EXHIBIT 10.6

        

        

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
REDBIRD GAS STORAGE LLC
a Delaware Limited Liability Company
October 2, 2012

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER ANY SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
ABSENT SUCH REGISTRATION OR AN EXEMPTION THEREFROM. THE TRANSFER OF MEMBERSHIP
INTERESTS IS FURTHER RESTRICTED BY ARTICLE X OF THIS AGREEMENT.

i

TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS                                1

1.1.
Defined Terms                                1

1.2.
Other Definitions                                5

1.3.
Usage                                    6

ARTICLE II
ORGANIZATIONAL MATTERS                        6

2.1.
Formation                                    6

2.2.
Name                                    6

2.3.
Registered Office and Agent                        7

2.4.
Term                                        7

2.5.
Purposes                                    7

2.6.
Powers                                    7

2.7.
Company Property                                7

2.8.
Consent to Admission of Members                        7

2.9.
Status of Manager and Members                        7

2.10.
Certificates of Membership Interests                    7

2.11.
No State Law Partnership                            7

2.12.
Subsidiaries                                    8

ARTICLE III
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS            8

3.1.
Initial Capital Contributions                        8

3.2.
Additional Capital Contributions                        8

3.3.
Capital Accounts                                9

3.4.
No Right to Return of or Interest on Capital Account            9

3.5.
Member Loans                                9

ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS                    9

4.1.
Allocation of Profit or Loss                            9

4.2.
Distributions of Distributable Cash                        9

4.3.
Withholding                                    10

4.4.
Limitation on Distributions                            10

4.5.
No Right to Partition or Distributions in Kind                10

4.6.
Recovery of Erroneous Distributions                    10

ARTICLE V
MANAGEMENT                                11

5.1.
Management and Control of Company Business                11

5.2.
Delegation of Authority                            11

5.3.
Limitations on Manager Authority                        11

5.4.
Reliance                                    13

5.5.
Compensation and Expenses of Members and Manager            13

5.6.
Standards of Manager and Member Conduct                14

5.7.
Resignation, Removal, and Replacement of Manager            14

ARTICLE VI
LIABILITY AND INDEMNIFICATION                    16

6.1.
Limitation of Liability                            16

6.2.
Indemnification by Company                        16

6.3.
Conduct Not Protected                            17

6.4.
Insurance                                    17

6.5.
Survival                                    17

ARTICLE VII
BOOKS AND RECORDS; REPORTS                    17

7.1.
Maintenance of and Access to Books and Records                17

7.2.
Fiscal Year                                    18

7.3.
Financial, Operating Reports and Inspection Rights            18

7.4.
Tax Reports                                    18

7.5.
Transmission of Communications                        19

ARTICLE VIII
TAX MATTERS                                19

8.1.
Tax Classification                                19

8.2.
Company Returns                                19

8.3.
Tax Elections                                19

8.4.
Consistent Reporting                            19

8.5.
Tax Proceedings                                20

8.6.
Information and Documents to Company                    20

8.7.
Survival                                    20

ARTICLE IX
MEETINGS AND VOTING OF MEMBERS                20

9.1.
Meetings                                    20

9.2.
Voting                                    21

ARTICLE X
TRANSFER OF MEMBERSHIP INTERESTS                21

10.1.
Limitation on Transfers                            21

10.2.
Permitted Transfer of Membership Interest                    21

10.3.
Conditions to Permitted Transfers of Membership Interests        22

10.4.
Effective Date; Distributions                        22

10.5.
Transferor's Obligations                            23

10.6.
Assignee's Rights and Obligations                        23

10.7.
Effect and Consequences of Prohibited Transfer                23

ARTICLE XI
ADMISSION OF NEW MEMBERS                    24

11.1.
Substituted Members                            24

11.2.
Additional Members                            24

11.3.
No Required Capital Contributions                        24

11.4.
Amendments to Exhibit A                            24

ARTICLE XII
CONVERSION of Class B Interests                    24

ARTICLE XIII
RESIGNATION OR REMOVAL OF MEMBERS    25

13.1.
Resignation of Members                            25

13.2.
Removal of Members                            26

13.3.
Status of Former Member                            26

ARTICLE XIV
DISSOLUTION                                26

14.1.
Events Requiring Dissolution or Winding Up                26

14.2.
Winding Up Procedures                            27

14.3.
Continuation Without Winding Up                        27

14.4.
Liquidation of Assets and Application and Distribution of Proceeds    28

14.5.
Certificate of Cancellation                            28

ARTICLE XV
VALUATION                                29

15.1.
Fair Value of Company Property                        29

15.2.
Fair Value of Membership Interests                        29

ARTICLE XVI
GENERAL PROVISIONS                            30

16.1.
Amendments                                30

16.2.
Notice                                    30

16.3.
Governing Law; Consent to Jurisdiction                    30

16.4.
Waiver                                    31

16.5.
Entire Agreement                                31

16.6.
Successors and Assigns                            31

16.7.
Third-Parties                                31

16.8.
Severability                                    31

16.9.
Construction                                    31

16.10.
Execution of Agreement                            31

16.11.
Further Assurances                                32

16.12.
Power of Attorney                                32

16.13.
Legal Representation                            32

APPENDIX A
PRINCIPLES OF ALLOCATION                    1

A.1
Introduction                                1

A.2
Definitions                                    1

A.3
Capital Accounts                                4

A.4
Allocations of Net Profit and Net Loss                    5

A.5
Tax Allocations                                8

EXHIBITS

A-1    Initial Capital Contributions and Percentage Interests
A-2
Capital Contributions and Percentage Interests Immediately Prior to the
Effective Time

A    Capital Contributions and Percentage Interests as of the Effective Time

    

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
REDBIRD GAS STORAGE LLC
This Second Amended and Restated Limited Liability Company Agreement (this
“Agreement”) is entered into October 2, 2012 (the “Effective Date”), to be
effective as of 12:01 A.M. Central Time on October 1, 2012 (the “Effective
Time”), by the persons identified on the signature page(s) hereof.
RECITALS
A.    The Company was formed pursuant to a Certificate of Formation filed with
the Secretary of State of the State of Delaware effective as of May 24, 2011 to
hold membership interests in Cardinal Gas Storage Partners LLC, a Delaware
limited liability company (“Cardinal”).
B.    The Company has been governed by that certain Limited Liability Company
Agreement dated effective as of May 27, 2011 (the “Original LLC Agreement”), as
amended and restated in that certain Amended and Restated Limited Liability
Company Agreement dated effective as of September 11, 2011 (the “Old LLC
Agreement”).
C.    Martin Underground Storage, Inc., a Texas corporation (“MUS”), and Martin
Operating Partnership L.P., a Delaware limited partnership (“MOP”), constitute
all the Members of the Company, with MUS holding Class A Interests and MOP
holding Class A Interests and Class B Interests as shown on Exhibit A-2 to this
Agreement.
D.    MUS and MOP, among others, have entered into a Membership Interests
Purchase Agreement dated as of October 2, 2012 (the “Purchase Agreement”) and an
Assignment of Membership Interests dated of even date therewith pursuant to
which MUS has assigned to MOP all of its Class A Interests in the Company.
E.    MOP desires to execute this Agreement to set forth the terms of the
limited liability company agreement of the Company as of the Effective Time,
which is the effective time of the Closing under the Purchase Agreement.
NOW, THEREFORE, the undersigned hereby adopt this Agreement to supersede and
replace in its entirety the Old LLC Agreement and constitute the limited
liability company agreement of the Company as of the Effective Date:
ARTICLE I

DEFINITIONS
1.Defined Terms. The following definitions and the definitions set forth in
Appendix A to this Agreement, apply to the terms used in this Agreement for all
purposes.
“Act” means the Delaware Limited Liability Company Act (Del. Code Ann. tit. 6,
ch. 18).
“Additional Capital Contribution” means the sum of cash and the Fair Value of
any property contributed to the Company with respect to a Membership Interest as
permitted under this Agreement, but does not include an Initial Capital
Contribution.
“Additional Member” means a person who acquires a Membership Interest from the
Company after the Effective Time and is admitted to the Company as a Member
pursuant to Section 11.2. For the sake of clarity, no existing Member shall be
deemed an Additional Member to the extent that it makes Additional Capital
Contributions pursuant to Section 3.2.
“Affiliate” means a person who directly or indirectly controls, is controlled
by, or is under common control with the person in question.
“Assignee” means (a) a person to whom a Membership Interest has been transferred
by a Member or Assignee in a Permitted Transfer, or in a Prohibited Transfer
that the Company is required by law to recognize, but who has not become a
Member, and (b) a former Member as described in Section 13.3.
“Capital Contribution” means the sum of the Initial Capital Contribution and
Additional Capital Contributions, if any, with respect to a Membership Interest.
“Cardinal LLC Agreement” means the Amended and Restated Limited Liability
Company Agreement of Cardinal dated May 1, 2008, as amended from time to time.
“Certificate of Formation” means the certificate of formation filed with respect
to the Company as provided in Section 2.1, as such certificate may be corrected,
amended, or restated.
“Certificate of Membership Interest” means a certificate representing a Member's
Membership Interest in a form approved by the Manager.
“Class” means either the Class A Interests or the Class B Interests, as the case
may be. “Classes” means both the Class A Interests and the Class B Interests.
“Class A Interests” shall mean (a) the Class A Membership Interests initially
issued to MUS in exchange for the contribution by MUS to the Company of its
Category A membership interest in Cardinal; (b) any additional Class A Interests
issued to MUS and MOP pursuant to Section 3.2; and (c) any additional Class A
Interests issued on Transfer of any Class A Interest or to any Additional
Member. As of the Effective Time, MOP owns 100% of the Class A Interests.
“Class B Interests” shall mean (a) the Class B Membership Interests initially
issued to MOP in exchange for its contribution to the Company of $59,903,568 of
cash through the Effective Date, and which represents 100% of the Company's
economic rights associated with Cardinal's investment in Monroe Gas Storage; and
(b) any additional Class B Interests issued on Transfer of any Class B Interests
or to any Additional Member. As of the Effective Time, MOP owns 100% of the
Class B Interests.
“Class A Members” shall mean those Members holding Class A Interests.
“Class B Members” shall mean those Members holding Class B Interests.
“Company” means the limited liability company formed pursuant to the Certificate
of Formation.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through ownership of voting securities, by contract or otherwise.
“Damages” means any expense or loss (including any court costs, judgment or
settlement payment, penalty, fine, tax, and reasonable attorney's fees or other
dispute resolution costs) paid or incurred in connection with or as a
consequence of any Proceeding, net of any insurance or other recoveries received
by the Indemnified Person with respect to the foregoing.
“Distributable Cash” means the cash and cash equivalents held by the Company
(determined in accordance with its accounting policies for reporting cash
flows), less any amount of such cash that the Manager determines should be
retained for the reasonable current and future needs of the Company business.
“Fair Value” means, with respect to an asset or a Membership Interest, its Fair
Value determined according to Article XV.
“Fair Market Value” means the price at which property would change hands between
a willing seller and a willing buyer, neither being under any compulsion to
sell.
“Formation Date” means the effective date of the original Certificate of
Formation of the Company.
“Indemnified Person” means (a) a Member or Assignee; (b) a Manager; (c) a
Liquidator (if any); (d) any Affiliate of the Company, a Member or Assignee, a
Manager, or a Liquidator; and (e) any governing person, officer, employee,
agent, or owner of the Company, a Member or Assignee, a Manager, a Liquidator,
or any Affiliate of any of the foregoing. A person is an Indemnified Person
whether or not such person has the status required to be an Indemnified Person
at the time any Proceeding is made or maintained as described in Article VI or
at the time any amendment to this Agreement is proposed under Section 16.1,
provided such person had the status required to be an Indemnified Person at the
time of the relevant actions referenced in the Proceeding.
“Index Rate” means the rate specified in Section 2301 of the Delaware Commerce
and Trade Code.
“Initial Capital Contribution” means the sum of any cash and the Fair Value of
any property contributed to the Company by a Member with respect to a Membership
Interest in connection with the original issuance of a Class of Membership
Interest by the Company as set forth on Exhibit A-1 to this Agreement, which is
a copy of Exhibit A to the Old LLC Agreement.
“I.R.C.” means the Internal Revenue Code of 1986.
“Majority-in-Interest” means, with respect to each Class of Membership
Interests, one or more Members owning collectively more than 50% of the
Percentage Interests owned by all Members of the Class entitled to vote on the
particular issue.
“Manager” initially means Ruben S. Martin, and thereafter means any person who
becomes a replacement Manager hereunder, or the Members when they are acting
pursuant to Section 5.7(d), in each case in such person's capacity as Manager
and for the period that such person has such capacity.
“Mandatory Distribution” means any distribution that a Member is entitled to
receive and as to which the Member has attained the status of a creditor under
Section 18-606 of the Act.
“Member” means any person identified as a member on Exhibit A, and any other
person who becomes a member of the Company pursuant to this Agreement, who has
not ceased to be a Member. “Members” means all persons that are Members,
collectively.
“Membership Interest” means a Member's or Assignee's economic interest in the
Company or in a Class, as the case may be. The term includes the Member's or
Assignee's right to receive allocations of profits and losses and distributions
as described in Article IV, and other rights and obligations under this
Agreement or the Act of an Assignee who has not been admitted as a Member, but
does not include any right to participate in management or any other right
reserved under this Agreement or the Act exclusively to a Member.
“Monroe Gas Distributions” means the amount distributed to the Company from
Monroe Cash Available for Distribution pursuant to Section 4.3(d) of the
Cardinal LLC Agreement.
“Monroe Gas Storage” means Monroe Gas Storage Company, LLC, a Delaware limited
liability company, which has been merged with a subsidiary of Cardinal pursuant
to the Monroe Merger Agreement and, if such separate entity shall no longer
exist, or if any of its assets shall be transferred to Cardinal or any of its
subsidiaries, shall mean the aggregate of the business and operations previously
conducted by Monroe Gas Storage Company, LLC.
“Monroe Merger Agreement” means that certain Agreement and Plan of Merger among
MGS Holding LLC, MGS Merger Sub LLC, and Monroe Gas Storage Company, LLC, dated
May 16, 2011, as amended from time to time.
“Overhead Expenses” shall mean the ongoing operating expenses of the Company,
including amounts required to reimburse the Manager for certain expenses
pursuant to Section 5.5.
“Pad Gas Lease” means that certain Pad Gas Lease, dated June 12, 2009, between
Monroe Gas Storage as lessee and Credit Suisse Energy LLC, a Delaware limited
liability company as lessor, as amended by that certain Delivery Schedule
Amendment No. 1, dated as of May 11, 2010, and as amended from time to time.
“Percentage Interest” means, as to any Member or Assignee, such Member's or
Assignee's percentage interest of the Class either as set forth on Exhibit A, as
such exhibit is amended from time to time pursuant to the terms of this
Agreement, or as otherwise adjusted from time to time pursuant to Section 3.2,
Article X or Article XI.
“Permitted Transfer” means any Transfer of a Membership Interest that is
described in Section 10.2.
“Proceeding” means (a) any threatened, pending, or completed action or other
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative; (b) an appeal of any such proceeding; and (c) an inquiry or
investigation that could lead to any such proceeding.
“Prohibited Transfer” means any Transfer of a Membership Interest that is not a
Permitted Transfer.
“Projects” means all existing and future development projects of Cardinal except
any projects relating to Monroe Gas Storage.
“Substituted Member” means a person who is admitted as a Member pursuant to
Section 11.1 with respect to the Transfer of an existing Membership Interest.
“Treasury Regulations” means the Treasury regulations promulgated under the
I.R.C.
2.Other Definitions. Each of the following defined terms has the meaning given
such term in the Section set forth opposite such defined term:
Defined Term
Section Reference
Agreement
Preamble
Appraiser Notice
15.2(b)
Cardinal
Recitals
Cause
5.7(b)(ii)
Contributed Membership Interest
Recitals
Conversion
Article XII
Converting Member
Article XII
Effective Date
Preamble
Liquidator
14.2(b)
MGS Call
3.2(d)
MGS Call Notice
3.2(d)
MOP
Recitals
MUS
Recitals
Notice Date
5.7(a)
Old LLC Agreement
Recitals
Project Call
3.2(b)
Project Call Notice
3.2(b)
Transfer
10.1(a)
Valuation Notice
15.2(a)

3.Usage. In this Agreement, unless a clear contrary intention appears:
(a)the singular number includes the plural number and vice versa;
(b)reference to any person includes such person's successors and assigns but, if
applicable, only if such successors and assigns are not prohibited by this
Agreement, and reference to a person in a particular capacity excludes such
person in any other capacity or individually;
(c)reference to any gender includes the other gender and the neuter;
(d)reference to any agreement or other document means such agreement or other
document as amended or modified and in effect from time to time;
(e)reference to any statute, regulation, or other legal requirement means such
legal requirement as amended, modified, codified, replaced, or reenacted, in
whole or in part, and in effect from time to time, including rules and
regulations promulgated thereunder, and reference to any section or other
provision of any legal requirement means that provision of such legal
requirement from time to time in effect and constituting the substantive
amendment, modification, codification, replacement, or reenactment of such
section or other provision;
(f)“hereunder,” “hereof,” “hereto,” and words of similar import refer to this
Agreement as a whole and not to any particular Article, Section, or other
provision hereof;
(g)“including” (and with correlative meaning “include”) means including without
limiting the generality of any description preceding such term;
(h)“or” is used in the inclusive sense of “and/or”;
(i)with respect to the determination of any period of time, “from” means “from
and including” and “to” means “to but excluding”; and
(j)references to agreements or other documents refer as well to all addenda,
exhibits, schedules, or amendments thereto.
ARTICLE II

ORGANIZATIONAL MATTERS
1.Formation. The Company was formed pursuant to the Certificate of Formation
filed with the Delaware Secretary of State effective as of the Formation Date.
2.Name. The Company's name is as set forth in the Certification of Formation.
The Manager may change the Company name at any time without the approval of any
Member by filing a certificate of amendment. The Manager shall provide notice of
the change to all Members. The Company's business may be conducted under its
name and/or any other name or names deemed advisable by the Manager. The Manager
shall cause to be executed and filed of record all assumed or fictitious name
certificates required by law.
3.Registered Office and Agent. The street address of the initial registered
office of the Company in Delaware and the name of the initial registered agent
of the Company are as set forth in the Certificate of Formation. The Manager may
change the Company's registered office or registered agent at any time by filing
a Certificate of Amendment. The Manager shall provide notice of the change to
all Members.
4.Term. The Company will continue until terminated in accordance with
Article XIV.
5.Purposes. The purposes of the Company are to engage in any activities that are
permitted under applicable laws.
6.Powers. Subject to any limitations in this Agreement, the Company may exercise
the power to do any and all acts reasonably related to its purposes.
7.Company Property.
(a)All Company property shall be owned in the name of the Company and not in the
name of any Member. No Member or Assignee will have any interest in such Company
property solely by reason of the Member's status as a Member.
(b)The Manager shall deposit or invest all funds of the Company in an account or
accounts in the name of the Company. No funds other than the funds of the
Company may be deposited therein. The funds in such accounts shall be used
exclusively for the business of the Company (including distributions to the
Members) and may be withdrawn only by persons approved by the Manager.
8.Consent to Admission of Members. Each person executing this Agreement consents
to the admission as Members in the Company all of the other persons who are
Members as of the date such person executes this Agreement.
9.Status of Manager and Members. Except as otherwise provided by this Agreement,
the Manager has the status, rights, and obligations of a manager in a limited
liability company as set forth in the Act, and each Member has the status,
rights, and obligations of a member in a limited liability company as set forth
in the Act.
10.Certificates of Membership Interests. Each Member's Membership Interest may
be represented by a Certificate of Membership Interest, and shall be broken down
by Class. Each Certificate of Membership Interest for any Class shall be
numbered and registered in the records of the Company as they are issued, and
shall be signed by the Manager. The holder of any Certificate of Membership
Interest shall promptly notify the Company of any loss or destruction of the
certificate, and the Company shall cause a replacement certificate to be issued
to the holder upon receipt of satisfactory evidence of the loss, destruction, or
mutilation or the certificate and satisfaction of other reasonable conditions
established by the Manager.
11.No State Law Partnership. The Members intend that the Company is not a
partnership or joint venture, and that no Manager or Member is a partner or a
joint venturer 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.
12.Subsidiaries. The Company may, from time to time, to the extent the Manager
determines appropriate in its discretion, cause the formation of one or more
Subsidiaries of the Company.

ARTICLE III

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
1.Initial Capital Contributions. Each Member's Initial Capital Contributions
were as set forth on Exhibit A‑1 attached hereto. Exhibit A‑2 attached hereto
sets forth each Member's Capital Contributions immediately prior to the
Effective Time. Exhibit A attached hereto sets forth the Capital Contributions
and Membership Interests of MOP as of the Effective Time as a result of the
consummation of the transactions contemplated by the Purchase Agreement.
2.Additional Capital Contributions.
(a)A Member shall not be required to make Additional Capital Contributions
except as set forth in this Section 3.2. Except as set forth in Section 3.2(b)
or (c), no Member of any Class has the right or is permitted to make any
Additional Capital Contributions unless (i) the Manager and a
Majority-in-Interest of each Class approves such Additional Capital Contribution
after notice to all Members of each Class of (A) the amount of the Additional
Capital Contribution to be made, (B) the Class that will make the Additional
Capital Contribution, (C) the effect of the Additional Capital Contribution on
each Member's Percentage Interest, and (D) other material information relevant
to the proposed Additional Capital Contribution, and (ii) all Members of each
Class that will be making the Additional Capital Contribution are afforded an
opportunity to participate in the Additional Capital Contribution according to
their relative Percentage Interests in the Class.
(b)If the Company receives a request from Cardinal under the terms of the
Cardinal LLC Agreement for an additional capital contribution by the Company for
Projects other than Monroe Gas Storage (a “Project Call”), the Manager shall
provide prompt written notice thereof to the Class A Members, which notice shall
include the date such Project Call was received, the amount of such Project
Call, and any other relevant facts related thereto (a “Project Call Notice”).
Upon receipt of a Project Call Notice the Class A Members may make, at their
respective option, Additional Capital Contributions to fund Project Calls.
(c)If the Company receives a request from Cardinal under the terms of the
Cardinal LLC Agreement for an additional capital contribution by the Company
relating to Monroe Gas Storage (a “MGS Call”), the Manager shall provide prompt
written notice thereof to the Class B Members, which notice shall set forth the
date such MGS Call was received, the amount of such MGS Call, and any other
relevant facts related thereto (a “MGS Call Notice”). Upon receipt of a MGS Call
Notice, the Class B Members:
(i)shall make Additional Capital Contributions to fund such MGS Calls if and to
the extent such MGS Calls relate to the Pad Gas Lease; and
(ii)may make, at its option, Additional Capital Contributions, if and to the
extent such MGS Calls do not relate to the Pad Gas Lease.
(d)Effective as of the effective time of any Additional Capital Contribution
under this Section 3.2, Exhibit A shall be amended by the Manager from time to
time to reflect such Additional Capital Contributions under this Section 3.2 and
the corresponding changes, if any, in the Percentage Interests of the Members.
3.Capital Accounts. The Company shall establish a separate Capital Account for
each Member and Assignee. The Capital Accounts shall be maintained according to
the provisions of Appendix A.
4.No Right to Return of or Interest on Capital Account. No Member may demand or
receive the return of its Capital Contribution or any portion of its Capital
Account, except as provided in this Agreement and the Act. The Manager does not
have any personal liability for the repayment of any Capital Contributions of
any Member. No interest will accrue or be paid with respect to the Capital
Contributions or Capital Account of any Member.
5.Member Loans. The Company may borrow money from one or more Members to the
extent the Manager deems appropriate to the conduct of the Company business on
terms that comply with the requirements of Section 5.6(c) (relating to related
party transactions). The amount of any loan made to the Company by a Member will
not constitute a Capital Contribution or otherwise affect such Member's Capital
Account or Membership Interest.
ARTICLE IV

ALLOCATIONS AND DISTRIBUTIONS
1.Allocation of Profit or Loss. Company profits and losses shall be allocated
among the Members and Assignees in accordance with the provisions of Appendix A.
The Members are aware of the income tax consequences of the allocations made by
Appendix A and agree to be bound by the provisions of Appendix A in reporting
their shares of Company income and loss for income tax purposes.
2.Distributions of Distributable Cash.
(a)Except as otherwise provided in Section 4.3 (relating to withholding),
Section 4.4 (relating to limitations on distributions), or Section 14.4
(relating to liquidating distributions), any Distributable Cash shall be
distributed not later than the 25th day after the end of each fiscal quarter to
the Members and Assignees as follows: (i) an amount equal to the Monroe Gas
Distribution pursuant to Section 4.3(d) of the Cardinal LLC Agreement received
by the Company with respect to the preceding quarter, less the Company's
Overhead Expenses for the preceding quarter as reasonably determined by the
Manager, shall be distributed to Class B Members in proportion to their
ownership of Class B Interests, and (ii) all remaining Distributable Cash shall
be distributed to the Class A Members in proportion to their ownership of Class
A Interests. Overhead Expenses for purposes of Section 4.2(a)(i) shall not
exceed $25,000 per calendar year, unless the Class A Interests and Class B
Interests approve the excess Overhead Expense pursuant to Section 5.3(b). The
Manager may provide for a record date with respect to distributions.
(b)To the extent it may lawfully do so, the Company shall make distributions to
Members and Assignees in accordance with Section 4.2(a) and Section 14.4(a)(iii)
at such times and in such amounts as the Manager determines is sufficient to
enable the Members and Assignees to make payments of tax due (including
estimated taxes and any applicable and interest and penalties) with respect to
their allocable shares of the Company's taxable income. Unless the Manager
determines otherwise, the taxes due for each Member and Assignee shall be
calculated by assuming that the Member or Assignee is an individual taxed at the
highest U.S. federal income tax rate applicable to the type of income involved.
3.Withholding. The Company shall withhold from distributions, or pay on behalf
of a Member or Assignee, all amounts that the Manager determines the Company is
required to withhold or pay on behalf of such person (including federal and
state income tax withholding). All amounts so withheld from distributions are
deemed to have been distributed to the person otherwise entitled to receive the
amount so withheld. To the extent an amount is paid by the Company on behalf of
a Member or Assignee but not withheld from a distribution, the amount paid
constitutes a loan to such Member or Assignee. Such loan bears interest at the
Index Rate and is repayable on demand or, at the election of the Manager, is
repayable out of distributions to which such Member or Assignee would otherwise
be entitled.
4.Limitation on Distributions.
(a)The Company may not make a distribution to a Member or Assignee if it would
render the Company insolvent, determined in accordance with Section 18-607 of
the Act. A Member or Assignee who receives a distribution in violation of
Section 18‑607 of the Act is not required to return the distribution except as
required in Section 18‑607 of the Act.
(b)The Members shall look solely to the assets of the Company for any
distributions, including liquidating distributions. If the assets of the Company
remaining after the payment or discharge, or the provision for payment or
discharge, of the Company liabilities are insufficient to make any
distributions, no Member has any recourse against the separate assets of any
other Member.
5.No Right to Partition or Distributions in Kind. No Member has any right, and
waives any right that it might otherwise have, to cause any Company property to
be partitioned and/or distributed in kind. Except as provided in Section 14.4(d)
(relating to liquidating distributions), the Company may not make any
distributions in kind.
6.Recovery of Erroneous Distributions. If the Company has, pursuant to any clear
and manifest accounting or similar error, distributed to any Member an amount in
excess of the amount to which the Member is entitled pursuant to this Agreement,
the Member shall reimburse the Company to the extent of such excess, without
interest, within 30 days after demand by the Company.

ARTICLE V

MANAGEMENT

1.Management and Control of Company Business.
Subject to the limitations set forth in this Agreement, the Manager has
exclusive authority to manage and conduct the Company's business. The Manager
shall do all things appropriate to carry out the Company's purpose. The Manager
shall comply with the terms of the Cardinal LLC Agreement to the extent
applicable to the Company. Except as otherwise provided in this Agreement, all
actions that the Manager may take and all determinations that the Manager may
make pursuant to this Agreement may be taken and made in the absolute discretion
of the Manager. There shall be only one Manager of the Company.
(a)Except as set forth in Section 5.7(d), the Members may not take part in the
management or control of the Company business or bind the Company in their
capacity as Members. The Members shall not have the right to vote or otherwise
consent or withhold consent to any actions taken by the Manager except with
respect to such matters as are expressly stated in this Agreement.

2.Delegation of Authority.
(a)The Manager may cause the Company to hire employees and agents, and may
delegate to such persons any of its authority hereunder, as the Manager deems
appropriate for the conduct of the Company's business.
(b)The Manager may establish offices and appoint officers of the Company, and
may delegate to such officers any of its authority hereunder, as the Manager
deems appropriate. The officers may be appointed for such terms and may exercise
such powers and authority and perform such duties as determined by the Manager.
An officer need not be a Member of the Company. Any two or more offices may be
held by the same person. An officer may be removed, with or without cause, at
any time by the Manager. Each officer will hold office until his successor is
chosen and is qualified in his stead, or until his death, resignation, or
removal from office. Any vacancy in an office because of death, resignation,
removal, or otherwise may be filled by a person appointed by the Manager. An
officer is subject to the same standards of conduct as apply to a Manager as
described in Section 5.6.

3.Limitations on Manager Authority.
(a)The Manager may not do any of the following acts with respect to the Company
without the approval of all Members:
(i)knowingly do any act in contravention of this Agreement or, when acting on
behalf of the Company, engage in, or cause or permit the Company to engage in,
any activity that is not consistent with the purposes of the Company;
(ii)except as otherwise provided in this Agreement, knowingly do any act that
would make it impossible to carry on the Company business; or
(iii)cause the Company to (A) not be taxable as a partnership for federal income
tax purposes, or (B) take a position inconsistent with such treatment.
(b)The Manager may not do any of the following acts without the approval of a
Majority-in-Interest of each Class:
(i)cause the Company to (A) make a general assignment for the benefit of
creditors, (B) file a voluntary bankruptcy petition, or (C) seek an order for
relief or declaration of insolvency in a federal or state bankruptcy or
insolvency proceeding;
(ii)file a pleading seeking for the Company, or admitting or failing to contest
the material allegations of a petition filed by any other person seeking for the
Company, a proceeding of the type described by paragraph (i);
(iii)except as provided in Article XIV, seek, consent to, or acquiesce in the
appointment of a trustee, receiver, or liquidator of the Company or of all or a
substantial part of the Company's properties; cause the Company to issue any
Membership Interest or admit any Member other than pursuant to Section 2.8,
Section 3.2, or Article XI;
(iv)cause the Company to acquire any Membership Interest;
(v)cause the Company to acquire any equity or debt securities of any Member or
any Affiliate of a Member, or otherwise make loans to any Member or any
Affiliate of a Member;
(vi)cause the Company to acquire from any person any equity or debt securities
or assets of any corporation, limited liability company, partnership,
association, business, or business division, whether by stock purchase, asset
purchase, contribution, or other business combination (excluding investments in
Cardinal and investments and asset acquisitions in the ordinary course of the
Company's business);
(vii)cause the Company to participate in any merger, consolidation, transfer,
continuance, or conversion of the Company with or into any other person;
(viii)cause the Company to participate in any reorganization in which Membership
Interests are exchanged for or converted into cash, securities of any other
person, or other property;
(ix)sell or otherwise dispose of all or substantially all of the Company
property, except in connection with winding up the Company as permitted in this
Agreement;
(x)incur any indebtedness for borrowed money in the name of the Company; create
any lien on the assets or property of the Company; or guarantee or provide
surety for the obligations of any third party;
(xi)appoint as MRMC Managers (as defined in the Cardinal LLC Agreement)
individuals other than the current MRMC Managers on the Cardinal Board, Ruben
Martin and Wes Martin; or
(xii)approve Overhead Expenses in excess of $25,000 per year to be deducted from
the amount received as the Monroe Gas Distribution to calculate Distributable
Cash under Section 4.2(a)(i).
(c)The Manager may not do any of the following acts without the approval of a
Majority-in-Interest of the Class A Interests:
(i)consent to any action that requires the consent of the Category A Members of
Cardinal under the terms of Section 5.8 of the Cardinal LLC Agreement except
when such action relates exclusively to Monroe Gas Storage; or
(ii)cause the MRMC Managers on the Cardinal Board to consent to any action that
requires the consent of the Board of Cardinal under the terms of Section 5.7 of
the Cardinal LLC Agreement except when such action relates exclusively to Monroe
Gas Storage.
(d)The Manager may not do any of the following acts without the approval of a
Majority-in-Interest of the Class B Interests:
(i)consent to any action that requires the consent of the Category A Members of
Cardinal under the terms of Section 5.8 of the Cardinal LLC Agreement when such
action relates exclusively to Monroe Gas Storage; or
(ii)cause the MRMC Managers on the Cardinal Board to consent to any action that
requires the consent of the Board of Cardinal under the terms of Section 5.7 of
the Cardinal Agreement when such action relates exclusively to Monroe Gas
Storage.
For the avoidance of any doubt, any action relating to Monroe Gas Storage that
is taken by the MRMC Managers (as defined in the Cardinal LLC Agreement) on the
Cardinal Board shall require the approval of a Majority-in-Interest of the Class
B Members.
4.Reliance. Persons dealing with the Company may rely conclusively on the
authority of the Manager as set forth in this Agreement. Every document executed
by the Manager with respect to any business or property of the Company is
conclusive evidence in favor of any person relying on the document that (a) at
the time of the execution and delivery of the document this Agreement was
effective, (b) the document was executed in accordance with this Agreement and
is binding on the Company, and (c) the Manager was authorized to execute and
deliver the document on behalf of the Company.
5.Compensation and Expenses of Members and Manager. Members and Managers are not
entitled to any salary, fee, or other remuneration (other than distributions
with respect to the Member's Membership Interest) for providing property or
services or other consideration to or for the benefit of the Company in their
capacity as a Member or Manager, except that the Manager is entitled to
reimbursement from the Company for reasonable out-of-pocket expenses paid or
incurred on behalf of the Company, including reasonable charges for services
provided by employees of the Manager and overhead expenses. The Company shall
pay all out-of-pocket costs incurred in organizing the Company. This Section
does not limit or enlarge the Manager's or a Member's rights to liability
protection or indemnification under Article VI, and does not limit the Company's
ability to enter into transactions with Members in their capacities other than
as Members in accordance with Section 5.6(c).
6.Standards of Manager and Member Conduct.
(a)In General. The Manager shall manage and conduct the Company's business in
good faith and in a manner the Manager reasonably believes to be in the
Company's best interest. The Manager does not violate this Section 5.6(a) unless
the Manager engages in conduct described in Section 6.3(a) (relating to improper
conduct).
(b)Outside Activities of Manager and Members. The Manager shall devote to the
Company's affairs only such time and resources as the Manager deems necessary
for the conduct and winding up of the Company business. The Manager and Members
or its or their Assignees may engage in or have an interest in other business
ventures of every nature and description, independently or with others,
including the ownership and operation of businesses similar to or in competition
with, directly or indirectly, the Company. Neither the Company nor any Member or
Assignee has, solely as a result of such person's interest in the Company, any
right to acquire any rights in or to any such other business venture or to the
income or profits derived from any such other business venture. A Manager or
Member or Assignee has no duty to disclose any such similar or competing
business venture to the Company or any Member or Assignee, or to offer to the
Company or any Member or Assignee any prior opportunity to acquire an interest
in such other business venture.
(c)Related Party Transactions. Except as otherwise provided in this Agreement,
the Manager, when acting on behalf of the Company, may purchase property from,
sell property to, or otherwise deal with any Manager, Member, or Assignee,
acting on its own behalf, or any Affiliate of any Manager, Member, or Assignee,
but any such transaction shall be on terms that are no less favorable to the
Company than if the transaction had been entered into with an independent third
party. No provision of this Agreement requires disclosure of any transaction to,
and approval of the transaction by, any disinterested governing persons of the
Company or the Members.
7.Resignation, Removal, and Replacement of Manager.
(a)Resignation. The Manager may resign as manager of the Company only upon
notice to all Members. If there is no resignation date specified in the notice,
or if the specified date is earlier than 90 days following the date the notice
is given to Members (“Notice Date”), the Manager's resignation is effective on
the 90th day following the Notice Date. If the specified resignation date is
later than 180 days after the Notice Date, the Manager's resignation is
effective on the 180th day following the Notice Date. A Manager is deemed to
have resigned as manager of the Company upon the following events:
(i)any event specified in Section 18-304 of the Act (relating to bankruptcy or
insolvency proceedings with respect to a Member);
(ii)if the Manager is an individual, the Manager's death, the appointment of a
guardian or general conservator for the Manager, or a judicial determination
that the Manager is incapable of performing the Manager's duties under the
Agreement; or
(iii)if the Manager is an entity, the termination of the Manager's existence or
suspension of the Manager's right to do business.A resignation pursuant to
paragraph (ii) is not a violation of this Section 5.7(a) provided the estate or
personal representative other authorized person provides notice of the deemed
resignation within 90 days after the event giving rise to the deemed
resignation.
Removal.
(b)Removal for Cause. The Manager may be removed as manager of the Company upon
the affirmative vote of a Majority-in-Interest of each Class if there is cause
for removal as specified in Section 5.7(b)(ii) and the Company has received a
written opinion of counsel that:
(A)cause for removal as specified in Section 5.7(b)(ii) exists; and
(B)the removal of the Manager is not prohibited under any loan agreements,
contracts, or other applicable legal requirements.
(i)Definition of Cause. “Cause” for removal exists only if one or more of the
following conditions has occurred:
(A)there has been a change in Control of the Manager;
(B)the Manager has engaged in wrongful conduct described in Section 6.3(a) that
adversely and materially affected the Company business or the Members;
(C)the Manager or an Affiliate of the Manager has been convicted of a felony; or
(D)a final judgment of a court of competent jurisdiction has been entered that
the Manager's removal is necessary to comply with any requirements, conditions,
or guidelines contained in any opinion, directive, order, ruling, or regulation
of any federal or state agency or judicial authority or contained in any federal
or state statute.
(ii)Removal Without Cause. The Manager may be removed for any reason (or for no
reason) upon the affirmative vote of a Majority-in-Interest of each Class of the
Members.
(c)Election of Replacement Manager. If the Manager resigns or is removed as the
manager of the Company, within 90 days following such resignation or removal a
Majority-in-Interest of each Class may elect a replacement Manager of the
Company effective as of the date of the former Manager's resignation or removal.
The replacement Manager shall file any required amendments to this Agreement or
the Certificate of Formation to reflect the resignation or removal of the former
Manager and the election of the replacement Manager. If the Members fail to
elect a replacement Manager within 90 days following the resignation or removal
of the former Manager, the Company shall be wound-up according to Article XIV.
(d)Interim Management. During the period that the Members may elect a
replacement Manager as provided in Section 5.7(c) and prior to such election (or
an election to wind up the Company), the Members may by vote of a
Majority-in-Interest of each Class appoint an interim manager having authority
to manage and conduct the Company's business as the Manager as provided herein.
If an interim Manager is not appointed, the authority to manage and conduct the
Company's business is vested in the Members who may act by vote of a
Majority-in-Interest of each Class, and who may by vote of a
Majority-in-Interest of each Class appoint a committee of one or more persons to
exercise the authority of the Manager until such time as a replacement Manager
is elected or the Company commences winding up. The Members shall file any
required amendments to this Agreement or the Certificate of Formation to reflect
the resignation or removal of the former Manager and the appointment of the
interim Manager, and all Members hereby approve any such amendments.
ARTICLE VI

LIABILITY AND INDEMNIFICATION
1.Limitation of Liability. No Member or Manager is liable for any debts,
obligations, or liabilities of the Company. SUBJECT TO SECTION 6.3, AN
INDEMNIFIED PERSON IS NOT LIABLE TO THE COMPANY OR ANY OTHER INDEMNIFIED PERSON
FOR ANY DAMAGES ARISING FROM ANY PROCEEDING RELATING TO THE CONDUCT OF THE
COMPANY'S BUSINESS OR RELATING TO ANY ACT OR OMISSION BY THE INDEMNIFIED PERSON,
INCLUDING ANY ACT OR OMISSION CONSTITUTING NEGLIGENCE, WITHIN THE SCOPE OF THE
INDEMNIFIED PERSON'S AUTHORITY IN THE COURSE OF THE COMPANY'S BUSINESS, OR FOR
ANY MISCONDUCT OR NEGLIGENCE ON THE PART OF ANY OTHER PERSON WHO IS AN EMPLOYEE
OR AGENT OF THE COMPANY.
2.Indemnification by Company. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW
AND SUBJECT TO SECTION 6.3, THE COMPANY INDEMNIFIES AND HOLDS HARMLESS EACH
INDEMNIFIED PERSON FROM AND AGAINST ANY DAMAGES ARISING FROM ANY PROCEEDING
RELATING TO THE CONDUCT OF THE COMPANY'S 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 THE
COMPANY'S BUSINESS OR FOR ANY MISCONDUCT OR NEGLIGENCE ON THE PART OF ANY OTHER
PERSON THAT IS AN EMPLOYEE OR AGENT OF THE COMPANY. An Indemnified Person's
expenses paid or incurred in defending itself against any Proceeding shall be
reimbursed as paid or incurred. The right to indemnification conferred in this
Article is not exclusive of any other right that any person may have or
hereafter acquire under any statute, agreement, vote of Members, or otherwise.
3.Conduct Not Protected.
(a)This Article does not operate to limit liability or to indemnify a person to
the extent the person is found liable pursuant to a final judgment of a court of
competent jurisdiction for:
(i)an act or omission that involves gross negligence, intentional misconduct, or
a knowing violation of law;
(ii)a Transfer or attempted Transfer of all or a portion of a Membership
Interest in a Prohibited Transfer, a Manager's resignation in violation of
Section 5.7(a), or a Member ceasing to be a Member in violation of Section
13.1(a);
(iii)a willful or reckless material breach of this Agreement or any other
agreement relating to the Company's business; or
(iv)an act or omission for which indemnification is prohibited by law.
(b)No provision of this Agreement requires the Company to pay or incur any
amount for which indemnification is not permitted under this Article.
(c)Any payments made to or on behalf of a person who is later determined not to
be entitled to such payments shall be repaid by the person to the Company. The
Company may require, as a condition to the payment of any amounts pursuant to
Section 6.2, that the Indemnified Person provide to the Company (i) a written
affirmation by the Indemnified Person of the person's good faith belief that the
person has met the standard of conduct necessary for indemnification under this
Section; and (ii) a written undertaking by or on behalf of the Indemnified
Person to repay the amount paid or reimbursed if the person has not met that
standard or if indemnification is otherwise prohibited by applicable law.
4.Insurance. The Company may maintain insurance to protect any person against
any expense, liability, or loss, whether or not the Company would have the power
to indemnify such person against such expense, liability, or loss under the Act.
5.Survival. The indemnities provided for in this Agreement survive the Transfer
of an Indemnified Person's Membership Interest, the termination of the person's
status as a Member or other status giving rise to classification as an
Indemnified Person, and the termination of this Agreement and the Company.

ARTICLE VII

BOOKS AND RECORDS; REPORTS
1.Maintenance of and Access to Books and Records. The Company shall maintain
such books and records regarding the Company's business and properties as is
reasonable, including all books and records required under the Act. Any Member
and its representatives may from time to time at such Member's expense examine
(and make copies and extracts of) the Company's books, records and documents of
any kind at such reasonable times as such Member may request upon reasonable
notice.
2.Fiscal Year. The Company shall adopt the calendar year as its fiscal year for
financial and tax accounting purposes.
3.Financial, Operating Reports and Inspection Rights.
(a)Quarterly Report. As soon as practicable after the end of each of the first
three quarters of each fiscal year, but in any event not later than 60 days
after the end of each such quarter, the Manager shall deliver to each Member a
quarterly report containing summary Company balance sheet as of the end of such
quarter and summary Company statements of income, cash flows, and changes in
Members' equity for such quarter and for the portion of the fiscal year through
such date.
(b)Annual Report. As soon as practicable after the end of each fiscal year, but
in any event not later than 90 days after the end of the fiscal year, the
Manager shall deliver to each Member an annual report containing the following:
(i)a Company balance sheet as of the end of such fiscal year, and Company
statements of income, cash flows, and changes in Members' equity for such fiscal
year, each in reasonable detail and prepared according to United States
generally accepted accounting principles; and
(ii)a statement of changes in the Member's Capital Account (showing the balance
in the Member's Capital Account as of the beginning of the fiscal year,
contributions or distributions during the year, allocations of profits and
losses during the year, any other adjustments to the Capital Account balances
during the year, and the balance in the Capital Account as of the end of the
year).
(c)Inspection Rights Under Cardinal LLC Agreement. Upon notice to the Manager by
any Member, such Member may request the Company to exercise its inspection
rights as a Category A Member of Cardinal under the provisions of Section 7.4 of
the Cardinal LLC Agreement.
4.Tax Reports.
(a)Not later than the date (including extensions) for filing the Company's tax
return with the Internal Revenue Service (Form 1065), the Manager shall deliver
to each person who was a Member or Assignee at any time during the period
covered by the return all information necessary for the preparation of such
person's United States federal income tax returns, including a Form 1065
Schedule K-1 (if applicable).
(b)Upon the written request of any Member or Assignee, the Manager shall deliver
to such person information necessary for the preparation of any tax returns that
must be filed by such person, including information necessary for estimating and
paying estimated taxes.
5.Transmission of Communications. Each person who holds a Membership Interest on
behalf of, or for the benefit of, another person or persons shall be responsible
for conveying any report, notice, or other communication received concerning the
Company's affairs to such other person or persons.

ARTICLE VIII

TAX MATTERS
1.Tax Classification. The Members intend that the Company be classified as a
partnership for federal income tax purposes. The Manager shall take all actions
reasonably necessary or appropriate to ensure the Company is so classified
(including the filing of elections or tax returns). No Manager, officer, or
Member shall take any action inconsistent with the classification of the Company
as a partnership for federal income tax purposes.
2.Company Returns. The Manager shall cause the Company to file such tax returns
as may be required by law.
3.Tax Elections.
(a)General. Except as otherwise provided in this Agreement, the Manager shall
cause the Company to timely make or revoke all elections, and take all tax
reporting positions, necessary or desirable for the Company as determined by the
Manager. No election shall be made to have the Company excluded from the
application of any provision of Subchapter K of the I.R.C. or any equivalent tax
provision in any other tax jurisdiction. The Company shall make the election
referred to in I.R.C. Section 754 upon the request of any Member in connection
with a Transfer of the Member's Membership Interest.
(b)Safe Harbor Election for Compensatory Membership Interests. If Proposed
Treasury Regulation 1.83-3(l) is adopted as a temporary or final regulation, the
Company shall make the safe harbor election described in such regulations, and
the Company and each Member (including any person to whom an interest in the
Company is transferred in connection with the performance of services) shall
comply with all requirements of the safe harbor with respect to all Membership
Interests transferred in connection with the performance of services while the
election remains effective. The Manager shall prepare, execute, and file any
required documentation to cause the election to be effective. The Manager may
terminate the safe harbor election at any time if it determines in good faith
that it is in the best interests of the Company and the Members to do so.
4.Consistent Reporting. Each Member shall, on the Member's tax returns, treat
each partnership item (as defined in I.R.C. Section 6231(a)(3)) in a manner
consistent with the treatment of the item on the Company's return in all
respects, including the amount, timing, and character of the item. No Member
shall file a request for an administrative adjustment of partnership items under
I.R.C. Section 6227(a) if such request would cause the Member's treatment of the
item to be inconsistent with the treatment of the item on the Company's return.
5.Tax Proceedings.
(a)The Manager shall be the Company's tax matters partner as defined in I.R.C.
Section 6231, and shall take such actions as are required to be designated the
tax matters partner under applicable Treasury Regulations.
(b)The tax matters partner shall represent the Company in connection with all
examinations of the Company's tax returns by tax authorities, including
administrative and judicial proceedings to contest any proposed adjustments.
Subject to Section 8.5(c), the tax matters partner has the exclusive right to
conduct Proceedings relating to Company taxes and to determine whether the
Company (either on its own behalf or on behalf of the Members) will contest or
continue to contest any tax deficiencies assessed or proposed to be assessed by
any taxing authority. The tax matters partner shall keep the Members informed on
a timely basis of all material developments with respect to any such Proceeding.
Each Member shall cooperate with the tax matters partner and do or refrain from
doing all things reasonably requested by the tax matters partner with respect to
the conduct of any Company tax Proceeding.
(c)The tax matters partner may not bind any other Member to a settlement
agreement relating to taxes without obtaining the written concurrence of such
Member.
(d)Any deficiency for taxes imposed on a Member (including penalties, additions
to tax or interest imposed with respect to such taxes) shall be paid by such
Member and, if paid or required to be paid by the Company, is recoverable from
such Member pursuant to Section 4.3 or by other legal means.
6.Information and Documents to Company. Each Member shall timely provide to the
Company all information and documents that such Member is required to provide by
applicable tax requirements, and shall also provide to the Company upon request
such additional information and documents as the Manager may reasonably request
in connection with the Company's compliance with applicable tax requirements or
filing of any permitted tax elections.
7.Survival. This Article shall survive the termination of the Company and the
termination of any Member's interest in the Company and remain binding for a
period of time necessary to resolve all tax matters with applicable taxing
authorities.

ARTICLE IX

MEETINGS AND VOTING OF MEMBERS
1.Meetings.
(a)Meetings of the Members may be called at any time by the Manager, or by one
or more Members holding at least 50% of the Percentage Interest of either Class
held by the Members. Meetings shall be held at the Company's principal place of
business or at such other reasonable place set forth in the notice of the
meeting.
(b)Any action that may be taken at a Members' meeting may be taken without
holding a meeting if Members having at least the minimum Percentage Interest of
each Class that would be necessary to take the action at a meeting, in which
each Member entitled to vote on the action is present and votes, sign a written
consent or consents stating the action taken. Except as otherwise provided in
this Agreement, meeting notices and procedures, including procedures for
obtaining written consents in lieu of a meeting, shall be in conformity with
Del. Code title 8, Sections 211 through 233 as applied to corporations that
issue stock. Provisions relating to quorum and minimum voting requirements for
corporations shall not apply to the extent such provisions are inconsistent with
this Agreement. The Manager is solely responsible for conducting meetings of the
Members, conducting the solicitation of consents, determining the validity and
effect of responses to any solicitation of consents, and determining other
matters regarding meetings, voting, and consents.
(c)Notice of the results of any vote taken at a meeting, or the results of any
solicitation of consents in lieu of a meeting, shall be given to the Members not
later than with the delivery of the next following report of financial
information given pursuant to Section 7.3.
2.Voting. A Member entitled to vote on a matter may vote at a meeting in person,
or by a proxy executed in writing by the Member and received by the Manager
prior to the time when the votes of Members are to be counted. The provisions of
the Del. Code title 8, Section 212 pertaining to the validity and use of proxies
by shareholders of a corporation govern the validity and use of proxies given by
Members. Only Members of record on the date of the meeting (or if the vote is
conducted without a meeting then on the date of the notice soliciting the Member
consents) may vote.

ARTICLE X

TRANSFER OF MEMBERSHIP INTERESTS
1.Limitation on Transfers.
(a)The term “Transfer,” when used in this Agreement in reference to a transfer
of a Membership Interest, means an assignment (whether voluntarily,
involuntarily, or by operation of law and whether or not effective under this
Agreement) of all or any portion of a Member's or Assignee's Membership
Interest, or any interest therein, to another person, and includes a sale,
assignment, conveyance, gift, exchange, abandonment, or other disposition, a
transfer by merger or other business combination, a transfer pursuant to
bankruptcy, insolvency, incapacity, divorce, or death, and any pledge,
hypothecation, or other encumbrance.
(b)No Member may Transfer all or any portion of its Membership Interest unless
the Transfer is a Permitted Transfer. A Transfer of a Membership Interest that
is not a Permitted Transfer is a Prohibited Transfer.
2.Permitted Transfer of Membership Interest.
(a)A Transfer of a Membership Interest is a Permitted Transfer only if the
Transfer satisfies the conditions set forth in Section 10.3 and is described in
one or more of the following paragraphs of this Section 10.2(a):
(i)any Transfer by MOP that satisfies the conditions set forth in Section 10.3
shall be deemed a Permitted Transfer for purposes of this Agreement; or
(ii)in the case of a Transfer by a third party assignee, a Majority-in-Interest
of the Class A Interests and the Class B Interests must consent to such
Transfer, such consent to be not unreasonably withheld.
(b)Upon a Permitted Transfer by a Member of all of its Membership Interest, the
Member ceases to be a Member as of the effective date of the Transfer determined
according to Section 10.4.
3.Conditions to Permitted Transfers of Membership Interests. A Transfer shall
not be a Permitted Transfer unless the Manager determines that all of the
following conditions are satisfied:
(a)The Transfer complies with all applicable laws, including any applicable
securities laws.
(b)The Transfer will not cause the Company to be treated as other than a
partnership for United States federal income tax purposes.
(c)The Transfer will not cause the Company to be subject to regulation under the
Investment Company Act of 1940.
(d)The Transfer will not cause any assets of the Company to be deemed “plan
assets” under the Employee Retirement Income Security Act of 1974.
(e)The Transfer will not result in a termination of the Company under I.R.C.
Section 708, unless the Manager determines that such termination will not have
an adverse impact on the Members.
(f)The Transfer will not cause the application of the tax-exempt use property
rules of I.R.C. Sections 168(g)(1)(B) and 168(h) to the Company or its Members,
unless the Manager determines that such rules will not have an adverse impact on
the Members.
(g)The transferor and transferee have delivered to the Company any documents
that the Manager requests 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 an Assignee.
(h)If requested by the Manager, the Company has received a transfer fee in an
amount determined by the Manager to be sufficient to reimburse the Company for
the estimated expenses likely to be incurred by the Company in connection with
such transfer.
4.Effective Date; Distributions.
(a)A Permitted Transfer of a Membership Interest is effective as of the first
day of the calendar month following the calendar month during which the Manager
receives notice of such Transfer (in such form and manner as the Manager may
require) unless the Manager determines that the Transfer should be effective as
of an earlier or later date (for example, on any date the Transfer is effective
as a matter of state law, or where the notice of Transfer specifies that the
Transfer is to be effective on a future date).
(b)Distributions with respect to a transferred Membership Interest that are made
before the effective date of the Transfer shall be paid to the transferor, and
distributions made after such date shall be paid to the Assignee.
(c)Effective as of the effective date of a Transfer of a Membership Interest,
the Manager shall amend Exhibit A to reflect the reduction in the transferor's
Percentage Interest, if any, and to reflect the Assignee's Percentage Interest.
(d)Neither the Company nor the Manager has any liability for making allocations
and distributions to the Members determined in accordance with this Section
10.4, whether or not the Manager or the Company has knowledge of any Transfer of
any Membership Interest.
5.Transferor's Obligations. The transferor of a Membership Interest who ceases
to be a Member continues to be obligated with respect to its Membership Interest
or its status as a former Member as provided in the Code and applicable law.
6.Assignee's Rights and Obligations. Unless an Assignee becomes a Member
pursuant to Article XI, such Assignee shall not be entitled to any of the rights
granted to a Member, other than the rights to receive allocations of profits and
losses and distributions, to Transfer the Assignee's Membership Interest
(subject to the conditions of this Article X), and to receive reports and
information as specified in Article VII. An Assignee of a Membership Interest
shall succeed to the Capital Account of the transferor to the extent of the
Membership Interest transferred. An Assignee is bound by the limitations and
obligations imposed on Members under this Agreement irrespective of whether the
Assignee has signed or otherwise adopted this Agreement.
7.Effect and Consequences of Prohibited Transfer.
(a)Except as otherwise required by law, the Company and the Manager shall treat
a Prohibited Transfer as void and shall recognize the transferor as continuing
to be the owner of the Membership Interest purported to be transferred. If the
Company is required by law to recognize a Prohibited Transfer, the transferee
shall be treated as an Assignee with respect to the Membership Interest
transferred and may not be treated as a Member with respect to the Membership
Interest transferred unless admitted as a Member in accordance with Article XI.
(b)The Company may remove the transferor and Assignee with respect to a
Prohibited Transfer as provided in Article XIII.
(c)The transferor and transferee with respect to a Prohibited Transfer shall be
jointly and severally liable to the Company for, and shall indemnify and hold
the Company harmless against, any expense, liability, or loss incurred by the
Company (including reasonable legal fees and expenses) as a result of such
Transfer, their removal and liquidation of their Membership Interests (if
applicable), and the efforts to enforce the indemnity granted in this Section
10.7(c).

ARTICLE XI

ADMISSION OF NEW MEMBERS
1.Substituted Members. An Assignee of a Membership Interest shall be admitted as
a Substituted Member with respect to such Membership Interest on the date on
which all of the following conditions are satisfied:
(a)The Manager has approved in writing the admission of the Substituted Member.
(b)The Assignee has delivered to the Company any agreements and other documents
that the Manager requests to confirm such Assignee as a Member in the Company
and such Assignee's agreement to be bound by this Agreement as a Member.
(c)If requested by the Manager, the Company has received an admission fee in an
amount determined by the Manager to be sufficient to reimburse the Company for
the estimated expenses likely to be incurred by the Company in connection with
the admission of the Assignee as a Substituted Member.
2.Additional Members. The Manager shall admit a person as an Additional Member
upon satisfaction of all of the following conditions.
(a)A Majority-in-Interest of each Class has approved the admission of the
Additional Member after notice to all Members of (i) the Initial Capital
Contribution to be made by the proposed Additional Member, (ii) the effect of
the admission on each Member's Percentage Interest, and (iii) other material
information relevant to the proposed admission.
(b)The admission of the proposed Additional Member satisfies the applicable
conditions of Section 10.3.
(c)The proposed Additional Member has delivered to the Company any agreements
and other documents that the Manager requests to confirm the person as a Member
in the Company and the person's agreement to be bound by this Agreement as a
Member.
3.No Required Capital Contributions. A person may be admitted as a Member,
including as the sole Member, and may acquire a Membership Interest without
making a contribution to the Company or assuming an obligation to make a
contribution to the Company.
4.Amendments to Exhibit A. Effective as of the effective date of the admission
of a Substituted Member or an Additional Member, the Manager shall amend
Exhibit A to reflect the changes in Percentage Interests of the Members.

ARTICLE XII

CONVERSION of Class B Interests
Upon a sale of the membership interests, a merger, an exchange of interests, an
initial public offering of Cardinal or other similar transaction involving
Cardinal, MOP and any MOP Affiliate that acquires Class B Interests from MOP
(each, a “Converting Member”) shall have the right to convert all, but not less
than all, Class B Interests held by the Converting Members into Class A
Interests (a “Conversion”). In addition, and without limiting the foregoing, all
but not less than all of the outstanding Class B Interests may be converted into
Class A Interests upon the approval by all the Class A Members, with any such
Conversion to be upon terms and conditions that are mutually satisfactory to the
Class A Members and the Class B Members. Upon a Conversion, all Class B
Interests held by each Converting Member will be converted into the number of
Class A Interests having the same Fair Value on a fully diluted basis as the
Class B Interests held by such Converting Member immediately prior to the
Conversion. For purposes of this Article XII, Fair Value of Membership Interests
shall be determined in accordance with, and any dispute regarding such valuation
shall be resolved pursuant to, Section 15.2.
ARTICLE XIII

RESIGNATION OR REMOVAL OF MEMBERS
1.Resignation of Members.
(a)No Member may resign from the Company or otherwise cease to be a Member
except upon the following events:
(i)receipt by the Company of a notice of such Member's resignation from the
Company;
(ii)a Transfer of all of the Member's Membership Interest in a Permitted
Transfer; or
(iii)removal of the Member as a Member as provided in this Agreement.
(b)A Member shall be deemed to have resigned from the Company upon the following
events:
(i)an event specified in Section 13.1(a);
(ii)an event specified in Section 18-304 of the Act (relating to bankruptcy or
insolvency proceedings with respect to a Member);
(iii)if a Member is an individual, the Member's death, the appointment of a
guardian or general conservator for the Member, or a judicial determination that
the Member is incapable of performing the Member's duties under this Agreement;
or
(iv)if the Member is an entity, an event causing the termination of the Member's
existence or suspension of the Member's right to do business.
A resignation pursuant to paragraph (iii) is not a violation of Section 13.1(a)
provided the estate or personal representative other authorized person provides
notice of the deemed resignation within 90 days after the event giving rise to
the deemed resignation.
(c)If a Member ceases to be a Member in violation of Section 13.1(a), the
Company may recover damages from the former Member for breach of this Agreement.
2.Removal of Members.
(a)A Member may be removed as a Member by the Manager under the following
circumstances:
(i)the Member has transferred or attempted to Transfer all or any portion of its
Membership Interest in a Prohibited Transfer;
(ii)in the case of any Member who is also the Manager or an Affiliate of the
Manager, the Member or its Affiliate has ceased to be the Manager in violation
of Section 5.7(a) or has been removed as the Manager in accordance with Section
5.7(b);
(iii)the Member has materially breached the terms of this Agreement or any other
material agreement with the Company; or
(iv)the Manager determines that removal is necessary to comply with any
requirements, conditions, or guidelines contained in any opinion, directive,
order, ruling, or regulation of any United States federal or state agency or
judicial authority or contained in any United States federal or state statute.
(b)If the Manager proposes to remove a Member pursuant to this Section, the
Manager shall notify the Member in writing of the proposed removal, and if
applicable shall provide such Member a reasonable opportunity to cure the event
giving rise to removal. The removal of the Member is effective at such time as
determined by the Manager in accordance with applicable law and taking into
account the Member's opportunity to cure the event giving rise to removal.
3.Status of Former Member. A Member who has resigned or has been removed from
the Company or otherwise ceases to be a Member has the status of an Assignee
with respect to any Membership Interest held by such former Member. Except as
provided in Article XIV (relating to winding up and termination), such former
Member is not entitled to receive any payments under Section 18-604 of the Act.
ARTICLE XIV

DISSOLUTION
1.Events Requiring Dissolution or Winding Up. The Company is dissolved and shall
be wound up in accordance with this Agreement and the Act upon the first to
occur of the following events:
(a)a Majority-in-Interest of each Class votes to dissolve and wind up the
Company;
(b)a decree by a court requiring the dissolution and winding up of the Company;
(c)the termination of membership of the last remaining Member; or
(d)the resignation or removal of the Manager if the Members fail to elect a
replacement Manager as provided in Section 5.7(c).
2.Winding Up Procedures.
(a)On the occurrence of an event requiring winding up of the Company, unless
there is an action to continue the Company without winding up in accordance with
Section 14.3, the Manager (or other Liquidator as provided below) shall, as soon
as reasonably practicable, wind up the Company's business and affairs (including
disposing of the Company's assets and applying the proceeds as provided in
Section 14.4) and terminate the Company in accordance with this Agreement and
the Act. The Company shall cease to carry on its business (except to the extent
necessary to wind up its business), collect and sell its property to the extent
the property is not to be transferred or distributed in kind, and perform any
other act required to wind up its business and affairs.
(b)If the Manager has wrongfully caused the winding up of the Company or if
there is no Manager, (i) a Majority-in-Interest of each Class may vote to elect
a person or persons to accomplish the winding up of the Company, or (ii) if the
Members fail to elect a person to accomplish winding up the Company, then any
Member or Assignee may petition a court to wind up the Company as provided in
Section 18-803(a) of the Act. The person or persons winding up the Company,
whether the Manager or an elected or court appointed person or persons, is
referred to in this Agreement as the “Liquidator.”
(c)The Liquidator may determine the time, manner, and terms of any sale or sales
of Company property pursuant to such winding up. The Liquidator (if not the
Manager) is entitled to receive reasonable compensation for its services; may
exercise all of the powers conferred upon the Manager under this Agreement to
the extent necessary or desirable in the good faith judgment of the Liquidator
to perform its duties; and, with respect to acts taken or omitted while acting
in such capacity on behalf of the Company, is entitled to the limitation of
liability and indemnification rights set forth in Article VI.
(d)The Liquidator shall provide quarterly reports to the Members and Assignees
during the winding up procedure showing the assets and liabilities of the
Company, providing information and documents required by the Members and
Assignees to comply with their tax reporting obligations, and such other
information as the Liquidator deems appropriate. Within a reasonable time after
completing the winding up, the Liquidator shall give each Member and Assignee a
final statement setting forth the assets, liabilities, and reserves of the
Company as of the date of completion of winding up.
3.Continuation Without Winding Up.
(a)If there is a decision to dissolve and wind up the Company as described in
Section 14.1(a), the Company may be continued as provided in Section 18-806 of
the Act.
(b)If there is a termination of the continued membership of the last remaining
Member as described in Section 14.1(c), then prior to completion of the winding
up process but not later than 90 days after the event of termination, the
Manager may continue the Company by admitting one or more Members effective as
of the occurrence of the event of termination. Any Assignee whose Percentage
Interest would be diminished by reason of the admission of an Additional Member
under the circumstances described in this Section must approve the admission of
the Additional Member.
4.Liquidation of Assets and Application and Distribution of Proceeds.
(a)In General. On winding up the Company, the Liquidator shall dispose of the
Company's properties and apply and distribute the proceeds, or transfer the
Company properties, in the following order of priority:
(i)to creditors (including Members who are creditors) in accordance with their
relative rights and priorities to satisfy the liabilities of the Company,
including expenses associated with the winding up and termination of the
Company, but excluding any Company liability for any unpaid Mandatory
Distributions;
(ii)to Members, Assignees, and former Members to satisfy the Company's liability
for any unpaid Mandatory Distributions; and
(iii)to Members and Assignees in accordance with their positive capital account
balances.
(b)No Member Deficit Restoration Obligation. No Member is liable to the Company
or any other person for the repayment of any deficit in the Member's Capital
Account, except as provided in Section 18-607 of the Act.
(c)Reserves. In the discretion of the Liquidator, a pro rata portion of the
distributions that would otherwise be made pursuant to Section 14.4(a)(ii) and
(iii) may be withheld to provide a reasonable reserve for Company liabilities
(contingent or otherwise) and future expenses, including a reasonable reserve
for any claims for indemnification under Article VI and for any future expenses
associated with any tax audit or other Proceeding that is pending or may arise.
(d)Payments and Distributions to Members in Kind. The Liquidator may not make
any payments or distributions to Members or Assignees pursuant to Section
14.4(a)(ii) or (iii) other than in cash unless all Members and Assignees
receiving the property approve the transfer in kind. The Liquidator shall
determine the Fair Value of any property transferred to Members or Assignees in
kind according to the valuation procedures set forth in Article XV.
(e)Character of Liquidating Distributions. Except as otherwise required by the
I.R.C., amounts paid to Members pursuant to this Section 14.4 shall be treated
as made in exchange for the interest of the Member in Company property pursuant
to I.R.C. Section 736(b)(1), including the interest of such Member in Company
goodwill.
5.Certificate of Cancellation. The Liquidator shall file a Certificate of
Cancellation under the Act on the completion of the dissolution and winding up
of the Company.

ARTICLE XV

VALUATION
1.Fair Value of Company Property. The Fair Value of property contributed to the
Company by a Member as part of such Member's Initial Capital Contribution is the
amount of such Member's Initial Capital Contribution, as set forth on Exhibit A,
minus the amount of any cash contributed to the Company as part of such Member's
Initial Capital Contribution. In all other cases, the Fair Value of an asset,
other than a Membership Interest, as of any date is its fair market value as
determined by the Manager in good faith using any reasonable valuation method.
If any affected Member does not agree with the valuation set by the Manager, the
Fair Value shall be determined using procedures similar to those set forth in
Section 15.2, and the cost of any such determination shall be borne entirely by
the affected Member unless the Manager or a Majority-in-Interest of each Class
of Members other than the affected Member approves an alternative allocation of
such costs.
2.Fair Value of Membership Interests.
(a)For purposes of Article XII, the Fair Value of a Membership Interest is its
fair market value as determined by the Manager (or, if there is no Manager, by
the Liquidator) in good faith based on the net proceeds that would be received
with respect to such Membership Interest in a winding up of the Company. In
connection with the Conversion of a Membership Interest, the Manager or
Liquidator shall provide written notice to each Converting Member setting forth
the Fair Value of the Membership Interests, which notice shall include all
information relevant to the determination of such Fair Value (a “Valuation
Notice”).
(b)If a Converting Member does not agree with the Fair Value of the Membership
Interests as determined by the Manager or Liquidator, such Converting Member may
submit to the Company a notice of objection within 30 days after such Converting
Member's receipt of the Valuation Notice. Within 15 days following receipt of a
Converting Member's notice of objection, the Company shall appoint a qualified
appraiser and deliver a written notice to each Converting Member setting forth
the name and business address of such appraiser (an “Appraiser Notice”). The
appraiser shall determine the Fair Value of the Membership Interests in
accordance with the principles set forth in Section 15.2(a). Except as provided
in Section 15.2(c), the appraiser's determination of the Fair Value of the
Membership Interests shall be made within 30 days of his appointment (or such
longer period as is reasonably required to complete the appraisal), and will be
final and binding on all concerned, absent manifest error.
(c)If a Converting Member does not approve the appraiser selected by the Company
pursuant to Section 15.2(b) and identified in the Appraiser Notice, within 15
days following such Converting Member's receipt of the Appraiser Notice the
Converting Member may appoint a qualified appraiser of the Converting Member's
choice, and inform the Company in writing of the name and business address of
the appraiser. In such event, the appraisers appointed by the Company and the
Converting Member shall appoint a third qualified appraiser. Each of the three
appraisers shall determine the Fair Value of the Membership Interests in
accordance with the principles set forth in Section 15.2(a). With respect to
each Class, the average of the two valuations of such Class of Membership
Interests that are closest to each other shall be deemed to be the Fair Value of
such Class of Membership Interests and such determination shall be final and
binding on all concerned, absent manifest error.
(d)The cost of each appraisal shall be shared 50% by the Company and 50% by the
Converting Members.

ARTICLE XVI
GENERAL PROVISIONS
1.Amendments.
(a)In General. Subject to the following exceptions and limitations, this
Agreement may be amended only with the approval of a Majority-in-Interest of
each Class.
(b)Exceptions and Limitations. The Manager shall amend Exhibit A from time to
time to reflect the admission and withdrawal of Members, Additional Capital
Contributions and changes to any Member's Percentage Interest, in accordance
with this Agreement. The Manager may use the power of attorney granted in
Section 16.12 to make non-substantive amendments that do not adversely impact
the rights or obligations of any Manager or Member. No amendment of this
Agreement may adversely affect any Member's rights or obligations under this
Agreement (determined without taking into account the right of other Members to
amend this Agreement) without the adversely affected Member's approval. No
amendment of Article VI (relating to liability and indemnification) may
adversely affect the rights or obligations of any Indemnified Person without the
Indemnified Person's approval. No amendment of this Agreement may change the
requirements under this Agreement for approving any action without the approval
of the Members holding an aggregate Percentage Interest required to approve the
action.
2.Notice. Any notice, report, or other communication required or permitted to be
made to any person by this Agreement shall be in writing and is deemed given
when (a) delivered to the person by hand, (b) the third business day after
delivery to the United States Postal Service (or other designated delivery
service as defined in I.R.C. Section 7502(f)), postage prepaid, in an envelope
properly addressed to the person at the person's address set forth in the
Company's records as of the date of delivery, or (c) successfully transmitted by
facsimile or electronic message to the person's facsimile phone number or e-mail
address (as applicable) set forth in the Company's records as of the date of
transmission. Any communication to the Manager or the Company may be delivered
to the Company's registered office designated pursuant to Section 2.3.
3.Governing Law; Consent to Jurisdiction. This Agreement is governed by and
shall be construed under the laws of the State of Delaware without regard to
legal requirements that would require the application of the law of any other
jurisdiction. Any Proceeding arising out of or relating to this Agreement or the
Company's activities or properties may be brought in the state courts of the
County where the Company's principal office is located, or, if it has or can
acquire jurisdiction, in the United States District Court for the District in
which the Company's principal office is located. Each Member and Assignee
irrevocably submits to the exclusive jurisdiction of each such court in any such
Proceeding, waives any objection it may now or hereafter have to venue or to
convenience of forum, agrees that all claims in respect of the Proceeding shall
be heard and determined only in any such court and agrees not to bring any such
Proceeding in any other court. The Company or any Member or Assignee may file a
copy of this Agreement with any court as written evidence of the agreement
between the parties irrevocably to waive any objections to venue or to
convenience of forum. Process in any Proceeding referred to in the second
sentence of this Section may be served on any party anywhere in the world.
4.Waiver. Any failure by a party to insist upon the strict performance of any
covenant or condition of this Agreement, or to exercise any right or remedy upon
a breach of any such covenant or condition, does not constitute waiver of any
such covenant or condition or any breach thereof. A party will not be deemed to
have waived any right or remedy under this Agreement unless that party has
signed a written document to that effect, and any such waiver is applicable only
with respect to the specific provision and instance for which it is given.
5.Entire Agreement. This Agreement supersedes all prior agreements, whether
written or oral, between the parties with respect to its subject matter and
constitutes a complete and exclusive statement of the agreement between the
parties with respect to its subject matter.
6.Successors and Assigns. No Member or Assignee may assign any of its rights or
delegate any of its obligations under this Agreement except as expressly
permitted in this Agreement.
7.Third-Parties. Other than as provided in Section 5.4 (relating to reliance on
authority of the Manager) and Article VI (relating to rights of Indemnified
Persons), none of the provisions of this Agreement are for the benefit of or
enforceable by any creditors of the Company or other persons not a party to this
Agreement, except such benefits as inure to a successor or permitted assign in
accordance with Section 16.6.
8.Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
9.Construction. The language in this Agreement is to be construed according to
its fair meaning and is not to be strictly construed for or against any party.
Nothing in this Agreement is to be construed as authorizing or requiring any
action that is prohibited by the Act or other applicable law, or as prohibiting
any action that is required by the Act or other applicable law.
10.Execution of Agreement. This Agreement may be executed in counterparts, each
of which will be deemed to be an original copy of this Agreement, and all of
which together constitute one agreement. Any signature to this Agreement
evidenced by a facsimile or other electronic transmission of such signature
shall be binding on the parties to the same extent as if such signature were an
original.
11.Further Assurances. The parties shall execute and deliver all documents,
provide all information, and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement.
12.Power of Attorney.
(a)Each Member appoints the Manager and the Liquidator severally with full power
of substitution, as the true and lawful attorney-in-fact for such Member, and in
the name, place, and stead of such Member, to execute, certify, acknowledge,
swear to, file, publish, and record:
(i)any certificate or other document that may be required to be filed by the
Company or the Members in order to qualify the Company to do business in any
jurisdiction, except that no such filing shall include a consent by any Member
to service of process in any jurisdiction without the Member's approval;
(ii)any amendment to the Certificate of Formation, to this Agreement, or to any
other agreement or document as required or permitted by this Agreement;
(iii)any Certificate of Cancellation and other documents that may be required to
effectuate the termination of the Company pursuant to the provisions of this
Agreement; and
(iv)any document required of the Company to carry out the actions that the
Manager is authorized to take under this Agreement.
(b)The foregoing appointment of the Manager and Liquidator as a Member's
attorney-in-fact does not grant such attorney-in-fact any power or authority to
approve, consent, or agree to the substantive terms of any agreement or other
document on behalf of such Member.
(c)The power of attorney granted pursuant to this Section 16.12 (i) is a special
power of attorney coupled with an interest and is irrevocable, and (ii) survives
the resignation or removal of a Member or the assignment of its Membership
Interest.
13.Legal Representation. This Agreement has been prepared by Strasburger &
Price, LLP in its role as counsel to the Company. Strasburger & Price, LLP does
not represent any Member (other than MUS), and the Members should consult their
own counsel to advise them regarding this Agreement and the transactions
contemplated by the Company.

[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
Executed as of the Effective Date set forth above, by and among the persons
signing below.

MANAGER:
Ruben S. Martin
MEMBERS:
MARTIN OPERATING PARTNERSHIP L.P.
By:Martin Operating GP LLC,
its general partner
By:Martin Midstream Partners L.P.,
its sole member
By:Martin Midstream GP LLC,
its general partner

By: /s/Robert D. Bondurant
Name:Robert D. Bondurant
Title:Executive Vice President

EXHIBITS A‑1 AND A‑2 ACKNOWLEDGED BY FORMER MEMBER:
MARTIN UNDERGROUND STORAGE, INC.

By: /s/ Robert D. Bondurant
Name:Robert D. Bondurant
Title:Executive Vice President

Exhibit A-1

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
REDBIRD GAS STORAGE LLC
EXHIBIT A-1
INITIAL CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS
AS OF SEPTEMBER 11, 2011
Member Name and Address
 
Initial Capital Contribution
 
Initial Percentage Interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
Class A Member
 
 
Class A
 
Class B
 
Total
 
Class A
 
Class B
 
(Fully Diluted)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Martin Underground Storage, Inc.
4200B Stone Rd.
Kilgore, TX 75662
All membership interests owned in Cardinal valued at $150,000,000
 
—
 
$150,000,000
 
100
%
 
—
 
71.46139
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B Member
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Martin Operating Partnership L.P.
4200B Stone Rd.
Kilgore, TX 75662
—
 
$59,903,568(1)
 
 $ 59,903,568(1)
 
—
 
100
%
 
28.53861
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$150,000,000
 
$59,903,568
 
$209,903,568
 
100
%
 
100
%
 
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) The Initial Capital Contribution of $59,903,568 by the Class B Member
consists of:
(i)
$59,318,400 initial cash capital contribution to Cardinal to fund the Monroe Gas
Storage acquisition
(ii)
$585,168 in additional cash capital contribution to Cardinal for MSG Calls to
fund Monroe Gas Storage capital expenditures

Exhibit A-2 - Page 1

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
REDBIRD GAS STORAGE LLC
EXHIBIT A-2
CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS
IMMEDIATELY PRIOR TO THE EFFECTIVE TIME
Member Name and Address
 
Total Capital Contribution
 
Percentage Interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
Class A Member
 
 
Class A
 
Class B
 
Total
 
Class A
 
Class B
 
(Fully Diluted)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Martin Underground Storage, Inc.
4200B Stone Rd.
Kilgore, TX 75662
All membership interests owned in Cardinal valued at $150,000,000
 
—
 
$150,000,000
 
89.2552
%
 
—
 
63.2802
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Martin Operating Partnership L.P.
4200B Stone Rd.
Kilgore, TX 75662
$18,057,452(2) 
 
—
 
 $18,057,452 (2)
 
10.7448
%
 
—
 
7.6179
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B Member
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Martin Operating Partnership L.P.
4200B Stone Rd.
Kilgore, TX 75662
—
 
$68,983,612(1)
 
 $ 68,983,612(1)
 
—
 
100
%
 
29.102
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$168,057,452
 
$68,983,612
 
$237,041,064
 
100%
 
100
%
 
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) The Total Capital Contribution of $68,983,612 by the Class B Member consists
of:
(i)
$59,318,400 initial cash capital contribution to Cardinal to fund the Monroe Gas
Storage acquisition
(ii)
$9,080,036 in additional cash capital contribution to Cardinal for a MSG Call to
fund Monroe Gas Storage capital expenditures
(2) $18,057,452 in additional cash capital contributions to Cardinal to fund
Arcadia, Perryville and Cadeville Gas Storage capital expenditures.

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
REDBIRD GAS STORAGE LLC
EXHIBIT A
CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS
AS OF THE EFFECTIVE TIME
Member Name and Address
 
Total Capital Contribution
 
Percentage Interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
Class A Member
 
Class A
 
Class B
 
Total
 
Class A
 
Class B
 
(Fully Diluted)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Martin Operating Partnership L.P.
4200B Stone Rd.
Kilgore, TX 75662
All membership interests owned in Cardinal valued at $150,000,000 and an
additional $18,057,452(2)
 
—
 
$168,057,452
 
100
%
 
—
 
70.898
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B Member
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Martin Operating Partnership L.P.
4200B Stone Rd.
Kilgore, TX 75662
—
 
$68,983,612(1)
 
 $ 68,983,612(1)
 
—
 
100
%
 
29.102
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$168,057,452
 
$68,983,612
 
$237,041,064
 
100
%
 
100
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) The Total Capital Contribution of $68,983,612 by the Class B Member consists
of:
(i)
$59,318,400 initial cash capital contribution to Cardinal to fund the Monroe Gas
Storage acquisition
(ii)
$9,080,036 in additional cash capital contribution to Cardinal for a MSG Call to
fund Monroe Gas Storage capital expenditures
(2) $18,057,452 in additional cash capital contributions to Cardinal to fund
Arcadia, Perryville and Cadeville Gas Storage capital expenditures.

2

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
REDBIRD GAS STORAGE LLC
APPENDIX A
PRINCIPLES OF ALLOCATION

A.1Introduction. This Appendix sets forth principles under which items of
income, gain, loss, deduction and credit shall be allocated among the Members.
This Appendix also provides for the determination and maintenance of Capital
Accounts, generally in accordance with Treasury Regulations promulgated under
I.R.C. Section 704(b), for purposes of determining such allocations. For
purposes of this Appendix, an Assignee shall be treated in the same manner as a
Member.
A.2Definitions. Capitalized terms used in this Appendix have the meanings set
forth below or in the Agreement.
“Adjusted Capital Account Deficit” means any deficit balance in a Member's
Capital Account as of the end of a taxable year, after giving effect to the
following adjustments:
(i)    Credit to the Capital Account any amounts the Member is obligated to
restore pursuant to the Agreement or is deemed to be obligated to restore
pursuant to (a) Treasury Regulations Section 1.704-1(b)(2)(ii)(c) (relating to
obligations to pay partner promissory notes and other obligations to make
contributions to the Company), or (b) the penultimate sentences of Treasury
Regulations Sections 1.704-2(g)(1) (relating to partnership minimum gain) and
1.704-2(i)(5) (relating to partner nonrecourse debt minimum gain); and
(ii)    Debit to such Capital Account the items described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6).
The foregoing definition is intended to comply with Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
“Capital Account” has the meaning set forth in Section A.3.
“Depreciation” means, for each taxable year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such taxable year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such taxable year, Depreciation is an amount which bears the
same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such taxable
year bears to such beginning adjusted tax basis. If the adjusted basis for
federal income tax purposes of an asset at the beginning of such taxable year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the Manager.
“Gross Asset Value” means an asset's adjusted basis for federal income tax
purposes, except as follows:
(i)    The initial Gross Asset Value of an asset contributed by a Member to the
Company is the gross Fair Value of such asset, as determined by the contributing
Member and the Manager and as set forth on Exhibit A. If the contributing Member
is the Manager, the determination of the Fair Value of a contributed asset
requires the approval of a Majority-in-Interest of each Class.
(ii)    The Gross Asset Values of Company assets shall be adjusted to equal
their respective gross Fair Values (taking I.R.C. § 7701(g) into account), as
determined by the Manager, as of the following times: (A) the acquisition of an
additional interest in the Company by any new or existing Member in exchange for
more than a de minimis Capital Contribution; (B) the distribution by the Company
to a Member of more than a de minimis amount of property as consideration for an
interest in the Company; (C) the liquidation of the Company within the meaning
of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); (D) the Conversion of
Class B Interests into Class A Interests pursuant to Article XII of the
Agreement; and (E) in connection with the grant of an interest in the Company
(other than a de minimis interest) as consideration for the provision of
services to or for the benefit of the Company by a Member acting in a member
capacity or in anticipation of being a Member. Adjustments pursuant to clauses
(A), (B), (C) and (D) above are required only if the Manager determines that
such adjustments are necessary to accurately reflect the relative economic
interests of the Members in the Company.
(iii)    The Gross Asset Value of a Company asset distributed to a Member shall
be adjusted to equal the gross Fair Value (taking I.R.C. § 7701(g) into account)
of such asset on the date of distribution as determined by the distributee and
the Manager. If the distributee is the Manager, the determination of the Fair
Value of the distributed asset requires the approval of a Majority-in-Interest
of each Class.
(iv)    The Gross Asset Values of Company assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to I.R.C. Section 734(b) or I.R.C. Section 743(b), but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m). Gross
Asset Values shall not be adjusted pursuant to this paragraph (iv) to the extent
that an adjustment is required pursuant to paragraph (ii).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraphs (i), (ii) or (iv) of this definition, the asset's Gross Asset
Value shall thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing gain and loss.
“Income”, “Gain”, “Loss” or “Deduction”, and other items mean, for each taxable
year or other relevant period, an amount equal to the Company's items of income,
gain, loss or deduction, and other items for such taxable year or other relevant
period, determined in accordance with I.R.C. Section 703(a) (for this purpose,
all items of income, gain, loss, or deduction required to be stated separately
pursuant to I.R.C. Section 703(a)(1) shall be included in taxable income or
loss), with the following adjustments:
(i)    Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing income or gain shall be added to such
taxable income or gain.
(ii)    Any expenditures of the Company described in I.R.C. Section 705(a)(2)(B)
or treated as I.R.C. Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing items of loss or deduction shall be added to such items of loss or
deduction.
(iii)    If the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraph (ii) or (iii) of the Section A.2 definition of Gross Asset Value,
the amount of such adjustment shall be taken into account as gain or loss from
disposition of the asset for purposes of computing income, gain, loss or
deduction.
(iv)    Gain or loss resulting from any disposition of Company property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of (unreduced by any liabilities attributable thereto), notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value.
(v)    In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation computed in accordance with the
definition of Depreciation in Section A.2.
(vi)    To the extent an adjustment to the adjusted tax basis of any Company
asset pursuant to I.R.C. Section 734(b) is required pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as a result of a distribution other than in
liquidation of a Member's Membership Interest, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing income, gain, loss or deduction.
“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(1) and shall be determined according to the provisions of
Treasury Regulations Section 1.704-2(c).
“Nonrecourse Liability” has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(3).
“Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(4).
“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury
Regulations Section 1.704-2(i)(2) and shall be determined in accordance with
Treasury Regulations Section 1.704-2(i)(3).
“Partner Nonrecourse Deductions” has the meaning set forth in Treasury
Regulations Section 1.704-2(i)(1) and shall be determined in accordance with
Treasury Regulations Section 1.704-2(i)(2).
“Partnership 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 1.704-2(d).
A.3Capital Accounts. The Company shall determine and maintain Capital Accounts.
“Capital Account” means an account of each Member determined and maintained
throughout 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 foregoing, the following rules apply:
(a)    The Capital Account of each Member shall be credited with (i) an amount
equal to such Member's Capital Contributions and the Fair Value of property
contributed (if permitted hereunder) to the Company by such Member, (ii) such
Member's share of the Company's items of income or gain, and (iii) the amount of
any Company liabilities assumed by such Member or that are secured by property
distributed to such Member.
(b)    The Capital Account of each Member shall be debited by (i) the amount of
cash and the Fair Value of property distributed to such Member, (ii) such
Member's share of the Company's items of loss or deduction, and (iii) the amount
of any liabilities of such Member assumed by the Company or that are secured by
any property contributed by such Member to the Company.
(c)    Upon the Transfer by a Member of all or part of an interest in the
Company after the Effective Date, the Capital Account of the transferor that is
attributable to the transferred interest carries over to the transferee and the
Capital Accounts of the Members shall be adjusted to the extent provided in
Treasury Regulations Section 1.704-1(b)(2)(iv)(m).
(d)    In determining the amount of any liability for purposes of Sections
A.3(a) and A.3(b), I.R.C. Section 752(c) and any other applicable provisions of
the I.R.C. and the Treasury Regulations shall be taken into account.
(e)    Except as otherwise required by Treasury Regulations Section
1.704-1(b)(2)(iv), adjustment to Capital Accounts in respect of Company income,
gain, loss, deduction, and I.R.C. Section 705(a)(2)(B) expenditures (or items
thereof) shall be made with reference to the federal tax treatment of such items
(and, in the case of book items, with reference to the federal tax treatment of
the corresponding tax items) at the Company level, without regard to any
mandatory or elective tax treatment of such items at the Member level.
(f)    The provisions of this Appendix and of the Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulations
Section 1.704-1(b)(2)(iv), and shall be interpreted and applied in a manner
consistent with such Treasury Regulations. If the Manager determines that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including debits or credits relating to liabilities that are
secured by contributions or distributed property or that are assumed by the
Company or any Member), are computed in order to comply with such Treasury
Regulations, the Manager may make such modification if it is not likely to have
a material effect on the amounts distributed or to be distributed to any Member
pursuant to the Agreement. The Manager shall make any adjustments that are
necessary or appropriate (i) to maintain equality between the Capital Accounts
of the Members and the amount of Company capital reflected on the Company's
balance sheet, as computed for book purposes, in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv)(g), and (ii) if unanticipated events (for
example, the acquisition by the Company of oil or gas properties) might
otherwise cause this Agreement not to comply with Treasury Regulations Section
1.704-1(b).
(g)    The provisions of the proposed Treasury Regulations published on January
22, 2003 (68 Fed. Reg. 2930), as they may subsequently be modified or adopted as
temporary or final Treasury Regulations, shall apply with respect to any
noncompensatory options issued by the Company.
A.4Allocations of Net Profit and Net Loss
A.4.1    In General
(a)    Subject to the limitation in Section 4.1(d) below, items of income, gain,
loss and deduction equal in amount to the Company's proportionate share of the
items of income, gain, loss and deduction attributable to Cardinal's interest in
Monroe Gas Storage shall be allocated to Class B Members in proportion to their
ownership of Class B Interests.
(b)    Subject to the limitation in Section 4.1(d) below, a deduction equal to
twenty percent (20%) of Overhead Expenses shall be allocated to Class B Members
in proportion to their ownership of Class B Interests.
(c)    Subject to the limitation in Section 4.1(d) below, all remaining items of
income, gain, loss and deduction of the Company shall be allocated to Class A
Members in proportion to their ownership of Class A Interests.
(d)    No Member may receive an allocation of loss or deduction that would cause
the Member to have an Adjusted Capital Account Deficit at the end of the taxable
year. Loss or deduction not allocated to a Member pursuant to this subparagraph
(ii) shall be allocated to other Members according to their relative positive
Capital Account balances (calculated taking into account the adjustments
described in the definition of Adjusted Capital Account Deficit).
A.4.2    Regulatory Allocations. The following special allocations shall be
applied in the order in which they are listed. Such ordering is intended to
comply with the ordering rules in Treasury Regulations Section 1.704-2(j) and
shall be applied consistently therewith.
(a)    Minimum Gain Chargeback. Except as otherwise provided in Treasury
Regulations Section 1.704-2(f), anything to the contrary in this Section A.4
notwithstanding, if there is a net decrease in Partnership Minimum Gain during
any taxable year, each Member shall be allocated items of income and gain for
that taxable year (and, if necessary, subsequent taxable years) equal to that
Member's share of the net decrease in Partnership Minimum Gain determined in
accordance with Treasury Regulations Section 1.704-2(g)(2). This Section
A.4.2(a) is intended to comply with the minimum gain chargeback requirement in
Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith, including that no chargeback shall be required to the extent the
requirements for requesting a waiver described in Treasury Regulations Section
1.704-2(f)(4) are met or the requirements for any other exception prescribed by
or pursuant to Treasury Regulations Section 1.704-2(f) are met.
(b)    Partner Nonrecourse Debt Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulations Section 1.704-2(i)(4), anything to the contrary
in this Section notwithstanding, if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain during a taxable year, then, in addition to the
amounts, if any, allocated pursuant to paragraph 4.2(a), any Member with a share
of that Partner Nonrecourse Debt Minimum Gain (determined in accordance with
Treasury Regulations Section 1.704-2(i)(5)) as of the beginning of the taxable
year shall be allocated items of Company income and gain for that taxable year
(and, if necessary, for subsequent taxable years) equal to that Member's share
of the net decrease in the Partner Nonrecourse Debt Minimum Gain, determined in
accordance with Treasury Regulations Section 1.704-2(i)(4). This Section
A.4.2(b) is intended to comply with the chargeback of partner nonrecourse debt
minimum gain required by Treasury Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith, including that no chargeback shall be
required to the extent the requirements for any exceptions provided in Treasury
Regulation Section 1.704-2(i)(4) are met.
(c)    Qualified Income Offset. If any Member unexpectedly receives any
adjustment, allocation, or distribution described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain
shall be specially allocated to such Member in an amount and manner sufficient
to eliminate, to the extent required by the Treasury Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible. An allocation
pursuant to the foregoing sentence shall be made only to the extent that such
Member would have an Adjusted Capital Account Deficit after all other
allocations provided for in Section A.4 have been tentatively made as if this
Section A.4.2(c) were not in this Appendix. This allocation is intended to
constitute a “qualified income offset” within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(3) and shall be construed in accordance
with the requirements thereof.
(d)    Gross Income Allocation. In the event a Member has an Adjusted Capital
Account Deficit at the end of any taxable year, each such Member shall be
specially allocated items of Company income and gain in the amount of such
Adjusted Capital Account Deficit as quickly as possible; provided that an
allocation pursuant to this clause shall be made only if and to the extent that
the Member would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Section A.4 have been made as if this Section
A.4.2(d) were not in this Appendix.
(e)    Nonrecourse Deductions. Nonrecourse Deductions for any taxable year shall
be allocated among the Members in accordance with their relative Capital Account
balances.
(f)    Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
taxable year shall be specially allocated to the Member who bears the economic
risk of loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Treasury Regulations
Section 1.704-2(i)(1).
(g)    Basis Adjustments. To the extent an adjustment to the adjusted tax basis
of any Company asset pursuant to I.R.C. Section 734(b) or I.R.C. Section 743(b)
is required under Treasury Regulations Section 1.704-1(b)(2)(iv)(m) to be taken
into account in determining Capital Accounts, the amount of such adjustment to
the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis) and such gain or loss shall be specially allocated to the Members in a
manner consistent with the manner in which their Capital Accounts are required
to be adjusted pursuant to such Section of the Treasury Regulations.
A.4.3    Curative Allocations. The allocations set forth in Section A.4.2 hereof
(the “Regulatory Allocations”) are intended to comply with certain requirements
of the Treasury Regulations. The Members intend that, to the extent possible,
all Regulatory Allocations shall be offset either with other Regulatory
Allocations or with special allocations of other items of Company income, gain,
loss, or deduction pursuant to this Section A.4.3. Therefore, any other
provisions of this Section A.4 (other than the Regulatory Allocations)
notwithstanding, the Manager shall make such offsetting special allocations of
Company income, gain, loss, or deduction in whatever manner the Manager
determines appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to
Section A.4.1. In exercising its discretion under this Section A.4.3, the
Manager shall take into account future Regulatory Allocations under
Sections A.4.2(a) and A.4.2(b) that, although not yet made, are likely to offset
other Regulatory Allocations previously made under Sections A.4.2(e) and
A.4.2(f).
A.4.4    Other Allocation Rules
(a)    Items of income, gain, loss or deduction, and other items shall be
allocated to the Members pursuant to this Appendix A as of the last day of each
taxable year, and at such times as the Gross Asset Values of Company Property
are adjusted pursuant to subparagraph (ii) of the definition of Gross Asset
Value.
(b)    If during any taxable year any Member's Percentage Interest changes, each
Member's share of Items of income, gain, loss or deduction, and other items for
such taxable year shall be determined according to their varying interests and
I.R.C. Section 706(d), using any conventions permitted by law and selected by
the Manager.
(c)    All allocations pursuant to this Appendix A shall, except as otherwise
provided in this Agreement, be divided among the Members in proportion to the
relative Capital Account balances held by each Member.
(d)    For purposes of determining a Member's share of Company “excess
nonrecourse liabilities” within the meaning of Treasury Regulations Section
1.752-3(a)(3), the Members' shares of Company profits shall be deemed to be in
proportion to their respective Capital Contributions.
(e)    To the extent permitted by Treasury Regulations Section 1.704-2(h)(3),
the Manager may treat any distribution of the proceeds of a Nonrecourse
Liability or a Partner Nonrecourse Debt (that would otherwise be allocable to an
increase in Partnership Minimum Gain) as a distribution that is not allocable to
an increase in Partnership Minimum Gain to the extent the distribution does not
cause or increase an Adjusted Capital Account Deficit for any Member.
A.5Tax Allocations
(a)    In General. Except as otherwise provided in this Section A.5, each item
of income, gain, loss, and deduction of the Company for federal income tax
purposes shall be allocated among the Members in the same manner as such items
are allocated for book purposes under the Agreement and this Appendix A.
(b)    Contributed or Revalued Property. In accordance with I.R.C.
Section 704(c) and the related Treasury Regulations, income, gain, loss, and
deduction with respect to any property contributed to the capital of the Company
shall, solely for tax purposes, be allocated among the Members so as to take
account of any variation between the adjusted basis of such property to the
Company for federal income tax purposes and its Gross Asset Value. If the Gross
Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of
the definition of Gross Asset Value in Section A.2 hereof, subsequent
allocations of income, gain, loss, and deductions with respect to such asset
shall take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under I.R.C. Section 704(c) and the related Treasury Regulations. Any elections
or other decisions relating to allocations pursuant to this Section A.5 shall be
made by the Manager in any manner that reasonably reflects the purpose and
intention of this Appendix A and the Agreement.
(c)    Credits. Except as otherwise required by Treasury Regulations Section
1.704-1(b)(4)(ii), items of tax credit and tax credit recapture shall be
allocated among the Members in accordance with their relative Capital Account
balances.
(d)    Effect of Tax Allocations. Allocations pursuant to this Section A.5 are
solely for purposes of U.S. federal, state, and local taxes and shall not affect
any Member's Capital Account or share of Net Profit, Net Loss, or other items or
distributions pursuant to any provision of this Appendix and the Agreement.