇▇▇▇▇▇▇, Sr. Employment Agreement" means the Employment
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Agreement dated as of the date hereof by and between ▇▇▇▇▇▇▇▇, Sr. and the
Partnership.
1.1.28 "Certificate" has the meaning set forth in Section 2.4.
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1.1.29 "Chairman" has the meaning set forth in Section 6.4.
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1.1.30 "Chartwell Partners" means Holdings GP and Holdings LP.
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1.1.31 "Code" means the United States Internal Revenue Code of 1986,
----
as amended from time to time (or any corresponding provisions of succeeding
law).
1.1.32 "Commission" shall mean the Securities and Exchange
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Commission.
1.1.33 "Common Partnership Interests" shall mean the partnership
----------------------------
interests owned by the Partners listed on Schedule A in respect of their
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Ordinary Capital Contributions.
1.1.34 "Common Stock" has the meaning set forth in Section 12.1.3.
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1.1.35 "Control Remedy A" means that the Board of Directors shall
----------------
review the limits of authority of the various committees and officers of the
Partnership and may change the same (other than the authority of the Chief
Executive Officer).
1.1.36 "Control Remedy B" means that the Board of Directors shall
----------------
have the right to require the replacement of any management personnel, including
but not limited to the Chief Executive Officer, but excluding the Chairman.
1.1.37 "Control Remedy C" means that (i) each member of the Board of
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Directors and Executive Committee appointed by the Chartwell Partners shall have
such number of votes on any matter presented for consideration to such Board of
Directors and the Executive Committee such that such Chartwell Partner members
as a group would in the aggregate have a majority of the votes, (ii) the Board
of Directors shall have the right to appoint a majority of the members of the
Operating Committee, and (iii) the Board of
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Directors shall have the right to remove and replace the Chairman and/or the
Chief Executive Officer and/or President.
1.1.38 "Conversion Date" has the meaning set forth in Section 3.2.4.
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1.1.39 "Corporation" has the meaning set forth in Section 12.1.1.
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1.1.40 "Deadlock" has the meaning set forth in Section 6.1.7.
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1.1.41 "Demanding Group" has the meaning set forth in Section
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12.2.3.
1.1.42 "Demand Registration" has the meaning set forth in Section
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12.2.3.
1.1.43 "Determination Date" has the meaning set forth in Section
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13.8.
1.1.44 "Distributable Cash" has the meaning set forth in Section
------------------
5.1.2.
1.1.45 "EBITDA Actual Results" for any period means the amount equal
---------------------
to (a) the Net Income of the Partnership for such period, plus (b) the sum,
----
without duplication (and only to the extent such amounts are deducted from net
revenues in determining such Net Income), of (i) distributions, if any (whether
in cash or otherwise), paid or accrued during such period on any Partnership
Interests, (ii) the provision for income taxes for such period for the
Partnership, (iii) the consolidated interest expense of the Partnership for such
period, and (iv) the consolidated depreciation and amortization expenses of the
Partnership for such period; provided, however, that except to the extent
-------- -------
consented to in
-12-
writing by all of the members of the Board of Directors, EBITDA Actual Results
shall not include any extraordinary or nonrecurring income or losses of the
Partnership, including but not limited to (1) gains or losses from the sale of
assets; (2) gains or losses associated with debt restructuring; (3) adjustments
to established reserves or accruals other than in the ordinary course of
business or (4) any changes from prior practice in the application of accounting
principles to the operations of the Partnership (excluding any NTI's for the
first twelve months of the Partnership's operations of such NTI). For purposes
of EBITDA Actual Results, the operations of the Partnership shall be calculated
on a consolidated basis with its subsidiaries.
1.1.46 "EBITDA Projections" means the EBITDA projections heretofore
------------------
delivered to The First National Bank of Boston, as agent under the Amended and
Restated Credit Agreement on October 9, 1996 in connection with the Amended and
Restated Credit Agreement, a copy of which shall be maintained in the minute
books of the Partnership. EBITDA Projections for each calendar quarter shall
equal the EBITDA Projections for the full Fiscal Year multiplied by percentages
for each quarter as follows:
First Quarter 24.5% Third Quarter 28%
Second Quarter 26.5% Fourth Quarter 21%
1.1.47 "Effective Date" means January 30, 1997.
--------------
1.1.48 "Entire Interests" has the meaning set forth in Section
----------------
9.2.3.
1.1.49 "Excess Minimum Tax Distribution" shall mean, for each
-------------------------------
Partner, an amount equal to the sum of the cumulative
-13-
amount of Minimum Tax Distributions to such Partner in respect of Net Profits
Allocations (made subsequent to December 31, 1996) with respect to the Common
Partnership Interests that are subsequently reversed by Losses (occurring
subsequent to December 31, 1996).
1.1.50 "Exchange Act" has the meaning set forth in Section 12.2.7.
------------
1.1.51 "Exculpated Party" has the meaning set forth in Section 7.1.
----------------
1.1.52 "Executive Committee" has the meaning set forth in Section
-------------------
6.2 prior to the consummation of an IPO Incorporation, and thereafter means the
Executive Committee of the Board of Directors of the Corporation.
1.1.53 "Expansion Capital Expenditures" has the meaning set forth in
------------------------------
Section 3.4.1.
1.1.54 "Fair Market Value" means the enterprise value of the
-----------------
Partnership, as agreed upon by all members of the Executive Committee, failing
which, the enterprise value of the Partnership as determined by an investment
banking firm selected by all members of the Executive Committee, and with
respect to a Partnership asset, the gross value of such asset as agreed upon by
the Board of Directors.
1.1.55 "First Amended Agreement" has the meaning set forth in
-----------------------
Recital B of this Agreement.
1.1.56 "Fiscal Year" means (i) the period commencing on the
-----------
Effective Date and ending on the Friday closest to December 31 of the same
calendar year and, and (ii) any subsequent twelve (12) month period commencing
on the next day following the last day of
-14-
the previous Fiscal Year and ending on the Friday closest to December 31 of the
same calendar year.
1.1.57 "Fremont" means Fremont Investors, Inc., formerly known as
-------
Fremont Group, Inc. and, prior to such name, formerly known as Bechtel
Investments, Inc., a Nevada corporation.
1.1.58 "GAAP" means generally accepted accounting principles and
----
practices in effect in the United States of America from time to time.
1.1.59 "General Partners" means Holdings GP and Petro, as general
----------------
partners of the Partnership, and/or any Person who, at the time of reference
thereto, has been admitted to the Partnership, as a general partner of the
Partnership, and continues to act as a successor to the duties or interests of
such Persons, or as a replacement or additional general partner as provided
herein.
1.1.60 "Gross Asset Value" means, with respect to any Partnership
-----------------
property, such property's adjusted basis for U.S. Federal income tax purposes,
except as follows: that (i) the Gross Asset Value of Partnership property will
be adjusted to its Fair Market Value as of the Effective Date, (ii) whenever
such adjustment is required in order for allocations under this Agreement to
have "economic effect" within the meaning of Regulation Section 1.704-(b)(2)
(ii), and (iii) if the Board of Directors considers appropriate, whenever
such Adjustment to Fair Market Value is permitted under Regulation Section
1.704-1(b)(2)(ii). Gross Asset Value shall be adjusted by Book Depreciation
taken into account with respect to such asset for
-15-
purposes of computing Profits or Losses, and other items allocated pursuant to
Section 4.3.
1.1.61 "Holder" has the meaning set forth in Section 12.2.1.
------
1.1.62 "Holdings GP" means Petro Holdings GP Corp., a Delaware
-----------
corporation.
1.1.63 "Holdings LP" means Petro Holdings LP Corp., a Delaware
-----------
corporation.
1.1.64 "Immediate Family Member" means natural or adoptive parent,
-----------------------
sibling, child or grandchild of a Person (or a trust or other entity for the
benefit of any of the foregoing provided such Person retains voting control of
such entity).
1.1.65 "Income Taxes" means all (i) net income and franchise taxes
------------
and withholding in respect thereof (including, without limitation, United States
federal income taxes), and any interest thereon and any penalties, additions to
tax or additional amounts applicable thereto, (ii) any amounts payable under the
Code or ERISA in respect of any Plan and any interest, penalties or excise taxes
thereon and (iii) any liability for the payment of any consolidated or combined
federal, foreign, state or local income taxes, and any interest thereon and any
penalties, additions to tax or additional amounts applicable thereto, that is
payable as a result of being a member of, and which may be imposed upon, any
affiliated group (as defined in Section 1504(a) of the Code or other applicable
law) of which any Petro Partner is a member (including in all cases any amount
payable as a result of any tax sharing agreement, policies or arrangements).
-16-
1.1.66 "Indemnified Loss" means a Petro Indemnified Loss.
----------------
1.1.67 "Indemnified Parties" means the shareholders, subsidiaries,
-------------------
Affiliates, officers, directors, members, managers, employees and
representatives of an Indemnified Person, and the shareholders, subsidiaries,
officers, directors, members, managers, employees and representatives of such
shareholders, subsidiaries and Affiliates.
1.1.68 "Indemnified Person" means those Persons identified in either
------------------
Section 7.1, Section 7.2 or Section 7.3 as being entitled to receive the benefit
of the indemnity provided therein.
1.1.69 "Indemnified Stockholder" has the meaning set forth in
-----------------------
Section 12.2.7.
1.1.70 "Indemnifying Party" and "Indemnifying Parties" means the
------------------ --------------------
Person or Persons who have given indemnities hereunder.
1.1.71 "Interest Purchase Agreement" has the meaning set forth in
---------------------------
Recital C of this Agreement.
1.1.72 "IPO" means an initial public offering by the Corporation or
---
its successor of its equity interests.
1.1.73 "IPO Block Selling Partner" has the meaning set forth in
-------------------------
Section 12.1.6.
1.1.74 "IPO Incorporation" has the meaning set forth in Section
-----------------
12.1.
1.1.75 "JAJCO" means JAJCO, Inc., an Ohio corporation.
-----
1.1.76 "JAJCO II" means JAJCO II, Inc., a Delaware corporation.
--------
-17-
1.1.77 "JIMCO" means Texas JIMCO, Inc., a Texas corporation.
-----
1.1.78 "▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇▇ Investments, a Pennsylvania
---------
general partnership.
1.1.79 "▇▇▇▇▇▇▇▇▇ Conversion" has the meaning set forth in Section
--------------------
3.2.
1.1.80 "Limited Partner" means each of Holdings LP, ▇▇▇▇▇▇▇▇, Sr.,
---------------
▇▇▇▇▇▇▇▇, Jr., JAJCO II, Petro, Mobil and ▇▇▇▇▇▇▇▇▇, and any Person who becomes
a Limited Partner pursuant to the terms of this Agreement.
1.1.81 "Liquidating Event" has the meaning set forth in Section
-----------------
10.2.
1.1.82 "Mailing" has the meaning set forth in Section 12.1.7 hereof.
-------
1.1.83 "Minimum Tax Distribution" means the distribution provided
------------------------
for in Section 5.1.2(a).
1.1.84 "Minimum Tax Distribution Carryforward" shall mean, with
-------------------------------------
respect to any Partner, the cumulative amount of such Partner's Excess Minimum
Tax Distributions to date less any Excess Minimum Tax Distributions previously
taken into account in determining the amount of Minimum Tax Distributions to
which such Partner is entitled pursuant to Section 5.2; provided, that to the
-------- ----
extent a Minimum Tax Distribution Carryforward of a Partner is applied to reduce
the amount of a Minimum Tax Distribution to said Partner, such reduction shall
be considered a Minimum Tax Distribution to such Partner for purposes of
determining future
-18-
Minimum Tax Distributions to that Partner but shall not be considered a Section
704(c) Distribution.
1.1.85 "Mobil" means Mobil Long Haul Inc., a Delaware corporation,
-----
but for purposes of Article VI only, only for so long as Mobil Long Haul Inc. is
owned by Mobil Corporation or any direct or indirect subsidiary thereof or any
successor to a substantial portion of the domestic refining and marketing
operations of Mobil Oil Corporation.
1.1.86 "Net Income" for any period with respect to the Partnership
----------
means the net income (or loss) of the Partnership for such period, determined in
accordance with GAAP, excluding the net income (or loss) of any company acquired
in a pooling of interests transaction for any period prior to the date of such
acquisition.
1.1.87 "Net Profits Allocation" shall mean an allocation of Profits
----------------------
that causes the cumulative amount of Profits allocated to such Partner to exceed
the cumulative amount of Losses allocated to such Partner. For this purpose,
Profits and Losses shall include all Section 704(c) Allocations reportable by a
Partner for federal income tax purposes.
1.1.88 "Non-Compete Period" shall mean five years after the sale of
------------------
all or substantially all the assets or equity securities of the Partnership or
the Corporation (except as to Section 11.1.2, as to which such period is 30 full
calendar months after such sale), and in all other instances, 2 years after a
Partner and its Affiliates cease to be direct or indirect equity owners of the
Partnership or the Corporation.
-19-
1.1.89 "Nonrecourse Deductions" has the meaning set forth in
----------------------
Regulations Section 1.704-2(b)(1) and shall be determined according to the
provisions of Regulations Section 1.704-2(c).
1.1.90 "Nonrecourse Liability" has the meaning set forth in
---------------------
Regulations Section 1.752-1(a)(2).
1.1.91 "Notice" has the meaning set forth in Section 12.2.3.
------
1.1.92 "NTI" means any new location developed by the Partnership or
---
its subsidiaries after the date hereof, as of the date such location was first
placed in operation.
1.1.93 "Offering Amount" has the meaning set forth in Section 12.1.2
---------------
1.1.94 "Operating Committee" has the meaning set forth in Section
-------------------
6.3.
1.1.95 "Original Agreement" has the meaning set forth in Recital A
------------------
of this Agreement.
1.1.96 "Participation Agreement" means the Participation Agreement
-----------------------
dated as of April 30, 1992 entered into by and among the original partners of
the Partnership.
1.1.97 "Partner Nonrecourse Debt" has the meaning set forth in
------------------------
Regulations Section 1.704-2(b)(4).
1.1.98 "Partner Nonrecourse Debt Minimum Gain" has the meaning set
-------------------------------------
forth in Regulations Section 1.704-2(i)(2) and shall be determined in accordance
with Regulations Section 1.704-2(i)(3).
1.1.99 "Partner Nonrecourse Deductions" has the meaning set forth in
------------------------------
Regulations Section 1.704-2(i)(1) and shall be determined in accordance with
Regulations Section 1.704-2(i)(2).
-20-
1.1.100 "Partner Option Period" has the meaning set forth in Section
---------------------
9.2.4.
1.1.101 "Partners" means all General Partners and all Limited
--------
Partners, where no distinction is required by the context in which the term is
used herein. A Partner may be both a General Partner and a Limited Partner.
1.1.102 "Partnership" means Petro Stopping Centers, L.P., a Delaware
-----------
limited partnership.
1.1.103 "Partnership Interest" shall mean the partnership interests
--------------------
in the Partnership owned by the General and Limited Partners; provided, that,
-------- ----
for purposes of Sections 9.2.2 and 9.2.3 and Article 12, Partnership Interest
shall include, at the election of a transferring Partner, the equity interest of
the direct or indirect parent of such Partner provided that such parent and its
subsidiaries have no material assets or liabilities other than their Partnership
Interests and proper indemnities are provided to the acquiring Partner.
1.1.104 "Partnership Minimum Gain" has the meaning set forth in
------------------------
Regulations Section 1.704-2(b)(2) and shall be determined in accordance with
Regulations Section 1.704-2(d).
1.1.105 "Partnership Option Period" has the meaning set forth in
-------------------------
Section 9.2.4.
1.1.106 "Partner Veto Rights" has the meaning set forth in Section
-------------------
6.6.2.
1.1.107 "Person" means any individual, partnership, corporation,
------
limited liability company, association, business,
-21-
trust, government or political subdivision thereof, governmental agency or other
entity.
1.1.108 "Petro" means Petro, Inc., a Texas corporation, but only so
-----
long as at least 51% of Petro, Inc. is directly or indirectly beneficially owned
by ▇▇▇▇▇▇▇▇, Sr. or his Immediate Family Members and the management of Petro,
Inc. is directly or indirectly controlled by ▇▇▇▇▇▇▇▇, Sr. or his Immediate
Family Members.
1.1.109 "Petro Indemnified Loss" means any loss, liability, damage
----------------------
expense, including reasonable costs of investigation (other than any cost
attributable for investigation time by an employee of the Partnership or another
Indemnified Party) and all other expenses in respect of any matter hereafter
described, including reasonable attorneys' fees and expenses, sustained or
incurred by the Partnership or any Partner (or his or its Indemnified Parties)
of the Partnership who is not an Indemnifying Party with respect to such loss,
liability, damage or expense, arising out of or resulting from (i) any
inaccuracy in or breach of any of the representations, warranties or covenants
made by the Petro Partners in Sections 2.6, 2.9, 2.11, 2.19 and 2.22 of the
Participation Agreement, but only to the extent that any such obligation or
liability thereunder, if any, exists on the date hereof and survives the date of
this Agreement under applicable Federal and Delaware law; (ii) any liability or
obligation of the Petro Partners for Income Taxes as set forth in Article VIII
of the Participation Agreement, but only to the extent that any such liability
or obligation thereunder, if any, exists on the date
-22-
hereof and survives the date of this Agreement under applicable Federal and
Delaware law; or (iii) any liability or obligation of the Petro Partners which
was expressly not assumed by the Partnership in the Participation Agreement, as
set forth in Exhibit D to the Participation Agreement. "Petro Indemnified Loss"
----------------------
also shall include all damages, loss (including but not limited to reduction in
and/or loss of value or ownership of property, inability to use any Partnership
property, or damages or loss as a result of inability to fulfill any Partnership
obligations under contracts and leases), injury, expense and cost, including
attorneys' fees and court costs, arising out of or resulting from the existence
and/or assertion of rights by any Person in respect of any of the following: (i)
that certain deed with respect to the Eloy, Arizona site recorded as instrument
029807 at Docket 1792, page 891 in the records of the recorder of Pinal County,
Arizona; (ii) Uniform Commercial Code financing statements by any Petro Partner
in favor of Mbank; and (iii) any liability or obligation of the Petro Partners
as set forth in Section 12.16 of the Participation Agreement, but only to the
extent that any such liability or obligation thereunder, if any, exists on the
date hereof and survives the date of this Agreement under applicable Federal and
Delaware law. For purposes of clause (i) in the preceding sentence, no
reduction in and/or loss of value, if any, shall be deemed to occur until such
time as the Partnership shall make a good faith effort to sell, exchange or
otherwise dispose of the Eloy, Arizona site or until the Partnership shall merge
or consolidate with any Person or sell all or substantially all of its
-23-
assets to any Person. Notwithstanding any provision in this Agreement to the
contrary, the amount of a Petro Indemnified Loss shall be the actual loss,
liability, damage or expense sustained or incurred by the Partnership to the
extent ascertainable, irrespective of the number of different representations,
warranties or covenants violated in any of such agreements or otherwise.
1.1.110 "Petro Indemnifying Party" means an Indemnifying Party which
------------------------
is a Petro Partner. The Petro Partners shall be jointly and severally liable
with regard to all Petro Indemnified Losses, except that (i) JAJCO II and
▇▇▇▇▇▇▇▇, Jr. shall be jointly and severally liable only for those Petro
Indemnified Losses which are principally related to or arise from the
businesses, assets and operations of JAJCO II (including the businesses, assets
and operations of JAJCO and JIMCO prior to their merger into JAJCO II) and
▇▇▇▇▇▇▇▇, Jr., or any liabilities related thereto, and (ii) Arcadian's successor
in interest shall be liable only for those Petro Indemnified Losses which are
principally related to or arise from the business, assets and operations of
Arcadian, or any liabilities related thereto.
1.1.111 "Petro Partners" means Petro, Cardwell, Sr., ▇▇▇▇▇▇▇▇, Jr.
--------------
and JAJCO II.
1.1.112 "Piggyback Registration" has the meaning set forth in
----------------------
Section 12.2.2.
1.1.113 "Plan" has the meaning set forth in Section 12.1.3.
----
1.1.114 "Positive Basis" shall mean, with respect to any Preferred
--------------
Partnership Interest and as of any time of calculation,
-24-
the excess of the amount to which such Partner is entitled to upon withdrawal
from or liquidation of the Partnership over such Partner's "adjusted tax basis"
in its Preferred Partnership Interest at such time (determined without regard to
any adjustments made to such adjusted tax basis by reason of any transfer or
assignment of such interest, including by reason of death); and "Positive Basis
Partner" shall mean any Partner whose Preferred Partnership Interest is redeemed
by the Partnership and who has Positive Basis as of the effective date of such
withdrawal.
1.1.115 "Preferred Partnership Interests" shall mean the partnership
-------------------------------
interests owned by the Partners listed on Schedule A in respect of their
----------
Preferred Capital Contributions.
1.1.116 "Preferred Return" means, with respect to a Preferred
----------------
Partnership Interest, an amount equal to: with respect to Mobil, nine and one
half percent (9.5%); and with respect to the ▇▇▇▇▇▇▇▇ Partners and ▇▇▇▇▇▇▇▇▇,
eight percent (8%), in all cases per annum on an amount equal to the sum of such
Partner's Unrecovered Capital and any accrued but unpaid Preferred Return in
excess of the cumulative amounts distributed pursuant to Section 5.1.2(b), for
the actual number of days for which the Preferred Return is being determined,
cumulative and compounded semi-annually and based on the actual dates of
adjustments to Unrecovered Capital and Preferred Capital Contributions to and
Section 5.1.2(b) distributions from the Partnership.
1.1.117 "Preferred Stock" has the meaning set forth in Section
---------------
12.1.3.
-25-
1.1.118 "Profits" and "Losses" means, for each Fiscal Year, an
------- ------
amount equal to the Partnership's taxable income or loss for such Fiscal Year,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(a) Any income of the Partnership that is exempt from U.S.
federal income tax and not otherwise taken into account in computing Profits or
Losses pursuant to this Section shall be added to such taxable income or loss;
(b) Any expenditure of the Partnership that is
nondeductible for U.S. federal income tax purposes (including any expense
described in Code Section 705(a)(2)(B)) and is not otherwise taken into account
in computing Profits or Losses pursuant to this Section shall be subtracted from
such taxable income or loss;
(c) In the event the Gross Asset Value of the Property is
adjusted, the amount of such adjustment shall be taken into account as gain or
loss from the disposition of the Property for purposes of computing Profits or
Losses ;
(d) Gain or loss resulting from the disposition of the
Partnership property shall be computed by reference to the Gross Asset Value of
the property, notwithstanding that the adjusted tax basis of the property
differs from its Gross Asset Value;
-26-
(e) Notwithstanding any other provision of this Article,
any items which are specially allocated pursuant to Section 4.3 shall not be
taken into account in computing Profits or Losses; and
(f) Any difference between the Partnership's tax
depreciation or amortization deductions and Book Depreciation.
1.1.119 "Prospectus" shall mean the Prospectus included in any
----------
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
1.1.120 "Purchasing Partners" has the meaning set forth in Section
-------------------
12.1.6.
1.1.121 "Purpose" has the meaning set forth in Section 2.2.
-------
1.1.122 "Redemption Date" has the meaning set forth in Section 5.4.
---------------
1.1.123 "Registrable Securities" means the Common Stock, but with
----------------------
respect to any such Common Stock, only until such time as such stock (i) has
been effectively registered under the Securities Act and disposed of in
accordance with the Registration Statement covering it or (ii) has been sold to
the public pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act or may be sold to the public pursuant to Rule 144(k) of the
Securities Act.
-27-
1.1.124 "Registration" has the meaning set forth in Section 12.2.4.
------------
1.1.125 "Registration Statement" means any registration statement of
----------------------
the Corporation filed pursuant to the Securities Act and which covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement.
1.1.126 "Regulations" or "Treasury Regulations" means the Income Tax
----------- --------------------
Regulations, including Temporary Regulations, promulgated under the Code, as
such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
1.1.127 "Removal" has the meaning set forth in Section 9.2.
-------
1.1.128 "Request" has the meaning set forth in Section 12.1.1.
-------
1.1.129 "Roadside" means Roadside, Inc., a Delaware corporation.
--------
1.1.130 "Second Amended Agreement" has the meaning set forth in
------------------------
Recital B of this Agreement.
1.1.131 "Section" means a Section of this Agreement.
-------
1.1.132 "Section 704(c) Allocations" has the meaning set forth in
--------------------------
Section 4.5.
1.1.133 "Section 704(c) Distributions" has the meaning set forth in
----------------------------
Section 5.2.
-28-
1.1.134 "Securities Act" means the Securities Act of 1933, as
--------------
amended.
1.1.135 "Selling Partner" has the meaning set forth in Section
---------------
9.2.4.
1.1.136 "Sell Option" has the meaning set forth in Section 9.2.3.
-----------
1.1.137 "Senior Officer" means any of the following officers of the
--------------
Partnership: Chief Executive Officer, President, Executive Vice President and
Chief Financial Officer, Senior Vice President of Strategic Planning and
Development, Senior Vice President of Operations, Vice President of Real Estate
Services.
1.1.138 "Sequoia" means Sequoia Ventures, Inc., a Delaware
-------
corporation.
1.1.139 "Shares" has the meaning set forth in Section 12.1.3 hereof.
------
1.1.140 "Sharing Percentage" shall mean (i) with respect to any
------------------
Preferred Partnership Interest held by a Partner, the Preferred Sharing
Percentage listed on Schedule A and (ii) with respect to any Common Partnership
----------
Interest held by a Partner, the Common Sharing Percentage listed on Schedule A.
----------
1.1.141 "Stockholder" shall mean any holder of Shares.
-----------
1.1.142 "Transfer" has the meaning set forth in Section 9.2.
--------
1.1.143 "Transfer Documents" has the meaning set forth in Section
------------------
9.2.6.
1.1.144 "Transfer Notice" has the meaning set forth in Section
---------------
9.2.4.
-29-
1.1.145 "Unrecovered Capital" shall mean: with respect to any
-------------------
Preferred Partnership Interest, an amount equal to (X) the Preferred Capital
Contributions plus Profits allocated under Section 4.1.1 in respect of such
Interest less (Y) the sum of (i) the aggregate amount of Losses allocated to
such Preferred Partnership Interest under Sections 4.2.2 and 4.2.4 and (ii)
distributions to such Partner in respect of such Preferred Partnership Interest
pursuant to Section 5.1.2(c) and (to the extent that Section 4.1.2 Profits
allocations have been reversed by Section 4.2.2 Losses) Section 5.1.2(b); and,
with respect to any Common Partnership Interest, an amount equal to (X) the
amount of Ordinary Capital Contributions plus Section 4.1.1 Profits allocations
in respect of such Common Partnership Interest less (Y) the sum of (i)
distributions to such Partner in respect of such Common Partnership Interest
pursuant to Section 5.1.2(a) (except to the extent such distribution is
characterized as a Section 704(c) Distribution), Section 5.1.2(c) and Section
5.1.2(d), and (ii) the cumulative amount of Losses allocated to such Common
Partnership Interest pursuant to Sections 4.2.3 and 4.2.5.
1.1.146 "U.S. Taxes Due" means with respect to any Fiscal Year or
--------------
part thereof of the Partnership after the date hereof, the estimated Income Tax
which each Partner would be required to pay if the Applicable Tax Rate applied
to the Net Profits Allocations to such Partner for such period.
1.2 Interpretation. Words such as "herein," "hereinafter," "hereof" and
--------------
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the
-30-
context otherwise requires. The singular shall include the plural and the
masculine gender shall include the feminine and neuter, and vice versa, unless
the context otherwise requires. "Includes" or "including" shall mean "including
without limitation." Unless otherwise defined, all accounting terms used herein
shall have the meaning thereof specified by GAAP.
ARTICLE II
GENERAL PROVISIONS
------------------
2.1 Partnership Name. The name of the Partnership shall be Petro
----------------
Stopping Centers, L.P., and all business of the Partnership shall be conducted
in such name, or under such other name as the Board of Directors deems
appropriate.
2.2 Purpose. The purpose of the Partnership (the "Purpose") is to
-------
participate in the operation, management, development, franchising and/or
ownership of truck stops and lubrication centers and certain businesses in
connection therewith, including but not limited to the sale of petroleum
products, sundry products, and services, and the operation of restaurants, and
to engage in any and all activities related to or at truck stops or in any
manner incidental to any of the foregoing, including the ownership of interests
in other Persons in furtherance thereof.
2.3 Principal Place of Business. The Partnership's principal place of
---------------------------
business shall be ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. The Partnership's
principal place of business may be changed from time to time, and other offices
may be established from time to time, by the Board of Directors.
-31-
2.4 Term. The term of the Partnership commenced on the date the
----
certificate of limited partnership of the Partnership (the "Certificate") was
filed in the office of the Secretary of State of the State of Delaware in
accordance with the Act and shall continue until December 31, 2021, unless the
Partnership is earlier dissolved by operation of law or in accordance with the
provisions of Article X.
2.5 Filings.
-------
2.5.1 Status. The Board of Directors shall cause to be executed,
------
filed and published all such certificates, notices, statements and other
instruments and amendments thereto, and shall take any and all other actions,
under the laws of the State of Delaware and other applicable jurisdictions as it
may deem necessary or advisable to perfect and maintain the status of the
Partnership as a limited partnership under the laws of Delaware and any other
jurisdictions in which the Partnership engages in business.
2.5.2 Dissolution. Upon the dissolution and completion of winding
-----------
up of the Partnership, the Board of Directors shall promptly cause to be
executed and filed certificates of cancellation in accordance with the Act and
the laws of any other states or jurisdictions in which the Partnership has filed
certificates.
2.6 Limited Partner Powers. Each Limited Partner, any Affiliate thereof
----------------------
and any officer, director, shareholder, partner, employee, member, manager,
agent or representative of such Limited Partner or Affiliate may lend money to,
borrow money from, act as
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a surety, guarantor or endorser for, guarantee or assume one or more specific
obligations of, provide collateral for, and transact other business with the
Partnership and others (including, without limitation, pursuant to the
agreements listed on Schedule 2.6 hereto and the transactions contemplated
------------
thereby) and, subject to other applicable law and subject to the terms of this
Agreement, has the same rights and obligations with respect thereto as a Person
who is not a Partner. The existence of these relationships and acting in such
capacities shall not result in a Limited Partner being deemed to be
participating in the control of the business of the Partnership or otherwise
affect the limited liability of the Limited Partner. If a Limited Partner or
any Affiliate thereof is a lender, in exercising its rights as a lender,
including making its decision on whether to foreclose on property of the
Partnership, such lender will have no duty to consider (i) its status as a
Partner or an Affiliate of a Partner, (ii) the interests of the Partnership, or
(iii) any duty it may have to any Partner or the Partnership.
2.7 Specific Authorization of Documents. The Partnership and each
-----------------------------------
General Partner or Senior Officer, on behalf of the Partnership, may enter into
and perform the agreements listed on Schedule 2.6 hereto and the transactions
------------
contemplated thereby without further act, vote or approval of any Partner
notwithstanding any other provision of this Agreement, the Act or other
applicable law, rule or regulation.
2.8 Admission. Mobil, Holdings LP and ▇▇▇▇▇▇▇▇▇ are hereby admitted to
---------
the Partnership as, and Petro, Cardwell, Sr., ▇▇▇▇▇▇▇▇,
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Jr., and JAJCO II shall continue to be, limited partners of the Partnership.
Holdings GP is hereby admitted to the Partnership as, and Petro shall continue
to be, a general partner of the Partnership.
ARTICLE III
CAPITALIZATION
--------------
3.1 Capital Contributions.
---------------------
3.1.1 General. The initial Schedule A attached hereto describes
------- ----------
the initial Preferred and Ordinary Capital Contributions of the Partners as of
the Effective Date and the relative Preferred and Common Sharing Percentages of
the Partners. Schedule A shall be updated from time to time to reflect
----------
additional Capital Contributions by the Partners and any changes to Sharing
Percentages.
3.1.2 Intentionally Deleted.
---------------------
3.1.3 Capital Calls. The Board of Directors may, by written
-------------
notice, request the holders of Common Partnership Interests to make such
additional Capital Contributions as the Board of Directors, in its sole
discretion, considers necessary or appropriate to fulfill the purposes of this
Agreement. Such additional Capital Contributions may, at the option of each
Partner, be made within thirty (30) days after receipt of written request from
the Board of Directors and shall be contributed by the Partners electing to
contribute in proportion to their respective Common Partnership Interests. The
provisions of this Section 3.1.3 are intended solely to benefit the Partners
and, to the fullest extent permitted by applicable law, shall not be construed
as
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conferring any benefit upon any creditor of the Partnership (and no such
creditor shall be a third party beneficiary of this Agreement), and no Partner
shall have any duty or obligation to any creditor of the Partnership to make any
additional Capital Contributions or to cause the Board of Directors to request
additional Capital Contributions. If any Partner does not exercise its right to
maintain its proportionate percentage of the Common Sharing Percentages by
making an additional Capital Contribution pursuant to this Section 3.1.3, the
Common Sharing Percentages shall be adjusted based upon, and assuming the
Interests are sold based upon, Fair Market Value. ▇▇▇▇▇▇▇▇▇ shall have the
right upon any call being made for a Capital Contribution to make additional
Capital Contributions (in an amount equal, on a pro rata basis, to additional
Capital Contributions being made by other Partners such that its Common Sharing
Percentage, assuming conversion of its Preferred Partnership into a Common
Partnership Interest shall remain at the same percentage as the percentage of
Common Partnership Interests (assuming conversion of the Preferred Partnership
Interest of ▇▇▇▇▇▇▇▇▇ if then convertible) that ▇▇▇▇▇▇▇▇▇ owned immediately
prior to such additional Capital Contribution).
3.1.4 Pre-Emptive Rights. Upon the admission of any new Partner
------------------
as a holder of Common Partnership Interests pursuant to Article IX, each holder
of Common Partnership Interests (and ▇▇▇▇▇▇▇▇▇, if it then owns Preferred
Partnership Interests which are then convertible into Common Partnership
Interests) shall have the right, but not the obligation, to make additional
Capital
-35-
Contributions in cash to the Partnership such that such Partner's percentage of
Common Partnership Interests (assuming in the case of ▇▇▇▇▇▇▇▇▇, conversion of
its Preferred Partnership Interests immediately prior thereto, if not previously
converted) immediately after such admission of a new Partner shall be the same
as immediately prior to such admission.
The Board of Directors shall provide each Partner not less than 30 days'
prior written notice of its rights hereunder, which rights shall expire as to
any Partner who has not exercised the same by written notice to the Company
given not less than 10 days prior to the date specified in the notice from the
Board of Directors as the date established for such Capital Contribution.
3.2 Other Matters.
-------------
3.2.1 No Return of Capital. Except as provided in Section 5.4 or
--------------------
Article IX, no Partner shall demand or receive a return of its Capital
Contributions or withdraw from the Partnership.
3.2.2 No General Partner Liability. No General Partner shall have
----------------------------
any personal liability for the repayment of any Capital Contributions of any
Limited Partner.
3.2.3 No Limited Partner Liability. The Limited Partners shall
----------------------------
not be personally liable for the debts, liabilities, contracts or other
obligations of the Partnership.
3.2.4 ▇▇▇▇▇▇▇▇▇ Partner Conversion. The ▇▇▇▇▇▇▇▇▇ Partner may at
----------------------------
any time before the fifth anniversary date of the Effective Date of the
Partnership (the "Conversion Date") elect to convert its Preferred Partnership
Interest to a Common Partnership
-36-
Interest representing a 2 percent Common Sharing Percentage as of the Effective
Date of the Partnership (the "▇▇▇▇▇▇▇▇▇ Conversion"). Upon the ▇▇▇▇▇▇▇▇▇
Conversion, all Preferred Returns on the ▇▇▇▇▇▇▇▇▇ Preferred Partnership
Interest accrued prior to the Conversion Date shall cease to accrue any further
return, preferred or otherwise, and any such Preferred Return so accrued shall
be payable pro rata upon the payment of the Preferred Return to the other
holders of Preferred Partnership Interests. If an IPO Incorporation occurs, the
▇▇▇▇▇▇▇▇▇ Conversion will mandatorily occur immediately prior to the
consummation of the IPO.
3.3 704(c) Distributions. Any Section 704(c) Distribution made to a
--------------------
Partner pursuant to Section 5.2 herein, shall not bear interest and generally
shall be repaid by applying distributions otherwise payable to such Partner
pursuant to Section 5.1.2 (other than Minimum Tax Distributions) against such
advance. In addition, Section 704(c) Distributions shall be repaid to the
Partnership on: (a) an actual sale of all or substantially all of the
Partnership's assets; (b) upon an IPO Incorporation; and (c) upon the sale by
the ▇▇▇▇▇▇▇▇ Partners of their interests in the Partnership. To the extent not
otherwise paid in cash, repayment as a result of an event described in the
preceding sentence shall be made by cancelling first a Partner's Preferred
Partnership Interest to the extent of any unpaid accrued Preferred Return and
any Unrecovered Capital and then cancelling a Partner's Common Partnership
Interest to the extent of any Unrecovered Capital. Any remaining balance shall
be paid to the Partnership by such Partner in cash.
-37-
3.4 Priority of Expenditures. Expenditures of the Partnership shall be
------------------------
paid in the following order of priority:
3.4.1 First Priority. First, to pay all operating expenses and
--------------
capital expenditures other than expenditures for NTIs and acquisitions of
existing facilities from third parties ("Expansion Capital Expenditures");
3.4.2 Second Priority. Second, to pay the Partnership's debt
---------------
service;
3.4.3 Third Priority. Third, to make Minimum Tax Distributions
--------------
and to pay fees to Partners and Affiliates of Partners; and
3.4.4 Fourth Priority. Fourth, to make Expansion Capital
---------------
Expenditures; provided, that, Expansion Capital Expenditures shall not be made
-------- ----
by the Partnership unless Partners holding Preferred Partnership Interests shall
have received distributions pursuant to Section 5.1.2(b) in an amount equal to
their Preferred Returns and any unpaid accrued Preferred Returns; provided,
--------
further, that, Expansion Capital Expenditures may be made by the Partnership to
------- ----
the extent such Preferred distributions are not permitted under the
Partnership's loan and financing agreements.
3.4.5 Fifth Priority. Fifth, to make any other distributions to
--------------
the Partners.
-38-
ARTICLE IV
ALLOCATIONS
-----------
4.1 Profits. After giving effect to the special allocations set forth in
-------
Section 4.3 hereof, Profits for any Fiscal Year shall be allocated:
4.1.1 To Losses. First, to those Partners to which Losses have
---------
previously been allocated, in reverse order of the allocations listed in Section
4.2 and to the extent of such Losses;
4.1.2 To Preferred. Next, among the Partners holding Preferred
------------
Partnership Interests in accordance with their Preferred Sharing Percentages,
until the cumulative amount of Profits allocated pursuant to this Section 4.1.2
is equal to the cumulative amount of cash distributed pursuant to Section
5.1.2(b); and
4.1.3 To Common. Thereafter, to the Partners in proportion to
---------
their Common Sharing Percentages.
4.2 Losses. After giving effect to the special allocations set forth in
------
Section 4.3, Losses for any Fiscal Year shall be allocated:
4.2.1 To Common. First, among the Partners in accordance with
---------
their Common Sharing Percentages, until the cumulative amount of Losses
allocated pursuant to this Section 4.2.1 is equal to the cumulative amount of
Profits allocated pursuant to Section 4.1.3;
4.2.2 To Profits. Next, to the Partners that received allocations
----------
of Profits pursuant to Section 4.1.2 to the extent of such Profits;
-39-
4.2.3 To Common Unrecovered Capital. Next, among the Partners in
-----------------------------
accordance with their Common Sharing Percentages, to the extent of their
Unrecovered Capital; and
4.2.4 To Preferred. Next, among the Partners in accordance with
------------
their Preferred Sharing Percentages, to the extent of their Unrecovered Capital;
and
4.2.5 Residual. Thereafter, among the Partners holding Common
--------
Partnership Interests in accordance with their Common Sharing Percentages.
4.2.6 Limit. The Losses allocated pursuant to this Section 4.2
-----
shall not exceed the maximum amount of Losses that can be so allocated without
causing or increasing an Adjusted Capital Account Deficit of any Limited Partner
at the end of any Fiscal Year. All Losses in excess of the limitations set
forth in this Section 4.2.6 shall be allocated to the General Partners in
proportion to their Common Sharing Percentages.
4.3 Special Allocations. The following special allocations shall be
-------------------
made:
4.3.1 Minimum Gain Chargeback. Notwithstanding anything to the
-----------------------
contrary in this Article 4, if there is a net decrease in Partnership Minimum
Gain (within the meaning of Regulations Section 1.704-2(d)) for a fiscal year,
then there shall be allocated to each Partner items of income and gain for that
year equal to that Partner's share of the net decrease in Partnership Minimum
Gain (within the meaning of Regulations Section 1.704-2(g)(2)), subject to the
exceptions set forth in Regulations Section 1.704-2(f)(2), (3), and (5);
provided, however, that if the
-------- -------
-40-
Partnership has any discretion as to an exception set forth in Regulations
Section 1.704-2(f)(5), the Executive Committee may exercise such discretion on
behalf of the Partnership. The Executive Committee may, if the application of
this Partnership Minimum Gain chargeback requirement would cause a distortion in
the economic arrangement among the Partners, request the Commissioner of
Internal Revenue to waive the minimum gain chargeback requirement pursuant to
Regulations Section 1.704-2(f)(4). The items to be so allocated shall be
determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the
Regulations. The foregoing is intended to be a "minimum gain chargeback"
provision as described in Regulations Section 1.704-2(f)(1) and shall be
interpreted and applied in all respects in accordance with that Regulation.
4.3.2 Partner Nonrecourse Debt Minimum Gain Chargeback.
------------------------------------------------
Notwithstanding anything to the contrary in this Article 4 (other than Section
4.3.1 above), if during a fiscal year there is a net decrease in Partner
Nonrecourse Debt Minimum Gain (as determined in accordance with Regulations
Section 1.704-2(i)(3)), then, in addition to the amounts, if any, allocated
pursuant to Section 4.3.1, any Partner with a share of that Partner Nonrecourse
Debt Minimum Gain (determined in accordance with Regulations Section 1.704-
2(i)(5)) as of the beginning of the Fiscal Year shall, subject to the exceptions
set forth in Regulations Section 1.704-2(i)(4), be allocated items of income and
gain for that year (and, if necessary, for succeeding Fiscal Years) equal to
that Partner's share of the net decrease in the Partner
-41-
Nonrecourse Debt Minimum Gain. The Executive Committee may, if the application
of this Partner Nonrecourse Debt Minimum Gain chargeback requirement would cause
a distortion in the economic arrangement among the Partners, request the
Commissioner of the Internal Revenue to waive the minimum gain chargeback
requirement pursuant to Regulations Sections 1.704-2(f)(4) and 1.704-2(i)(4).
The foregoing is intended to be the "chargeback of partner nonrecourse debt
minimum gain" required by Regulations Section 1.704-2(i)(4) and shall be
interpreted and applied in all respects in accordance with that Regulation.
4.3.3 Qualified Income Offset. If any Partner unexpectedly
-----------------------
receives any adjustment, allocation or distribution described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain (consisting of a pro rata portion of each item of Partnership income,
including gross income and gain for such year) shall be specially allocated to
such Partner in an amount and manner sufficient to eliminate, to the extent
required by the Regulations, the Adjusted Capital Account Deficit of such
Partner as quickly as possible. An allocation pursuant to the foregoing
sentence shall be made only if and to the extent that such Partner would have an
Adjusted Capital Account Deficit after all other allocations provided for in
Article IV have been tentatively made. This allocation is intended to
constitute a "qualified income offset" within the meaning of Regulations
Sections 1.704-1(b)(2)(ii)(d)(3) and shall be construed in accordance with the
requirements thereof. An item of loss, deduction or Section 705(a)(2)(B)
expenditure shall not be
-42-
allocated to a Partner to the extent that, as of the end of any taxable year,
such allocation would create or increase an Adjusted Capital Account Deficit for
such Partner. Any amount that cannot be allocated to a Partner by reason of the
foregoing sentence shall be allocated to other Partners (except to the extent
that such allocation to any other Partner would also be limited under the
foregoing sentence). If allocations to all Partners would be so limited, such
amount shall be allocated to the General Partners.
4.3.4 Basis Adjustments. To the extent an adjustment to the
-----------------
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or
Code Section 743(b) is required under Regulation Section 1.704-1(b)(2)(iv)(m) to
be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations;
provided, however, in the event that an adjustment to the Book Value of
-------- -------
Partnership property is made as a result of an adjustment pursuant to Section
734(b) of the Code, items of income, gain, loss or deduction, as computed for
book and tax purposes, shall be specially allocated among the Partners so that
the effect of any such adjustment shall benefit (or be borne by) the Partner(s)
receiving the distribution which caused such adjustment.
-43-
4.3.5 Nonrecourse Deductions. Nonrecourse Deductions for any
----------------------
Partnership Fiscal Year or other period shall be allocated among the Partners in
accordance with their Common Sharing Percentages.
4.3.6 Partner Nonrecourse Deductions. Partner Nonrecourse
------------------------------
Deductions for any Partnership Fiscal Year or other period shall be specially
allocated to the Partner who bears the economic risk of loss with respect to the
Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i)(1).
4.3.7 Allocation of Self-Charged Interest. If a Partner makes a
-----------------------------------
loan to the Partnership, to the extent permitted under Regulations Section
1.469-7, the Partnership shall allocate to such Partner any interest deduction
specifically incurred by the Partnership as a result of such loan; provided,
--------
however, that this Section 4.3.7 shall not affect the amount of income or loss
-------
otherwise allocable to such Partner.
4.3.8 Sharing of Excess Nonrecourse Liabilities. Excess
-----------------------------------------
nonrecourse liabilities, as defined in Regulations Section 1.752-3(a)(3), shall
be shared by the Partners holding Common Partnership Interests in accordance
with their respective Common Sharing Percentages.
4.4 Other Allocation Rules.
----------------------
4.4.1 Positive Basis Partners. Allocations of items of gross
-----------------------
income shall be made to Positive Basis Partners to the extent of any such
Partners' Positive Basis as of the date of withdrawal from the Partnership or
liquidation of such Partnership Interest.
-44-
4.4.2 Timing. For purposes of determining the Profits, Losses or
------
any other items allocable to any period, Profits, Losses and any such other
items shall be determined on a daily, monthly or other basis, as determined by
the tax matters partner and approved by the Executive Committee using any
permissible method under Code Section 706 and the Regulations thereunder.
4.4.3 Method. Except as otherwise provided in this Agreement, all
------
items of Partnership taxable income, gain, loss, deduction and credit shall be
allocated in the manner provided for Book Purposes and any allocations not
otherwise provided for shall be divided among the Partners in the same
proportions as they share Profits or Losses, as the case may be. However,
notwithstanding any other provisions of this Agreement, the General Partners
shall be allocated not less than 1% of each item of Partnership income, gain,
loss, deduction or credit, except to the extent such an allocation would be
contrary to the provisions of Section 704(b) or (c) of the Regulations.
4.5 Tax Allocations: Code Section 704(c).
------------------------------------
4.5.1 Section 704(c). Except as otherwise provided in this
--------------
Agreement, all items of Partnership taxable income, gain, loss, deduction and
credit shall be allocated in the manner as provided for Book Purposes. For
purposes of Code Section 704(c), income, gain, loss and deduction with respect
to any property contributed to the capital of the Partnership shall, solely for
tax
-45-
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its Gross Asset Value. With respect to (i) property
contributed by the ▇▇▇▇▇▇▇▇ Partners prior to the Effective Date, and (ii) any
"reverse Code section 704(c) allocations" resulting from the revaluation of
Partnership property pursuant to Regulations Section 1.704-1(b)(2)(iv)(f) and
any post-Effective Date Section 704(c) Allocations (collectively the "Section
704(c) Allocations"), the Board of Directors shall determine the Code Section
704(c) method with respect to any such Section 704(c) Allocations. Allocations
pursuant to this Section 4.5.1 are solely for purposes of Federal, state and
local taxes and (with the exception of the remedial allocation method) shall not
affect, or in any way be taken into account in computing, any Partner's Capital
Account or share of Profits, Losses, other items, or distributions (other than
Minimum Tax Distributions and Net Profits Allocations) pursuant to any provision
of this Agreement.
4.5.2 Election. The Partnership shall make the election described
--------
in Code Section 754 for its taxable year including the Effective Date. Any
other elections or other decisions relating to allocations shall be made by the
Executive Committee in any manner that reasonably reflects the purpose and
intention of this Agreement.
4.6 Tax Matters Partner.
-------------------
4.6.1 Appointment. By executing this Agreement, each Partner
-----------
appoints and designates Petro as the "tax matters partner"
-46-
of the Partnership, as such term is defined under the Code. Any action taken by
the tax matters partner that could adversely affect the taxes of the Partnership
or any Partner, including any extension of the statute of limitations, shall be
subject to the unanimous approval by the Executive Committee which approval
shall not be unreasonably withheld or inconsistent with prevailing authority.
Any such action, to the extent permitted by law, shall be binding upon the
Partners. To the extent permitted by law, each Partner further agrees that such
Partner will not treat any Partnership item inconsistently on such Partner's
income tax return with the treatment of the item on the Partnership's tax return
and that such Partner will not independently act with respect to tax audits or
tax litigation affecting the Partnership, unless previously authorized to do so
in writing by the Executive Committee, which authorization may be withheld in
the reasonable discretion of the Executive Committee.
4.6.2 Elections. At the direction of the Executive Committee, the
---------
tax matters partner shall cause the Partnership to make all elections required
or permitted to be made by the Partnership under the Code and not otherwise
expressly provided for in this Agreement, in the manner that the Executive
Committee determines will be most advantageous to all Partners.
4.6.3 Miscellaneous. The tax matters partner shall be (i) the
-------------
"designated organizer" of the Partnership for the purpose of registering it as a
tax shelter pursuant to Section 6111 of the Code and Temporary Treasury
Regulation (S) 301.6111-1T and (ii) the "designated person" for the purpose of
maintaining lists of
-47-
investors in the Partnership pursuant to Section 6111 of the Code and Temporary
Treasury Regulation (S) 301.6112-1T. The tax matters partner shall timely cause
the Partnership to be registered as a tax shelter if required under Section 6111
of the Code and shall take all actions required by Section 6112 of the Code to
maintain a list of the names of the Limited Partners, their addresses, and their
taxpayer identification numbers, to the extent such information is provided to
the tax matters partner.
4.6.4 Reimbursement. Subject to the approval of the Executive
-------------
Committee, for purposes of fulfilling and diligently carrying out its duties as
the tax matters partner, the tax matters partner shall be entitled to
reimbursement from the Partnership of all reasonable expenses incurred by it and
shall be entitled to utilize Partnership personnel and employ, at Partnership
expense, accountants, attorneys and any other professional advisors.
ARTICLE V
DISTRIBUTIONS
-------------
5.1 Distributions.
-------------
5.1.1 Authority. The Executive Committee may make such
---------
distributions at such times and in such amounts as it considers appropriate in
its absolute discretion; provided that any Minimum Tax Distributions pursuant to
Section 5.1.2(a) shall be made on not less than a quarterly basis.
5.1.2 Priority. Available Cash plus an amount equal to Minimum
--------
Tax Distributions ("Distributable Cash") shall be distributed to the Partners as
follows:
-48-
(a) First, among the Partners in proportion to their Common
Percentage Interests, until each Partner has received an amount equal to its
Minimum Tax Distribution as determined in accordance with Section 5.2;
(b) Next, among the Partners in proportion to their
Preferred Partnership Interests until each such Partner has received an amount
equal to the amount of its current Preferred Return and any unpaid accrued
Preferred Return;
(c) Next, to the Partners in proportion to (at the
discretion of the Executive Committee) their Preferred or Common Sharing
Percentages, to the extent of any Unrecovered Capital therefor; provided that
liquidating distributions shall be first made to the extent of any Unrecovered
Capital in respect of Preferred Partnership Interests; and
(d) Thereafter, to the Partners in accordance with their
positive Capital Account balances.
5.1.3 Adjustment. In making distributions (other than Minimum Tax
----------
Distributions) pursuant to this Section 5.1, the Executive Committee shall
reduce the amount of any distribution otherwise payable to a Partner by the
amount of any prior Section 704(c) Distributions. Distributions so applied
shall reduce the amount of the Section 704(c) Distributions previously made. The
Executive Committee shall have the authority to pay distributions in cash or in
kind. In the case of a distribution in kind, the value of each item of property
shall be distributed to the Partners, to the extent practicable, in the priority
of Section 5.1.2.
-49-
5.2 Minimum Tax Distributions. A Minimum Tax Distribution shall be made
-------------------------
to a Partner holding a Common Partnership Interest in an amount equal to the
following:
(a) U.S. Taxes Due; less
(b) the sum of (i) Minimum Tax Distribution Carryforwards
(but only to the extent not previously applied against U.S. Taxes Due) and (ii)
aggregate distributions (other than Minimum Tax Distributions) to such Partner;
provided, that, for this purpose distributions to Mobil shall not include any
-------- ----
distributions in respect of its Preferred Partnership Interest. Any reduction in
Minimum Tax Distributions required pursuant to clause (b) as a result of prior
distributions (other than Minimum Tax Distributions), shall result in the prior
distributions being recharacterized as a Minimum Tax Distribution only for
purposes of this Section 5.2 and shall not be considered a Section 704(c)
Distribution.
Notwithstanding the reductions required under Sections 5.2(b) or 5.2(c), no
recharacterization of a Minimum Tax Distribution Carryforward under Section
5.2(b) as a Minimum Tax distribution or other distributions under Section 5.2(c)
as Minimum Tax Distributions shall have the effect of recharacterizing such
reductions as "Section 704(c) Distributions" (as defined below). In the event
the reductions under Sections 5.2(b) or 5.2(c) reduce a Minimum Tax Distribution
distributable to a Partner to an amount less than such Partner's U.S. Taxes Due,
the Executive Committee may, in its discretion, unanimously agree to decrease
the reductions to be made under Sections 5.2(b) or 5.2(c) in an amount
-50-
necessary for a Partner to receive a distribution with respect to Minimum Tax
Distributions in an amount needed to pay such Partner's U.S. Taxes Due.
Minimum Tax Distributions made with respect to Section 704(c) Allocations
to a Partner shall be considered advances by the Partnership to such Partner
governed by Section 3.3 hereof ("Section 704(c) Distributions"). If
Distributable Cash is sufficient to make Minimum Tax Distributions (determined
without regard to any allocations related to basis adjustments pursuant to Code
Section 743(b)) to all Partners otherwise entitled to such distributions, then
Minimum Tax Distributions shall be determined without regard to any allocations
related to basis adjustments pursuant to Code Section 743(b). If Distributable
Cash is insufficient to make such Minimum Tax Distribution (as redetermined),
then Minimum Tax Distributions shall be determined with regard to the allocation
related to the basis adjustments pursuant to Code Section 743(b). Minimum Tax
Distributions shall be made by the Partnership pursuant to Section 5.1.2(a) only
with respect to Net Profits Allocations on or after January 1, 1997. Minimum
Tax Distributions and all factors relevant to the determination thereof shall be
determined on a consolidated basis with the Company's subsidiaries.
5.3 Distribution to Limited Partners. It is the intent of the parties
--------------------------------
hereto that no distribution to any Limited Partner shall be deemed a return of
money or other such property in violation of the Act. This provision shall be
deemed to be a compromise within the meaning of Section 17-502(b) of the Act,
and
-51-
the Limited Partner receiving any such money or property shall not be required
to return any such money or property to the Partnership, any creditor of the
Partnership or any other Person. However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Agreement, any
Limited Partner is obligated to return such money or property, such obligation
shall be the obligation of such Limited Partner and not of the General Partners.
5.4 Redemption of Preferred Partnership Interests. On the date which is
---------------------------------------------
270 days after the tenth anniversary of the date hereof (the "Redemption Date"),
the Partnership shall redeem the Preferred Partnership Interests by distributing
to the Partners holding such interests amounts equal to the Unrecovered Capital
and any unpaid and accrued Preferred Return with respect thereto. Upon
redemption of any Preferred Partnership Interest in accordance with this Section
5.4 such Preferred Partnership Interest shall be deemed cancelled. In the event
that the Company offers to redeem any Preferred Partnership Interests prior to
the Redemption Date, such offer shall be made pro rata to all holders of
Preferred Partnership Interests.
5.5 Limitation of Distributions. Notwithstanding any provision to the
---------------------------
contrary contained in this Agreement, the Partnership, and the Executive
Committee on behalf of the Partnership, shall not make a distribution to any
Partner on account of its interest in the Partnership if such distribution would
violate Section 17-607 of the Act or other applicable law, or any bank credit
agreements or indenture debt instruments to which the Partnership is a party.
-52-
ARTICLE VI
MANAGEMENT
----------
6.1 Board of Directors.
------------------
6.1.1 Authority. Pursuant to the Act, the General Partners hereby
---------
delegate to a committee of the Partners' representatives (the "Board of
Directors") the General Partners' rights, powers and authority to manage and
control the overall business and affairs of the Partnership and to do on behalf
of the Partnership all things that are necessary, proper and desirable to
accomplish the Purpose of the Partnership, with respect to both the policy and
direction of the Partnership. The Board of Directors may authorize and direct
the officers of the Partnership to engage in any kind of activity and execute,
perform and carry out agreements of any kind necessary to, or in connection with
or convenient and incidental to, the accomplishment of the Purpose of the
Partnership, so long as such activities and agreements may be lawfully carried
on or performed by a limited partnership under the laws of the State of
Delaware. The Limited Partners shall have no part in the management or control
of the Partnership, shall have no authority or right to act on behalf of the
Partnership in connection with any matter and, except as expressly provided
herein or as required by the Act, shall have no right to consent to or approve
any action by the Board of Directors. Without limiting the generality of the
duties and obligations of the Board of Directors hereunder, except as expressly
provided to the contrary herein, the
-53-
following powers are reserved exclusively to the Board of Directors unless
delegated by the Board of Directors to any Person:
(a) subject to Section 6.4 hereof, and except for the
initial appointments set forth in this Agreement, to employ and retain Persons,
and to prescribe the powers and duties of such Persons, as may be necessary or
appropriate for the conduct of the Partnership's business, including employees
and agents who may be designated as officers with titles including but not
limited to "Chairman," "Chief Executive Officer," "President," "Vice President,"
"Chief Financial Officer," as and to the extent authorized by the Board of
Directors;
(b) to adopt the annual budget of the Partnership and
approve any annual variance from the amount budgeted for capital expenditures;
(c) to change or adopt any incentive compensation plans for
officers, employees and agents of the Partnership and determine amounts payable
under such plans;
(d) to approve the compensation of the officers of the
Partnership, and to approve any base compensation payable to an employee or
agent (other than pursuant to the Marketing Services Agreement or Secondment
Agreement of even date herewith between the Partnership and Mobil Oil
Corporation) of the Partnership that exceeds $100,000 annually for such person;
(e) to select auditors and manage the conduct of legal
proceedings of any form, and to compromise and settle any such proceedings on
whatever terms deemed appropriate by the Board of Directors;
-54-
(f) to receive from Partners contributions to the capital
of the Partnership;
(g) to disburse payments of distributions to Partners
pursuant to Section 5.2;
(h) to disburse other payments as provided for in this
Agreement;
(i) to communicate with the general public, if necessary,
regarding Partnership matters;
(j) to issue to any Partner, in such form and on such terms
as the Board of Directors may consider appropriate, an instrument certifying
that such Partner is the owner of an interest in the Partnership; and
(k) generally to provide all other executive and
administrative undertakings for and on behalf of the Partnership.
6.1.2 Limitations on Authority. The Board of Directors shall have
------------------------
no authority to:
(a) do any act in contravention of this Agreement;
(b) do any act that would make it impossible to carry on
the ordinary business of the Partnership; and
(c) take any action that has been vetoed by a Partner
having a Partner Veto Right.
6.1.3 Duties and Obligations. The Board of Directors shall cause
----------------------
the Partnership to conduct its dealings with third parties in its own name and
as a separate and independent entity. The Board of Directors shall take or
cause to be taken all actions
-55-
that may be necessary or appropriate for the continuation of the Partnership's
valid existence as a limited partnership under the laws of the State of
Delaware.
6.1.4 Composition. The Board of Directors shall initially consist
-----------
of six (6) persons who shall be appointed, prior to an IPO Incorporation, in
accordance with the provisions of this Article (and the Chartwell Partners shall
have the right to nominate 2 additional persons as members of the Board of
Directors, subject to unanimous Executive Committee approval):
(a) So long as the ▇▇▇▇▇▇▇▇ Partners or their Affiliates
collectively directly or indirectly beneficially own at least 51% of Petro, Inc.
and the management of Petro, Inc. is directly or indirectly controlled by the
▇▇▇▇▇▇▇▇ Partners or their Affiliates, and (A) own not less than 7.5% of the
total Common Partnership Interests outstanding or (B) own not less than 75% of
the amount of Preferred Partnership Interests owned by the ▇▇▇▇▇▇▇▇ Partners
collectively as of the date hereof, the ▇▇▇▇▇▇▇▇ Partners collectively shall
have the right to appoint two persons to the Board of Directors. If the ▇▇▇▇▇▇▇▇
Partners or their Affiliates do not so own Petro, Inc. or own less than 7.5% of
--
the total Common Partnership Interests outstanding and less than 75% of the
amount of Preferred Partnership Interests owned by the ▇▇▇▇▇▇▇▇ Partners
collectively as of the date hereof, the ▇▇▇▇▇▇▇▇ Partners shall have no right to
appoint any persons to the Board of Directors.
(b) So long as Mobil or its Affiliates own (A) no less than
3.75% of the total Common Partnership Interests outstanding or (B) no less than
50% of the amount of Preferred
-56-
Partnership Interests owned by Mobil on the date hereof, Mobil shall have the
right to appoint two persons to the Board of Directors. If Mobil or its
Affiliates own less than 3.75% of the total Common Partnership Interests
outstanding and less than 50% of the amount of Preferred Partnership Interests
owned by Mobil on the date hereof, Mobil shall have no right to appoint any
persons to the Board of Directors.
(c) So long as the Chartwell Partners or their Affiliates
own (A) no less than 7.5% of the total Common Partnership Interests outstanding,
the Chartwell Partners collectively shall have the right to appoint two persons
to the Board of Directors. If the Chartwell Partners or their Affiliates own
less than 7.5% of the total Common Partnership Interests outstanding, the
Chartwell Partners shall have no right to appoint any persons to the Board of
Directors.
(d) If a Partner is no longer entitled to appoint members
of the Board of Directors, any members of the Board of Directors that it
appointed shall automatically be removed from the Board of Directors.
(e) Upon an IPO Incorporation, the Board of Director
composition shall be established by the articles of incorporation of the
Corporation.
6.1.5 Term; Vacancies. Each member of the Board of Directors
---------------
shall hold office until death, resignation or removal pursuant to Section
6.1.4(d) or at the pleasure of the Partner or Partners that appointed such
member, and if a vacancy occurs on the Board of Directors, the Partner or
Partners that appointed such
-57-
vacating member shall appoint such member's successor, provided such Partner or
Partners still have appointment power under Section 6.1.4.
6.1.6 Voting. Subject to Section 6.5 hereof, each member of the
------
Board of Directors shall be entitled to one vote on all matters submitted to a
vote of the Board of Directors.
6.1.7 Deadlock. If at any time the Board of Directors, the
--------
Executive Committee or the Partners are unable to reach agreement on matters
described in Section 6.1.1 wherein unanimous vote requirements or Partner Veto
Rights apply and where either unanimous vote is not obtained or Partner Veto
Rights are exercised (other than pursuant to Section 6.6.3), and any member of
the Board of Directors designated by a Partner has given written notice to the
others that a deadlock has occurred (such event, a "Deadlock"), then the
provisions of Section 9.2.2(a) and 9.2.3 (relating to Transfers by the Chartwell
Partners) shall apply.
6.2 Executive Committee.
-------------------
6.2.1 Authority. The Partnership shall have an executive
---------
committee (the "Executive Committee") of the Board of Directors, and the Board
of Directors hereby delegates to the Executive Committee, the authority to take
the following actions and to delegate such authority to any Person:
(a) To take action with respect to matters as to which the
Board of Directors has authority to act during the period between meetings of
the Board of Directors.
-58-
(b) Concurrent with the authority of the Chief Executive
Officer, to terminate the employment of any Senior Officer.
(c) Concurrent with the authority of the Chief Executive
Officer, upon the unanimous approval of the members of the Executive Committee,
to approve the employment of any Senior Officer.
(d) To take such other actions as are specifically provided
for in this Agreement.
6.2.2 Composition. The Executive Committee shall consist of not
-----------
more than three persons, appointed as follows:
(a) The ▇▇▇▇▇▇▇▇ Partners collectively shall have the right
to appoint one person to the Executive Committee. The ▇▇▇▇▇▇▇▇ Partners hereby
appoint as their initial representative to the Executive Committee the Chief
Executive Officer of Petro, who on the date hereof is ▇▇▇▇▇▇▇▇, Sr.
(b) Mobil shall have the right to appoint one person to the
Executive Committee. Mobil hereby appoints as its initial representative to the
Executive Committee the Manager of U.S. Distillate Business (or successor title)
of Mobil Oil Corporation, who on the date hereof is ▇▇▇▇ ▇▇▇▇▇▇▇.
(c) The Chartwell Partners collectively shall have the
right to appoint one person to the Executive Committee. The Chartwell Partners
hereby appoint as their initial representative to the Executive Committee the
President of Chartwell Investments Inc., who on the date hereof is ▇▇▇▇ ▇.
▇▇▇▇▇▇.
-59-
(d) A Partner shall no longer be entitled to representation
on the Executive Committee if it no longer is entitled to appoint any members of
the Board of Directors or have representatives thereon.
6.2.3 Voting. Subject to Section 6.5, each member of the
------
Executive Committee shall be entitled to one (1) vote on all matters submitted
to the Executive Committee for consideration.
6.3 Operating Committee.
-------------------
6.3.1 Authority. The Partnership shall have an operating
---------
committee (the "Operating Committee") of the Board of Directors, and the Board
of Directors hereby delegates to the Operating Committee operations authority
for the Partnership, subject to the review by the Board of Directors and the
Executive Committee.
6.3.2 Composition. The Operating Committee shall be comprised of
-----------
the following persons: (i) the Chief Executive Officer; (ii) the President;
(iii) the Executive Vice President and Chief Financial Officer; (iv) the Senior
Vice President of Operations; (v) the Senior Vice President of Strategic
Planning and Development; (vi) the Vice President of Real Estate Services; (vii)
a representative designated collectively by the Chartwell Partners; (viii) if
the Senior Vice President of Strategic Planning and Development is not a
secondment employee of Mobil, a representative designated by Mobil; and (ix)
such other persons as the Board of Directors shall designate.
6.4 Officers. The Partnership shall have the officers set forth in this
--------
Section 6.4 and such additional officers as the Board
-60-
of Directors may designate. The officers of the Partnership shall manage the
day-to-day affairs of the Partnership at the direction of the Board of Directors
and the Executive Committee.
6.4.1 Chairman. The Partnership shall have a Chairman of the
--------
Board of Directors (the "Chairman"). The Chairman shall preside at all meetings
of the Partners and all meetings of the Board of Directors. Subject to Section
6.5 relating to the applicability of Control Remedy C to the Partnership, the
Chairman and the Executive Committee shall each have the authority to hire and
terminate the employment of any Senior Officer. The Partners hereby appoint
▇▇▇▇▇▇▇▇, Sr. as the initial Chairman, Chief Executive Officer and President of
the Partnership.
6.4.2 Chief Executive Officer. The Partnership shall have a Chief
-----------------------
Executive Officer who, subject to the authority of the Board of Directors and
the Executive Committee, shall manage the business and affairs of the
Partnership. The Chief Executive Officer shall be the Chairman of the Operating
Committee. In the absence of the Chairman of the Board of Directors, the Chief
Executive Officer shall preside at all meetings of the Partners and all meetings
of the Board of Directors. The Chief Executive Officer shall carry out the
directives of the Board of Directors.
6.4.3 President. The Partnership shall have a President who,
---------
subject to the authority of the Board of Directors and the Executive Committee,
shall serve under the direction of the Chief Executive Officer. In the absence,
incapacity or inability or refusal of the Chief Executive Officer to act, the
President
-61-
shall assume the authority and perform the duties of the Chief Executive
Officer.
6.4.4 Executive Vice President and Chief Financial Officer. The
----------------------------------------------------
Partnership may have an Executive Vice President and Chief Financial Officer who
shall serve under the direction of the Chief Executive Officer. In the absence,
incapacity or inability or refusal of the Chief Executive Officer and the
President to act, the Executive Vice President and Chief Financial Officer shall
(unless the Board of Directors determines otherwise) assume the authority and
perform the duties of the Chief Executive Officer.
6.4.5 Senior Vice President of Strategic Planning and Development.
------------------------------------------------------------
The Partnership may have a Senior Vice President of Strategic Planning and
Development who shall serve under the direction of the Chief Executive Officer.
The Senior Vice President of Strategic Planning and Development shall be
responsible for all aspects of the Partnership relating to human resources,
corporate planning, franchisee business and support services of the Partnership.
The Partners hereby appoint ▇▇▇▇ ▇▇▇▇▇▇▇ as the initial Senior Vice President of
Strategic Planning and Development.
6.4.6 Senior Vice President of Operations. The Partnership may
-----------------------------------
have a Senior Vice President of Operations who shall serve under the direction
of the Chief Executive Officer. The Senior Vice President of Operations shall
be responsible for the operations at sites owned or operated by the Partnership
and fleet business of the Partnership. The Partners hereby appoint ▇▇▇▇▇▇▇▇,
Jr. as the initial Senior Vice President of Operations.
-62-
6.4.7 Vice President of Real Estate Services. The Partnership may
--------------------------------------
have a Vice President of Real Estate Services who shall serve under the
direction of the Chief Executive Officer. The Vice President of Real Estate
Services shall be responsible for all maintenance and improvements of property
and structures, and the development of new locations of the Partnership. The
Partners hereby appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as the initial Vice President of Real
Estate Services.
6.4.8 Secretary. The Secretary shall attend all meetings of the
---------
Board of Directors and all meetings of the Partners and record all votes and the
proceedings of the meetings in a book to be kept for that purpose and shall
perform like duties for any committees of the Board of Directors, if requested
by such committee. He shall give, or cause to be given, notice of all meetings
of Partners and special meetings of the Board of Directors, and shall perform
such other duties as may from time to time be prescribed by the Board of
Directors or the Chairman. He shall have custody of the seal of the
Partnership, if any, and he, or an Assistant Secretary, shall have authority to
affix the same to any instrument requiring it, and, when so affixed, the seal
may be attested by his signature or by the signature of such Assistant
Secretary.
6.4.9 Limitation. A Limited Partner, any Affiliate thereof or an
----------
employee, stockholder, partner, member, manager, agent, director, officer or
representative of a Limited Partner or any Affiliate thereof, may also be an
employee, agent, stockholder, partner, member, manager, director, officer or
representative of
-63-
the Partnership or a General Partner. The existence of these relationships and
acting in such capacities will not result in the Limited Partner being deemed to
be participating in the control of the business of the Partnership or otherwise
affect the limited liability of the Limited Partner.
6.4.10 Authority Generally. Unless specifically reserved to the
-------------------
Board of Directors under this Agreement, the officers of the Partnership shall
have such authority as is necessary and appropriate to carry out the functions
of such officer. Each officer of the Partnership shall have such additional
authority, including authority to execute documents, instruments and agreements
on behalf of the Partnership, as is expressly delegated to such officer by the
Board of Directors. One Person may hold one or more offices simultaneously.
6.5 Modifications to Control.
------------------------
6.5.1 Loan Default. In the event that the Partnership is in
------------
violation of any covenant under any loan document with respect to any lender to
the Partnership, then Control Remedy A and Control Remedy B shall apply to the
Partnership.
6.5.2 EBITDA Control Remedy A. In the event that EBITDA Actual
-----------------------
Results of the Partnership's operations for the latest four quarters commencing
with the second full calendar quarter after the date hereof are less than 95% of
the EBITDA Projections for such period, then Control Remedy A shall apply to the
Partnership.
6.5.3 EBITDA Control Remedy B. In the event that EBITDA Actual
-----------------------
Results of the Partnership's operations for the
-64-
latest four quarters commencing with the second full calendar quarter after the
date hereof are less than 90% of the EBITDA Projections for such period, then
Control Remedy B shall apply to the Partnership.
6.5.4 Control Remedy C. In the event that (i) the Partnership is
----------------
in violation of any covenant under any loan document with respect to any lender
to the Partnership, and such violation is not waived or cured within the period
permitted by such agreement, or (ii) the Partnership is in default of the terms
of payment of principal or interest under any loan document with respect to any
lender to the Partnership, or (iii) EBITDA Actual Results of the Partnership's
operations for the latest five quarters commencing with the second full calendar
quarter after the date hereof are less than 85% of the EBITDA Projections for
such period, then Control Remedy C shall apply to the Partnership. Control
Remedy C shall continue to apply until EBITDA Actual Results of the
Partnership's operations for the latest five quarters remain above 95% of the
EBITDA Projections for such period for three consecutive quarters, at which
point in time the provisions of Control Remedy C shall no longer apply. Any
reductions in the levels of authority of the Chairman or any Senior Officer, and
any management replacements, as a result of the application of Control Remedy C
to the Partnership, shall remain in effect until such time as the Board of
Directors approves otherwise.
6.5.5 No Limitation. Nothing in this Section 6.5 shall be deemed
-------------
to imply or indicate that the Board of Directors
-65-
shall not have the authority, in the absence of the conditions referred to in
Sections 6.5.1, 6.5.2 and 6.5.3, to take any of the Board actions set forth in
Control Remedy A, Control Remedy B and Control Remedy C, which authority is
hereby confirmed.
6.6 Major Decisions.
---------------
6.6.1 In General. The Partnership shall not take any of the
----------
following actions without the consent of all Partners having Partner Veto
Rights:
(a) Amend or cancel any agreement (subject to the
provisions of such agreement), or enter into a new agreement, between the
Partnership and a Partner or Affiliate of a Partner;
(b) Acquire any real property that serves or is intended to
serve as a truck stop in the business of the Partnership;
(c) Enter into a franchise agreement relating to the name
or any aspect of the Partnership's business with any Person; or
(d) Permit the tax matters partner to take any position or
make any decision that could materially adversely affect the Partnership or any
Partner;
(e) In accordance with Section 8.1, amend any of the
following Articles or Sections of this Agreement: Sections 6.1.4 (Composition of
the Board of Directors), 8.1 (Amendments), 3.1.3 (Capital Contribution Rights),
5.1.2 (Cash Distributions), Article IV (Allocations), 11.1 (Noncompetition), 9.2
(Transfer and Assignment), or Article VI (Management); and
-66-
(f) In accordance with and subject to Section 9.1, admit
any new Limited Partners to the Partnership.
6.6.2 Partner Veto Rights. Only the Partners specified in this
-------------------
Section 6.6.2 shall have the right to veto ("Partner Veto Rights") any of the
actions by the Board of Directors, the Executive Committee, the Operating
Committee or the Partnership set forth in Section 6.6.1 if such Partner
maintains the requirements of ownership of Partnership Interests set forth in
this Section 6.6.2 for such Partner:
(a) So long as Mobil or its Affiliates own no less than
7.5% of the total outstanding Common Partnership Interests or no less than 50%
of the amount of Preferred Partnership Interests owned by Mobil on the date
hereof, Mobil shall have Partner Veto Rights.
(b) So long as the Chartwell Partners or their Affiliates
collectively own no less than 7.5% of the total outstanding Common Partnership
Interests, Holdings GP shall have Partner Veto Rights.
(c) So long as the ▇▇▇▇▇▇▇▇ Partners or their Affiliates
own no less than 7.5% of the total outstanding Common Partnership Interests or
own at least 75% of the amount of Preferred Partnership Interests owned on the
date hereof, Petro shall have Partner Veto Rights.
6.6.3 Additional Limitations on Actions of the Partnership. So
----------------------------------------------------
long as Mobil or its Affiliates own no less than 3.75% of the total outstanding
Common Partnership Interests or no less than 50% of the Preferred Partnership
Interests owned by Mobil
-67-
on the date hereof, the Partnership shall take no action that is a material
adverse change to Mobil, in Mobil's reasonable opinion, in Petro's national
retail image standards and marketing strategy; provided, however, that the
-------- -------
provisions hereof shall not prevent the Partnership from acquiring one or more
truck stops if such acquired truck stops will not be branded Petro or Mobil
until they meet such standards.
6.6.4 Voting. Except as specifically set forth in Section 17-216
------
of the Act, no Partner shall have any right to vote on any matter relating to
the Partnership except as expressly provided in this Agreement. No class of
Partners shall have any right to vote as a class on any matter relating to the
Partnership except as expressly provided in this Agreement. The Partnership may
merge with, consolidate into, or convert into, another Person only upon the
unanimous consent of the Partners that have Partner Veto Rights (without the
need for the consent of any other Person); provided, however, that the
-------- -------
Partnership may merge with, consolidate into, or convert into, another Person to
consummate an IPO Incorporation upon the approval of only the Chartwell Partners
(without the need for the consent of any other Person (subject to Section 12.1.6
of this Agreement)).
6.7 Right to Rely on Chairman or Secretary. Any Person dealing with the
--------------------------------------
Partnership may rely (without duty of further inquiry) upon a certificate signed
by the Chairman or Secretary as to the identity of any Partner, the Persons who
are authorized to execute and deliver any instrument or document of the
Partnership
-68-
and any act or failure to act by the Partnership or any other matter whatsoever
involving the Partnership or any Partner.
6.8 Meetings and Approval Requirements of Board of Directors and
------------------------------------------------------------
Committees.
----------
6.8.1 Regular Meetings. The Board of Directors and its committees
----------------
shall hold regular meetings at such times and places as are established by the
consent of the Board of Directors or such committees.
6.8.2 Special Meetings. A special meeting of the Board of
----------------
Directors or any committee thereof shall be held at the written request of any
member of the Board of Directors or such committee.
6.8.3 Telephonic Meetings. Any meeting of the Board of Directors
-------------------
or any committee thereof may be held by conference telephone call or through
similar communications equipment by means of which all persons participating in
the meeting can hear each other. Participation in a telephonic meeting held
pursuant to this Section shall constitute presence in person at such meeting.
6.8.4 Notices. Notices of regular meetings of the Board of
-------
Directors or its committees are not required. Notices of special meetings of
the Board of Directors or its committees shall state the date and hour of the
meeting and the purpose or purposes for which the meeting is called. Special
meetings shall be held at the address of the Partnership or at such other place
as shall be agreed to by the members of the Board of Directors or such
committee. The notice of a special meeting shall be given to each member of the
Board of Directors or its committees in writing not
-69-
less than one (1) or more than ten (10) days prior to the date of the meeting.
Members of the Board of Directors or its committees may waive in writing the
notice requirements hereunder before, at or after the relevant special meeting.
Notices shall be delivered personally, by telecopy or recognized overnight
delivery service to the last known business address of each member of the Board.
6.8.5 Quorum. At each meeting of the Board of Directors or its
------
committees, the presence in person or by telephone of a majority of the votes of
the members of the Board of Directors or such committee, provided that at least
one nominee of each of the ▇▇▇▇▇▇▇▇ Partners, the Chartwell Partners and Mobil
(so long as each shall be entitled to membership thereon) shall be present,
shall be necessary to constitute a quorum for the transaction of business.
6.8.6 Approval Requirements. Subject to Section 6.6.1 (relating
---------------------
to major decisions), consent or approval of the Board of Directors or its
committees shall mean the affirmative vote of a majority of the votes of the
members of the Board of Directors or such committees present in person or by
telephone, as applicable, and voting at a duly held meeting of the Board of
Directors or its committees.
6.8.7 Written Consents. Any action required or permitted to be
----------------
taken at a meeting of the Board of Directors or its committees may be taken
without a meeting if all of the members of the Board of Directors or such
committee consent thereto in writing. Such consents shall be filed with the
minutes of the proceedings of the Board of Directors or such committee.
-70-
ARTICLE VII
LIABILITY AND INDEMNIFICATION
-----------------------------
7.1 General. Each current and former Partner of the Partnership and the
-------
shareholders, partners, officers, directors, members, managers, employees and
agents of each Partner and its Affiliates, including the tax matters partner and
each member of the Board of Directors and each committee thereof and the
officers of the Partnership (individually, an "Exculpated Party") shall not be
liable, responsible or accountable in damages or otherwise to the Partnership or
any Partner and shall be indemnified and held harmless by the Partnership, to
the fullest extent permitted by law, with respect to any liability, damage,
loss, injury, expense and cost (including reasonable attorneys' fees) to any
Person for any act or omission performed or omitted: (a) in good faith on behalf
of the Partnership; (b) in a manner reasonably believed by such Person to be
within the scope of the authority granted to such Person by this Agreement or
the Board of Directors; and (c) in a manner not constituting willful misconduct,
fraud, breach of such Person's fiduciary duty of loyalty or gross negligence.
The Partnership shall indemnify, defend and hold harmless each Exculpated Party,
to the fullest extent permitted by law, for any such acts or omissions, and for
any acts or omissions not meeting such requirements to the extent that a court
determines that in view of all the circumstances of the case, such Exculpated
Party is fairly and reasonably entitled to indemnification for those expenses
that the court deems proper. If approved by the Board of Directors, expenses
(including reasonable attorneys' fees and
-71-
costs) incurred by an Exculpated Party in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Partnership in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Exculpated
Party to repay such amount if it shall ultimately be determined that such
Exculpated Party is not entitled to be indemnified by the Partnership.
7.2 Intentionally Deleted.
---------------------
7.3 Indemnification by Petro Partners. The Petro Partners (with such
---------------------------------
several, or joint and several liability as set forth in the definition of Petro
Indemnifying Party in Section 1.1) agree, to the fullest extent permitted by
law, to indemnify the Partnership, the Bechtel Partners, their assigns and any
Petro Partner who is not an Indemnifying Party with respect to a particular
Petro Indemnified Loss, together with their respective Indemnified Parties, from
and against, and to hold them harmless from any Petro Indemnified Loss.
7.4 Survival. The obligations of the Petro Partners contained in Section
--------
7.3 shall survive without limitation in time, except as specifically set forth
in the definition of "Petro Indemnified Loss" in Section 1.1.106 hereof.
7.5 Indemnification Procedures. In any instance where the Partnership or
--------------------------
a Petro Partner is the Indemnifying Party, the provisions of this Section 7.5
shall apply:
7.5.1 Notice. Promptly after the determination of an Indemnified
------
Loss or the assertion of any claim or the commencement of any action by any
third party in respect of which a Person is
-72-
entitled to be indemnified or held harmless under this Agreement, the
Indemnified Person shall notify the Indemnifying Parties in writing of the
Indemnified Loss or the assertion of claim or commencement of action.
7.5.2 Reimbursement. In the case of an Indemnified Loss not
-------------
involving an assertion of claim or commencement of action by any third party,
the Indemnifying Parties shall promptly reimburse the Indemnified Person for all
damages, loss, injury, expense and costs, including reasonable attorneys' fees
and costs which the Indemnified Person has suffered or may thereafter suffer as
a result thereof.
7.5.3 Defense by Indemnifying Parties. Promptly after the
-------------------------------
assertion of any claim or the commencement of any action by any third party in
respect of which an Indemnified Person is entitled to be indemnified or held
harmless under this Agreement, the Indemnified Person shall notify the
Indemnifying Parties in writing of such assertion or commencement. Subject to
paragraph 7.5.4 below, the Indemnifying Parties shall, at the Indemnifying
Parties' expense, assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Person. Subject to paragraph 7.5.4 below, the
Indemnifying Parties shall have full control of the defense, including any
compromise or settlement; provided, however, that any settlement requiring
-------- -------
material nonmonetary consideration from the Indemnified Person must be approved
in advance by the Indemnified Person, which approval shall not be unreasonably
withheld.
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7.5.4 Defense by Indemnified Person. If the Indemnifying Parties
-----------------------------
fail to diligently and promptly defend or settle the claim or action after
notice, which failure continues for more than thirty (30) days after such
notice, or if the Indemnified Person is the Partnership or one or more of the
Bechtel Partners, then the Indemnified Person shall have the right to defend, at
the sole cost and expense of the Indemnifying Parties, the claim by all
appropriate proceedings, which proceedings shall be promptly and vigorously
prosecuted by the Indemnified Person to a final conclusion or settled. If the
preceding sentence applies, the Indemnified Person shall have full control of
such defense and proceedings, provided, however, that without the Indemnifying
-------- -------
Parties' consent, which shall not be unreasonably withheld, the Indemnified
Person may not enter into any compromise or settlement of such claim; and
provided, further, however, that if the Indemnified Person receives a bona fide
-------- ------- -------
offer of monetary settlement (without the requirement for material nonmonetary
settlement terms that the Indemnified Person in its sole discretion determines
to be contrary to the Indemnified Person's best interests) for any such claim
with respect to which the Indemnifying Parties are obligated to indemnify such
Indemnified Person, the Indemnified Person shall inform the Indemnifying Parties
of the proposed settlement terms and if the Indemnifying Parties are willing and
able to pay such settlement upon its terms but the Indemnified Person is not
willing to settle on such terms, the maximum indemnification that the
Indemnifying Parties must provide to the Indemnified Person with respect to such
claim shall
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be the amount of such bona fide offer of settlement the Indemnifying Parties
were willing and able to pay (plus expenses and costs, including reasonable
attorneys' fees, incurred to the date such settlement offer is rejected by the
Indemnified Person). If requested by the Indemnified Person, the Indemnifying
Parties shall, at the sole cost and expense of the Indemnifying Parties,
cooperate with the Indemnified Person and its counsel in contesting any claim
related to the Indemnified Loss that the Indemnified Person is contesting, or,
if appropriate and related to the claim in question, in making any compulsory
counterclaim against the Person asserting the claim or any cross-complaint
against any Person.
7.5.5 Fees and Expenses. The Indemnified Person shall have the
-----------------
right to employ separate counsel in any action and to participate therein, but
the fees and expenses of such counsel shall be at the expense of the Indemnified
Person unless (i) the employment thereof has been specifically authorized by the
Indemnifying Parties in writing, (ii) paragraph 7.5.4 above shall be applicable,
or (iii) the named parties to such action (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Person, and the
Indemnified Person shall have been advised by counsel that there are likely to
be one or more meritorious legal defenses available to it which are different
from or in addition to those available to the Indemnifying Parties. In the
event any of the conditions set forth in this paragraph 7.5.5 are met, the
Indemnifying Parties shall not have the right to assume the defense of such
action on behalf of the Indemnified
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Person but shall indemnify the Indemnified Person against all litigation
expenses (including reasonable fees and expenses of counsel) in connection with
such defense. In the event the conditions set forth in this paragraph 7.5.5 are
met, the Indemnified Person shall have the right to select such Person's
counsel, which counsel must be reasonably satisfactory to the Indemnifying
Parties.
7.5.6 Periodic Payments. Indemnification hereunder shall be made
-----------------
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or loss, damage,
liability, cost or expense is incurred; provided, however, that no settlement or
-------- -------
compromise of any claim asserted or action commenced in respect of which the
Indemnifying Parties will be liable in accordance with its indemnity under this
Agreement shall give rise to liability of the Indemnifying Parties unless the
Indemnifying Parties shall have been notified in writing of the proposed
settlement or compromise and shall have consented in writing thereto, which
consent shall not be unreasonably withheld. Promptly after the discovery of any
facts or circumstances giving rise to any claim for indemnification under this
Agreement, the Indemnified Person shall notify the other parties of the
existence of such claim and the basis therefor, provided, however, that the
-------- -------
failure of any Indemnified Person to give such notice promptly shall not relieve
the Indemnifying Parties of the indemnity obligations except to the extent that
such failure shall adversely affect the ability to defend against third party
claims or actions to which the indemnity obligation applies.
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7.5.7 Intentionally Deleted.
---------------------
7.5.8 Insurance. The liability of any Indemnifying Parties
---------
hereunder shall be reduced by the amount of insurance, including title insurance
and liability insurance, and any other amounts that may be recovered by the
Indemnified Person from any third party, provided, however, that the Indemnified
-------- -------
Person shall have no obligation to exhaust available remedies against any
insurer or other third party, and it shall be the obligation of, and at the sole
expense of, the Indemnifying Parties to pursue any remedies that may be
available from any third party to reduce the amount otherwise payable by the
Indemnifying Parties and the Indemnified Person shall use reasonable efforts to
assist and cooperate with the Indemnifying Parties (at the expense of the
Indemnifying Parties) in pursuing such remedies. So long as the Indemnifying
Parties shall be diligently pursuing remedies against any such third party,
which remedies counsel for the Indemnifying Parties (who shall be reasonably
acceptable to the Indemnified Person) shall have informed the Indemnified Person
to be reasonably meritorious in the opinion of such counsel, and so long as the
Indemnifying Parties shall have posted such bonds and otherwise entered into
arrangements satisfactory to the Indemnified Person (in such Person's sole but
reasonable discretion) to assure the Indemnified Person that it will not be
adversely affected by delay in payment (including loss of interest of cost of
funds, as applicable) by the Indemnifying Parties, the Indemnifying Parties may
defer payment of amounts which they would otherwise be obligated to pay
hereunder to the extent that such third party may
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be liable therefor. If in the opinion of the Indemnified Person, the
Indemnified Person has remedies available to it against third parties and the
Indemnifying Parties do not have such remedies available to them against the
same third parties, then at the option of the Indemnifying Parties, the
Indemnified Person shall, at the sole cost of the Indemnifying Parties, exhaust
available remedies against any such third party; provided, however, that the
-------- -------
Indemnifying Parties shall use all reasonable efforts to assist and cooperate
with the Indemnified Person (at the expense of the Indemnifying Parties) in
pursuing such remedies; and provided further, however, that the Indemnifying
---------------- -------
Parties shall have posted such bonds and otherwise entered into arrangements
satisfactory to the Indemnified Person (in such Person's sole but reasonable
discretion) to assure the Indemnified Person that it will not be adversely
affected by delay in payment (including loss of interest or cost of funds, as
applicable) by the Indemnifying Parties.
7.6 Liabilities in Exhibit D of the Participation Agreement and
-----------------------------------------------------------
Obligations. The parties acknowledge that the liabilities and obligations
-----------
listed on Exhibit D of the Participation Agreement were not assumed by the
Partnership and continue as the sole responsibility of the Person or Persons
having responsibility therefor prior to the closing of the First Amended
Agreement and the Participation Agreement. Should the Partnership (or any
Partners in the Partnership other than the responsible Person) become liable or
obligated or should any claim or allegation be made that the Partnership (or any
Partners in the Partnership other than the responsible Person) are liable or
obligated in respect
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thereof, such matter shall be treated as a Petro Indemnified Loss under this
Agreement.
7.7 No Personal Liability for Indemnification. Notwithstanding anything
-----------------------------------------
to the contrary in this Agreement, in no event will any indemnification
obligation set forth in this Article VII or otherwise subject any Partner to
personal liability.
ARTICLE VIII
AMENDMENTS
----------
8.1 Amendments. Subject to Section 6.6.1(e) or as otherwise provided in
----------
this Agreement, this Agreement may be amended if such amendment is approved by
the holders of 66 2/3% of the Common Partnership Interests (determined by
reference to Capital Account balances as most recently calculated prior to the
date of the relevant vote or consent); provided, however, that no provision of
-------- -------
this Agreement may be amended in a manner which would alter or change the
powers, preferences or special rights of the Partnership Interests or a Partner
so as to adversely affect the rights of the holder of such Partnership Interests
or such Partner without the consent of such Partner. Amendments to this
Agreement may be made only by an instrument in writing signed by the Partners
whose consent is required. Without the consent of any other Person, the Board
of Directors may amend and revise Schedule A to this Agreement to properly
----------
reflect any changes required to be reflected thereon by this Agreement.
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ARTICLE IX
ADMISSIONS; EXITS AND TRANSFERS
-------------------------------
9.1 Admission of Additional Limited Partners. Subject to Section 3.1.4,
----------------------------------------
the Partners owning a majority of the Common Partnership Interests at any time
may admit any Person who shall agree to be bound by all of the terms of this
Agreement as an additional Limited Partner upon the consent of all Partners
having Partner Veto Rights at such time, which consent may not be unreasonably
withheld. The amount of any initial Capital Contribution to be made by such new
Limited Partner shall be determined by the Board of Directors. Effective upon
such admission, the Sharing Percentage of each existing Partner of the
Partnership shall be adjusted pro rata to reflect the Partnership Interest of
the new Limited Partner, and Schedule A shall be revised to reflect such
----------
adjusted Sharing Percentages as well as the name and initial Capital
Contribution of such new Limited Partner. For purposes of this Section 9.1, the
withholding of consent shall not be deemed unreasonable if based on a material
retail image issue or a competitive petroleum issue or the likelihood that such
new Limited Partner would have a detrimental effect on the business of the
Partnership.
9.2 Restriction on Transfers by Partners.
------------------------------------
9.2.1 General. No Partner shall sell, assign or otherwise dispose
-------
of or transfer ("Transfer") all or any portion of its Partnership Interest
except in accordance with the provisions of this Section 9.2 and Section 13.8,
except as heretofore
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otherwise disclosed in writing to the Partners and except as required by the
lenders to the Partnership.
9.2.2 Chartwell Transfers.
-------------------
(a) If a Deadlock occurs or the Chartwell Partners otherwise
desire to Transfer some or all of their respective Partnership Interests, the
provisions of this Section 9.2.2(a) shall apply. The Chartwell Partners first
may deliver a written notice to the Partnership and the other Partners (in the
case of a Deadlock, within 45 days after the occurrence of such Deadlock), which
notice shall include a statement designating the Partnership Interests that the
Chartwell Partners desire to Transfer. Within thirty (30) calendar days after
receipt of such notice by the ▇▇▇▇▇▇▇▇ Partners, the ▇▇▇▇▇▇▇▇ Partners shall
notify the Chartwell Partners and Mobil of the price (the "▇▇▇▇▇▇▇▇ Buy Price")
at which the ▇▇▇▇▇▇▇▇ Partners propose that the ▇▇▇▇▇▇▇▇ Partners and/or Mobil
may purchase the Partnership Interests designated by the Chartwell Partners.
Within thirty (30) calendar days after receipt of the ▇▇▇▇▇▇▇▇ Buy Price by the
Chartwell Partners, the ▇▇▇▇▇▇▇▇ Partners and Mobil shall have the right to
offer to purchase, or to designate a third party to purchase, the Partnership
Interests of the Chartwell Partners at the ▇▇▇▇▇▇▇▇ Buy Price in proportion to
each of ▇▇▇▇▇▇▇▇ Partners' and Mobil's respective shares of the aggregate of the
▇▇▇▇▇▇▇▇ Partners' and Mobil's Common Partnership Interests or otherwise as the
▇▇▇▇▇▇▇▇ Partners and Mobil Partners may agree. If the ▇▇▇▇▇▇▇▇ Partners
collectively or Mobil do not offer to purchase all or part of their
proportionate shares of the aggregate of the Chartwell Partners'
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and Mobil's Common Partnership Interests, such ▇▇▇▇▇▇▇▇ Partners on the one hand
and Mobil shall notify the remaining party. Such remaining parties shall have
the right to offer to purchase all or part of such remaining Partnership
Interests of the Chartwell Partners. If the Chartwell Partners decline the
▇▇▇▇▇▇▇▇ Buy Price or the ▇▇▇▇▇▇▇▇ Partners and Mobil elect not to offer to
purchase the Partnership Interests of the Chartwell Partners, the Chartwell
Partners shall have one hundred eighty (180) calendar days, after the receipt of
a statement of purchase intentions from all of the ▇▇▇▇▇▇▇▇ Partners and Mobil,
to market the sale of all outstanding Partnership Interests of the Partnership
at an enterprise value not less than 105% of the ▇▇▇▇▇▇▇▇ Buy Price. If the
Chartwell Partners are successful in locating a third party purchaser within one
hundred eighty (180) days after the receipt of a statement of purchase
intentions from all of the ▇▇▇▇▇▇▇▇ Partners and Mobil, the ▇▇▇▇▇▇▇▇ Partners
and Mobil shall each receive its respective percentage of the sale price of all
of the Partnership Interests of the Partnership determined with reference to the
▇▇▇▇▇▇▇▇ Buy Price. If the Chartwell Partners do not find a third party
purchaser on such terms within such 180-day period, then the Chartwell Partners
shall so notify the ▇▇▇▇▇▇▇▇ Partners and Mobil and shall be deemed to have made
an offer to sell to the ▇▇▇▇▇▇▇▇ Partners and Mobil (based upon their respective
ownership of Common Partnership Interests) the Partnership Interests of the
Chartwell Partners at a price that is equal to 95% of the ▇▇▇▇▇▇▇▇ Buy Price.
If the ▇▇▇▇▇▇▇▇ Partners and Mobil do not accept the offer to purchase the
Partnership Interests of the Chartwell Partners at a
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price that is equal to 95% of the ▇▇▇▇▇▇▇▇ Buy Price within 30 days after the
end of the 180 days, the Chartwell Partners shall have the right to market and
arrange to sell all of the Partnership Interests of the Partnership to a third
party at the best price that it is able to obtain. Upon such sale, the ▇▇▇▇▇▇▇▇
Partners and Mobil shall receive their respective share of the proceeds of such
sale based on their respective ownership of Common Partnership Interests;
provided, however, that if the price of such sale would be less than 90% of the
-------- -------
▇▇▇▇▇▇▇▇ Buy Price, then the ▇▇▇▇▇▇▇▇ Partners and Mobil shall have a pro rata
right of first refusal (based on their respective ownership of Common
Partnership Interests or otherwise as they may mutually agree) to purchase the
Partnership Interests of the Chartwell Partners at such price.
(b) A closing on the sale of all or part of the Partnership
Interests owned by the Chartwell Partners must occur within ninety (90) calendar
days after the acceptance of any offer to purchase such Partnership Interests
pursuant to the procedures set forth in Sections 9.2.3(d), (e) and (f) below.
9.2.3 ▇▇▇▇▇▇▇▇ Buy-Sell.
-----------------
(a) Notice of ▇▇▇▇▇▇▇▇ Buy-Sell. Subject to the last sentence
---------------------------
of this Section 9.2.3(a), if ▇▇▇▇▇▇▇▇, Sr. is terminated as Chairman or Chief
Executive Officer of the Partnership, or he terminates his employment "for good
reason" as defined in his Employment Agreement with the Partnership of even date
herewith, (a "Removal"), or if there is a Deadlock and Chartwell Partners do not
exercise their rights under Section 9.2.2(a), then within thirty (30) days
thereafter the ▇▇▇▇▇▇▇▇
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Partners may give written notice (the "▇▇▇▇▇▇▇▇ Buy-Sell Notice") to each of the
members of the Board of Directors appointed by Mobil and the Chartwell Partners
stating that the ▇▇▇▇▇▇▇▇ Partners desire to exercise their rights under this
Section 9.2.3 to sell to, or purchase from, each of Mobil and the Chartwell
Partners, all the Common Partnership Interests and Preferred Partnership
Interests owned by such Partners and their Affiliates (such interests
collectively, the "Entire Interests"). For purposes of determining a purchase
price under this Section 9.2.3(c), the ▇▇▇▇▇▇▇▇ Buy-Sell Notice shall specify an
amount that the ▇▇▇▇▇▇▇▇ Partners designate to be the gross fair market value of
all assets of the Partnership. The purchase price for the selling Partners'
Partnership Interests shall be determined pursuant to Section 9.2.3(c) (relating
to Purchase Price). Any ▇▇▇▇▇▇▇▇ Buy-Sell Notice given by any of the ▇▇▇▇▇▇▇▇
Partners shall be deemed to be given by such party and all of the ▇▇▇▇▇▇▇▇
Partners. Notwithstanding anything else in this Section 9.2.3 to the contrary,
▇▇▇▇▇▇▇▇, Sr. shall have no rights to buy or sell Partnership Interests pursuant
to this Section 9.2.3 solely because ▇▇▇▇▇▇▇▇, Sr. dies, becomes disabled,
resigns (other than "for good reason"), is terminated for cause, as defined in
the ▇▇▇▇▇▇▇▇, Sr. Employment Agreement or is terminated as a result of the
application of Control Remedy B or Control Remedy C to the Partnership. In the
event that the ▇▇▇▇▇▇▇▇ Partners sell their Entire Interests pursuant thereto,
▇▇▇▇▇▇▇▇▇ shall have the right to sell its Partnership Interests at the same pro
rata Purchase Price, in which event for purposes of this Section 9.2.3 the
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▇▇▇▇▇▇▇▇▇ Partnership Interests shall be deemed a part of the ▇▇▇▇▇▇▇▇ Partners
Entire Interests.
(b) Election. The Chartwell Partners shall have thirty (30)
days after receipt of the ▇▇▇▇▇▇▇▇ Buy-Sell Notice to elect by written notice to
the ▇▇▇▇▇▇▇▇ Partners (A) to buy the ▇▇▇▇▇▇▇▇ Partners' Entire Interests (the
"Buy Option") or (B) to sell to the ▇▇▇▇▇▇▇▇ Partners the Entire Interests of
the Chartwell Partners (the "Sell Option"). If the Chartwell Partners elect the
Buy Option, each of Mobil and the Chartwell Partners shall, in the absence of a
contrary agreement between them, be entitled to purchase that proportion of the
selling ▇▇▇▇▇▇▇▇ Partners' Entire Interests as such buying Partner's Percentage
Interest bears to the Percentage Interests of all of the buying Partners, but as
to the ▇▇▇▇▇▇▇▇ Partners, each buying Partner shall be jointly and severally
obligated with respect to the purchase price for the Entire Interests. If the
Chartwell Partners elect the Sell Option, each ▇▇▇▇▇▇▇▇ Partner shall, in the
absence of a contrary agreement between them, be entitled and obligated to
purchase that proportion of the selling Partners' Entire Interests as such
▇▇▇▇▇▇▇▇ Partner's Percentage Interest bears to the Percentage Interests of all
of the ▇▇▇▇▇▇▇▇ Partners, but as to the selling Partners each ▇▇▇▇▇▇▇▇ Partner
shall be jointly and severally obligated with respect to the purchase price for
the Entire Interests, except that ▇▇▇▇▇▇▇▇, Jr. and JAJCO II shall be jointly
and severally obligated to the selling Partners only for that percentage of the
purchase price which is equal to the percentage that their collective
Partnership Interests bear to the Percentage Interest of all of the
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▇▇▇▇▇▇▇▇ Partners. The Chartwell Partners shall notify the ▇▇▇▇▇▇▇▇ Partners of
their election within the thirty (30) day period. If no response is received
from the Chartwell Partners within the thirty (30) day period, such failure to
respond shall be deemed an election of the Sell Option. If either the Buy
Option or the Sell Option is properly exercised or deemed exercised as provided
above, then the Partners shall buy and sell their respective Entire Interests in
accordance with this Section 9.2.3.
(c) Purchase Price. The purchase price of the selling
--------------
Partners' Entire Interests shall equal the net amount which the selling Partners
would receive if the assets of the Partnership were sold for their gross fair
market value specified in the ▇▇▇▇▇▇▇▇ Buy-Sell Notice with respect to the
Partnership, the liabilities of the Partnership liquidated and paid, and the net
proceeds distributed to the Partners in accordance with Section 10.3.2. For
purposes of applying this Section 9.2.3, a taxable sale of Partnership assets
shall be deemed to have occurred, Profits, Losses and other items arising from
such deemed sale will be allocated pursuant to Article IV, taking into account
any adjustments to Sharing Percentages which occur by the end of the period
during which the parties not originally giving the ▇▇▇▇▇▇▇▇ Buy-Sell Notice must
respond to such notice, and the Partners' Capital Accounts adjusted accordingly.
The Executive Committee shall make the calculations necessary to determine the
purchase price.
(d) Closing; Payment. The closing shall be held at the
----------------
principal office of the Partnership on a business day
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selected by the purchasing Partners, which day shall not be less than thirty
(30) or more than one hundred twenty (120) days after the applicable option is
properly exercised or deemed exercised. The terms of the purchase and sale
shall be unconditional, except that the selling Partners shall be deemed to
represent and warrant that as of the closing they shall have good and marketable
title to their Entire Interests being sold and that such Entire Interests shall
be transferred subject to no claims, liens, encumbrances, options, warrants or
rights of third parties and shall deliver at the closing an instrument
confirming such representations and warranties. At the closing, the following
events shall occur: (A) the purchasing Partners shall deliver an amount equal
to the purchase price determined under Section 9.2.3(c) in immediately available
funds, to the selling Partners; (B) the selling Partners shall deliver to the
purchasing Partners assignments of their Entire Interests being sold without
warranty except as expressly provided above; and (C) the purchasing Partners
shall, in addition to the purchase price determined under Section 9.2.3(c), pay
or cause the Partnership to pay to the respective selling Partners, in
immediately available funds, an amount equal to the principal balance of, and
any accrued and unpaid interest on, any loans of such selling Partners to the
Partnership, which payment shall be deemed a payment to such selling Partners
with respect to such loan to the extent of the amounts so paid.
(e) Failure to Perform. If a selling Partner defaults in its
------------------
obligation to deliver an assignment of its Entire Interest, the defaulting
Partner shall cease to be a Partner of the
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Partnership and shall have no further right or interest under this Agreement or
in and to the Partnership other than to receive its share of the purchase price,
net of damages and expenses resulting from such default. Notwithstanding any
other provision of this Section 9.2.3, if a purchasing Partner wrongfully fails
to close the purchase and sale, the selling Partners shall have the right, by
written notice to the defaulting Partner given within sixty (60) days after the
last date for the closing, to treat the failure to perform as an exercise by
such purchasing Partner of the Sell Option at 95% of the purchase price that the
purchasing Partner would have received for such Partner's Entire Interests
pursuant to Section 9.2.3 as a selling Partner, made as of the date of such
default, and the selling Partners shall then have all of the rights pursuant to
an election of the Buy Option. If the selling Partners do (1) elect to pursue
the Buy Option, the purchase pursuant thereto shall be such selling Partners'
sole and exclusive remedy for such failure; or (2) not elect to pursue the Buy
Option, they may pursue any other rights they may have in equity or at law.
(f) Amendment to Partnership Agreement. If, pursuant to the
----------------------------------
provisions of this Section 9.2.3, any Partner sells, assigns or transfers its
Entire Interest in a permitted manner, then the Partners and the transferee
shall amend this Agreement to reflect such event.
9.2.4 General Right of First Refusal.
------------------------------
(a) Subject to the terms of this Agreement, any Partner may
Transfer, in one or more transactions, up to an aggregate of 25% of the total
Common Partnership Interests owned by
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such Partner on the date hereof by following the procedures in this Section
9.2.4. If a Partner (the "Selling Partner") desires to Transfer 25% or less of
the total Common Partnership Interests owned by such Partner on the date hereof,
the Selling Partner first shall deliver a written notice (the "Transfer Notice")
to the Partnership and the other Partners, together with all agreements,
schedules and documents relating thereto. The Transfer Notice shall name the
proposed transferee (if any), the amount of the Partnership Interest to be
transferred, the purchase price and all other terms and conditions of the
Transfer. In the event the Transfer is to be made without consideration, the
purchase price shall be deemed to be the Fair Market Value of the Partnership
Interest on the date of the Transfer Notice. If the proposed purchase price
includes property and assets other than cash, the cash value of such property
shall be the Fair Market Value of such property.
(b) For twenty (20) Business Days following receipt of the
Transfer Notice (the "Partnership Option Period"), the Partnership shall have
the option to purchase all or a portion of the Partnership Interest specified in
the Transfer Notice at the price and upon the terms set forth in the Transfer
Notice by delivering a written notice to the Selling Partner specifying the
portion of the available Partnership Interests the Partnership desires to
purchase.
(c) In the event the Partnership does not elect to acquire
all of the Partnership Interests specified in the Transfer Notice, the Partners
shall have the option of purchasing
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such available Partnership Interests during the ten (10) Business Day period
immediately following the Partnership Option Period (the "Partner Option
Period"). A Partner electing to purchase such Partnership Interests shall,
within the Partnership Option Period, deliver a written notice to the
Partnership and the Selling Partner specifying the portion of the available
Partnership Interests such Partner desires to purchase. In the event the
available Partnership Interests are oversubscribed, the available Partnership
Interests shall be allocated among the Partners desiring to purchase the
Partnership Interests pro rata, in accordance with the purchasing Partner's
respective ownership of Common Partnership Interests.
(d) In the event the Partnership and/or the other Partners
elect to purchase all of the Partnership Interests as specified in the Transfer
Notice, settlement for such Partnership Interests shall be consummated within
forty-five (45) days after the date of the Transfer Notice; provided, however,
-------- -------
that if the terms and conditions contained in the Transfer Notice specify
consideration other than cash, the Partnership and/or Partners shall pay the
cash value of such consideration as determined in accordance with Section
9.2.4(a). Any Partnership Interests acquired by the Partnership in accordance
with this Section 9.2.4 shall be deemed cancelled and Schedule A shall be
amended accordingly.
(e) In the event the Partnership and/or the other Partners do
not elect to purchase all of the Partnership Interests specified in the Transfer
Notice, the Selling Partner may
-90-
within the 180-day period following the expiration of the Partnership Option
Period, sell such Partnership Interests to a third party at a price equal to or
greater than the price and on terms not materially more favorable to the buyer
than those contained in the Transfer Notice. If the sale is not consummated
within such time period, the provisions of Section 9.2.4 shall again apply to
such Partnership Interests.
(f) Notwithstanding any other provision of this Agreement,
any Transfer of any Partnership Interests in contravention of any of the
provisions of this Agreement shall be void and ineffective and shall not bind or
be recognized by the Partnership. To the fullest extent permitted by law, the
Selling Partner hereby agrees to indemnify and hold harmless, the Partnership
and the other Partners against any and all loss, damage and expense (including
without limitation tax liabilities or loss of tax benefits) arising directly or
indirectly from any Transfer or purported Transfer in violation of this
Agreement.
(g) ▇▇▇▇▇▇▇▇▇ may, subject to the first refusal rights and
procedures set forth in this Section 9.2.4, Transfer all of its Partnership
Interests; provided, that, the Executive Committee approves any third party sale
-------- ----
which approval shall not be unreasonably withheld.
(h) Nothing herein shall preclude any Partner from pledging
its Partnership Interests.
9.2.5 Transfers to Affiliates. Any Partner shall have the right to
-----------------------
Transfer all or part of its Partnership Interests to a majority beneficially
owned Affiliate or an Affiliate which owns
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a majority of such Partner or to an Immediate Family Member of such Partner;
provided, however, that voting rights of such Partners shall not be transferred
-------- -------
upon Transfer of such Partnership Interest to an Immediate Family Member unless
such Immediate Family Member is admitted to the Partnership in accordance with
Section 9.3.
9.2.6 Rights Upon Transfer. Any Partner that has Transferred all
--------------------
or any portion of its Partnership Interest in accordance with this Agreement may
execute, deliver and perform all such other agreements, documents, instruments
and other writings as are contemplated by the Transfer, including, without
limitation, powers of attorney, credit agreements, liens, mortgages, pledge
agreements and financing statements (the "Transfer Documents"). Transfer
Documents may include such rights and remedies as are agreed to among the
parties to the Transfer and consented to by the Board of Directors, including,
without limitation, information rights, restrictions on assumption of
indebtedness, rights to distributions of the Partnership to the transferor,
foreclosure rights and restrictions on voting and other rights. The Partners
agree that the party in whose favor the rights and remedies are granted is
authorized to exercise those rights and remedies.
9.2.7 Change of Control Restriction. The Partners acknowledge that
-----------------------------
the Indenture relating to the Partnership's 10 1/2% Senior Notes due 2007 and
the Partnership's bank credit agreement contain a "Change of Control" provision
which, if triggered, would create an event of default under any debt instrument
or agreement binding upon the Partnership or its assets. The Partners therefore
agree that, notwithstanding any provision of this Agreement to the
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contrary, except in the event of a transaction pursuant to Section 9.2.2, 9.2.3
or Article XII of this Agreement, no Partner shall be permitted, without the
prior express written consent of the Executive Committee, to receive
distributions in kind, or directly or indirectly transfer Partnership Interests,
in the aggregate equal to or in excess of that amount of equity of the
Partnership or its successor that, together with an assumed similar simultaneous
distribution in kind to all other Partners and all other direct and indirect
Partners in the Partnership in amounts based upon hypothetical liquidations of
the Partnership and such other direct and indirect Partners, would result in a
"Change of Control" occurring under any of the then existing debt documents or
instruments of the Partnership or its successor.
9.3 Rights of Unadmitted Assignees. Without the prior written consent of
------------------------------
the Board of Directors (which consent may be withheld or given in the sole
discretion of the Board of Directors), an assignee of a Partnership Interest
(including, without limitation, anyone who becomes an assignee through the
enforcement of a remedy by a holder of a security interest in a Partnership
Interest) shall not be admitted as a substituted Limited Partner, shall be
entitled only to allocations and distributions with respect to such Partnership
Interest in accordance with this Agreement and shall have no right to any
information or, to the fullest extent permitted by law, to an accounting of the
affairs of the Partnership, shall not be entitled to inspect the books or
records of the Partnership and shall not have any of the rights of a Partner
under the Act or this
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Agreement, including any voting rights granted under this Agreement. An
assignee of a Partnership Interest shall execute an instrument in form and
substance satisfactory to the Board of Directors agreeing to be bound by, and to
acquire the Partnership Interest subject to, the provisions of this Agreement.
9.4 Distributions and Allocations in Respect to Transferred Interests.
-----------------------------------------------------------------
If any Partnership Interest is Transferred (which, for purposes of this Section
9.4, shall not include a pledge, encumbrance or grant of a security interest)
during any Fiscal Year in compliance with the provisions of this Article IX, all
items of Profit and Loss attributable to the Transferred Partnership Interest
for such Fiscal Year shall be divided and allocated between the transferor and
the transferee by taking into account their varying Partnership Interests during
such Fiscal Year in accordance with Code Section 706(d), using any conventions
permitted by law and selected by the Executive Committee. All distributions on
or before the date of such Transfer shall be made to the transferor, and all
distributions thereafter shall be made to the transferee. Any Partnership
Interest that is transferred to a transferee pursuant to this Agreement whereby
the transferee is admitted as a substitute partner to the Partnership shall be
subject to the same terms and provisions under this Agreement in the hands of
the transferee as in the hands of the transferor.
9.5 Employee Common Partnership Appreciation Rights. The Board of
-----------------------------------------------
Directors may issue to employees of the Partnership certain rights to share in
the appreciation in the value of the Partnership from and after the Effective
Date; provided, that any
--------
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rights granted shall not, in the aggregate, exceed ten percent (10%) of any
appreciation in value of the Partnership from and after the Effective Date. Any
such rights are not, and shall not be deemed to be, Partnership Interests in the
Partnership, and no employees, by virtue of its ownership of such rights, shall
be or be deemed to be a Partner of the Partnership.
9.6 Termination of the Partnership. Except for Transfers of Partnership
------------------------------
Interests specifically permitted in this Agreement or an IPO Incorporation, no
Transfers of Partnership Interests shall be made if the effect of the Transfer
will be to terminate the Partnership pursuant to Section 708(b) of the Code or
any similar successor provision of the Code, or otherwise materially adversely
affect the Partnership or any other Partner under the Code.
ARTICLE X
DISSOLUTION AND WINDING UP
--------------------------
10.1 No Termination. Except as expressly provided in this Agreement, to
--------------
the fullest extent permitted by law, no Partner shall have the right, and each
Partner hereby agrees not, to dissolve, terminate or liquidate the Partnership.
No Partner shall have the right, and each Partner hereby agrees not, to petition
a court for the dissolution, termination or liquidation of the Partnership
except as such rights are provided in this Agreement or are available under
applicable law notwithstanding any agreement herein to the contrary.
10.2 Events of Dissolution. The Partnership shall dissolve and commence
---------------------
winding up and liquidating upon the first to occur of any of the following
("Liquidating Events"):
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10.2.1 Expiration. Expiration of the term of Partnership set forth
----------
in Section 2.4;
10.2.2 Executive Committee. The unanimous approval of the Executive
-------------------
Committee to dissolve the Partnership, but only on the effective date of
dissolution specified by the Executive Committee at the time of such approval;
10.2.3 Impossibility. The happening of any event that makes it
-------------
unlawful, impossible or impractical to carry on the business of the Partnership;
10.2.4 General Partner Withdrawal. The withdrawal, removal or
--------------------------
bankruptcy of a General Partner, the assignment by a General Partner of its
entire interest in the Partnership or any other event that causes a General
Partner to cease to be a general partner under the Act; provided, however, that
-------- -------
the Partnership shall not be dissolved and required to be wound up in connection
with any such events if (i) there is at least one remaining General Partner of
the Partnership who is hereby authorized to and does carry on the business of
the Partnership in accordance with this Agreement, or (ii) within 90 days after
the occurrence of such event, a majority in interest of the remaining Partners
holding Common Partnership Interests (or such greater percentage as is required
by the Act) agree in writing to continue the business of the Partnership and to
the appointment, effective as of the date of such event of one or more
additional General Partners of the Partnership;
10.2.5 Consent. The written agreement of all Partners of the
-------
Partnership; and
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10.2.6 Judicial Dissolution. The entry of a decree of judicial
--------------------
dissolution under Section 17-802 of the Act.
10.3 Winding Up. Upon the dissolution of the Partnership, the Partnership
----------
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its creditors and
Partners. To the extent not inconsistent with the foregoing, all covenants and
obligations in this Agreement shall continue in full force and effect until such
time as the Partnership assets have been distributed pursuant to this Section
10.3 and the Certificate of Limited Partnership has been cancelled in accordance
with the Act. The Board of Directors shall be responsible for overseeing the
winding up and dissolution of the Partnership, shall take full account of the
Partnership's liabilities and assets, shall cause the Partnership property to be
liquidated as promptly as is consistent with obtaining the fair value thereof,
and shall cause the proceeds therefrom, to the extent sufficient therefor, to be
applied and distributed in the following order:
10.3.1 To Creditors. First, to creditors of the Partnership,
------------
including Partners who are creditors, to the extent otherwise permitted by law,
in satisfaction of the liabilities of the Partnership (whether by payment or the
making or reasonable provision, including reserves, for payment thereof); and
10.3.2 To Partners. The balance, if any, to the General Partners
-----------
and the Limited Partners in accordance with Section 5.1.2.
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ARTICLE XI
NONCOMPETITION AGREEMENT
------------------------
11.1 Covenant Not to Compete.
-----------------------
11.1.1 Chartwell and ▇▇▇▇▇▇▇▇. As a separately bargained for
----------------------
commitment, so long as any affiliate of Chartwell Partners or ▇▇▇▇▇▇▇▇ Partners
continues as a Partner, or shareholder, partner or Affiliate of any Partner in
the Partnership or holds directly or indirectly any Partnership Interest or
Shares in the Corporation, or is an officer or employee of the Partnership, and
for the Non-Compete Period after termination of any direct or indirect ownership
interest in the Partnership or Shares in the Corporation, each of Chartwell
Partners and ▇▇▇▇▇▇▇▇ Partners shall take such action as shall be required to
ensure that neither it nor they Affiliates shall (unless acting as an agent,
representative, consultant, contractor or employee of the Partnership), directly
or indirectly (i) own, manage, operate, finance, join, control or participate in
the ownership, management, operation, financing or control of, or be connected
as an officer, director, employee, partner, principal, agent, representative,
consultant, contractor, or otherwise (with or without compensation) with, or use
or permit his or its name to be used in connection with, any competitive
business within a radius of two hundred fifty (250) miles of any truck stopping
center or business location in which the Partnership conducted business during
such Partner's association with the Partnership, in competition with the
development of truck stopping centers, or (ii) solicit any
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customer, employee, vendor, supplier or business contact of the Partnership
regarding matters relating to the business of the Partnership or competition
with the business of the Partnership, or (iii) solicit any officer or employee
of the Partnership unless such officer or employee has been terminated by the
Partnership unilaterally and without cause. Notwithstanding the foregoing: (i)
▇▇▇▇▇▇▇▇, Sr. or an entity directly or indirectly owned by him, may own, manage,
operate and finance the El Paso Truck Terminal, C&R Distributing, Inc. and
retain his interest in the franchisee which currently owns and operates four (4)
Petro Stopping Center franchises; and (ii) Affiliates of the Chartwell Partners
may own, manage and/or operate entities in its convenience store/gasoline sales
business.
11.1.2 Mobil. For so long as Mobil or any of its Affiliates own any
-----
Partnership Interests or Shares and thereafter during the Non-Compete Period,
neither Mobil nor its Affiliates shall directly purchase or own any Truck Stop
Chain (for purposes of this Article 11, defined as ten or more truck stops in
three or more states); provided, however, that neither Mobil nor its Affiliates
-------- -------
shall be precluded from, directly or indirectly, investing or otherwise
participating in a Truck Stop Chain as a consequence of a merger, acquisition or
joint venture with or of another entity whose principal business (i.e., based on
----
gross revenue) is not a Truck Stop Chain and, if an entity is acquired or joint
ventured in which a Truck Stop Chain is not the principal business, adequate
measures are put in place to protect the
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confidentiality and non-use of non-public Petro information (including but not
limited to (a) an internal Mobil Oil Corporation "Chinese wall" such that
employees of Mobil Oil Corporation and its Affiliates directly involved in the
management, strategic direction and operation of the competing truck stop chain
would not have access to the Partnership's confidential information and would
not be involved in the Partnership's business; and (b) Partnership Board of
Directors, Executive Committee and Operating Committee representatives of Mobil
(i) would not, if so requested by the Chartwell Partners and the ▇▇▇▇▇▇▇▇
Partners, participate in any strategic decision concerning Partnership business
to the extent the competing Truck Stop Chain's business is competitive with the
Partnership business and (ii) would be deemed to vote in the same manner as the
Chartwell Partners and ▇▇▇▇▇▇▇▇ Partners representatives vote on any matter
referred to in clause (b)(i) above).
Neither Mobil nor its Affiliates shall, for so long as they own any
Partnership Interests and for two years thereafter, solicit any employee of the
Partnership unless such employee has been terminated by the Partnership
unilaterally and without cause.
11.1.3 ▇▇▇▇▇▇▇▇▇ Non-Compete. For so long as ▇▇▇▇▇▇▇▇▇ or any of
---------------------
its Affiliates own a Partnership Interest, and for a period of two years
thereafter, ▇▇▇▇▇▇▇▇▇ and its Affiliates shall comply with the provisions of the
Covenant Not To Compete set forth in the Franchise Agreement dated December 29,
1995 between the Company and Bordentown Junction Truck Stop Joint Venture.
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11.1.4 Reformation. In connection with the restrictive covenants
-----------
contained herein, the parties hereto agree that (a) the terms and conditions of
the restrictive covenants have been agreed by the parties hereto to be
reasonable, (b) the restrictive covenants were negotiated in good faith by the
parties hereto and would not achieve their intended purpose if they were on
different terms or for periods of time shorter than the periods of time provided
for herein or were applied in more restrictive geographical areas than are
provided for herein, (c) the business of the Partnership is highly competitive
and the restrictive covenants are material to the parties' willingness to enter
into this Agreement, and (d) the restrictive covenants are not more restrictive
than is necessary to protect the legitimate interests of the Partnership and the
parties hereto. In the event the provisions of this Section should ever be
deemed to exceed the time or geographic limitations or any other limitations
permitted by applicable law in any jurisdiction, they shall be deemed reformed
in that jurisdiction to the maximum extent permitted by applicable law.
11.2 Ownership in Publicly Traded Corporation. The foregoing covenant
----------------------------------------
shall not prohibit any Partner from owning less than a five (5) percent
ownership interest in any competitor which is a publicly held corporation.
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ARTICLE XII
CONVERSION TO CORPORATION
-------------------------
12.1 Conversion to Corporation for Public Offering.
---------------------------------------------
12.1.1 Chartwell Partners Demand. The Chartwell Partners at any
-------------------------
time may file a request in writing (the "Request") with the Board of Directors
that the Partnership be incorporated under the laws of the State of Delaware or
such other state as the Board of Directors may agree (the "Corporation"), but
solely for the purpose of effecting an initial public offering of the
Corporation's stock to be registered under the Securities Act (the "IPO
Incorporation"). The Partners, the Executive Committee and the Board of
Directors hereby approve the IPO Incorporation, effective as of such time as the
same shall be requested by the Chartwell Partners, and the Plan, subject only to
Section 12.1.6.
12.1.2 Opinion. The Request shall be accompanied by a letter from a
-------
reputable investment banking firm selected by the Chartwell Partners experienced
in effecting initial public offerings stating (a) that in the opinion of such
investment banking firm such a public offering will be reasonably likely to be
successfully completed, (b) the suggested capital structure for such Corporation
(i.e., the number of shares of common stock and preferred stock into which the
----
Partnership Interests should be converted), (c) the probable size of the
offering in terms of number of shares to be offered, the allocation of the
offering among the Corporation and its shareholders, and the likely price range
per share in the offering (the "Offering Amount"), and (d)
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that such firm is prepared to act as the managing underwriter in a "firm
commitment" underwriting of the shares, if completed. Such letter will not be a
binding commitment of the underwriter, it being understood by the parties that
any underwriter's commitment will be by way of a firm underwriting agreement in
customary form executed at the time and in the manner as is customary in initial
public offerings.
12.1.3 Plan. The Request shall also be accompanied by the proposed
----
Plan of Reorganization ("Plan") for conversion of the Partnership into a
Corporation, which shall contain such terms as the Chartwell Partners shall
reasonably determine to be appropriate, including the proposed form of
Certificate of Incorporation and Bylaws of the Corporation. The terms of any
such Plan shall require (a) that the Common Partnership Interests of each
Partner of the Partnership be converted into shares of one class of common stock
of the Corporation ("Common Stock") based on the conversion price determined
under Section 12.1.10 and without regard to voting and other differences in
rights among classes of Common Partnership Interests, (b) that the Preferred
Partnership Interests be converted into one or more classes of preferred shares
of the Corporation ("Preferred Stock", together with the Common Stock, the
"Shares") having a liquidation value equal to the Unrecovered Capital and any
unpaid and accrued Preferred Return with respect thereto, and generally with the
same economic terms as to priority, dividends and mandatory redemption as the
Preferred Partnership Interests, (c) except to the extent required by
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applicable law or the managing underwriter of the offering, the IPO
Incorporation and the conversion of Partnership Interests to Shares shall not
take place prior to the closing under the underwriting agreement, (d) to the
extent shares of Common Stock may be sold other than for the account of the
Corporation, the holders of Common Stock to be issued pursuant to the Plan shall
have the right to participate in the public offering pro rata to the number of
shares of stock to be received by them pursuant to the Plan but only if such
holders agree to participate in the underwriting on the same basis as other
selling shareholders, including but not limited to execution of the underwriting
agreement, (e) that the minimum number of directors of the Corporation shall be
six (6) and (f) the option provided for in Section 12.1.5.
12.1.4 Alternative Structures. The Chartwell Partners shall have
----------------------
the right to require alternative structures for an initial public offering or
for a transaction pursuant to Section 9.2.2, including but not limited to a
merger, consolidation, sale or transfer of all the assets of the Partnership, or
creation of a holding company structure, which may or may not involve the
conversion of the Partnership to a corporation. No such structural change
(whether an IPO Incorporation or an alternative structure) shall be effective
until the consummation of the transaction involving such IPO Incorporation,
alternative structure or Section 9.2.2 transaction.
12.1.5 Partner Securities Exchange. At the option of any Partner,
---------------------------
such Partner may exchange all the equity securities
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issued by it or its direct or indirect parent (instead of such Partner's
Partnership Interests) in exchange for the Shares, provided that: (a) such
Partner has no material assets or liabilities other than its Partnership
Interests; and (b) proper indemnities are provided to the Partnership and its
Affiliates by the recipient(s) of the Shares with respect to any liabilities of
the Partner at the time of such exchange.
All expenses in connection therewith, including any expenses reasonably
incurred by the Chartwell Partners and, with respect to the legal, investment
banking and accounting advisors selected by the Chartwell Partners, approved by
the Executive Committee, which approval shall not be unreasonably withheld in
respect of the Plan and the other matters described in this Section 12.1, shall
be paid or reimbursed by the Partnership.
12.1.6 Objection. If any of the ▇▇▇▇▇▇▇▇ Partners shall object to
---------
the IPO Incorporation, then the ▇▇▇▇▇▇▇▇ Partners may veto the IPO
Incorporation, in which event all of the ▇▇▇▇▇▇▇▇ Partners (the "Purchasing
Partners") shall be jointly and severally obligated to purchase all or such part
of the Common Partnership Interests of the Chartwell Partners and Mobil and
▇▇▇▇▇▇▇▇▇, who elect by written notice to the Partnership within sixty (60) days
of such objection to sell all or part of their Common Partnership Interests in
the Partnership (the "IPO Block Selling Partners") to the Purchasing Partners;
provided that, if the Request is made prior to January 30, 2000, the ▇▇▇▇▇▇▇▇
-------- ----
Partners shall be obligated
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to purchase only 50% of all the Common Partnership Interests of any IPO Block
Selling Partner.
12.1.7 Purchase. The purchase by the Purchasing Partners shall take
--------
place within one hundred twenty (120) days after the mailing of the Request (the
"Mailing"). The purchase price for the Partnership Interest of a Partner shall
be determined under Section 12.1.10, assuming for this purpose that the Offering
Amount is determined by the middle of the selling price range referenced in
Section 12.1.2(c) and by the estimated number of shares of Common Stock to be
offered as referenced in Section 12.1.2(c). In addition, all expenses
reasonably incurred by the Partners in respect of the Plan and the other matters
described in this Section 12.1 shall be paid or reimbursed by the Purchasing
Partners. The Partnership shall pay all direct and indirect transfer taxes
associated with the purchase and sale. Payment shall be in cash against
delivery of such documents of transfer as the Purchasing Partners may reasonably
request to transfer the Interests sold by the IPO Block Selling Partners free
and clear of all liens, claims, encumbrances and rights of third parties other
than any rights of first refusal or other purchase rights pursuant to this
Agreement.
12.1.8 Security. In order to secure the payment by the Purchasing
--------
Partners to the IPO Block Selling Partners, within ninety (90) days of the
Mailing, the Purchasing Partners shall execute a finance and security agreement
(for an amount not less than the purchase price as determined under Section
12.1.10) in the
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form provided by the IPO Block Selling Partners, and reasonably acceptable to
the Purchasing Partners, and deposit in escrow with a security agent selected by
the Chartwell Partners and reasonably acceptable to the Purchasing Partners,
documents of transfer in the form appended to the finance and security
agreement, executed in blank, with respect to the Partnership Interests held by
the Purchasing Partners.
12.1.9 Assistance. The Partnership shall provide the Chartwell
----------
Partners and its employees, attorneys, accountants, agents and investment
bankers ("Agents") all reasonable assistance as may be reasonably requested in
connection with the development of any proposal for an IPO Incorporation and
Plan, including but not limited to providing full access to the properties,
employees and books and records of the Partnership; provided, however, that the
-------- -------
Partnership shall have the right to require any such Partner and its Agents to
execute such confidentiality agreements as may be reasonably requested by the
Partnership.
12.1.10 Conversion Price. The IPO conversion price of any Partner's
----------------
Common Partnership Interest in the Partnership shall equal the net amount which
such Partner would receive if the assets of the Partnership were sold for their
gross fair market values as of the date of the IPO Incorporation, the
liabilities of the Partnership paid, and the net proceeds distributed in
accordance with Section 10.3.2. For purposes of applying this Section 12.1.10,
a sale of Partnership assets shall be deemed to have occurred, Profits, Losses
and other items arising from such deemed
-107-
sale will be allocated pursuant to Article IV, taking into account any
adjustments to Sharing Percentages which occur on or before the date of the IPO
Incorporation, and corresponding adjustments to the Partners' Capital Account
balances shall be made. For this purpose, the gross fair market value of all
Partnership assets shall be equal to the middle of the range of the Offering
Amount multiplied by the number of shares of common equity to be outstanding
immediately prior to the IPO plus all liabilities and Preferred Interests of the
Partnership. The Executive Committee shall compute such conversion price.
12.2 Registration Rights.
-------------------
12.2.1 Application. The provisions of this Section 12.2 shall apply
-----------
to any Partner of the Partnership who shall have the right to receive Common
Stock to be issued or who received Common Stock issued pursuant to the IPO
Incorporation. For purposes of this Section 12.2, such Partners are referred to
as a "Holder" or "Holders" of Common Stock of the Corporation, even though at
any particular time they are Partners and not yet holders of Common Stock, and
"Corporation" shall be deemed to include the Partnership prior to the transfer
of assets by the Partnership to the Corporation pursuant to the Plan.
12.2.2 Piggyback Registration Rights.
-----------------------------
(a) Rights to Piggyback. After the consummation of the IPO,
-------------------
if the Corporation otherwise proposes to register any Common Stock under the
Securities Act and the registration form to be used may be used for the
registration of
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the Registrable Securities (as defined below) (other than a Registration
Statement on Form S-8 or any similar successor forms) (a "Piggyback
Registration"), the Corporation will give written notice to all Holders of
Registrable Securities, at least 30 days prior to the anticipated filing date,
of its intention to effect such a registration, which notice will specify the
proposed offering price, the kind and number of securities proposed to be
registered, the distribution arrangements and such other information that at the
time would be appropriate to include in such notice. The Corporation will,
subject to subsection 12.2.3 below, include in such Piggyback Registration all
Registrable Securities with respect to which the Corporation has received
written requests for inclusion therein within 20 business days after the date of
delivery of the Corporation's notice; provided, however, that if, at any time
-------- -------
after giving written notice of its intention to register any securities and
prior to the effective date of the Registration Statement filed in connection
with such registration, the Corporation shall determine for any reason not to
register or to delay registration of such securities, the Corporation may, at
its election, give written notice of such determination to each holder of
Registrable Securities and, thereupon, (i) in the case of a determination not to
register, the Corporation shall be relieved of its obligation to register any
Registrable Securities under this Section 12.2 in connection with such
registration (but not from its obligation to pay the registration expenses
incurred in connection therewith) and (ii) in
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the case of a determination to delay registering, the Corporation shall be
permitted to delay registering any Registrable Securities under this Section
12.2 during the period that the registration of such other securities is
delayed. Except as may otherwise be provided in this Agreement, Registrable
Securities with respect to which such request for registration has been received
will be registered by the Corporation and offered to the public in a Piggyback
Registration pursuant to this Section 12.2.2 on the terms and conditions at
least as favorable as those applicable to the registration of shares of Common
Stock to be sold by the Corporation.
(b) Priority on Piggyback Registrations. If the managing
-----------------------------------
underwriter or underwriters, if any, advise the holders of Registrable
Securities in writing that in its or their reasonable opinion or, in the case of
a Piggyback Registration not being underwritten, the Corporation shall
reasonably determine (and notifies the holders of Registrable Securities of such
determination), after consultation with an investment banker of nationally
recognized standing, that the number or kind of securities proposed to be sold
in such registration (including Registrable Securities to be included pursuant
to subsection (a) above) will adversely affect the success of such offering, the
Corporation will include in such registration the number of securities, if any,
which, in the opinion of such underwriter or underwriters, or the Corporation,
as the case may be, can be sold as follows: (i) if such registration was
initiated by the
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Corporation, (A) first, the shares the Corporation proposes to sell and (B)
second, the Registrable Securities and other shares of Common Stock requested to
be included in such registration by the Holders thereof entitled to participate
in such registration; and (ii) if such registration was initiated as the result
of the exercise of a demand registration right of holders of Common Stock other
than the Holders (A) first, the shares of Common Stock requested to be included
in such registration by the demanding holders pro rata among those requesting
such registration on the basis of the number of shares of Common Stock requested
to be included and (B) second, the shares to be issued and sold by the
Corporation and shares held by Persons other than the demanding holders and
requested to be included in such registration. To the extent that the privilege
of including Registrable Securities or other shares of Common Stock in any
Piggyback Registration must be allocated among the Holders thereof pursuant to
clauses (i)(B) or (ii)(B) above, the allocation shall be made pro rata based on
the number of shares of Common Stock that each such participant shall have
requested to include therein.
(c) Selection of Underwriters. If any Piggyback Registration
-------------------------
is an underwritten offering, the Executive Committee will select a managing
underwriter or underwriters to administer the offering, which managing
underwriter or underwriters will be of nationally recognized standing.
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12.2.3 Demand Registration Rights.
--------------------------
(a) Right to Demand by the Shareholders. On any two occasions
-----------------------------------
after 270 days after the first registration of shares of Common Stock under the
Securities Act (other than any registrations on Form S-8 or any similar
successor form), any one or more initial Holders of Registrable Securities
(collectively, a "Demanding Group") may make a written request of the
Corporation for registration with the Commission, under and in accordance with
the provisions of the Securities Act, of all or part of their Registrable
Securities (a "Demand Registration"); provided, however, that (x) the
-------- -------
Corporation need not effect a Demand Registration unless such Demand
Registration shall include a number of Registrable Securities having an
estimated fair market value of $7,500,000 upon the receipt of notice of Demand
Registration (y) the Corporation may, if its Board of Directors determines in
the exercise of its reasonable judgment that to effect such Demand Registration
at such time would have an adverse effect on the Corporation, defer such Demand
Registration for a single period not to exceed 180 days, and (z) if the
Corporation elects to defer any Demand Registration pursuant to terms of this
sentence, no Demand Registration shall be deemed to have occurred for purposes
of this Agreement during the term of such deferral. Within 30 days after
receipt of the request for a Demand Registration, the Corporation will send
written notice (the "Notice") of such registration request and if a proper
request is made in accordance herewith, its intention to comply therewith, to
each of the other holders of
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Registrable Securities and, subject to subsection (c) below, the Corporation
will include in such registration all Registrable Securities of such Holder with
respect to which the Corporation has received written requests for inclusion
therein within 30 business days after the effectiveness of the Notice. All
requests made pursuant to this subsection (a) will specify the aggregate number
of Registrable Securities requested to be registered and will also specify the
intended methods of disposition thereof. For purposes of this Section
12.2.3(a), the ▇▇▇▇▇▇▇▇ Partners shall be collectively deemed one Holder and the
Chartwell Partners shall be collectively deemed one Holder.
(b) Number of Demand Registrations. A Demand Registration
------------------------------
shall not be counted as a Demand Registration hereunder until such Demand
Registration has been declared effective by the Commission and maintained
continuously effective for a period of at least 90 days or such shorter period
when all Registrable Securities properly included therein have been sold in
accordance with such Demand Registration .
If the Corporation elects to issue and sell any equity securities pursuant
to any Registration Statement filed in connection with a Demand Registration,
then such Registration shall be deemed to be a Demand Registration solely for
purposes of determining the number of Demand Registrations granted by this
Agreement unless the Corporation's participation in the Registration Statement
reduces the number of equity securities
-113-
which otherwise would have been sold by equity security holders pursuant to such
Registration Statement.
(c) Priority on Demand Registrations. If in any Demand
--------------------------------
Registration, the managing underwriter or underwriters thereof (or in the case
of a Demand Registration not being underwritten, in the opinion of the holders
of a majority of the Registrable Securities included therein), advise the
Corporation in writing that in its or their reasonable opinion the number of
securities proposed to be sold in such Demand Registration exceeds the number
that can be sold in such offering without having an adverse effect on the
success of the offering (including, without limitation, any impact on the
selling price or the number of shares that any participant may sell), the
Corporation will include in such registration only the number of securities
that, in the reasonable opinion of such underwriter or underwriters (or holders
of Registrable Securities, as the case may be) can be sold without having an
adverse effect on the success of the offering as follows: (i) first, the
Registrable Securities properly requested to be included in such Demand
Registration by the Holders thereof pro rata among those requesting such Demand
Registration on the basis of the number of Shares requested to be included, (ii)
second, the shares to be issued and sold by the Corporation and shares held by
Persons other than the holders of Registrable Securities and requested to be
included in such Demand Registration. To the extent that the privilege of
including shares of Common Stock in any Demand Registration must be allocated
among the Holders thereof
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pursuant to clause (ii) above, the allocation shall be made pro rata based on
the number of shares of Common Stock that each such participant shall have
requested to include therein.
(d) Selection of Underwriters. If a Demand Registration is an
-------------------------
underwritten offering, the Executive Committee will select a managing
underwriter or underwriters of recognized national standing to administer the
offering; provided, however, that such underwriter or underwriters must be
-------- -------
reasonably satisfactory to the holders of a majority of the Registrable
Securities to be included in such Demand Registration held by members of the
Demanding Group that initiated such Demand Registration. Only the Executive
Committee may approve of a demand registration without an underwriter.
12.2.4 Registration Procedures. With respect to any Piggyback
-----------------------
Registration or Demand Registration (generically, a "Registration"), the
Corporation will, subject to subsections 12.2.2(a)(ii) and 12.2.3(a) above, as
expeditiously as practicable:
(a) prepare and file with the Commission, a Registration
Statement or Registration Statements relating to the applicable Registration on
any appropriate form under the Securities Act, which form shall be available for
the sale of the Registrable Securities in accordance with the intended method or
methods of distribution thereof;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
with the Registration Statement as
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may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement;
(c) furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Common Stock owned
by them;
(d) use commercially reasonable efforts to register and
qualify the Common Stock covered by the Registration Statement under securities
or Blue Sky laws of such states as shall be reasonably requested by the Holders
or underwriters, provided that the Corporation shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states; and
(e) notify the selling holders of Registrable Securities and
the managing underwriters, if any, promptly, and (if requested by any such
Person) confirm such advice in writing, (i) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the Commission for amendments
or supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose,
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(iv) of the receipt by the Corporation of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose
and (v) of the happening of any event which makes any statement made in the
Registration Statement, the Prospectus or any document incorporated therein by
reference untrue or incomplete or which otherwise requires the making of any
changes in the Registration Statement, the Prospectus or any document
incorporated therein by reference in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(f) cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and to be in such denominations and registered in such names as the
managing underwriters may request at least two business days prior to any sale
of Registrable Securities to the underwriters;
(g) upon the occurrence of any event contemplated by
subsection (e)(v) above, prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, the Prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact necessary to
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make the statements therein, in light of the circumstances under which they were
made, not misleading;
(h) provide a CUSIP number for all Registrable Securities,
not later than the effective date of the applicable Registration Statement;
The Corporation may require each seller of Registrable Securities as to
which any Registration is being effected to furnish to the Corporation such
information regarding the proposed distribution of such securities as the
Corporation may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Corporation of
the happening of any event of the kind described in subsection (e)(v) of this
subsection 12.2.4, such holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement until such
holder's receipt of copies of the supplemented or amended Prospectus, or until
it is advised in writing (the "Advice") by the Corporation that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus, and,
if so directed by the Corporation, such Holder will deliver to the Corporation
(at the Corporation's expense) all copies, other than permanent file copies then
in such Holder's possession of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.
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12.2.5 Restrictions on Public Sale.
---------------------------
(a) Public Sale by Holders of Registrable Securities. To the
------------------------------------------------
extent inconsistent with applicable law, each Holder whose Registrable
Securities are included in a Registration Statement, hereunder, if requested by
the managing underwriter or underwriters for such Registration, agrees not to
effect any public sale or distribution of Registrable Securities, including a
sale pursuant to Rule 144, during the 30 business days prior to, and during the
120 day period (or such shorter period as may be agreed to by such underwriters)
beginning on the effective date of a Registration Statement pursuant to such
Piggyback Registration or Demand Registration (except as part of such Piggyback
or Demand Registration).
(b) Other Registrations. If the Corporation has previously
-------------------
filed a Registration Statement with respect to Registrable Securities, and if
such previous Registration has not been withdrawn or abandoned, the Corporation
will not file or cause to be effected any other registration of any of its
Common Stock (or securities convertible into or exchangeable for, or options to
purchase, Common Stock) under the Securities Act (except on Form S-8 or any
similar successor form), whether on its own behalf or at the request of any
holder or holders of Common Stock (or securities convertible into or
exchangeable or exercisable for Common Stock), until a period of at least 90
days has elapsed from the effective date of such previous Registration;
provided, however, that if the holders of 50% or more of the aggregate number of
-------- -------
Registrable
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Securities included in such previous Registration shall agree in writing, such
period may be shortened by the Corporation but not to a period shorter than one
month.
12.2.6 Registration Expenses. All expenses incurred in connection
---------------------
with a registration, including all registration, filing and qualification fees,
printing and accounting fees, fees and disbursements of counsel shall be paid by
the Corporation, but excluding underwriting commissions and discounts applicable
to Common Stock offered by the Holders, taxes and legal and other professional
fees incurred by the Holders.
12.2.7 Indemnification.
---------------
(a) Indemnification by the Corporation. The Corporation
----------------------------------
agrees to indemnify and hold harmless each Holder (an "Indemnified
Stockholder"), to the fullest extent lawful, from and against any and all
losses, claims, damages, liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (or any amendments or supplements thereto),
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages, liabilities or judgments (A) are caused
by any such untrue statement or omission or alleged untrue statement or omission
based upon information furnished in writing to the Corporation by any of the
Holders or their affiliates for use
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therein or (B) with respect to any preliminary prospectus, result from the fact
that any of the Holders or their respective affiliates sold shares of Common
Stock to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final prospectus as amended or
supplemented, if the Corporation shall have previously furnished copies thereof
to the Stockholders or their respective partners in accordance with this
Agreement and the final prospectus, as amended or supplemented, would have
corrected such untrue statement or omission.
In case any action shall be brought against any of the Indemnified
Stockholders based upon any Registration Statement or Prospectus, or any
amendment or supplement thereto, and with respect to which indemnity may be
sought against the Corporation, such Indemnified Stockholder (or the Indemnified
Stockholder controlled by such controlling person) shall promptly notify the
Corporation in writing and the Corporation shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Stockholder and payment of all fees and expenses. Such Indemnified Stockholder
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the reasonable fees and expenses of such
counsel shall be paid by such Indemnified Stockholder, unless (i) the employment
of such counsel shall have been specifically authorized in writing by the
Corporation, (ii) the Corporation shall have failed to assume the defense and
employ counsel or (iii)
-121-
the named parties to any such action (including any impleaded parties) include
both such Indemnified Stockholder and the Corporation and such Indemnified
Stockholder shall have been advised by such counsel that it would be
inappropriate for the same counsel to represent the Indemnified Stockholder and
the Corporation, it being understood, however, that the Corporation shall not,
in connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for the
Indemnified Stockholders, which firm shall be designated in writing by the
Indemnified Stockholders and that all such fees and expenses reasonably incurred
shall be reimbursed as they are incurred. The Corporation shall not be liable
for any settlement of any such action effected without the written consent of
the Corporation, but if settled with the written consent of the Corporation, the
Corporation agrees, to the fullest extent permitted by law, to indemnify and
hold harmless any Indemnified Stockholder and any such controlling person from
and against any amounts payable pursuant to such written consent in connection
with such settlement. The Corporation shall not, without the prior written
consent of such Indemnified Stockholder, effect any settlement of any pending or
threatened proceeding in respect of which such Indemnified Stockholder is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Stockholder,
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unless such settlement includes an unconditional release of such Indemnified
Stockholder from all liability on claims that are the subject matter of such
proceeding.
(b) Indemnification by Stockholders. Each selling
-------------------------------
Stockholder agrees to indemnify and hold harmless the Corporation and its
officers, directors, shareholders and Affiliates or, in each case other than an
Indemnifying Party or an Affiliate thereof, any person controlling the
Corporation within the meaning of Section 15 of the Act or Section 20 of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), to the
same extent as the foregoing indemnity from the Corporation to each of the
selling Stockholders, but only with reference to information relating to such
selling Stockholder that was furnished in writing by such selling Stockholder
for use in any Registration Statement. In no event shall the liability of any
selling Stockholder hereunder be greater in amount than the dollar amount of the
proceeds received by such selling Stockholder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
12.2.8 Rule 144. The Corporation agrees that at all times after it
--------
has filed a Registration Statement pursuant to the requirement of the Securities
Act relating to any class of equity securities of the Corporation, it will file
in a timely manner all reports required to be filed by it pursuant to the
Securities Act and the Exchange Act and will take such further action as any
holder of Registrable Securities may reasonably request in order
-123-
that such holder may effect sales of Shares pursuant to Rule 144.
Notwithstanding the foregoing, the Corporation may deregister any class of its
equity securities under Section 12 of the Exchange Act or suspend its duty to
file reports with respect to any class of its securities pursuant to Section
15(d) of the Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.
12.2.9 Participation in Underwritten Registrations. No Holder may
-------------------------------------------
participate in any underwritten Registration hereunder unless such Holder (a)
agrees to sell its Shares of Common Stock on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to select
or approve the underwriter pursuant to subsections 12.2.2(c) or 12.2.3(d) above,
and (b) accurately completes in a timely manner and executes all questionnaires,
powers of attorney, underwriting agreements and other documents customarily
required under the terms of such underwriting arrangements.
ARTICLE XIII
MISCELLANEOUS
-------------
Notwithstanding anything in the Act (including Section 17-305(b) of the
Act) or this Agreement to the contrary, to the fullest extent permitted by law,
no General Partner shall have the right to keep confidential from Mobil, in its
capacity as a Limited Partner of the Partnership, any confidential information
concerning the Partnership; provided, that, Mobil maintains the confidentiality
-------- ----
thereof.
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13.1 Financial Reports. As soon as practicable after the end of
-----------------
each Fiscal Year, and after the end of each fiscal quarter, the Board of
Directors shall cause to be furnished to each Partner a financial report
regarding the Partnership's financial position, which shall include a balance
sheet, income statement and cash flow statement and such other or further data
deemed appropriate by the Board of Directors. Such report as of the end of each
Fiscal Year shall be audited.
13.2 Binding Effect. Except as otherwise provided in this
--------------
Agreement, every covenant, term and provision of this Agreement shall be binding
upon and inure to the benefit of the Partners and their respective heirs,
legatees, legal representatives, successors, transferees, and assigns.
13.3 Severability. Every provision of this Agreement is intended
------------
to be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
or legality of the remainder of this Agreement.
13.4 Governing Law. The laws of the State of Delaware (without
-------------
regard to conflict of law principles) shall govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights
and duties of the Partners.
13.5 Not for Benefit of Creditors. The provisions of this
----------------------------
Agreement are intended only for the regulation of relations among Partners and
between Partners and former or prospective Partners
-125-
and the Partnership. This Agreement is not intended for the benefit of non-
Partner creditors and no rights are granted to non-Partner creditors under this
Agreement.
13.6 Counterpart Execution. This Agreement may be executed in any
---------------------
number of counterparts with the same effect as if all of the Partners had signed
the same document. All counterparts shall be construed together and shall
constitute one agreement.
13.7 Sole and Absolute Discretion. Whenever in this Agreement an
----------------------------
Indemnified Person is permitted or required to make a decision (i) in its "sole
discretion" or "discretion", or under a similar grant of authority or latitude,
the Indemnified Person shall be entitled to consider only such interests and
factors as it desires and may consider its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors affecting
the Partnership or the Limited Partners, or (ii) in its good faith or under
another express standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different standards imposed by
this Agreement or by law or any other agreement contemplated herein.
13.8 FIRPTA. At least sixty (60) days prior to the date the
------
Partnership would be required, if it were a corporation, pursuant to Regulations
Section 1.897-2(c) to determine (a "Determination Date") whether it was a
"United States real property holding corporation" as defined in Code Section
897(c)(2) and Regulations Section 1.897-2, the Executive Committee shall
determine whether
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the Partnership would, if it were a corporation, be considered a United States
real property holding corporation. Any costs of such determination shall be
borne by the Partnership as may reasonably be determined by the Executive
Committee. If the Executive Committee determines that the estimated fair market
value of the United States real property held by the Partnership relative to the
fair market value of the assets listed in Regulations Section 1.897-2(i), (ii)
and (iii) result in the Partnership, if it was a corporation, being
characterized as a United States real property holding corporation, the
Executive Committee, by unanimous vote, which vote shall not be unreasonably
withheld shall take such actions, as may be required to avoid such
characterization before the next occurring Determination Date. In the event the
Executive Committee does not unanimously agree to any such action, at least
thirty (30) days prior to the Determination Date the Chartwell Partners shall
have the right to Transfer all or a portion of their Partnership Interests to an
Affiliate or Affiliates; provided, that, if any such Transferor's Transfer would
-------- ----
have a material adverse effect on any Partner, such Transfer would require the
consent of the Partner so affected, which consent will not be unreasonably
withheld. The Executive Committee shall continuously monitor whether the
Partnership, if it was a corporation, would be characterized as United States
real property holding corporation and shall, consistent with the Purpose of the
Partnership, use commercially reasonable efforts to avoid such
characterizations.
-127-
13.9 Certificates. Partnership Interests may, at the discretion
------------
of the Board of Directors, be evidenced by certificates or other written
instruments evidencing the same.
-128-
IN WITNESS WHEREOF, the parties hereto have caused this Third Amended and
Restated Limited Partnership Agreement to be duly executed as of the date first
above written.
PETRO, INC., a
Texas corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------- --------------------------------
[WIFE] ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
Individually
PETRO HOLDINGS GP CORP., a
Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
PETRO HOLDINGS LP CORP.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
JAJCO II, Inc., a Delaware
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
----------------------------- -------------------------------
[WIFE] ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
Individually
-129-
MOBIL LONG HAUL INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇ INVESTMENTS, a
Pennsylvania general
partnership
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, a
general partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, a
general partner
-130-
ACKNOWLEDGMENT AND AGREEMENT OF SPOUSE
--------------------------------------
The undersigned Spouse of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,a Partner who is a
party to the Third Amended and Restated Limited Partnership Agreement dated as
of January 30, 1997 (the "Partnership Agreement") of Petro Stopping Centers,
L.P., a Delaware limited partnership, does hereby acknowledge and agree that
she:
1. Has read the foregoing Partnership Agreement;
2. Has been informed of and is familiar with the background of and the
reasons for the provisions of the Partnership Agreement, including without
limitation all of the option and transfer provisions described in Articles 9
and 12, whether or not such undersigned spouse holds a community property or
other spousal interest under any law;
3. Hereby consents to the terms and conditions of the foregoing
Agreement, including without limitation all of the option and transfer
provisions described in Articles 9 and 12, whether or not much undersigned
spouse holds a community property or other spousal interest under any local law;
4. Hereby agrees to be bound by any option which may arise upon the
occurrence with respect to his or her spouse, of any of the events set forth in
said Partnership Agreement and to cooperate fully and take all such action as
may be necessary to facilitate the exercise of any such option in accordance
with the Partnership Agreement, as it may be amended from time to time.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ACKNOWLEDGMENT AND AGREEMENT OF SPOUSE
--------------------------------------
The undersigned Spouse of ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇., a Partner who is a party
to the Third Amended and Restated Limited Partnership Agreement dated as of
January 30, 1997 (the Partnership Agreement") of Petro Stopping Centers, L.P., a
Delaware limited partnership, does hereby acknowledge and agree that she:
1. Has read the foregoing Partnership Agreement;
2. Has been informed and is familiar with the background of and the
reasons for the provisions of the Partnership Agreement, including without
limitation all of the option and transfer provisions described in Articles 9 and
12, whether or not such undersigned spouse holds a community property or other
spousal interest under any law;
3. Hereby consents to the terms and conditions of the foregoing
Agreement, including without limitation all of the option and transfer
provisions described in Articles 9 and 12, whether or not such undersigned
spouse holds a community property or other spousal interest under any local law;
4. Hereby agrees to be bound by any option which may arise upon the
occurrence with respect to his or her spouse, of any of the events set forth in
said Partnership Agreement and to cooperate fully and take all such action as
may be necessary to facilitate the exercise of any such option in accordance
with the Partnership Agreement, as it may be amended from time to time; and
5. Hereby agrees that as evidenced by the terms of the Second Addendum
to Post-Marital Agreement relating to JAJCO, II, Inc. and originally dated April
27, 1992, the undersigned spouse holds no community property or other spousal
interest in Petro Stopping Centers, L.P.
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
