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ACCEPTED 05-18-00647-CV 05-18-00647-CV FIFTH COURT OF APPEALS DALLAS, TEXAS 6/4/2018 2:29 PM Part 2 of 5 LISA MATZ CLERK No. 05-18-00647-CV In the Court of Appeals FILED IN Fifth District of Texas at Dallas 5th COURT OF APPEALS DALLAS, TEXAS 6/4/2018 2:29:41 PM LISA MATZ Clerk In re JOHN CALCE Relator RECORD FOR PETITION FOR WRIT OF MANDAMUS Relator John Calce submits this record of trial court proceedings in support of his petition for writ of mandamus. Index of Documents # Date Description Record Pages 1 6/26/16 Plaintiff’s Original Petition 001-023 2 7/31/17 John Calce’s Original Counterclaim Against 024-172 Centurion Logistics LLC and Centurion Pecos Terminal LLC 3 11/22/17 John Calce’s First Amended Counterclaim 173-321 Against Centurion Logistics LLC and Centurion Pecos Terminal LLC 4 11/22/17 John Calce’s Amended Motion for Partial 322-393 Summary Judgment Regarding Counterclaim Against Centurion Logistics LLC 10000280.1/SP/38371/0105/060118 5 11/27/17 John Calce’s Supplemental Evidence in 394-405 Support of Calce’s Amended Motion for Partial Summary Judgment Regarding Counterclaim Against Centurion Logistics LLC 6 12/8/17 Plaintiff’s Response to John Calce’s Amended 406-858 Motion for Partial Summary Judgment Regarding Counterclaim Against Centurion Logistics LLC 7 12/12/17 John Calce’s Reply Brief in Support of 859-865 Amended Motion for Partial Summary Judgment Regarding Counterclaim Against Centurion Logistics LLC 8 12/15/17 Notice of Trial Setting 866 9 5/2/18 Plaintiffs’ Second Amended Petition 867-903 10 5/21/18 Order Denying John Calce’s Amended 904-905 Motion for Partial Summary Judgment Regarding Counterclaim Againt Centurion Logistics LLC 10000280.1/SP/38371/0105/060118 Declaration of Chase J. Potter STATE OF TEXAS § COUNTY OF DALLAS § My name is Chase J. Potter. My date of birth is May 12, 1986. My address is 901 Main Street, Suite 6000, Dallas, Texas 75202. I hereby declare under penalty of perjury as follows: 1. I am over eighteen years of age and am fully competent to make this declaration. I am an attorney licensed by the Supreme Court of Texas and am counsel for Relator John Calce in this case. 2. The factual statements contained within this instrument are within my personal knowledge and are true and correct. 3. The copies of pleadings, motions, and other documents included in this Record for Petition for Writ of Mandamus are true and correct copies of these documents as filed in the trial court. Executed in Dallas County, Texas, on June 4, 2018. /s/ Chase J. Potter Chase J. Potter, Declarant 10000280.1/SP/38371/0105/060118 12.3. Optional Reclemplion of Membership lnlcrest. Subject lo Section 4.4 (relming k> limitntions 011 distributions). l he Managers, or, ii' there is no Manager. a Requisite Percentag~, in~1) cause the Compuny to redeem the Membership Interest of an Assignee by pay ing the Assignee the Fair Vnluc of its Membership lnten.:st ns of the redemption date or the actual value or the Members Capital Account. Interest will ac:true al the Index Rate ~rn the amount o\\·cd under this Section 12.3 frnm the 30111 day after the redemption dale to the date the payment is made. The rcdcrn rit ion date shall be tlxed b) the Managers in accordance with the principles of Section IOA. Except a:; otherwise required by the l.R.C.. amounts paid in redemption of an Assignee's Membershi p Interest shall be treated as made in exchange for the interest or lite Assignee in Company property pursuant lo 1.R.C. Section 7J6(b)(I ). including the interest or such Assignee in Company goodwi ll. 12.4. Status or Fonner Member. A tvlember who withdraws or has been removed rrom the Company or otherwise ceases to be a Member has the status of an As ignec with respect to any Membership Interest held by such former 1cmber. Except as provided in Section 12.J (relating to optional redemption of a Membcr·s Membership Interest) or Article XIII (relating to winding up and term ination). such former Memher is not entitled to recl.'ive any payments under Sect ion 101.205 ol'thc Ccide. ARTICLE XIII WINDING lJP ANU T E RMIN ATION 13.1. Events Requiring Winding Up. The Company shall commence winding up procedures in accordnnce with this Agreement and the Code upon the l'irsl to occur of any or thl' lhlltm ing events: (a) a Requisite Percentage vote to wind up and terminate the Company: (b) a dl.'crce by a court requir ing the windi ng up of the Compnny; (c) the 1ermi11ation of membership nl'thc last remaining Member: or (d} the re ·ignation or removal ot' all 1 lanagers if the 1 kmbers lbil to elect a replacement Manager as provided in Section 5. 7(1). 13.2. Windim!. Up Prm:edures. (a) On the occurrence of an event rl:quiring winding up of the Company, nnless there is an action to continue the Company without wind ing up in accordance with Secti on 13.3. the Managers (or othcu Liqnidator as pro,,idcd bckrn) shal I. as soon as reasonabl y practicable. wind up the Company's business and affairs (including disposing of the Company's assets and npplying the proceeds as pro\'ided in Section 13.-t ) and tenui nate the Company in accorclan~t: \\ith this Agreement ond the Code. The Company shall cease to ctm) on its business (except to the extent neccssur) to "ind up its business). collect and sell ib property lo the extent the \0 \11',\ ~ \ Ac..au:1·: \H,' " ' 01· C' I·.' I I, ltlO' LOGIS I I C., LLC E:x11mn A 1 1 5\)8~8\2 2112•2011 CALCE01505 MR.214 property is not to be translCrr~d or distributed in kind. and µc rfomi any other act required to'' incl up its busit1ess and affai rs. (b) If the Mu11Hgers have wrongfully caused the windi ng up or the Company or if there is 110 Manager, (i) a Requ isi te Percentage may vote to elect a person or persons to accomplish the w inding up or the Company. or (ii) if the Members foi l to \!led a person to accomplish winding up the Company. then an) Member or Assignee may petition a court tL> wind up the Compan) as provided in Section I 1.054 of the Code. The pcl'son or persons winJing up !he Cu111pa11). \\hcthtr Lht: Mam1gers ur an dcctt'd ur 1.:uun appointed persun ut persons. is referred lo in thi s Agreement us the .. Liquidator.'· (c) The Liquidator may determine the time. manner. and terms of any sn le or sales ol' Company properly pursuant to such winding up. The Liquidator (if not the M u1mgers) is entitled to receive rensonablc compcnsmion for its ser\'ices: may exercise all or the powers conforrl;!d upon. the Managers under this Agreement Lo the extent nccessar) or desirable in the good faith judgment ol' the Liqu idator to perform its duties: and with respect to ae ts 1nkc11 or omitted w hile acting in such capacity on behalf or the Company, is entitled to the limi tatio11 o l' liability a11d indem11i [it.:ation rights set lorth in Article VI. (d} The Liquidator shall pro\•ide quarterly report · to the Members and Assignees during the \\inding up procedure showing the assets and liabilities of the Company. providing information and docu1m:11ts requ ired by the Members and 1\ssignces lo comply with thei r lax reporting obligations. and such other inCornrntion as the Liquidmor deems appropriate. W ith in u reasonable ti me after completing the windi ng 11p. the Liquidator shall give cuch Member and Assignee a linal statement setting forth the assets. liabi lities. and reserves or the Company ns or the date orcompletion of winding up. IJJ, Cominuation Without Wi11ding Up. (n) If there is a decision lo wind up and lerminak the Company ns described i11 Section 13.J Ca). the Compan) may be continued as provided in cction I 01.552 of the Code. ( b} ff there is a ccrmination o f the continued membership of the last remaining Member as described in Section lJ. I(c). then prior to completion of the wincling up process but not later than 90 days alter the event of termina tion. the Manngers may continue the Company by admi lling one or more M!.!mbers cftective as () I' the occurrence or the event or termination. 1\ny Assignee whose Percentage lnterest \\'OUld be diminished by reason or the admission or n11 Addi tional Member under the circumstances described in this ection 13.J(b) must apprO\c the admission of the Addit ional Member. 13.4. Liquidation ol' Assets and Application and Distribution of PrOL'.t.:i.:ds. (uJ 111 General. On winding up the Cornpan) . the Liquidator shnll tlisposc ot' Lhe Company·s properties and apply and tlis1ributt: the proceeds. or trans(er the C'o111pft11) prope11ics. in the following order orp1fori t~ : C0\11' \:'I y /\C ll EE \l t.'1 1 0 1· C F\' I l'l\10' Loc as·11c'" LLC E\'1111111 /\ H511~~8'21 ' 1! '101 I CALCE01506 MR.215 (i) to credi tors (i ncluding Members who are creditors) in accordance with their relati' c rights and priorities to satisfy the liabilities or the Company. including expenses associated with the " inding up and termination or the Compan}. but excluding any Company liability for nny unpaid Mandat01) Distributions: (i i) to Members. Assignees. nnd ronner Members to sntist'y the Company's liability for any unpaid tamlatory Distributions: and (iii) ro tvlcmbers and Assignees as provided in Sc1.:tion -l.2. (b) No Member Deficit Resto1·atio11 Obli gation. No Member is liable to the Company. to another Mcmbe1·. or lo n third party. ror the repayment or any ueficit II\ the Member· s Capital /\ccounl. C:'(cept as provided in Section 10 1.206 or the Code. (c) Rcserves. 111 the discretion or the Liquidator. a pro rata portion of the distributions LJiat wou ld otherwise be made pursuant lo Section 13 A(a)( ii ) and J.ilil may be withheld 10 provide a reasonable reserve for Company liabilities (contingent or othen;o,•1se) and future expenses. including N reasonable reserve for any clai ms Lbr indemnification under Art icle Yl and for any future expenses associated with any tax aud it or othc1· Proceeding that is pe11di11g OI' may arise. (tl) Pa\ ments anti Distributions to Members in Kind. f hc Liquidator ma~ not make any payments or distributions to Members or Assignees pursuant to Section 13.-i{a)( ii) or (ifil other than in easiJ unless all Members and Assignees receivi ng the property approve the transfrr in kind. The Liquidator shall determine the Fair Market Value or any property transferred lo Members or Assignees in kind according to the val uation procedures set fort h in Article XIV. (e) Churacter of Liguidating Distributions. Except ns otherwise ri;:quired by the l.R.C.. amounts pnid to Members pursuant to this Section 13.4 shall be !rented as made in exchange for the interest of' the Member in Company proper!) pllrSllant to l.R.C. Section 7J6(b)( l ). includ ing the interest of such Member in Company gooexecute. certi I)'. acknowledge. swear to. lile. publish. and record: (i ) any certificate or other document that may be required to be filed by the Comptll1) or the Members in order to qualify the Compflny to do business in any jurisdiction. except that no such Ii ling shall include a consent by any Member to service or process in any jurisdiction withom the Member's approval; (ii) any amendment to the Certi!icutc or Fornmtion. to this Agreement, or lo an) other· agreement or document as required or permitted by this Agreement: (iii) any ccrti licate of tennination and other documents that ma) be required w cffcctutttc the termination of the Company pursuant Lo the provisions () f this Agrec)llent: and (i\') any document required of the Company to cnrry out the nc1ions 1ho1 the Managers are authorized Lo take under this Agreement. (b} rhe foregoi ng appointment or the Managers and Liqu idator as a Membet's al1orney-in-foc1 does not granl such attorney-in-fact any po,vcr or authori t) lo approve. consent. or or agree to the substantive terms of any agreement or other document on behalr such Member. (cl flw power orattorney grankd pursuant to this Section 15.12 (i) is a spec ial power or attorne) coupled with an interest and is irrevucnblc. and (ii l sun i\'es the withdrawal or remorn l o f a Member or the assignment or its Membership lnterc. t. !T his Page Inten tion ally Left Blank. Signatu re Page l'ollows. I C.:0.\ 11' \ " ' A t, nU: \H:~ I OF Ct,, 11 IUO;>. L OG IS'l I( 'i L L C E~\1111111 A 1 1SI/~ 18'11112· J l)I ~ CALCE01511 MR.220 Ext.:cuted as or the Effec tiv~ Date set fo rth above, b) and among the persons sig11i11g belo\\. MEtvH3ER ': Marc Marrocco, an individual Antonio Albanese. an individual CCl\11'.\ ' \ Ar:REE\I E'\ T OF CF:'\ rt lllO'\ LOGISTll S LLC EXllllll r A I 151J8~R\l l · 1 :!'101~ CALCE01512 MR.221 EXHIBlT A Effecfive as of September 18, 2013 Number of MEMBF.H. NAME AND ADDRESS Initial Capital Contribution Units TXC Energy LLC 560 l J>rcakness Ln 300 $300.00 Plam), Texas 75093 Marc Manocco 3602 Binkley Ave 300 $300.00 Dallas. Texas 75205 Antonio Albanese 6605 Gentle Wind Ln 300 $300.00 Dallas. Texas 75248 CO:\IP.\ :"\\ ' AG1u:n1f:XT IW CE'\Tl 'IUO'\ L ses at the beginning of such taxable year. Deprc<:iation is an amount \vhich bears the same ratio to such beginning Cross Asset Value as the federal income tax dcprecimion. amortization. or other cost tecovery deductio11 fot· such ta:-new or existing Meinber in cxclrnnge for more than a cle mi11i111is CapilHI Contribution: (13) the distribution by the Company to a Member of more than a de 111inimis amount of property as consideration for an interest in the Company; (C) the liquid01ion of the Company \Ni thin !he meaning o f Treasury Regulations Section 1. 704- l(b)(2)( ii )(g): a nd (D) in connection with the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of scr\'ices to or for the benefit of the Company by a Member acti ng in a mc.;mber capacity or in anticipation or being a Member. Atljustments pursuant to clauses (A), (B) and (C) above are requ ired only if the Managers determ ine thut such adj ustments arc necessary lo accurately re nccl the,; relative economic interests of the Members in the Company. (iii) rhc Gross Asset Value of a Company asset distributed ton Member shall * be a{ijusled to equal the gross Fair Value (taking l.R.C. 770 l (g) into accmmt) of such ussct on the date of distribution as determined by the distributce and the Managers. (iv) l'hc Gross Asset Values of Company assets shall be increased (tW decreased) to rellcct any adjustmen ts lo lhe adjusted basis of such nssels pmsuant lo l.R.C. Section 734(b) or l.R.C. 'cction 743(b). but only to the extent that such adjustments arc taken into account in determining Capital Accounts pursuant to Treasur) Regulations Section I. 704- l (b){~)(iv)(mJ. Gross Asset Values shall not be adjusted pursuant to thi s parngraph ( iv) to the ex tent that an adj ustment is requi red pursuant lo paragraph (ii). Ir the Gross Asset Value of an asset has been determined or adjusted pursuant to subparngraphs {i). Cii) or (iv) of this defini tion. the asset's Gross Asset Value . hall thereafter he adj usted by the Depreciation taken into account wi th respect to such asset for purposes or computing Net Profit mid Net Loss. "Ne t Pro liC and "Net Loss·· mean. for each taxable year or other re levant period, ,111 amount equal lo the Compan) ·s taxable income or loss for such taxable year or other relevmlt period. determined in accor artncrship Minimum Gain" has the meaning set forth in Treasury Regulations Section 1. 704-2(b)(2) and shall be determined in accordance with Treasury Regulations Section I. 704- 2( d). A.3 Capital Accounts. The Company shall ~letennine and maintain Capital Accounts. ··Capital Account" means an account of each Member deterrni ned and maintained throughoul the full term of the Company in accordance with the capital accounting rules of Treasury Regulations Section 1.704-1 (b)(2)(iv). Without limiting the generality of the l'oregoing, thL· following rules apply: (a) The Capital Account of each ivlcmber shall be credited with ( i) an amount cqtial to such Member's Capital Contributions and the Fair Value of property contributed (if permitted hereunder) to the Coll1pany by such Member, (ii) such Member"s share of the Company'~ Net Profit. and (iii) the amount of any Comp d evl'!nts ( lor example. the acquisition by the Compnny or oil or gas properties) might othern ise cause this Agreement not to comply '' ith rrt'asury Regulations Section L. 704- 1(b). (g) n1e pro\•isions or the propo.sed Tn.:asury Regulations published Oil Januat) 22. 2003 (68 F0tl. Reg. 2930), as they may subsequent I) be mo - . Company Net Profil and Net Loss shall be allocated to the Members as fo llows; (a) Net Profit. Net Pro fit for any period (t:>.:<.:lud i11g tt1x items nlkicated pmsuant to Sections A .4.2 and A .4.3) shall be al located as lollows: First, Nel Profit sha ll be al located to the Members to the extent of and in (i) proportion to Lhe excess. jf any. of (i) the cunrnlali\'e Net Loss allocated pursuant to 'cction A.4.1 (b) for nil prior periods, over t ii) Lhc cumulative Net Pro tit allocated pursuant to this Section J\4. 1(a) for all prior periods. (ii) Set:ond. an) remaining Net Prolit shall be- allocated to the Members pro rata in accordance with their respect ive Percentage l ntcrcs1s. (b) Net Loss. Net Loss for an) period (excluding tax items allocated pursuant to Sections 1\.4.2 and A.4J) shall be allocated as follows: ( i) Net Loss shall be allocated to the Members pro rnta in accordance with thei r res pee ti,.e Percentage Interests, subject lo tile Ii mitation in Section A.4. L(b )(ii). C0\ 11 1 \\ \ i\(;111:1:.\ n.\ I OF Cl<\ H IHO;\ LOG I ST I C~L LC- p \ C li A·5 CALCE01519 MR.228 (ii) No Member may rl:!ceive an allocation or Net Loss rhat wuu ld cause the Member Lo lwve an Adjusted Capi tal Account Deficit at lhc end o f the taxable year. Net Loss not allocated Lo n Member pursuant Lo this subparagraph (ii) shall be allocalt'd to other Members according to their relative positive Capi tal Account balances (cakulutcd taking into account the adjustments described in the defin ition of Adjusted Capitul Account Deficit). /\.4.2 Regulatory Allocations. The following special allo<.·ations shall he applied in lhL' order in which they are listed. Such onkring is in tended 10 com ply wi th the ordering rules in Treasury Regule1tions Section I .704-2(j ) and shal l be applied consistently therewith. (a) Minimum Guin Chargeback. Except as otherwise provided in Treasu1) Regulations Section 1.704-2( f). not" ilhswnding anything to the contrary in this Section t\.-l. if there is a net decrease in Partnership Minimum Gain during any taxable year. each Member shnll be all ocated item~ of income and gain for llu:1t taxable year (and, ir necessary. subsequent taxable years) eq ual to that Member·s share or the net decrease in Partnership Minimum Ga in. detcnnined in accordru1ce \\ ith Treasury Regulations Section I.704-2(g)(2 }. rhis Section A.4.2(a) is intended lo comply with the minimum guin chargebac.:k requirement in T reasur~ Regul ations Section 1.704-2(1) and shall be interpreted consistently therewith, including that 110 chm·geback sha ll be required to the extent the requirements for requesting a wa iver describcJ iii Treasury Regulations Section 1.704-2(1){4) arc met or the requirements for an) other exception prescribed by or pursuanr Lo Treasury Regulations Section l.70.t-2(1) are met. (b) Partner Nonrccourse Debt Minim um Gain Chargeback. Except as otherwise provided in Treasury Regulations Section l.704-2(i )( 4). notwithstanding anything to the contrary in this Section. i r there is H net decreas~ in Partner Nonrecoursc Debt Minimum Gain during a mxable year, then, in addition 10 the amounts. if any. allocated pursuant to pnrngrnph 4.2(a). any Member with a share of" that Partner Nonrecourse Debt Minimum Gain (determined i11 aecordancc with Treasury Regulations Section l. 704-2(i)(5 )) as or the beginning of the taxabk year shal I be allocated items of Com pan} income and gain for that taxable year (and, ir necessary. for subseq uent taxable years) equa l to that Member's share of the net decrease in the Partner No11recourse Debt Minimum Gai n. determined in accordance with Treasu1y Regulati ons Section l.704-2(i)(4). This Section L\.4.2(b) is intended to compl y with 1h1: clrnrgebm.:k or partne1· nonrecourse debt minimum gain required by Treasury Regulations Section I .704-2( i )(4) and shnll be interpreted consistent!) there\\ ith. incl uding that no chargeback shall be required lo the extent the requirements !or any exceptions provided in Treasury Reglllation Section I .704- 2(i)( 4) are met. (c) Ouc1lilied Income O ffset. I( any Memb1.:r unexp1:ctcdly receives 1111) adjustment. allocmion, or distribution described in rreaslll') Regulntions Seclions I .704-l (b)('.2){ ii)(d)l-l). (5). or (6). items or CompaJly i11c1.1me and gai n shall be specially allocated 10 such Member i11 on amount and mnnner sufficient lo eliminate. to the extent required by lhe Treasury Regulati ons, the Adjusted Capital Account Deficit of such Member us quickly as possible. i\n allocation pursuant 10 the fo regoing senLence shall be nrnde onl) to the extent that such Member "1.1uld C mll'.\:"o\' AGlH,l·:\11: \ r OF 0 ::-. 11 Hill\ Loc;1s 11( ~ LLC P \
fS ............................................................................................................. 1 1.1 . Defil\ed Te1·111s ........................................................................................... .......... .... 1 1.2. CoJ:struction ................................ ............................... ............ ................................5 Al'<.T.lCI.:E ll OROANlZATlONAL MATfERS ........................................................................... 6 2.1. Formation ..................................... ............................................................................6 2.2, 7-.Jt\me ..... ,...... ,,,.,,,., .. >··tr·· ~ ··•···· · ···· · ··~···•· • ·· · · · ·········· I · ·· ... ,........................................ ..... 6 2.:i . . Rcgir-1tcrcd Ofticc ml211-157. jl~P.'J.IO~ll(lll!llMI IM MR.235 CALCE01434 6. t. or 1.:1nbi lity ................................... ........................................................ 14 f..,ilnit1.1tio~ 6.2. lndcmnilicntion by. Cornpnny .................. .. ...... .............. ....................................... 14 6.3. Conduct Nol P1·01ecied .................... .... ........ ... ............. ...... ..... ........ ........................ 14 . 6.4. 1nsUrflflce ........................... .......... ..... .......... ...... .... .......... ..... ............ ... .. ................. 15 6.5. Sti1·\ 1Jvn) .,,,,,,,, ..•.. J , j , . • . • • , . , , . , t5 • • • , . . . . . . . . . . . . . . . . . . "' • • • • \ , • • • • • • . • • • . • • • , •• , . , , • • • • • • . • • • • • • • • • • • • • • • • • • ••• , . , • • • • • , . • . J\RTtCLF: Vil BOOKS AND RECORDS: REPORTS ................................................................ 15 7.1. Maintcm1::ce of and Access tc Bool~s nnd Records ............................................... 15 · 7.2. . F isca l Year ... :.... ............... . ............ ., .......................... .. ....................................... 15 7.3. Financial and Opcruting Rcporls .... .............. ......... ... .... ...... ........ ... .... ................... 15 7.4. TnxRcporls .................................................. ............. ............................ ................ 16 · 1.5. Trnnsmission of'Comml1nlcntiom: .................................................... ............. .. ,... 16 ART!Cl.E Vlll ·rAX MATTRRS ....................... .. ............. .. ......................................................... 16 8.".I. Tct;< Clt1ssiric<1li()n ... ,................... ,.......................................................................... 16 8.2. Con1pnny Retui·ns ................................................................................ ................. 16 8.3.· Tax Ek~tions ................................................................................................ ........ 16 8.4. · Consistent Reporting... ............... ............. ............... ................. ........................ ..... ; 7 8.5. ··· Tux Proceedings ......................... ,. ...........,........... ,............................... ............. .. .... : 7 8.6. Information nnd Doc;.;mcnls lo Cornpany ............................... .............................. : 7 · 8.7.. Survival ........................................................... ...... .... ............. .......................... .... !7 AR:l'ICLE·iX MCTETlNGS ANO VOTING OF Mf.tMBERS .................................. ................... 17 9. 1. l\tleetin[;s .. ................................................ ........................................... ................... 17 · 9.2.~ Voting .................................... ..................................................... .......................... 18 AR'l'ICLE x "f'RANsh:m. OF MEMBERS! llP INTERR8T8 ................... .......... .. ... ... ................ I 8 I 0.1 . . l.. imilalion on Trnrn:den; .......................................... ............ .................................. 18 1O.?.. Permitted Tr:.msfor of Mcmbzrship Intcrcsl ........................ ................................. 18 I 0.3, Righi of First Rel\1s1d; Tag-Aloht-; Righ ts; 'l"riggcril\f:l Evc11ts ..............................19 l 0.4. Conditions to Permitted Tnms!Crs oi' Membor.ship lnterc!lts ................................. 20 I0.5. Effective Date; Dislribulions ....,....................................... ................................... 21 I0.6. TrnnsreJ'or's Oblig'°1tion:; .....,. .................................................................... ........... 21 I 0. 7. /\ssignc<::':i Rig!mi .., Stntus \If fl orml!r ;\1le111ber ... ........................ ... . ,....... ,................. .. ,.. ,............ ,,.. ..... .23 ·-··). A~TJCLE Xlll WINDING UP AND Tnt~M!NA'l' I ON ...... ,............,........................................L4 co~u•,\NY AGm:~;.~11,N r OF Ci.;N'!TlUO;'li Pf.COS Ti'.llMl~.\J , LLC PAGE I hi !w~IJ.1~7 f•l)i>,'J .I0.11/lllt>l /0-~l MR.236 CALCE01435 13.J. Events Rcqu i1'iiig Winding Up ................................................................. .............211. 13.2. Winding Up Procedl;res ............................................... .. .......................................24 13.3. Continuation Wilhvljl Winding l.lp ........................................................................ 25 · t 3 .4. Liqukfotion of Assets nnd Application and Drntribution or Proccccb. ................... 25 13.5. Ce1tilicH:e ofTem1im1tion ................................. .................................................... 26 ·· 13.6. Reinstatcmcnt....... ..................................................................................................26 ART!CL.E x:r\1 ·\'ALU ATION :;................................................................................................... 26 14.1. f'ail' Vnlueof(;oir1pnny Property ...........................................................................26 ... 14.2. Purchase Price ol' Membcrsbip lntcrcsl ............................... ,............................... ?.6 ·. 14.3. Vnluotion ofMembe:·~hip Interest<> ............... ............................................ ..,.........26 • . 'AR;ncLJS xv GltN8RAI,.; PROVISIONS .. ,............................,. ..................................................26 r 5. 1. A t1H~ ridme11 ts .......... , ...................................... .. ........... ... , ....... ............. ... ... ,...... .. ... 26 15.2.. Notice............................. ............. .............. .........................................................27 I5.3.. Gover~ing Luw; Consent 1<1 .lurisdiclion ............................................................... 27 15,4. Waiver.,, ....... ,...... ,, ...... ,., ...,.,, .... ,., .... ,..,,..,.. ,.,,., ....... ,,................. ,.. ,.............. ,, .... 27 l 5.5. · En!lre .1\grcement ........................ .......................................................................... 27 15.6. Succ<:ssors and Assigng· ........................................................ ................................27 15.7. Third Parties .............................. ....................................................... .............. ....27 4 15 .8. Severtll)ility I•" ,, .. ......... · ~·····• 1•1•• · . ••" ........ .. "' ••••••••••. ..••..•... .. , . , , , .... ....... ,. , ~····· · .• .•. , ... .. 2'7 15.9 . . Constniction ...........................................................................................................28 15 , I 0. Excculion of J\g1·ccrncnt ............................................................. .. .. .......................28 15.1l .· fo\1rthe1· Assurance.:s .................................. .................................. ,....................,...... 28 C eetl tr:insferred by u Member or As~ign~e in v. Pcrmm~d 'l'f·r.ns1'cr, or :1~ 11 f>rohibitcd Tnmsfcr 1lwt the Compnny i~ r~q uired by !nw H1 tecognize, but who hus 11ol become a Member•. i111d (b) H forrner Me111b~r us dest:ribud ln 1k~Ji.~1.11 . 1.u. 1 'CAlvl .. 1111::nns CAM Oil nnd N:1,w·<1l Uus. L '.,l'. n LnuisiH~!U limited linbi lity co 111puny. '·~opital C9ntnbtitic11" 111enns 1he st1rn of lhe lnitinl Copilul CnntribtttltHl u11d Ac:~lithmol Ct1plwl Ccmtribulions, ifnny. with respect lo t1 Membership l mcrcsl. COMPANY AGRer=Mt:NT OF C~:.NTtlltlON Pf:C'OS TEH!)lf,~/lf. LLC PAGE 1 3ii1457.1/SP/~3032/ll'10110911~ ~ MR.238 CALCE01437 •·ccr'llurion'' mcuns c~mnil'loll t.ogi$tics LLC, ~1 'l'~:-:us li1~:itc~I lktbility c0mp11n); nml u Mcmhcr of I he C1mipnny m; of !he ~ffoctiv(.o Dute. "(ertlticnt~ or Fq1·1nmiill!." means ltrn Certili~111e of Formation ld>::nti!ied !11 Lhe rei.:itnls to this Agrec1m·nt, as snch ccrtificat~ may bt! cnm-:ctcd, rn~'i::11clect, or rcstntcd. "Ce1'1i-licme of MeJJ,tbersl:WiJnteJ'est'' menns ti cet·ti lieu!~ l'eJ.)resenllug « Member':; M~rnbc!'shif' lfl1Cl'Cs1 in a fom1 approved by the Boal'cl or Mrt11Hgcrs. ··f;Q.U\R.fl!1Y.°' n1cans tiie limited linbility co1:1r:~n>· formei.I pur$i1mH to the Ccrtifa:nte ol' Fmmat~on. •;Chn11g~ of; Con1rnf'' menns ;.vilh relipec\ 1~1 a tv!embet» l hnl the owner~ ol suGh Member (as e,xisting as or 1hc d111c hereof) shnll (i) cemst: 10 ow11. direi;tly or indirec\1y, 51.0% of lhe out.stnnding ownership intcrvsts 1} f st1ch Member, o:· (ii) ccn~;,~ to ()Wl't or cxe1'Cisc voting con!rol over 51.0% or the 01lls1m1din~ voting inlCl'l!!i\S of sui~h f\1lember. "~'ontrol" t11 Clll1S 1hC pOSSCSSt011, clir<~c!ly Or indirectly. of the power lo dirCt~l nt· t: \11d uller establishment .111d muintemmce' of s11ch cash r~set'ves 11s the Boal'd or Mrinugc"s dctcltl1incs· shollld be rewinccl lbr the rensonabk C\lt'renl and l't1tul'e ncecl11 or the Company's husinc.. nt or uny other nght rc:-icrvcd ~rndcr this Agrl!cmcnt 01 tht.: Cod~ \:1;1;hisivcl;v 10 u ~1fomber. ~'Perci;nmge lni~r~~f' means,. ' ihreutened, pending, or completed nci\011 or other prot.:ccding, wh~~1hcr civil, ci·iminal. administrative. al'bitrnti vc, or invcstignt i vc; (b) un nppcc of uny. such proccctllt1g; and tc) an inquiry or invcstig<\li(>n thnt could le;.1d 10 any swch p1ucecding. "'Prohibi!cd Ttrmsfci·" means imy Lrnnsf'cr uf a McrnJcn:hip Int~rcsl thM i$ not n Pc:-inilted Trn11s!cr. ''Rcdcmplion Nol'i;;e'' is detincd in Section 10.3(c)(i). .. Req§motion QpliQ;~'' is clctined m Sectio11J.03(c)(j). 1 '~Bbstltuted ft1£JID2£t° means a person who is atlmiltcd illi tt Me111bcr pu1·Huanl lo ~££!l!J.!Ll.Ll With 1·e~pecl LO the tronsfer o!"~n existing Membet•ship Interest. ' Tretl'sun Regy.!.f!.!it)ns'' meat:s the Treas111')' n.:g11!ntions p1·onltitgalcd under the !. R.C. 1 ' "Ir.iggeri11g H.vent" l1,e:ms the nrsl lo OC«~tll' or (a) the clnte of a Prohib ited Translcr, incltJdillg ony trahsfcr to('.) a Member's lrustoe in ::.111nkn1ptcy, (ii) n purchiiscr til 1my t:r~ditor's or court st1lc, {iij) n Mcmhcl''s spouse purs111111t to a decree or n HWl\,\I. LLC PAGE4 G:114!l7,11S1'13l032101Gf/O!l111~ MR.241 CALCE01440 Mr.rkcl Valli\~, timl (b) if lhere is no such Ccrtilic~1t() of Fhir M'irscl Value e/'J'cctivi: with n:spci::t to lh1~ Triggeri ng l\vcnt, (i) b;t ugreemcnt or the Co111pnny m1d the Offl!nng M:;mbcr or the Offering Member's succ1!ssor in interest. us rpplick1ole. or (ii) ir no stu"h ~tgreenicmt hi rc;;~~ lwi.! wilhin 30 days e1Hcr the iSHllHm:c or 1he Reclcrnprion ~Joth~c, by QI\ independent uppl'~liSCI' d1os"n 11'1\IWf'lllY by lhe C vided. lli,~. thnL in :: the poweJ' to do any nnd all acts t'eHr;onably rel11tecl lo iis pw·pnl1es. 2. 7 Company Proper lj:'.. M All Co111pt11~y rrop<~rl)' :;hnll ho owncci 111 the nmnc of tho Cnrnpm1)1 nnd nol i11 1hc oun1e of uny M~mbtl'. No Mt~mber 01' AMsignt:c will huvc uny i11ten:s1 in sue:~ Co1npt111)~ propi..:!'ly-sull.'ly by ri::nso11 of the f\'lcmbcr's sta~us as u Member. (b) The Board of tvbnag~rn shaH cause all funds ol' thi;: Compimy to be d(c.;pmritcl.l 01· inveslc-d in u11 nccmmt or accounts m the narnc of the Compa1~y. No fund~ other thnn 1·he funds of ~nc Cornpnny may be deposited 1he1·ein. Thn runds in such n<; -.elusively lor tbt: business or the Colilpuny (i11ch1dl11g distribution~ to the Men·,be1 s) i1l~d m,1y be w;thdrnwn ouly by· persons approver uriy pttrposG5 nthcr lh.un income: tu:.; purposes No provision of thi~ Agreement rn.1y be uon,sl t'tt..Jd to !')Lt!J.gcst othe1·wisc. ARTICLE HI C1.\.1°1TAL CONTIUUU'fJONS: CAPrTAL ACCOUl'\TS 3.1. .l11itinl C.apitit! Con'tribuli9pe. Each M~111bc1 ·s Initinl Cnpitul Con1ribi1ti 11S u1· Cupirul J\l'C{iUnl ol uny Member. COl\WANY AGREEMeNT oi:- C1·:N'l l•Ht0.'< PK<:O!' 1'1m~11N1\I , LLC PAG!::7 lll,145T.11$PtJ30J210 J01/09111rl MR.244 CALCE01443 :1 .5. .M~ru.ber L2an~. '1110 Compmiy· may bon·ow money from one or more Members lo lhc cxten1 the Bor.rcl of Mmwgcrs deems appror;·intc to the contluct of the; Company bus i nc~s on lcrms llrnt comply witb lhc 1·cquircme1H$ of Section S,S{b)[iii} (rclnting 10 related pnrty l1'H11S()Ctio11s) The wnount cfimy loim mmlc to the Comprn1y by n Member wi'l 1101 consti1~:tc u c~1pilal Contributwn or uthc:rwisl.! 11ffoc1 s11ch :vfom!Jer's Cnpitnl Account rn· tv.fembcr.-hip Jn len:sl. ART1C'LE 1\t l)ISTt~rnurmNS 1 1U.LOC/\ l'!ONR ANO 4.1. Allocnllbn ol' Profit or Loss. Compm1y prolits . For t:1'.s purpose. o Mcrnt/e1· or /\ssigni:c i:i dl!cmed to huv~ on unltJ111.lcd t~l< liability for a li.1:-< yer.r to th\'! extent (i) the crnnulative nmo~1J1l 1jistribulct: lt' the MfJmbcr or Assigncl.:.'. tmi.Je;· Section 4.2(a'j 1mcl advanced Lo 11tc Mcr1bcl' or Assignee Lmder this ~~Qn 1.2(b.} (and 1101 previously r~covori! .l; :c.:oin<.' tu.I\ wilhholding) , All. amou;1ts Sl\ witlthdtl ·from cii::itributions are deemed to hnve bec11 distriblltecl 10 th~ person othc·,wisc entitled t<> 1·ecdve the timounl so withheld. Tci the extent un am\1,ml ili paid l>y ,he: Co111pn11y·on behall'ol' ·a Member or Assig1\ec but nol withheld from a clistriblttion, the amou111 1n1icl con:-;titutc~ 11 1001~ to such Memb~r or Assig1lee. Such loan beat·s inlerf.ll\ <11 lhe Index Rt11" a11d is rnpay~1blc~ on dernanci or. t'l the electinu of the Board or Mmrnge1·s, ls 1·epnyuble out ol' distributlons tn which such Memb·~r 01· As!:ilgncc wou1~1 othl~rwise be entitled. 4.4. U111itnti(l11 ·oi' Distribution~. · (n) The C.\H1Jj1m ·y may 11ol 11n1ke o clb:l'ribul'i:m lo <1 Member m· As5ignr.c if il wo-:ld 1cndcr lhc C,-:impnny insolwnl. dc1cl'mincd in nccorclanl:c wilh Sc\;tion 101.206or1l1c l'mk. A Mc111''>c1 or i\ssi~llC(I who l'l.'!l!eivcs n uistribution in violoti~·ll o!' St::.!ion 1Ol.206 DI the Code is 1101 rcqui1\.'d lo rctum lh·~ cJislrib~ttion CXt;<.:pt ru; required in s~clion I() 1..206 of the C0ctc, · · ·(b) The Mc1i1bers shuP look sGlcly lo lhc 11ss~ls of the Comprn1y !'or ~my distribution$, including li ,\J, l1LC e2114M.1/SPl~~032/0~ 01/001 1 1~ MR.246 CALCE01445 (b) ·!:'.txcept us pl'OVided in S&.filions &~5(n} (reh1ting lo tax molters), the Mcmbcm; mny· l1ot take purl in the mtmagemenl or control ol' the Company business er bind the Comrmny in their cap~Jcily a:; Members. The Members shall not have the right lo vote 01 otherwise co'1set1l ur withhold 1.:0i1SCl't 10 i:ln)' klctionS taken by the l3t1Ul'd of \ll:i1~uge;1•s ~XCCj)t wilh fCSj).!CI lo SLtCh liillltCI"$ tlS UI'~ <;.)(pre~sly ~!nted In ;h1,') Agree111e11t. 5.2. . &.~i~m1tio_11,· R~mgval, and R~ruru;£ment ol Mnml'J&r~. (H) JTu.?.jgnulion.. J\ny Mu1rnge1· mny l'esign ns n 111:111nger of the Compnny upon notice lo :'Ill M~mbc1'<>, which resignation shall be cl'fcc~ive im1ncdiHt'cly 11pon delivery of such notice. A Manager is deemed 10 have resigned ns ti mn111;gc1· ffi' the.: Comr>any cffoc1ivcly. imml.ldralviy uron 1hc lollowing eve!1l!I: (i) U11)i· CVe111 ~pccdkd l :1 Section 153.l.55(l1)(4) or Scct1011 15:3.155(n)(5) oJ' the Code (relating to bankrnptcy Oi' insolvt:n~r pn.)cei::dingg with rc!!p1.;c1 lu r r1::1novnl u Mqjority-in-incrcs! mny c:ecl l:l replncetnent Man unanimous vote or written consent of the Mm1agers slrnlt be rcqui1ed l0 ap1wovc any action by the Board of Managers. In the event nn ;iction i~ t1pp1' rnt,k l1S !l pt1rl 11cr$ilip r'or l'edcrnl 111:.:ome ta~ purposes, \lr (ii) take a pc1silion inconsislent with .such lreatmcnt. '(d) cause the Cor11fla11y to (i) muke l.l gcnertd as.slg,11me11t li1r lht! be11clil orcmditor~. {ii) ·me f-1' \loiuntnry b~111krnptcy petilio11, tJI' (iii) $ei..!k <111 oriJer for rel kl" o~· c.l~e l m•nti:m er it1soh1i:ncy in my M~mb~r !ilhcr tlrnn pt1rsl1nnl to .S.£,;;.tip11..f,,~ or Article XI; (!':) c:.lllse the Company lo lU.:qlJire .tny equity ()J' debl ~t:clil'itk::; or t:ny j\'fcmb1~!' ur uny Affiliiltc or n Mcmbc1., 01• ori1crwisc make lt~ans tt.11111y. Mc111l>;::f or My/.\ l'filiatc ol' a Member; · O cause lhQ Company to Ol:quirc from t111y p'!rson uny eqt1il) ur debt ~~clir:!iei: or 1 ;issets· oi" any corporntion,!imilt'tl li part iciput~ i:; m1y merger, consol ioat'ion, lrunsfor, continuMce, or conve1·sion of the Compuny with 01· rnto any c1thcl' pcrnott: (k~ cwse the Company lo pa1'tkipi:itc in any 1·co1·gimiznt'ion in which Membership !merest": 11rc exchungecl fo,· or ccin vcncd i::tn Ci.\Sh. securi!1c!:: ol nny nth~r f)l!rscw1. m othc1· prnpcr;y; or (lj sell or orherwise di~;posi.: of u: J or· substt:ntinlly nll of lh~ Cw1~pt'l11y properly, except in e1mncc1inn with winding np lhe Comp~tn)' us permitled in 1hi:o; f\gr~<;1m:11l. (u) The Board nf Mmrngcrs may 1)Ull5C the Compnny u:i hire such cmp loycc!S und ag:.:l'lls ms the Boi1rcl of J'vlam1g~rs dee.·ms t.tppropriHlt: IO; the C:Ol'IC:tlCl or th~' Compnny's.business. (b) The Benni or Mtlr1iJgcrs lllclj' CS\ubfo;:~ t1rficc:; ;111•.: •IPfXlil11 officers 1~r the Compmly, Mcl mny clckgatc to sLtch olfo..:cns uny ol' its· 1.1~1thonly lwrei.tnckr. as ihc Bomd or Murmgcrs deems upprn11ri;:te. The 0Hicers m;iy be Hppointl"tnnd~nls of condw;t us Apply lo u i'vlum1g1~1· as de~<.:ribed ir1 Sec:jon 5.9. 5,7. Reliance.. Persons dealing with the Company n•ny rely co11dusiv11ly 011 the uuthori1y or th~ Bom·d of Mum1gt:rs m; ~li!l for~!; 1r. this Agn:rn1cnl. l!vct)' do .'11ment ::xec~11t:d by tiny M li under Arlicl~-YL find doc:; not limit lh·.: Compi pc1wc1· to indemnil'v snch 1jc1·.son n1,wi11st· such e?ipen:;e, liability, or loss u11dc1· the Code. 6.5. $lll'vivi.1!. The indc111nitk::; pmvidcd lh l' in this i\gr1;<:111crn SW'\'JVt: thi.:: lr£\11l>l~r or WI h1dcnmified Pot'!\ · equity. for sue-Ii r•'iscnl Yeiw. e<1ch in 1-e:iso1rnble dcl - :ovc:·ies dul'lng the fisc!ll q11nrtcr1 irntl n dcscl'iption ol'm'I)' Prncecdi11gs involving th~~ Compnny; um; {(") (I ~U1te111i::nt or chungi.::s in tliC~ f\'lt~mbt~r'~: Cupilul .l\<,:count (llhi.lW il1g Lhc l1ulunce in 1hc :\lh:m1h1;r':1 Cnpltul Accou:1 1 ns or the bcginn 1'.1g of' the J'i::;c~il Year, eontl'ihutio1is u:• dbi1·il'nll iuns drn·ing lh~ year, ulkJculions 0:1 profits a11d losses du:·ing lh<.: yc:ar. any othc:: <1djust01cnls lu Lhc Capita! Account bolanccs during the Y!:.!HI'.,
slw! I dcliwr l'.1 Cl1Ch pc1·~011 who wns 11 .'vtemlicJ or A~~ignec 01 uny time during the p~~rloJ coven~igne<:. th~ Bonn.l M Mui~ag~rN ~hall delivcl' to such person· inform<1t'ior1neces~rn1·y lht· the preparn1ion of' My tax ren1 rns thm mus: be liled by s~1ch per~on, including information 1 1ec~ssrn·y for cstirnnting uncl pr.yi11g estit11r1iccl 'ICl' lt'Hth·c adjustment of' pa:·tnl'.rship ·items under l.R.C. !'iccrion 6227(n) if such rcquc~\t would cmt'.'lc the: Ml•rnbcr"!i lrc<,tment ot' th~! item to be im:om>i:-itenl with lhe trenlmenl o:· d1e ilt!m nn the Compm1y':> retllrn. ·· S.5. JitX P1·ocecdi11gs. (a) John V. Cflkc ·shn!J be the Company's tu,x mnttcrs pmtncr ns defined in l.!~.C. Section 623 l, nnc.J shnll take such actions 11s uri:: requirc~1 to be dcsignutcd thi::: lnx mm,crs pnrlncr u:;de1 r.pplicnble Tre <~$) slwll llc pnildi11g nt lc:H>i 15% o!'thc l>cn:crHuge:: !nrerest hckl by lilt: Memb(tr:;. M1:•.:tlngs sl1t1ll be ht!ld nt the Comptllly' 1S pnneipul pktcc or hu!'il\<.'!!S [)l' lil .~llt:h \1\l;er rcasonublc pla::1~ set forth 111 the noti(:c of lhe meeting. COMPANY ACReeMENT Of' Ct:N'l'l l HJON P~:co:; n:a(lrt'i;\l.J.i ,(' Pt.GI: 17 U?11457.1/SP/33032/Q10i/091114 MR.254 CALCE01453 (h) Any: ur.:tion lhul :rn1y bc lnkcn 1.11 H M:!mbcrs· meeti ng mu)' be t:1kcn without· !1 o ldin1~::1 111•~eting il'M..imb1::1·s howing.11! lcilsl the minimum Pe1c;::ntuge l111.er1o:st !hat would bl! m~::essa;·y lo l ~ ihc Ul:lio11 ut (\ mc1;:ting, in which ca,;h Member entitk:d to V bers not h1ter ti··an with the deliver)! of'lhc> 1J1.::~l fhllciwin!,.:. n~port of' linancinl inlbrmntion given pursunm 10 SectiqJl.Z.J. . 9.2. Vg(iJJS: A Member 1m1y vote at a 111eeling in person, or by fl pr0)\y executed in writing by lhe Member •ind received by the Board of' Mtu1ngc1s pd or lo the li rnc wlwn 1hc \'oles ()f Mcmbt:rs :.ire to be counted. The provisions er il1c Code pcrLai11ing to the validity l.tnd llSC <11' pt•o.xics b)• shareholders or a corporotio1~ govtrn the vll!idity and use of proxies t:iivr.:n b,r ivlemlie1·s. On:y Mcmhe1s nl' iec:Md on 1l;c :-fol<: of' the meeting (0r ii' the vote is concb\!tcd without cl mec:ing rlwn on the dtitc of lhc 11\)tice soi iciting ll\\J Member consents) may vole. ARTtCLF. X TRANSFER ()Ii' ivmMnEH.SHff' INTERESTS IO. l, Limitation or. T111!1sfoi·s; '(ft) The 1cnn "trunsfor," when us~, m dl~lti1. •tnd miy pledge, hypu\hecatio11, 01· uthei' encl11'11b111!iCl:. (b) N!i Mi:-mbcr may m1m1tb· till or any rmrlion ~1 1 · its Mt¢ ·•~bersh!µ ln;eres1 t111les8 the tr l; membci· or' !lie Member's oflllimcd g1·m1p (as dcl'i11ed in l.R.C, Section IS04(a)); (iv) ii' the Member i!i n trLtJllCC of one OI' more employee •:cncfit pion~. lhc lfa!'1sll:'r is lb n co-lnislce· or i.t sue~cssor trw ro be sokl in tf1e conrcmplnted lrMl'>ter. as the cnse may be. If the olhci Mcmbccs foil to gi'-•c n•Jlt flcntloll within 15 business c1~1ys or nn e1~Cli~)!1 to purchn!!e lhe selling f\lkmber's Meniber.ship lnli.:!rest or p<1rticipnlc in tlw contcmplEkd 1ra1:sfor, then lhe selli ng Member shull (I(! pern1iHcd. 101· ti pi th, l!~ird par1y upon th~ terms >ind ~ I' the pl'opos~1 d snit! or 1hi1·d puc'ly nllcr, ::-r 1nnJ.:cs an r.::lcetio11 lo ptu·i.:h.isc till. ~.:!ling tvkmber'!! M'!01bersl11p I111\:!rc~n unclc1 §~Cl.!Q!l.) 0.3(nll,iJ. each ~if the pim.:lmsing Members :;hull purchnsc :1 portion of rhc "cl ling Mcn1ber's tvlemb<.~r~hip lntcresl tint! is proporliumd to lh(ll M~mhiJI'<$ Ptr\!\::nlllc,;1' lnLcrr::)l. (c) (i ) Upon rhc occtn'i·cncr t~f n T "iggcrlng Event with respect to '111)" Member (th~ "Qjforin1.t. l'vfomber'·), Coinpuny sh;il l lwvo tlw rig.ht but nol llw obligution tQ p~u·~·.lrnsi: ull of 1he Olforing Member's Mcmbe1·ship Interest in the Co1npnny at the ti111t Dt' tlH:: Triggc1fog Evtmt (the ·'Rt;dcmp litrn .Qblli~,tG"). Witlli11 60 days nfk1· !hi~ Company receivt'!l written nut ice o l' the occurrcncr or (11nd date of) lhc Triggering Event, the Company slrnll provicle wri1:1:'.n notice ofiJs ckctiOll of'lhe R~~dcmptk11 Optir.;n COMPANY Acm~EMF.NT OF C.~:NTllHION f'E('OS TElli\llNAI. LLC PAGE '19 6211 tG7.1/SPl~JD3U01B1/0~1'114 MR.256 CALCE01455 lo the Ofler!11g Membet• m• the Offel'ing M~:mbel"s ~uccessor lu intcrc:!'L, u$ u('lplicnblc (tht: '"RcdcmJ;)lion Notice'} in the even\ th~ CompHny e:ects r~1 exercise the Redemption Option, the Comptmy s l1uli pL11't.:lrni11;.~. nnd the Oflering Member 01' lhc onering Member's successor intcrcsi, t\S applicable, shnll sell, all of' the Membership tntcl'est owned by the O(rering Member al th1: t.1111e or lhe l"rigg~ring Event at n price et1unl 10 the TriggcriJ1g Evi::nt"Purchasc Price. (ii) . A closing (~ "Iri.ti.!l&ci.UR Evfil1t C.19.~illl:l") slrn11 b~ held 60 clnys ol'tl?r the lulu of' the' dntc of th: Rcdcm1>tio11 Notice or the d,11c thi1t \'he Triggcl'ing Gvcrn Pun.:hn!-ic Price !ms been tstab!,shed. . (11i) /\t th~ Tl'igg.eri 1;g E\•em Cl~>si1,g, the Of'H::ri11g Memb~1· or Offodng Mcmb1:r's successor in interest, as applicable, sh:ill deliver to th1.: Company r.11 f!Ssigomcnt ol' Membership !11tcrcst nwnc~i by the Offoring Mc111her, duly cntkirf.lccl for :rnnstbr lo the Com puny. (l~) At !he rl'iggod11g Evt.:nt Cie~in~, 11w Ccmpany sh,11! P th~: Ollen11g Mcmb1;:· ()l' lhe Ol'!crl11g Mi.:mlx: t".~ .$l1C1.:c:m11 in i111~rc:>I, ,1;; cipplic~1b 1 c, in irn::·;ediatc!y availabi1: li.111rs (b}' wire; ccrti licd or bnnl c: M lo the Members· dctcnnin<:d m nccon.huR~ ~ with this Seel ion I0.5. wbt)lh;;:r or nol the l3oarc.l ~ii' Managers 01· t '~c Cu111pt1ny h<1:; knowk:dgc of !In} trnnsfoi- ()j' *~;iy Mc1nh~rslilp lnt~rosl. 10,6. 'f'nmsforor's Oblig:.ilio,;~: The lt'nll$fol'OI' or l1 Membership inrereSI who l:e111>1!S to be ii Member conlimtr:s lo be ohf igittcd with rc1!pcct 10 ill! Mt~m be:rsn it~ lntcn:sl or its stt1 ~ ;.is il!> a fbnrt:r Me111be1· ns provided in th<:' Code and ~ipplicablc lnw. l 0.7, A~sigoel:!'s Ri1;1hts !1ml Qbliga.i1Qns. Unlt:!Ss nn Assignee b~comcs a Member pursunnt tt) b.Jticlc_XJ_, sL1ch Assignee shall 1101 be entilled lo <1ny ot lht~ rights gronli;:d I<, u Member (cHhQt' •ntin us 1·cq 1.1ired by !he Codi'::), and shnll h ree wiLh l'i;:sp~<.:l to ~l Prollibl ti.:d Trnnsti::J :shull be jointly t:mf scvcrnlly linblt.. 10 the Cc1111pHn.I' !b'.'1 und slnill !ndcmnily Md il o!cl the Compnny h1nnkss ugainst, <~ny cxp<.m:;~. fl atislktl: . (H) Ttie Boal'mpnny for the estimated t'~pcnse$ likely h> be incurn: PAGE 22 !i1.1 ~ 4S7.11Sl'/~~ llJ2/v1G11!i91114 MR.259 CALCE01458 ARTICLE XU WITJ40RAWAL OR RF.l\ilOVAL OF MEMIU:RS . (ti) . f\io f\Ac111bcr muy withdrnw frm11 lhc Ct~ mpun)" or otherwise ccnsc w l~c u Member e:-.:ccp1 ui;on· the following events: '(i) n trml!lfor tlf nil of the• Mcmbe!"s Membership Interest in ll Pcrmillcd (ii) removal of the Member ns a Meir,ber m; provided in .S..9..~.t.i..9.!J~ oi" this Agreement. (b) A Member'slrnll be deemed Lo with N PECO~ Ti:HMtX;\ I, t.l..C PAGE 23 U 111157 'llSPl3303210101I001Hll MR.260 CALCE01459 ARTICJ .I~ xm WINDJNC lll' AND 'rii:nMINATfON i'1. I. Events R~..rn1Mng Wi11din1]. U1). The Compn11y slia!l coinmenci,:1 winding ur prnc1~lw·1:rn in w.ico1:cla11ce with this AgrccmMi {.lnd the Code up1)n the tirnl lti QCcur ol' the (01 l cai·1·y on its business (cxc:,.;pt tu the cxlt:;1I nccicssary lo wind up i•i> ~:n1siness), collect Hrt in this 1\grccmcnl as lhc "l.l!luid9ll,1,r.' (c) 'The Liquid910r mny dctcnmnc the time, m<1nne1·, and lcrms of any Sf! lc or sales or Compnny pror:erty pursuant to ~ ·.1cli winding up. The Liquidator (i r nut the 13ourd ol' Marn1gers} Is c11titkd to receive 1·cas.·onubk con-q:>M:>Mian li:ll' its services; rm1y exe1'Cise ull lutc1111::nt selling J01lh tlie us~t:ts, li~1l>i l itios, und reserves of d1t1 Compnny as of llie diile of c.:on1pk:tion or wiqding L:p. COMPANY AGnE€MENT OF C1•:NTllHIO~ 1'1:c1 >,-:·TKlti\llNr\l , l.t<; tll!H441. l/$P/J~03210101/0S1114 MR.261 CALCE01460 13.3. ConlinunJ..on Wllhou,Ll~iJ)dini{ Up. (tt) Jf tht:•'C is U decision tu Wind Llfl tl!ld lc:·11iimllc the ( l11l1J.ltlil)I' US dCScr:tJ~d in Section 13.1{<1), lhc Con'lpan~ mll.y.bc continued o~ provided :n Section I 0 ! .552 the Code. or (b) If thct'l'! •$ u rc1·m inaliM or ii !C! CO!~limu;d lllGtnbc:·ship of the lasl rcmnrnmg Mern be!' ~ls ckscrlbctl in Sec: ti en 13. I(c ), then pi ior to <.:omplelion of the winding up prcce!>!'; blll not le.~ tcr than 90 days nllcr' the cv\!nt or t1;;nnim11io11, :Ile Bmml of Mtmul!crs may contim;r; lht: Compuny by. 1:1dmitting one or more M~111be rs el'fccl.ive as of 1hc occiirrenc.:~ or 1hc 1!v~nl or tc1'111in~ttion. Any. Assignee whose Pert~enhtge Interest wou ld be diuiiHh;lied by rr.f.\sm1 of the utlmiss1on of un Additiorial Membe1· u11de1 the circumstances described in this Section mus; uppmvt: lhe Hdmis~ion ol tlte Addi tional Member. (a) In Oenernl. On wiuding up the Company, th\! Liq .. iclalol shall dispO!lt nl' u1e Comp11.ny'~ properties nnd r.pply ~in } in ;1ci.:ordu11tl:! with 1hei1· 1·~lutive righ!S t'ncl !;rioritie:.; 10 sutisi'y th~ liubl li1je:i (11' 1hc Co1np~1ny, including 1.!Xp~nse;\ · associatt;d with thc ·winding up um:I lcnnillr.Uon of the Co111pn11y, ht;t excluding nny Comp::)ll)' liflbility flit any unp:iid lvfandmory Dislributio:1s; (ii) to Members. i\!;signc:cs, l1nd former \llcmbcrs In sutisl'y the Compi.my':-i liability for m'\y. unpaid M~rndiitory Dis~l'ibutions: and (iii) · to M1:111o~rs i111d As">igm;c:; ;1;5 provjtlcd in Sc<.:tio11 4.2(al. (b) Jjo Me~11bcr Dclk: t Rcstorati~)ll Obli,gotion. No Member is linb:c 10 the Company or S.fi1;t!9n 13 14Cnl'fl.U:ai~d (i.ill mny b~ wltht\eid lo pro,iide " 1-eu:;11m1ble res~rve fo1· Company linbilit ies (contingent· 01· othc1 wise) w1d future expenses, includmg a :easonnble reserve for uny t.:hiiim: for in I' Tc1·mi1rntion of n O<>mcstic Emity (Jn th!! corn1~l~1ic1 n l'..ll''he winding op ol'lht: Cor:1puny. I:3.6, RcJ.rstalc.m.~ll· If the CGmruny is terminated, it may be r'·111:1tutcd in the 11ii1Jt11t:r pro11idf<:d in lbc Code. AH.TlCLt XIV VALLATJON . J4. l . [i'air Vnlye ol Compmw P1\11Jertv. The f.'ai1· Vnlue of property contriouted to th(; Compnny by l1 Member us ptll'l of such Mcmb~r's Initial C1:1pital C:tmtrilnnion iR the amount or such Member' !: lt11[laJ Cnpilnl Con1ribu1iont as set fon!1 on H~.P.ili!l.!.'\: 1ni11t1s the amount of m1y c:n~h contri buted to the Compony ns part of s;,:ch Member's lnitinl c,1pi10 I Conti ibu1ion. 111 nll other cnst's, lhc ft::1ir V nloe of ~111 (tssct as of uny d~1te is it:; foi1· mnrkcl l'lil"c as dc\ermined by the: 13oc1•·d or Managers in good fo ith usin~ l 111 y fcns 1S oJ' ihc d;11e ol dc;lvcry. or (<.') suc1.:c~.sf1.11ly tn1m;mi1ted by lllcsirn ilc 01· 1.: ~cctro11 ic mes~H~(~ I<.> tlic person's li1ci;ilnik· phone number or e-mail <1ddress {as 11pplicuble) seL forth in lht Comp,1ny's wcords 11 or tile luw of any olhcl' jurisdiction. Any Proc~cd i ng c1r1~i11g uul ol or 1·elutin~ In thi.:: Agreement the Compnny's acrivities or properties mny bi: brought .:~ the sttlte COLlrlS of Dnllas 01 Coi1nt)(, Ti~:-cas or, if it h th~! !.),'\\\lu!-!ivc jurisdii.:1io11 ol' eutli such cowl io nny .such f'l'oceed!ng, wn i v~s uny objci.:1100 h ll'l<•Y 1H>1\' 01· hen.'t11i·e,. ht:vc 10 vc11t1c (i i ' tl1 co1wcnlc11:.:c or' fon1m. ngrecs lh£t! ni l <:1<1ims i;, rcspl.'.ct ol' t·hc P" b1igntions undc1· lhi~ /\gr1.:e111t..:nl cxccpl lt)< c,' L u:iy party. Nolh ing i11 this Ag:~cmcnt is lo be const!'l!Cd ns outhori.zing o~ l'cquiri11g nny ;lction thnt is prohibited by the Code or other npplicablc l11w, or as pl'Ohibiting uny nctio11 •!rnt is ri:quircd by !/1t) Code or u~licl' ;1pplk<1blt: !aw. · . 15.1O. )*csutjon 9f 1\j,;rec111~1'1. This Agret?mcnl mti)I' be <::xect1i!!d in coun 1.erparts, ench or \vhich will be deemed lo be an original copy of th ls Agreemet:I, Hild ull oJ' which logeilw coristitlJIC one . agreement. Any signnlmc to this Agreement evidenced by n facsimile or othc1· electronic 1n111smissio11 of such signnlure ~hH!l be binding on the p .tEE INTEREST P,\Y. N~ . 313-429-1103 P. 0 ~2 CENTURION 1,0GlST!C.S 'lLC .... ., ,• . ... . .. ~ . j' MAN'AGER: . ' " . . ~ /, lo COMPANY AcRl!ltM'EN1. 01" ommuoN:Ptcos'.l.'E.nl 11NALLLC t11ft-.t.14~ • 1Vt"lt'l.,,l\"1' 'Jf"l.lf'\,lflU\•""' 4 I' l· l MR.266 CALCE0146~ COMPANY AGREfi:Ml!.:NT Ofi' CENTURION PECOS TILll.MiNAL LLC ..... . . EXH101T A M.E_MBEfil.:_CONTIUDUTlONS AND P~RC.J~NTAG ll;J NTll:IU!:STS ... Kl'foctivc us ot' 1'hc li:l'fccHvc B}ltc . . M 'E MUER'NAM'E ANI) Al)ORESS lnitinl Cnpitnl lnitinl Percf:nt~gc Contrihution I ntcrcst Cc1~ t llrion L'Ggi;stics' LI .C $400.00 40.00~1(, 17950 Pl'esro11 Rond .. ,. Suite 1080 · D<1llt1s Tc.1 P1;co!{'fr.m11;11,\1.·1,1,c G211~.ll 'l, 11SP/33<13210•1(11/09' 114 MR.267 CALCE01466 COMPANY .\.GRF.li:MI?NT 1 OF CENTt;R!ON PCCOS TERMINAL LLC APPEi'; HIX A ......_... PRlNCIPUl:S OF ALLf)CATION __ A. l lt111·odu<:tiqu. This Aj)pendix se;s forlh pri1wiplcs undui· which items of income, gain. loss.: deductioll nncl crcdil sh:tll be allocated nmong th1:: Memliers. This /\pp1.111dix •ll~o ;)rovides f:.)!' th(: dcterrn inntion Hcd mnintennnce of C11;)ilal Accounts , generally it\ m.:cordancc wit h ·l'l'emn1ry Rcuuhulons promulgated tllld~r !, R,C. S~lkm 704(b ), lhr pt1qmse~ or detamin1 ng !!llch altm:utior1s. For purpo!!<'!!> o I' this Appendix, 2111 Assignee shnl I be '. rc111cd in 1bc same munm:r i1s n lvkmbt::-. A.2 e Dl:linitiOll!'.i. Cnpitnlized tk:rms used in lhi~ l\r>P1!. 11 di~ htt\'C lhi: mcunings !:lel ri.1rlh below or in the Agrcc:1"cn1. ;,Adjt1~tcd Cuphnl A'<.:coH;1t Dtli5iil" tn~atw tiny dclic!t bnlmicc 111 ti Member's Cnpitul Acco.int ns . of the end ni«t lllxable yeiir. cil1er giving. ~·lfoct to lhi.: lbilowi11g <1tijus1111c111s: · C1•cdi1 ro the Capiwl /\ccount '~~ar bems lo sut.:h begi1mi11g ndjuslc)d t~1.~ b.isis. Jr the adjus1~d lx1sis ro:· fodcral in..:ome tnx purpose~ (') r l111 t1~1Scl !ll thi:l 1i~.:gi 1111 l 11g (i I' ~\li!h !t\Xttblc )'CHI' is r.ero. fkpr>·! tent 1hat un nqjustmcnl is required pun!uunt to pnrngraph (H). . 11' the Gros.!\ i\.ss~t Yalt1c <.11' an uss1~1· lrns b1.:1rn dctcr"t'111cd 01· adjusted p1.: 1·sua1:t· to subpnrl'lgt·aph$ (i). (ii)7 ~ll' t)v) or tllis delinilit111, the usset's Gwss ..\~SCI Value shnll Hie1•ei;iler· be: tidjus!ed by the f)cprc1:iuli11n tuken into accoun: with 1·cspccr lCI such nssc:l fol' pu~·1~oscs of Gl,mpuring Net Profit un " mean, fi.)r 1~tcl1 l 1~oo~Tt;1t'llN;\l. l.1I,{ G11HS7 1/SP/l30J2!0'1!)110!l1114 MR.269 CALCE01468 (i;i) I!' thr. G1•oss Asset Value of ~111Y Company ussct is ncljustc'd pmsurul! lo :ntbp gain m· loss lhim dlspl)siti(m <)J' the nssc.:1 li..;r 1rn11,os~!s c;f'c~m1puling N~:t Prnnt nml Net Loss. (ivj . Otiir:• ()I' loss i·csulling lh1111 r:ny disposil ion or Co:~:p111 1 y propc:rly with rcsp(:Cl lo wh ich gHin or leis:; 1s recognized for leckMl incrll))I.! t unl lbr pi:rposcs of compl1ling Net Profil er ".'Jct J.oss. ··Non1·ecnw·se Oedu~tions'' hns the meaning, !iel thrtb IH Trc•1sury Rcg11lati l .. 1 re<1s\1ry Rcgu lulions Scclio1t 1.704-2(1.:). "Nonre,comsc l,.1nhll.iJ.x'' hn:; 'the mcnning :;1~ L fortr in Tr~a:nll'y Rcgi.ilations Section : .704-· 2(b)(J ). ''.,&1rtncr 1'1011rccoqrs~••P.~" hm; the inern~ing ~t !Orth in Tre,1sury R1;!g~1lutions S;:ction I .704- 7.(b)(4} ''Part.ner Nonrecoui·sc Debt Minimum Gain'' hns the mco1i:11g set for!h 111Trcasll~·y Rcgult1lions Sec1 :on L'704·2(i)(:!) n11d ~hnll he del'crrni;;cd in nccortluncc wilh Treasury Rcgul:ilinns "lcation I.'7CM- 2{i)l3 ). ·'f>artne~ Non1:gco11r;;;~ Deductions" hm; 1hc m1:aning set l.brth in frcr1Slll)' Rcguhttions &-c1io11 J. 704-';:(i )( l) ~llld sl1t11l be det~rminei.::r dcto.:1·n·.i11cd und 1nttint<1incd lh1'ol1ghnt11 th~ i'ull lc:ln 1>1' the Conmiioy i11 ~iccordance wilh the C•'1pi l1.1l <1<.:cl11mling ru les 01· Tt·c~i:-;111 y Regulations Section I.'704-1 (b}(:?.)(iv) Withotl! limiting t he g~nernlity ol the lorcguing. 1l1c fbllowing mies apply: 911N MR.271 CALCE01470 any period ·shnll be illlocmellitic:s» till (lu l igntions (ifuny) of Members to comribu\e udditk1!·1\ll <.:;:ipitul to 1he Crnnp<1n)' were Sf.ttisticd, und uny rcm11ining- cush was clistributed to the Memncrs 11nd~l' Section 4.2 us of the li1s1 day r.!' sucl1 period, m11111$ (ii) the Member's share '~O:'. 1h0n1 iil Hcld :rion 10 the a1Mt\ttts, 1f'My, oll<)Catcd p~irsuivt 11; pnrugruph 4.2(n), m;y Me1nbcr wil'l u s!HU'e or lh:H P~ll'tne r NcmrecOUl'Se Dt:bt t-.-1iuilm11J) Onin (dcwm1inod in ;iccordoncc with Tt'Oll~ Ul'Y Regultnionr, S('Cli<\n 1.704-2(i)(5)) OS of the D~gi nnin~ or the 1nxub lc )'Cat' shell! be <1llocu1cd itc111s fll Com puny income ~ind g~1in for 1ha1 tnxabk: yenr ( 1tion. 1;· Member hu~ un r'\d,iu;-;t~xi C11pi~~1l Ac1;(lu1tl D<:li~! il nl lhe 1:.nd or tuty tnxuble yenr, each s11ch M~mbcr s11111l be spc<.:iully ;:illoc,1!..:d item~ of' C'rnnpu11y im:o1m: und gain in the.: mnoun~ of such Adjustt::d Capital Account Oclkit a~ qui<.:l Jdurtfons ure t11tdbutahlc in nccorc.lnnr.:e wl;b Tre~1~ury Regulnli(Jns Sc(,;it r1s. A.4.3 Ci.1rnlive Allot:ntions. The allllc::nions ~ct Jbrth in Section A.4.2 hcrcol· (the "Rcg;1lntory Allocr.tiotis'!) .we lim~nded to comply with certnin 1-eqL1il'emems ot' the T1·~as1.11·y Rcgulmions. Tile Members inter1d that, lo tile extem possible, all Regul~1tory Allocalious slw.I be offset either with ntbe1· Regulatory Al!ccations or with special allocations or other items of Company incc.1mt , gain, loss, or deduction pllrsuum te> this ~cction A.4.3. Tho:-efore, imy other prnvis ions ()f thli: SectiM AA (orhel' ~han tl1~: .Re~tdulory Alloc~Hions) notwithsmnditig. !he Board (1f lVhrnagers ~h;1ll make :rnch offo~:llin!>, ~pcci~1I allocnli(H!S' or Co1npnny incorne, gtiin, loss. or dcduclion in whatl'.:Vt:I' lllllllllCI' the Bn:ll'd o'f Mn1111gc1·s detonninc:-; appropt•intc su thEJI. alhH' such olfse11ing t1llvt..'t'llio1is •m: made. e<1d1 Mcmb~r·s C:ipltl-11 /\cco1ml hul~mi.:e 1s, lei thl' cxicnl p1rnsihlc, cqrn1l t•1 tin.: Cupilctl Acl:ollnl b ilal Accou:il D('ficit for a1\)· Me111bc1-. A.S · ' T_.Px Allocqtj.QM (n) . 'In Geneh'tl. E:-wept ns othe:·wise prnvided in !his Section I'd, <:Heh item of i11c:orr1e, gttin, loss~ nnd ck(uction of the Compnriy !Or tederal income lnx purposes slmll be allocnted among the Members iu the san\e mnnner ns st.ch Items nrc :1l l0l:lltcd !or honk purpu;,e~ under lh~~ Agreement and 1hi!1' Appendix. (b) · k~~n~·Tu!!~~.!;l.Qt.Ji~.'~W'id J.lrppc(lx. In «1<.:<.:cn.ltm(:;,: with J R.C. Scc!i,ln 704(c) a11d the rclmci:J Trcri.sw·y Rcguluuo11s, inccme, guin. IM::;. nml dcdllction w~th 1·cspcot t11 lHlY p1·or>1;:1'l,)' i;011tri!:iui1.xl to lhc c;:ipitnl ol' the C()rnpany shall, solely rui tax pllrf>O!'IC1;i, be ul!m:n:ed Vil'iOn or llii:-: Ap('l1:!11dix nncl tho /\gn:cr;1~ml. COMPANY AGREEMENT Of' CrXl'lllt!ON Pll.('(l.'> Tf:1n11~1\l LLC \;211<16'i'.11SPll303li0101i\l0l t 14 MR.274 CALCE01473 . In uccm dance with th1:. provision~ (Ir lilt dcllni1im t or ''Triggcri11g 6\1cnl Purdm~~ P1•i~i)" ol' l!w Comp 1 Johns. I . Dcfi11ed Terms ......................................................................................................... J 1.2. Conslruclion ................................................................................................... _.. 5 a • •• • ••••• ARTfCLE JI ORGANIZATIONAL MAlTERS ...........................................................................6 2.1. Fonnation ............................................... .................................................................. 6 2.2. Nanlc ......................................................................................................................... 6 2.3. Registered Office and Agent; Principal Office........................................................6 2.4. Tenn ..........................................................................................................................7 2.5. Pl.lr]>OSCS ... ......................................................... ......... .................... ............................. 7 2.6. 11 owcrs ........................................................................................ ,................................ 7 2. 7. Cornpnny Properly ................................................................................................... 7 2.8. Consent to Ad1nission of Members ......................................................................... 7 2.9. Status of Managers and Mcmbcrs ............................................................................7 2.10. Cerlificates of Membership lntcrcsts ....................................................................... 7 2.11. No State Law Partnership ........................................................................................ 8 ARTICLE Ill CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS ...................................... 8 3.1. Initial Capital Conlributions .................................................................................... 8 3.2. Additional Capital Contributions .............................................................................8 3.3. Capila) Accounts ................................................................................................... ,.....8 3.4. No Right to Return of or Interest on Capital Account .............................................8 3. 5. Member Loans ............................................................................................................ 8 ARTICLE IV ALLOCATIONS AND DISTRIBUTIONS.............................................................8 4.1. Allocation of Profit or Loss ..................................................................................... 8 4.2. Distributions of Distributable Cash ......................................................................... 8 4.3. Withl1oldi11g ······················••t·•··················································································9 4.4. Limitnlion on Distributions......................................................................................9 4.S. No rught to Partition or Distributions in Kind ...................................................... 10 4.6. Recovery of Erroneous Distributions .................................................................... 10 ARTICLE V MANAGEMENT; ACTIVITIES OF MANAGERS AND MEMBERS ................ 10 5.1. Management and Control of Company Business .................................................. 10 5.2. Resignation, Removal, and Replacement of Managers ......................................... 1O 5.3. Actions of the Board of Managers ......................................................................... 12 5.4. Limitations on Board ofMnnugers' Authority ...................................................... 12 5.5. Dclcgntion of Authority; Officers .......................................................................... 13 5.6. Reliance ................................................................................................................. 13 S. 7. Compensation and .Expenses of Members and Managers ..................................... 1J 5.8. Standards of Manager and Member Conduct ........................................................ 14 ARTICLE VJ LIABILITY AND 1NDEMJ\'JF1CATION ......................................... .................... 14 FIRST AJ\lf.Nl>lm AND RESTATEU COMP/\N\' AGnt;t:r.n:NT
1Dli0721J5 MR.279 6.1 . L..imitntion of Liability .... ,,., .................................................................................... 14 6.2. lnden1nificatio11 by Company ................................................................................ J 5 6.3. Conduct Not Protcctcd ..................................... ...................................................... 15 6.4. lnst1rance ................................................. ,.............................................................. l S 6.5. St1rvival ................................................................................................. ..................... 15 ARTICLE vn BOOKS AND RECORDS; REPORTS ................................................................ 16 7.1. Mni nlenance of cmd Access to Books and Records ............................................... t 6 7.2. Fiscal Year ............................................................................................................. 16 7.3. Financial and Operating Reports ............... ............................................................ 16 7.4. 'fax Rcports ............................................................................................................ 16 7.5. 'fransmission of Com1nunications ......................................................................... 16 ARTICLE VIII TAX. MA·rrERS ................................................................................................. 17 8.1. 'J·ax Classification ............................... ,.................................................................. I7 8.2. Company Returns ..................................................................................................... 17 8.3. Tax Elections .. ,. .......................................................................................................... 17 8.4. Consistent Reporting ......................................................................................... ...... .... 17 8.5. Tax Proceedings ........................................................................................................ 17 8.6. lnfonnation and Documents to Company .............................................................. I8 8. 7. Su.rvival .................................................................................................................. 18 ARTICLE IX MEETINGS AND VOTING OF MEMBERS ...................................................... 18 9. I. Mcetings ............................................................................................................ ,....... 18 9.2. Voting ......................................................................................................................... 19 ARTICLE X TRANSFER OF MEMBERSI UP INTERESTS ..................................................... 19 10.1 . Limitation on Transfers ......................................................................................... 19 10.2. Permitted Transfer of Membership Interest. .......................................................... 19 10.3. Right of First Refusal; Tag-Along Right.c1; Triggering Events ..............................20 l 0.4. Conditions lo Permitted Tnmsters of Membership lnterests .................................21 10.5. Eflective Date; Distributions ................................................................................. 21 10.6. Transferor's Obligntions ........................................................................................22 10.7. Assignee's Rights und Obligations ........................................................................22 I 0.8. Effect and Consequences of Prohibited Transfer ..................................................22 ARTICLE XI ADMISSION OF NEW MEMBERS ....................................................................23 11. I. Substituted Me1nbers ...................................... .......................................................23 J1.2. Additional Mc1nbers ..............................................................................................23 11.3. No Required Capital Contributions .......................................................................23 ARTICLE XJI WITHDRAWAL OR REMOVAL OF MEMBERS ............................................23 12.J. Wit11draWc1I of"Mcml1era ...............................................................................,, .... ,....23 12.2. Rc1novnl ofMembers........ ............................................................................ 24 4 •••••• • • • 12.3. St.illus of Fonner Membei· ........................................................................................24 ARTICLE XJJI WfNDING UP AND TERMINATION ................... ........................................... 24 FIRST AAr£NDF.D AND RESTATED Cmll'AN\' AGREEMENT OF CENTURION PECOS 'l'ERMJ:'JAL LLC PAGE 62l l457. aid or incurred in connccliun with or us a consequence of any Proceeding, net of any in.surunce or other recoveries received by the Indemnified Person with respect to the foregoing. "Distributable Cash" means the cash and cash equivalents held by the Company from operations rcasonnbly detcm1incd by the Board of Managers to be available for distribution to the Members after payment of the Company's debts, expenses, und other obligations, und aficr establishment and maintenance of such cash reserves ns the Board of Managers dctennines should be rctnined for the reusonablc current und future needs of the Company's business. ..E1foclivc Dute'' is defined in the introduction to this Agreement. "Entjty" mcnns any gcncrnJ partnership, limited partnership, limited liability partnership, limited liability company, corporation, joint venture, trust, business trus~ cooperative, association, foreign trust. foreign business organization, or other business entity. "Fair Value'' means, wirh respect to an !:ll)Set, its Fair Value delem1ined according to Section "Fiscal Year" is defined in Section 7.2. "Fonnntion Date" is defined in the recitals to this Agreement. ..Indemnified Person" means (a) a Member or Assignee; {b) n Mnnnger, (c) a Liquidator (if any}; (d) nny Affiliate of the Company. u Member or Assignee, a Manager, or a Liquidator; and (c) any governing person, ollicer, employee, ugent, or owner of the Company, u Member or Assignee, u Manager, u Liquidator, or any Affiliate of any of the foregoing. A person is an Indemnified Person whether or not such person has the status required to be an Indemnified Person at the time ony Proceeding is made or maintained as described in Article VI or al the time any amendment to this Agreement is proposer.J under Sectfon 15. l. provided such person had the status required to be an [ndemnified Person at the time of the relevant actions referenced in the Proceeding. "Index Rate" means the rate specified in Section 302.002 oflhc Texas Finance Code. "Initial Cupjtul Con1ribution'' means the sum of any cash and the Fnir Value of any pmperty contributed to the Company by a Member with respect to a Membership Interest in connection with the original issuance of the Membership lntercst by the Company as set forth on Exhibit A. "J.R.C." means the lnternaJ Revenue Code of J986. "Liquidator" is defined in Section 1J.2(b). "'Majority-in-Interest" means one or more Members owning collectively more than 50% of the Percentage Intere~1S owned by all Members entitled to vote 011 the pnrticuJnr issue. "Manager'' means the person or persons designated ns manager of the Company in the Certificate of Formation and any person or persons who become a rcpJoccmenl Manager pursuant tu Section 5.3. FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF C!o:"l lllllON Pl-.:COS Tlo:K,\.111\'AI, LLC PAGE3 ll211.t57.CISPl3303ZI01Ot1072115 MR.284 "Mandatory Distribution'' means nny distribution tlmt a Member is entitled to receive und as to which the Member has attained the slnttlS of n creditor under Section l 01.207 of the Code. ·~Member" meuns any person identified as n member on Exhibit A, and any other person who becomes a mcmher of the Company pursuant to this Agreement, who has not ceased tu be u Member. "Members" mcnns nil pt!rsons that arc Members, collectively. "Membership Jntercst0 means n Member's or Assignee's economic inlc1·cst in the Company. The tcnn includes the Member's or Assignee•s right to receive allocations of profits and losses and distributions as described in Article IV, and other rights and obligations under this Agreement or the Code of an Assignee who has not been admitted as a Member, but docs not include any right to participate in management or any other right reserved under this Agrcemenl or lhe Code exclusively to a Member. ·•otrcnng Member" is defined in Section 1O.J(cl(i). ••Percentage Interest" means, os to nny Member or Assignee, the percentage interest set fm1h on Exhibit A. "Pcm1ined TranslCr'' means any transfor of a Membership Interest that is described in Section "Person" or "person" means any individual or Entity, and the heirs, executors, administrnlors, legal representntives, successors, nnd assigns of such "Person," as and where the context so pcm1its or requires. ''Proceeding" means (o) any threatened, pending, or completed action or other proceeding, whether civil, criminnl, administrative, arbitrcitive, or investigative; (b) an nppcaJ of any such proceeding; and (c) an inquiry or investigation that could lend to any such proceeding. ''Prohibited Transfer" me~ms any transfer of n Membership Interest that is not a Pcnnined Transfer. ''Redemption Notice" is defined in Section I 0.3(c){i}. "Redemption Option·• is defined in Section 10.3(c)(i). "Stampede" means Stampede Energy, LLC, a Louisiana limited liability company. "Stampede Capital Conlribulion Balunce" means, with respect to Stampede, the total Cnpitul Contribution of Stampede less the cumulative distributions of cash by the Company to Stampede in return of Stampede's Cupital Contribution pursuant to Section 4.2Cu)(ii). For purposes of calculating the Stampede Capital Contribution Balance, no deduction shall be made for any tax distributions made to Stnmpede, whether pursuant to Section 4.2(bl of this Agreement or otherwise. "Stampede Preferred Return" means, with respect Lo Stampede an nmount equal to nn 8% cumulative compounded annual relum on the amount of Stampede's unreturned tolol Capital Contribulion accrued as of any date of determination. The Stampede Preferred Return will be calculuted by treating all distributions of the Stampede Preferred Return pursunnt to Section 4.2(a) as first being a FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF CEN'TURJON PECOS Tf.'. HMINAI. l.LC PAGE4 8Z1 t457.41SP13l03ZI010tl012115 MR.285 payment of any undistributed nccumulntcd aruuml 1'Cturn as of the distribution date and then being a repayment of any and nil of Stampede's Capital Contributions as of the distribution dnte. "Stampede Preferrcd Return Bnlnnce" ml!uns. wilh respect lo Stampede, the cumulative nccrued Stampede Preferred Return less the cumulative distributions of cash by the Company to Stampede in payment of the Stampede Preferred Return pursuant to Section 4.2CnlCi). For purposes of calculating the Stampede Prcforred Return Balance, no deduction shall be made lbr any tux disuibutions mndc to Stampede, whether pursuant lo Section 4.2Cb) of this A!:,rreement or olherwise. "Substituted Member" means a person who is ndmittcd as a Member puJ·suant to Section 11.1 with respect to the transfer of nn existing Membership Interest. 0 Trcasury Regulations" means the Treasury regulations promulgated undcl' the l.R.C. "'Triggering Event" means the first to occur of (a) the date of a Prohibited Trnnsfer, incluc.Jing nny transfer to (i) a Member's trustee in bankruptcy, (ii) a purchaser at nny creditor's or court sale, {iii) a Member's spouse pursuant to a decree of u divorce court, or (iv) the guardian of an incompetent Member, (b) the date of denth of an individual Member, (c) the dale of' a Change or Control or tenninution of a Member that is no1 an individual; (d) the removal of u Member pursuant to Section 12.2; or (c) the voluntary election of a Member that is not an individual to liquidate oil or substantially all of its assets and/or dissolve. "Triggering Event Closing•· is defined in Section 1O.J(c)(ii}. "Triggering Event Purchase Price" means, in the case of a Membership Interest to be purchused pursuant to Section 10.3(c), the urair market value" (as defined in this paragraph) of the Membership Interest as of the date of the Tdggcring Event, dctennincd assuming an onns length snle of nil of the Company's assets ton third party (ns n going concern und not as a Hquidation) for fair murket value and the application of the proceeds of the sale according to Section 13.4. The Triggering Event Purchase Price will be detennined (a) if there is in effect as of the date of the Triggering Event a valid Certi licate of Fair Market Value in substantially the form attached as Schedule A executed by all Members, by relerencc to the fair market valuc for such Membership Interest as set forth in such Certificate of Fair Markel VuJue, and (b) if there is no such Certificate of Pair Market Value effective with respect to the Triggering EventJ (i) by agreement of the Company and U1c Offering Member or the Offering Member's successor in interest, as applicable, or (ii) if no such agrccmeat is reached within 30 days aOcr the issuance of the Redemption Notice, by ru1 Independent appraiser chosen mutually by the Company and the Offering Member or the Offering Member's successor in interest, as applicable; provided. however, thul in detennining the fair market vulue of a Member's Membership Inlerest, such appraiser shall take into account the Stampcde~s Capital Contribution Balance nnd the Stampede Preferred Return Balance and shall increase or decrease Triggering Event Purchase Price of each Member's Membership Interest occordingly. Any foir market value agreed by the Members in a Certificate of Fair Murkel Vulue shall be elTcctive until the earlier of (A) 90 days from the date set forth in any such Certificate of Fnir Market Vnlu~, or (A) the date that a new Certificate of fair Market Value hns been executed by all of the Members. 1.2. Construction. In this Agreement, unless n clear contrary intention appears: (a) the singular number includes the plural number and vice versa; FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF CJ~NTUIUO~ P•:cos Tf:H!\11"11/\I. LLC PAGES 6211~5".419P/33032J0101/07211 fi MR.286 (b) reference to any per!'nn includes such person's successors nm! ussigns but, if tipplicuble, only if such successors and nssigns arc not prohibited by this Agreement, and reference to a person in o particular capacity excludes such person in any other capacity or individually; (c) reference to any gender includes the other gender and the neuter; (d) reference to any agreement or other document mcnns such agreement or other document as nmcnclcd or modified and in effect from time to time; (e) reference to any statute, rcgulotion, or other legal requirement means such legal requirement as amended, mm.lilied, codified, replaced, or reenacted. in whole or in pnrt, und in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any legal requirement menns that provision of such legal requirement from time to time in cITccl and constituting the substantive amendment, modification, codiliculion, replacement, or reenactment of such section or other provision; (r) '"hereunder," "hereof:•· ~'hereto~·' and words of similur import refer tu this Agreement us u whole nnd not to any particulur Article. Section, or other provision hereof; (g) "including" (and with its correlotive meaning "include'') means including without limiting the genernlily of any description preceding such tcm1; (h) 0 or" is used in the inclusive sense of''and/or''; (i) with respect lo the determinution of aoy period of time, "from" means ''from and including" nnd "to" mcnns "to but excluding"; und (j) references to ngreemenl.s or other documents re for us well to all addenda, e;'l(hibits, schedules, or amendments thereto. ARTICLE II ORGANIZATIONAL MATTERS 2.1. f'ormation. The Company was formed pursuant to the Certificate of formation effective us of the Fonnation Date. 2.2. Name. The Company's name is as set forth in the Ce11ificatc of Fonnation. The Donrcl or Managers may change the Company name at any time without the approval of any Member by filing a certificate of amendment to the Certificate of Formation. The Board of Managers shall provide notice of nny such change lo alJ Members. The Company's business may be conducted under its name and/or nny other nume or names deemed advisable by lhe Board of Managers. The Board of Managers shall cause ro be executed and fiJcd of record all assumed or .fictitious name certificates for the Company as are required by law. 2.3. Registered Office nnd Agent; Principal OJTice. (n) The street address of the initial registered office of the Company in Texas and the name of lhe initial registered agent of the Company are as set forth in t11e Certificate of Formation. The Board of Managers may change the Company's registered office or registered agenL ut uny time by filing FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF C•:NTlllU01" rEcos 'l'ERMINAI. l.LC PAGE6 1211'4!i7,41SP/33032/0101/0121115 MR.287 a Chunge of Registered Agent and/or Registered Office os provided in the Code. The Board of Managers shull provide notice of the chunge to nil Members. (b) ·n1c address of the principal office of the Company in the United States where records arc to be kcpl or made available under Section 101.501 of Lhe Code shall be as dctcnnined by the Board of Managers. The Board of Managers may change the Compnny's principal ollice in the United Stntcs at any time upon notice to the Members. ·n1c Company shall keep at its registered office and make available ton Memher on reasonable request the street address of the Company's principal office in U1c United Slates. 2.4. Tenn. The Company wiJl continue until terminated in accordance with Article XIIT. 2.5. Pumoses. The purpose for which the Company is organized is for the development aml opcrntion of the Projecl and the transaction of any and nil lawful business for which limited liability companies may be organized under the Code. 2.6. Powers. Subject to nny limitations in lhis Agreement, the Company may exercise the power to do any and nil acts reasonnbly related to its purposes. 2.7. Company Property. (a) AJI Company property shall be 0V\11ed in the name or the Company and not in the name of any Member. No Member or Assignee wH1 have any interest in such Company property solely by reason of the Member's stalUN as a Member. (b) The Board of Managers shnJJ cause all funds of the Company to be deposited or invested in an account or uccounts in the nwne or the Company. No funds other than the funds of the Company may be deposited therein. TI1e funds in such accounts shall be used exclusively for the business of the Company (including distributions to the Members) and muy he \vithdrawn only by persons approv~d by the Board of Managers. 2.8. Consent to Admission of Members. Each person executing this Agreement consents to the admission as members in the Company all of the other persons who are Members as of the date such person executes this AgreemenL 2.9. Status of Managers and Members. Except as otherwise provided by this Agreement, each Manager has the status, rights. and obligations of n monuger in a limited liability company us set forth in the Codt:, and each Member has the s1atus, rights, and obligations of u member in a limited liability company as set forth in the Code. 2. I 0. Certificates of Membership Jntercsts. If provided by the Board of Managers, ench Member's Membership Interest may be represented by n Certificate of Membership Interest. Each such Certificate of Membership Interest, if any, shall be numbered and registered in the records of the Company as lhcy are issued, nnd shall be signed by two oOicers of the Company. The holder of any Certificate of Membership Interest shall promptly notify the Company of any loss or destruction of the certificale, and the Company shall cause a replacement certificate to be issued to the holder upon receipt of satisfactory evidence of the loss, destruction, or mutilation or the ccrtificmc and snlisfoction of other reasonable conditions esUiblished by tht! Bourd of Mnnogers. FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF CENTURION PECOS TERMl~AL LLC PAGE7 11211"457.41SP/3Jo:J2/010~/D72115 MR.288 2.11. No Slate Lnw Pa11ncrship. The Members intend that the Company is not a partnership or joint venture, and thnt no Manager or Member is a pnrtncr or a joint venturer of any other Manuger or Member. for any purposes other than income tax purposes. No provision of this Agreement may be construed Lo suggest otherwise. ARTICLE Ill CAPlTAL CONTIUllUTIONS; CAPlTAL ACCOUNTS 3.1. Initial Capital Contributions. Euch Member's Initial Cupit.al Contribution is set forth on Exhibit A. 3.2. Additional Capital Contributions. No Member shull be required to muke Additional Capital Contributions. No Member has t.he right or is permitted to make any other Additional Cnpitul Contributions unless (a) the Board of Munugers approves such AdditionuJ Capital Contribution after notice to all Members of (i) the amount of the Additional Capital Contribution to be made, (ii) the effect of the Additional Capital Contribution on each Member's Percentage Interest, and (iii) other material information relevant to the proposed Additional Capital ConlribuLion, and (b) nil Members are afforded an opportunity to participate in the Additional Capital Contribution according lo their relative Percentage Interests. 3.3. Capital Accounts. The Company shall establish a sepurule Cupitnl Account for each Member and Assignee. The Cnpitnl Accounts shall be maintained according to the provisions of Appendix A. 3.4. No Right to Return of or Interest on Capital Account No Member may demand or receive the retum orits Capital Contribution or any portion of its Capital Account, except as provided in this Agreement imd the Code. Neither any Manager nor any Member has any personal liability for the repayment of any CnpitaJ Contributions of any Member. No interest will accrue or be puid with respect to the Capital Contributions or Capitol Account of any Member. 3.5. Member Loans. The Company may borrow money from one or more Members ro the extent the Board of Mnnagers deems appropriate to the conduct of the Company business on tcnns thnt comply with the requir~ments of Section 5.8(b)(iii) (relating to related pnrty transactions). The amount of any loun made to the Company by a Member will not constitute a Capital Contribution or otherwise affect such Member's Capital Account or Membership Interest. ARTICLE JV ALLOCATIONS AND DISTRIBUTIONS 4.1. AIJocntion of Profit or Loss. Cumpuny profits and losses shnB be allocnted among the Members nnd Assignees in accordance with the provisions of Appendix A. The Members are awnre of the income tax consequences of the allocations made by Appendix A and agree to be bound by the provisions of Appendix A in reporting their shares of Company income and loss for income tax purposes. 4 .2. Distributions of Distributable Cash. (a) Except os otherwise provided in Section 4.2(b) (relat.ing to distributions lo pay truces), Section 4.3 (relating to withholding), Section 4.4 (relating to limitations on distributions), or FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF CEl\TURION PECOS TERMJNAL LLC PAGES 8211•57.4fSPIJ3032!0101/072111i MR.289 Section 13.4 (relating to liquidnling distributions), Distributable Cash shall be distributed to ll1c Members as follows: (i) first, lo Slumpede in payment of the Stampede Preforrcd Return until the Stampede Prefcn·ed Return Baluncc has been reduced to zero; (ii) next, to Stampede in payment of Stampede's Capitnl Contribution until the Stumpcde Capital Contribution Balance has been reduced to zero; and (iii) finally, to the Members according to their Percentage Interests. The Board ofMonngers may provide for a record date with respect to distributions. (b) To the extent Lhe Board of Managers determines that any Member or Assignee has an unfunded tax liability as a result of allocations of Company lax items for any tax year. then, to the extent the Compnny has fonds JcgaUy available for the payment of distributions to Members, the Bourd of Managers .shall make a special tax distribution to all such Members and Assignees pro rntn accnrding lo their relative unfunded tax liabilities in the minimum amount necessary lo pay any .such unfonded tax liabilities. For this purpose, a Member or Assignee is deemed lo have an unfunded tax liabilily for a tax year to the extent (i) the cumulative umount distributed lo the Member or Assignee under Section 4.2{a) nnd advanced to the Member or Assignee under this Section 4.2(b} (nnd not previously recovered) rrom the inception of the Company thJ'ough the end of the such tax yeur exceeds (ii) the Member's or Assignee's tax liability with respect to such Member's or Assit,rnee's cumulative aJlocablc share of Company tax items for ull periods from the inception of the Company through the end of such tax year. Unless the Board of Managers dctcnnines otherwise, the taxes due for each Member and Assignee shall be calculated by assuming that the Member or Assignee is an individuaJ taxed nt the highest tux rate applicable to tJ1c type of income involved. A.ny such tax distribution shall, to the extent it exceeds the amount tlte Member or Assignee would otherwise be entitled to receive under Section 4.2(ll), be Lrentcd as an n Interest or admit nny Member other lhnn pursuant to Section 2.8 or Article XI; (h) cause the Compm1y Lo ~tcquire uny equity or debt securities uf nny Member or any Affiliate of a Member, or otherwise make loans to uny Member or any Alliliute of a Member; (i) cause the Company to acquire from any person nny equity or debt s~curities or assets of any corporation, limited liability company, partnership, associolion, business. or business division, whether by stock purchase. asset purchase. contribution, or other business combinntion (excluding invcsuncnts and asset ncquisitions in the ordimtry cour.sc of the Company's business and lrummclions contemplated by this Agreement)~ (j) cause the Company to participate in any merger, consolidution, transfer, continuance, or conversion of the Company with or into uny other person; (k) cnuse the Company to participate in nny reorganization in which Membership Interests are exchanged for or converted into cash, securities of uny other person, or other property; or (I) sell or otherwise dispose or all or subs1anLially all of the Company property, except in connection with winding up the Compnny as pennitted in this Agreement. 5.6. Delegation of Authority; Officers. (a) The Board of Mnnngcrs mny cause the Company 10 hire such employees and agents us the Board of Managers deems appropriute for the cone.fuel of the Company's business. (b) The Board of Managers may establish offices nnd uppoint officers of the Company, and may delegate to such uflicers any of its nuthority hereunder, us the Board of Managers deems appropriate. The oflicers muy be appointed for such terms and may exercise such powers and nuthority and perfonn such duties as detennined by the Board of Manager. An officer need not be a Member of the Company. Any two or more offices may be held by the same person. An officer may be removed, with or without cause, at any time by chc Bourd of Managers. Each officer will hold office until his successor is chosen and is qualified in his stead, or until his deuth, resignationt or rcmovul from office. Any vacwicy in an oflice because of death, resignation, removal, or otherwise may be filled by a person appointed by the Board of Managers. An officer is subject to the snme standards of conduct as apply lo a Munnger as described in Section 5.9. 5.1. Reliance. Persons dealing with the Company may rely conclusively on lhe authority of lhe Board of Managers as set forth in tflis Agreement. Every document executed by uny Manager with respect to nny business or properly of Lhe Company is conclusive evidence in favor of any person relying on the document that (a) at the time of the execution nnd delivery of the document this Agreement wmi effective, (b) the document was executed in accordance with this Agreement and is binding on the Company, and (c) the Manager was nuthori7..ed lo execute and deliver the document on behnl f of the Company. 5.8. Compensation and Expenses of Members and Managers. Members and Munngcrs are not entitled to any salary. fee, or other remuneration (other than distributions with respect to the Member's Membership Interest) for providing property or services or other consideration to or for the bcnent of the Company in their capacity us a Member or Manager, except that each Manager is enlittcd lo FIRST AMENDED ANO RESTATED COMPANY AGREEMENT OF Cfo:,Vl"llRION Pt!COS Tt.;H.,\UNAI, LLC PAGE 13 621101.41SPl33032/01011072115 MR.294 reimbursement from the Company for rcLLc;onablc out-of-pocket expenses paid or incurred on behalf of the Company, including rcusonahle charges for services pl'Ovided by employees of the Manuger nnd overhead expenses. The Company shall pay ull oul-ot:.pockct costs incurred in orgnnizing the Company. This Section 5.8 docs not limit or enlarge a Mw1ager's or a Member's rights lo liability protection or indemnification under Article Vl, and docs not limit the Company's ability to ~nler into transactions with Members in their capacities other than os Members in accordance with Seel ion 5.9(iiil. 5.9. Standards of Manager and Member Conduct. (a) In General. 1l1e Board of Managers shall manuge und conduct the Company~s business in good faith and in n manner the Managers reasonably believe to be in the Company's best interest. A Manager does not violate this Section 5.8(a) unJess the Manager engages in conduct described in Section 6.3{o) (relating to improper conduct). (b) Oucside Activities of Mnnagcr and Members: Noncompetilion Covenants. Each Manager shall devote to the Company's affairs only such time nnd (i) resources as the Manager dcoms necessary for the conduct and winding up of the Company business. (ii) Except as provided herein, the Managers and Members or their Assignees may engage in or have an interest in other business ventures of every nature und description, independently or with others, including the ownership and operation of businesses similar to or in compeCition with, directly or indirectly, the Company, and neither the Company nor any Member or Assignee has, solely as n result of such penmn's interest in the Company, any right to acquire any rights in or to nny such other business venture or to the income or profits derived from any such other business venture. A Manager or Member or Assignee has no duty to disclose any such similar or competing business venture to the Company or any Member or Assignee, or to offer to the Company or any Member or Assignee any prior opportunity to acquire an interest in such other business venture. Related Pnrtv Transactions. Except us otherwise provided in this (iii) Agreement, the Board of Managers, when accing on behalf of the Company, may purchase property from, sell property to, or otherwise deal with any Manager, Member, or Assignee, acting on its own behalf. or any Affiliate of uny Munuger, Member, or Assignee, but nny such transaction shall be on tcnns that are no Jess favorable to the Company chan if the transaction had been entered into with nn independent third party. No provision of this Agreement requires disclosure of any lrnnsaction to, and approval of the transaction by, uny disinterested governing pt!rsons oflhe Company or the Members as provided in Section 101.255 of the Code. ARTICLE VI LIABILITY AND INDEMNlFlCATION 6.1. Limitation of Liability. No Member or Manager is liable for any debts, obligations, or liabilities of the Company. Subject to Section 6.3, an Indemnified Person is oot liable lo the Company or any other Indemnified Person for any Damages arising from any Proceeding relating to the conduct of the Company's business or relating to any act or omission by the Indemnified Person, including any act or omission constituting negligence, within the scopt! of the Jndcmrufied Person's authority in the course FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF CENTl'RION PECOS TERMINAL l.. LC PAGE14 6211..57.WP/3303210101/07211 S MR.295 of the Company's business, or for uny miscom.Jucl or negligence on the parl of any other person who is an employee or agenl of the Company. 6.2. lndernnillcalion by Compuny. To l11e f'ullcst extcm permitted by applicable law and subject to Seclion 6.3, the Company indemnifies and holds hannless ench Jndemnified Person from and against uny Dumnges arising from any Proceeding reluting to the conduct of the Company's business or lo any uct or omission by such Indemnified Person, including uny uct or omission constituting negligence, within the scope of the lndemnificd Person's nuthority in the course of the Company's business or for nny misconduct or negligence on the part of any other person that is an employee or agent of the Company. An Indemnified Person's expenses paid or incurred in defending itself against any Proceeding shoU be reimbursed as pnid or incurred. The right to indemnification conferred in this Article VI is not exclusive of any other right that nny person may have or hercufier acquire under any statute, agreement, vote of Members, or otherwi~e. 6.3. Conduct Not Protected. (n) This Article VJ docs not operate to limil liability or lo indenmify n person to the extent the person is found liable pursuant to a final judgment of a court of competent jurisdiction for: (i) an act or omission tlmt involves gros:-; negligence, intcotionnl misconduct, or a knowing violation of law; a transfer or attempted transfer of all or u porlion or a Membership Jntercst (ii) in a Prohibited Transfer, a Manager's resignation in violation of Section 5.2(u), or a \1cmber ceasing to be a Member in violation of Section 12.1 (n); (iii) u willful or reckless mntcriol brcnch of this Agreement or nny other ugreement relating to the Company's business; or (iv) an act or omission for which indemnification is prohibited by law. (b) No provision of this Agreement requires the Company to pay or incur any amount for which indemnificulion is not penniuec.l under this Article VI. (c) Any payments mHde lo or on bchulf ofa person who is Inter determined not to be entitled to such payments shall be repaid by the person to tbe Company. The Company may require, ns n condition to the payment of any amounts pursuant to Section 6.2, that the Indemnified Person provide to the Compnny (i) a written affinnntion by the Indemnified Person of the person's good faith belief thnl the person ha.~ met the standard of conduct necessary for indemnification under this Section; and (ii) a written undertaking by or on behalf of the fndemnified Person to repay the amount paid or reimbursed if the person has not met that standard or if indemnification is otherwise prohibited by Jaw. 6.4. Insurance. The Company may maintain insurance lo prolt!Ct any person uguinst nny expense, liability, or loss, whether or not the Company would have the power lo indemnify such person against such expense, liability, or loss under t.hc Code. 6.5. Survival. The indemnities provided for in this Agreement survive the transfer of an Indemnified Person's Membership Interest, the tcm1ination of the person's status as u Member or other status giving rise to classitication n.~ an Indemnified Person, and the termination of this Agreement and the Company. FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF CENTURION PECOS TER.\llNAL LLC PAGE 15 62t1457.~SP/33032101011072t15 MR.296 ARTJCLE VU BOOKS AND RECORDS; REPORTS 7.1. Maintenance of and Access tn Books and Records. 111e Compnny shall maintain such books and records regurding the Company's business and properties as is rensonablc, including all books nnd records required under the Code. Each Member shall have access thereto during ordinary business hours to the extenl und under the conditions provided in the Code. 7.2. Fiscal Year. The Compuny shall adopt the calendar yearns its fiscal year for financial and tax accounting purposes (such liscaJ year of the Company being referred to as the uFiscnl Yenr"). 7.3. Financial and Operating Reports. As soon as practicable atler the end of each Fiscal YcRr, but in any event not later than 90 days after the end of the Fiscru Year, the Board of Managers shall deliver to each Member an annual report containing the following: (a) o. Company balance sheet ns of the end of such Fiscal Year, and Company statements of income, cash flows, uncl changes in Memhcrs• equily for such Fiscal Year, euch in reasonable detail und prepared according to United States generally uccepted accounting principles; (b) u general description of the Company's activities during such Fiscnl Year. including a description of the amount and circumstances of nny indemnification paymcnL'i paid or requested pursuant to Section 6.2. a description of any material insurance claims or recoveries during the fiscal quarter. nnd a description of nny Proceedings involving the Company; nnd (c) a statement of changes in the Member's Capital Account (showing the balance in the Member's Capital Account os of the beghming of the Fiscal Year, contributions or distributions during the year. allocations of profits and losses during the year, any other adjustments to the Cupital Account balances during the year, and the balance in lhe Capital Account ns of the end of the year). 7.4. Tax Reports. (a) Not later than the date (including exten.c;ions) for filing the Company's tax return with the Internal Revenue Service (Form I065), the Board of Managers shall deliver to each person who was n Member or Assignee at any time during the period covered by the return nil infonnation nt!ccssary for the preparation of such person's United States federal income lax returns, including n Fonn 1065 Schedule K-1 (if npplicahle). (b) Upon the written request of any Member or Assignee, the Board of Managers shall deliver lo such person infonnalion necessury for lhe preparation of any tax returns that must be lilecl by such person, including information necessary for estimating unc.l paying estimated taxes. 7.5. Transmission of Communicalions. Each person who holds u Membership Interest on behalf of, or for the benefit of, anoU1cr person or persons shall be responsible for conveying any report, notice, or other communication received concerning the Compwiy's affairs to such other person or persons. FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF C•:NTllRION P1~c:os n.HMll\AI. LLC PAGE 18 &211.Cll7.4/SP/3303210101I07211 II MR.297 ARTICLE Vlll TAX MA·f,'ERS 8.1. Tux Clussiticalion. The Members intend that the Company be classified as n partnership for federal income tnx purposes. The Board of Mnnagcrs shall take nil actions rensonubfy necessary or appropriate lo ensure the Company is so cfussiflcd (including the filing of elections or tax rt!lurns). No Manager, oflicer, or Member shnll tuke uny action incom.;slent with the clnssificntion of the Company as a parUtership for fedl!ral income tax purposes. 8.2. Company Returns. The Board of Managers shall cause the Compnny to file such tax returns as may be required by law. 8.3. Tax Elections. (a) General. Except as otherwise provided in this Agreement, the Board ol' Managers shall cause the Company to timely make or revoke nil elections, and tnke all tux reporting positions, necessary or desirable for the Compuny as determined by the Board of Mnnugers. Nu election shnll be made lo have the Company exclude such winding up. The Liquidator (if not the Board of Managers) is entitled to receive reasonable compensation for its services; mny exercise ull of lhe powers conforred upon the Board of Managers under this Agreement to tl1e extent necessary or desirable in the goud faith judgment of the Liquidator to perfonn its duties; and ~~th respect to acts taken or omitted while acting in such cupacily on behalf of the Company, is entitled to the limitation of liability and indemnification rights set forth in Article VI. (d) The Liquidator shall provide quarterly reports to the Members und Assignees during the winding up procedure showing the assets and liabilities of lhe Company, providing information aml documents required by the Members and Assignees to comply with their tax reporting obligations, nnd such other infonnation as the Liquidutor deems appropriate. Within a reasonable time ufler completing the winding up, the Liquidator shall give each Member and Assignee a final statement setting forth the assets, liabilities, and reserves of the Compw1y as of the dale of completion of winding up. 13.3. Continuation Without Winding Up. (a) ff there is u decision to wind up and terminate the Company ns described in Section 13. )(a), the Company may be continued as provided in Section I 01.552 oflhe Code. (b) If lhere is a termination of tbc continued membership of Lhe last remammg Member as described in Section 13.l{c}, then prior to completion of the v.inding up process but not later than 90 days ufier the event of termination, the Board of Managers moy continue the Company by admitting one or more Members effective as of the occurrence of the event of termination. Any Assignee whose Percentage Interest would be diminished by reason of the admission of an Additional Member under the circumstances described in this Section must approve the admission or lhc Additional Member. FIRST AMENDED ANO RESTATED COMPANY AGREEMENT OF Cf.l"n'URION PECOS 'l'l-:R.\llNAI. LLC PAGE 25 8211"57-41SP/330S2/010110721t5 MR.306 IJ.4. Liquidation of AsscL.; and Application nnd lJisrribution of Proceeds. (a) In General. On winding up the Company, tl1e Liquidator shall di:-;posc of the Company's properties und apply and distribute the proceeds, or transfer the CompW1y properties, in the following order of priority: (i) lo creditors {including Members who are creditors) in accordance with their relative rights and priol'itics to satisfy the liabilities of the Company. including expenses associated with the winding up nnd termination of the Company, but excluding uny Company linbility for any unpaid Mandatory Distributions; {ii) to Members, Assignees, and former Members to satisfy the Company's liability for any unpaid Mandatory Distributions; und (iH} to Members and Assignees as provided in Section 4.2(a). (b) No Member Deficit Restoration Obligation. No Member is liuble to the Company or MY other person for the rcpaymenr of any deficit in the Member's Capital Account, except as provided in Section l 01.206 of the Code. (c) Reserves. Tn the discretion of the Liquidator, a pro rata portion of the distributions tbat would otherwise be made pursuant to Section 13.4CalCiil and (iii) may be withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) nnd future expenses, including a reasonable reserve for any claims for indemnification under Article VI and for uny future expenses ussocintcd with nny tax audit or other Proceeding lhnt is pending or may arise. (d) Payments and Qistributions to Members in Kind. The Liquidator may not make nny payments or distributions lo Members or Assignees pursuant to Section I 3.4(a)(ii} or (iii) other than in cash unless all Members and Assignees receiving the property approve the transfor in kind. The Liquidator shall detennine the Fair Market Vulue of uny property transferred l<> Members or Assignees in kind according to the valuation proceuures set forth in Article XIV. (e) Character of Liquidating Distribution~. Except as otherwise required by the J.R.C., amounts paid to Members pursuant lo this Section 13.4 shall be treated as made in exchange for the interest of the Member in Compnny property pursuant to J.R.C. Section 736(b)(l), including lhe interest of such Member in Company goodwiU. 13.5. Certificate of Tenninution. The Liquidntor shall tile a Certificate of Tcnnination of a Domestic ~ntity on the completion of the winding up of the Company. I3.6. Reinstatement. Jf the Company is tcnninnte uch Member's Capital Contributions and the Fair Value of property contributed (ff permitted hereunder) to the Company by such Member, (ii) such Member's share of the Company's Net Profit, FIRST AMENDED AND RESTATED COMPANY AGREEMENT OF CF."T\JRION PECOS TERMl~At. LLC rAGf; A-4 G211«57,41SP/n03210101/072115 MR.315 and (iii) the amount of any Company liabilities assumed by .such Member or that arc secured by property distributed to such Member. (b) The Capital Account of each Member shall be debited by (i) the nn1otml of cash and the Fair Value of pl'Opcrty distributed to such Member. (ii) such Member's share of the Compnny's Net Loss, and (iii) the amount of any liabilities of such Member assumed by the Company or that arc secured by nny property contributed by such Member to the Company. (c) Upon the transfer by a Member of all or part of an interest in the Company ofter the Effective Dale, the Capital Account of the transferor that is attributable to the transferred interest carries over to the transferee and the Capital Accounts of the Members shall be aqjustcd to the extent provided in Treasury Regulations Section l.704-l(b)(2)(iv)(m). (d) Jn dctennining the amount of nny liability for purposes of Sections A.3(a) and A.3(b), I.R.C. Section 752(c) and any other applicable provisions of the I.R.C. and the Treasury Regulations shall be taken into account. (e) Except as otherwise required by Trcnsury Rcgulntions Section l.704-1(b)(2)(iv), adjustment to Cnpitnl Accounts in respect of Company income, guin, loss, deduction, und T.R.C. Section 705(a)(2)(B) expenditures (or items thereof) slmll be made wilh reference to the Je id. ¶¶ 36 – 42, 60, 69 – 72. 4 2. Centurion Logistics claims that Calce and the other Defendants carried out a scheme that resulted in Centurion Pecos and Centurion Logistics losing their interest in the 2 A true and correct copy of the Agreement is attached hereto as Exhibit A-1. 3 In this Motion, Calce only seeks a declaration that he is entitled to advancement/reimbursement from Centurion Logistics for his past and future defense costs and a judgment that Centurion Logistics breached the Agreement. Calce will move for a judgment for his actual defense costs at a later date. 4 Centurion Logistics has sought leave to file its First Amended Petition. As of the date of this filing, leave has not been granted. Centurion Logistics’ First Amended Petition includes the following causes of action against Calce: (1) breach of fiduciary duty; (2) unjust enrichment; (3) aiding and abetting fraud/fraudulent inducement; (4) violation of the Texas Theft Liability Act; (5) tortious interference with contract; (6) fraudulent inducement; and (7) promissory estoppel. See Plaintiff’s Motion for Leave to File Amended Petition. JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 2 9516179.1/SP/38371/0105/112217 MR.323 Reeves County Property 5, thereby allegedly depriving such entities of the opportunity to construct a railway terminal for the shipping of crude oil from such property. See generally Pl.’s Orig. Pet. Among other things, Plaintiff alleges that Calce breached the fiduciary duties that he owed Centurion Logistics as a manager of the company. See
id. ¶¶ 36– 42. 6 3. On September 20, 2016, Calce filed his Motion to Transfer Venue and Brief in Support Thereof and, Subject Thereto, Original Answer (the “Original Answer”). Since the filing of his Original Answer, Calce has incurred, and continues to incur, significant expenses in defending against the claims that have been brought against him in the Lawsuit. Calce’s Contractual Right to Immediate Reimbursement of Defense Costs 4. Calce is a manager of Centurion Logistics. See Pl.’s Orig. Pet. ¶ 12. Section 1.1 of the Company Agreement of Centurion Logistics (the “Agreement”) defines an “Indemnified Person” as follows: “Indemnified Person” means (a) a Member or Assignee; (b) a Manager; (c) a Liquidator (if any); (d) any Affiliate of the Company, a Member or Assignee, a Manager, or a Liquidator; and (e) any governing person, officer, employee, agent, or owner of the Company, a Member or Assignee, a Manager, a Liquidator, or any Affiliate of any of the foregoing. A person is an Indemnified Person whether or not such person has the status required to be an Indemnified Person at the time any Proceeding is made or maintained as described in Article VI or at the time any amendment to this Agreement is proposed under Section 15.1. See Ex. A-1 § 1.1 (emphasis added). Calce, as a manager of the company, is therefore an “Indemnified Person” under the Agreement. See
id. 5. Section6.2 of the Agreement provides as follows: 5 The term “Reeves County Property,” when used herein, should be understood to have the same meaning as the term is used and defined in Plaintiff’s Original Petition. 6 Centurion Logistics makes the same allegations in the First Amended Petition that it has sought leave to file. See Plaintiff’s Motion for Leave to File Amended Petition, Ex. A, ¶¶ 52 – 58. JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 3 9516179.1/SP/38371/0105/112217 MR.324 To the fullest extent permitted by applicable law, and subject to Section 6.3, [Centurion Logistics] indemnifies and holds harmless each Indemnified Person from and against any Damages arising from any Proceeding relating to the conduct of [Centurion Logistics’] business or to any act or omission by such Indemnified Person within the scope of the Indemnified Person’s authority in the course of [Centurion Logistics’] business or for any misconduct or negligence on the part of any other person that is an employee or agent of [Centurion Logistics]. An Indemnified Person’s expenses paid or incurred in defending itself against any Proceeding shall be reimbursed as paid or incurred. The right to indemnification conferred in this Article VI is not exclusive of any other right that any person may have or hereafter acquire under any statute, agreement, vote of Members, or otherwise. See Ex. A-1 § 6.2 (emphasis added). Accordingly, pursuant to Section 6.2, Calce—as an Indemnified Person—is entitled to immediate reimbursement of “expenses paid or incurred in defending [himself] against any Proceeding.” See
id. 6. Section1.1 of the Agreement defines “Proceeding” as follows: “(a) any threatened, pending, or completed action or other proceeding, whether civil, criminal, administrative, arbitrative, or investigative; (b) an appeal of any such proceeding, and (c) any inquiry or investigation that could lead to any such proceeding.” See Ex. A-1 § 1.1. This Lawsuit clearly constitutes a “Proceeding” under the Agreement, which Plaintiff does not dispute. See infra. 7. Section 6.3(c) of the Agreement provides the following remedy for Centurion Logistics if it is ultimately determined—pursuant to a final judgment of a court of competent jurisdiction—that Calce is not entitled to advancement/reimbursement under Section 6.2: Any payments made to or on behalf of a person who is later determined not to be entitled to such payments shall be repaid by the person to the Company. The Company may require as a condition to the payment of any amounts pursuant to Section 6.2, that the Indemnified Person provide to the Company (i) a written affirmation by the Indemnified Person of the person’s good faith belief that the person has met the standard of conduct necessary for indemnification under this Section 6.3; and (ii) a written undertaking by or on behalf of the Indemnified JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 4 9516179.1/SP/38371/0105/112217 MR.325 Person to repay the amount paid or reimbursed if the person has not met that standard or if indemnification is otherwise prohibited by law. See Ex. A-1 § 6.3(c) (emphasis added). Centurion Logistics’ Refusal to Reimburse Calce’s Defense Costs 8. On August 22, 2017, Calce—through his counsel—requested that Centurion Logistics, pursuant to Section 6.2 of the Agreement, (1) reimburse Calce the full amount of expenses that he had been invoiced as of July 31, 2017, plus an additional $50,000 to be applied to future expenses as they are incurred; and (2) agree to reimburse Calce the additional expenses, in excess of such $50,000 advancement, that he pays or incurs in his defense of the Lawsuit as such expenses are paid or incurred. See the August 22, 2017, letter, a true and correct copy of which is attached hereto as Exhibit B (referred to hereinafter as the “Reimbursement Request”). 7 9. The Reimbursement Request provides that, “[p]ursuant to Section 6.3 of the Agreement, Mr. Calce hereby affirms that it is his good faith belief that he has met the standard of conduct necessary for indemnification under Section 6.3.” See Ex. B at 2. The Reimbursement Request also provides that “Mr. Calce further agrees to repay any amount that is paid or reimbursed by Centurion Logistics, pursuant to Section 6.2, if it is determined by a court of competent jurisdiction that Mr. Calce did not meet the aforementioned standard or if indemnification is otherwise determined to be prohibited by law.” See
id. 10. CenturionLogistics denied Calce’s request for reimbursement. See letter of September 5, 2017, a true and correct copy of which is attached hereto as Exhibit C (referred to hereinafter as the “Reimbursement Denial”). Despite denying the request, Centurion Logistics conceded that Calce is an “Indemnified Person” and that this litigation is a “Proceeding” as those 7 The Agreement was attached as Exhibit A to the Reimbursement Request. The Agreement has been omitted as an attachment to the Reimbursement Request since it is attached as Exhibit A-1 to this Motion. JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 5 9516179.1/SP/38371/0105/112217 MR.326 terms are defined in the Agreement. See Ex. C at 2. To date, Centurion Logistics has not reimbursed Calce any amount for the expenses he has paid and incurred in defending himself against the claims brought against him in the Lawsuit. See the Declaration of John Calce, a true and correct copy of which is attached hereto as Exhibit A, ¶ 4. ARGUMENT AND AUTHORITIES This Motion only addresses Calce’s right to advancement/reimbursement of defense costs—not his right to indemnification. These rights are often improperly conflated, but they are distinct concepts with completely different standards. Calce does not contend that he is entitled to indemnification—as a matter of law—from Centurion Logistics at this point in the litigation. However, his right to advancement/reimbursement of defense costs is clear and appropriate for determination at the summary judgment stage. In order to adequately demonstrate Calce’s entitlement to the relief requested herein, it is important to first contrast the difference between the right to advancement/reimbursement and the right to indemnification. These concepts are extensively analyzed in In re Aguilar,
344 S.W.3d 41(Tex. App.—El Paso 2011, orig. proceeding) (referred to herein as “Aguilar”). A. The right to advancement/reimbursement of expenses and the right to indemnification are separate and distinct legal concepts. Aguilar is strikingly similar to the present case. Aguilar and another individual formed Perspectiva Group, Inc. (“Perspectiva”). See
Aguilar, 344 S.W.3d at 44. Aguilar was an officer and director of Perspectiva. See
id. Perspectiva filedsuit against Aguilar and certain Perspectiva employees alleging that Aguilar had breached his fiduciary duties to the company and engaged in a conspiracy. See
id. Perspectiva laterfiled a second suit against Aguilar and others, which was eventually consolidated with the first suit into one cause, accusing Aguilar and his daughter of forming a company that competed with Perspectiva (similar to the allegations in the current JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 6 9516179.1/SP/38371/0105/112217 MR.327 case). See
id. During thependency of the consolidated lawsuit, Aguilar’s attorney—pursuant to Perspectiva’s bylaws—sent Perspectiva’s attorney a letter requesting that Perspectiva advance Aguilar’s defense costs, including attorneys’ fees (which is exactly what Calce has requested here). See
id. Perspectiva—like CenturionLogistics—denied Aguilar’s advancement/reimbursement request. See
id. at 45.The trial court denied Aguilar’s motion requesting advancement/reimbursement of defense costs. See
id. The appellatecourt conditionally granted Aguilar’s petition for a writ of mandamus and provided that the writ would issue if the trial court refused to (1) vacate its order denying Aguilar’s motion regarding advancement; and (2) enter an order granting the motion. See
id. at 56.In analyzing the issue, the Aguilar appellate court first stated that Article 2.02-1 of the Texas Business Corporation Act expressly allowed Texas corporations to advance litigation expenses to its directors. See
id. at 45.The Aguilar court further noted that the applicable section of Perspectiva’s bylaws was nearly identical to the statutory language regarding advancement/reimbursement of expenses. See
id. at 45– 46. Article 2.02-1 of the Texas Business Corporation Act is the predecessor to Section 8.104 of the TBOC. See TEX. BUS. ORGS. CODE § 8.104. 8 Similarly, here, Section 6.2 is consistent with the statutory language set forth in Section 8.104 of the TBOC. See Ex. A-1 § 6.2; see also TEX. BUS. ORGS. CODE § 8.104. The Aguilar court next turned to the lack of Texas case law addressing the right to advancement/reimbursement of defense costs: “There are no Texas cases concerning advancement under the Business Corporation Act or the Business Organizations Code. But the courts of Delaware have addressed advancement on numerous occasions.”
Aguilar, 344 S.W.3d at 46. It is common for Texas courts to look to Delaware law for guidance regarding 8 The prior and current statutes are essentially the same in all material respects. Compare TEX. BUS. CORP. ACT ART. 2.02-1 with TEX. BUS. ORGS. CODE § 8.104. JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 7 9516179.1/SP/38371/0105/112217 MR.328 unsettled/undeveloped areas of corporate law. 9 The Delaware Supreme Court has explained that “‘[a]dvancement is an especially important corollary to indemnification’ because it provides corporate officials with immediate interim relief from the burden of paying for a defense.” See
Aguilar, 344 S.W.3d at 46(quoting Homestore, Inc. v. Tafeen,
888 A.2d 204, 211 (Del. Supr. 2005)). “Although the right to indemnification and advancement are correlative, they are separate and distinct legal actions.”
Id. (quoting Homestore,888 A.2d at 212). Perhaps most importantly, “[t]he right to advancement is not dependent on the right to indemnification.” Id. (citing
Homestore, 888 A.2d at 212) (emphasis added). This concept is vitally important to the determination of this Motion, because it demonstrates that Calce’s alleged conduct is completely irrelevant to his right to immediate advancement/reimbursement of his defense costs. B. Centurion Logistics cannot rely on its own allegations to deny Calce’s right to advancement/reimbursement of defense costs. The Reimbursement Denial states that Centurion Logistics denied Calce’s request for reimbursement/advancement, at least in part, on the basis of Centurion Logistics’ allegations in the Lawsuit—specifically that Calce (1) was not acting “within the scope of [his] authority in course of the Company’s business”; and (2) was engaging in “intentional misconduct” and a “knowing violation of law.” See Ex. C. These are mere allegations for which Centurion Logistics has the burden of proof. Centurion Logistics does not get to assume the role of accuser 9 “Delaware has been described as ‘the Mother Court of corporate law.’”
Aguilar, 344 S.W.3d at 47(citing Kamen v. Kemper Fin. Servs., Inc.,
908 F.2d 1338, 1343 (7th Cir. 1990), rev’d on other grounds,
500 U.S. 90(1991)). “Courts throughout the country look to Delaware for guidance on matters of corporate law.”
Id. (citing NeurobehaviorialAssocs., P.A. v. Cypress Creek Hosp., Inc.,
995 S.W.2d 326, 332 n. 12 (Tex. App.—Houston [1st Dist.] 1999, no pet.) (turning to Delaware corporate law for guidance regarding “winding-up” because there was no Texas cases addressing the issue)). “The law of advancement, in particular, is ‘a Delaware specialty.’”
Id. (citing Int’lAirport Ctrs., LLC v. Citrin,
455 F.3d 749, 750 (7th Cir. 2006)). “To the limited extent that there is law [regarding advancement] outside Delaware, it is the same as the law in Delaware.”
Id. (quoting StephenA. Radin, “Sinners Who Find Religion”: Advancement of Litigation Expenses to Corporate Officials Accused of Wrongdoing, 25 Rev. Litig. 251, 271 (2006)). JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 8 9516179.1/SP/38371/0105/112217 MR.329 and fact-finder. More importantly, these allegations are irrelevant to the determination of whether Calce is entitled to advancement/reimbursement of his defense costs. In Aguilar, Perspectiva similarly denied Aguilar’s request for advancement on the basis that Aguilar purportedly had unclean hands due to the alleged breaches of his fiduciary duties. See
Aguilar, 344 S.W.3d at 46. The Aguilar court stated that “[u]nder Delaware law, advancement is allowed even when the official seeking advancement is being sued by the corporation that must advance the litigation expenses” as “Delaware case law is replete with insider trading cases in which executives’ expenses are advanced despite allegations of defrauding the corporation or its stockholders of millions of dollars.”
Id. at 47(citing James River Mgmt. Co., Inc. v. Kehoe,
674 F. Supp. 2d 745, 750 (E.D. Va. 2009)). The Aguilar court further provided that “[a]dvancement claims are frequently granted when, as in this case, the corporation is suing an official for breach of fiduciary duty.”
Id. That isthe exact situation here—i.e., Calce is being sued for breach of fiduciary duty. See Pl.’s Orig. Pet. ¶¶ 36 – 42. “The corporation [Centurion Logistics] cannot defend against the advancement claim on the ground that it now believes the fiduciary [Calce] to have been unfaithful because it is in those very cases that the right to advancement attaches most strongly.”
Id. (citing Kehoe,674 F. Supp. 2d at 750) (internal quotations omitted) (emphasis added). The Delaware Court of Chancery perhaps put it best stating: It is not uncommon for corporate directors, officers, and employees to be sued for breach of the fiduciary duty of loyalty [exactly what Calce is being sued for here], and to have to defend claims that they took official action for the primary purpose of diverting corporate resources to their own pocketbooks . . . . Therefore, it is highly problematic to make the advancement right of such officials dependent on the motivation ascribed to their conduct by the suing parties. To do so would be to largely vitiate the protections afforded by [statutory] and contractual advancement rights. JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 9 9516179.1/SP/38371/0105/112217 MR.330 Reddy v. Elec. Data Sys. Corp., No. CIV.A.19467, 2002 Del. Ch. LEXIS 69, at *15 – 16 (Del. Ch. June 18, 2002); see also
Aguilar, 344 S.W.3d at 48(expressly rejecting proposition that “the entitlement to advancement hinges on proof that the director did not violate his fiduciary duties.”). Calce’s alleged conduct is completely irrelevant for purposes of this Motion and the determination of whether Calce is entitled to advancement/reimbursement of his defense costs. See
Aguilar, 344 S.W.3d at 48(citing Reddy, 2002 Del. Ch. LEXIS 69, at *28 – 29) (providing that any other result “would turn every advancement case into a trial on the merits of the underlying claims of official misconduct.”)). Rather, the determinative question is whether the terms of the Agreement afford Calce the right to advancement/reimbursement of his defense costs. The answer is unquestionably yes. C. Calce’s contractual right to advancement/reimbursement is unambiguous and mandatory. 1. The terms of the Agreement are unambiguous and its interpretation is a question of law for the Court. The interpretation of an unambiguous contract is a question of law for the court. See Moayedi v. Interstate 35/Chisam Rd., L.P.,
438 S.W.3d 1, 7 (Tex. 2014) (citing MCI Telecomms. Corp. v. Tex. Utils. Elec. Co.,
995 S.W.2d 647, 650 (Tex. 1999)). Likewise, “[t]he question of whether a contract is ambiguous is one of law for the court.” Peterson v. Farmers Tex. Cnty. Mut. Ins. Co., No. 05-15-00678-CV, 2016 Tex. App. LEXIS 6586, at *8 (Tex. App.—Dallas June 22, 2016, no pet.) (mem. op.) (citing Coker v. Coker,
650 S.W.2d 391, 394 (Tex. 1983)). A contract is not ambiguous if, like the Agreement here, “the contract’s language can be given a certain or definite meaning.”
Id. (citing ElPaso Field Servs., L.P. v. MasTec N. Am., Inc.,
389 S.W.3d 802, 806 (Tex. 2012)). The mere fact that the “parties advance different interpretations JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 10 9516179.1/SP/38371/0105/112217 MR.331 of a contract does not necessarily mean that the contract is ambiguous.” PopCap Games, Inc. v. MumboJumbo, LLC,
350 S.W.3d 699, 707 (Tex. App.—Dallas 2011, pet. denied). “In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument.”
Moayedi, 438 S.W.3d at 7(emphasis added). “Absent a finding of ambiguity, a court must interpret the meaning and intent of a contract from the four corners of the document without the aid of extrinsic evidence.” Peterson, 2016 Tex. App. LEXIS 6586, at *9; see also Sacks v. Haden,
266 S.W.3d 447, 450-51 (Tex. 2008) (quoting Nat’l Union Fire Ins. Co. of Pittsburgh, Penn. v. CBI Indus. Inc.,
907 S.W.2d 517, 520 (Tex. 1995)) (providing that “[o]nly where a contract is ambiguous may a court consider the parties’ interpretation and ‘admit extraneous evidence to determine the true meaning of the instrument’”). Moreover, “[u]nless the agreement shows the parties used a term in a technical or different sense, the terms are given their plain, ordinary, and generally accepted meaning.”
Moayedi, 438 S.W.3d at 7(citing Heritage Res., Inc. v. NationsBank,
939 S.W.2d 118, 121 (Tex. 1996)). The relevant terms of the Agreement are unambiguous and entitle Calce to indemnification. 2. Section 6.2 of the Agreement clearly requires Centurion Logistics to immediately reimburse Calce the expenses he pays or incurs in defending himself in the Lawsuit. It is undisputed that Calce—as a manager of Centurion Logistics—is an “Indemnified Person” under the Agreement. See Pl.’s Orig. Pet. ¶ 12; see also Ex. A-1 § 1.1; Ex. C at 2. It is further undisputed that the Lawsuit constitutes a “Proceeding” as defined in Section 1.1 of the Agreement. See Ex. A-1 § 1.1; see also Ex. C at 2. Section 6.2 of the Agreement provides that “[a]n Indemnified Person’s [e.g., Calce] expenses paid or incurred in defending [himself] against any Proceeding [e.g., this Lawsuit] shall be reimbursed as paid or incurred.” See Ex. A-1 § 6.2 JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 11 9516179.1/SP/38371/0105/112217 MR.332 (emphasis added). There are no qualifications and/or conditions to Calce’s express right to advancement/reimbursement of defense costs. 10 The Aguilar court—after noting that the term “shall” is generally construed to be mandatory—held that Perspectiva had a mandatory duty, under the applicable section of its bylaws (which is strikingly similar to the language of Section 6.2), to advance Aguilar’s defense costs. See
Aguilar, 344 S.W.3d at 51. 11 Similarly, Centurion Logistics is required, pursuant to Section 6.2 of the Agreement, to reimburse Calce the expenses he pays or incurs in defending himself in the Lawsuit—as such expenses are paid or incurred. 3. Calce’s reimbursable expenses include his attorneys’ fees. The Aguilar court expressly rejected Perspectiva’s argument that the undefined term “reasonable expenses” does not include attorneys’ fees. See
Aguilar, 344 S.W.3d at 51– 52. In support of its holding, the Aguilar court stated that “Perspectiva’s interpretation renders [the relevant section of Perspectiva’s bylaws] insignificant and practically useless.”
Id. at 51.The Aguilar court further provided that “[t]he purpose of advancement is to relieve corporate officials from the burden of paying the significant on-going expenses involved in litigation” and that “[t]he burden of litigation comes from attorney’s fees, not copying costs.”
Id. at 51– 52 (internal quotations and citations omitted). This reasoning is equally applicable here. Moreover, 10 Section 6.3(c) of the Agreement does provide that “[t]he Company [Centurion Logistics] may require, as a condition to the payment of any amounts pursuant to Section 6.2, that the Indemnified Person provide to the Company (i) a written affirmation by the Indemnified Person of the person’s good faith belief that the person has met the standard of conduct necessary for indemnification under this Section 6.3; and (ii) a written undertaking by or on behalf of the Indemnified Person to repay the amount paid or reimbursed if the person has not met that standard or if indemnification is otherwise prohibited by law.” See Ex. A-1 § 6.3. Calce has already agreed in writing to repay any amount that he is reimbursed by Centurion Logistics if it is ultimately determined that he was not entitled to such payments. See Ex. B at 2. 11 The pertinent section of Perspectiva’s bylaws provided as follows: “[r]easonable expenses incurred by a person who was, is, or threatened to be made a named defendant or respondent in a Proceeding shall be paid or reimbursed by the Corporation . . . .” See
Aguilar, 344 S.W.3d at 44. JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 12 9516179.1/SP/38371/0105/112217 MR.333 Section 8.001 of the TBOC defines the term “expenses” to include “reasonable attorney’s fees.” See TEX. BUS. ORGS. CODE § 8.001(3)(B). It is therefore clear that Calce’s right to advancement/reimbursement of “expenses” includes the attorneys’ fees he pays or incurs in his defense of this Lawsuit. D. Summary Judgment is the appropriate—and only meaningful—mechanism for Calce to exercise his right to advancement/reimbursement of defense costs. The Aguilar court made clear that a summary judgment motion is an appropriate procedural vehicle for seeking advancement/reimbursement of defense costs. See
Aguilar, 344 S.W.3d at 52– 53. More importantly, the Aguilar court stated that “[b]y its very nature, advancement of expenses can occur only during the course of the trial court proceedings.”
Id. at 55(citing Morgan v. Grace, No. Civ.A. 20430, 2003 Del. Ch. LEXIS 113, at *4 (Del Ch. Oct. 29, 2003) (providing that “[t]he value of the right to advancement is that it is granted or denied while the underlying action is pending.”)). “It is indemnification of expenses that occurs at the conclusion of the case.”
Id. Therefore, Calce’sright to advancement/reimbursement of defense costs is ripe. The only appropriate time for such determination is now. Calce’s advancement/reimbursement claim will be effectively moot at the conclusion of the case. See
id. CONCLUSION Forthese reasons, Calce requests that the Court grant his Motion for Partial Summary Judgment against Centurion Logistics and enter the following judgment: a) A declaration that Centurion Logistics is required to reimburse Calce the expenses, including but not limited to attorneys’ fees, that he has paid or incurred to date in defending himself against the claims brought against him in the Lawsuit; b) A declaration that Centurion Logistics is required to reimburse Calce the expenses, including but not limited to attorneys’ fees, that he pays or incurs in the future in defending himself against the claims brought against him in the Lawsuit within ten (10) days of Calce submitting such expenses to Centurion Logistics; JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 13 9516179.1/SP/38371/0105/112217 MR.334 c) Judgment that Centurion Logistics breached the Agreement by failing to reimburse Calce the amount of expenses, including but not limited to attorneys’ fees, that he has paid or incurred to date in defending himself against the claims brought against him in the Lawsuit; 12 and d) Such other and further relief to which Calce may be justly entitled. Respectfully submitted, /s/ David N. Kitner DAVID N. KITNER State Bar No. 11541500 david.kitner@strasburger.com CHASE J. POTTER State Bar No. 24088245 chase.potter@strasburger.com STRASBURGER & PRICE, LLP 901 Main Street, Suite 6000 Dallas, TX 75202-3794 (214) 651-4300 (214) 651-4330 Fax ATTORNEYS FOR JOHN CALCE, CENTURION MIDSTREAM GROUP, LLC, CENTURION TERMINALS, LLC, AND STAMPEDE TX ENERGY, LLC 12 Calce’s First Amended Counterclaim against Centurion Logistics—like his Original Counterclaim— includes claims for declaratory relief and breach of contract. See Calce’s First Am. Counterclaim. For the reasons set forth herein, Calce is entitled to summary judgment on his breach of contract claim, in addition to his claim for declaratory relief. To succeed on a breach of contract claim, a plaintiff must show: “(1) a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.” Marquis Acquisitions, Inc. v. Steadfast Ins. Co.,
409 S.W.3d 808, 813 – 814 (Tex. App.—Dallas 2013, no pet.). The arguments set forth above and summary judgment evidence conclusively establish all such elements as a matter of law: (1) the Agreement is a valid contract; (2) Calce submitted his written undertaking (without even being requested to do so by Centurion Logistics); (3) Centurion Logistics breached Section 6.2 of the Agreement by denying Calce’s request for advancement/reimbursement of defense costs; and (4) Calce has suffered and continues to suffer the harm of significant, unreimbursed defense costs. JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 14 9516179.1/SP/38371/0105/112217 MR.335 CERTIFICATE OF SERVICE The undersigned counsel certifies that on the 22nd day of November, 2017, a true and correct copy of the foregoing was forwarded to all known counsel in compliance with the Texas Rules of Civil Procedure. /s/ Chase J. Potter Chase J. Potter JOHN CALCE’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC PAGE 15 9516179.1/SP/38371/0105/112217 MR.336 EXHIBIT A MR.337 CAUSE NO. DC-16-07706 CENTURION LOGISTICS LLC, § IN THE DISTRICT COURT OF individually and derivatively on behalf of § CENTURION PECOS TERMINAL LLC, § a Texas Limited Liability Company, § § Plaintiffs, § § v. § § JAMES BALLENGEE, BALLENGEE § INTERESTS, LLC, JOHN CALCE, § DALLAS COUNTY, TEXAS STAMPEDE TX ENERGY, LLC, § CENTURION MIDSTREAM GROUP, § LLC, CENTURION TERMINALS, LLC § § Defendants, § § and CENTURION PECOS TERMINAL § LLC, a Texas Limited Liability Company § § Nominal Defendant. § 44th JUDICIAL DISTRICT DECLARATION OF JOHN CALCE 1. My name is John Calce. I have personal knowledge of every statement made herein, and they are all true and correct. 2. I am a manager of Centurion Logistics LLC (“Centurion Logistics”). I have been a manager of Centurion Logistics since the date the company was formed. 3. Attached hereto as Exhibit A-1 is a true and correct copy of the Company Agreement of Centurion Logistics. 4. To date, Centurion Logistics has not reimbursed me any amount for the expenses that I have paid or incurred in defending myself against the claims that have been brought against me in the above-entitled lawsuit. DECLARATION OF JOHN CALCE PAGE 1 9389432.1/SP/38371/0105/100517 MR.338 Dallas MR.339 EXHIBIT A-1 MR.340 COMPANY AGREEMENT OF Centurion Logistics LLC a Texas Limited Liability Company Effective September 16, 20 B THE MEMBEnSlllP INTERESTS REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED lJNDF,R ANY SECURITU:s LAWS AND MAY NOT BE SOLD, PLEDGED OR OTHRIHVISE TRANSEi'muu;:o ABSENT SlJCH IU:GISTRATION OR AN EXEMPTION THEREFROM. THE TRANSFER OF MF.MBF:RSHIP INTERESTS IS FURTHER RESTRICTED BY ARTICLI( X OF THIS AGREF:MENT. I 1508~~'2 2/1 2120 14 MR.341 TABLE OF CONTENTS Page 1\llTICljl·~ 1 DEFl'N l'flONS .................................................................,......................................... t 1.1. J)etined Tcrn1s ......................................................................................................... I 1.1. LJsage ....................................................................................................................... 4 ARTICLE JI ORGANlZATIONAL MATTERS ...................................................................... 5 2.1. Forn1ation .. .............................................................................................................. 5 2.2. Na1ne ....................................................................................................................... 5 2.3. Registered Office and Agent; Principal Office ....................................................... 5 2.4. ·1·crn1 ....................................................... ... ,............................................................. 5 2.5. Purposes ............................................................................................... .................... 5 2.6. Po\vcrs ..................................................................................................................... 5 2. 7. Co1npany Property ................................................................................................... 5 2.8. lnitial IV1cn1bers ....................................................................................................... 6 2.9 Options to Acquire Additional Units ....................................................................... 6 2.10 Consent of lvf anagers ............................................................................................... 6 2.1 l. Status of Managers and Members ....... .................................................................... 6 2.12. Unit C:crtificatcs ...................................................................................................... 6 2.13. No State Law Partnership .............................. .......................................................... 6 ARTICLE III CAPITAL CONTRIBUTIONS; CAt•tTAL ACCOUNTS .............................. 6 3.1 . Initial Capital Contributions .................................................................................... 6 3.2. Additional Capital Contributions ............................................................................ 6 3.3. Capital Accounts ........... .............. ................................................................... ..... .... 7 3.4. No Right to Return of or Interest on Capital Account ............................................ 7 3.5. Ivlen1bcr Loans ........................................... .............................................................. 7 3.6. I\1etnber Notes ......................................................................................................... 7 ARTICLE IV ALJ,OCATIONS AND DISTRIBUTIONS ....................................................... 8 4. 1. A!location of Profit or Loss ..................................................................................... 8 4.2. Distributions of Distributable Cash ......................................................................... 8 4.3. \Vithholding ............................................................................................................. 8 4.4. Limitation on Distributions ..................................................................................... 8 4.5. No Right to Partition or Distribtttions in Kind ........................................................ 9 ARTICLE V 1'i·l1\NAG 1~1\lf EN,.r .................................................................................................... 9 5. I. Management and Control of Company Business ................................... ................. 9 5.2. Delegation of Authority ........................................................................................ . l 0 5.3. Limitations on Manager Authority ........................................................................ l 0 5.4. Reliance ................................................................................................................. 10 5.5. Compens,\tion and Expenses of Members and Managers ..................................... I0 5.6. Standards of Manager and Member Conduct ........................................................ I0 CO\IP.\'\\ A
- . Company Net Profil and Net Loss shall be allocated to the Members as fo llows; (a) Net Profit. Net Pro fit for any period (t:>.:<.:lud i11g tt1x items nlkicated pmsuant to Sections A .4.2 and A .4.3) shall be al located as lollows: First, Nel Profit sha ll be al located to the Members to the extent of and in (i) proportion to Lhe excess. jf any. of (i) the cunrnlali\'e Net Loss allocated pursuant to 'cction A.4.1 (b) for nil prior periods, over t ii) Lhc cumulative Net Pro tit allocated pursuant to this Section J\4. 1(a) for all prior periods. (ii) Set:ond. an) remaining Net Prolit shall be- allocated to the Members pro rata in accordance with their respect ive Percentage l ntcrcs1s. (b) Net Loss. Net Loss for an) period (excluding tax items allocated pursuant to Sections 1\.4.2 and A.4J) shall be allocated as follows: ( i) Net Loss shall be allocated to the Members pro rnta in accordance with thei r res pee ti,.e Percentage Interests, subject lo tile Ii mitation in Section A.4. L(b )(ii). C0\ 11 1 \\ \ i\(;111:1:.\ n.\ I OF Cl<\ H IHO;\ LOG I ST I C~L LC- p \ C li A·5 CALCE01519 MR.228 (ii) No Member may rl:!ceive an allocation or Net Loss rhat wuu ld cause the Member Lo lwve an Adjusted Capi tal Account Deficit at lhc end o f the taxable year. Net Loss not allocated Lo n Member pursuant Lo this subparagraph (ii) shall be allocalt'd to other Members according to their relative positive Capi tal Account balances (cakulutcd taking into account the adjustments described in the defin ition of Adjusted Capitul Account Deficit). /\.4.2 Regulatory Allocations. The following special allo<.·ations shall he applied in lhL' order in which they are listed. Such onkring is in tended 10 com ply wi th the ordering rules in Treasury Regule1tions Section I .704-2(j ) and shal l be applied consistently therewith. (a) Minimum Guin Chargeback. Except as otherwise provided in Treasu1) Regulations Section 1.704-2( f). not" ilhswnding anything to the contrary in this Section t\.-l. if there is a net decrease in Partnership Minimum Gain during any taxable year. each Member shnll be all ocated item~ of income and gain for llu:1t taxable year (and, ir necessary. subsequent taxable years) eq ual to that Member·s share or the net decrease in Partnership Minimum Ga in. detcnnined in accordru1ce \\ ith Treasury Regulations Section I.704-2(g)(2 }. rhis Section A.4.2(a) is intended lo comply with the minimum guin chargebac.:k requirement in T reasur~ Regul ations Section 1.704-2(1) and shall be interpreted consistently therewith, including that 110 chm·geback sha ll be required to the extent the requirements for requesting a wa iver describcJ iii Treasury Regulations Section 1.704-2(1){4) arc met or the requirements for an) other exception prescribed by or pursuanr Lo Treasury Regulations Section l.70.t-2(1) are met. (b) Partner Nonrccourse Debt Minim um Gain Chargeback. Except as otherwise provided in Treasury Regulations Section l.704-2(i )( 4). notwithstanding anything to the contrary in this Section. i r there is H net decreas~ in Partner Nonrecoursc Debt Minimum Gain during a mxable year, then, in addition 10 the amounts. if any. allocated pursuant to pnrngrnph 4.2(a). any Member with a share of" that Partner Nonrecourse Debt Minimum Gain (determined i11 aecordancc with Treasury Regulations Section l. 704-2(i)(5 )) as or the beginning of the taxabk year shal I be allocated items of Com pan} income and gain for that taxable year (and, ir necessary. for subseq uent taxable years) equa l to that Member's share of the net decrease in the Partner No11recourse Debt Minimum Gai n. determined in accordance with Treasu1y Regulati ons Section l.704-2(i)(4). This Section L\.4.2(b) is intended to compl y with 1h1: clrnrgebm.:k or partne1· nonrecourse debt minimum gain required by Treasury Regulations Section I .704-2( i )(4) and shnll be interpreted consistent!) there\\ ith. incl uding that no chargeback shall be required lo the extent the requirements !or any exceptions provided in Treasury Reglllation Section I .704- 2(i)( 4) are met. (c) Ouc1lilied Income O ffset. I( any Memb1.:r unexp1:ctcdly receives 1111) adjustment. allocmion, or distribution described in rreaslll') Regulntions Seclions I .704-l (b)('.2){ ii)(d)l-l). (5). or (6). items or CompaJly i11c1.1me and gai n shall be specially allocated 10 such Member i11 on amount and mnnner sufficient lo eliminate. to the extent required by lhe Treasury Regulati ons, the Adjusted Capital Account Deficit of such Member us quickly as possible. i\n allocation pursuant 10 the fo regoing senLence shall be nrnde onl) to the extent that such Member "1.1uld C mll'.\:"o\' AGlH,l·:\11: \ r OF 0 ::-. 11 Hill\ Loc;1s 11( ~ LLC P \
Document Info
Docket Number： 05-18-00647-CV
Filed Date： 6/4/2018
Precedential Status： Precedential
Modified Date： 4/17/2021