ACCEPTED
05-18-00647-CV
05-18-00647-cv Part 1 of 5
FIFTH COURT OF APPEALS
DALLAS, TEXAS
6/4/2018 2:25 PM
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 2:25:47 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
FILED
DALLAS COUNTY
7 CT-ATTY 6/27/2016 11:01:53 AM
FELICIA PITRE
DISTRICT CLERK
DC-16-07706 Freeney Anita
CAUSE NO. -
CENTURION LOGISTICS LLC, § IN THE DISTRICT COURT OF
individually and derivatively on behalf of §
CENTURION PECOS TERMINAL LLC, §
a Texas Limited Liability Company, § DALLAS COUNTY, TEXAS
§
Plaintiffs §
§
vs. §
§
JAMES BALLENGEE, BALLENGEE §
INTERESTS, LLC, JOHN CALCE, §
STAMPEDE TX ENERGY, LLC, §
CENTURION MIDSTREAM GROUP, LLC, §
CENTURION TERMINALS, LLC §
§
Defendants, § B-44TH
§ JUDICIAL DISTRICT
and CENTURION PECOS TERMINAL §
LLC, a Texas Limited Liability Company §
§
Nominal Defendant. §
PLAINTIFF’S ORIGINAL PETITION
Plaintiff Centurion Logistics LLC (“Centurion Logistics”) files this Original Petition
individually and derivatively on behalf of Centurion Pecos Terminals LLC (“Centurion Pecos”)
against James Ballengee (“Ballengee”), Ballengee Interests, LLC (“Ballengee Interests”), John
Calce (“Calce”), Stampede TX Energy, LLC (“Stampede”), Centurion Midstream Group, LLC
(“Centurion Midstream”), and Centurion Terminals, LLC (“Centurion Terminals”), bringing
claims directly and derivatively on behalf of Centurion Pecos LLC for: breach of fiduciary duty,
aiding and abetting breaches of fiduciary duty, money had and received (unjust enrichment),
fraudulent concealment, aiding and abetting fraudulent concealment, and declaratory judgment.
Accordingly, Plaintiff would respectfully show the Court as follows:
PLAINTIFF’S ORIGINAL PETITION Page 1 of 23
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MR.001
I.
DISCOVERY CONTROL PLAN
1. Pursuant to Texas Rules of Civil Procedure 190.1-190.6, Plaintiff hereby
designates that discovery will be conducted under Level 3. Pursuant to Rule 47 of the Texas
Rules of Civil Procedure, at this time, Plaintiffs seek monetary relief, exclusively in the form of
interest, costs, and attorneys’ incurred or to be incurred in excess of $1,000,000.
II.
PARTIES
2. Plaintiff Centurion Logistics is a Texas limited liability company, with its
principal office in Dallas, Texas. Centurion Logistics is a member and manager of Centurion
Pecos. The members of Centurion Logistics are: Marc Marrocco (“Marrocco”), Antonio
Albanese (“Albanese”), and TXC Energy LLC, an affiliate of Calce.
3. Nominal Defendant Centurion Pecos is a Texas limited liability company, with its
principal office in Dallas, Texas. The current member and manager of Centurion Pecos is
Centurion Logistics. Stampede was a member and manager of Centurion Pecos until June 13,
2016. Centurion Pecos may be served through service on its registered agent, John Calce, at
15851 Dallas North Parkway, Suite 650, Addison, TX 75001.
4. Defendant Ballengee is an individual residing in Dallas County, Texas. He may
be personally served at 3838 Oak Lawn Avenue, Suite 1150, Dallas, Texas 75219 or wherever he
may be found. Ballengee is a member and manager of Defendant Ballengee Interests.
5. Defendant Ballengee Interests is a Louisiana limited liability company. Ballengee
is a managing member of Ballengee Interests. Ballengee Interests may be served by serving its
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MR.002
Texas registered agent, National Registered Agents, Inc., at 1999 Bryan St., Suite 900, Dallas,
Texas 75201.
6. Defendant Calce is an individual residing at 5601 Preakness Lane, Plano, TX
75093. He may be served at this residence or wherever he may be found. .
7. Defendant Stampede is a Texas limited liability company, with its principal place
of business in Dallas, Texas. Stampede was a manager and member of Centurion Pecos, but was
removed as a manager and member on June 13, 2016. Stampede may be served, by serving its
registered agent, Blumberg Excelsior Corporate Services, Inc., at 814 San Jacinto Boulevard,
Suite 303, Austin, TX 78701.
8. Defendant Centurion Midstream is a Texas limited liability company, formed on
October 20, 2015, with its principal place of business in Dallas County, Texas. Calce is the
manager of Centurion Midstream. Centurion Midstream may be served, by serving its registered
agent, John Calce, at 15851 Dallas North Parkway, Suite 650, Addison, TX 75001.
9. Defendant Centurion Terminals is a Texas limited liability company, with a
principal place of business in Dallas County, Texas. By information and belief, Centurion
Terminals is an entity controlled by Defendant Calce. The manager of Centurion Terminals is
58C, LLC, a Texas limited liability company, whose manager is LV III, LLC, whose manager is
Calce. 1 Centurion Terminals may be served, by serving its registered agent, John Calce, at
15851 Dallas North Parkway, Suite 650, Addison, TX 75001.
1
The repeated use of the number 58 in these entities is evidence that they are the creation of Calce: Calce is very
proud of having lettered as an offensive lineman on a Football Championship Subdivision team, where his jersey
number was 58.
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MR.003
III.
JURISDICTION AND VENUE
10. This Court has jurisdiction over this case because the amount in controversy is in
excess of the Court’s minimum jurisdictional limits. Moreover, Defendants have engaged in
sufficient conduct in the State of Texas to confer jurisdiction over them. The Court has
jurisdiction over the subject matter of the action because a substantial portion of the events
giving rise to Plaintiffs’ claims occurred in Dallas County, Texas.
11. Venue is proper in Dallas County, Texas, pursuant to Texas Civil Practice and
Remedies Code Sections 15.002-15.007, because it is the county where all or a substantial part of
the events or omissions giving rise to the claims occurred as detailed in the following paragraphs.
IV.
BACKGROUND FACTS
A. Creation of Centurion Logistics and Centurion Pecos
12. Several years ago, Marrocco and Albanese were looking for ways to use their
expertise in real estate to invest in projects related to the booming oil and gas industry. During
their investigations, Marrocco became better acquainted with Calce, who worked in the oil and
gas industry, and whom Albanese happened to know from outside his business dealings. After
some investigation, Marrocco, Albanese and Calce decided to pursue a project to purchase real
estate and to develop a railway terminal for the shipping of crude oil. In order to pursue that
project, Marrocco, Albanese and Calce formed Centurion Logistics on September 16, 2013.
Centurion Logistics is manager-managed and its managers are Marrocco, Albanese and Calce.
Under the company agreement of Centurion Logistics, a majority of the managers are required to
take any action.
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MR.004
13 Calce concluded that the geology in the area surrounding Pecos, Texas made it
likely that there would be significant demand for a crude shipping terminal there. Albanese used
his connections to obtain the interest of a possible anchor tenant who might want to ship
hydraulic-fracturing sand through a terminal in that area, as a way to build Centurion Logistics’
credibility with oil companies and the railroad. Marrocco identified, and placed under contract,
an approximately 177-acre parcel in Reeves County, Texas (the “First Parcel”) to use for the
terminal, and obtained a contract for Centurion Logistics to purchase it.
14. In order to obtain funds to purchase the First Parcel, Calce, Marrocco and
Albanese discussed bringing an equity partner into the Pecos project to contribute cash. Calce
offered two potential investors from the oil and gas industry with whom he was acquainted.
Because Marrocco had already begun to hear rumors that Calce had a reputation for self-dealing,
Marrocco proposed that Centurion Logistics work with the investor to whom he believed Calce
had fewer ties, namely Ballengee. Additionally, Ballengee’s company was already trucking
crude oil in the vicinity. Centurion Logistics and a predecessor of Stampede (which was an
ostensibly unrelated entity Ballengee used as a conduit for his investment, in order to conceal
any activities that might appear to compete with his current business) formed Centurion Pecos,
on September 11, 2014, and Centurion Logistics assigned to Centurion Pecos the contract to
purchase the First Parcel.
15. Ballengee agreed to contribute cash to Centurion Pecos, in order to purchase the
First Parcel without any liens or encumbrances. Shortly before the closing of the sale of the First
Parcel, however, Ballengee announced to Centurion Logistics that he would not simply
contribute cash, as he had represented, but would require that Centurion Pecos grant a deed of
trust to Texas Capital Bank (“TCB”), to secure payment of the loan that Ballengee would use to
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MR.005
fund his contribution. Because Centurion Logistics had no other way to fund the purchase of the
First Parcel before the required closing date, and because the seller was already threatening to
sell to another purchaser, Centurion Logistics had no choice but to grant the deed of trust
Ballengee demanded, and the proceeds of the loan by TCB to Ballengee Interests were
contributed by Ballengee, through Stampede’s predecessor, and used to purchase the First Parcel
on September 19, 2014.
16. Centurion Logistics has since learned that Ballengee’s purpose in having
Centurion Pecos grant a deed of trust to TCB, was to create a mechanism by which Ballengee
could cause the property to be removed from Centurion Pecos through foreclosure; Ballengee
had more than adequate cash to fund the purchase of the First Parcel without taking a loan from
TCB.
17. Centurion Logistics determined that the terminal project could be expanded by
acquiring an approximately 300-acre parcel adjacent to the First Parcel (the “Second Parcel”).
Marrocco obtained a contract for an entity he controlled, in order to purchase the Second Parcel.
Marrocco was increasingly concerned about Calce’s reputation for underhandedness, and, as a
condition to assigning the purchase agreement to Centurion Pecos, insisted that Centurion
Logistics and Stampede amend and restate the company agreement of Centurion Pecos, in order
to remove Calce as the sole manager of Centurion Pecos, as of November, 2014.
18. Under the amended and restated company agreement of Centurion Pecos,
Centurion Logistics and Stampede were the members and managers of Centurion Pecos.
Centurion Pecos is manager-managed, and, under the amended and restated company agreement,
any action requires the consent of all managers.
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19. Again, at the closing of the Second Parcel, Ballengee insisted that Centurion
Pecos grant a deed of trust to the Second Parcel to TCB to secure a loan to Ballengee, rather than
fulfilling his representation to make a contribution of cash to purchase the Second Parcel without
liens or encumbrances. Again, Ballengee’s purpose, in causing Centurion Pecos to grant a deed
of trust, was to create a mechanism to remove the Second Parcel from Centurion Pecos. The
purchase of the Second Parcel closed on August 21, 2015. The First Parcel and the Second Parcel
are collectively referred to as the “Reeves County Property”.
20. Again, Ballengee did not provide the funds for the Second Parcel directly to
Centurion Pecos. Rather, he funneled the funds through Stampede because his participation in
the Centurion Pecos venture was circumscribed by a non-compete agreement related to one of
his previous businesses.
21. Both deeds of trust, granted at the closings of the Reeves County Property,
contain a cross-collateralization clause pledging the Reeves County Property as collateral for all
obligations of Ballengee Interests to TCB, even obligations not involving Centurion Pecos.
Purportedly, Calce signed both deeds of trust in his capacity as manager of Centurion Pecos,
although he was not a manager of Centurion Pecos at the time he signed the deed of trust to the
Second Parcel, and had no other authority to sign the second deed of trust for Centurion Pecos.
B. Defendants’ Fraudulent Scheme Unfolds
22. In late 2015, Calce began communicating to Marrocco that Calce and Ballengee
wanted to bring other participants into the project, and wanted Marrocco and Albanese to take a
more passive role and a reduced share of the profits. In particular, Calce expressed a desire to
force Albanese out as a manager of Centurion Logistics, and to require Albanese to sell his
membership interest in Centurion Logistics for less than its fair value. Calce threatened that if
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MR.007
Marrocco did not cooperate in removing Albanese from Centurion Logistics, Calce and
Ballengee would conspire to exclude Marrocco from participation in the terminal project, as
well; namely by removing the Reeves County Property from Centurion Pecos through
foreclosure. Marrocco refused to participate in removing Albanese from Centurion Logistics.
Calce and Ballengee subsequently asked for a meeting with Marrocco to negotiate a fair price for
Marrocco’s interest in Centurion Logistics, but the proposal proved to be a ruse to trick
Marrocco into attending an uncalled meeting of the managers of Centurion Pecos to approve an
“assignment and assumption agreement” with Ballengee Interests. Marrocco refused to attend
the meeting.
23. The actions of Ballengee and Calce demonstrate a scheme to move the Reeves
County Property out of Centurion Pecos and into an entity in which Marrocco and Albanese have
no interest, in order to deprive Marrocco and Albanese of their interests in the terminal project.
In addition to his affiliation with Centurion Logistics, Calce is President of Centurion
Midstream, an entity unrelated to either Centurion Logistics or Centurion Pecos. Centurion
Midstream, or another entity affiliated with Calce, has attempted to negotiate directly with Union
Pacific Railroad (“Union Pacific”) for the establishment of rail service to the Reeves County
Property, initially holding itself out as owning or representing the owner of the property and,
after Centurion Logistics notified Union Pacific that Centurion Midstream had no affiliation with
Centurion Pecos, by telling Union Pacific that Marrocco and Centurion Logistics were no longer
involved in the project, and that Centurion Midstream would own the Reeves County Property
“within a few weeks.” On its website, Centurion Midstream claims to own the property
purchased by Centurion Pecos and purports to be creating a terminal at Pecos, Texas. Calce, as
President of Centurion Midstream, receives a salary and other benefits.
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24. In furtherance of this scheme, Calce, Ballengee and/or Stampede have, in addition
to the deeds of trust executed at the closings of the Reeves County Property, created a number of
unauthorized and/or fraudulent documents purporting to pledge the Reeves County Property or
create obligations of Centurion Pecos. These unauthorized transactions and documents were not
only concealed from Plaintiff, but, on information and belief have been created recently and
backdated.
25. In a transaction unrelated to the purchase of the Reeves County Property,
Ballengee Interests granted a promissory note to TCB dated January 6, 2015 for a line of credit
in the amount of $750,000. In order to secure the note, Calce executed a deed of trust to the First
Parcel, purportedly on behalf of Centurion Pecos as its manager. The January 6, 2015 deed of
trust also contained a cross-collateralization clause pledging the First Parcel as collateral for all
obligations of Ballengee Interests to TCB, even obligations not involving Centurion Pecos.
Calce was not a manager of Centurion Pecos in January, 2015, and had no other authority to sign
the January 6, 2015 deed of trust. The proceeds of the line of credit were not used for any
purpose related to the business of Centurion Pecos. Upon information and belief, they were
largely used to fund a different terminal project in Brownsville, Texas, owned by Calce.
Centurion Logistics was unaware of the January 6, 2015 deed of trust, and only discovered it
during a record search of Reeves County conducted in May 2016.
26. In October, 2015, around the time Calce began expressing a desire to remove
Albanese from Centurion Logistics, and shortly after Centurion Midstream was formed,
Ballengee Interests extended the term of the note to TCB, and filed an extension of the deed of
trust on the First Parcel to secure the note. Again, that extension was signed by Calce, as
manager of Centurion Pecos, although he was not a manager of Centurion Pecos at the time, and
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had no other authority to act on behalf of Centurion Pecos. Centurion Logistics and Centurion
Pecos were not aware of the extension of the deed of trust on the First Parcel, and only
discovered it during a record search of Reeves County conducted in May 2016. Ballengee’s and
Calce’s purpose in extending the deed of trust was to preserve the Ballengee Interests note as a
means to remove the First Parcel from Centurion Pecos.
27. In April 2016, without authority to act for Centurion Pecos, Stampede and Calce
created documents that purported to obligate Centurion Pecos to assume Ballengee Interests’
obligations under the notes from Ballengee Interests to TCB used to obtain the funds contributed
to purchase the Reeves County Property, and to grant Ballengee Interests a deed of trust to
secure the assumption. Centurion Pecos was unaware of these documents or the purported
unauthorized assumption until it received a “notice of default” dated April 28, 2016 from
Ballengee Interests for its purported failure to make interest payments under the assumption
agreement. Neither Centurion Pecos nor Centurion Logistics has ever been provided with copies
of the purported assumption agreement and deed of trust.
28. In addition, Calce created a note, dated on or about November 15, 2015,
purporting to obligate Centurion Pecos to make payments to Centurion Terminals, another entity
controlled by Calce. Centurion Pecos first learned of this note in a demand letter dated May 27,
2016. No note of this description was ever authorized by Centurion Pecos, and neither Centurion
Logistics nor Centurion Pecos has ever seen this purported note.
29. Ballengee Interests and Calce also created fraudulent notes by Centurion Pecos to
Ballengee Interests, dated September 16, 2014 and August 17, 2015. Centurion Pecos first
learned of these notes in demand letters dated May 25, 2016. Neither Centurion Logistics nor
Centurion Pecos has ever seen these purported notes.
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30. In furtherance of their scheme, Defendants are now threatening to use the
unauthorized and fraudulent documents to foreclose on the Reeves County Property. Centurion
Pecos has received letters from Ballengee Interests and Centurion Terminals demanding payment
of purported obligations that Centurion Pecos never, in fact, agreed to assume.
C. Stampede’s Violations of the Company Agreement
31. Section 10 of the First Amended and Restated Company Agreement of Centurion
Pecos Terminal LLC (“Company Agreement”) sets forth the conditions under which a member
may transfer its membership interest. Section 10.4 states that a transfer shall not be permitted
unless:
[t]he transferor and transferee have delivered to the Company any
documents that the Board of Managers request to confirm that the
transfer satisfies the requirements of this Agreement to give effect
to the transfer, and to confirm the transferee’s agreement to be
bound by this Agreement as Assignee.
32. Pursuant to Section 10.1(a) of the Company Agreement, “transfer” includes “a
transfer by merger or other business combination.” Stampede’s predecessor, Stampede Energy,
LLC, a Louisiana limited liability company (“Stampede Louisiana”) was a member of Centurion
Pecos at the time that the Company Agreement was adopted. On January 20, 2016, Stampede
Louisiana was converted to Stampede. Stampede then engaged in mergers with Stampede
Energy, LLC, a Delaware limited liability company on March 2, 2016, and with Centurion
Brownsville Terminal, LLC, a Texas limited liability company, on February 4, 2016.
33. On April 30, 2016 and again on May 4, 2016, Centurion Logistics expressly
requested that Stampede and Centurion Brownsville Terminal, LLC provide the information
required by Section 10.4 of the Company Agreement. Stampede and Centurion Brownsville
Terminal, LLC failed and refused to provide the information required by the Company
Agreement.
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D. Centurion Pecos Votes to Expel Stampede as Member and Manager
34. In order to address Stampede’s violations of the Company Agreement, Centurion
Logistics, on behalf of Centurion Pecos, on May 31, 2016, called a meeting of managers and
members of Centurion Pecos, which was held on June 13, 2016. At the meeting, Centurion
Logistics moved to remove Stampede as a member of Centurion Pecos based on Stampede’s
prohibited transfer of its membership interest. Because the motion involved removing Stampede
as a member, Stampede was an interested manager and not eligible to vote. Centurion Logistics,
the only manager eligible to vote on the motion, voted to remove Stampede as a member.
35. Subsequently, a meeting of the members of Centurion Pecos met to determine
whether Stampede should be removed as a manager because it had transferred its membership
interest in a prohibited transfer and engaged in other wrongful conduct that materially affected
the business of Centurion Pecos and its members, and had also engaged in conduct that had made
it not reasonably practicable to carry on the company business with Stampede. Centurion
Logistics, the only remaining member, voted to remove Stampede as a manager of Centurion
Pecos.
V.
CAUSES OF ACTION
A. First Cause of Action: Breach of Fiduciary Duty as to Calce
36. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
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37. As a manager of Centurion Logistics, Calce had a duty of loyalty to the company.
The duty of loyalty requires Calce to act in good faith and not allow personal interests to take
precedence over the interests of Centurion Logistics.
38. Calce also had a duty to disclose all important information concerning any
transaction, including any matters that might influence them to act in a manner prejudicial to
Centurion Logistics.
39. In violation of his fiduciary duties, Calce colluded with Stampede, Ballengee and
Ballengee Interests to engage in a series of fraudulent transactions which were contrary to the
interests of Centurion Pecos and Centurion Logistics. This pattern of misconduct is intended to
further Defendants’ plan, namely, to remove the Reeves County Property from Centurion Pecos
for use in their competing development, and to deprive Centurion Logistics of its share of any
profits from the terminal project. The entire scheme is an egregious breach of Calce’s duty of
loyalty and full disclosure.
40. By secretly encumbering Centurion Pecos’ assets, Calce has damaged the ability
of Centurion Logistics to conduct business and impaired the value of those assets.
41. Calce’s breaches of fiduciary duty proximately caused Centurion Logistics to
suffered damage and Calce has obtained benefits, which Calce should be required to forfeit. The
benefits Calce should be required to forfeit also include any remuneration he has received from
Centurion Midstream.
42. Calce’s breaches of fiduciary duty were intentional and, accordingly, Centurion
Logistics seeks, and should recover, exemplary damages against Calce.
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B. Second Cause of Action: Breach of Fiduciary Duty as to Stampede
43. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
44, As a manager of Centurion Pecos, Stampede owed Centurion Pecos a duty of
loyalty. Further, Stampede owed Centurion Pecos a duty of candor, including a duty to disclose
information concerning its role in any transaction that would prejudice the interests of Centurion
Pecos.
45. Stampede violated its fiduciary duty by covertly engaging in a pattern of
transactions designed to deprive Centurion Pecos of the Reeves County Property, as well as
Centurion Pecos’ interest in the terminal project.
46. By secretly encumbering Centurion Pecos’ assets, Stampede has damaged the
ability of Centurion Pecos to conduct business and has impaired the value of those assets.
47. Stampede’s breaches of fiduciary duty have proximately caused Centurion Pecos
to suffer damage and Stampede has obtained benefits which Stampede should be required to
forfeit.
48. Stampede’s breaches of fiduciary duty were intentional and, accordingly,
Centurion Pecos seeks, and should recover, exemplary damages against Stampede.
C. Third Cause of Action: Aiding and Abetting Breach of Fiduciary Duty
49. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
50. Centurion Midstream and Centurion Terminals assisted with, encouraged and
participated in breaches of fiduciary duty by Calce and Stampede. As set forth above, Calce and
Stampede had fiduciary duties of loyalty to Centurion Logistics and to Centurion Pecos and
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fiduciary duties to disclose any transactions that would be prejudicial to the chief objectives of
Centurion Logistics and Centurion Pecos.
51. Centurion Logistics and Centurion Pecos were created chiefly to purchase the
Reeves County Property and to develop a railway terminal in order to transport petroleum and
petroleum products. Rather than pursue these objectives with loyalty fiduciaries owe, Calce
assisted in the creation of Centurion Midstream to thwart the efforts of Centurion Logistics and
Centurion Pecos and to compete with these companies. Based on the content of the Centurion
Midstream website, Centurion Midstream is covertly assisting Calce in his plan to take over the
Reeves County Property, and to build the railway terminal for his own benefit and for the benefit
of Centurion Midstream.
52. Based on its affiliation with Calce, Centurion Terminals was aware that Calce was
not authorized to undertake any obligation to Centurion Terminals on behalf of Centurion Pecos.
Nonetheless, Centurion Terminals entered into the note and has threatened to enforce it.
53. The breaches of fiduciary duty of Calce and Stampede, committed with the
assistance of Centurion Midstream and Centurion Terminals, proximately caused Plaintiff to
suffer actual damages in an amount exceeding the minimum jurisdiction of the Court.
54. As Centurion Midstream’s and Centurion Terminals’ participation in the breaches
of fiduciary duty were intentional and exemplary damages are recoverable for the breaches of
fiduciary duty, Plaintiff prays for exemplary damages against Centurion Midstream and
Centurion Terminals.
D. Fourth Cause of Action: Money Had and Received (Unjust Enrichment)
55. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
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56. A claim for money had and received arises when the defendant obtains money or
a benefit that in equity and good conscience belongs to the plaintiff. It is an equitable doctrine
applied to prevent unjust enrichment. A cause of action for money had and received is not based
on wrongdoing but, instead, looks only to the justice of the case and inquires whether the
defendant has received money that rightfully belongs to another. A claim for money had and
received is based upon the doctrine of unjust enrichment.
57. Further, where a defendant obtains a benefit from the plaintiff by fraud, duress, or
taking undue advantage, the plaintiff may recover money or property under the theory of unjust
enrichment.
58. Ballengee and Ballengee Interests colluded with Calce to encumber property of
Centurion Pecos to secure debts of Ballengee Interests, including the notes to purchase the
Reeves County Property and the $750,000 line of credit.
59. Ballengee and Ballengee Interests have, therefore, been unjustly enriched by
pledges of property to secure Ballengee Interests’ debt, including the $750,000 line of credit, and
unauthorized assumption of the Ballengee Interests’ obligations to TCB. Indeed, pursuant to the
cross-collateralization clauses, the deeds of trust pledged the Reeves County Property to secure
all Ballengee Interests’ debts to TCB, not merely those related to Centurion Pecos. Defendants
Ballengee and Ballengee Interests should be required to disgorge and to turn over to Centurion
Pecos any benefits obtained through these transactions.
60. By information and belief, Calce has received a salary and other benefits from
Centurion Midstream, in exchange for effectuating his and Ballengee’s plan, namely, to
fraudulently obtain ownership of the Reeves County Property. This remuneration constitutes
unjust enrichment.
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61. Centurion Midstream has developed, or plans to develop, a railway terminal in
competition with the terminal planned by Centurion Pecos. In so doing, Centurion Midstream,
through its aiding and abetting of breaches of fiduciary duty, has obtained, or will obtain in the
future, money that rightfully belongs to Centurion Pecos. These funds should be disgorged and
transferred to Centurion Pecos.
62. Centurion Midstream has been—and will be—unjustly enriched by its
interference with Plaintiff’s efforts to secure the Reeves County Property and develop the Pecos
terminal.
63. In obtaining these benefits, Defendants have acted with fraud and malice.
Accordingly, Plaintiff prays that these Defendants be found liable for exemplary damages.
E. Fourth Cause of Action: Fraudulent Concealment
64. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
65. Ballengee and Ballengee Interests represented to Centurion Pecos that it would
make a capital contribution by purchasing the Reeves County Property on behalf of Centurion
Pecos. At the 11th hour, Ballengee and Ballengee Interests demanded that Centurion Pecos agree
to deeds of trust on the Reeves County Property. Ballengee and Ballengee Interests did not
disclose that the purpose of this demand was to eventually force a foreclosure on the Reeves
County Property in order to cut off Centurion Pecos’ interest in the terminal project.
66. Centurion Pecos justifiably relied on Ballengee’s and Ballengee Interests’
professions that their purpose was to invest in, and to promote, the Centurion Pecos terminal
project.
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67. Ballengee’s and Ballengee Interests’ failure to disclose their true intentions has
injured Centurion Logistics and Centurion Pecos, in that Defendants are now attempting to use
the TCB deeds of trust, as well as false and unauthorized documents, to complete their scheme to
obtain the Reeves County Property for the competing entity, Centurion Midstream.
68. The wrongful fraudulent acts and omissions have proximately caused Centurion
Logistics and Centurion Pecos to suffer damages. Because Defendants’ wrongful fraudulent acts
and omissions were conducted with intent, Plaintiff seeks both actual and exemplary damages.
F. Fifth Cause of Action: Aiding and Abetting Fraudulent Concealment
69. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
70. Defendants Calce and Stampede provided knowing and intentional assistance to
the fraud committed by Ballengee and Ballengee Interests. Calce and Stampede were aware of
the fraudulent scheme and Stampede allowed itself to be used as a conduit through which
Ballengee Interests made its payments for the Reeves County Property. As fiduciaries, Calce
and Stampede had a heightened duty to disclose Ballengee’s true intent, but they remained silent.
Indeed, they actively furthered the scheme through their participation in the creation of false and
unauthorized transactions and the creation of fraudulent documents.
71. Calce’s and Stampede’s assistance and encouragement constituted a substantial
factor in causing the fraud. Without their participation, it is unlikely that Ballengee and
Ballengee Interests could have attempted the scheme, given the limitations imposed on
Ballengee by the non-compete agreement. Moreover, these Defendants, through a series of
threatening communications, continue to push the fraudulent plan.
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72. Calce’s and Stampede’s participation in the fraudulent scheme has proximately
caused Centurion Logistics and Centurion Pecos to suffer damages. Because these Defendants’
participation in the wrongful fraudulent scheme was conducted with knowledge and intent,
Plaintiff seeks both actual and exemplary damages.
G. Sixth Cause of Action: Declaratory Judgment
73. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
74. A justiciable controversy exists between Centurion Pecos and Stampede regarding
the status, rights, obligations and legal relations between Centurion Pecos and Stampede in
connection with the Company Agreement. The justiciable controversy concerns the right of
members and managers of Centurion Pecos to expel Stampede as a member and manager.
75. Pursuant to the terms of the Company Agreement, transfer of membership
interests is prohibited unless certain conditions were met. Among the conditions is the
obligation of the transferor and transferee to provide information to assure that the transfer
comported with the Company Agreement and the transferee agreed to be bound by the Company
Agreement. Transfer of a membership interest includes any transfer by merger or business
combination.
76. Stampede or its predecessor transferred of its membership interest within the
definitions of the Company Agreement through one or more of three business transactions. First,
Stampede Energy, LLC, a Louisiana limited liability company, converted to Stampede. Second,
Stampede merged with Stampede Energy, LLC, a Delaware limited liability company. Third,
Stampede divided into two entities, Stampede and Centurion Brownsville Terminal, LLC, a
Texas limited liability company.
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77. Subsequently, both the transferor and transferee companies expressly refused to
provide information about the transactions, as required by the Company Agreement, for any
transfer of a membership interest to be permitted. Centurion Pecos duly called a meeting of the
managers and members of Centurion Pecos in order to discuss Stampede’s violations and its
removal as a member and manager.
78. At the June 13, 2016 meeting, Centurion Logistics, as manager of Centurion
Pecos, voted to remove Stampede as a member of Centurion Pecos. As the party whose removal
was at issue, Stampede was an interested manager excluded from voting. Accordingly,
Stampede was removed as a member of Centurion Pecos.
79. Following the June 13, 2016 managers meeting, a meeting of members was held
to determine whether Stampede should be removed as a manager of Centurion Pecos for cause.
Centurion Logistics, the only remaining member, voted to expel Stampede, based on its
prohibited transfer of membership interest, as well as its other misconduct, as set forth in this
Petition.
80. In accordance with Tex. Civ. Prac. & Rem. Code § 37.001, et seq., Plaintiff seeks
a declaratory judgment against Defendant Stampede, wherein the Court declares that following:
(a) The June 13, 2016 meeting was a valid meeting under the Company
Agreement;
(b) The removal of Stampede as a member of Centurion Pecos was a valid,
binding and enforceable action of the managers of Centurion Pecos;
(c) The removal of Stampede as a manager of Centurion Pecos was a valid,
binding and enforceable action of the members of Centurion Pecos.
81. In addition, there is a real and justiciable controversy between Centurion Pecos,
on the one hand, and Ballengee, Ballengee Interests, and Centurion Terminals, on the other hand,
concerning the enforceability of certain financial obligations that Defendants purport were
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entered into on behalf of Centurion Pecos. As set forth above, Calce, without authority to act for
Centurion Pecos, and in violation of his fiduciary duties, created documents purporting to
obligate Centurion Pecos to pay the notes that Ballengee Interests entered into with TCB and to
make other payments to Ballengee Interests. Similarly, Calce, again without the authority to act
for Centurion Pecos, and in violation of his fiduciary duties, apparently created a promissory
note in favor of Centurion Terminals, purportedly obligating Centurion Pecos to make certain
payments to Centurion Terminals.
82. In accordance with Tex. Civ. Prac. & Rem. Code § 37.001, et seq., Plaintiff seeks
a declaratory judgment against Defendants Ballengee, Ballengee Interests, and Centurion
Terminals, wherein the Court declares the following:
(a) Any assumption agreement purported to exist between Ballengee
Interests and Centurion Pecos is invalid, void and unenforceable;
(b) Any agreement that purports to create an obligation of Centurion Pecos to
Ballengee Interests is invalid, void and unenforceable;
(c) Any promissory note or other documents purported to create obligations
between Centurion Pecos to Centurion Terminals is invalid, void and
unenforceable.
83. In addition and cumulative of other relief sought herein, Plaintiff is entitled to
declaratory judgment concerning the status of Stampede under the Company Agreement and the
enforceability of certain financial obligations that Calce, without authority, and in violation of
his fiduciary duties, purported to create on behalf of Centurion Pecos.
VI.
ATTORNEYS’ FEES AND COSTS
84. Plaintiff hereby restates and incorporates by reference the allegations contained in
the foregoing paragraphs as if fully set forth herein.
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85. As a result of Defendants’ actions, Plaintiff was forced to retain the legal counsel
of Shamoun & Norman, LLP (“S&N”) to bring this lawsuit. Plaintiff retained the services of
S&N to prosecute these claims and agreed to pay S&N its usual, customary and reasonable
attorneys’ fees. Such action and payment is necessary for the enforcement of Plaintiff’s rights.
86. Plaintiff seeks the recovery of attorneys’ fees and costs that it incurs in
prosecuting the above-stated claims pursuant to Chapter 37 of the Texas Civil Practice and
Remedies Code, or any other applicable law.
VII.
CONDITIONS PRECEDENT
87. All conditions precedent to Plaintiff’s right to obtain the relief requested herein
have been performed or have occurred.
VIII.
PRAYER
WHEREFORE, Plaintiff Centurion Logistics LLC, individually and on behalf of
Centurion Pecos Terminal LLC, respectfully requests that upon final trial of this cause the Court
enter judgment against James Ballengee, Ballengee Interests, LLC, John Calce, Stampede TX
Energy, LLC, Centurion Midstream Group, LLC and Centurion Terminals, LLC as follows:
A. Against all Defendants and in favor of Plaintiff for the amount of actual damages
sustained by Plaintiff;
B. Against all Defendants and in favor of Plaintiff for the disgorgement of unjust
enrichment and money had and received;
C. Entering a declaratory judgment concerning the status of Stampede under the
Company Agreement and the enforceability of certain financial obligations that Calce, without
PLAINTIFF’S ORIGINAL PETITION Page 22 of 23
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authority, and in violation of his fiduciary duties, purported to enter into on behalf of Centurion
Pecos;
D. Awarding to Plaintiff the costs and disbursements of the action, including
reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses; and
E. Granting such other and further relief as the Court deems just and proper, at law
or in equity.
Respectfully Submitted,
/s/ C. Gregory Shamoun
C. GREGORY SHAMOUN
State Bar No. 18089650
J. BLAIR NORRIS
State Bar No. 24014515
SHAMOUN & NORMAN, LLP
1755 Wittington Place, Suite 200
Dallas, Texas 75234
Phone: (214) 987-1745
Fax: (214) 521-9033
Email: g@snlegal.com
Email: bn@snlegal.com
ATTORNEYS FOR PLAINTIFF
PLAINTIFF’S ORIGINAL PETITION Page 23 of 23
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FILED
DALLAS COUNTY
7/31/2017 5:52 PM
FELICIA PITRE
DISTRICT CLERK
Angie Avina
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
DEFENDANT/COUNTER-PLAINTIFF JOHN CALCE’S ORIGINAL
COUNTERCLAIM AGAINST CENTURION LOGISTICS LLC AND
CENTURION PECOS TERMINAL LLC
John Calce (“Counter-Plaintiff” or “Calce”) files his Original Counterclaim complaining
of Centurion Logistics LLC (“Centurion Logistics”) and Centurion Pecos Terminal LLC
(“Centurion Pecos”) (collectively, “Counter-Defendants”) and, in support thereof, would
respectfully show the Court as follows:
I.
DISCOVERY LEVEL
1. Discovery in this matter is to be conducted under Texas Rule of Civil Procedure
190.4 (Level 3).
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II.
MONETARY RELIEF
2. Calce seeks both monetary and non-monetary relief. The monetary relief sought
by Calce is, at this time, $100,000 or less. But the monetary relief sought by Calce continues to
increase as he is required to incur additional expenses in defending himself against the claims
brought against him in this lawsuit.
III.
PARTIES
3. Plaintiff Calce is an individual residing in Collin County, Texas.
4. Counter-Defendant Centurion Logistics is a limited liability company organized
under the laws of the State of Texas with its principal place of business in Dallas, Dallas County,
Texas. Centurion Logistics has made an appearance in this matter.
5. Counter-Defendant Centurion Pecos is a limited liability company organized
under the laws of the State of Texas with its principal place of business in Dallas, Dallas County,
Texas. Centurion Pecos has made an appearance in this matter through Centurion Logistics
bringing claims against Calce and the other Defendants derivatively on behalf of Centurion
Pecos.
IV.
JURISDICTION AND VENUE
6. This Court has jurisdiction over this matter because the amount in controversy
exceeds the minimum jurisdictional limits of this Court.
7. Calce asserts that Dallas County is not a proper venue for this lawsuit pursuant to
Section 15.011 of the Texas Civil Practice and Remedies Code. The bases for such assertion are
set forth in Calce’s Motion to Transfer Venue. The Motion to Transfer Venue has been denied
and is an interlocutory order.
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V.
FACTUAL BACKGROUND
8. On June 27, 2016, Centurion Logistics, individually and derivatively on behalf of
Centurion Pecos, filed its Original Petition complaining of Calce and the other Defendants.
Centurion Logistics has brought claims against Calce for (1) breach of fiduciary duty; (2) unjust
enrichment; and (3) aiding and abetting fraudulent concealment.
9. Plaintiff generally claims that Calce and the other Defendants carried out a
scheme that resulted in Centurion Pecos and Centurion Logistics losing their interest in the
Reeves County Property, thereby allegedly depriving such entities of the opportunity to construct
a railway terminal for the shipping of crude oil on the Reeves County Property. 1 Among other
things, Plaintiff alleges that Calce breached the fiduciary duties that he allegedly owed Centurion
Logistics as a manager of the company. See Pl.’s Orig. Pet. ¶¶ 36 – 42. Plaintiff further claims
that Calce took various allegedly unauthorized acts on behalf of Centurion Pecos. See id. ¶ 24.
10. On September 20, 2016, Calce filed his Motion to Transfer Venue and Brief in
Support Thereof and, Subject Thereto, Original Answer. Since the time of filing his Original
Answer, Calce has incurred significant expenses in defending against the claims that have been
brought against him in the lawsuit.
CALCE’S RIGHT TO INDEMNIFICATION FROM CENTURION LOGISTICS
11. Calce is a manager of Centurion Logistics. Section 1.1 of the Company
Agreement of Centurion Logistics (the “Logistics 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
1
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.
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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 Section 1.1 of the Logistics Agreement (emphasis added). A true and correct copy of the
Logistics Agreement is attached hereto as Exhibit A.
12. Section 6.2 of the Logistics Agreement is entitled “Indemnification by Company”
and provides as follows:
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 § 6.2 (emphasis added).
13. Under the terms of the Logistics Agreement, Centurion Logistics is required to
reimburse Calce for any and all expenses paid or incurred by Calce in defending himself in this
lawsuit—as such expenses are paid or incurred. If it is ultimately determined that Calce is not
entitled to indemnification, the Logistics Agreement expressly provides Centurion Logistics with
an appropriate remedy. See Ex. A § 6.3(c) (providing that “[a]ny 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 [Centurion Logistics].”).
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14. 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
this lawsuit.
CALCE’S RIGHT TO INDEMNIFICATION FROM CENTURION PECOS
15. When Centurion Pecos was initially formed, Calce was the sole manager of the
company. See the Company Agreement of Centurion Pecos (the “Pecos Original Agreement”),
which is dated effective September 12, 2014, a true and correct copy of which is attached hereto
as Exhibit B. Calce was also appointed as the president of Centurion Pecos. Such appointment
was effective as of September 11, 2014.
16. In November 2014, the First Amended and Restated Company Agreement of
Centurion Pecos (the “Pecos Amended Agreement”) was executed. A true and correct copy of
the Pecos Amended Agreement is attached hereto as Exhibit C. The First Amended and Restated
Company Agreement removed Calce as a manager of Centurion Pecos, but Calce remained the
duly appointed president of the company.
17. Section 1.1 of both the Pecos Original Agreement and the Pecos Amended
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 [Centurion Pecos], 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, provided such person had the status required to be an Indemnified Person at
the time of the relevant actions referenced in the Proceeding.
See Ex. B § 1.1 (emphasis added); see also Ex. C § 1.1 (emphasis added).
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18. Moreover, Section 6.2 of both the Pecos Original Agreement and the Pecos
Amended Agreement is entitled “Indemnification by Company” and provides as follows:
To the fullest extent permitted by applicable law and subject to Section 6.3,
[Centurion Pecos] indemnifies and holds harmless each Indemnified Person from
and against any Damages arising from any Proceeding relating to the conduct of
[Centurion Pecos’] business or to any act or omission by such Indemnified
Person, including any act or omission constituting negligence, within the scope of
the Indemnified Person’s authority in the course of [Centurion Pecos’] business or
for any misconduct or negligence on the part of any other person that is an
employee or agent of [Centurion Pecos]. 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, vote of Members, or otherwise.
See Ex. B § 6.2 (emphasis added); see also Ex. C § 6.2 (emphasis added).
19. Like the Logistics Agreement, the terms of the Pecos Original Agreement and the
Pecos Amended Agreement require Centurion Pecos to reimburse Calce for any and all expenses
paid or incurred by Calce in defending himself in this lawsuit, as such expenses are paid or
incurred. Furthermore, also like the Logistics Agreement, both the Pecos Original Agreement
and the Pecos Amended Agreement provide Centurion Pecos with an adequate remedy if it is
ultimately determined that Calce is not entitled to indemnification. See Exs. B and C § 6.3(c)
(providing that “[a]ny 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 [Centurion Pecos].”).
20. To date, Centurion Pecos has not reimbursed Calce any amount for the expenses
that he has paid and incurred in defending himself against the claims brought against him in this
lawsuit.
21. The Pecos Amended Agreement identifies Centurion Logistics and Defendant
Stampede TX Energy, LLC (“Stampede”) as the only members of Centurion Pecos. Pursuant to
the Pecos Amended Agreement, Stampede is the majority-in-interest member holding a 60%
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membership interest in Centurion Pecos, and Centurion Logistics holds the remaining 40%
membership interest.
22. Stampede—on behalf of Centurion Pecos—has already agreed that Centurion
Pecos will reimburse Calce for the amount of expenses that he has paid or incurred (or will pay
and incur) in defending himself against the claims brought against him in this lawsuit that relate
to either (i) the business of Centurion Pecos and/or (ii) any alleged acts or omissions that were
purportedly taken or made by Calce in his capacity as a manager of Centurion Pecos. But
Centurion Logistics claims that Stampede was removed as a manager of Centurion Pecos on June
13, 2016. Stampede disputes the propriety of the alleged removal and does not recognize same.
Accordingly, Calce’s claim for contractual indemnification and funding of defense costs against
Centurion Pecos is significantly intertwined with and dependent upon the outcome of the
competing declaratory judgment claims of Stampede and Centurion Logistics regarding which
entity has control of Centurion Pecos.
VI.
CAUSES OF ACTION
COUNT 1: DECLARATORY JUDGMENT
23. Calce restates and incorporates the allegations contained in the preceding
paragraphs.
24. As shown by the facts set forth above, Calce is entitled to indemnification from
Centurion Logistics and Centurion Pecos pursuant to the terms of such entities’ own company
agreements. Calce is further entitled to reimbursement of the expenses he has paid and incurred
(and those that he will pay and incur in the future), as such expenses are paid and incurred, in
defending himself against the claims brought against him in this lawsuit.
25. Calce therefore seeks a judicial determination that:
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(a) Centurion Logistics is required to reimburse Calce the amount of expenses that he
has paid or incurred to date in defending himself against the claims brought
against him in this lawsuit that relate to either (i) the business of Centurion
Logistics and/or (ii) any alleged acts or omissions that were purportedly taken or
made by Calce in his capacity as a manager of Centurion Logistics;
(b) Centurion Logistics is required to reimburse Calce the amount of expenses that he
pays or incurs in the future in defending himself against the claims brought
against him in this lawsuit that relate to either (i) the business of Centurion
Logistics and/or (ii) any alleged acts or omissions that were purportedly taken or
made by Calce in his capacity as a manager of Centurion Logistics;
(c) In the unlikely event that any liability be found on the part of Calce, Centurion
Logistics is required to indemnify Calce and hold him harmless from any
damages that relate to either (i) the business of Centurion Logistics and/or (ii) any
alleged acts or omissions that were purportedly taken or made by Calce in his
capacity as a manager of Centurion Logistics (not including any damages arising
from any conduct set forth in Section 6.3(a)(i)-(iv) of the Logistics Agreement);
(d) Centurion Pecos is required to reimburse Calce the amount of expenses that he
has paid or incurred to date in defending himself against the claims brought
against him in this lawsuit that relate to either (i) the business of Centurion Pecos
and/or (ii) any alleged acts or omissions that were purportedly taken or made by
Calce in his capacity as a manager of Centurion Pecos;
(e) Centurion Pecos is required to reimburse Calce the amount of expenses that he
pays or incurs in the future in defending himself against the claims brought
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against him in this lawsuit that relate to either (i) the business of Centurion Pecos
and/or (ii) any alleged acts or omissions that were purportedly taken or made by
Calce in his capacity as a manager of Centurion Pecos; and
(f) In the unlikely event that any liability be found on the part of Calce, Centurion
Pecos is required to indemnify Calce and hold him harmless from any damages
that relate to either (i) the business of Centurion Pecos and/or (ii) any alleged acts
or omissions that were purportedly taken or made by Calce in his capacity as a
manager of Centurion Pecos (not including any damages arising from any conduct
set forth in Section 6.3(a)(i)-(iv) of the Pecos Original Agreement and Pecos
Amended Agreement).
COUNT 2: BREACH OF CONTRACT (CENTURION LOGISTICS)
26. Calce restates and incorporates the allegations contained in the preceding
paragraphs.
27. The Logistics Agreement constitutes a valid and enforceable contract. Centurion
Logistics breached the Logistics Agreement by failing to reimburse Calce the amount of
expenses he has paid and incurred in defending himself against the claims brought against him in
this lawsuit that relate to either (1) the business of Centurion Logistics and/or (2) any alleged acts
or omissions that were purportedly taken or made by Calce in his capacity as a manager of
Centurion Logistics. Calce performed, tendered performance of, or was excused from
performing any of his obligations under the Logistics Agreement.
28. As a result of Centurion Logistics’ breach, Calce has suffered actual damages.
Calce is entitled to recover such damages from Centurion Logistics.
DEFENDANT/COUNTER-PLAINTIFF JOHN CALCE’S ORIGINAL COUNTERCLAIM
AGAINST CENTURION LOGISTICS LLC AND CENTURION PECOS TERMINAL LLC PAGE 9
9190395.1/SP/38371/0105/073117
MR.032
COUNT 3: BREACH OF CONTRACT (CENTURION PECOS)
29. Calce restates and incorporates the allegations contained in the preceding
paragraphs.
30. The Pecos Original Agreement and the Pecos Amended Agreement constitute
valid and enforceable contracts. Centurion Pecos breached the Pecos Original Agreement and
the Pecos Amended Agreement by failing to reimburse Calce the amount of expenses he has paid
and incurred in defending himself against the claims brought against him in this lawsuit that
relate to either (1) the business of Centurion Pecos and/or (2) any alleged acts or omissions that
were purportedly taken or made by Calce in his capacity as a manager of Centurion Pecos or as
the president of Centurion Pecos. Calce performed, tendered performance of, or was excused
from performing any of his obligations under the Pecos Original Agreement and the Pecos
Amended Agreement.
31. As a result of Centurion Pecos’ breach, Calce has suffered actual damages. Calce
is entitled to recover such damages from Centurion Pecos.
VII.
ATTORNEYS’ FEES
32. Calce restates and incorporates the allegations contained in the preceding
paragraphs.
33. Pursuant to Section 37.009 of the Texas Civil Practice and Remedies Code, Calce
seeks an award of his reasonable and necessary attorneys’ fees and costs incurred in prosecuting
his declaratory judgment claim and for any appeal.
34. Calce is further entitled to and hereby requests judgment for his reasonable and
necessary attorneys’ fees incurred in bringing this counterclaim and for any appeal pursuant to
Section 38.001 of the Texas Civil Practice and Remedies Code. Calce either has or will present
DEFENDANT/COUNTER-PLAINTIFF JOHN CALCE’S ORIGINAL COUNTERCLAIM
AGAINST CENTURION LOGISTICS LLC AND CENTURION PECOS TERMINAL LLC PAGE 10
9190395.1/SP/38371/0105/073117
MR.033
his claim to Plaintiff or to a duly authorized agent of Plaintiff in accordance with Section 38.002
of the Texas Civil Practice and Remedies Code.
VIII.
CONDITIONS PRECEDENT
35. All conditions precedent to maintaining this action have occurred and been
satisfied or have been excused or waived.
IX.
PRAYER
Counter-Plaintiff John Calce requests that, upon final hearing, Calce have judgment
against Counter-Defendants Centurion Logistics LLC and Centurion Pecos Terminal LLC as
follows:
1. A declaration that Centurion Logistics is required to reimburse Calce the amount
of expenses that he has paid or incurred to date in defending himself against the
claims brought against him in this lawsuit that relate to either (i) the business of
Centurion Logistics and/or (ii) any alleged acts or omissions that were
purportedly taken or made by Calce in his capacity as a manager of Centurion
Logistics;
2. A declaration that Centurion Logistics is required to reimburse Calce the amount
of expenses that he pays or incurs in the future in defending himself against the
claims brought against him in this lawsuit that relate to either (i) the business of
Centurion Logistics and/or (ii) any alleged acts or omissions that were
purportedly taken or made by Calce in his capacity as a manager of Centurion
Logistics;
3. A declaration that, in the unlikely event that any liability be found on the part of
Calce, Centurion Logistics is required to indemnify Calce and hold him harmless
from any damages that relate to either (i) the business of Centurion Logistics
and/or (ii) any alleged acts or omissions that were purportedly taken or made by
Calce in his capacity as a manager of Centurion Logistics (not including any
damages arising from any conduct set forth in Section 6.3(a)(i)-(iv) of the
Logistics Agreement);
4. A declaration that Centurion Pecos is required to reimburse Calce the amount of
expenses that he has paid or incurred to date in defending himself against the
claims brought against him in this lawsuit that relate to either (i) the business of
DEFENDANT/COUNTER-PLAINTIFF JOHN CALCE’S ORIGINAL COUNTERCLAIM
AGAINST CENTURION LOGISTICS LLC AND CENTURION PECOS TERMINAL LLC PAGE 11
9190395.1/SP/38371/0105/073117
MR.034
Centurion Pecos and/or (ii) any alleged acts or omissions that were purportedly
taken or made by Calce in his capacity as a manager of Centurion Pecos;
5. A declaration that Centurion Pecos is required to reimburse Calce the amount of
expenses that he pays or incurs in the future in defending himself against the
claims brought against him in this lawsuit that relate to either (i) the business of
Centurion Pecos and/or (ii) any alleged acts or omissions that were purportedly
taken or made by Calce in his capacity as a manager of Centurion Pecos;
6. A declaration that, in the unlikely event that any liability be found on the part of
Calce, Centurion Pecos is required to indemnify Calce and hold him harmless
from any damages that relate to either (i) the business of Centurion Pecos and/or
(ii) any alleged acts or omissions that were purportedly taken or made by Calce in
his capacity as a manager of Centurion Pecos (not including any damages arising
from any conduct set forth in Section 6.3(a)(i)-(iv) of the Pecos Original
Agreement and Pecos Amended Agreement);
7. Judgment against Centurion Logistics for the amount of expenses, including
attorneys’ fees, paid or incurred by Calce in defending himself against the claims
brought against him in this lawsuit that relate to either (i) the business of
Centurion Logistics and/or (ii) any alleged acts or omissions that were
purportedly taken or made by Calce in his capacity as a manager of Centurion
Logistics;
8. Judgment against Centurion Pecos for the amount of expenses, including
attorneys’ fees, paid or incurred by Calce in defending himself against the claims
brought against him in this lawsuit that relate to either (i) the business of
Centurion Pecos and/or (ii) any alleged acts or omissions that were purportedly
taken or made by Calce in his capacity as a manager of Centurion Pecos;
9. Judgment against Counter-Defendants for Calce’s reasonable and necessary
attorneys’ fees incurred in pursuing this counterclaim;
10. Judgment against Counter-Defendants for pre- and post-judgment interest as
provided by law;
11. Judgment against Counter-Defendants for Calce’s costs of suit; and
12. Such other and further relief to which Calce may be justly entitled.
DEFENDANT/COUNTER-PLAINTIFF JOHN CALCE’S ORIGINAL COUNTERCLAIM
AGAINST CENTURION LOGISTICS LLC AND CENTURION PECOS TERMINAL LLC PAGE 12
9190395.1/SP/38371/0105/073117
MR.035
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 DEFENDANTS
JOHN CALCE, CENTURION MIDSTREAM
GROUP, LLC, CENTURION TERMINALS,
LLC, AND STAMPEDE TX ENERGY, LLC
CERTIFICATE OF SERVICE
The undersigned counsel certifies that on the 31st day of July, 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
DEFENDANT/COUNTER-PLAINTIFF JOHN CALCE’S ORIGINAL COUNTERCLAIM
AGAINST CENTURION LOGISTICS LLC AND CENTURION PECOS TERMINAL LLC PAGE 13
9190395.1/SP/38371/0105/073117
MR.036
EXHIBIT A
MR.037
COMPANY AGRF:F:MF:NT
OF
Centurion Logistics LLC
a Texas Limited Liability Com pan~'
Effoctivc September· 16, 2013
THE MEMBERSHIP INTERESTS REPRESENTED BY THIS AGREEl\ilENT HAVE
NOT BEEN REGISTERED UNDER ANY SECURITrns LA ws AND MAy NOT HE
SOLD, PLEDGED OR OTHERWISF: TRANSFERRF.D ABSENT SUCH
l~EGISTl~ATION OR AN EXEMPTION THEREFROM. THE TRANSFER OF
rvmMBERSIIIP INTERESTS IS FORTHER RESTRICTED B\' ARTICLI~'. x OF THIS
AGREl<:MENT.
CALCE01478
MR.038
T AHLE OF CONTENTS
Page
AH.TIC~ LE l DEFINITIONS ........................................................................................................ t
1. l. Delined Tcnns ......................................................................................................... l
1.1. Usage ..................................................................... .................................................. 4
ARTICLE fl ORGANIZATIONAL MATTERS ...................................................................... 5
2.1. Fonnation ................................................................................................................ 5
2.2. Naine ....................................................................................................................... 5
2.3. Registered Office and Agent; Principal Office ....................................................... 5
2.4. Tenn ........................................................................................................................ 5
2.5. Purposes .............................................................. ...... ........................... .................... 5
2.6. Po\vers ..................................................................................................................... 5
2.7. Co1npany Properly ................................................................................................... 5
2.8. Initial l'vlc111bers ............................. .......................................................................... 6
2.9 Options to Acquire Additional Uni1s ....................................................................... 6
2.10 Consent of lvfanagers ............................................................................................... 6
2. l 1. Status of Managers and Members .......................................................................... 6
2.12. Unit Certificates .......................................................................... ,........................... 6
2. l J. No State Law Partnership ........................................................................................ 6
ARTICLE III CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS .............................. 6
J . l. Initial Capital Contributions .................................................................................... 6
3.2. Additional Capital Contributions ............................................................................ 6
3J . Capital Accounts ............................................................................................... ...... 7
3.4. No Right to Return of or Interest on Capit~tl Account ........................................, ... 7
3.5 . Me1nbcr Loans ............................... .................................................................. .. ...... 7
3.6. i\1e1nber Notes ......................................................................... ................................ 7
ARTICLE IV ALLOCATIONS AND DISTRIBUTIONS ....................................................... 8
4.1. Allocation of Profit ()r Loss ..................................................................................... 8
4.2. or
Disnibutions Distributable Cash ......................................................................... 8
4.3. \Vithholding ............................................................................................................. 8
4.4 . Limitation on Distributions ..................................................................................... 8
45. No Right to Partition or Distributions in Kind ........................................................ 9
ARTl(~LF. V l\ilANAGEiVIENT............................................................................................... ~ ... 9
5. I . Management and Control of Company Business .................................................... 9
5.2. Delegation of Authority ......................................................................................... I 0
5.3. Limitations on Manager Authority ........................................................................ 10
5.4. Reliance ................................................................................................................. 10
5.5. Co111pens<1tion and Expenses of Members and Managers ................................. .... 10
5.6. Standards of Manager and Member Conduct ........................................................ 10
C0:\11'.\'\\ Al;HH:\IDl OF C•:'>ll HIO:\ Loc;JSTICS LLC
P _\(;E i
CALCE01479
MR.039
5.7. Resignation, Removal, an' ,\Glu:nH:Sr m CC\j l f!IO;\ l,()(;ISTIC"S LLC F:~llllll'I' A
11 SOK.\S1·2 2-' I 1 '~0 I.\
CALCE01484
MR.044
··Prohibited Transfer" means any lnmsfcr of a lvfembcrsliip !n1ercst that is not a Perm ilted
Transt'er.
"Requisite Perccnta~e·· means one or more Members owning more than seventy ~Ive
percent ( 75.0%) oC the Percentage Interests owned by all t-.1le111bers entitled to vote on the
particular issue.
··substituted M~rnbt!r ..
means a person who is admitted as a Nfernher to the Company
pursuant to Section 11.1 with respect to the transfer of an existil1g rvkrnbership Interest.
··Units" means units of Membership Interest in the Comp11ny.
1.2. Usag~.
In this Agreement. unless a clear contrary intention appears:
(a) the singular number includes the plural number and vice versa:
(b) refei·cnce to any person includes such person's successors and assigns but, ii.
applicable, only if such successors and assigns arc not prohibited by this Agreement, and
rdcrencc to a pcr.-;on in a particular capacity excludes such person in any other cupacity or
indiv:duatty;
(c) reference to any gender includes the othc1· gender and the neuter;
(d) rckrencc to any agreement or other document means such agreement or other
document as amended or modified and in effect from time to time;
(c) relercnce \o any sUHute, regulation. or other legal requirement means such legal
requi1·eme11t as amended. modified, codilied, replaced, or reenacted. in whole or in purl, and in
cffec~ from time to time. including rules and regulations promulgated thereunder. and refcn:nce
Lo any section or other provision of any legal requirement meims !hat provision of »uch legal
requirement Crom time to time in effect and constituting the substantive amendment,
modltication, codification. replacement, or reenactment of such section ()f other provision:
(t) "hereunder." '"hereof:' '"hereto:· and words of similar import refer to this
;\grccment as a whole nls thereto.
ARTICLE II
ORGAN IZATIONA L MATTERS
2. 1. Formation. rhe Comprul) \HIS formed pursuant lo !he Ccl'liticntc of Formation or
the Company filed with the l't!xas Secretary of State effecti ve as oft he Formation Date.
2.2. Name. The Company"s name is as set forth in the Cert ification or Formation.
The Managers may change the Company name at any time without the apprnvu l of any Member
by liling a Certificate of ;\111cndment. fhe Managers shall provide notice or the change to all
Members. -n1c Company's business may be cuntlndcd under its name and/or any other name or
names deemed advisable by lhe Managers. The Man<1gers shaU cause to be executed and fi led of
record all assumed or fictitious name certificates required by la\\.
1 "·
-·-' Registered Office and A!!ent Principal 011ice.
(a) The stree t address of the initial registered office o f the Compan) in Texas and the
nnme of the initial registered agent or the Compuny are as set l'orth in the Certificate or
Formation. The Managers may change the Company's registered oflice m registered agent tlt
any time by liling a Change of Registered Agent and/or Registered Office as provided in the
Code. The Managers shall pro\'ide notice orthe change to all Members.
(b) fhe address or the principal onice of the Company in thl? United States where
rt.:cords are to be kept or made avai lable under Section 101.501 of' the Code shall be as
determined by the Manag.crs. The Managers may change the Company's principal office in the
llnitt:d States at any tline ttpon notice to the Members. The Company shall keep at its registered
olfa.:e and make available to a Member on re11so1wble request the street address or the
Company's principa l oftic0 in the United States.
2.4. Term. The Company will ex ist pcrpctunlly and will continue until term inated in
accordance with Article XIII.
2.5. Purposes. I he purposes of the Co mpan~ are to cngag.c in uny activities that arc
permitted under applicable laws.
2.6. Powers. Subject to any limirutions in thi s Agreement. the Company may exercise
the power to do any and nil acts reasonably rclat~'d to its purposes.
2.7. Compnnv Property.
(a) /\ II Compan) pro pert) shall be O\\ ncd in the name ol" the Compan~ and not in the
name of any Member. No Member or Assignee \\ ill hfl\ e an} inleresl in such Company property
solel) by reason-ol'the Member' s status as a Member.
Ct>\11' \ '\ \ A<;ttU.\I I '\ I m C t·:' 11 KIO'\ LOG ISTIC 'i L LC Ex111u11 1\
11 50R48' 2 ~1 1 21211 11
CALCE01486
MR.046
(b) The i\-lanagers shall deposit or invest all fonds of the Company in an account or
accounts in the name of the Company. No funds other than the funds of the Co111pany ma:y be
deposited therein. The funds in such accounts shall be used e,Xclusivcly for the business of the
Company (including distributions to the Members) 11nd may be withdrmvn only by persons
approved by the Managers.
2.8. Initial Member$.. In connection with the formation of tire Company, the persons
executing this Agreement as of the Effective Date ("Initial Members'') arc mimitted to th0
Company as Members. The number of Units held by each of the Initial Members as or the
1--:ffeetivc Date arc set forth next to the Initial Members~ nmncs on Exhibit ..A.''
2.9. Consent of Members. Each person executing this Agreement consents to the
admission as members in the Company all of' the Initial Members and all other persons who are
Members as of the date such person executes this Agreement and further consents Lo the issuance
of additional U11its as provided in Section 2.9.
2.. l 0 Status of !vlanagers and Members. Lxeept as otherwise provided by this
Agreement, the tv1anagers have the status, rights. and obligations of a manager in a lim:ted
liability company as set forth in the Code, and each Member has the status, rights, and
obligations of a member in a limited liability company as set fo1th in the Code.
2.11 . Unit Certificates. Each Me111bcr"s Units may be represented by a Unit Certificate.
If Unit Certificates are issued, each Unit Certificate shall be number<.!d and registered in the
records of the Company as they are issued, and signed by any of the Managers. The holder or
any Unit Certificate shall promptly 11otit)· the Company of any loss or destruction of the
certificate, and the Managers shall cause a replacement certificate to be issued to the holder upmt
receipt or satisfactory evidence ol' the kiss. destruction. or mutilation or the certificate and
satisfaction of other reasonable conditions.
2.12. 1\o State Lav,' Partnership. The Members inknd that the Company is not a
partnership or joint venture,. and that no Manager or Member is a partner or a joinL \·enture1· of
any other Manager or Member for any purposes other than income tax purposes. No provision
of this Agreement may be construed to suggest otherwise.
ARTICLE III
CAPITAL CONTJUBlJTIONS; CAPITAL ACCOUNTS
3. I. Initial Capital Contributions. Each Mernber" s Initial Capital ContribLttion is set
f(}1th DllEx hi bit A.
3.2. Additional Capital Contributions. A Member is not required lo tnake Additional
Capital Contributions to the Company. No Member has the right ot is permitted to make
Additional Capital Contributions unless (a) all of the lvfanagers and a Requisite Percentage
approves sLtch -Additional Capital Contribution after notice to all Members of (i) the amount ol'
\he 1\dditional Capital Contribution to be made and (ii} other material information relevant to the
E.:\HHllT A
I 151J1l~8\1 ~ 'I ~,1111~
CALCE01487
MR.047
proposed Additional Capital Contribution. and (b) all Members arc afforded an opportunity to
participak in the Addi tional Capital Contribution in accordance with their rclath e Percentage
Interests.
3.J. Capital Accounts. The Company shall establish a separate Capital Account for
each Member and Assignee. The Capita l Accounts shall be maintai ned accord ing to the
provisions oi' Ap_pcndix !\.
JA. No Right to Return o f or Interest on Capital /\ccouut. No Member may demand
or receive lllc return of its Capiwl Contribution or· any portion o f i.ts Capital Account. except as
provided in thi s Agreement and lhe Code. The Managers do not bave any personal liability lor
the repayment of any Capital Contributions of any t!ember. No interest \Yill accrnc or be paid
with respc<.:t to the Capi tal Corltrlhutions or Capital Account o l' any Member.
3.5. Member Loans. Su ~ject lo the approva l of nil ol' the Managers, the Company 11Hl)
borrow money from one or mon: Members Lo the extent the Managers deem Hppropriate to the
Clilld uct or the Ct)lllpany business 011 tenns that comply wi th the requ irements or Section 5.6(c)
(re lating to related party trnnsactions). The amlH111 l of any loan made to the Company by a
Member \\ ii I not constitute a Capital Contribution or othern ise affect such Member" s C'npitnl
Account or Membershir Lnten::st.
3.6. Member Notes. In connection with the execution or thi s Agreement. the
Company expects to issue promissol') 1wtes to certain Members in connection with assets that
rile Members have trnnsfcrred 10 the Company or expenses that the Members have incurred on
behalr or the Company ("Member Notes"). For Cc:deral income tnx purposes. the Members
intend thnt each Member Note be characterized as a preferred membership interest (equity) in the
Company. thnt a holder's right to any interest or original issllc discount on the Member 1 ote be
charnctcriled as a right to a distributi ve share of Company income and not as a guara111t•ed
payment under l.R.C'. Section 707(c ). and th al all payments with respect Lo the Member Note be
cha111ctcrized as a distribution \\ ith respect to a membership interest. Allocations of profit or loss
and lax items as pro,·ided in Section 4.1 and Section A.5 or Appendix 1\ sha ll be aqjusted as
necessary, as determined by lh\! Managers, l o rctkct Lhe preferred membership interest dccmt!d
to be held by the holders of the Member Notes. 1:or thi s purpose. the fvkmbers intend that only
net profit or nel loss. and onl) net taxable income or loss (rather than items thereof). for an)
all ocation period wil l be nllrn:ated with res pect to the Member otes. fo r exampk, irthere is net
\frxable income fo r the period from Lhe issue date o f the Member Notes through the end ol' 2009.
it is intenckd that such net wxnble income \\"ill be nllocated to the Member Notes holders to the
extent or nny accrued interest or original issue discoum on the Member Notes. und If there is a
11 ~t taxable loss for s uch period, it is intended that such net taxable loss will be ul locmed first to
the Members to the extent ol' their Capital Contdfrntions fi nd then 10 the holders or the Member
Notes.
( ' 0 \1 PA"\\ /\(;nn . \11."\ I Of. CF"\ 11 !U0:-1 LO<: ' " I IC'S LLC F::-; 1m11 1 A
I l~IJ~~l!11 2 l l1ll l l~
CALCE01488
MR.048
ARTICLE IV
ALLOCATIONS AND lllSTRIBUTIONS
4. l . ~!location of Profit or Loss. Subject to Section_~Q. Company profits and losses
shall be allocated among the l'vkmbcrs and Assignees in accordance with the provisions of
Appendix A or as is determined by the Managers. The l\ilembcrs are aware of the income tax
conscq uences 0 r the allocul i(.rns.
4.2 . Distributions of Distributable Cash .
(a) Except as otherwise provided in Section 4.3 (rdating to \Vithholding), Section 4.4
(relating to Einitatiolls on distributions). or Section 13.4 (relating to liquidating distributions).
any Distributable Cash shall be: distributed not later than the 3011' day after the end of each fiscal
((L1arter to the Members and Assignees according to their Percentage Interests unless othcnvise
determined by the Managers. The Managers may provide for a record date with respect m
distributions.
(b) To Lhe extent it may lawfully do so. the Company shall make distributions to
Members and Assignees in accordance with Section 4.2(a) and Section ! 3.4(a)(iii) at such times
and in such nrnounts as the ivfanagers determine is sufficient to enable Members and Assignees
t<) make payments of tax due (including any applicable interest and penalties) with respect to
their allocable shares ol' the Company's taxable income. Unless the Managet's determine
otherwise. the taxes due ti..w each Member and Assignee shall be calculated by assu111ing that the
Jvfember or Assignee is an individual taxed at the highest lax rate other Indenmi lied Person for an) Damages arising from an)
Proceeding rela1ing to the conduct of the Company·s business or rdating to nny at:l or omission
by the Indemnified Person within the scope or the Indemnified Person's ;;1uthority in the course
of th\'! Company's business, including any breach or any fiduciary duties. or for any misconduct
M negligence on the part or any other person who is an e111ployee or agent or the Company.
6.2. lndc111nification by Cornpan\ . ·1Cl the fu llest extent permitted by applicable la\ .
and subject Lo Section 6.3. the Company indemnifies and holds hnnnkss each lndenrnilied
Person from and against any Damages arising from any Proceeding rclnting lo the conduct or the
Company·s business or to any act or omission b. such Indemnified Person within the scope or
the Indemnified Pcrson·s authority in the course of the Compan>·s business or for an}
misconduct or negligence on the part or any other person that is an employee or agent of the
Company. An Indemn ified Person· s expenses paid or in(;urred in defend ing itself against an)
Proceeding shall be reilllbmsed as paid or incurred. The right to inde11111ifi1.:atio11 confe rred in
this Article VI is not exclusive or any other right that any person may have or hereafter acquire
under any statute, agreement. vote of Members, or otherwise.
6.J. Conduct Not Protected.
(a) This Article V I does not operate to limit liability or lo indcmnif) a person to thl'
extent the person is found liable pursuant to a final j udgmcnl of a courl of <.:Ompetent jurisdiction
l ~)r:
(i) an ad or omission that involves gross negligence, intentiona l misconduct,
or a knowi ng violHtion of law:
(ii ) o tmnsfer or attempted transfer or all or a porlion of n Membership Interest
in a Prohibited Tran fer. a Manager's resignation in Yiolation of' Section 5. 7(a}. or a
Member ceasing to be a Member in' iolauon or Section I?. I(a):
(ii i) a willful or reckless material breach of this Agreement or any oLht:r
agreement rcluting to the Company's business; or
(iv) un act or omission for which i11de11111ification is prohibited by law.
(b) No provision of this Agreement requi res 1he Company lO puy or incur any amount
!'or which indcmnilication is not permitted under this Article VL
( c) t\11r payments made to or Otl bd mlr or H person who is Inter determined not lo be
emit led to such payments shall be repaid by t'h<:: person to the Compan). The Company mny
C0\11'.\ " ' A1an:r.,n::-. 1 m C t ~ 11 IHO\ L oG1s 11c'\ LLC E.'\111Bn A
I 1 508~ .~12 21 1 ~12011
CALCE01494
MR.054
requi re. as n cond ition tn the paymt'.!111 nf' any amounts pu rsuant to Section 6.2. that thL'
Indemnified Person proviue to the Cornp(lny (i) a wriuen affi rmation by the Indemnified Person
of !he person·s good faith belier that the person has met the standard of conduct necessary for
indemnification under this Section 6.J: and (i i) a \Hillen umlertnl-.ing b) or on behal f of the
Inde111ni fkd Person to repay the amount paid or reimbursed i !" the person has not met that
standurd or if indemnitication is otherwise prohibited by law.
6.4. Insurance. rl1c Company may maintain insurance to protect any person ngain 1
any expense, liability. or loss. \\ hether or not the Company would ha\·e the power IO indemnil)
such person against such expense, liabi li ty, or loss under the Code.
6.5. Sun ival. The indemnities provided for in this Agl'ccment survive the transfer ul'
itn Indemnified Pcrson· s Membership Interest. the ten11ina1ion of 1he pel'son· ::. status as a
tvkm ber or other status giving rise lO classification as an Imkmni lied Person. and the
termination of thi s Agreement nnd the Company.
ARTICLE VII
BO OKS AN O R ECORDS; RlW OlffS
7.1 . Ma intenance or and Access to Books unu Record s. The Compnny shall mainta in
such books and records regarding the Company's business and properties as is reasonabk
includ ing all books and record:; 1~qu i !'ed under the Code. Each Member shall ha\ c access th~reto
during ordinary business hours lo tbe extent and under the conditions provided in thl.! Code.
7.2. Fiscal Year. ·1he Company shall adopt the cn lendnr year as ils fiscal yenr !'or
linanc ial and tax accounting purposes.
7.3. Financ ial and Operating Reports. As soon as practicable after the end or euch
liscnl year. but in any event nol later lhun 90 days nftcr the end ol' the fiscal year, the Managers
shall dcli\·er lo each Member Rn annual report containin~ the fo ll owi ng:
(n) a Company balance sheet as of the encl of such liscnl year. and Compa ny
statements or income. cash !lows. and changes in Members· equity fo r such fisca l year. each in
reasonable detail and [Jrepnrcd according to United Slates generally accepted accounting.
pri111.:iples:
(b) a general description of the Compan; ·s ac tivities during such fiscal year and
business plans for the succeeding year; and
(c) a stmement of clmnges in the Member's Capital Accoum (sho\\1ng the balance in
tlH: Mernber·s Capi tal !\ccnl!nl as l)I' the beginning of the t'lscHI year. contributions or
distributions dt1ring the yccll'. allocations of prolits and losses during the year, any other
~1dj u s1ments to the Capital J\ i:c:ount bala1ices during the year. and the balance in the C11 pita l
Account as of the end of Lhc ycor).
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CALCE01495
MR.055
7.4. rax Reports.
(!\) Not later 1ha11 the date (including extt:nsions) for Jiling 1he Con\pany" s tax return
with the Internal Revenue Service (form I065 ), the Managers shall del iver to each person who
was a Member or Assignee at any time during the period covered by the return all information
necessary ror the preparation of such person· s United States fCJcrnl income tax returns. including
a Form 1065 Schedule K- 1 (if applicable).
(b) Upon the \\l'illen req uest of any Member or /\ ·signee, the Managers shall delivcl'
to such person information necessary !'or the preparat ion of' any tax returns tlrnt must be ti led hy
such person. including i11km11a1ion necessa ry lo r estimating and paying estimated t11xes.
7.5. Transmission orCommunications. Each person who holds n J\krnbership Interest
on behalf or. or fr>r the benefit of. another person or persons shall be responsible fo r coll\·eying
any report. notice. or other communi cation received concerning the Company' s nffairs to such
other person or persons.
ARTICLE vnr
TAX MAT TERS
8.1. Tax Classilication. The Members intend th<1l lhl! Company be classi fied HS a
partnersh ip fo r federal inl'omc tax purposes. The Managers shall lake all actions as are or may
be reasonably necessary or appropriate to ensure the Co111 po11y is so classi lied (including the
filing or l!lcct ions or tax returns). No Manager, officer. or Member sh alI take any action
inconsistc111 with the t:lassilication or the Company as a partnership for lcdcrnl income tax
purposes.
8.2. Company Returns. The Managers shall cause the Compan) lo file such tax
returns ns may be req uired by law.
8.3. Tax Elections,
(a) General. Except as othcrn ise provided in this Agreement. the Managers shall
cause thi:! Company 10 timely make or revoke all elections, and take all ta:< reporting positions.
necessary or desirable for the Company and l o maxim ize the tax benefits 10 the Members. No
elec tion shall be made to have lite Compa1i.. exc luded from the applicatilm of any provision ur
Subchaptcr K or Lhe I. R.C. or any equivalent tax provision in any other ta:-; jurisdiction.
( b) Section 75·1 l~kction. The Co111pnny shal1 make the election rclc m;d to in £.R.C:.
Secti on 75..i. upon the request of any Ml!mber in connection with a transfer or the Member· s
Mem bcrshi p Interest.
(c} S11fe I !arbor Election for Conrnensatorv Ml!tnbcrship Interests. If Proposed
T reastir) Regulation 1.83-3( I) is adopted as a temporary or ll11al regulation. the Company shall
make the safe harbor election descri bed in such regulations. nncl the Company and each Member
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(including anr person to whom an intere t in the Compan) is lransll!t'l'ccl in connection with the
perfornu1111.:c of ser\ ices) shall comp!) "ith all requirements ol'the safe harbor with respect to all
Membership lnterc:sls transferred in cc11mectio11 'vvith the pcrlormance or services while tile
dection remains effective. The Managers shall prepare. execute, and tile any requi red
docu1nentarion to cause the election to bt: effecti,·c. Ille Managers may terminate the safe hnrbor
election nt any time if it determines in ~ood faith that it is in the best interests or the CO IUf>Hll~
and the Members to do so.
8.-1. Consistent Reporting. Each J\rfember shall, on the Member· s ta:-. returns. treat
ench partnership item (as delined in l.R.C. Section 623 1{a)(3)) in a manner consistent wi th the
treatmem or the item on the Company's return in all res pect~. including 1he amount, timing, and
character of the item. No Member shall file a request !or an administrative Cldjusunenl of
partnershi p items under l.R.C. Section 6227(a) if such request would cause 1he Member"s
treatment orthe item to be im:onsistent with the treatment or the item 011 the Company 's return .
8.5. Ta-: Proceedini:ts.
(u) The Managers shnll be the Compnny·s tax matters partner as dclinetl in l.R.C.
Section 623 1. and shall take such actions as are required to be designated lhe ta~x matters partner
under applicable ·1rcasury Regulntions. The tax mallers partner shall n:presem the Company in
connect ion with all exami11<1tions o f the Company's tax returns by tax authorit ies. includ ing
adm inistrati ve and judicial proceed ings to contest any proposed adjustments. Subject to Section
8.5(c). the tax mn1te1·s partner has the exclusi vi.: right to conduct Proceedings relating lo
C'ompa11:, taxes and to determine whether the Company (either on its own bcha lr or on bchall' of
the Members) will contest or continue to contest a11y lnx dt:liciencics assessed or proposed to be
assessed by any taxing authority. The tax mailers partner shall keep 1he Members informed on a
timely basis or all material developments with respect lo an) such Proceeding. Each Memhcr
shall cooperate with the tax malters partner and do or refrain fro m doing all things reasonably
requested by tJ1e tax niatters pnrlner with respect to lhe conduct or any Company tax Proceeding.
(bl The tax mailers partner may not bind any other ~ ! e mber Ill n selllerncnt agreement
rd,1ting. to laxes without obtaining the written concurrence ot\ uch Member.
(c) A n~ dclicienc) for taxes imposed on a Memb~r (including penalties. additions Lo
tax or interest impo~ed with respect to such Laxes) shall be pnid by such Member nnd. if paid or
required lo be p<1 id by the Campany. is rel':overnblc l'n:>1n such Me mber pursuant to Section 4.3 ur
by other legal means.
(d) This Section 8.5 and Section 8.6 Sll r\' i\' C' the termination nr Lhe Company and the
termination of any Member's interest in the Company and r~· main bincling for a period or lime
necessary Lo resolve all tax mailers with applicable taxi ng authorities.
8.6. Information and Documents lo Company. Each Member shall timdy pro\'ick to
1h1: Company all information and documents thnt such Member is required to provide by
nµplic nblc tnx requi rements. and shall also pro\'idc to the Co111pa11: upon request such additio11al
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CALCE01497
MR.057
inrormation and documents as the Managers may n:asonably request in co11ncction with the
Cotnpany's cotnpli ance with appl icable l!\X req uirements or fil i11 g of nny permitted tax e l ecti on~.
ARTICLE IX
MEETINGS ANO VOTI NG OF MEMUF.l~S
9. 1. Meetings.
(a) Meetings of the Members mny be calletl nt any 1i1ne by the Monogers or b) one or
more Members holding at least 75.0% or the Percentage Interest held by Members. Meeting~
slHl ll be held al the Compa ny's principnl place of business or at suuh other reasonable plat:e set
forth in the notice of the meeting.
(b) A ny action lhat may be wkcn at a Members' meeti ng may be taken \\ ithout
holding a meeting if Members having al least the Requisite Percentage interc:;l that would be
necessary to lake the action al a meeting. in which em:h Member entitled to vok on the action is
present and votes. ·ign a \Hillen consent or consents stating the action taken.
(c) Except as otherwise prO\ idcd in this /\grcement, meeting notices nnd procedurt:s.
including procedures for obtnining written consents in lieu of'a 1111.:cting. shall be in conformity
with Chaplers 6 and 10 I ( 11) of the Code. Sections l 0 l.353 through J 01.356 or the Codi.:
(relating to quorum and minimum voting requirements) shall not apply 10 the extent such
provisions are inconsistent wi th this Agreement. The Managers ~re solely responsible for
conveni ng and conducting meetings of the Members. conducting. the solicitati on of consents.
or
determ ining the vnlidity and effect of responses to any solicitation consents. and determining
01hc1· matters regarding meetings. voting. and consents.
(d) Notke of 1hc results of any vote taken at a meeting. or the results or any
solicitation of consents in li0u of a mt:eling. shall be given to the Members not later than ' vi th the
delivery of the nex t fo llmvi ng report of tinaneial information given pursuant to Section 7.3.
<>.2. Voting. A Member may vote at a meeting in person. or by a proxy executed in
writing by the Member and received by the Managers prior to the time when the votes or
Members are to be counted. The provisions or the Code pertai ning to the vnlidity and use or
proxies by shareholders or i] corporation govern the validi ty and use or pro~ies given by
Members. Only Members of record on the date of the meeting (or if the vote is conduc1cd
withou1 a meeting then on the dalt: of the notice soliciting the Member consents) may vote.
ARTICLE X
TRANSFER OF MEMBERSlllP INTim ESTS
l 0. 1. Li111i1ation 011 Transfers.
(a) The term "transfer:· when used in rcl'erenct to a lranster of a Membershi p
l rncrest. means un assignment (whether \Oluntat'ily. in,·oluntmily. ur by operation uf la\\ un with hold approval fo r the transfer or a Membersh ip Interest. a transfer
shnll not be a P~ nnittcd Transfer un less the \ilam1gcrs determi n~ tlun ull of the following
conditions are smistied:
(a) The transfer complies with all applicable laws. including uny applicable securities
( b) rhc transfer \\ii l not cause the C\1rn1x111) to be 1reMed as other than a partnership
for United States ledernl income tax: purposes.
(c) The trnnsl'cr will not cause the Company to be subject to regulation under the
Investment Compa ny /\ct of 1940. as nrnendeJ.
(d) The translcr \\ill not cause any as'>ets of the Company to be deemed ..plan assets'·
under the Einplo) ce Retirement Income Security 1\cl of 197-l.
(e) The trnnsrer will not result in <1 tern1inalion or the Compn11) under l.R.C. Section
708. unless the Managers determine that such lcnninution wi ll not have nn adverse impact on the
Mt:mbers.
( I) The trans for will not cause the application or the Lax-exempt use property rules or
l.ltC. Sections t68(g)( I )( H) and 168(h) lo the Company or its Members. unless the Managers
determine that such rules wi ll not have an adverse impact on the Members.
(g) fhc transferor and transferee ha\'c delivered to the Compnny a1\)' documents thul
tile Managers request to confirm that the transfer satis lies the requirements orthis Agreement. to
gi\'e effect to the trunsle r. and to conlirm the transteree· s agreement lo be bound by this
Agreement ns nn Assignee.
(h) If requested by the Managers. thl' Company has received a tnms le r lee in a11
amount determined b) the Mmrngers to be S\ll'liCil.!nt to reimburse the Company for the estimated
expenses like!) to be incurred by the Company in connection with such trnn ·ter.
I 0.-l. Effective Date: Distributions.
(a) 1\ Perm itted Trnnsfer or a Membership Interest is effcctiv1.: as ol' the lirst day or
the calendar month fol lo\ving the calendar rnuntli during \\-hich the Mamtgers receive notice M
such transfer (in such fo rm and manner as the Managers may require) unless the Managers
determine that the transfer should be ef't'cctivC' as of an earlier or later date ( l~ir example. on an)
date 1he1ranslcr is clli:cti ve as a matter ofs1arc la\\. or wherethe notic~ ()ftransfer specilies thm
the tt"ansfer is to be effective on a future date}.
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(b) Distributions with respect to a transrerrcd Membership rntercst tbot arc made
be l'orc lhe effective dale o r the lransrer shall be paid l tl the trans feror. aml uis1ributio11s mad1:
nlh:r such date shull be paid lo lhe Assignee.
tc) Effecti ve as or the effective date of n mrnsfer or a Membership Interest. the
Munagcrs shall amend Exhibit A lo reflect the reducti on in the trnnsteror' s Percentage Interest
ancl tl) re fl eel the Assignee· s l'~rcen tage Intercsl.
(d) Neither the Company nor the Managers have any liability for making allocations
and distribut ions to the Members dctcrmi ned in acCl>1'dnnce with thi s Section I0.4. whether or
not the Company or the Managers have knowledge ol' uny transler of any Membership Interest.
I 0.5. Transferor" s Obliuations. !11e transferor or a Membership I ntcrcst \'vho ceases lo
bl.! n Member continues to be obligated wi th respect to its Membership Interest or its status as n
l(rn11er Member ns provided in the Code and appli cable lnw.
10.6. Assignee·s Ri~hts and Obliltations.
Unless an Assignee becomes a Member pursunnt lo Article XL such Assignee shal l not
be entitled to any or the rights granted lti n Member. other than the rights to receive al locatio11:" or
profit. and losses and distributions as ir such Assignee were a Member. to transfer the
Assignee·s Membership Interest (subject to the conditions of this Article X). and to receiYe
reports and inlo rmation as specilied in Article VII. An Assignee or a Membership Interest shall
succeed to the Capita l Contribution or the transferor to the extent or the Membership Interest
transfened. An Assignee is bound by this Agreement irrespective of\ hether lhL" Assignee has
signed or otherwise adopted this Agreement. An Assignee's Membership Jntcrest may be
redeemed at the option or the Managers as provided in S1.:ction 12.3.
10.7. Ef'tcct and Conseq uences of' Prohibited Transfer.
(a) Except as otherwise required by la\\. the Company and the Managers shall trem a
Pr~)hibitedTransfer ns void and shall reeogniLe 1hc tra nsferor as conti nuing 10 be the owner or
the Membership Interest purported to be transfern:d , If the Company is required by law to
recognize a Prohibited Transfer. the trans force sha ll be treated as on Assignee \\ ith respect to the
kmbership Interest transferred nnd mn) not be treutcd as <1 Member wil h respect to th..:
ivkmbership 1ntercst transferred unkss admitted as a ~1kmber in accordance with Article XI.
(b) The Company may remove the tram;l"eror and Assignee with respect to a
Prohibited Transrer as pro\ ided in Artick x_t I.
(c) Tht' trans!e ror und trnnslercc '"iLh respect 10 a Prohibited Transfer shall bejoi ntl)
and severally liable to the Company for, and shall indemni ty and hold the Company hann kss
against. any expense. liability. or loss incmred by the Company (i11cl11ding reasonable legal fees
and C'\penses) as a result or such Iranster. their remo\ al and liquidation ol' their Membership
!ntNcsis (if applicabte). and the efforts to ~nforce the indcrnnit) grnntcd in this Section 10.7C c ).
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I 0.8. Agreements of Spouse: Sole Manugcment Conununil) Prnpert\ .
(fl) Execution of Spousal .loinder and Consent. The spouse of each Member shall
cxec11 tc anhip Interest on the date on which all or the
following conditions are satislled:
(a ) The Managers ha,·c approved in \vriting the ad111ission of the Substituted Mcni bcr.
(b) The Assignee has de livered lo the Company any agreements and other docu111c11Ls
that the Managers request to confirm such Ass ignee as a Member in the Company and such
A ss ig n ~c · s agreement to be bound by this Agree111ent as n Member.
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(c) If requested by the ;-,fanagers, the Comp~ny has received un admission fee in an
amount determined by the rvlanagers to be sufficient to reimburse the Company lo.f the estimated
expenses likely to be incurred by the Company in connection with the admission of the Assignee
as a Sltbstitutcd Member.
I 1.2. 6dditional ivlernbers.
(11) ln Genen1l. The. Mtmag<..:rs may cm1se the Company tu ad111il a person as an
Additional Member and issue Additional Units to such Additional Member upon satisfaction of
all of the fol!O\ving conditions.
(i) /\. Requisite Percentage l:as approved the admission uf the Additional
Member alter notice to all Members of (i) the Initial Capitnl Contriblltion to be made by
the proposed Additional Member, (ii) the effect of the admission on each Partner's
Percentage Interest. and (iii) other materiaJ information relevant to the proposed
admission.
(ii) The admission of the proposed Additional Member satisfies the applicable
..:onditions of Section 10.3.
(iii) The proposed Additional Member has delivered to the Company any
agreements and other documents that the Managers request to confirm the person as a
Member ln the Company and the person's agreement to be bound by this Agreement as a
Member.
ARTICLE XU
WITllDRAWAL OR Irn~IOVAL OF MF.MBERS
12.1 . \Vithdrawal of Members.
(a) No Member may withdraw from the Company or otherwise cease to be a Member
except upon the following events:
(i) receipt by tht.: Company of a notice of such ~vternbcr's withdrawal fron~ the
Company:
(ii) a transfer of all or the Member's Membership Interest in a Permitted
Transfer: or
(iii) removal or the \1ember as a Member as pruvided in this t\gn:1:111enl.
(b) A Member shall be deemed !() withdraw from the Company upon the following
events:
(i) an event specified in Section 12. [{u):
Co.'111' \ ,,. A
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
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MR.065
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~ :
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(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 goo \\ ith the approval of a Rcquisitecl
Percentage.
(b) Exceptions and Limitations. The Managers may <1mend Exhi bit A from ti me to
time to retlect the admission and withdrawa l or Members, and challges lO nny Member's
Percentage Interest. in accorda nce with this .1\ gn.:ement. The Managers may use the power ur
a llorney granted in St:ction 15. 12 to make mm-~ubstmHi ve amendments that do not adversely
impact the rights or obli gations or any Manager or Member. No amenclrncnt of the Agreement
may adversely affect any Mt:mber" s rights or obl igations under this Agreement (determi ned
without taking into m:count the light or other Members lO am~ml the 1\grecment) without the
adversely affected Member's approval. No amendment o r Article VI (relating to li ability and
indemni fication) mny adversely affect !he rights or obligations or any Indemnified Person
\Vithnut the Indemni tied Person's apprOvl't l. No amendment of I his Agreement may change the
requirements under this Agreement f'or approving any action without the approval or the
Members holding an aggregate Percentage Interest requi red to approve the action.
15.2. Notice. Any notice, report, or other communication req uired or permitted to be
made lo nny person by this Agreement shall be in writing nnd is deemed given when
(al deli vered to the person by hand. (b) the third business day after delivery to the United States
Posltll Service (or other designated deli\·ery sen ice as defined in l.R.C. Se<.:tion 7502( f)). postage
prepaid. in an envelope properly adJresscd lo 1he person at the person·s address set forth in the
Company's records as of the date ol' deli\·ery. or (c) successfu lly transmitted b} facsimile or
elei.: cronic message lo the Cacsimi le phone number or e-mail address (as appl icable ) set forth in
the Company's records as or the date or transmission. Any commun ication lo tht! Manu~.:rs or
the Company may be clclh·ercd to the Company·s registered office designated pursuant to
Section 2.3.
E:\111 1111 /\
1150818, ! ~I~ 2111 1
CALCE01509
MR.069
15.3. GO\·ernin~ Lu\\': Consent to Jurisdiction. This Agreement i:; go,·crne execute. 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.071
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.072
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'\ Lses 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 accorartncrship 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 Compd 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 moin Re: John Calce
Combined Opinion