Document:

Exhibit 10.2

DPTS MARKETING LLC

SECOND AMENDED AND RESTATED MEMBER CONTROL
AGREEMENT

          THIS SECOND
AMENDED AND RESTATED MEMBER CONTROL AGREEMENT, (the “Agreement”) is made
effective as of December 31, 2013 (the “Effective Date”), by and between Dakota
Plains Marketing, LLC, a Minnesota limited liability company (“DPM”), Petroleum
Transport Solutions, LLC, a Minnesota limited liability company (“PTS”), and
DPTS Marketing LLC, a Minnesota limited liability company (the “Company”).

RECITALS:

          A. DPM, PTS
and the Company are parties to that certain DPTS Marketing LLC Amended and
Restated Member Control Agreement dated as of June 1, 2012 and amended as of
August 30, 2012 and as of June 17, 2013 (the “Original Agreement”). 

          B. DPM and
PTS constitute all of the Members of the Company.

          C. DPM, PTS
and the Company desire to amend and restate the Original Agreement in its
entirety as set forth herein and pursuant to Section 10.5 of the Original
Agreement.

          D. This
Agreement is a Member Control Agreement under Chapter 322B of the Minnesota
Statutes, Section 322B.37.

          E. The
parties are interested in the growth, development and management of the Company
and in the long-term economic success of the Company and its business, and
mutually desire to make certain agreements relating to the (i) management and
control of the Company and its business, (ii) admission and termination of
Members, and (iii) allocation of income, losses and distributions between the
Members.

AGREEMENTS:

          NOW
THEREFORE, in consideration of the foregoing, the mutual terms, covenants and
conditions contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

ARTICLE 1

FORMATION, NAME AND OFFICE, BUSINESS, 

TERM, AND DEFINITIONS

          1.1) General.
Except as otherwise provided in this Agreement or the Company’s Operating
Agreement, the rights and responsibilities of the Members shall be as provided
under the LLC Act (defined below). It is intended that the Company be
classified and taxed as a partnership for United States income tax purposes,
and no Member shall take any action not required by law to change the tax
status of the Company under the Code (defined below).

          1.2) Name
and Principal Office. The name of the Company shall be “DPTS Marketing
LLC.” The Company’s principal office will be 605 North Highway 169, Suite 1100,
Plymouth, MN 55441, or such other place as the Board of Governors of the
Company (the “Board”) may from time to time determine. 

          1.3) Members.
The names and addresses of the Members are set forth in Exhibit A. 

          1.4) Term.
The Company shall exist perpetually until it is dissolved, wound up, and
terminated in accordance with this Agreement.

          1.5) Purpose.
The Company shall be authorized to engage in (a) the purchase, sale, storage,
transport and marketing of hydrocarbons produced within North Dakota to or from
refineries and other end-users or Persons, wherever located, and the conduct of
Trading Activities (defined below); and (b) any other lawful activities as the
Board of Governors may determine from time to time.

          1.6) Definitions.
Unless the context otherwise specifies or requires, the terms defined in this
Section shall have the meanings given them in this Section for purposes of this
Agreement. Certain other capitalized terms used in this Agreement are defined
within this Agreement.

	
  

 	
  

 
	
  

 	
           (a)
 Affiliate. “Affiliate” means, with respect to any Person, any other
 Person directly or indirectly controlling, controlled by or under common
 control with such Person. For purposes of the immediately preceding sentence,
 the term “control” (including, with correlative meanings, the terms
 “controlling”, “controlled by” and “under common control with”), as used with
 respect to any Person, means the possession, directly or indirectly, of the
 power to direct or cause the direction of the management and policies of such
 Person, whether through ownership of voting securities, by contract or
 otherwise.

 
	
  

 	
  

 
	
  

 	
           (b)
 Agreement. “Agreement” means this Member Control Agreement as it may
 be further amended or supplemented from time to time.

 
	
  

 	
  

 
	
  

 	
           (c)
 Articles of Organization. The “Articles of Organization” means the
 document filed with the Secretary of State of Minnesota by the Organizer as
 they may be further amended or supplemented from time to time. 

 
	
  

 	
  

 
	
  

 	
           (d)
 Capital Accounts. The “Capital Accounts” means the capital accounts
 maintained by the Company for each Member in respect of such Member’s Company
 Interest.

 
	
  

 	
  

 
	
  

 	
           (e)
 Code. The “Code” means the Internal Revenue Code of 1986, as amended.
 All references to a section of the Code or the treasury regulations
 promulgated under the Code shall mean and include any subsequent amendment or
 replacement of that section.

 
	
  

 	
  

 
	
  

 	
           (f)
 Company. The “Company” means DPTS Marketing LLC, a Minnesota limited
 liability company, formed upon the filing of the Articles of Organization
 with the Secretary of State of Minnesota.

 
	
  

 	
  

 
	
  

 	
           (g)
 Company Interest. “Company Interest” means all of a Member’s right and
 interest in the Company.

 
	
  

 	
  

 
	
  

 	
           (h)
 Damages. “Damages” means any and all losses, liabilities, claims,
 damages, deficiencies, fines, payments, assessments, taxes, liens, costs and
 expenses (other than expenses for Labor Overhead), whenever or however
 arising and whether or not resulting from third-party claims (including the
 reasonable costs and expenses of any and all proceedings or other legal
 matters; all amounts paid in connection with any demands, assessments,
 judgments, settlements and compromises relating thereto; interest and
 penalties with respect thereto; and costs and expenses, including reasonable
 attorneys’, accountants’ and other experts’ fees and expenses, 

 

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 incurred in
 investigating, preparing for or defending against any such proceedings or
 other legal matters or in asserting, preserving or enforcing an indemnitee’s
 rights hereunder).

 
	
  

 	
  

 
	
  

 	
           (i)
 Distribution. “Distribution” means a distribution of cash or property
 to the Members pursuant to this Agreement.

 
	
  

 	
  

 
	
  

 	
           (j)
 Distribution Percentage. “Distribution Percentage” means, with respect
 to each Member as of the end of a calendar quarter, a percentage equal to the
 Percentage Interest of such Member; provided, however, that if a Member has
 terminated its participation in the Trading Activities pursuant to
 Section 9.3, then during all periods of time during which such Member is
 a Terminating Member, the Terminating Member’s Distribution Percentage shall
 be equal to 15% and the Non-Terminating Member’s Distribution Percentage
 shall be equal to 85%, in each case subject to Section 9.3(b)(v). 

 
	
  

 	
  

 
	
  

 	
           (k)
 Governor. “Governor” means a natural person elected by the Members to
 serve on the Board.

 
	
  

 	
  

 
	
  

 	
           (l)
 LLC Act. The “LLC Act” means the Minnesota Limited Liability Company
 Act, as amended. All references in this Agreement to a section of the LLC Act
 shall be considered also to include any subsequent amendment or replacement
 of that section.

 
	
  

 	
  

 
	
  

 	
           (m)
 Members. The Members of the Company are collectively referred to
 herein as the “Members” and individually as a “Member.”

 
	
  

 	
  

 
	
  

 	
           (n)
 ND Crude Oil. “ND Crude Oil” means crude oil originating from
 production fields anywhere in North Dakota.

 
	
  

 	
  

 
	
  

 	
           (o)
 Operating Agreement. The “Operating Agreement” means the document
 adopted by the Board relating to the operation of the Company,

 
	
  

 	
  

 
	
  

 	
           (p)
 Organizer. “Organizer” means the individual signing and filing the
 Articles of Organization.

 
	
  

 	
  

 
	
  

 	
           (q)
 Percentage Interest. “Percentage Interest” of each Member shall be a
 fraction, the numerator of which is the total number of Units held by such
 Member on the date of determination and the denominator of which is the Total
 Units as of such date.

 
	
  

 	
  

 
	
  

 	
           (r)
 Profits and Losses. “Profits” and “Losses” shall have the meaning set
 forth in Appendix A.

 
	
  

 	
  

 
	
  

 	
           (s)
 Person. “Person” means any natural person, company (whether general or
 limited), limited liability company, trust, estate, association, corporation,
 joint venture, proprietorship, governmental agency, trust, estate,
 association, custodian, nominee or any other individual or entity, whether
 acting in an individual, fiduciary, representative or other capacity.

 
	
  

 	
  

 
	
  

 	
           (t)
 Risk Equivalence. “Risk Equivalence” refers to the objective of
 maintaining between Members an equivalent level of risk with respect to their
 respective Units (except as otherwise provided in this Agreement), all as
 more specifically described in Section 10.1 below.

 
	
  

 	
  

 
	
  

 	
           (u)
 Termination Loss Amount. “Termination Loss Amount” means, with respect
 to the effective date of any Trading Activities Termination, the amount, if
 any, by which the 

 

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 Termination
 Net Value is less than the aggregate amount of all outstanding Member
 Preferred Contributions by all Members as of the effective date of the
 Trading Activities Termination.

 
	
  

 	
  

 
	
  

 	
           (v)
 Termination Net Value. “Termination Net Value” means, with respect to
 the effective date of any Trading Activities Termination, whether positive or
 negative, the amount of assets of the Company minus the amount of liabilities
 of the Company (which shall include all accrued and unpaid preferred returns
 on Member Preferred Contributions), in each case as of the effective date of
 the Trading Activities Termination as
 determined by the Trading Member after performing a mark-to-market analysis
 of the assets, liabilities and trading positions of the Company as of the
 effective date of the Trading Activities Termination. For the avoidance of
 doubt, the amount of outstanding Member Preferred Contributions shall not be
 considered liabilities of the Company.

 
	
  

 	
  

 
	
  

 	
           (w)
 Total Units. “Total Units” means the aggregate outstanding Units
 issued to all Members as of a given date.

 
	
  

 	
  

 
	
  

 	
           (x)
 Unit. “Unit” means the designation which the Company has established
 to represent the Company Interests of the Members.

 
	
  

 	
  

 
	
  

 	
           (y)
 Unrealized Termination Profits. “Unrealized Termination Profits”
 means, with respect to the date any Terminating Member resumes participation in the Trading Activities
 pursuant to Section 9.3(e), the amount of any unrealized profits with respect to assets, liabilities and trading
 positions of the Company as of such date as determined by the Trading Member after performing a
 mark-to-market analysis thereof as of such date.

 

ARTICLE 2

MEMBERS

          2.1)
Members. The Members will be those Persons named in Exhibit A,
each assignee of a Company Interest who is admitted as a Member under this
Agreement, and new Members admitted pursuant to this Agreement.

ARTICLE 3

CAPITAL, SERVICES, MEMBER PREFERRED CONTRIBUTIONS AND VOTING

          3.1)
Capital Accounts. The following shall apply with respect to the Capital
Accounts: A Capital Account shall be maintained for each Member and determined
in accordance with Section 2 of Appendix A. A credit balance in a
Member’s Capital Account shall not entitle such Member to demand any
Distribution from the Company, and a debit balance in a Member’s Capital
Account shall not constitute an obligation of such Member to the Company. No
Capital Account maintained for the Members by the Company shall bear interest.

          3.2)
Capital Contributions. The following provisions apply with respect to
contributions to the Company

	
  

 	
  

 
	
  

 	
           (a)
 The capital contribution of each Member shall be the amount of money and fair
 market value of any property (net of liabilities secured by such property
 that the Company is considered to assume or take such property subject to and
 net of any other liabilities of a Member that are assumed by the Company in
 connection with the contribution of such property) contributed by a Member to
 the Company.

 

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           (b)
 A Member shall not be obligated to make additional capital contributions to
 the Company except as the Members may unanimously agree in writing.

 
	
  

 	
  

 
	
  

 	
           (c)
 It is specifically intended that no creditor of the Company nor creditor of a
 Member will have any right by virtue of this Section or any other provision
 of this Agreement to obligate any Member to pay funds to such creditor or to
 the Company.

 
	
  

 	
  

 
	
  

 	
           (d)
 Each Member has made an initial cash capital contribution of One Hundred
 dollars ($100).

 
	
  

 	
  

 
	
  

 	
           (e)
 No Member shall be required or permitted to make capital contributions of
 more than One Hundred dollars ($100) in the aggregate without the unanimous
 written consent of all Members.

 
	
  

 	
  

 
	
  

 	
 3.3) Services
 to be Performed by the Trading Member. 

 
	
  

 	
  

 
	
  

 	
           (a)
 Trading Services. During the Term, one of the Members (the “Trading
 Member”), which shall initially be PTS, acting itself or through one or more
 of its Affiliates, shall perform and be solely responsible for purchasing,
 selling, storing, transporting, marketing and transacting trades in ND Crude
 Oil, and entering into related agreements and conducting related activities,
 on behalf of the Company, subject to the terms contained in this Agreement
 (the “Trading Activities”). All Trading Activities in ND Crude Oil involving
 transportation by rail and requiring transloading shall be required to be
 transloaded at the New Town, North Dakota, facility owned by DPT or its
 Affiliate unless otherwise agreed upon by the Members. Trading Activities
 may, without limitation, consist of physical and/or financial transactions,
 including hedging or other financial arrangements not involving the actual
 trading of any physical ND Crude Oil; provided, however, that such financial
 transactions must be entered into for risk management purposes and must not
 involve the assumption of any flat price risk. Counterparties to any
 individual transaction constituting a Trading Activity may be the Company,
 the Trading Member or an Affiliate of the Trading Member, as determined by
 the Trading Member in its sole discretion; provided, that any and all
 transactions constituting Trading Activities to which the Trading Member or
 an Affiliate of the Trading Member is a counterparty shall be segregated
 from, and not commingled with, other transactions and lines of business
 engaged in by the Trading Member and its Affiliates. The Trading Member shall
 be solely responsible for employing and compensating employees that execute
 transactions constituting Trading Activities and for providing office space
 and necessary information technology equipment for such employees to conduct
 the Trading Activities. The Trading Member shall be obligated to use
 commercially reasonable efforts, in the exercise of its reasonable judgment,
 to maximize the profitability to the Company of the Trading Activities,
 considered in the aggregate, over the Term, it being understood that (x) such
 commercially reasonable efforts shall not require the Trading Member to take
 any actions prohibited by this Agreement or to make any contributions or
 advances to the Company not required by this Agreement and (y) the Trading
 Member shall not be in violation of its obligations hereunder in the exercise
 of its judgment in connection with any individual trading transaction except
 as provided in Section 7.8.

 
	
  

 	
  

 
	
  

 	
           (b)
 Charges. Commencing with the Effective Date, the Company shall pay to
 the Trading Member a fee per barrel of ND Crude Oil as approved by the Board
 (the “Charge”) subject to Trading Activities during such month; provided,
 that from and after such time the Trading Member shall be entitled to receive
 a minimum monthly Charge calculated assuming a minimum volume of five
 thousand (5,000) barrels per day in Trading Activities; provided, further
 that in the event the Trading Member does not engage in any Trading
 Activities for three 

 

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 (3)
 consecutive months, then such minimum monthly Charge shall be suspended
 commencing in the month following such three (3) consecutive month period
 until the next succeeding month in which the Trading Member engages in any
 Trading Activities. The Charge for each month shall be paid to the Trading
 Member within five (5) days after the end of such month. The Trading Member
 shall be solely responsible for the Trading Member’s direct cost of salary,
 office space, information technology equipment and related overhead incurred
 in its employment of employees that execute transactions constituting Trading
 Activities (“Labor Overhead”). Other than for Labor Overhead, the Company
 (and not the Trading Member) shall be responsible and liable for all
 (i) out-of-pocket and other costs and expenses incurred by the Company
 or the Trading Member or any of its Affiliates in connection with conducting
 Trading Activities, including all commissions (including commissions on
 physical and financial Trading Activities), brokerage fees, insurance fees,
 transport fees, shrinkage fees, inspection fees and other fees and expenses,
 and (ii) losses incurred by the Company or the Trading Member or any of
 its Affiliates as a result of transactions constituting Trading Activities
 (it being understood that allocations of Profits and Losses to each Member
 will be effected in accordance with the terms of this Agreement).

 
	
  

 	
  

 
	
  

 	
           (c) Rail
 Cars. During the term of the Company’s operations under this Agreement,
 the Trading Member will continue to sublease to the Company rail cars under
 the subleases identified on Exhibit B, which exhibit may be amended,
 from time to time by unanimous action of the Board. Each such sublease,
 including the rent payments thereunder, shall be deemed Member Transactions
 for purposes of this Agreement.

 
	
  

 	
  

 
	
  

 	
           (d) Limitations.
 Unless otherwise approved by each Member, the Trading Member’s ability to
 engage in Trading Activities shall be subject to the following limitations:

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 each individual transaction shall be subject to a maximum volume of ten
 thousand (10,000) barrels per day and a maximum term of twenty-four (24)
 months; provided that such maximum volume may be increased to twenty thousand
 (20,000) barrels per day and such maximum term may be increased to
 forty-eight (48) months for any individual transaction with the approval of
 each Member’s Authorized Person (defined below);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 the aggregate portfolio limit in respect of Trading Activities shall be fifty
 thousand (50,000) barrels per day of purchases and/or sales;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 the maximum outright flat price volume exposure in respect of Trading
 Activities at any time shall be fifty thousand (50,000) barrels, either long
 or short; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 all Trading Activities shall be transacted through segregated sub-accounts
 reviewed by independent auditors on a quarterly basis. The Trading Member
 also agrees to provide such documents and information as are reasonably
 requested to allow all Members to complete quarterly financial reviews and
 annual audits of all Trading Activities for their own financial reporting
 purposes; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided, however, the approval of any Member who has terminated its
 participation in the Trading Activities pursuant to Section 9.3 shall not be
 required in connection with the foregoing activities during all periods of
 time during which such Member is a Terminating Member.

 

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           (e)
 Authorized Person. Each Member shall designate an authorized person
 (such Member’s “Authorized Person”) who shall have authority to approve
 Trading Activities that would otherwise be limited without such Member’s
 approval pursuant to Section 3.3(c)(i).

 
	
  

 	
  

 
	
  

 	
           (f)
 Trading Member Discretion. The Members hereby acknowledge and agree
 that except to the extent provided in Section 3.3(c), the Trading Member
 shall have sole discretion in conducting the Trading Activities, and that
 such discretion shall include whether or not to engage in any Trading
 Activities, the selection of Trading Activities to engage in, the evaluation
 of risks related thereto, the timing of Trading Activities and the
 establishment of cash flows, revenues and margins to be derived from Trading
 Activities; provided, however that the other Member shall at
 all times have the right to participate in the vetting of contractors,
 conduct risk assessments and audit any of the Trading Activities.

 
	
  

 	
  

 
	
  

 	
           (g)
 Internal Controls. The Trading Member shall implement internal
 controls and financial reporting procedures to (i) enable any and all
 transactions constituting Trading Activities to be segregated from, and not
 commingled with, other transactions and lines of business engaged in by the
 Trading Member and its Affiliates and (ii) enable the Trading Activities
 to be tracked and reported.

 
	
  

 	
  

 
	
  

 	
           (h)
 Summary Reports. Within the time period(s) set forth in Exhibit C, the
 Trading Member shall provide to each other Member (to such Person as such
 other Member shall designate) a summary report of the information set forth
 in Exhibit C under the heading “Summary Reports”.

 
	
  

 	
  

 
	
  

 	
           (i)
 Financial Reports. Within twenty (20) days after the end of each month
 during which any Trading Activities occur, the Trading Member shall provide
 each other Member with the items required in Exhibit C under the
 heading “Financial Reports”. 

 
	
  

 	
  

 
	
  

 	
           (j)
 PTS Trading Activity Termination. In the event PTS terminates its
 participation in the Trading Activities pursuant to Section 9.3, PTS
 shall thereafter immediately cease to be the Trading Member, at which point
 DPM shall become the Trading Member. If, after DPM so becomes the Trading
 Member, PTS resumes its participation in the Trading Activities and DPM
 terminates its participation in the Trading Activities, then PTS shall become
 the Trading Member again.

 
	
  

 	
  

 
	
  

 	
           (k)
 Removal of Trading Member. Except as provided in Section 3.3(j),
 PTS may not be removed as the Trading Member without the unanimous approval
 of the Board.

 
	
  

 	
  

 
	
  

 	
 3.4)
 [Intentionally Omitted].

 
	
  

 	
  

 
	
           3.5)
 Preferred Contributions. In order to support and fund the Trading
 Activities, the Members shall make preferred contributions (the “Member
 Preferred Contributions”) to the Company as follows:

 
	
  

 	
  

 
	
  

 	
           (a)
 Initial Contribution. Upon formation of the Company, each Member made
 an initial Member Preferred Contribution to the Company in the amount of Ten
 Million dollars ($10,000,000). Each Member of the Company has provided the
 cash proceeds of its respective Member Preferred Contribution. 

 
	
  

 	
  

 
	
  

 	
           (b)
 Additional Contributions. Upon the written agreement of all the
 Members, the Members will make such additional Member Preferred Contributions
 to the Company as are agreed upon in writing by all of the Members on such
 terms as they shall so agree (including such 

 

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 terms as
 shall be contained in an amendment to the Agreement). No Member shall be
 required to make Member Preferred Contributions of more than Ten Million
 dollars ($10,000,000) in the aggregate without the unanimous written consent
 of all Members. Notwithstanding anything in this Agreement to the contrary,
 either Member may make additional Member Preferred Contributions to the
 Company in excess of Ten Million dollars ($10,000,000) without the agreement
 of the other Member but only to the extent necessary to effectively conduct
 Trading Activities in accordance with this Agreement; provided, that
 (x) such additional Member Preferred Contributions made without the
 agreement of the other Member shall not result in any adjustment to the
 Members’ Distribution Percentages or to the relative amounts of distributions
 to be made to the Members pursuant to Section 5.1(b)(iv)
 or Section 9.2(b)(v) or impact
 the ownership of Units by the Members and (y) the terms of such
 additional Member Preferred Contributions shall be negotiated in good faith
 by all the Members.

 
	
  

 	
  

 
	
  

 	
           (c)
 Preferred Returns. All Member Preferred Contributions made to the
 Company shall entitle the Member who made such Member Preferred Contributions
 to receive a cumulative preferred return on such Member Preferred
 Contributions of 5% per annum, which preferred return will be paid in cash on
 a quarterly basis subject to there being cash available to be distributed
 therefor pursuant to Section 5.1(b)(i). The parties acknowledge that it
 shall not be a default hereunder if preferred returns on any Member Preferred
 Contribution are not paid at any time if funds are not available to pay the
 same pursuant to Section 5.1(b)(i) (it being understood that such
 preferred returns will continue to be due and owing and will be payable when
 cash is next available therefor pursuant to Section 5.1(b)(i)). Distributions
 of preferred returns on Member Preferred Contributions must be made to each
 Member simultaneously pro rata based on each Member’s respective proportion
 of outstanding Member Preferred Contributions. Members shall begin to receive
 distributions in respect of their outstanding Member Preferred Contributions
 on a quarterly basis promptly following the quarter ended December 31,
 2026 pursuant to Section 5.1(b)(ii). The parties acknowledge that it
 shall not be a default hereunder if distributions in respect of outstanding
 Member Preferred Contributions are not paid at any time after
 December 31, 2026 if funds are not available to pay the same pursuant to
 Section 5.1(b)(ii) (it being understood that such outstanding Member
 Preferred Contributions will continue to be due and owing and will be payable
 when cash is next available therefor pursuant to Section 5.1(b)(ii)). 

 
	
  

 	
  

 
	
  

 	
           (d)
 Company Cash. All cash of the Company, including the proceeds of cash
 capital contributions, loans and Member Preferred Contributions and cash
 derived from Trading Activities, shall be deposited by the Trading Member in
 one or more segregated bank accounts in the name of the Company and shall be
 controlled by the Trading Member and used by the Trading Member in its sole
 discretion to conduct the Trading Activities.

 

          3.6)
Distributions In Respect Of Contributions. Upon any distribution
pursuant to this Agreement to a Member in respect of outstanding Member
Preferred Contributions (other than distributions in respect of accrued and
unpaid preferred returns thereon), the portion of such Member Preferred
Contributions in respect of which a distribution was made pursuant to this
Agreement shall cease to accrue preferred returns and shall be cancelled and no
longer outstanding for any purpose whatsoever. 

          3.7)
Voting Power. Each Unit shall entitle the owner of such Unit to one vote
on all matters submitted to the vote of Members. Member Preferred Contributions
shall not entitle the makers thereof to any voting rights in respect of such
Member Preferred Contributions.

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ARTICLE 4

TAX MATTERS AND ALLOCATIONS

          4.1)
Tax Characterization and Returns. The Members acknowledge that the
Company will be treated as a “partnership” for federal and Minnesota state
income tax purposes. Within a reasonable time after the end of each fiscal
year, the Company shall deliver to each Person who was a Member at any time
during such fiscal year a Form K-1 and such other information, if any, with
respect to the Company as may be necessary for the preparation of such Member’s
federal or state income tax (or information) returns, including a statement
showing each Member’s share of income, gain, or loss and credits for such
fiscal year for federal or state income tax purposes.

          4.2)
Accounting Decisions, Tax Elections. All decisions as to accounting
matters or tax elections shall be made by the Board. The Board may make or
revoke such elections as may be allowed pursuant to the Code, including the
election referred to in Section 754 of the Code to adjust the basis of
Company property.

          4.3)
Tax Matters Partner. The Board shall designate a Member to act on behalf
of the Company as the “Tax Matters Partner” within the meaning of Section
6231(a)(7) of the Code. PTS shall be the initial Tax Matters Partner.

          4.4)
Section 754 Election. Any election by the Company under Section 754
of the Code to adjust the basis of the Company’s assets pursuant to
Section 734 and Section 743 of the Code shall be made in the discretion
of the Board. If such election is made, allocation of items of the Company’s
income, gain, loss and deductions shall otherwise be made in a manner
consistent with such allocation of basis in accordance with Section 734
and/or Section 743 of the Code, as the case may be, notwithstanding any
other provision of this Agreement.

          4.5)
Allocation of Profits and Losses. After giving effect to the special
allocations set forth in Sections 3 and 4 of Appendix A:

	
  

 	
  

 	
  

 
	
                     (a)
 Profits for any fiscal year of the Company, or part thereof, shall be
 allocated to the Members as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 First, to the Members, in proportion to their relative share of Losses
 allocated to the Members pursuant to Section 4.5(b)(vi), until the cumulative
 Profits allocated to the Members pursuant to this Section 4.5(a)(i) equals
 the cumulative Losses allocated to the Members pursuant to Section
 4.5(b)(vi);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 Second, to the Terminating Member, if any, in the amount of the Losses allocated
 to the Terminating Member pursuant to Section 4.5(b)(v), until the cumulative
 Profits allocated to the Terminating Member pursuant to this Section
 4.5(a)(ii) equals the cumulative Losses allocated to the Terminating Member
 pursuant to Section 4.5(b)(v);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 Third, to the Members, in proportion to their relative share of Losses
 allocated to the Members pursuant to Section 4.5(b)(iv), until the cumulative
 Profits allocated to the Members pursuant to this Section 4.5(a)(iii) equals
 the cumulative Losses allocated to the Members pursuant to Section
 4.5(b)(iv);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 Fourth, to the Members, in proportion to their relative share of preferred
 return (taking into account only preferred returns for which Profits have not
 previously been allocated under this Section 4.5(a)(iv)) accrued on each
 Member’s Member 

 

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 Preferred
 Contributions since the date of such Member’s Member Preferred Contributions
 until the amount of Profits allocated to each Member pursuant to this Section
 4.5(a)(iv) for this and all prior years (after taking into account any
 allocation of Losses pursuant to Section 4.5(b)(iii)) equals the amount
 of preferred return accrued on such Member’s Member Preferred Contributions
 since the dates of such Member’s Member Preferred Contributions;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (v)
 Fifth, in the event Members are entitled to receive distributions under
 Section 5.1(b)(iii) in respect of Unrealized Termination Profits, an amount
 equal to such Unrealized Termination Profits until the cumulative Profits
 allocated pursuant to this Section 4.5(a)(v) (after taking into account any
 allocation of Losses pursuant to Section 4.5(b)(ii)) equals the
 cumulative distributions to which such Member is entitled to receive pursuant
 to Section 5.1(b)(iii); and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (vi)
 Sixth, to the Members, in proportion to their Distribution Percentages.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b) Losses
 for any fiscal year of the Company, or part thereof, shall be allocated to
 the Members as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 First, to the Members, in proportion to their relative share of Profits
 allocated to the Members pursuant to Section 4.5(a)(vi), less the cumulative
 distributions paid to the Members pursuant to Section 5.1(b)(iv), until the
 cumulative Losses allocated to the Members pursuant to this Section 4.5(b)(i)
 equals the cumulative Profits allocated to the Members pursuant to Section
 4.5(a)(vi);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 Second, to the Members, in proportion to their relative share of Profits
 allocated to the Members pursuant to Section 4.5(a)(v), less the cumulative
 distributions paid to the Members pursuant to Section 5.1(b)(iii), until the
 cumulative Losses allocated to the Members pursuant to this Section
 4.5(b)(ii) equals the cumulative Profits allocated to the Members pursuant to
 Section 4.5(a)(v);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 Third, to the Members, in proportion to their relative share of Profits
 allocated to the Members pursuant to Section 4.5(a)(iv), less the cumulative
 distributions paid to the Members pursuant to Section 5.1(b)(i), until the
 cumulative Losses allocated to the Members pursuant to this Section
 4.5(b)(iii) equals the cumulative Profits allocated to the Members pursuant
 to Section 4.5(a)(iv);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 Fourth, to the Members, in proportion to their relative share of Member
 Preferred Contributions, until the amount of Losses allocated to each Member
 pursuant to this Section 4.5(b)(iv) for this and all prior years (after
 taking into account any allocation of Profits pursuant to
 Section 4.5(a)(iii)) equals the amount of such Member Preferred
 Contributions less any amounts distributed in respect of such Member
 Preferred Contributions pursuant to Section 5.1(b)(ii), provided that in the
 event a Member terminates its participation in the Trading Activities pursuant
 to Section 9.3, then during all periods of time during which such Member is a
 Terminating Member, all of the Losses allocated pursuant to this Section
 4.5(b)(iv) shall be allocated to the Non-Terminating Member; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (v)
 Fifth, to the Terminating Member, if any, during all periods of time during
 which such Member is a Terminating Member, until the amount of Losses
 allocated to the Terminating Member pursuant to this Section 4.5(b)(v)
 for this and all 

 

- 10 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 prior years
 (after taking into account any allocation of Profits pursuant to
 Section 4.5(a)(ii)) equals the amount of such Member’s Member Preferred
 Contributions less (x) any amounts distributed in respect of such
 Member’s Member Preferred Contributions pursuant to Section 5.1(b)(ii)
 and (y) amounts distributed to such Member pursuant to
 Section 5.1(b)(iii); and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (vi)
 Sixth, to the Members, in proportion to and in accordance with their
 Distribution Percentages.

 
	
  

 	
  

 	
  

 
	
  

 	
 Notwithstanding
 the foregoing, the allocation of Profits and Losses for any year shall be
 adjusted as appropriate to take into account changes from time-to-time in
 Distribution Percentages, including changes resulting from a Member
 terminating participation in the Trading Activities pursuant to Section 9.3,
 so that the cumulative amount of Profits and Losses allocated to each Member
 is appropriately reflective of each Member’s Distribution Percentages and
 rights to receive distributions under Section 5.1 and Article 9.

 

ARTICLE 5

DISTRIBUTIONS

          5.1)
Distribution and Payment Provisions. The following provisions apply with
respect to the distribution and payment of items to and among the Members:

	
  

 	
  

 	
  

 
	
  

 	
           (a)
 Priority Cash Available. As soon as practicable following the end of
 each calendar quarter, the Trading Member shall determine the amount of
 Priority Cash Available. For purposes of this Section, “Priority Cash
 Available” shall mean cash accumulated by the Company at the end of a
 calendar quarter in excess of the sum of (x) until the calendar quarter
 ending December 31, 2026, the aggregate amount of outstanding Member
 Preferred Contributions and (y) cash necessary to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 pay operating expenses of the Company incurred to parties other than Members
 or their respective Affiliates (the “Third Party Expenses”), the Charges to
 the Trading Member pursuant to Section 3.3(b), any amounts payable to
 the Trading Member pursuant to Section 7.9 and accounting fees payable
 to the Trading Member pursuant to Section 7.6(c) and to fund Trading
 Activities, in each case through the end of such calendar quarter, and 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 pay the amount of cash reasonably projected by the Trading Member (the
 “Reserve”) to be necessary for the payment of Third Party Expenses, the
 Charges to the Trading Member pursuant to Section 3.3(b), any amounts
 payable to the Trading Member pursuant to Section 7.9 and accounting
 fees payable to the Trading Member pursuant to Section 7.6(c) and the
 funding of Trading Activities, in each case through the end of the next
 calendar quarter. 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Members
 acknowledge and agree that the payment of Third Party Expenses, the Charge to
 the Trading Member pursuant to Section 3.3(b), any amounts payable to
 the Trading Member pursuant to Section 7.9 and Financial Services Fee
 (defined below) payable to the Trading Member pursuant to Section 7.6(c)
 and the funding of Trading Activities, in each case through the end of an
 applicable calendar quarter, shall be provided for prior to the setting aside
 of any amounts in respect of the Reserve. Notwithstanding the foregoing, the
 Company may reduce Priority Cash Available by any amount that the Board
 unanimously determines is necessary or prudent to pay any anticipated costs
 or extraordinary expenses for succeeding calendar quarters.

 

- 11 -

	
  

 	
  

 	
  

 
	
  

 	
           (b) Priority
 Payments to Members. To the extent there is Priority Cash Available, as
 soon as practicable following the end of each calendar quarter, but in no
 event more than thirty (30) days following the end of each calendar quarter,
 the Company shall make distributions to the Members as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 First, in respect of preferred returns due to Members with respect to
 outstanding Member Preferred Contributions for the calendar quarter just
 ended and for any prior period for which preferred returns have not been paid
 thereon, on a pro rata basis to the Members based on the then outstanding
 amount of accrued and unpaid preferred returns for such calendar quarter and
 all prior periods due to each Member on all Member Preferred Contributions
 made by such Member;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 Second, to the extent of any Priority Cash available after application of
 clause (i) above, for all quarters commencing with the quarter ended
 December 31, 2026, in respect of outstanding Member Preferred
 Contributions, on a pro rata basis to the Members based on each Members’ then
 outstanding Member Preferred Contributions;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 Third, to the extent of any Priority Cash available after application of
 clauses (i) and (ii) above, in the event there are Unrealized Termination
 Profits as of the date any Terminating Member resumes participation in the Trading Activities pursuant to
 Section 9.3(e), 85% of such Unrealized Termination Profits to the
 Non-Terminating Member and 15% of such Unrealized Termination Profits to the
 Terminating Member until the aggregate amount of all distributions pursuant
 to this Section 5.1(b)(iii) is equal to the amount of such Unrealized
 Termination Profits; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv) Fourth,
 to the extent of any Priority Cash available after application of clauses
 (i), (ii) and (iii) above, all of such Priority Cash Available to the Members
 based upon their Distribution Percentages in effect on the last day of the
 applicable calendar quarter with respect to which distributions are being
 made pursuant to this Section 5.1(b)(iv).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c) Other
 Distribution Matters.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 So long as all preferred returns have been paid on all outstanding Member
 Preferred Contributions for the calendar quarter just ended and for all prior
 periods, all Unrealized Termination Profits have been fully paid pursuant to
 Section 5.1(b)(iii) and all amounts, if any, available to be distributed
 under Section 5.1(b)(iv) for the calendar quarter just ended have been
 distributed, the Board after the end of any calendar quarter occurring prior
 to December 31, 2026, upon unanimous consent of all Governors, may declare
 and pay distributions in respect of all or any portion of outstanding Member
 Preferred Contributions (but if such distributions are not made in respect of
 all outstanding Member Preferred Contributions, such distributions shall be
 on a pro rata basis based on each Members’ then outstanding amount of Member
 Preferred Contributions).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 No Member shall have any right to interim Distributions except as determined
 by the Board, and, except as otherwise provided in this Agreement, no Member
 shall be entitled to interest on any contributions made by such Member to the
 Company. No Member shall have the right to withdraw or to demand the return
 or repayment of any or all of such Member’s contributions.

 

- 12 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 Any and all amounts payable to the Members under Section 3.3(b) for the
 Charge and Section 7.6(c) for the Financial Services Fee (defined below): (1)
 shall be deemed operating expenses of the Company, (2) shall not be subject
 to treatment as a Member Transaction and (3) shall not offset or otherwise
 adjust any distributions to such Member in respect of such Member’s Units. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 The Members hereby agree to cause the Board to take such actions as may be
 necessary to implement the distributions and payments described in this
 Section 5.1.

 
	
  

 	
  

 	
  

 
	
  

 	
           (d)
 Tax Burden Distributions. Notwithstanding the provisions of
 subparagraphs (a) and (b) above: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 The Company shall distribute to the Members each calendar year, to the extent
 there is Priority Cash Available, the amount calculated pursuant to Section
 5.1(d)(ii) to permit the Members to pay income taxes on their respective
 allocable shares of the estimated taxable income of the Company; provided,
 that such estimated taxable income may be offset by any allocable loss
 carryforwards of the Company in the sole discretion of the Board.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 Distributions in accordance with the foregoing paragraph shall be based on
 the premise that all Members are subject to the maximum combined federal and
 Minnesota tax rates applicable to the type of income generated by the Company
 (after making appropriate provisions for cross-deductibility of federal and
 state income taxes).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 The Board may make Distributions on a quarterly basis to facilitate the
 payment of estimated taxes by the Members.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 Any amount distributed pursuant to this Section 5.1(d) shall, for purposes of
 calculating the amount of future distributions pursuant to
 Section 5.1(b)(i), Section 5.1(b)(iii), Section 5.1(b)(iv)
 (but not in respect of distributions in respect of any Member Preferred
 Contribution) and Section 9.2(b), be taken into account and considered
 to be an advance with respect to the next distributions to which such Member
 is otherwise entitled pursuant to such Sections.

 
	
  

 	
  

 	
  

 
	
  

 	
           (e)
 In-Kind Distributions. No Member shall have the right to require any
 distribution of any assets of the Company in kind. If any assets of the
 Company are distributed in kind, such assets shall be distributed on the
 basis of their fair market value as determined by the Board. Solely for the
 purpose of maintaining Capital Accounts, the amount by which the fair market
 value of any property to be distributed exceeds or is less than the adjusted
 basis of such property for book purposes shall be taken into account in
 determining Profit or Loss as if such property had been sold at its fair
 market value as determined in good faith by the Board.

 

ARTICLE 6

ISSUANCE/ESTABLISHMENT OF UNITS; ADMISSION OF MEMBERS; REGISTRATION

          6.1)
Issuance/Establishment of Units. Notwithstanding any provision of this
Agreement or the Operating Agreement to the contrary, the Company shall not
issue any additional Units at any time without the unanimous express written
consent of all Members at the time of such proposed issuance. Any Member may
withhold its consent to the issuance of any additional Units for any reason or
no reason whatsoever, in its sole and unilateral discretion. In connection with
the issuance of any additional Units, 

- 13 -

the Board
shall value all nonmonetary consideration and establish a price in money or
other consideration, or a minimum price, or a general formula or method by
which the price will be determined. The Board may establish, by resolution
adopted in the manner described in the Operating Agreement, either additional
Units or one or more additional classes or series of Units, designate each such
additional class or series, and fix the relative rights and preferences of each
such additional class or series, subject to the provisions of this Agreement.
Notwithstanding any provision of this Agreement or the Operating Agreement to
the contrary, the Board shall not establish additional Units or additional
classes or series of Units, designate each such additional class or series, or
fix the relative rights and preferences of each such additional class or series
without the unanimous express written consent of all Members at the time of
such proposed issuance. Any Member may withhold its consent to such actions for
any reason or no reason whatsoever, in its sole and unilateral discretion.

	
  

 	
  

 
	
  

 	
 6.2) Admission
 of Members. 

 
	
  

 	
  

 
	
  

 	
           (a)
 Issuance or Assignment of Units. A Person shall be admitted as a
 Member upon payment for any Units issued to such Person pursuant to
 Section 6.1 of this Agreement effective when such Person executes or
 otherwise evidences an intent to be bound by this Agreement. An assignee of a
 Member’s Units may be admitted as a Member upon unanimous consent of all
 Members at such time, but only if such Person executes or otherwise evidences
 an intent to be bound by this Agreement.

 
	
  

 	
  

 
	
  

 	
           (b)
 Exhibit A. The current Members of the Company and the capital
 contributions made or agreed to be made by each of them and numbers of Units
 that are issued and outstanding are set forth on Exhibit A. The Board
 is authorized from time to time to update Exhibit A to reflect the
 identity of all Members, the capital contributions made or agreed to be made
 and the class and number of each class of Units that are issued and
 outstanding.

 
	
  

 	
  

 
	
  

 	
 6.3) Registration.

 
	
  

 	
  

 
	
  

 	
           (a)
 Register. The Company shall keep at its principal office a register
 containing the names of the owners of outstanding Units and all transfers of
 outstanding Units. References to the owner of a Unit shall mean the Person
 shown as the owner of such Unit in the register, and the ownership of a Unit
 shall be proved by such register. Except as otherwise specifically provided
 in this Agreement, the registered owner of a Unit shall be deemed to be the
 owner of such Unit and a Member for all purposes of this Agreement.

 
	
  

 	
  

 
	
  

 	
           (b)
 Certificates. Certificates evidencing the Units owned by a Member may,
 but need not, be issued by the Company. Each certificate shall serve only as
 evidence of ownership of the Units it identifies and shall not be assignable,
 except as otherwise provided in this Agreement.

 
	
  

 	
  

 
	
  

 	
           (c)
 Registration of a Transfer. Each Unit issued under this Agreement,
 whether originally or in substitution for, or upon transfer, exchange or
 other issuance of a Company Interest represented by such Unit, shall be
 registered on the effective date of the transfer, exchange or other issuance
 as determined in good faith by the Board; provided, however, that no
 registration of any transfer not made in compliance with this Agreement shall
 be made in the register.

 

- 14 -

	
  

 	
  

 
	
  

 	
           (d)
 Preemptive Rights. No Member, merely because of such Member’s status
 as a Member or an owner of Units, shall have any preemptive rights to
 purchase any Units proposed to be sold or issued by the Company.

 

ARTICLE 7

MANAGEMENT AND OPERATION OF THE COMPANY

          7.1)
No Authority of the Members. Except as specifically provided in this
Agreement, no Member shall have any authority in such Member’s capacity as a
Member to act for, or to assume any obligations or responsibility on behalf of,
or bind the Company or any other Member. Such authority shall be vested solely
in the Board (and, pursuant to Section 7.2(c), officers, employees and
agents of the Company) under this Agreement. 

	
  

 	
  

 	
  

 
	
  

 	
 7.2) Board
 of Governors.

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)
 Management Vested in Board. The business and affairs of the Company
 shall be managed by or under the authority of the Board, except as otherwise
 specifically required by the LLC Act or this Agreement. Except as otherwise
 provided in this Agreement or the Operating Agreement, the Board shall have
 the sole and exclusive power to manage the Company’s business.
 Notwithstanding any provision of this Agreement or the Operating Agreement to
 the contrary, except as may be required under the LLC Act, each of the following
 actions must be approved by the Board:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 the sale or issuance of any Units or other securities exercisable for,
 convertible into or related to the Units or which cause the Company to incur
 any debt;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 except as otherwise provided for in Section 5.1, authorizing any distribution
 and declaring or paying any other distributions;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 any transactions with any Member or any Affiliate of any Member except as
 otherwise provided in this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 any transaction or series of related transactions outside the ordinary course
 of business to acquire, dispose of, encumber or transfer assets having a
 value in excess of $75,000;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (v)
 consolidations, mergers or any other extraordinary transactions;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (vi)
 the incurrence, guarantee, assumption, repayment, voluntary prepayment,
 redemption, refinancing or amendment of the terms of any indebtedness having
 a balance in excess of $75,000;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (vii)
 the entering into of finance or operating leases (other than any credit or
 lease transactions involving payments that do not exceed in the aggregate
 $175,000 in any year);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (viii)
 establishing, or transferring assets or agreements to, any subsidiaries;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ix) the
 liquidation, dissolution or commencement of any case, proceeding or other
 action relating to bankruptcy, insolvency, reorganization or relief of
 debtors or any consent to any such proceeding or other action that is
 involuntary;

 

- 15 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (x)
 the entering into, cancellation or amendment of material agreements outside
 the ordinary course of business (for purposes of this clause, material
 agreements shall be defined as any agreement with either a current market
 value or a total remaining cost of greater than $400,000);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (xi)
 changing the independent accountant or auditor of the Company;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (xii)
 initiating or settling any lawsuit or other legal proceeding outside the
 ordinary course of business;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (xiii)
 investing in any third party;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (xiv)
 engaging in any business or activity that is inconsistent from the purpose of
 the Company as set forth in Section 1.4;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (xv)
 the transfer or encumbrance of any asset for or in payment of any individual
 obligation of any Member; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (xvi)
 making any decision, or entering into any agreement, commitment or
 arrangement, to take any of the foregoing actions or which could reasonably
 be foreseen as resulting in any of the foregoing actions.

 

	
  

 	
  

 
	
  

 	
           (b)
 Designation of Board Members. Each Member shall be permitted to
 appoint one designee of such Member to the Board. There shall be no other
 members of the Board. Any vacancy in the Board shall be filled by the action
 of the Member that appointed the Board member whose Board position is
 vacated.

 
	
  

 	
  

 
	
  

 	
           (c)
 Delegation. The Board shall be entitled to delegate its duties as it
 may deem reasonable or necessary in the conduct of the business of the Company
 to one or more officers, employees, agents, or committees of the Company, who
 shall each have such duties and authority as the Board shall determine, or as
 may be set forth in this Agreement, the Operating Agreement or any agreement
 between such person and the Company.

 
	
  

 	
  

 
	
  

 	
           (d)
 Qualification and Term of Office. Governors need not be Members or
 employees of the Company. A Governor shall hold office until such person’s
 successor shall have been appointed, or until the earlier death, resignation,
 removal or disqualification of such Governor. A Governor may be removed only
 by the Member that appointed such Governor.

 
	
  

 	
  

 
	
  

 	
           (e)
 Resignation. Any Governor may resign at any time by giving written
 notice to the Company. The resignation is effective when notice is given to
 the Company, unless a later date is specified in the notice, and acceptance
 of the resignation shall not be necessary to make it effective.

 
	
  

 	
  

 
	
  

 	
           (f)
 Voting Power. Except as provided in the Operating Agreement, each Governor
 shall have one vote on any matter submitted to the vote of the Board.

 
	
  

 	
  

 
	
  

 	
           (g)
 Acts of the Board. The Board shall take action in the manner set forth
 in the Operating Agreement.

 
	
  

 	
  

 
	
  

 	
           (h)
 Standards of Conduct. A Governor shall discharge the duties of serving
 on the Board in good faith, in a manner the Governor reasonably believes to
 be in the best interests of

 
	
  

 	
  

 

- 16 -

	
  

 	
  

 
	
  

 	
 the Company and with the
 care an ordinarily prudent person in a like position would exercise under
 similar circumstances. A Governor shall not be liable as a fiduciary with
 respect to the duties of serving on the Board.

 

          7.3)
Officers. The Company may have one or more natural persons exercising
the functions of the offices, however designated, of Marketing Manager and
Treasurer. The Board may elect or appoint such other officers or agents as it
deems necessary for the operation and management of the Company including, but
not limited to, a Chairman of the Board, a President, one or more Vice
Presidents, and a Secretary, each of whom shall have the powers, rights, duties
and responsibilities set forth in the Operating Agreement, unless otherwise
determined by the Board. Any of the offices or functions of those offices may
be held by the same person.

          7.4)
Members or Affiliates Dealing with the Company. The Company may contract
or otherwise deal with a Member or any Person who is an Affiliate of a Member
including the purchase or sale of goods or services. In any such transaction
between the Company and a Member or a Person who is an Affiliate of a Member,
the Agreement shall be approved in accordance with Section 7.2(a) of this
Agreement and Section 322B.666 of the LLC Act. Compensation for such goods
or services shall in all instances be commercially reasonable.

          7.5)
Compensation for Services. Unless otherwise determined by the Board or
as provided in this Agreement, no Member or officer shall be compensated for
services to the Company. No relationships between the Company or any Person who
is an Affiliate of a Member are authorized unless the Board is fully aware of
the circumstances and, in no event, will compensation to any such Affiliate be
more than is reasonable given all of the facts and circumstances. The Members
acknowledge and agree that all compensation payable to the Trading Member
pursuant to this Agreement is reasonable.

          7.6)
Operation of the Trading Activities and Conduct of the Company’s Business.

	
  

 	
  

 
	
  

 	
           (a)
 Business Divisions. The Company shall conduct one category of business
 activities: The purchase, sale, storage, transport and marketing of
 hydrocarbons produced within North Dakota to or from refineries and other
 end-users or Persons, wherever located, and the conduct of Trading
 Activities.

 
	
  

 	
  

 
	
  

 	
           (b)
 Credit. The Company may, at the sole discretion of the Trading Member, establish and maintain appropriate credit facilities with a commercial
lender to accommodate its regular working capital needs.

 
	
  

 	
  

 
	
  

 	
           (c)
 Accounting, Bookkeeping, Tax and Treasury. Accounting,
 bookkeeping, tax and treasury services (collectively, the “Financial
 Services”) for the Company shall be performed by PTS or its Affiliates, and
 the reasonable market rate of fees for the Financial Services (collectively,
 the “Financial Services Fee”) shall be paid by the Company as approved by the
 Board on an annual basis. If the Board fails to establish the Financial
 Services Fee for any fiscal year, then the applicable Financial Services Fee
 for such fiscal year shall be equal to the Financial Services Fee for the
 prior fiscal year plus three percent (3%) until the establishment of the
 Financial Services Fee by the Board. Any Member maintaining or possessing the
 books and records of the Company will provide any other Member’s personnel
 and auditors, accountants, and legal counsel access to such books and records
 during business hours upon reasonable request.

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 Company shall use reasonable efforts to deliver within nineteen (19) days
 after the end of each month to each Person who was a Member at any time
 during such calendar month (1) monthly financial statements prepared in
 accordance with U.S. 

 

- 17 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 GAAP (which financial
 statements, including balance sheet, income statement, cash flow and Member’s
 equity, need not contain notes or a comparison to the prior month) and
 (2) the financial information identified on Exhibit D, which
 exhibit may be amended, from time to time by unanimous action of the Board.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 Company shall deliver within eighteen (18) days after the end of each fiscal
 quarter to each Person who was a Member at any time during such fiscal
 quarter quarterly financial statements prepared in accordance with U.S. GAAP
 (which financial statements, including balance sheet, income statement, cash
 flow and Member’s equity, need not contain notes or a comparison to the prior
 quarter). The Company and any Member maintaining or possessing the books and
 records of the Company will cooperate with any other Member in preparing
 notes to such financial statements.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 Company shall deliver within forty-five (45) days after the end of each
 fiscal year to each Person who was a Member at any time during such fiscal
 year (1) annual financial statements prepared in accordance with U.S.
 GAAP (which financial statements, including balance sheet, income statement,
 cash flow and Member’s equity, need not contain notes or a comparison to the
 prior fiscal year) and (2) the financial information identified on Exhibit
 D, which exhibit may be amended, from time to time by unanimous action of
 the Board. An estimate of the taxable income generated by the Company during
 the applicable period will be provided upon completion. The Company and any
 Member maintaining or possessing the books and records of the Company will
 cooperate with any other Member in preparing notes to such financial
 statements.

 
	
  

 	
  

 	
  

 
	
  

 	
           (d)
 Member Expenses. Except as specifically provided in this Agreement to
 the contrary, DPM and PTS shall each be solely responsible for their
 respective costs incurred in delivering and performing the services and
 assets required to be contributed to the Company under this Agreement,
 including travel, overhead, legal, and general and administrative expenses of
 the Member or its Affiliates.

 
	
  

 	
  

 	
  

 
	
           7.7)
 Operating Agreement. The Operating Agreement may contain any provision
 relating to the management and operation of the Company not inconsistent with
 the LLC Act and this Agreement. In the case of any inconsistency, this
 Agreement and the LLC Act will govern. The Board may amend or repeal the
 Operating Agreement. Any such amendment or repeal of the Operating Agreement
 shall not be deemed to be an amendment of this Agreement.

 
	
  

 	
  

 	
  

 
	
           7.8)
 Limitation of Liability. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (a)
 No Member, Governor, officer, or other employee of the Company shall be
 liable, responsible or accountable in damages or otherwise to the Company, or
 to any Member, or to any other third Person for any failure to act or for any
 acts performed, where such person’s failure to act or such action was in good
 faith and such person believed such action or failure to act was in the best
 interests of the Company. Except as expressly provided in the LLC Act, no
 Member, Governor, officer or other employee of the Company shall be obligated
 personally for any debts, obligations, or liabilities of the Company (whether
 arising in contract, tort or otherwise) solely by reason of being a Member,
 officer or employee of the Company or serving on its Board.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (b)
 Notwithstanding anything else contained in this Agreement, in no event will
 the Trading Member or its Affiliates, or any of their respective directors,
 officers, and employees, nor any agents and representatives acting on behalf
 of the Trading Member or its Affiliates, be liable 

 

- 18 -

	
  

 	
  

 
	
  

 	
 for any action, error or
 omission in transacting any Trading Activities or declining to transact any
 Trading Activities, or any defect in the transaction of the Trading Activities,
 except to the extent such action, error, omission or defect is directly
 attributable to the gross negligence or willful misconduct of such Trading
 Member in the transaction of the Trading Activities pursuant to this
 Agreement.

 
	
  

 	
  

 
	
  

 	
           (c)
 Notwithstanding any provision of this Agreement or the Operating Agreement to
 the contrary, in no event will PTS or its Affiliates, or any of their
 respective directors, officers, and employees, nor any agents and
 representatives acting on behalf of PTS or its Affiliates, be liable for any
 action, error or omission in conducting the Financial Services, except to the
 extent such action, error, omission or defect is directly attributable to the
 gross negligence or willful misconduct of PTS. 

 
	
  

 	
  

 
	
  

 	
           (d)
 Notwithstanding anything to the contrary contained in this Agreement and
 without limiting the generality of the foregoing, the Trading Member or PTS,
 as the case may be, shall be excused from its respective obligations under
 this Agreement, and shall have no liability for any resulting loss or damage,
 in the event and to the extent that its performance is delayed or prevented
 by any circumstance reasonably beyond its control, including earthquake,
 fire, flood, epidemic, explosion, act of any government in its sovereign
 capacity, act of God or of the public enemy, strike, walkout or other labor
 dispute, riot or civil disturbance, disruption or unavailability of storage
 or transportation facilities, inability to obtain production from intended
 sources and production breakdowns.

 
	
  

 	
  

 
	
  

 	
           (e)
 Notwithstanding anything to the contrary contained in this Agreement, none of
 the Members or any of their Affiliates will be liable for any special,
 consequential, incidental or punitive damages of the Company, another Member
 or any of their respective Affiliates based upon, arising out of or relating
 to this Agreement, any provision of this Agreement or the breach,
 performance, enforcement, validity or invalidity thereof (other than any special,
 consequential, incidental or punitive damage components of claims and awards
 against the Company, another Member or any of their respective Affiliates by
 third parties).

 
	
  

 	
  

 
	
  

 	
 7.9) Indemnification.
 

 
	
  

 	
  

 
	
  

 	
           (a)
 The Company shall indemnify such Persons, for such expenses and liabilities,
 in such manner, under such circumstances, and to such extent as permitted by
 Minnesota Statutes Section 322B.699.

 
	
  

 	
  

 
	
  

 	
           (b)
 Without limiting the foregoing, the Company will indemnify, defend and hold
 harmless the Trading Member and its Affiliates, PTS and its Affiliates, and
 each of their respective directors, officers, and employees, as well as
 agents and representatives acting on behalf of the Trading Member, PTS or any
 of their respective Affiliates (each such party, an “Indemnified Party”) from
 and against, and pay or reimburse, as the case may be, the Indemnified Party
 for, all Damages, as incurred, suffered by any such Person based upon,
 arising out of or relating to the transaction of the Trading Activities, the
 Financial Services, or acting as the Trading Member hereunder, as the case
 may be, except to the extent such Damages are based upon, arise out of or
 relate to the gross negligence or willful misconduct of the Trading Member in
 the transaction of their respective activities pursuant to this Agreement.

 
	
  

 	
  

 
	
  

 	
           (c)
 The indemnification provided for in this Section 7.9 will survive the
 termination of the Trading Activities, the Financial Services and this
 Agreement. 

 

- 19 -

	
  

 	
  

 	
  

 
	
           7.10) Other Ventures.
 Any Member may engage in or possess any interest in any other ventures or
 businesses of any nature or description, independently or with others,
 including ventures or businesses which may engage in business transactions
 with the Company provided such transactions with the Company are commercially
 reasonable. Neither the Company nor any other Member shall have a right by
 virtue of this Company to participate in any way in any such other venture or
 the income or profits derived therefrom. Notwithstanding the foregoing, each
 Member agrees that it will not (and it will not permit its Affiliates to),
 during the period it is a Member of the Company, and for one year thereafter,
 directly or indirectly, purchase, sell, store, transport or market crude oil
 originating from production fields anywhere in North Dakota or conduct any
 trading activities related thereto, except through the Company; provided,
 however, that DPM and its Affiliates are expressly permitted to transport any
 materials, including crude oil, by road. 

 
	
  

 	
  

 	
  

 
	
 ARTICLE
 8

 
	
 DIRECTORS
 AND DECISIONS OF BOARD OF GOVERNORS

 
	
  

 	
  

 	
  

 
	
           8.1)
 Number. The Board of the Company shall consist of as many natural
 persons as there are Members of the Company and each Member shall have the
 right to appoint one Governor.

 
	
  

 	
  

 	
  

 
	
           8.2)
 Term. A Governor designated in accordance with the provisions of
 Section 8.1 shall serve for an indefinite term until such Governor’s earlier
 death, resignation, or removal. 

 
	
  

 	
  

 	
  

 
	
 ARTICLE
 9

 
	
 RESTRICTIONS
 ON TRANSFER; TERMINATION

 
	
  

 	
  

 	
  

 
	
           9.1)
 Restriction on Transfer or Assignment. Upon any intended transfer of a
 Member’s Units, the provisions of the Buy-Sell Agreement among the Members
 and the Company (the “Buy-Sell Agreement”) shall govern the process and the
 terms of disposition or transfer of such Units. No Member may transfer or
 assign all or any portion of such Member’s Units (other than to an Affiliate
 of such Member), in a transaction in which the Buy-Sell Agreement would be
 operative unless such Member or its Affiliate also transfers or assigns to
 the same transferee the same proportion of its units in Dakota Petroleum
 Transport Solutions, LLC. In the absence of any such Buy-Sell Agreement, a
 Member may not transfer or assign all or any portion of such Member’s Units
 (other than to an Affiliate of such Member), whether by sale, gift, devise,
 or distribution; the death, withdrawal, bankruptcy, divorce, separation,
 dissolution or termination of such Member; or otherwise, except upon the
 written consent of the Board.

 
	
  

 	
  

 	
  

 
	
  

 	
 9.2)
 Term and Termination. 

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)
 The Company shall exist for an initial term expiring December 31, 2026 (the
 “Initial Term”), and the term shall automatically extend in one-year renewal
 periods (each, a “Renewal Term”) (the Initial Term and any Renewal Term are
 also referred to as a “Term”) unless and until terminated as provided herein.
 The Company shall dissolve, be wound up and terminated in the manner
 described below:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 By Agreement. Upon the written agreement to terminate signed by all
 Members at any time during the Initial Term or a Renewal Term; or

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 Member Notice. At the date of the completion of any Term if written
 notice of termination is delivered by one Member to the other Member and to
 the Company at least three (3) years prior to the end of such Term.

 

- 20 -

	
  

 	
  

 	
  

 
	
  

 	
           (b)
 Upon the occurrence of an event triggering the dissolution, wind up or
 termination of the Company pursuant to Section 9.2(a), the Company shall continue solely for the purposes of
 winding up its affairs in an orderly manner, liquidating its assets, and
 satisfying the claims of its creditors and Members, and no Member shall take
 any action with respect to the Company that is inconsistent with the winding
 up of the Company’s business and affairs; provided that all covenants
 contained in this Agreement and obligations provided for in this Agreement
 shall continue to be fully binding upon the Members until such time as the
 Company’s assets have been distributed pursuant to this Section 9.2(b).
 The Trading Member shall be responsible for overseeing the winding up and
 dissolution of the Company. On the sale of Company assets, any gain or loss
 realized by the Company upon such sale of its assets shall be deemed
 recognized and allocated to the Members in the manner set forth in
 Article 5. The Trading Member shall take full account of the Company’s
 liabilities and assets and shall cause the proceeds from the sale or
 disposition of assets or to the extent sufficient therefor, to be applied and
 distributed, to the maximum extent permitted by applicable law and
 notwithstanding anything in this Agreement to the contrary, in the following
 order:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i)
 First, to creditors
 (including any Members and their Affiliates who are creditors) in
 satisfaction of all of the Company’s debts and liabilities other than
 liabilities for which reasonable provision for payment has been made; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 Second, to the extent
 of any available proceeds after application of clause (i) above, in respect
 of preferred returns due to Members with respect to outstanding Member
 Preferred Contributions, on a pro rata basis to the Members based on the then
 outstanding amount of accrued and unpaid preferred returns due to each Member
 on all Member Preferred Contributions made by such Member;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 Third, to the extent of
 any available proceeds after application of clauses (i) and (ii) above, in
 respect of outstanding Member Preferred Contributions, on a pro rata basis to
 the Members based on each Members’ then outstanding Member Preferred
 Contributions;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 Fourth, to the extent
 of any available proceeds after application of clauses (i), (ii) and (iii)
 above, in the event there are Unrealized Termination Profits as of the date
 any Terminating Member resumes participation
 in the Trading Activities pursuant to Section 9.3(e), 85% of such
 Unrealized Termination Profits to the Non-Terminating Member and 15% of such
 Unrealized Termination Profits to the Terminating Member until the aggregate
 amount of all distributions pursuant to Section 5.1(b)(iii) and this
 Section 9.2(b)(iv) is equal to the amount of such Unrealized Termination
 Profits; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (v)
 Fifth, to the extent of
 any available proceeds after application of clauses (i), (ii), (iii) and (iv)
 above, to the Members based upon their Distribution Percentages on the last
 day of the most recent calendar quarter, provided that any such proceeds that
 were generated after the end of such calendar quarter shall be distributed to
 the Members based upon their Distribution Percentages on the date of such
 distribution. 

 
	
  

 	
  

 	
  

 
	
  

 	
 9.3)
 Termination of Participation in Trading Activities. 

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)
 Each Member may elect to terminate its participation in the Trading
 Activities (a “Trading Activities Termination”) on ninety (90) days prior
 written notice to the other Member of such termination. Trading Activities
 Terminations must be effective on the first day of a calendar quarter. During
 all periods of time during
 which a Member is a Terminating Member, such 

 

- 21 -

	
  

 	
  

 	
  

 
	
  

 	
 Member shall not be
 required to make any Member Preferred Contributions in accordance with
 Section 3.5(b).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b) (i) Upon a Trading Activities Termination, the aggregate amount of
 outstanding Member Preferred
 Contributions of the Member electing
 the Trading Activities Termination (the “Terminating Member”) shall be
 irrevocably reduced (but in no event to less than zero) by an amount, if any,
 equal to the product (“Pro Rata Termination Loss Amount”) of (i) the
 Terminating Member’s Distribution Percentage calculated immediately prior to,
 and without giving effect to, the Terminating Member’s termination of
 its participation in the Trading Activities pursuant to this Section 9.3
 and (ii) the Termination Loss Amount (it being understood that, except as set forth in
 Section 9.3(b)(iv), such reduction shall not effect the Company’s
 obligation to pay any preferred returns on the amount of the Members Preferred
 Contribution so reduced accrued and
 unpaid up to the date of such reduction in accordance with the terms of this
 Agreement). 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii)
 After giving effect to the reduction described in Section 9.3(b)(i), to
 the extent any amount of any Member Preferred Contributions of
 the Terminating Member remains outstanding, then the Member not electing the
 Trading Activities Termination (the “Non-Terminating Member”) shall have the
 right to elect (A) that the amount of such Member Preferred
 Contributions remain in full force
 and effect in accordance with this Agreement or (B) to acquire such
 Member Preferred Contributions
 and pay to the Terminating Member an aggregate amount equal to the
 outstanding amount of, and any accrued and unpaid preferred returns (but not
 including any accrued and unpaid preferred returns on any amount of the
 Member Preferred Contributions
 reduced pursuant to Section 9.3(b)(i)) on, such Member Preferred Contributions. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii)
 Upon any reduction in
 Member Preferred Contributions pursuant to Section 9.3(b)(i), such
 Member Preferred Contributions or the portion thereof in respect of which a
 reduction was made pursuant to Section 9.3(b)(i) shall cease to accrue
 preferred returns and shall be cancelled and no longer outstanding for any
 purpose whatsoever. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv)
 To the extent that the
 Terminating Member’s Pro Rata Termination Loss Amount exceeds the aggregate amount of outstanding Member Preferred
 Contributions of the Terminating
 Member (before giving effect to the reduction described in
 Section 9.3(b)(i)), the aggregate amount of accrued and unpaid preferred
 returns on Member Preferred Contributions owed to the Terminating Member shall be irrevocably reduced (but in
 no event to less than zero) by the amount of such excess.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (v)
 To the extent that the
 Terminating Member’s Pro Rata Termination Loss Amount exceeds the sum of (A) the aggregate amount of
 outstanding Member Preferred Contributions of the Terminating Member (before giving effect to the reduction
 described in Section 9.3(b)(i)) and (B) the aggregate amount of
 accrued and unpaid preferred returns on Member Preferred Contributions of the Terminating Member (before giving
 effect to the reduction described in Section 9.3(b)(iv)), (x) all
 distributions otherwise distributable to the Terminating Member pursuant to
 Section 5.1(b)(iii), Section 5.1(b)(iv), Section 9.2(b)(iv) and Section 9.2(b)(v) shall be
 reduced (but in no event to less than zero) until such time as the aggregate
 amount of reductions pursuant to this Section 9.3(b)(v) is equal to such
 excess and (y) any amounts not distributed to the

 

- 22 -

	
  

 	
  

 
	
  

 	
 Terminating Member
 pursuant to clause (x) above shall instead be distributed to the
 Non-Terminating Member.

 

	
  

 	
  

 
	
  

 	
           (c)
 Any Trading Activities Termination shall be effective for at least six (6)
 months and, if longer, a period that is an integral multiple of six (6)
 months. Any Profits allocated
 to a Terminating Member pursuant to Section 4.5(a) and distributions
 payable to a Terminating Member pursuant to Section 5.1(b)(iv) and Section 9.2(b)(v) shall be calculated for each six-month period
 during which a Trading Activities Termination shall be in effect.

 
	
  

 	
  

 
	
  

 	
           (d)
 For the avoidance of doubt, during all periods of time during which a Member is a Terminating
 Member, such Member shall remain subject to and bound by Section 7.10
 (and for purposes of such Section 7.10 be considered a Member during
 such time). 

 
	
  

 	
  

 
	
  

 	
           (e)
 A Terminating Member may elect to resume its participation in the Trading
 Activities at the end of any six-month period following its applicable
 Trading Activities Termination. Any such resumption of participation in the
 Trading Activities must commence, and will be effective, on the first day of
 a calendar quarter. Prior to any such resumption, the Terminating Member
 (i) must give the Non-Terminating Member ninety (90) days’ prior written
 notice of its election, (ii) shall acquire from the Non-Terminating
 Member one half of any Member Preferred Contributions made
 to the Company by the Non-Termination Member during such period of time when
 the Terminating Member was a Terminating Member and pay to the
 Non-Terminating Member an aggregate amount equal to the outstanding amount
 of, and any accrued and unpaid preferred returns on, such Member Preferred
 Contributions being acquired and
 (iii) if the Non-Terminating Member made the election described in
 clause (B) of Section 9.3(b)(ii), the Terminating Member shall
 acquire from the Non-Terminating Member any then outstanding Member Preferred
 Contributions that were acquired by
 the Non-Terminating Member pursuant to clause (B) of
 Section 9.3(b)(ii) and pay to the Non-Terminating Member an aggregate
 amount equal to the outstanding amount of, and any accrued and unpaid
 preferred returns on, such Member Preferred Contributions. 

 

ARTICLE 10

MISCELLANEOUS PROVISIONS

          10.1)
Risk Equivalence. Except as otherwise provided in this Agreement, the
Members intend that the exposure for contributed capital by the Members shall
be maintained to the greatest extent practicable on a basis that results in
equivalent financial risk for the Members (the concept of “Risk Equivalence”).
To the extent not detrimental to the viability and financial success of the
overall operations of the Company, except as otherwise provided in this Agreement,
the Members will work in good faith with each other to accomplish and maintain
Risk Equivalence through appropriate measures, distributions or voluntary
contributions to capital; provided, however, that nothing in this Agreement
shall be deemed to require additional capital contributions by the Members. 

          10.2)
Arbitration. Each dispute, claim and controversy (whether arising during
or after the term of this Agreement) arising out of or relating to this
Agreement or its breach, (including but not limited to the validity of the
agreement to arbitrate and the arbitrability of any matter), shall be settled,
upon demand and written notice by any Member, the Company, their legal representatives, successors and assigns, by
an arbitrator agreed upon by the parties. If the parties are unable to agree,
the dispute will be settled by three (3) arbitrators, one (1) of whom shall be
chosen by the party making such demand, one (1) by the other party, and the
third arbitrator by the two (2) so chosen. The party demanding arbitration
shall in its demand for arbitration notify the other party of the identity of
the arbitrator chosen by it. The other party shall, within fifteen (15) days
after its receipt of such written demand for arbitration, likewise select its 

- 23 -

appointee and give written
notice of such selection. If the party receiving such demand for arbitration
fails to notify the other party in writing of the identity of the arbitrator
chosen by it within such fifteen (15) day period, or if the two (2) arbitrators
so selected are unable to agree on the selection of a third arbitrator within a
period of fifteen (15) days after the appointment of the second arbitrator, any
party may request that the Chief Judge of the District Court of Hennepin
County, Minnesota appoint such arbitrator(s). The proceedings shall in all
other respects be conducted in accordance with whichever arbitration rules are
selected by the arbitrator, or a majority vote of the arbitrators, to the
extent such rules are not inconsistent with the provisions of this arbitration
provision. The cost of the proceedings shall be shared equally by the parties,
provided, however, that each party shall be solely responsible for the costs
and expenses of its own legal counsel and any experts or consultants
representing or assisting such party in connection with the proceedings. Unless
otherwise agreed upon, the place of arbitration proceedings shall be Hennepin
County, Minnesota. The decision of the arbitrator, or a majority of the three
(3) arbitrators, shall be final and binding on all parties. Except as otherwise
provided in this Section 10.2, such arbitration shall be governed by the
commercial arbitration rules of the American Arbitration Association. This
Section 10.2 shall survive termination of the Agreement. Notwithstanding the
provisions of this Section 10.2, decisions to be made hereunder by the Board
shall not be subject to arbitration or contested in any court as all of such
decisions shall be final and binding on the Members and their respective heirs,
legal representatives, successors, and assigns; provided, that the Board is
acting within the scope of its authority pursuant to the terms of this
Agreement.

          10.3)
Equitable Relief. Section 10.2 shall not preclude the Company, or
any Governor, Member, officer, or their legal representatives, successors and assigns from seeking an
injunction, specific performance, or other equitable relief with respect to any
dispute, claim and controversy arising out of or relating to this Agreement or
its breach.

          10.4)
Notice. Any notice, demand, consent, authorization or other
communication which is required to be given under this Agreement shall be in
writing and shall be deemed to be valid and duly given if hand-delivered,
telecopied, couriered overnight, or if mailed by registered or certified mail,
return receipt requested and postage prepaid, as follows: (i) if to the
Company to the Marketing Manager at the principal office of the Company;
(ii) if to a Governor, to the Governor at the address shown on the
Company’s records for such Governor; and, (iii) if to a Member, to such
Member at the address shown on the Company’s records for such Member. Each
notice, demand, request or communication which shall be delivered, mailed or transmitted
in the manner described above shall be deemed to be received for all purposes
three (3) business days after it is deposited in the mail as provided in this
Agreement or upon actual presentation to the addressee.

          10.5)
Amendment. This Agreement together with all exhibits contains the entire
understanding of the Members governing their business relationship and the conduct of the affairs of the
Company and may be amended only upon the written agreement of all the Members.
As of the Effective Date, and on a going forward basis only, this Agreement
shall replace and supersede the Original Agreement; provided, however,
that the terms of the Original Agreement shall govern with respect to all
rights, obligations and liabilities of the parties that arise out of or relate
to the period prior to the Effective Date.

          10.6)
Limitation on Benefits of this Agreement. It is the explicit intention
of the Members that no Person other than the Members and the Company is or
shall be entitled to bring any action to enforce any provision of this
Agreement against any Member or the Company, and that the covenants,
undertakings and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the Members (or their respective
heirs, legal representatives, successors and assigns as permitted pursuant to
this Agreement) and the Company.

- 24 -

          10.7)
General. Subject to any provisions contained in this Agreement
restricting assignment, this Agreement shall be binding upon and shall inure to
the benefit of the Members and their respective successors and permitted
assigns. This Agreement, the rights and obligations of the parties to this
Agreement, and any claims or disputes relating to this Agreement, shall be
governed by and construed in accordance with the laws of the State of
Minnesota. The Members agree that the Company’s assets are not and will not be
suitable for partition. The Members waive any right of partition or any right
to take any action that otherwise might be available to them for the purpose of severing their
relationship with the Company or interest in assets held by the Company from
the interest of the other Members. The representations, warranties,
indemnifications, and covenants in this Agreement shall survive the signing and
delivery of this Agreement. All pronouns and any variations shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity
of the Person may require. References to “include,” “includes” and “including”
shall be deemed to be followed by the words “without limitation.” Article and
Section headings contained in this Agreement are inserted for convenience of
reference only, shall not be deemed to be a part of this Agreement for any
purpose, and shall not in any way define or affect the meaning, construction or
scope of any of the provisions contained in this Agreement. To facilitate
execution, this Agreement may be executed in as many counterparts as may be
required; and it shall not be necessary that the signatures of, or on behalf
of, each party, or that the signatures of all Persons required to bind any
party, appear on each counterpart; but it shall be sufficient that the
signature of, or on behalf of, each party, or that the signatures of the
Persons required to bind any party, appear on one or more of the counterparts.
All counterparts shall collectively constitute a single agreement. It shall not
be necessary in making proof of this Agreement to produce or account for more
than a number of counterparts containing the respective signatures of, or on
behalf of, all of the parties to this Agreement.

          10.8)
Insurance. Each Member (a) shall use commercially reasonable
efforts to obtain insurance coverage with respect to such Member’s obligations
hereunder and (b) upon request of the other Member at any time and from
time to time during the Term, shall provide to such other Member evidence,
reasonably satisfactory to such other Member, of the effectiveness of such
insurance coverage.

 [Signature Page Follows]

- 25 -

          IN
WITNESS WHEREOF, the Members have executed this Agreement on December 31, 2013,
effective as of the Effective Date.

	
  

 	
  

 	
  

 
	
  

 	
 DPTS MARKETING LLC

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
       /s/ Carlos R. Cuervo 

 	
  

 
	
  

 	
 By Carlos R. Cuervo

 	
  

 
	
  

 	
 Its Marketing Manager

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 DAKOTA PLAINS MARKETING,
 LLC

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
       /s/ Gabriel G. Claypool 

 	
  

 
	
  

 	
 By Gabriel G. Claypool

 	
  

 
	
  

 	
 Its Chief Executive
 Officer

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 PETROLEUM TRANSPORT
 SOLUTIONS, LLC

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
       /s/ Ronald Crowell 

 	
  

 
	
  

 	
 By Ronald Crowell

 	
  

 
	
  

 	
 Its Sr. Vice
 President-Finance

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 Signature Page to DPTS Marketing LLC

 	
  

 
	
  

 	
 Second Amended and Restated Member
Control Agreement

 	
  

 

Exhibit A
to
Second Amended and Restated Member
Control Agreement
of
DPTS Marketing LLC

Current as
of December 31, 2013

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Member

 	
  

 	
 Units

 	
  

 	
 Capital

 Contribution

 	
  

 	
 Member
 Preferred

 Contribution

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
Dakota Plains Marketing,
 LLC

 	
  

 	
 1,000

 	
  

 	
 $100

 	
  

 	
 $10,000,000

 
	
  294 Grove Lane East,
 Wayzata, MN 55391

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
Petroleum Transport
 Solutions, LLC

 	
  

 	
 1,000

 	
  

 	
 $100

 	
  

 	
 $10,000,000

 
	
 605 North Highway 169,
 Suite 1100, Plymouth, MN 55441

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

- 27 -

Exhibit B
to
Second Amended and Restated Member
Control Agreement
of
DPTS Marketing LLC

Member Transactions

	
  

 	
  

 	
  

 
	
 A.

 	
 Rail Car Leasing.

 
	
  

 	
  

 	
  

 
	
  

 	
 The
 Member Transaction Pricing shall be pursuant to the terms and provisions set
 forth in the following rail car sublease agreements:

 
	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Railcar
 Sublease Agreement made as of June 1, 2012, by and between Western
 Petroleum Company and DPTS Marketing LLC with respect to that certain Master
 Railcar Lease and certain schedules thereto with CIT Group/Equipment
 Financing, Inc.

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 Railcar
 Sublease Agreement made as of June 1, 2012, by and between Western
 Petroleum Company and DPTS Marketing LLC with respect to that certain Car
 Leasing Agreement and certain riders thereto with General Electric Railcar
 Services Corporation

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 Railcar
 Sublease Agreement made as of June 1, 2012, by and between Western
 Petroleum Company and DPTS Marketing LLC with respect to that certain
 Railroad Car Lease with Progressive Rail Inc.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 Railcar
 Sublease Agreement made as of June 1, 2012, by and between Western
 Petroleum Company and DPTS Marketing LLC with respect to that certain
 Railroad Car Lease and certain riders thereto with Trinity Industries Leasing
 Corporation

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 Railcar
 Sublease Agreement made as of June 1, 2012, by and between Western
 Petroleum Company and DPTS Marketing LLC with respect to that certain Rail
 Car Lease Agreement and certain riders thereto with UTLX International, a
 division of Union Tank Car Company

 

- 28 -

Exhibit C
to
Second Amended and Restated Member
Control Agreement
of
DPTS Marketing LLC

Summary Reports

	
  

 	
  

 
	
 1.

 	
 Such
 performance metrics as determined by the Board.

 
	
  

 	
  

 
	
 Financial
 Reports

 
	
  

 	
  

 
	
 1.

 	
 GAAP
 Financial Statements

 
	
 2.

 	
 Bank
 Statements

 
	
 3.

 	
 Trial
 Balance

 
	
 4.

 	
 Account
 Reconciliations that tie directly to the financial statements 

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 •

 	
 Balance
 Sheet

 
	
  

 	
  

 	
  

 	
 i.

 	
  

 	
 Cash

 
	
  

 	
  

 	
  

 	
 ii.

 	
  

 	
 A/R – Aging
 report, detail by customer, and intercompany activity

 
	
  

 	
  

 	
  

 	
 iii.

 	
  

 	
 A/P – Aging
 report, detail by vendor, and intercompany activity

 
	
  

 	
  

 	
 •

 	
 Income
 Statement

 
	
  

 	
  

 	
  

 	
 i.

 	
  

 	
 Revenue –
 Formulaic pricing and volume by customer

 
	
  

 	
  

 	
  

 	
 ii.

 	
  

 	
 Railcar
 Leasing – Number of cars and price per car

 
	
  

 	
  

 	
  

 	
 iii.

 	
  

 	
 Trucking
 Fees – Number of barrels trucked and accrual analysis

 
	
  

 	
  

 	
  

 	
 iv.

 	
  

 	
 COS Crude Oil
 – Formulaic pricing and volume by producer/vendor

 
	
  

 	
  

 	
  

 	
 v.

 	
  

 	
 Freight –
 Accrual analysis

 
	
  

 	
  

 	
  

 	
 vi.

 	
  

 	
 G&A
 Expense – Detail supporting overhead allocation

 
	
  

 	
  

 	
 •

 	
 Cash Flow
 Statement

 
	
  

 	
  

 	
 •

 	
 Member’s
 Capital

 

	
  

 	
  

 
	
 5.

 	
 NewEdge
 Statements

 
	
 6.

 	
 Monthly
 Volume Summary/Roll Forward

 
	
 7.

 	
 Financial
 Statement Variance Analysis

 
	
 8.

 	
 Producer
 & Customer Contracts/Agreements that support the monthly activities

 
	
 9.

 	
 General
 Ledger Detail

 
	
 10.

 	
 Such other
 information as determined by the Board.

 

- 29 -

APPENDIX
A

TAX
DEFINITIONS, CAPITAL ACCOUNTS

AND SPECIAL ALLOCATIONS

          1.
Tax Definitions.

          “Adjusted
Capital Account Deficit” means the deficit balance (if any)
in a Member’s Capital Account as of the end of any taxable year of the Company,
after:

               (a)
crediting to such Capital Account any amount which such Member is
obligated to restore pursuant to this Agreement or is deemed obligated to
restore pursuant to the minimum gain chargeback provisions of Treas. Reg. § 1.704-2(f)
and (g), and 

               (b)
charging to such Capital Account any adjustments, allocations or distributions
described in the qualified income offset provisions of Treas. Reg. §
1.704-1(b)(2)(ii) which are required to be charged to such Capital Account
pursuant to this Agreement.

          “Company
Minimum Gain” means the amount determined in accordance with
the principles of Treas. Reg. § 1.704-2(d)
and 1.704-2(g).

          “Contributed
Assets” has the meaning set forth in Section 4(a) below.

          “Depreciation”
means, for each taxable year of the Company or other period, an amount equal to
the depreciation allowable with respect to an asset for such taxable year or
other period; provided, however, 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 or other period, Depreciation shall be an amount
that bears the same ratio to such beginning Gross Asset Value as the federal
income tax depreciation with respect to such asset for such taxable year or
other period bears to such beginning adjusted tax basis; and provided further,
that if the federal income tax depreciation for such taxable year or other
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the Members.

          “Gross
Asset Value” shall be determined as follows:

               (a)
the initial Gross Asset Value of any asset contributed by a Member to
the Company subsequent to the date hereof shall be the fair market value of
such asset, as agreed to by the Board;

               (b)
the Gross Asset Value of all Company assets shall be adjusted to equal their
respective fair market values (taking Section 7701(g) of the Code into account)
as determined by the Board as of the following times: (i) 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 or in connection
with the performance of services; (ii) the distribution by the Company to a Member
of more than a de minimis amount of Company assets as consideration for an
interest in the Company, but only if, in the case of either (i) or (ii), the Board
reasonably determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Members in the Company,
(iii) the liquidation of the Company within the meaning of Treas. Reg. §
1.704-1(b)(ii)(g) and/or (iv) the forfeiture by a defaulting Member of its
interest in the Company;

- 30 -

               (c)
the Gross Asset Value of any Company asset distributed to any Member
shall be the fair market value (taking Section 7701(g) of the Code into
account) of such asset on the date of distribution as determined by the
distributee and the Board;

               (d)
the Gross Asset Values of Company assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such Company assets pursuant
to Section 732(d), Section 734(b) or Section 743(b) of the Code, but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treas. Reg. § 1.704-l(b)(2)(iv)(m)
and 1.704-1(b)(2)(iv)(f); provided, however, that Gross Asset Values shall not
be adjusted pursuant to this subsection (d) to the extent that the Board
determines that an adjustment pursuant to subsection (b) of this definition is
necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this subsection (d); 

               (e)
if the Gross Asset Value of any Company asset has been determined or adjusted
pursuant to subsection (a), (b), (c) or (d), such Gross Asset Value shall
thereafter be adjusted by the Depreciation that would be taken into account
with respect to such asset for purposes of computing gains or losses from the
disposition of such asset; and

               (f)
Gross Asset Value of any Company asset that was not contributed by a Member
means the adjusted basis of such Company asset for federal income tax purposes.

          “Profits”
and “Losses” shall mean, for each
taxable year of the Company or other period, an amount equal to the Company’s
taxable income or loss, as the case may be, for such taxable year or period,
determined in accordance with Section 703(a) of the Code (for this purpose, all
items of income, gain, loss and deduction required to be stated separately
pursuant to Section 703(a)(1) of the Code shall be included in taxable income
or loss), with the following adjustments:

               (a)
any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses pursuant to this
subparagraph shall be added to such taxable income or loss;

               (b)
any expenditures of the Company described in Section 705(a)(2)(B) of the Code
or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treas.
Reg. § 1.704-l(b)(2)(iv)(i), and
not otherwise taken into account in computing Profits or Losses pursuant to
this definition shall be subtracted from such taxable income or loss. For
purposes of this Agreement, any deduction for a loss on a sale or exchange of
Company property that is disallowed to the Company under Section 267(a)(1) or
Section 707(b) of the Code shall be treated as a Section 705(a)(2)(B) of the
Code expenditure.

               (c)
in the event the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraph (b) or (c) of the definition thereof, the amount of such
adjustment shall be taken into account as gain or loss from the disposition of
such asset for purposes of computing Profits or Losses;

               (d)
gain or loss resulting from the disposition of any Company asset 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 asset disposed of,
notwithstanding that the adjusted tax basis of such asset differs from its
Gross Asset Value;

               (e)
in lieu of the Depreciation taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such taxable year
of the Company or other period, computed in accordance with the definition
thereof;

- 31 -

               (f)
to the extent an adjustment to the adjusted tax basis of any Company asset
pursuant to Section 734(b) of the Code is required, pursuant to Treas.
Reg. § 1.704-l(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 interest in the Company,
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 such basis) from the disposition of such asset and shall be taken
into account for purposes of computing Profits or Losses; and

               (g)
notwithstanding any other provision of this definition, any items which are
specially allocated pursuant to Section 3 below shall not be taken into account
in computing Profits and Losses.

          “Regulations”
or “Treas. Reg.”
shall mean a regulation issued by the United States Treasury Department and
relating to matters arising under the Code.

          “Regulatory
Allocations” has the meaning set forth in Section 3(h) below.

          “Member
Nonrecourse Debt” has the same meaning as the term “partner
nonrecourse debt” set forth in Treas. Reg. § 1.704-2(b)(4).

          “Member
Nonrecourse Debt Minimum Gain” means an amount, with respect
to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would
result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with the provisions of Treas. Reg. § 1.704-2(i)(3)
relating to “partner nonrecourse debt minimum gain”.

          “Member
Nonrecourse Deductions” has the same meaning as the term
“partner nonrecourse deductions” set forth in Treas. Reg. § 1.704-2(i)(1) and 1.704-2(i)(2).

          “Nonrecourse
Deductions” has the meaning set forth in Treas. Reg. §
1.704-2(b)(1).

               2.
Capital Accounts.

               (a)
Except as provided in this Section 2, the Capital Account of each Member shall
be (i) increased by (A) the amount of cash and the Gross Asset Value of any property
contributed to the Company by such Member (net of liabilities secured by the
property or to which the property is subject that the Company is considered to
assume or take subject to pursuant to Section 752 of the Code), and (B) Profits
and any other items of income and gain allocated to such Member,
(ii) decreased by (A) the amount of cash and the Gross Asset Value of any
property distributed to such Member (net of liabilities secured by the property
or to which the property is subject that such Member is considered to assume or
take subject to pursuant to Section 752 of the Code) and (B) the Losses and any
other items of deduction and loss allocated to such Member, and (iii) otherwise
maintained in accordance with Treas. Reg. § 1.704-1(b)(2)(iv) in order for the
allocation of Profits and Losses to have “substantial economic effect” in
accordance with Treas. Reg. § 1.704-1(b)(2).

               (b)
For purposes of this Section 2, (i) an assumption of a Member’s unsecured
liability by the Company shall be treated as a distribution of money to that
Member and (ii) an assumption of the Company’s unsecured liability by a Member
shall be treated as a cash contribution to the Company by that Member.

               (c)
In the event of a contribution of money or other property to the Company (other
than a contribution made ratably by all existing Members), an issuance of an
interest in the Company in connection with the performance of services or the
forfeiture by a Member of its interest in the Company, then the Capital
Accounts for the Members shall be adjusted in respect of the hypothetical
“book” gain or 

- 32 -

loss that would have been realized by the Company if
all Company assets had been sold for their Gross Asset Values in a cash sale.

               (d)
In the event that Company assets other than money are distributed to a Member
in liquidation of the Company, or in the event that assets of the Company other
than money are distributed to a Member in kind, in order to reflect unrealized
gain or loss, Capital Accounts for the Members shall be adjusted in respect of
the hypothetical “book” gain or loss that would have been realized by the
Company if the distributed assets had been sold for their Gross Asset Values in
a cash sale. In the event of the liquidation of a Member’s Shares, in order to
reflect unrealized gain or loss, Capital Accounts for the Members shall be
adjusted in respect of the hypothetical “book” gain or loss that would have
been realized by the Company if all Company assets had been sold for their
Gross Asset Values in a cash sale.

               (e)
If Company property is reflected on the books of the Company at a book value
that differs from the adjusted tax basis of such property, the Members’ Capital
Accounts shall be adjusted in accordance with Treas. Reg. §
1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization,
and gain or loss, as computed for book purposes, with respect to such property.

               (f)
Upon any transfer of all or part of an interest in the Company, as permitted by
this Agreement, the Capital Account (or portion thereof) of the transferor that
is attributable to the transferred interest (or portion thereof) shall carry
over to the transferee.

               (g)
The foregoing provisions of this Section 2 and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to
comply with Treas. Reg. § 1.704-1 and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations and any amendment or
successor provision thereto. The Board shall cause appropriate modifications to
be made if unanticipated events might otherwise cause this Agreement not to
comply with such Regulations, so long as such modifications do not cause a
material change in the relative economic benefit of the Members under this
Agreement.

               3.
Special Tax Allocations. The
following special allocations shall be made in the following order:

               (a)
Minimum Gain Chargeback. Subject
to the exceptions set forth in Treas. Reg. § 1.704-2(f), if there is a
net decrease in Company Minimum Gain during a taxable year of the Company, each
Member shall be specially allocated items of income and gain for such taxable
year (and, if necessary, for subsequent years) in an amount equal to such Member’s
share of the net decrease in Company Minimum Gain during such taxable year
(which share of such net decrease shall be determined under Treas. Reg. §
1.704-2(g)(2)). It is intended that this Section 3(a) shall constitute a
“minimum gain chargeback” as provided by Treas. Reg. § 1.704-2(f) and shall be
interpreted consistently therewith.

               (b)
Member Nonrecourse Debt Minimum Gain
Chargeback. Subject to the exceptions contained in Treas.
Reg. § 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt
Minimum Gain during a taxable year of the Company, any Member with a share of
such Member Nonrecourse Debt Minimum Gain (determined in accordance with Treas.
Reg. § 1.704-2(i)(5)) as of the beginning of such taxable year shall be
specially allocated items of income and gain for such taxable year (and, if
necessary, for subsequent years) in an amount equal to such Member’s share of
the net decrease in Member Nonrecourse Debt Minimum Gain (which share of such
net decrease shall be determined under Treas. Reg. § 1.704-2(i)(4) and
1.704-2(j)(2)). It is intended that this Section 3(b) shall constitute a
“partner nonrecourse debt minimum gain chargeback” as provided by Treas. Reg. § 1.704-2(i)(4) and shall be interpreted
consistently therewith.

               (c)
Qualified Income Offset. In the
event any Member unexpectedly receives any adjustments, allocations, or
distributions described in Treas. Reg. § 1.704-l(b)(2)(ii)(d)(4),
1.704-l(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6) (modified as appropriate,
by Treas. Reg. § 1.704-2(g)(1) and 

- 33 -

1.704-2(i)(5)), items of Company income and gain for
such taxable year shall be specially allocated to the Member in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, any Adjusted Capital Account Deficit of the Member as quickly as
possible, provided that an allocation pursuant to this Section 3(c) shall
be made if and only to the extent that the Member would have an Adjusted
Capital Account Deficit after all other allocations have been tentatively made
as if this Section 3(c) were not in this Appendix A.

               (d)
Gross Income Allocations. To the
extent required by the Regulations, in the event a Member has a deficit balance
in its Capital Account at the end of any taxable year of the Company in excess
of the sum of (A) the amount such Member is required to restore pursuant to the
provisions of this Agreement, if any, and (B) the amount such Member is
deemed obligated to restore pursuant to Treas. Reg. § 1.704-2(g) and
1.704-2(i)(5), such Member shall be specially allocated items of Company income
and gain in the amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 3(d) shall be made if and only to the
extent that such Member would have an Adjusted Capital Account Deficit after
all other allocations have been tentatively made as if this Section 3(d)
were not in this Appendix A.

               (e)
Nonrecourse Deductions. Any Nonrecourse
Deductions shall be allocated to the Members in the same manner as Losses are
allocated pursuant to Section 4.5 of this Agreement.

               (f)
Member Nonrecourse Deductions. Any
Member Nonrecourse Deductions shall be allocated to the Member that bears the
economic risk of loss for the Member Nonrecourse Debt to which such deductions
relate as provided in Treas. Reg. § 1.704-2(i)(1). If more than one Member
bears the economic risk of loss, such deduction shall be allocated between or
among such Members in accordance with the ratios in which such Members share
such economic risk of loss.

               (g)
Certain Section 754 Adjustments. To
the extent any adjustment to the adjusted tax basis of any Company asset
pursuant to Section 732(d), Section 734(b) or Section 743(b) of the Code
is required, pursuant to Treas. Reg. § 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts as the result of a distribution to a
Member in complete liquidation of its interest in the Company, the amount of
such adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases such basis) and an item of loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Members in accordance with their interests in the Company as determined under
Treas. Reg. § 1.704-1(b)(3) in the event Treas. Reg. § 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Member to whom such distribution was made in the event
Treas. Reg. § 1.704-l(b)(2)(iv)(m)(4) applies.

               (h)
Limit on Loss Allocations.
Notwithstanding the provisions of Section 4.5 of this Agreement or any other
provision of this Agreement to the contrary, Losses (or items thereof) shall
not be allocated to a Member if such allocation would cause or increase a
Member’s Adjusted Capital Account Deficit and shall be reallocated to the other
Members in proportion to their Distribution Percentage, subject to the
limitations of this Section 3(h).

               (i)
Curative Allocations. The
allocations under Sections 3(a) through (h) above (such allocations, the “Regulatory Allocations”) are intended to
comply with certain requirements of the Regulations. It is the intent of the
Members and the Company that, to the extent possible, all Regulatory
Allocations shall be offset either with other Regulatory Allocations or with
special allocations of other items of income, gain, loss or deduction pursuant
to this Agreement. Therefore, notwithstanding any other provision of this
Agreement to the contrary (other than the Regulatory Allocations), the Company
shall make such offsetting special allocations of income, gain, loss or
deduction in whatever manner the Board determines appropriate so that, after
such offsetting allocations are made, each Member’s Capital Account 

- 34 -

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 items were allocated
pursuant to Section 4.5 of the Agreement. For purposes of this Section 3(i),
future Regulatory Allocations under Sections 3(a) through (h) that are likely
to offset other Regulatory Allocations previously made shall be taken into
account.

               4.
Tax Allocations: Code Section 704(c).

               (a)
For federal, state and local income tax purposes only, with respect to any
assets contributed by a Member to the Company (“Contributed Assets”) which have a Gross Asset Value on the
date of their contribution which differs from the Member’s adjusted basis
therefore as of the date of contribution, the allocation of Depreciation and
gain or loss with respect to such Contributed Assets shall be determined in
accordance with the provisions of Section 704(c) of the Code and the Regulations
promulgated thereunder using the method described under Treas. Reg. §
1.704-1(b)(iv)(2)(f). For purposes of this Agreement, an asset shall be deemed
a Contributed Asset if it has a basis determined, in whole or in part, by
reference to the basis of a Contributed Asset (including an asset previously
deemed to be a Contributed Asset pursuant to this sentence).

               (b)
In the event the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraph (b) of the definition thereof, subsequent allocations of
income, gain, loss and deduction 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 Section
704(c) of the Code and Treas. § 1.704-1(b)(iv)(2)(f).

               (c)
Allocations pursuant to this Section 4 are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into
account in computing any Member’s Capital Account or share of Profits, Losses,
other items, or distributions pursuant to any provision of this Agreement.

               5.
Allocations in the Event of Transfer.
If all or any portion of any Units are transferred to a substitute Member during
any taxable year of the Company, Profits, Losses, each item thereof and all
other items attributable to such Units for such period shall be divided and
allocated between the transferor and transferee by applying any method which
satisfies Code Section 706(d). The Tax Matters Member may revise, alter,
or otherwise modify, without the consent of the other Members, the method of
allocation as necessary to comply with Code Section 706 and Treasury
Regulations or rulings promulgated thereunder.

               6.
Profits Interest Safe Harbor.
The Tax Matters Member is authorized to amend this Agreement, without the
consent of the other Members, to comply with any safe harbor finalized by the
United States Department of the Treasury or the Internal Revenue Service
relating to the tax treatment of a transfer of an interest in the Company for
services. For example, this Section 6 shall apply to any safe harbor finalized
by Internal Revenue Service notice or Regulations as successor to the proposed
safe harbor described in Internal Revenue Service Notice 2005-43, 2005-1 C.B.
1221. In the event any such safe harbor is finalized and elected by the
Company, all Members agree to comply with all the requirements of such safe
harbor and any amendments to this Agreement that the Tax Matters Member effects
pursuant to this Section 6.

- 35 -EXHIBIT 10.1

 

VOTING AGREEMENT

 

Each of the undersigned
directors of United Bancorp, Inc. (“Company”) hereby agrees in his or her individual capacity as a shareholder
to vote his or her shares of Company Common Stock that are registered in his or her personal name (and agrees to use his or her
reasonable efforts to cause all additional shares of Company Common Stock owned jointly by him or her with any other person or
by his or her spouse or over which he or she has voting influence or control to be voted) in favor of the Agreement and Plan of
Merger by and between Old National Bancorp and Company, dated January 7, 2014 (the “Agreement”). In addition,
each of the undersigned directors hereby agrees not to make any transfers of shares of Company Common Stock with the purpose of
avoiding his or her agreements set forth in the preceding sentence and agrees to cause any transferee of such shares to abide by
the terms of this Voting Agreement. Each of the undersigned is entering into this Voting Agreement solely in his or her capacity
as an individual shareholder and, notwithstanding anything to the contrary in this Voting Agreement, nothing in this Voting Agreement
is intended or shall be construed to require any of the undersigned, (i) in his or her capacity as a director of Company or (ii)
in his or her capacity as a trustee, personal representative or other fiduciary capacity, to act or fail to act in accordance with
his or her duties in such director or fiduciary capacity. Furthermore, none of the undersigned makes any agreement or understanding
herein in his or her capacity as a director of Company. Notwithstanding any contrary provision herein, this Voting Agreement shall
be effective from the date hereof and shall terminate and be of no further force and effect upon the earliest of (a) the consummation
of the Merger (as defined in the Agreement); (b) the termination of the Agreement in accordance with its terms; or (c) upon a Company
Adverse Recommendation Change (as defined in the Agreement). This Voting Agreement may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together constitute one and the same instrument.

 

Dated this 7th day of January,
2014.

 

	
         

        ___________________________________

        Karen F. Andrews
	
         

        ___________________________________

        Kenneth W. Crawford

	
         

        ___________________________________

        Stephanie H. Boyse
	
         

        ___________________________________

        John H. Foss

	
         

        ___________________________________

        James D. Buhr
	
         

        ___________________________________

        Norman G. Herbert

	
         

        ___________________________________

        Robert K. Chapman
	
         

        ___________________________________

        James C. Lawson

	
         

         
	
         

        ___________________________________

        Len M. Middleton

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