Exhibit 10.27
XXXX, LLC
LIMITED LIABILITY
COMPANY AGREEMENT
LIMITED LIABILITY
COMPANY AGREEMENT
OF
XXXX, LLC
A DELAWARE LIMITED LIABILITY COMPANY
The undersigned members, desiring to form a limited liability
company under the Delaware Limited Liability Company Act, hereby agree as
follows:
ARTICLE 1
FORMATION
1.1 NAME. The name of the limited liability company is XXXX,
LLC (the "Company"). At such time as TA Operating Corporation is no longer a
member of the Company, the Company shall immediately change its name to a name
which does not include "TA" and shall cease using "XXXX" and "TA" in any manner.
At such time as Xxxxx Bros., Inc. is no longer a member of the Company, the
Company shall immediately change its name to a name which does not include "BB"
and shall cease using "XXXX" and "BB" in any manner. Each member agrees that
upon the completion of the dissolution and winding up of the Company the right
of the Company to use the names "XXXX", "TA" and "BB" shall cease and the
Company shall have no continuing rights or interests in such names or in any
derivations thereof to use or to convey to others (including any members) for
use thereafter. The Company and the members acknowledge and agree that the
restrictions on the use of names contained in this Section 1.1 apply to any and
all uses of such names by the parties subject to such restrictions, including
but not limited to the use of any trade name, service name, trademark, service
xxxx, logo or other intellectual property rights which may incorporate any such
name in whole or in part.
1.2 CERTIFICATE OF FORMATION. A Certificate of Formation
having an effective date of November 16, 1995 shall be filed with the Delaware
Secretary of State promptly upon execution of this Agreement and before the
Company begins conducting business.
1.3 DURATION. The Company shall exist for a period ending on
December 31, 2025, unless earlier dissolved as provided in this Agreement.
1.4 PRINCIPAL PLACE OF BUSINESS. The principal office of the
Company initially shall be located at 00000 Xxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxx
00000. The Company may relocate the principal office or establish additional
offices from time to time.
1.5 REGISTERED OFFICE AND REGISTERED AGENT. The Company's
initial registered office in Delaware shall be located at 0000 Xxxxxx Xx.,
Xxxxxxxxxx, Xxxxxxxx 00000. The Company's registered agent in Delaware and in
each state in which the Company appoints a registered agent shall be CT
Corporation.
1.6 PURPOSE. The purpose of the Company is to form and operate
a network of truckstops and travel plazas to enable members of the network to
compete for fuel purchase contracts with trucking companies desiring to purchase
fuel at a negotiated price and on acceptable terms at locations throughout the
2
United States and to receive periodically a single statement for such purchases
from a single source. The Company may engage in any and all lawful activities
necessary or incidental to the foregoing purpose.
ARTICLE 2
MEMBERS, CONTRIBUTIONS, AND INTERESTS
2.1 NAMES AND ADDRESSES. The names and addresses of the
founding members of the Company and the amount of their initial capital
contributions are:
NAME AND ADDRESS CONTRIBUTION
Xxxxx Bros., Inc. $ 10,000
------------
Address:
Xxxxxxxxx Building, Suite 1200
000 X.X. Xxxxxxxx
Xxxxxxxx, Xxxxxx 00000
TA Operating Corporation,
dba Truckstops of America $ 10,000
-----------
Address:
King Xxxxx Xxxxxx Xxxx
Xxxxx Xxxx Xxxxxxxx
Xxxxx 000
00000 Center Xxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Each founding member's initial capital contribution shall be paid in cash.
2.2 OTHER BUSINESS OF MEMBERS. Subject to any restrictions
imposed upon the members in any other agreement they may enter into with the
Company, each member may engage independently or with others in other business
3
and investment ventures of every nature and description and shall have no
obligation to account to the Company or to the other member for such business or
investments or for business or investment opportunities.
2.3 ADDITIONAL MEMBERS. Additional members shall not be
admitted except with the consent of both founding members. Any additional
members shall have such management and economic rights with respect to the
Company as shall be mutually agreed upon by the founding members.
2.4 ADDITIONAL CONTRIBUTIONS. The members shall not be
required or permitted to make additional capital contributions unless the
members approve and set the amount of the additional capital contributions. Each
member's additional capital contributions shall be equal in amount to the other
member's contributions, and shall be paid in cash, unless the members agree
otherwise. In no event will any member be required to make any capital
contribution or other payment to restore any deficit balance in such member's
capital account maintained as provided in Section 2.6.
2.5 NO INTEREST ON CAPITAL CONTRIBUTIONS. No interest shall be
paid on capital contributions or on capital accounts.
2.6 CAPITAL ACCOUNTS.
(a) An individual capital account shall be maintained
for each member. Each member's capital account shall be (i) credited with all
capital contributions by such member and with all Net Profits and items in the
4
nature of income and gain allocated to such member under the terms of this
Agreement; and (ii) charged with the amount of all distributions to such member
and with all Net Losses and items in the nature of losses and deductions
allocated to such member under the terms of this Agreement. Capital accounts
shall be maintained in accordance with federal income tax accounting principles
in compliance with Treasury Regulations promulgated under Section 704(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); and, to the extent not
inconsistent with the provisions of this Agreement, the provisions of this
Agreement relating to the maintenance of capital accounts shall be interpreted
and applied in a manner consistent with such Treasury Regulations.
(b) If all or any portion of a member's interest in
the Company is transferred to a third party in compliance with the provisions of
Article 7, the original capital account established for the transferee of such
interest shall be in the same amount as the capital account of the member which
such transferee succeeds with respect to the transferred interest. The capital
account of any member whose interest shall be increased by means of the transfer
to it of all or part of the interest of another member shall be appropriately
adjusted to reflect such transfer. Any reference in this Agreement to a capital
contribution of or distribution to a then member shall include a capital
contribution or distribution previously made by or to any prior member on
account of the interest of such then member.
5
ARTICLE 3
MANAGEMENT
3.1 GENERAL. The business and affairs of the Company will be
managed by the members. Except as otherwise provided in this Agreement, all
members shall be entitled to vote on any matter submitted to the vote or consent
of the members. All decisions of the members shall be made by the unanimous
action of the members entitled to vote thereon.
3.2 MANAGEMENT COMMITTEE. Except for those matters
specifically reserved for action by the members under the terms of this
Agreement, the members will manage the business and affairs of the Company
through a management committee consisting of four individuals (each a
"representative"). Each member will appoint two executive officers of the member
to serve as the member's representatives. Each member will appoint another
executive officer of the member to act as an alternate in the absence of one of
the member's representatives. Each member may remove at will one or both of the
member's representatives and the member's alternate. Each member promptly will
notify the other member in writing of appointments and removals of the member's
representatives and alternate.
3.3 QUORUM. The presence of three (3) out of the four (4)
representatives will constitute a quorum for the transaction of business at any
regularly scheduled meeting of the management committee or any special meeting
of the management committee.
6
3.4 MANNER OF ACTING. The act of the majority of the
representatives present at a meeting at which a quorum is present will be the
act of the management committee, provided that at least one representative of
each member must be included in the majority for any action to be authorized and
approved.
3.5 AUTHORITY. The management committee shall have no
authority to bind the Company, and a representative shall have no authority to
bind the Company or to bind the member he or she represents, as to any matter
except by act of the majority as provided in this Article.
3.6 MEETINGS. During the one year period commencing on the
date of this Agreement, the management committee shall meet not less frequently
than one time in each month at a regularly scheduled time and place. Thereafter,
the management committee shall hold regular meetings, at a regularly scheduled
time and place, with such frequency as the members may decide. The management
committee also shall meet at such other times and places as the management
committee has agreed, and may specially meet upon call of one or more
representatives by written notice given to all other representatives and
alternates not less than forty-eight hours before the time set for the meeting.
The notice of special meeting shall specify the time, place and purpose of the
meeting.
3.6.1 MEETINGS BY TELEPHONE. Meetings of the
management committee may be held by conference telephone or by any other means
of communication by which all participants can hear each other simultaneously
7
during the meeting, and such participation shall constitute presence in person
at the meeting.
3.6.2 INFORMAL ACTION. Any action required to be
taken at a meeting of the management committee may be taken without a meeting if
a consent in writing, setting forth the action taken, is signed by those
representatives whose affirmative votes would be required to authorize such
action at a meeting.
3.7 DEADLOCK. In the event the management committee is unable
to agree upon the taking of any action required or permitted to be taken by the
management committee, which the member whose representatives have recommended
such action reasonably believes to be in the best interests of the Company and
which materially affects the business of the Company, the member whose
representatives have recommended such action may declare that a deadlock exists
by delivering written notice to such effect to the other member within thirty
(30) days after the last meeting at which such matter was considered by the
management committee. For a period of up to thirty (30) days after such other
member's receipt of such notice, the chief executive officers of the members
shall consider the matter which has produced the deadlock in a good faith effort
to resolve the deadlock. If such officers should fail to resolve the deadlock in
such period, then the member declaring the deadlock shall have the right (acting
alone) to elect to cause the dissolution and termination of the Company within
ninety (90) days after the expiration of the second 30-day period referred to
above.
3.8 SALARIES; EXPENSE REIMBURSEMENTS. Representatives and
8
alternates shall not receive from the Company a salary or other compensation for
services as a representative on the management committee. However,
representatives and alternates shall be reimbursed by the Company for all
reasonable expenses incurred by them in connection with attending meetings of
the management committee, promptly upon the presentation by them of such written
documentation of such expenses as would be reasonably necessary in order for the
Company to support the deduction of such expenses for federal income tax
purposes.
3.9 OTHER AGENTS. The management committee shall appoint a
general manager, and may appoint such other agents as the management committee
deems necessary, to carry out the day-to-day activities of the Company. The
general manager shall have general supervision and control of the day-to-day
business activities of the Company; PROVIDED that the general manager must act
in accordance with the limitations of this Agreement and general business
policies and specific operational directives adopted from time to time by the
management committee. Any other agents appointed by the management committee
shall have only the authority expressly conferred in writing by the management
committee. The management committee shall have the right to cause the Company to
engage any member, any affiliate of a member or any third party to provide any
or all of the billing and collection services which the Company is obligated to
provide under any Agency Agreement entered into with any member of its network.
3.10 EXECUTION OF DOCUMENTS. No member, representative or agent
9
shall have authority to execute and deliver any contract, lease, certificate or
other document on behalf of the Company except as provided in this Section. In
furtherance of the delegation of authority to the general manager under Section
3.9, the general manager shall have the power and authority to negotiate and
enter into, on behalf of the Company: (i) fuel purchase contracts which meet the
guidelines for such contracts established by the members under the separate
Agency Agreements between the members and the Company; and (ii) such other
contracts and agreements, entered into in the ordinary course of the Company's
business, as the management committee may expressly delegate to the general
manager from time to time. All other documents to be executed and delivered on
behalf of the Company shall be approved by the management committee and executed
by at least one representative of each member.
3.11 BINDING EFFECT OF ACTIONS. Any action taken by the members,
the management committee, the general manager or any other agent on behalf of
the Company in accordance with the provisions of this Article 3 shall constitute
the act of the Company and shall serve to bind the Company. No member,
representative, agent or other person shall, on behalf of or in the name of the
Company, take any action which has not been authorized in accordance with this
Article 3, and any such action shall not bind the Company or constitute its act.
10
ARTICLE 4
ACCOUNTING AND RECORDS
4.1 BOOKS OF ACCOUNT. The management committee shall cause the
Company to maintain complete and accurate books and records at the principal
office. The books and records shall be appropriate and adequate for the
Company's business and for the carrying out of this Agreement. Each member may
inspect and copy all books and records of the Company at all reasonable times.
4.2 FISCAL YEAR. The fiscal year of the Company shall be the
calendar year.
4.3 ACCRUAL METHOD. The Company will adopt the accrual method
of accounting for tax and financial reporting purposes.
4.4 ACCOUNTING REPORTS. Within ninety (90) days after the
close of each fiscal year, or as soon thereafter as practicable, the management
committee shall cause each member to receive unaudited financial reports of the
activities of the Company for the preceding fiscal year, including a copy of a
balance sheet of the Company as of the end of such year and a statement of
income or loss for such year. All financial statements of the Company shall be
prepared in accordance with generally accepted accounting principles,
consistently applied.
4.5 TAX RETURNS. The management committee shall cause all
required federal and state income tax returns for the Company to be prepared and
timely filed with the appropriate authorities. Within ninety (90) days after the
end of each fiscal year, or as soon thereafter as practicable, each member shall
11
be furnished a statement suitable for use in the preparation of the member's
income tax return, showing the amounts of any distributions, contributions,
gains, losses, profits or credits allocated to the member during such fiscal
year. TA Operating Corporation will serve as the "tax matters partner" for
federal tax purposes. The Company shall, to the fullest extent permitted by law,
reimburse and indemnify the tax matters partner for all reasonable expenses,
including reasonable legal and accounting fees, claims, liabilities, losses and
damages incurred by the tax matters partner in connection with any
administrative or judicial proceeding with respect to the tax liability of the
members.
ARTICLE 5
ALLOCATIONS AND DISTRIBUTIONS
5.1 ALLOCATIONS OF NET PROFITS AND NET LOSSES.
(a) DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings ascribed to them below:
(1) The "Book Value" of any Company asset
shall mean its adjusted basis for federal income tax purposes, except
as hereinafter provided. The initial Book Value of any asset
contributed by a member to the Company shall be the gross fair market
value of such asset at the time of such contribution (the "Initial Book
Value"). The Book Value of any asset of the Company may be adjusted by
the Company to equal its gross fair market value, as determined by the
management committee, as of the following times: (A) the admission of a
12
new member to the Company or acquisition by an existing member of an
additional interest in the Company; (B) the distribution by the Company
of money or property to a retiring or continuing member in
consideration for the retirement of all or a portion of such member's
interest in the Company; (C) the termination of the Company for federal
income tax purposes pursuant to Section 708(b)(1)(B) of the Code; and
(D) such other times as determined by the members. The Book Value of a
Company asset shall be adjusted for the depreciation and amortization
of such asset taken into account in computing Net Profits and Net
Losses and for Company expenditures and transactions that increase or
decrease the asset's federal income tax basis.
(2) "Company Minimum Gain" has the meaning
of "partnership minimum gain" as set forth in Sections 1.704-2(b)(2)
and 1.704-2(d) of the Treasury Regulations.
(3) "Member Minimum Gain" has the meaning of
"partner nonrecourse debt minimum gain" as set forth in Sections
1.704-2(i)(3) and (5) of the Treasury Regulations, determined in
accordance with Sections 1.704-2(g)(1) and (3) of the Treasury
Regulations.
(4) "Member Nonrecourse Debt" has the
meaning of "partner nonrecourse debt" as set forth in Section
1.704-2(b)(4) of the Treasury Regulations.
(5) "Member Nonrecourse Deductions" has the
meaning of "partner nonrecourse deductions" as set forth in Section
13
1.704-2(i)(2) of the Treasury Regulations. The amount of Member
Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a
fiscal year of the Company equals the excess, if any, of the net
increase, if any, in the amount of Member Minimum Gain attributable to
such Member Nonrecourse Debt during such fiscal year over the aggregate
amount of any distributions during such fiscal year to the member that
bears the economic risk of loss for such Member Nonrecourse Debt, to
the extent such distributions are from the proceeds of such Member
Nonrecourse Debt and are allocable to an increase in Member Minimum
Gain attributable to such Member Nonrecourse Debt determined in
accordance with Section 1.704-2(i)(2) of the Treasury Regulations.
(6) "Net Profits" and "Net Losses" shall
mean the income and loss of the Company as determined in accordance
with the accounting methods followed by the Company for federal income
tax purposes, including income exempt from tax and described in Code
Section 705(a)(1)(B), treating as deductions items of expenditure
described in, or under Treasury Regulations deemed described in, Code
Section 705(a)(2)(B) and treating as an item of gain (or loss) the
excess (deficit), if any, of the fair market value of distributed
property over (under) its Book Value. Depreciation, depletion,
amortization, income and gain (or loss) with respect to Company assets
shall be computed with reference to their Book Value rather than to
14
their adjusted bases. The parties acknowledge that XXXX'x revenues,
income and working capital are to be provided principally from fees
paid by member firms of the XXXX network as determined under their
respective Agency Agreements with XXXX. Accordingly, XXXX'x Net Profit
or Net Loss for any fiscal year generally will represent any excess or
deficit of the aggregate amount of such fees for such fiscal year
relative to XXXX'x aggregate expenses for such fiscal year.
(7) "Nonrecourse Deductions" has the meaning
set forth in Section 1.704-2(b)(1) of the Treasury Regulations. The
amount of Nonrecourse Deductions for a fiscal year equals the net
increase, if any, in the amount of Company Minimum Gain during that
fiscal year over the aggregate distributions made during the year of
proceeds of any Nonrecourse Liability that are allocable to an increase
in Company Minimum Gain.
(8) "Nonrecourse Liability" has the meaning
set forth in Sections 1.704-2(b)(3) and 1.752-1(a)(2) of the Treasury
Regulations.
(9) "Treasury Regulations" shall mean the
federal income tax regulations, including any temporary or proposed
regulations, promulgated under the Code, as such regulations may be
amended from time to time.
(b) NET PROFITS GENERALLY. Except as otherwise
provided in paragraphs (d) and (e) below, the Net Profits of the Company shall
be allocated among the members in the following order and priority:
15
(1) first, among the members until the
cumulative Net Profits allocated pursuant to this paragraph (b)(1) are
equal to the cumulative Net Losses allocated among the members pursuant
to paragraph (c)(3) below for all prior periods, and in the proportions
that such Net Losses have been so allocated;
(2) then, among the members until the
cumulative Net Profits allocated pursuant to this paragraph (b)(2) are
equal to the cumulative Net Losses allocated among the members pursuant
to paragraph (c)(2) below for all prior periods, and in the proportions
that such Net Losses have been so allocated; and
(3) thereafter, among the members in
proportion to their respective capital contributions.
(c) NET LOSSES GENERALLY. Except as otherwise
provided in paragraphs (d) and (e) below, the Net Losses of the Company shall be
allocated among the members in the following order and priority:
(1) first, among the members until the
cumulative Net Losses allocated pursuant to this paragraph (c)(1) are
equal to the cumulative Net Profits allocated among the members
pursuant to paragraph (b)(3) above for all prior periods, and in the
proportions that such Net Profits have been so allocated;
(2) then, among the members in proportion
16
to, and to the extent of, the positive capital account balances of the
members; and
(3) thereafter, among the members in
proportion to their respective capital contributions.
(d) OTHER ALLOCATION RULES.
(1) Except as provided in paragraph (d)(3)
below, in the event any member unexpectedly receives any adjustments,
allocations or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Treasury Regulations, items
of Company income and gain shall be specially allocated to such member
in an amount and manner sufficient to eliminate, to the extent required
by the Treasury Regulations, any deficit balance in the capital account
of such member as quickly as possible.
(2) Except as provided in paragraph (d)(3)
below, in the event any member has a deficit balance in its capital
account at the end of any fiscal year, such member shall be specially
allocated items of Company income and gain in an amount and manner
sufficient to eliminate, to the extent required by the Treasury
Regulations, the deficit balance in the capital account of such member
as quickly as possible.
(3) Notwithstanding any other provision of
this Article 5, if there is a net decrease in Company Minimum Gain
during any fiscal year of the Company, each member shall be specially
allocated items of Company income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such member's share
17
of the net decrease in Company Minimum Gain, to the extent required
under the Section 1.704-2 of the Treasury Regulations. The items to be
so allocated shall be determined in accordance with Section 1.704-2 of
the Treasury Regulations. This paragraph (d)(3) is intended to comply
with the "minimum gain chargeback" requirement in such Section of the
Treasury Regulations and shall be interpreted consistently therewith.
(4) To the extent an adjustment to the
adjusted tax basis of any Company asset pursuant to Code Section 734(b)
or Code Section 743(b) is required, pursuant to Treasury Regulations
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 members in a
manner consistent with the manner in which their capital accounts are
required to be adjusted pursuant to such Section of the Treasury
Regulations.
(5) Nonrecourse Deductions and Nonrecourse
Liabilities for any fiscal year or other period shall be allocated
among the members in proportion to their respective capital
contributions. Member Nonrecourse Deductions and Member Nonrecourse
Debt for any fiscal year or other period shall be allocated among the
18
members in accordance with applicable Treasury Regulations under
Sections 704 and 752 of the Code.
(6) For purposes of determining the Net
Profits, Net Losses or any other items allocable to any period, Net
Profits, Net Losses and any such other items shall be deemed to have
been earned ratably over the period of the fiscal year of the Company,
except that Net Profits, Net Losses and any other items arising from
the sale or other disposition of assets of the Company, other than in
the ordinary course of business, shall be taken into account as of the
date of such sale or other disposition.
(7) Except as otherwise provided in this
Agreement, all items of income, gain, loss and deduction, and any other
allocations not otherwise provided for, shall be allocated among the
members in the same proportions as they share Net Profits or Net Losses
(as the case may be) for each fiscal year.
(e) CURATIVE ALLOCATIONS. The allocations set forth
in paragraph (d)(1), (2), (3), (4) and (5) above (the "Regulatory Allocations")
are intended to comply with certain of the requirements of Section 1.704-1(b) of
the Treasury Regulations. The Regulatory Allocations may not be consistent with
the manner in which the members intend to share distributions from the Company.
Accordingly, the members hereby are authorized to divide other allocations of
income, gain, deduction or loss among the members so as to prevent the
19
Regulatory Allocations from distorting the manner in which distributions from
the Company are intended to be shared among the members pursuant to this
Agreement. The members will have the discretion to accomplish this result in any
reasonable manner.
(f) TAX ALLOCATIONS.
(1) In accordance with Code Section 704(c)
and the Treasury Regulations thereunder, income, gain, loss and
deduction with respect to any property contributed to the capital of
the Company shall, solely for tax purposes, be allocated among the
members so as to take account of any variation between the adjusted
basis of such property to the Company for federal income tax purposes
and its Initial Book Value.
(2) In the event the Book Value of any
Company asset is adjusted as specified in Section 5.1, subsequent
allocations of income, gain, loss and deduction for tax purposes with
respect to such asset shall take into account any variation between the
adjusted basis of such asset for federal income tax purposes and its
Book Value in the same manner as under Code Section 704(c) and the
Treasury Regulations thereunder.
5.2 DISTRIBUTIONS.
(a) TAX DISTRIBUTIONS. The Company shall make
distributions to the members to enable the members to pay federal, state and
local income taxes attributable to their interests in the Company (including
20
quarterly tax distributions to those members who make estimated tax payments),
and all distributions under this paragraph (a) shall be made to the members
based upon an assumed tax rate equal to the highest marginal tax rate then
applicable to any of the members, and among the members based upon their
relative shares of the Company's taxable income for the period.
(b) INTERIM DISTRIBUTIONS. The Company may make other
distributions to the members when, as and if declared by the management
committee (except in connection with the termination and winding up of the
Company), and all distributions under this paragraph (b) shall be made among the
members in proportion to their capital contributions.
(c) WITHDRAWALS OF CAPITAL CONTRIBUTIONS. No member
shall be entitled to withdraw any part of its capital contributions to, or to
receive any distributions from, the Company except as provided in this Section
5.2, Section 6.1 and Section 6.3. No member shall be entitled to demand or
receive any property from the Company other than cash, except as provided in
Section 6.3.
5.3 LIMITATION ON DISTRIBUTIONS. No distributions shall be
declared and paid unless, after such distributions are made, the assets of the
Company exceed the liabilities of the Company.
ARTICLE 6
WITHDRAWAL; DISSOLUTION
6.1 VOLUNTARY RIGHT OF RESIGNATION AND WITHDRAWAL. Each member
21
shall have the right to voluntarily resign from the Company, by the delivery of
written notice to such effect to the Company and the other member, at any time
after September 30, 1998 and on or before December 31, 1998. In the event a
member elects to resign as aforesaid, the Company shall be dissolved in
accordance with Section 6.2 unless the other member elects to continue the
Company and admit a new member thereto in accordance with the second paragraph
of Section 6.2; and if the other member makes the election to continue the
Company the resigning member shall be entitled to receive a cash payment from
the Company, in exchange for and in complete termination of the resigning
member's interest in the Company, equal to the amount such resigning member
would have received had the Company been liquidated and dissolved in accordance
with Section 6.3 as of the date the notice of such resignation is received by
the Company.
Except as provided in this Section 6.1, in connection with the
transfer of a member's entire interest in the Company to a transferee who is
admitted as a substituted member in accordance with Article 7, or in connection
with the dissolution and termination of the Company in accordance with Section
6.2, no member shall be entitled to resign or withdraw from the Company.
6.2 TERM. The Company will dissolve upon the earliest to occur
of (i) December 31, 2025; (ii) the mutual agreement of the founding members to
dissolve and terminate the Company; (iii) the bankruptcy (as defined in Section
18-101(1) of the Delaware Limited Liability Company Act) or dissolution of a
member; (iv) the resignation of a member in accordance with Section 6.1 of this
22
Agreement; (v) if any event described in subparagraphs (A) - (F) below has
occurred and the member not affected by such event elects to dissolve and
terminate the Company, by written notice to such effect delivered to the Company
and the affected member, within ninety (90) days after the occurrence of such
event or such later date upon which the electing member first learns of the
occurrence of such event, (A) the affected member has materially breached this
Agreement or any agreement between the Company and such affected member, (B) the
Company or any of its representatives, managers, agents or employees have
materially breached the confidentiality covenants entered into for the benefit
of the electing member, (C) the Company has materially breached any agreement
between the Company and the electing member, (D) a deadlock has been declared
and has not been resolved with respect to any matter recommended for approval by
the representatives of the electing member serving on the management committee
(as described under "DEADLOCK," Section 3.7 above), (E) any secured creditor of
the affected member which has been granted a security interest in the affected
member's membership interest in the Company commences any action to foreclose
upon such membership interest, or (F) a Change in Control (as hereinafter
defined) has occurred with respect to the affected member; or (vi) the order by
any court of competent jurisdiction decreeing that the Company be dissolved and
terminated. For purposes of this Section 6.2, a "Change in Control" with respect
to a member shall be deemed to have occurred if (x) there is any substantial
23
change in the individuals who constitute the executive officers of such member
immediately prior to the event or the entering into of any agreement with
respect to any transaction described below, which substantial change results
directly from any of the following: (1) the sale or other disposition of a
majority of the outstanding capital stock of such member, entitled to vote in
the election of directors, to a person or group of persons who are not then
affiliates of such member in a single transaction or series of related
transactions; (2) the sale or other disposition of all or substantially all of
the operating assets of such member to a person or group of persons who are not
then affiliates of such member in a single transaction or series of related
transactions; (3) a merger, consolidation or other similar transaction the
effect of which is substantially the same as a transaction described in clause
(1) or (2) above; (4) a decision of the Board of Directors of such member to
remove such individuals from office or to materially diminish the nature or
scope of the responsibilities, duties, power or authority of such individuals;
or (y) the Board of Directors of such member takes any action to remove from
office (other than by reason of disability), or to materially diminish the
nature or scope of the responsibilities, duties, powers or authority of, three
(3) or more of the individuals who are then the executive officers of such
member actively involved in the management of the day-to-day operations of such
member, in any period of twelve (12) consecutive months; or (z) in the case of
TA Operating Corporation, there should occur any merger or other combination of
the businesses of TA Operating Corporation and National Auto/Truckstops, Inc.
24
For purposes hereof, a substantial change in the executive officers of a member
shall be deemed to have occurred directly as a result of any of the transactions
described in clause (x)(1), (2) or (3) above if (without limiting the
circumstances in which the change may result directly from such transaction)
such substantial change occurs within one (1) year after the occurrence of such
event. For purposes hereof, a "substantial change in the executive officers of a
member" shall mean the change (other than by reason of death, disability or
voluntary resignation) or material diminution in the nature or scope of the
responsibilities, duties, powers or authority of three (3) or more of the
individuals who are then executive officers of such member actively involved in
the management of the day-to-day operations of such member.
If an event described in clause (iii) or clause (iv) above
occurs with respect to a member, the other members shall have the right, for a
period of ninety (90) days after the occurrence of such event, to elect
unanimously to continue the business of the Company and admit a new member to
take the place of the affected member. If the remaining members make this
election, the Company will not be dissolved and terminated as a result of such
event.
6.3 LIQUIDATION UPON DISSOLUTION AND WINDING UP. Upon the
dissolution of the Company, the remaining member(s) shall wind up the affairs of
the Company. A full account of the assets and liabilities of the Company shall
be taken. The assets shall be liquidated and the business wound up as promptly
25
as possible by either or both of the following methods: (i) selling the assets
and applying the proceeds thereof as hereinafter provided; or (ii) if all
remaining members shall agree, retaining the assets, adjusting the capital
accounts of the members in accordance with Article 5 to reflect a deemed sale of
such assets at their aggregate Book Value as of the date of dissolution and
applying such assets as hereinafter provided.
The proceeds of any liquidation or the retained assets of the
Company shall be applied as follows: (i) first, to the expenses of dissolution
and winding up; (ii) second, to the debts and liabilities of the Company to
third parties, if any, in the order of priority provided by law; (iii) third, a
reasonable reserve shall be set up to provide for any contingent or unforeseen
liabilities or obligations of the Company to third parties (to be held and
disbursed, at the discretion of the liquidating member(s), by an escrow agent
selected by the liquidating member(s)) and at the expiration of such period as
the liquidating member(s) may deemed advisable the balance remaining in such
reserve shall be distributed as provided herein; (iv) fourth, to debts of the
Company to the members or their affiliates and any fees and reimbursements
payable under this Agreement to the members or their affiliates; (v) fifth, to
the members in proportion to and to the extent of their positive capital account
balances; and (vi) sixth, any balance to the members in accordance with Section
5.2(b).
26
ARTICLE 7
TRANSFER OF INTEREST
A member may sell, transfer or assign all or any part of its
interest in the Company to any entity which controls, is controlled by or is
under common control with such member; PROVIDED that two (2) or more of the
individuals who are then executive officers of the transferring member actively
involved in the management of the day-to-day operations of such member are
executive officers of the transferee actively involved in the management of the
day-to-day operations of the transferee, and FURTHER PROVIDED that no interest
in the Company shall be sold, transferred or assigned, by operation of law or
otherwise, under this sentence to National Auto/Truckstops, Inc. or to any
entity controlled by National Auto/Truckstops, Inc. For the purpose of this
Article, one entity controls another entity if the first entity beneficially
owns not less than a majority of the voting rights of the entity or not less
than two-thirds of the rights to share in distributions by the entity. A member
may not sell, transfer or encumber, including any voluntary or involuntary
transfer by operation of law by merger, in bankruptcy or by way of execution,
seizure or sale by legal process, or otherwise, all or any part of its interest
in the Company to any other entity, or to any natural person, except with the
prior written consent of the other member, which consent may be withheld for any
reason or no reason in the sole discretion of the other member; PROVIDED, that
Xxxxx Bros., Inc. acknowledges and consents to the granting by TA Operating
27
Corporation of a security interest in TA Operating Corporation's membership
interest in the Company and rights under this Agreement pursuant to that certain
Security Agreement dated as of December 9, 1993, as amended, among TA Operating
Corporation, TA Franchise Systems, Inc., TA Holdings Corporation and Chemical
Bank, as collateral agent for certain financial institutions and holders of
senior secured notes who are lenders to TA Operating Corporation; and FURTHER
PROVIDED that TA Operating Corporation acknowledges and consents to the granting
by Xxxxx Bros., Inc. of a security interest in Xxxxx Bros., Inc.'s membership
interest in the Company and its rights under this Agreement pursuant to that
certain Security Agreement Covering Accounts, Chattel Paper, Documents,
Instruments and General Intangibles dated as of March 20, 1992, as amended, by
and between Xxxxx Bros., Inc. and United States National Bank of Oregon. A
permitted transferee (whether such transferee becomes a transferee by reason of
a transfer permitted by the first sentence or by the second sentence of this
Article 7) of a member shall have only the rights of an assignee as provided by
Delaware law and may be admitted to the Company as a substituted member only
with the prior written consent of the non-transferring member, which consent may
be withheld for any reason or no reason in the sole discretion of the
non-transferring member.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION. Any person made, or threatened to be
28
made, a party to any action or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was (i) a member (or a shareholder, director, officer, employee or agent
thereof), or (ii) a representative or alternate of a member serving on the
management committee (collectively, the "Indemnified Persons"), shall be
indemnified by the Company for any losses or damages sustained with respect to
such action or proceeding, and the Company shall advance such Indemnified
Person's reasonably related expenses to the fullest extent permitted by law. The
Company shall have the power to purchase and maintain insurance on behalf of the
Indemnified Persons against any liability asserted against or incurred by them.
The duty of the Company to indemnify the Indemnified Persons under this Section
8.1 shall not extend to actions or omissions of any Indemnified Person which are
grossly negligent or which involve fraud, misrepresentation, bad faith or other
willful misconduct by such Indemnified Person, or which are in material breach
or violation by such Indemnified Person of this Agreement or which are in
derogation of the fiduciary duties owed by such Indemnified Person to the
Company and the members, in each case as determined by a court of competent
jurisdiction. The duty of the Company to indemnify the Indemnified Persons under
this Section 8.1 shall be limited to the assets of the Company and no recourse
shall be available against any member for satisfaction of such indemnification
obligations of the Company.
8.2 WAIVER OF LIABILITY. Representatives and alternates
29
serving on the management committee shall not be personally liable to the
Company or to its members for monetary damages for conduct as members of the
management committee, unless the actions of such persons constitute gross
negligence, fraud, misrepresentation, bad faith, willful misconduct or breach of
the duty of loyalty owed by such persons to the Company and the members, in each
case as determined by a court of competent jurisdiction. No repeal or amendment
of this section or of the Delaware Limited Liability Company Act shall adversely
affect any right or protection of a representative or alternate for actions or
omissions prior to the repeal or amendment.
ARTICLE 9
CONFIDENTIALITY; NONSOLICITATION
9.1 ACCESS TO INFORMATION; CONFIDENTIAL TREATMENT. All
information disclosed by any party hereto (a "disclosing party") to any other
party hereto (a "receiving party") in connection with this Agreement or
otherwise, and whether disclosed prior to, on or after the date hereof, is
deemed to be confidential unless the disclosing party expressly advises the
receiving party to the contrary in writing. Each receiving party undertakes to
keep confidential during the term of this Agreement and for a period of five (5)
years thereafter any and all information disclosed by or otherwise obtained from
a disclosing party as aforesaid, and not to disclose the same to any third party
or to use it for its own benefit, unless (i) the same is first disclosed to the
receiving party by a source other than the disclosing party or an affiliate of
30
such disclosing party (said source having properly obtained the information
independently of the disclosing party or any such affiliate), (ii) the
information has previously been, at the time, made generally available to the
public by a source neither directly nor indirectly related to the receiving
party, or (iii) the information was known to the receiving party or its
affiliates at the time of its initial disclosure to the receiving party by the
disclosing party; PROVIDED that the foregoing limitations shall not apply to the
disclosure or use of such information by the receiving party (x) to the extent
necessary to perform its obligations under this Agreement or any other agreement
between the receiving party and any other party to this Agreement or (y) as may
be required by law. Each party hereto also agrees that the existence and terms
of the relationships among them contemplated by this Agreement shall be
confidential information subject to the restrictions of this Section 9.1.
Should the receiving party at any time elect to rely on any
one or more of the reasons set forth in the preceding clause (i), (ii) or (iii),
then before making disclosure to any independent third party of or making use of
any information, the receiving party will notify the disclosing party in writing
of its intent to do so and supply the disclosing party with the basis for its
reliance upon the applicability of clause (i), (ii) or (iii) to the information
to be disclosed or used. In the event that the disclosing party fails to advise
31
the receiving party in writing within 10 days from receipt of such notice that
in the judgment of the disclosing party the preceding clause (i), (ii) or (iii)
does not apply to the information which the receiving party intends to disclose
or use, then the disclosing party is deemed to have waived any objection to such
disclosure or use based on this Section 9.1 or otherwise.
With respect to its internal operations, each receiving party
shall make reasonable efforts to limit access to information disclosed or
otherwise obtained from a disclosing party to those of the receiving party's
employees to whom it is essential to give access and only to such extent as is
essential for each such employee to perform his or her regular duties. Each
receiving party will exercise reasonable efforts to limit access to any
information received from a disclosing party to a minimum number of its
respective management personnel. No copies of any information received from any
disclosing party shall be made by any receiving party, other than those copies
required specifically for internal operation, and each receiving party shall use
its reasonable efforts to keep records of all such copies. Each receiving party
agrees that it will not use, license, sell or in any manner convey any
information obtained by it from a disclosing party by virtue of this Agreement
or otherwise and that may not be disclosed or used by the receiving party
pursuant to this Section 9.1.
Each receiving party agrees that it shall ensure that the
provisions of this Section 9.1 with respect to the protection of confidential
32
information shall also apply as against any affiliate (including shareholders,
officers and directors) of such receiving party.
9.2 NONSOLICITATION. Each member, while it is a member and for
a period of two (2) years thereafter, agrees that it shall not (and it shall
cause its affiliates not to) directly or indirectly solicit for purposes of
employment any person who is or was an employee of another member or the Company
at any time during the preceding 24 months, without the prior written consent of
the other member.
ARTICLE 10
AMENDMENTS
The Certificate of Formation of the Company and this Agreement
may be amended, and their provisions may be waived, only by written instrument
approved by the management committee and signed by the officers of the founding
members who have signed this Agreement or by their successors in office or by
successors in interest to the founding members.
ARTICLE 11
MISCELLANEOUS
11.1 ADDITIONAL DOCUMENTS. Each member shall execute such
additional documents and take such actions as are reasonably requested by the
other member or the Company in order to perform such first member's obligations
under by this Agreement.
11.2 ARBITRATION. Any dispute between the members or between the
33
members and the Company concerning this Agreement shall be settled by
arbitration before a single arbitrator, using the rules of commercial
arbitration of the American Arbitration Association. Arbitration shall occur in
Portland, Oregon, if arbitration is demanded by TA Operating Corporation, and in
Cleveland, Ohio, if arbitration is demanded by Xxxxx Bros., Inc. The parties
shall be entitled to conduct discovery in accordance with the Federal Rules of
Civil Procedure, subject to limitation by the arbitrator to secure just and
efficient resolution of the dispute. If the amount in controversy exceeds
$10,000, the arbitrator's decision shall include a statement specifying in
reasonable detail the basis for and computation of the amount of the award, if
any. A party substantially prevailing in the arbitration shall also be entitled
to recover such amount for its costs and attorneys fees incurred in connection
with the arbitration as shall be determined by the arbitrator. Judgment upon the
arbitration award may be entered in any court having jurisdiction. Nothing
herein, however, shall prevent a member from resort to a court of competent
jurisdiction in those instances where injunctive relief may be appropriate.
11.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, which together shall constitute one agreement.
11.4 GOVERNING LAW. This Agreement and the relationships of the
members to each other, and their relationships to the Company as members, shall
34
be governed by Delaware law, without regard to the principles of conflicts of
laws.
11.5 THIRD-PARTY BENEFICIARIES. This Agreement is intended
solely for the benefit of the members and the Company and shall create no rights
or obligations enforceable by any third party, including any creditor of the
Company, except as otherwise expressly provided by this Agreement.
11.6 CERTIFICATE REQUIREMENTS. From time to time the members
shall sign and acknowledge all such writings as are required to amend the
Certificate of Formation or for the carrying out of the terms of this Agreement
or, upon dissolution of the Company, to cancel such Certificate of Formation.
11.7 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings among the members with
respect to the subject matter hereof.
11.8 SEVERABILITY. If any provision of this Agreement or the
application thereof to any circumstance shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement or of the application of such provision to
circumstances other than those as to which it is held invalid, illegal or
unenforceable shall not in any way be affected or impaired thereby.
11.9 NUMBER AND GENDER. As used in this Agreement, all pronouns
and any variation thereof shall be deemed to refer to the masculine, feminine or
35
neuter, singular or plural, as the identity of the person or persons may
require.
11.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the members and their respective successors and
permitted assigns.
11.11 SECURITIES LAWS. All offerings and transfers of interests
in the Company shall be made in compliance with applicable federal and state
securities laws. Each member indemnifies the other members and the Company for
any loss, cost, liability or damage arising from its breach of the foregoing
sentence.
11.12 WAIVER OF PARTITION. Each member hereby waives its right
to bring any action for partition of any of the property owned by the Company.
11.13 INJUNCTIVE RELIEF. Each member acknowledges that it will
be impossible to measure in money the damages to the Company and to the other
member if there is a failure to comply with this Agreement. Accordingly, it is
agreed that the Company or any other member, in addition to any other rights or
remedies which they may have, shall be entitled to immediate injunctive relief
and to specific performance to enforce this Agreement without the necessity of
proving actual damages. Each member and the Company hereby waives any
requirement that the party seeking any such relief post a bond.
11.14 TAX ELECTION. In the event of a transfer of all or any
portion of the interest in the Company of a member, the Company may elect (by
action of the members) pursuant to Section 754 of the Code to adjust the basis
36
of assets of the Company upon written request of the transferee.
11.15 SURVIVAL OF CERTAIN COVENANTS. The provisions of Article 9
of this Agreement shall survive any dissolution, termination and winding up of
the Company in accordance with the terms of such provisions and shall continue
to bind and inure to the benefit of the members and their successors and
permitted assigns for the entire period of such covenants as specified therein.
11.16 NOTICES. Notices required or permitted to be given
pursuant to this Agreement shall be given in writing addressed, if to XXXX, to:
XXXX, LLC, 00000 Xxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxx 00000; if to Xxxxx Bros.,
Inc., to: Xxxxx Bros., Inc., Xxxxxxxxx Building, Suite 1200, 000 X.X. Xxxxxxxx,
Xxxxxxxx, Xxxxxx 00000; and , if to TA Operating Corporation, to: Truckstops of
America, 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxx 00000-0000, or to
such other address as a party may designate by notice to the other party.
Notices shall be deemed given (i) when personally delivered; (ii) when
transmitted by facsimile transmission if mailed in accordance with this
paragraph within two business days after such transmission; or (iii) three
calendar days after deposit in the United States mail, certified or registered
mail, postage prepaid.
37
ADOPTED as of November 15 , 1995, by the undersigned,
----------------
constituting all of the members.
XXXXX BROS., INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
----------------------------
Its: President
-----------------------------
TA OPERATING CORPORATION,
dba TRUCKSTOPS OF AMERICA
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
----------------------------
Its: President
-----------------------------
38
