EXHIBIT 10.37
SECOND AMENDMENT TO THE LIMITED LIABILITY COMPANY OPERATING
AGREEMENT OF PETRO TRAVEL PLAZA LLC
This SECOND AMENDMENT TO THE LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF PETRO TRAVEL PLAZA LLC (this "Amendment") is entered into as of December 19,
2002 (the "Effective Date"), by and between Petro Stopping Centers, L.P., a
Delaware limited partnership ("Petro"), and Tejon Development Corporation, a
California corporation ("TDC" together with Petro, the "Members").
RECITALS
A. The Members are parties to that certain Limited Liability Operating
Agreement of Petro Travel Plaza LLC dated December 5, 1997, as
previously amended by that certain First Amendment to Limited
Liability Company Operating Agreement of Petro Travel Plaza LLC dated
January 1, 1999 (the "Operating Agreement").
B. The Members desire to cause Petro Travel Plaza LLC, a California
limited liability company (the "Company"), to purchase "Parcel 3" and
"Parcel 4" described on Exhibit "A" to this Amendment and, upon
completion of a lot line adjustment or other action implemented
pursuant to the California Subdivision Map Act, the portion of "Parcel
5" described said Exhibit "A" (Parcel 3, Parcel 4 and said portion of
Parcel 5 being referred to herein as the "Adjacent Land"), all subject
to the Declaration of Covenants, Conditions and Restrictions and Grant
and Reservation of Easements attached hereto as Exhibit "C".
C. The Members desire to cause the Company to design, construct and
operate a new full service convenience store with fuel services (the
"Second Fueling Stop") on the Adjacent Land.
D. Except as expressly set forth in this Amendment, the parties wish to
operate the Second Fueling Stop following existing operational
guidelines set forth in the Operating Agreement.
AMENDMENT
NOW, THEREFORE, in consideration of the premises hereof, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members of the Company hereby agree to amend the Operating
Agreement as follows:
1. Capitalized terms set forth in this Amendment shall, unless otherwise
indicated herein, have the meanings ascribed to such terms in the Operating
Agreement.
2. In addition to the business purposes set forth under Section 1.4.1 of
the Operating Agreement, the purposes of the Company shall also be to (a)
acquire the Adjacent Land via a deed substantially in the form attached hereto
as Exhibit "B" (except that the portion of Parcel 5 to be acquired by the
Company shall be acquired upon completion of a lot line adjustment or other
action implemented pursuant to the California Subdivision Map Act), (b) develop
and
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improve the Adjacent Land, including (i) preparing the Adjacent Land for, and
constructing thereon, the Second Fueling Stop and related on-site improvements
(the "SFS Improvements"), pursuant to such plans, specifications, budgets and
the like which may be approved by the Members from time to time, (c) operate the
SFS Improvements pursuant to the Budget (as such term is defined below) in
effect from time to time and in a manner consistent with the uses for which they
are designed or for such other use or uses which may be approved by the Members
from time to time, and (d) do all things necessary for, incident to and
connected with or arising out of such activities (including, without limitation,
financing such activities and selling or exchanging the Company's business or an
interest or interests therein).
3. The Company shall purchase the Adjacent Land from Tejon Industrial
Corp., a California corporation ("TIC") pursuant to a purchase and sale
agreement acceptable in form and substance to TIC and the Company and for a
purchase price not to exceed $960,000. Further, the Members hereby expressly
authorize and approve, as required by Section 6.1.2(e) of the Operating
Agreement, the execution of such purchase and sale agreement by and between the
Company and TIC, which is an Affiliate of TDC.
4. The Members acknowledge that the Adjacent Land is part of the
Restricted Areas and further acknowledge and agree that the restrictions
applicable to the Adjacent Land set forth under Section 1.4.2 of the Operating
Agreement have been complied with by each of the Members, Affiliates of the
Members and the Company. Further, each of the Members consents to the matters
contemplated by this Amendment and, to the extent such matters are inconsistent
with any of the rights set forth in Sections 1.4.2 or 1.4.3 of the Operating
Agreement, waives any of its rights set forth in such sections with respect to
the Adjacent Land and the SFS Improvements.
5. Section 2.4 of the Operating Agreement relating to the definition of
Administrative Fee is hereby amended by deleting such provision in its entirety
and replacing such provision with the following:
"2.4 `Administrative Fee' means the $29,166.66 monthly payment to be
made to Petro, commencing with the first day of the calendar month
following the Effective Date. Each installment of the Administrative
Fee shall be payable in arrears out of Cash Available for Distribution
(determined without regard to the Administrative Fee), and, to the
extent that an installment or any portion thereof cannot be paid when
due, such installment or portion shall thereafter be payable out of
the first available Cash Available for Distribution (determined
without regard to accrued Administrative Fees payable)."
6. Section 2.14 of the Operating Agreement relating to the definition of
Company Accounting and Tax Services Fee is hereby amended by deleting such
provision in its entirety and replacing such provision with the following:
2.14 "Company Accounting and Tax Services Fee" means the $2500 monthly
payment to be made to Petro, commencing with the first day of the calendar
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month following the Effective Date. Each installment of the Company
Accounting and Tax Services Fee shall be payable in arrears out of Cash
Available for Distribution (determined without regard to the Administrative
Fee and the Com Accounting and Tax Services Fee), and, to the extent that
an installment or any portion thereof cannot be paid when due, such
installment or portion shall thereafter be payable out of the first
available Cash for Distribution (determined without regard to accrued
Administrative Fees and Company Accounting and Tax Service Fees payable).
In the event that the Company has insufficient funds to pay both the
Administrative Fee and the Company Accounting and Tax Services Fee when
due, the Administrative Fee shall be paid first and, to the extent of the
remaining available funds, a partial payment of the Company Accounting and
Tax Services Fee shall be made."
7. Section 2.64 of the Operating Agreement relating to the definition of
System is hereby amended by deleting such provision in its entirety and
replacing such provision with the following:
"2.64 `System' means Petro's nationwide system of travel centers,
including the Travel Plaza, operated by Petro or pursuant to a
franchise from Petro, but such term shall not include the Second
Fueling Stop."
8. The Company shall use available cash on hand and from any available
credit facilities first to acquire the Adjacent Land and then to construct the
SFS Improvements. To the extent that the Company's available cash on hand and
from any available credit facilities is insufficient to acquire the Adjacent
Land and to complete the SFS Improvements, Company shall use its commercially
reasonable best efforts to obtain a loan or loans in the aggregate amount
necessary to purchase the Adjacent Land and construct the SFS Improvements. To
the extent that the Company may require funds provided from future operations to
enable it to pay the entire purchase price for the Adjacent Land and to
construct the SFS Improvements, it shall, after taking into account available
loan proceeds, immediately commence funding a Reserve from operating and other
available cash flow to enable it to do so.
9. Section 6.1.1 of the Operating Agreement is revised to read as
follows:
"6.1.1 In consideration of the Company Accounting and Tax Services Fee
to be paid to Xxxxx, Xxxxx shall be responsible for the
administrative, accounting, record-keeping, financial, tax and related
functions of the Company, and Petro shall have all authority and
power, on behalf of the Company and at Company expense, to perform
such functions."
10. While Petro is a Member of the Company, Petro shall be responsible for
operation of the SFS Improvements and all related matters and shall have all
authority and power, on behalf of the Company and at Company expense (except as
otherwise provided in this Amendment or the Operating Agreement), to perform
such functions. Without limiting the
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foregoing, but subject to the terms and conditions set forth below and elsewhere
in this Amendment and the Operating Agreement:
(a) Petro shall operate the Second Fueling Stop in accordance with the
same standards and policies that Petro uses to operate a convenience store with
fueling services that is part of a Type One "Petro Stopping Center," and it
shall, on behalf of the Company, maintain high standards of quality of service
and products. All services and products provided to the Company by Petro shall
be at Petro's actual cost and without markup and with no carrying cost added.
The authority of Petro for the operation of the SFS Improvements shall include,
without limitation, the authority to operate, direct and manage personnel
policies, credit policies (including the execution of agreements with credit and
charge card organizations), terms of purchases, charges to customers for
services and products, purchasing of operating equipment, maintenance of the
Second Fueling Stop, repairs to and replacements of furnishing and equipment,
and advertising, promotion and publicity relating to the Second Fueling Stop as
contemplated by this Amendment.
(b) Petro, on behalf of the Company, shall negotiate and enter into an
agreement ("Branding Agreement") providing for the branding of the Second
Fueling Stop for the purpose of providing brand recognition to the Second
Fueling Stop and providing a source of supply for the Second Fueling Stop. Petro
shall use its commercially reasonable best efforts to enter the Branding
Agreement with a national brand. Petro shall operate the Second Fueling Stop and
its fuel supply purchases in the manner it operates Type One "Petro Stopping
Centers" owned and operated by Petro and shall have all authority in acting and
dealing on behalf of the Company in branding the Second Fueling Stop. The
Company shall be solely responsible and liable under the terms of the Branding
Agreement for all purchases made by Petro on behalf of the Company, and the
Company hereby indemnifies and agrees to defend and hold Petro, its partners,
officers, directors and Affiliates harmless from any and all such liabilities.
Petro hereby agrees to indemnify, defend and hold the Company and TDC and their
respective officers, directors and Affiliates (other than Petro) harmless from
any and all responsibilities and liabilities of Petro under the Branding
Agreement other than liabilities of Petro thereunder for purchases of on behalf
of the Company.
(c) The operating practices with respect to the Travel Plaza as
described in Parts (d) through (l) of Section 6.1.2 of the Operating Agreement
shall also apply to the Second Fueling Stop except that: (i) Part (k)(iii) of
Section 6.1.2 of the Operating Agreement shall not apply with respect to the
Second Fueling Stop; and (ii) any reference to the standards applicable to a
Type One "Petro Stopping Center" shall be interpreted as meaning only those
standards that would be applicable to a convenience store with fuel services
operated as part of a Type One "Petro Stopping Center."
(d) The authority granted to Petro under this Section 10 to act on
behalf of Company shall include the authority for Petro to take all actions and
do all things and make all payments as shall be reasonably necessary or
appropriate as an incident to the exercise by Petro of such authority.
Petro may delegate to its own employees, the employees of the Second
Fueling Stop and independent contractors engaged by Petro in the operation of
the Second Fueling Stop the
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performance and observance of such of the tasks and actions undertaken by Petro
in its operation of the Second Fueling Stop in accordance with this Amendment or
the Operating Agreement as Petro in its reasonable judgment deems to be
appropriate
11. Section 6.1.2(c) of the Operating Agreement is hereby amended by
deleting such provision in its entirety and replacing such provision with the
following:
"For each Fiscal Year, Petro shall, at least forty-five (45) days
before the beginning of such Fiscal Year, submit for the Members'
approval an estimation of revenues and expenditures for the
Travel Plaza and the Second Fueling Stop, including capital
expenditures and repair, replacement and maintenance
expenditures, for such Fiscal Year. Upon approval by the Members
of the estimation of revenues and expenditures (as such may be
revised pursuant to discussions of the Members) (the "Budget"),
Petro shall use its commercially reasonable best efforts to
manage and operate the Travel Plaza and the Second Fueling Stop
on the basis of the Budget; that Petro shall have the authority
to incur and may incur on behalf of Company in the operation of
the Travel Plaza and the Second Fueling Stop emergency repair and
replacement expenditures as described in Section 6.1.2(h) below."
12. Section 6.1.2 (e) of the Operating Agreement is amended by adding the
following thereto:
"Notwithstanding the foregoing, Petro agrees, at the request of
the Company, to execute and enter into a quick service restaurant
("qsr") franchise agreement in order to provide quick service
restaurant offerings to the Travel Plaza. In the event Petro enters
into any such qsr franchise agreements, it is agreed that (i) the
Company shall reimburse Petro any out-of-pocket costs and expenses
incurred by Petro in connection with execution, delivery and
performance under such qsr franchise agreement; (ii) the Company would
provide, at its expense, any and all insurance coverages required in
connection with such qsr franchise; and (iii) the Company would pay
Petro a fee equal to $1000 per month per qsr franchise agreement
executed by Petro during the term of each such qsr franchise
agreement, commencing on the first day of the calendar month following
the effective date of any such qsr franchise agreement. In addition,
it is specifically understood and agreed that the indemnification
provisions provided in Section 6.7 of the Operating Agreement shall
protect Petro, as a Member, acting in its capacity of franchisee under
a qsr franchise agreement executed as contemplated herein and
operative solely with respect to one or more sites at the Travel
Plaza.
13. Petro shall engage an architect and engineer for purposes of designing
the SFS Improvements. All non-operational decisions relating to the SFS
Improvements shall be made
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jointly by the Members, including, without limitation, the approval of the
design and size of the Second Fueling Stop.
14. All decisions with respect to, and arising from, the Company's
participation in, or the encumbrance of the Adjacent Land by, one or more
assessment districts, community facilities districts, reimbursement districts,
or other financing districts that may be formed to fund transportation or other
improvements that benefit the Adjacent Land or the Second Fueling Stop on a fair
share basis shall be made in the sole and absolute discretion of TDC.
15. The insurance requirement of Section 6.5 of the Operating Agreement
regarding insurance shall be extended to the Second Fueling Stop. Specifically,
the first sentence of Section 6.5.1 of the Operating Agreement and the first
sentence of Section 6.5.2(d) of the Operating Agreement shall be amended to
change the phrase "Travel Plaza" to "Travel Plaza and the Second Fueling Stop".
16. Sections 6.1.2(b) and 6.1.2(k) of the Operating Agreement shall be
amended by changing the phrase "Travel Center" to "Travel Plaza" under such
sections of the Operating Agreement.
17. Section 6.6 of the Operating Agreement is hereby amended by deleting
such provision in its entirety and replacing such provision with the following:
"6.6 Records and Reports.
6.6.1 Petro shall cause to be kept at the principal place of
business of the Company a current list (including addresses) of
the Members and other Persons holding Economic Interests in the
Company, a current list of Company managers (if any), copies of
the Articles and this Agreement (together with all amendments
thereto or hereto), copies of Company tax returns and financial
statements for the six (6) most recent fiscal years, full and
proper ledgers, other books of account, and records of all
receipts and disbursements, other financial activities and the
internal affairs of the Company for at least the current and past
four (4) fiscal years, and any other items required by the Act,
and Petro shall cause the following reports or information to be
provided to all Members:
(a) within one-hundred twenty (120) days after the end
of each fiscal year, annual financial statements, including
a balance sheet, an income statement and a statement of
changes in financial position for the fiscal year;
(b) within ninety (90) days following the end of each
fiscal year of the Company, a report
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that shall include all necessary tax reporting information
required by the Member for preparation of its federal, state
and local income or franchise tax returns, including each
Member's pro rata share of Net Profits, Net Losses and any
other items of income, gain, loss and deduction for such
fiscal year; and
(c) promptly after receipt thereof, all other reports
or statements prepared by the Company's accountant.
6.6.2 The Members (personally or through an authorized
representative) may, for purposes reasonably related to their
interest, rights or duties, examine and copy the books and
records of the Company at all reasonable times."
18. Section 6.9 of the Operating Agreement is hereby amending by deleting
such provisions in its entirety and replacing such provision with the following:
"Company Officers. The Members may, via their mutual agreement or
consent set forth in writing, appoint or remove, at any time and from
time to time, one or more officers of the Company. Unless set forth in
a separate written agreement between the Company and an officer of the
Company, such officer shall not be entitled to compensation from the
Company for services rendered by him or her as an officer of the
Company. The officers of the Company shall be: Xxxxxx X. Xxxxx
("Xxxxx) - Chairman; Xxxx Xxxxxxxx ("Xxxxxxxx") - President; Xxxxx
Xxxxxxxxxxx ("Xxxxxxxxxxx") - Executive Vice-President; Xxxxxx
Xxxxxxxx ("Xxxxxxxx") - Executive Vice-President; Xxxx Xxxxxx
("Xxxxxx") - Executive Vice-President; and Xxxxx Xxxx ("Xxxx") -
Executive Vice President and Secretary. Xxxxx, Xxxxxx and Xxxx are
collectively referred to as the "Tejon Officers", and Xxxxxxxx,
Xxxxxxxxxxx and Xxxxxxxx are collectively referred to as the "Petro
Officers". Each Tejon Officer is empowered to assert the rights of TRC
set forth herein and each Petro Officer is empowered to assert the
rights of Petro set forth herein. Notwithstanding the foregoing,
however, each check drawn upon an Company account, not to include the
operation accounts once Travel Plaza is operating, shall require two
signatures at least one of which shall that of an officer. Each
officer, or group of officers, shall also have such rights and
responsibilities specified from time to time via a written direction
duly executed by both Members."
19. Section 9.2 of the Operating Agreement shall be amended by deleting
such provision in its entirety and replacing such provision with the following:
"9.2 Accountants. Petro shall select and retain a certified
public accounting firm to prepare the Company's
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tax returns, to prepare the annual financial statements (which
need not be audited) and to give advice with respect to the
maintenance of the Company's books and records."
20. The Company shall execute and deliver to TDC that certain Declaration
of Covenants, Conditions and Restrictions and Grant and Reservation of Easements
relating to the Adjacent Property and attached hereto as Exhibit "C".
21. Each Member shall cooperate in all reasonable respects with the other
Member as necessary or desirable to comply with the reporting obligations of the
other Member or any of its Affiliates under state and federal securities laws.
22. Except as amended hereby, the provisions of the Operating Agreement
shall remain in full force and effect.
23. This Amendment may be executed in counterparts, all of which together
shall constitute one agreement binding on all parties hereto, notwithstanding
that all the parties have not signed the same counterpart.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the Members have duly executed this Amendment as of the
day and year first above written.
PETRO STOPPING CENTERS, L.P., a TEJON DEVELOPMENT CORPORATION,
Delaware limited partnership a California corporation
By: By:
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Title: Title:
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By: By:
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Title: Title:
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[Signature Page to Second Amendment to the Limited Liability Company
Operating Agreement of Petro Travel Plaza LLC]
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