¹ In fact, the Sebastians conceded in their “Emergency Application for TRO” not only that their terminations occurred but also that their terminations were the basis (“Specified Event” or “triggering event”) that required a buy out of their interest. MR:509 (¶2), 510 (¶¶ 8, 9).

² In accordance with Rule 47 of the TEXAS RULES OF CIVIL PROCEDURE, Plaintiff seeks monetary relief of $250,000 or less and non-monetary relief from Defendants at this time. The damages sought are within the jurisdictional limits of this Court. Parties and Jurisdiction

³ Plaintiff is a Texas limited liability company with its principal place of business in Grapevine, Tarrant County, Texas.

⁴ Defendant Michael Jeffrey Sebastian is a Texas resident who resides in Tomball, Texas and may be served with process at his usual place of abode, which is 25702 Zion Lutheran Cemetery Road, Tomball, Harris County, Texas 77375, or wherever he may be found in the State of Texas. App.A 0001 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 1

⁵ Defendant Tiffany Lynn Sebastian is a Texas resident who resides in Richmond, Texas and may be served at her usual place of abode, which is 5002 Shiloh Lake Dr, Richmond, Fort Bend County, Texas 77407, or wherever she may be found in the State of Texas. Venue

⁶ Venue is proper in Tarrant County, Texas because Plaintiff maintains a principal office at 1101 West State Highway 114, Grapevine, TX, such office being in Tarrant County, Texas; because all or a substantial part of the events or omissions giving rise to the claims asserted herein by Plaintiff occurred in Tarrant County, Texas; and because no mandatory venue rule applies. See TEX. CIV. PRAC. & REM. CODE § 15.002; In re Cont’l Airlines, Inc., 988 S.W.2d 733, 735 (Tex. 1998) (“[a]ctions for declaratory judgments are governed by general venue rules for civil actions. … the injunction venue statute [TEX. CIV. PRAC. & REM. CODE § 65.023(a)] applies only to suits in which the relief sought is purely or primarily injunctive.”).

⁷ The temporary injunctive relief requested herein is ancillary to the declaratory judgment because the injunctive relief is sought solely to maintain the status quo ante (i.e., the peaceable operation of the dealership) pending resolution of the declaratory judgment sought. In re FPWP GP LLC, No. 05-16-01145-CV, 2017 WL 461355, at *3 (Tex. App.—Dallas Jan. 25, 2017, no pet.) (“When the injunctive relief is sought simply to maintain the status quo pending resolution of the lawsuit, then the injunctive relief is ancillary to the relief sought and [mandatory venue] section 65.023 does not apply.”); see also In re City of Corpus Christi, 13–12–00510–CV, 2012 WL 3755604, at **1, 5 (Tex. App.—Corpus Christi Aug. 29, 2012, orig. proceeding) (mem. op.) (injunctive relief ancillary to declaratory relief where plaintiff sought only temporary injunctive relief pending final hearing of the merits of the declaratory judgment action); In re Adan Volpe Props., Ltd., 306 S.W.3d 369, 377–78 (Tex. App.—Corpus Christi 2010, orig. proceeding) (holding that request for injunctive relief was ancillary in libel action in which declaratory judgment was also sought where injunction was sought to maintain status quo until libel suit could be resolved); Shuttleworth v. G & A Outsourcing, Inc., No. 01–08–00650–CV, 2009 WL 277052, at **1, 4 (Tex. App.—Houston [1st Dist.] Feb. 5, 2009, no pet.) (holding that temporary injunction to prevent party from using, disseminating, or destroying App.A 0002 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 2 confidential information was ancillary to suit against former employee for violation of non-compete and non-solicitation agreements where injunction sought to preserve evidence for trial and plaintiff sought substantial damages on contract and tort claims).

⁸ When a party “does not plead for a permanent injunction, the injunctive relief is ancillary to the other relief sought.” FPWP, 2017 WL at *3; see also In re Cont’l Airlines, 988 S.W.2d at 736-37 (section 65.023 inapplicable and injunctive relief ancillary to prayer for declaratory relief where the plaintiff did not pray for permanent injunctive relief, the pleadings would not support a permanent injunction, the controversy can be fully resolved by declaratory judgment, and “throughout the pleading the only requests for court action ask the trial court to declare the parties' rights under the contract.”); Flewellen v. Brownfield State Bank & Tr. Co. of Brownfield, 517 S.W.2d 384, 388 (Tex. Civ. App.—Amarillo 1974, no writ) (“The petition demonstrates that the principal and primary relief sought is to establish by the court's decree the correlative rights of the plaintiff and the defendants for possession and disposition of the cotton grown by Weiss, and the respective priorities thereto, and that the injunctive relief sought is only incidental to such main relief and to protect and enforce the rights so established.”). Facts

⁹ Plaintiff operates a new and used automobile sales and service dealership at 8100 South Hwy 6, Houston, Texas 77083 (the “Dealership”). The Dealership is part of The Classic Family of Dealerships, which owns dozens of automobile dealerships in Texas and beyond. The Dealership is a General Motors (“GM”) authorized franchise, licensed to do business by the State of Texas.

¹⁰ Jeff is a member of Plaintiff pursuant to that certain written Company Agreement of Classic Chevrolet West Houston, LLC dated as of November 29, 2019 (the “Company Agreement”). Tiffany is not a member of Plaintiff. A true and correct copy of the Company Agreement is attached hereto as Exhibit “1.” Jeff’s membership interest is subject to that certain Buysell Agreement for Interests in Classic Chevrolet Sugar Land, LLC, Classic Chevrolet West Houston, LLC, Classic Elite Buick GMC, LLC [sic], and 16835 Cadet Partners, LLC dated May 1, 2023 (the “Buy-Sell Agreement”). A true and correct copy of the Buy-Sell Agreement is attached hereto as Exhibit “2.” App.A 0003 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 3

¹¹ In addition to owning a membership interest in the Dealership, Jeff was also responsible for performing certain management-type duties at the Dealership. However, as the Dealership’s performance and profitability was lagging in 2023 and 2024, the members who hold a majority of the interest in the LLC (as defined in the Buy-Sell Agreement) voted “no confidence” in Jeff, and, in accordance with Section III.1.(iv) of the Buy-Sell Agreement, exercised their option to buy-out Jeff’s interest in the Dealership. A true and correct copy of Plaintiff’s October 11, 2024 written notice to Defendant regarding “Exercise of Option to Purchase pursuant to that certain Buysell Agreement…” is attached hereto as Exhibit “3”. 1

¹² In September 2024, Jeff improperly attempted to join Plaintiff (as a co-respondent) to a pending divorce action between Jeff and Tiffany in the 387th Judicial District Court in Fort Bend County, Texas, cause number 24-DCV-318087 (the “Fort Bend Action”). See Counterpetition in Divorce, attached hereto as Exhibit “4”.

¹³ On December 3, 2024, Defendants filed a third-party action in the Fort Bend Action wherein they asserted claims for breach of contract and declaratory judgment. A true and correct copy of the Third-Party Petition filed by Defendants is attached hereto as Exhibit “5”.

¹⁴ On December 20, 2024, Defendants filed their First Amended Third-Party Petition in the Fort Bend Action. A true and correct copy of the First Amended Third-Party Petition is attached hereto as Exhibit “6”. This filing included Defendants’ request for the court-ordered appointment of a receiver over the Dealership. Id., ¶¶ 74-79. In the third-party petition, Defendants also seek, inter alia, declaratory relief pertaining to their rights under the Buy-Sell Agreement. Id., ¶¶ 48-49. Defendants’ First Amended Third-Party Petition also admits (i) that the Company Agreement is “valid and enforceable” and “governs” the management and operation of the Dealership Id., ¶41, and (ii) that Defendants were terminated and replaced at the Dealership in July and September of last year. Id., ¶31. The Dealership has operated without Defendants’ involvement for over seven (7) months as to Jeff and almost six (6) months as to Tiffany. 1 The Buy-Sell Agreement defines the term “LLC” to include Classic Chevrolet West Houston, LLC (Plaintiff herein), Classic Elite Buick GMC, Inc., Classic Chevrolet Sugar Land, LLC, and 16835 Cadet Partners, LLC. App.A 0004 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 4

¹⁵ Pursuant to the Company Agreement, Defendants’ request for appointment of receiver over the Dealership is an event that constituted an “Involuntary Transfer,” which term is defined by the Company Agreement at Section 1.1(z). See Ex. “1” at § 1.1(z) (“Involuntary Transfer shall mean … if there is filed by or against a Member … a petition for the appointment of a receiver”).

¹⁶ More than sixty (60) days have elapsed since Defendants’ request for a receiver over the Dealership and, in the interim, Jeff did not withdraw, release, vacate, stay, or otherwise “cure” his request to appoint a receiver over the Dealership. Therefore, the Involuntary Transfer was effective as of February 18, 2025. Id., § 1.1(z). The effect of the Involuntary Transfer resulting from Defendants’ application for appointment of receiver is governed by, among other things, Section 6.6 of the Company Agreement, which specifies that, as a direct result of the Involuntary Transfer, Jeff lost all of his voting and other management rights associated with his membership interest in Plaintiff / the Dealership. See Ex. “1” at § 6.6.

¹⁷ On January 2, 2025, the defendants in the Fort Bend Action (including Plaintiff herein) filed a Notice of Removal to the newly established Texas Business Court, transferring certain of Defendants’ claims in the Fort Bend Action to the Eleventh Division of the Texas Business Court, where it was assigned a cause number of 25-BC11A-0001 (the “Removed Action”). See Ex. “7.”

¹⁸ On January 9, 2025, Defendants filed a Motion to Remand the Removed Action, and on February 4, 2025, the Business Court granted the Motion to Remand, which, but for the stay issued by the 15th Court of Appeals (discussed infra, ¶20) would have transferred the Fort Bend Action back to the Fort Bend Divorce Court (“the Remand Order”).

¹⁹ On February 18, 2025, Jeff purported to issue a Notice of Special Meeting of Managers (“the Notice”) of Plaintiff, a true and correct copy of which is attached hereto as Exhibit “8”. The Notice purported to set a meeting of the Dealership Managers on Saturday, February 22, 2025 to discuss and vote upon Jeff’s proposed removal and of Thomas R. Durant as Plaintiff’s President and Manager—and installation of himself as replacement President—and upon certain App.A 0005 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 5 compensation-related matters. See id. However, that same day, Jeff lost all of his voting and other management rights associated with his membership interest in Plaintiff / the Dealership pursuant to the Company Agreement. Ex. “1” at § 6.6.

²⁰ On February 21, 2025, Plaintiff’s counsel sent Jeff’s counsel a letter informing her Jeff was not authorized to call a meeting of the Dealership or to take any unilateral action on behalf of the Dealership. See Ex. 9. Because Jeff lost his voting and other managerial rights in Plaintiff’s organization by virtue of his request for a court-ordered receivership over the Dealership (i.e., a contractually-specified event of Involuntary Transfer), Jeff was not entitled to call a special meeting, he was not entitled to vote, and he was not (and is not) otherwise entitled to participate in Plaintiff’s / the Dealership’s management or operation. Id. Moreover, even if Jeff had not lost his voting and managerial rights in the Dealership, the purported actions taken, including removal of Mr. Durant as President and Manager, required a unanimous vote of the Managers to be effective. See Id.; Ex. 1, Company Agreement, §§ 1.1(bb), 3.14. Furthermore, attendance of all of Plaintiff’s Managers, which did not occur, was required to meet a Quorum pursuant to section 3.27 of the Company Agreement. Id.

²¹ Also on February 21, 2025, Defendants filed a Joint Emergency Application for Temporary Restraining Order and Temporary Injunction in the Fort Bend Action seeking entry of a temporary restraining order effectively stripping Thomas R. Durant of all ownership and management rights in Plaintiff and transferring those rights to Jeff. See Ex. 10.

²² In response to the foregoing, on February 21, 2025, Plaintiff and other defendants in the Fort Bend Action were forced to file an Emergency Motion for Stay pending the Fifteenth Court of Appeals’ review of those parties’ petition for writ of mandamus regarding the Business Court’s Remand Order. That same day, February 21, 2025, the Fifteenth Court of Appeals granted the Emergency Motion for Stay and ordered a temporary stay of the Fort Bend Action and proceedings in the Business Court pending review of the petition for writ of mandamus and requested further briefing on the mandamus from both sides (“the Stay Order”). See Ex. 11. As App.A 0006 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 6 of the date of this filing, the Stay Order remains in full force and effect, staying all proceedings in both courts.

²³ On February 22, 2025, Defendants purported to hold a Meeting of the Managers of Plaintiff Classic Chevrolet West Houston. On February 24, 2025, despite the Stay Order and notice from the Dealership that the Meeting was not authorized by the Company Agreement, Jeff’s counsel sent Plaintiff’s a letter stating that Jeff had purported to: unilaterally remove Thomas R. Durant as President and Manager of Plaintiff; appointed Jeff as President of Plaintiff; appointed Tiffany as Manager in Mr. Durant’s place; and set compensation for the Managers at $15,000 per month plus two percent (2%) of the Dealership’s gross sales.

²⁴ On March 12, 2025, without prior notice, Defendants entered the Dealership property, purporting to “work,” disrupting the Dealership’s operations and forcing the Dealership to curtail operations. Defendants informed personnel on site that they intended to return to the Dealership the following day, March 13, 2025, to further disrupt the Dealership’s operations. Defendants further falsely represented and held themselves out as Plaintiff’s Managers to Plaintiff’s employees, causing confusion and dissension among employees, further harming the Dealership’s business operations. See Ex. 12 (Bohreer 3/12/25 Letter).

²⁵ On March 13, 2025, after a hearing, the Court signed a Temporary Restraining Order enjoining Defendants from interfering with the peaceable operation of the Dealership. See Ex. 13. Plaintiff paid the bond the same day.

²⁶ On March 17, 2025, Defendants filed their Joint Motion to Transfer Venue and, Subject Thereto, Emergency Motion to Dissolve Temporary Restraining Order and for Action on Bond.

²⁷ All conditions precedent have been performed or have occurred. App.A 0007 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 7 Causes of Action Count 1: Request for Declaratory Judgment

²⁸ Plaintiff incorporates the foregoing paragraphs as if fully set forth herein.

²⁹ Plaintiff seeks entry of a Declaratory Judgment under the Texas Uniform Declaratory Judgments Act (the “Act”). TEX. CIV. PRAC. & REM. CODE §§ 37.001, et seq.

³⁰ Plaintiff seeks a declaratory judgment against Defendants to determine certain rights of the parties insofar as a justiciable controversy has arisen and harm has resulted from the controversy. In this case, a justiciable controversy is whether Jeff had a right to call for the February 22, 2025 special meeting made the subject of the Notice (attached as Exhibit 8) in light of the event constituting an Involuntary Transfer (i.e., Defendant’s request for appointment of a receiver, now more than sixty (60) days old under the Company Agreement), and consequently, whether the actions Jeff purported to take at said special meeting—including the purported removal of Thomas R. Durant as Manager and appointment of Tiffany as Manager—were authorized under the Dealership’s governing documents. Imminent harm to Plaintiff has occurred and will continue to occur because of Defendants’ actions.

³¹ Indeed, there is a real and substantial controversy involving a genuine conflict of tangible interests; namely, the managerial and voting rights (or lack thereof) of Defendants. Moreover, in the absence of an injunction, Defendants have indicated that they will continue to cause harm to the business operations of Plaintiff, including entering the Dealership property and disrupting business operations. Further, Defendants’ purported removal and replacement of Thomas R. Durant as Manager, and subsequent purported actions including the installation of Jeff as President, the March 12, 2025 disruption of the Dealership’s operations, and threatened actions on March 13, 2025 and thereafter, have and would continue to jeopardize the ongoing operation of the Dealership, causing Plaintiff ongoing irreparable financial and reputational harm.

³² Plaintiff seeks an interpretation of a written contract, specifically the Company Agreement, to confirm that Defendants lost all of their voting and managerial rights over Plaintiff such that, due to their request for appointment of a receiver over the Dealership in the Fort Bend App.A 0008 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 8 Action, Defendants had (and have) no right under the Company Agreement to call for or participate in any management meeting(s) or to vote or engage in any managerial function associated with their membership interest(s) in Plaintiff. Plaintiff further seeks a determination that the purported actions taken by Jeff and Tiffany at the February 22, 2025 Meeting are null and void and without effect; and consequently, that Defendants have no managerial or official rights or responsibilities with respect to the Dealership operations and are prohibited from entering Dealership property. Application for Temporary Injunction

³³ Pursuant to Texas Rules of Civil Procedure 680, et seq., and Texas Civil Practice & Remedies Code § 65.011, Plaintiff seeks a Temporary Injunction enforcing Plaintiff’s contractual rights under the Company Agreement. Specifically, Plaintiff requests a Temporary Injunction with the following provisions: a. The purported actions taken at the February 22, 2025 special meeting were unauthorized under the Company Agreement and are, therefore, null and void; b. Defendants are prohibited from attempting to call, or otherwise participate in, any meetings of Plaintiff’s members; and c. Defendants are prohibited from attempting to vote or engage in any managerial function associated with their membership interest(s) in Plaintiff, including without limitation, entering the Dealership, giving instruction, direction, or orders to Dealership employees, or accessing or attempting to access any financial records of the Dealership.

³⁴ Based on the verified facts set forth herein, Plaintiff is entitled to the issuance of a Temporary Injunction to protect and preserve the status quo ante pending a full trial on the merits. The status quo for the approximately seven (7) months preceding Defendants’ unauthorized intrusion on Dealership property on March 12, 2025, was the peaceable operation of the Dealership without participation or interference by Defendants. Plaintiff has suffered and will suffer irreparable harm due to Jeff’s blatant disregard of his contractual prohibition to vote and otherwise participate in the management of the Dealership. Moreover, the actions Defendants improperly purported to take, without regard for Jeff’s forfeiture of such rights under the Company App.A 0009 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 9 Agreement, have caused and will continue to cause imminent and irreparable harm to the Dealership. Specifically, Defendants’ entry onto Dealership property has disrupted the business operations of Plaintiff and caused Plaintiff financial and reputational harm; no judgment from any court can remedy this harm. Pending a determination of the validity of the purported actions taken at the February 22, 2025 “meeting,” including whether such purported actions were authorized or effective under the Company Agreement, a temporary injunction to preserve the status quo is necessary.

³⁵ Plaintiff has demonstrated a likelihood of success on the merits of this case and a balancing of the equities strongly favors an award of injunctive relief as requested herein. Plaintiff has no other adequate remedy at law.

³⁶ Plaintiff is willing to post a bond to obtain the requested relief. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests Defendants be cited to appear and answer herein as required by law, and that after proper consideration by the Court, be subject to the Orders and Final Judgment of the Court as follows: a. Declaratory Judgment interpreting the Company Agreement to find Jeff forfeited all of his voting and managerial rights in Plaintiff’s organization as a result of his request for appointment of a receiver; b. Declaratory Judgment interpreting the Company Agreement to find Defendants’ proposed removal and replacement of Thomas R. Durant as Manager and President requires the unanimous consent of all members; c. the injunctive relief as requested herein; d. payment to Plaintiff for Plaintiff’s reasonable and necessary attorneys’ fees, costs, and expenses; and e. all and such further relief to which Plaintiff may be entitled at law or in equity. App.A 0010 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 10 Respectfully submitted, By: /s/ Derek D. Rollins Derek D. Rollins State Bar No. 24029803 Lucas Peterson State Bar No. 24121468 SHACKELFORD, MCKINLEY & NORTON, LLP 9201 N. Central Expressway 4th Floor Dallas, Texas 75231 214-780-1400 [email protected] [email protected] Timothy D. Zeiger State Bar No. 22255950 [email protected] 2600 Via Fortuna, Suite 150 Austin, Texas 78746 (512) 469-0900 ATTORNEYS FOR PLAINTIFF App.A 0011 PLAINTIFF’S VERIFIED FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY INJUNCTION PAGE 11 DECLARATION OF THOMAS BENTLY DURANT Texas STATE OF ___________ ) ) COUNTY OF ___________ Tarrant ) 1. “My name is Thomas Bently Durant. I am over 18 years of age, competent to make this declaration, and am otherwise in all respects competent and qualified to make this verification. 2. The facts stated in the foregoing Verified First Amended Petition and Application for Temporary Injunction are within my personal knowledge and are true and correct.” JURAT July 20 1982 My name is Thomas Bently Durant. My date of birth is ________________, and my address is __________________________________________________. 1920 country moss way, Southlake Tx 76092 I declare under penalty of perjury that the foregoing is true and correct. This declaration is being executed pursuant to 28 U.S.C. §1746, TEX. CIV. PRAC. & REM. CODE § 132.001, and any other applicable law authorizing use of an unsworn declaration. Glynn Executed in ________ County, State of __________, Georgia on the ___ 19 day of March 2025. Thomas Bently Durant, Declarant App.A 0012 THE SECURITIES REPRESENTED HEREBY: (1) HAVE NOT BEEN REGISTERED OR QUALIFIED I]NDER THE U.S. FEDERAL SECURITIES ACT OF 1933, AS AMENDED crHE *M',), OR UNDER STATE SECURTTTES LAWS AND ARE *RESTRICTED SECURITIES' AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT (6RULE W'); (2) HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR IN CONNECTION WITH THE DISTRIBUTION THEREOF; AND (3) MAY NOT BE SOLD OR OTIIERWISE DISPOSED OF WITHOUT A}[ EFFECTIVE FEDERAL REGISTRATION STATEMENT AND STATE QUALIFICATION RELATED THERETO O& IF REQUESTED BY TIIE MANAGERS, AI\ OPINION OF COUNSEL FURNISHED AT BUYER'S EXPENSE IN FORM AIID SUBSTAIICE AND FROM COUNSEL REASONABLY SATISFACTORY TO THE ISSUER OF TIIESE SECURITIES THAT SUCH SALE OR DISPOSITION IS IN COMPLIANCE WITH RULE 144 OR TITAT SUCH REGISTRATION AI\D QUALIFICATION OTHERWISE IS NOT REQUIRED UNDER THE ACT AND UNDER APPLICABLE STATE LAW. ALL TRANSFERS OF MEMBERSHIP INTERESTS ARE SUBJECT TO AND GOVERNED BY THAT CERTAIN BUY.SELL AGREEMENT FOR MEMBERSIIIP INTERESTS OF EVEN DATE HEREWITIT, AS AMENDED FROM TIME TO TIME, BY AND AMONG THE COMPANY A}[D ITS MEMBERS. COMPANYAGREEMENT OF CLASSIC CHEVROLET WEST HOUSTON, LLC THIS COMPANYAGREEMEN! dated as of November l4 .2019, is hereby duly adopted as the Company Agreement (hereinafter referred to as this "Afreement") of Classic Chewolet West Houston, LLC, a Texas limited liability company, by the Managers of Company (as defined below) and by the Mernbers (as defined below) who agree to be bound hereby. The Certificate of Formation of Classic Chevrolet West Houston, LLC, dated as of October 10,2019, was filed in the Office of the Secretary of State of Texas and became effective on October 10,2019. ARTICLE I DEFINITIONS l.l Definitions. The following terms used in the Agreement shall have the following meanings (unless otherwise expressly provided herein): (a) "Additional Capital Contributions" means Capital Contributions made pursuant to Section 7.3. O) Adjusted Capital Account Deficit". Any reference to "Adjusted Capital App.A PAGE 0013 Exhibit 1 COMPANY AGREEMENT I Account Deficit" shall mean, with respect to any $ember, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: [i] credit to such Capital Account any amounts which such Mernber is obligated to restore (pursuant to the terms of such Mernber's promissory note payable to the Company or otherwise) or is deerned to be obligated to restore pursuant to the penultimate sentence of Reg. $$ 1.704-2(gXt) and 1.704-2(iX5); and [ii] debit to such Capital Account the amounts specified in Reg. $$ 1.704-l(bx2)(iixdx4), (dX5) and (dX6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Reg. $ 1.704-lO)(2XiiXd) and shall be interpreted consistently therewith. (c) "Affiliate". Any reference to an "Affiliate" shall mean, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with the Person, (ii) any Person owning or controlling fifty percent (50%) or more of the outstanding voting interests of the Person, (iii) the Person's spouse, children or more remote descendants (either natural or adoptive), sons-in-law, daughters-in-law, and any trust of which one or more of such individuals (including the Person) are current beneficiaries, and (iv) the equitable or beneficial owners of any Person which is not an individual. For purposes of this definition, the term "controls," "is controlled by''or "is under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. (d) "Assigee" means a Person who has acquired all or a portion of a beneficial interest in a Mernbership Interest. An Assignee has only the rights granted under Section 101.109 of the BOC. As Assignee does not have the right to become a Member except as provided in this Agreement or in Section 101.109 of the BOC. (e) "Bankruplgy" means bankruptcy of a Member, which shall be deemed to have occurred when a Member: (i) makes a general assignment for the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvencyproceeding; (iv) files an answer or other pleading admitting, or fails to contest the material allegations of a petition filed against the Member seeking rcorganization, arrangetrnent, composition, readjustment, liquidation, winding up or similar relief under any law; or (v) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of Mernber or all or substantially all of Member's properties. (D 65BQe" shall mean the Texas Limited Liability Company Law, part of the Texas Business Orgaruzations Code, as the same may be amended from time to time. (g) "Buy-Sell Agreement" shall mean that certain Buy-Sell Agreement for Membership Interests in Company, of even date herewith, as amended from time to time, by and among the Members and Company. G) "Capital Account" means, with respect to any Manber, the account maintained for such Member pursuant to Section 7.8 and Schedule I of this Agreement. (h) "Capital Contributions" shall mean, with respect to any Member, the COMPANY AGREEMENT App.A PAGE 0014 2 amount ofmoney and the initial Gross Asset Value of anyproperty (other than money) contributed to the Company by such Person (or its predecessors in interest) with respect to the interest in the Company held by such Person. The principal amount of a promissory note that is not readily traded on an established securities market and that is contributed to the Company by the maker of the note (or a Person related to the maker of the note within the meaning of Reg. Section 1.704- 1 O)(2XiiXc)) shall not be included in the Capital Account of any Person until the Company makes a taxable disposition of the note or until (and to the extent) principal payments are made on the note, all in accordance with Reg. Sectionl.704-l(bX2)(iv)(dX2). (i) "Cash Available for Dis '. Any reference to "Cash Available for Distribution" shall mean the gross cash proceeds from Company operations (including sales and dispositions and loan proceeds) less the portion thereof used to pay or establish reserves for all Company expenses, debt payments, capital improvernents, replacements, and contingencies, all as determined by the Managers. "Cash Available for Distribution" shall not be reduced by depreciation, arnortization, cost recovery deductions, or similar allowances, but shall be increased by any reductions of working capital reserves previously established by the Managers. CI) "Certificate of Formatiod' shall have the meaning glven that term in Section 2.1 hereof and includes theAmended and Restated Certificate of Formation described therein. (k) "Class A Members" means those Mernbers holding the Class A Mernbership Interest of Company. 0) "Class A Membership Interest" means the percentage of ownership interest of a Class A Member of Company at any particular time, as further described in Subsection 6.1(a) of this Agreement. (m) "Class.BN[9pqbers''means those Members holding the Class B Membership Interest of Company. (n) "Class B Membership Int'msans the percentage of voting interest of a Class B Member of Company at any particular time, as further described in Subsection 6.1O) of this Agreernent. (o) "Code" means the Internal Revenue Code of 1986, as amended. (p) "Company''means Classic Chewolet West Houston, LLC, a Texas limited liability company. (q) "Company Minimum Gain" shall mean that amount determined by first computing for each Nonrecourse Liability of the Company, any gain the Company would realize if it disposed of the Company property subject to such liability for no consideration other than fulI satisfaction of the liabili$;and by then agseg&tingthe separatg$ computed gains. For purposes of determining the amorggof-such giarn, the p,{$Spmt"S+9$,g!i[$},in Reg. $ 1.704-2(d) shall be followed. COMPANY AGREEMENT App.A PAGE 0015 3 G) "Contributed Property'' shall mean each property or asset of any kind or nature, whether real, personal or mixed, contributed to the Company by one or more of the Mernbers, including any property subsequently acquired by the Company which has a basis determined by reference in whole or in part to any such property. (s) "Dealer Operator" shall mean the individual who is designated in writing by the Company to the Manufacturer (as defined hereafter) as the "dealer operator," "dealer principal" or like description to be primarily responsible for the management and control of the Dealership (as defined hereafter). (t) "DeDreciation" shall mean, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Fiscal Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Yearbears to such beginning adjusted tax basis, provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Managers. (u) "Distributions" shall mean any cash and the fair market value of any property distributed to a Member on account of its Membership Interest. (v) "Economic Interes!" shall mean a Person's share of the Profits and Losses of, and the right to receive Distributions from, the Company pursuant to this Agreement and the BOC, but shall not include any right to participate in the management or affairs of the Company, including, the right to vote on, consent to, or otherwise participate in any decision of the Members or Managers, and shall not include any right to require any information or account of the Company's transactions or to inspect the Company's books and records, tax retum information, or any other Company information, documents, or other data associated with the Company. (w) "Fiscal Year" shall mean (i) the period commencing on the effective date of this Agreement and ending on December 31 of the year of the effective date of this Agreement and (ii) any subsequent twelve (12) month period commencing on January l, and ending on December 31. (x) "Gross Asset Value" shall mean, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the contributing Member and the Managers, provided that, if the contributing Member is a Manager, the determination of the fair market value of a contributed asset shall require the consent of a majority of the Munbers; COMPANY AGREEMENT App.A PAGE 0016 4 (ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Managers, as of the following times: [a] the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution, including services; [b] the distribution by the Company to a Member of more than a de minimis amount of Property as consideration for an interest in the Company; and [c] the liquidation of the Company within the meaning of Reg. $ 1.704-1(b)(2)(ii)(g), provided, however, that adjustments pursuant to clauses [a] and [b] above shall be made only if the Managers reasonably determine that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members; (iii) The Gross Asset Value of any Company asset distributed to any Mernber shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the distributee and the Managers, provided that, if the distributee is a Manager, the determination of the fair market value of the distributed asset shall require the consent of a majority of the Mernbers; and (iv) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to 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 Reg. $ 1.704- t(b)(2)(iv)(m) and subparagraph (vi) of the definition of Profits and Losses or Article VIII, provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the Managers determine that an adjustment pursuant to subparagraph (ii) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraphs (i), (ii), or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses. (y) "Initial Capital Contribution" means the initial Capital Contribution to Company made by a Member pursuant to this Agreernent. (z) "Involuntar.y Transfer" shall mean (i) any foreclosure or similar event associated with a Membership Interest or any beneficial right therein; (ii) committing an act of bankruptcy or making a general assignment for the benefit of creditors; or (iii) if there is filed by or against a Member a petition in bankruptcy or a petition for the appointment of a receiver, or the corrmencement under any bankruptcy or insolvency laws of any proceeding for relief, composition, extension, arrangement or adjustment of any obligations of such Mernber; or (iv) the issuance of any writ, attachment or similar process against the property of a Menrber; or (v) the taking of possession of or assumption of control of all or any substantial part of the property of a Mernber by any government or agency thereof. COMPA}IY AGREEMENT App.A 0017 PAGE 5 Provided, however, notwithstanding the foregoing, there shall be no Involuntary Transfer pursuant to (iii), (iv), or (v) above if, within sixty (60) days after: [a] any matter described in (iii), such filing, petition, or cofiImencernent is withdrawn, released, vacated or stayed; or [b] any matter described in (iv) above, such writ, attachment, or similar process is vacated, released, or bonded; or [c] any matter described in (v) above, such taking of possession of or assumption of control shall have been rescinded or otherwise relinquished or abandoned. The date of such Involuntary Transfer shall be: [a] with respect to any matter described in (ii) upon the committing of such acts of bankruptcy or making of such general assignment; or [b] with respect to any matter described in (iii), (iv), or (v) above, upon the expiration of such sixty (60) day period without any of the applicable curative events described above. (aa) "b6" Illeans, for each Fiscal Year, the losses and deductions of Company determined in accordance with accounting principles consistently applied from year to year under the method of accounting adopted by Company and as reported, separately or in the aggregate, as appropriate, on Company's information tax return filed for federal income tax purposes, plus any expenditures described in SectionT05(a)(2)(B) of the Code. (bb) "Mqi.q!Iy" means (i) with respect to any referenced goup of Members, a combination of such Members constituting more than fifty percent (50%) of the number of Mernbers of such referenced goup who are then Mernbers, and (ii) with respect to any referenced goup of Managers, a combination of any such Managers constifuting more than fifty percent (50%) of the number of Managers of such referenced goup who are then elected and qualified. Any action to be taken by the Managers hereunder, unless otherwise specified under the BOC or this Agreement, shall be taken upon the affrrmative vote of a Majority of the Managers. (cc) "Maiority-In-Interesf' means, with respect to any referenced group of Members, a combination of any of such Mernbers who, in the aggregate, own more than fifty percent (50%) of the Membership Interests owned by all of such referenced group of Members. Any action to be taken by the Menrbers hereunder, unless otherwise specified under the BOC or this Agreernent, shall be taken upon the affrrmative vote of a Majority-In-Interest of the Members (dd) "MAEAeers" means Thomas R. Durant, Michael Jeffrey Sebastian, or any other Person(s) who is (are) designated to succeed him in that capacity or who are designated to act as additional Managers of Company as provided herein, but does not include any Person who has ceased to be a Manager of Company. "Ma44gers" means all such Persons, whether one or more, collectively in their capacity as Managers of Company. (ee) "@ber" means each Person designated as a Class A Member or Class B Member on Schedule 1, attached hereto and hereby made a part hereof, any successor or successors to all or any partof any such Person's interest in Company, or any additional Mernber admitted as a Class A Member or Class B Mernber of Company in accordance with Article VIII, each in its capacity as a Member of Company, but does not include any Person who has ceased to be a Member of Company. "Members" means all such Persons collectively in their capacity as Mernbers of Company. COMPANY AGREEMENT App.A PAGE 0018 6 (f0 "@' shall mean an amount, with respect to each Mernber Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Mernber Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Reg. $ 1.704-2(i). (gg) "Member Nonrecourse D$f' shall have the meaning set forth in Reg. $ 1.704-2b)(4), being generally any nonrecourse debt of the Company for which any Member (or related person within the meaning of Reg. S 1.752-4(b)) bears the economic risk of loss. (hh) "MernberNonrecourse Deductions" shall have the meaning set forth in Reg. S$ 1.704-2(i)(l) and CX2). (ii) "Membership Interest" or "l@t" means the (i) percentage of ownership interest of a ClassAMember of Company atany particular time or (ii) percentage of voting rights of each Member, as indicated on Schedule I attached hereto. The total of all Membership Interest in Company shall at all times equal one hundred percent (100%). 0j) "Nonrecourse Deductiod'shall have the meaning set forth in Reg. $ 1.704- 2(bxl). (kk) "Nonrecourse LiabiliV'shall have the meaning set forth in Reg. $ 1.704- 2(bx3). (11) ((@" shall have the meaning given that term in the BOC. (mm) "Profits and Losses". Profits" shall mean the net income of the Company as determined for federal income tax purposes, and any reference to "Losses" shall mean the net losses of the Company as determined for federal income tax purposes, for each Fiscal Year, (including all iterns of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code) adjusted as follows: (i) AnV income of the Company that is exempt from federal income tax and not other"wise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be added to such net income or loss; (ii) Any expenditures of the Company described in Section 705(a)(2XB) of the Code or treated as Section 705(a)(2)(B) expenditures pursuant to Reg. Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits and Losses" shall be subtracted from such net income or loss; (iii) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of "Gross Asset Value," 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; (iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing suchnet income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of "Dqlreciation"; (vi) To the extent an COMPANY AGREEMENT App.A 0019 PAGE 7 adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or Section 743b) of the Code is required pursuant to Reg. Section 1.704-1(b)(2)(iv)(m)(a) to be taken into account in determining Capital Accounts as a result of a distribution other than in complete liquidation of a Member's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (ifthe adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and (vii) there shall be excluded from such net income or losses those items subject to special allocation under the Regulatory Special Allocations and the Special Curative Allocations. The amount of Company income, gain, loss or deduction available to be specially allocated pursuant to the Regulatory Special Allocations and Special Curative Allocations, shall be determined by applyng rules analogous to those set forth in subparagraphs (i) through (vi) above. (m) "Reg." or "Treasury Regulations" shall mean the designated Treasury Regulation promulgated under the Code, as such Treasury Regulation may be amended from time to time. (oo) "Transfer" means any change in the record ownership of Mernbership Interest, whether made voluntarily or involuntarily by operation of law, including, but not limited to, the following: (i) a sale or gift to any Person; (ii) a transfer to the personal representative of the estate of a Mernber upon such Mernber's death, and any subsequent transfer from such personal representative to the heirs or devisees of the deceased Member under his will or by the laws of descent and distribution; (iii) a transfer to judicially appointed personal representative as a result a of the adjudication by a court of competent jurisdiction that the transferor Member is mentally incompetent to manage his person or property; (iv) a transfer to the transferor Mernber's spouse or former spouse, or heirs of such spouse or former spouse, in connection with a division of their community or other property upon the death of the transferor Member, divorce or the death of such spouse; (v) a general assignment for the benefit of creditors, or any assignment to a creditor resulting from the creditor's foreclosure upon or execution against such Interest; (vi) the filing by the transferor Mernber of a voluntary Bankruptcy petition; (viD the entry of a judicial order granting the relief requested by the petitioner in an involuntary Bankruptcyproceeding filed against the transferor Mernber. COMPAI{-Y AGREEMENT App.A PAGE 00208 ARTICLE II FORMATION OF COMPANY 2.1 Name and Formation. The name of Company is Classic Chewolet West Houston, LLC. Company was formed pursuant to the Certificate of Formation of Company filed in the office of the Secretary of State of Texas on October 10, 2019 (the "Certificate of Formation"), in accordance with the BOC. 2.2 Principal Place of Business. The principal place of business of Company shall be 8100 South Hwy 6, Houston, TX 77083. Company may locate its place(s) of business and registered office at any other place or places as a Majority of the Managers may from time to time deem necessary or advisable. 2.3 Reeistered Office and Resistered Aeent. Company's registered office shall be I 01 1 W. State Highway 114, Grapevine, Texas 76051, or such other office selected by a vote of a Majority-In-Interest of the Members from time to time. The registered agent of Company is Thomas R. Durant or another Person or Persons selected by a vote of a Majority-In-Interest of the Members from time to time. 2.4 Term. The term of existence of Company shall be perpetual, unless Company is earlier wound up in accordance with the provisions of either this Agreanent or the BOC. 2.5 Pumoses and Powers. The purposes and character of the business of Company shall be the ownership and operation of a Chrysler, Dodge, Jeep, RAM and Fiat automobile sales and service dealership business (the "DSglership") located in Sugar Land, Texas, pursuant to a written sales and service dealership agreement with FCA USA LLC (the "Manufacturer"). Company shall have any and all powers which are necessary, proper, alvisable, convenient, or desirable to carry out the purposes and business of Company, to the extent the same may be legally exercised by limited liability companies under the BOC. 2.6 Foreign Oualification. The Managers shall cause Company to comply, to the extent legally possible, with all requirements necessary to qualiff Company as a foreign limited liability company in each jurisdiction in which Company conducts business. At the request of the Managers, each Mernber shall execute, acknowledge, swear to, and deliver all certificates and other instruments conforming with this Agreanent that are necessary or appropriate to qualify, continue, and terminate Company as a foreign limited liability company in all such jurisdictions in which Company may conduct business. 2.7 Merqers. Conversions and Exchanses. Company may be a party to (a) a merger, (b) a conversion, or (c) an exchange or acquisition of the tlpe described in the BOC, subject to obtaining the unanimous vote of the Mernbers. 2.8 No State Law Partnership. The Members intend that Company will be treated as a partnership for tax purposes and that each Member will be treated as a partner of a partnership for tax purposes, and that Company will not be a partnership (including, without limitation, a limited COMPANI"Y AGREEMENT App.A 0021 PAGE 9 partnership) or joint venture, and that no Manager or Member be a partner or a joint venture of any other Manager or Member, for any purposes other than tax purposes, and this Agreement may not be construed to suggest otherwise. ARTICLE III POWERS, RIGHTS AND DUTIES OF MANAGERS AND OFFICERS 3.1 Manasement Powers of Manasers. The Managers shall have the sole and exclusive right to manage the Company business and shall, on behalf and in the name of the Company, carry out the purposes of the Company and perform all acts, contracts and other undertakings which are necessary or advisable or incidental to the purposes of the Company. Except as provided in this Agreement, all decisions made or actions taken by the Managers shall be binding upon the Company and all of the Members, and the ratification or consent of the Members to such decisions or actions shall not be required. Subject to the stated purposes of the Company and the limitations set forth in this Agreement, the Managers' authority and power shall include, but not be limited to, the following, which authorities and powers shall be broadly construed and may be exercised by a Manager when and under such terms and conditions as the Managers, in their discretion, may determine to be in the best interest of the Company: (a) In General. Engage in any kind of activity and perform and carry out contracts of any kind necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified. (b) Property Acquisitions. Acquire by purchase, lease, exchange, or otherwise any real and/or personal property. (c) Property Manaeement. Operate, maintain, finance, improve, construct, own, grant options with respect to, sale, convey, assign, mortgage, and/or lease any real property and/or any personal property owned, directly or indirectly, by the Company. (d) Interest in Properties. Make all elections or decisions, and bind the Company thereby, that may be necessary or permissible in connection with any purchase, joint venture agreement or other type of contract under which an interest in properties is to be acquired, operated, sold or assigned by the Company. (e) Property Leasins. Negotiate and execute any lease agreements with respect to Company property. (D Property Sales. Sell, exchange or otherwise transfer all or any part of the assets of the Company. (9 Financing. Borrow money and mortgage or encumber property of the Company in order to further the purposes of the Company. COMPANY AGREEMENT App.APAGE 002210 (h) Deeds. Morteaees. Deeds of Trust and Other Instruments. Execute any deed, lease, mortgage, deed of trust, mortgage note, security agreanents, pledge, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Company property. (i) Depository Accounts. Open any one or more accounts on behalf of the Company, and to make deposits therein and to execute and deliver all appropriate checks, drafts, or other orders for payment of funds on behalf of the Company. (i) Liquid Investments. Invest and reinvest the property of the company in savings accounts, certificates of deposit, stocks, bonds, notes, options, margin accounts, calls, puts, money market or cash accounts maintained or administered by banks, savings and loans, brokerage firms, or any state or national institution having similar characteristics. (k) Business Investments. Acquire, invest in, loan to, hold, retain, and operate anybusiness interest, whetheritbe a soleproprietorship, jointventure, partnership, limited liability company, corporation, or other type of business organization. 0) Contracts. Execute and perform any and all agreements, confracts, documents, certifications, and any other instruments necessary, appropriate or convenient in connection with or incidental to the managanent, maintenance and operation of Company property, or in connection with managing the affairs of the Company or the accomplishment of the purposes of the Company. (m) Miscellaneous Insurance. Purchase and pay for property, casualty, andlor liability insurance, including extended coverage liability and casualty and worker's compensation, as would be customary for any Person owning comparable property and engaged in a business similar to that of the Company and/or covering such risks as deerned appropriate by the Manager. (n) Life Insurance. Purchase or acquire life insurance policies on the life of any person in whom the Company has an insurable interest, pay prerniums therefor, borrow against the policies and exercise any and all other rights of ownership regarding the policies and the proceeds therefrom; provided that any insured person, shall be prohibited from exercising any incidents of ownership, within the meaning of Section2042 of the Code, over any life insurance policy on the life of the person, whether as a Mernber, an officer, director, manager, member or other representative of a Member or the Company, or in any other capacity, as such incidents of ownership shall be exercised solely by the non-insured Manager or Managers and the non-insured representatives thereof anything to the contrary in this Agreement notwithstanding. (o) Loans and Guarantees. Execute loan guarantees for transactions entered into for or by the Company and make loans to any Member of the Company on such terms, conditions, and collateral as the Managers, in their reasonable discretion, shall deem appropriate. (p) Judicial and Administrative Actions. Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of or against the Company or its Mernbers in connection with Company activities and COMPANY AGREEMENT App.APAGE 002311 transactions, and engage counsel or others in connection therewith and execute powers of attorney, consents, waivers and other documents that may be necessary before any court, administrative board or agency of any govemmental authority, affecting the properties owned by the Company. (q) Tax Retums. Prepare or have prepared and file all tax returns for the Company (but not the tax retums or information retums of the individual Mernbers) and make all tax elections under the Code or relevant state or local law as the Managers shall, in their discretion, deem to be in the best interest of the Members. G) Employees and Contractors. Contract on behalf of the Company for the ernployment and services of employees and/or independent contractors and delegate to such Persons such responsibilities and duties as the Managers, in their discretion, may determine, and select for and contract on behalf of the Company for all professional services, including, but not limited to, accountants, lawyers, investment advisors, or other professional advisors. G) Certificate of Authority. The Managers may provide any Person dealing with the Company, and such Person may rely upon, a certificate signed by a Manager as to: (l) the identity of the Members; (2) any conditions precedent to acts by the Company; (3) the Persons who are authorized to execute any documents and bind the Company; and (a) any other matter involving the Company. 3.2 Limitations on Manasers' Authority. Notwithstanding anything contained in this Agreernent to the contrary, the Managers shall not have the authority to do or cause the Company to do any of the following acts without the affirmative unanimous Vote of all of the Mernbers: (a) Contravention. Do any act in contravention of this Agreement; (b) Impossibility: Do any act which would make it impossible to carry on the ordinary business of the Company; (c) Illeeality. Do any act in violation of the BOC, including but not limited to the making of a Distribution that would irnpair the ability of the Company to pay its debts as they mature or that would violate the limitations set forth in Section 101.206 of the BOC; (d) Company Property. Possess Company property or assign the rights of the Company in specific property for any purpose other than for and on behalf of the Company; (e) Sale. Exchanee or Disposition of Company Property. Sell, lease, exchange or otherwise dispose of (other than by way of a pledge, mortgage, deed of trust or trust indenture) all or substantially all the Company's property and assets (with or without good will); (0 Mergers or Acquisitions. Be a party to [i] a merger, [ii] an interest exchange, or [iii] a conversion; or (g) Amendment of Certificate of Formation. Amend or restate the Certificate of Formation. COMPA}TY AGREEMENT App.A PAGE 002412 'v 3.3 Third Party Reliance. Any Person, other than a Member, dealing with the Company may rely on the authority of any Manager in taking any action in the name of the Company without inquiry into the provisions of this Agreement or compliance herewith, regardless of whether that action actually is taken in accordance with the provisions of this Agreement. 3.4 Nominees to Hold Companv Property. Any Person, including without limitation any Member, may be specifically authorized by the Managers to acquire, on behalf of the Company, any real or personal property, .urange any financing, execute contracts and complete all other arrangements needed to effectuate the purposes of the Company, without the need to disclose the existence of the Company. Such Person shall place a written declaration in the Company's books and records acknowledging the Person's capacity as an agent and nominee for and onbehalf of the Company, and the name of the Company as the true owner thereof. The acquisition of Company property or the creation of indebtedness of the Company in the name of such Person acting as a nominee shall not give such Person an interest in Company property or cause it to be liable for a Company debt in excess of its proportionate part based on its Mernbership Interest, if arry. 3.5 Delegation of Authority. The Managers may, from time to time, delegate to one or more Managers such authority and duties as the Managers may deem advisable. Any such delegation may be revoked at any time by the Managers. A Manager's signed statement delegating its authority to any other Person shall automatically vest fuIl power and authority in that Person to execute and deliver any and all documents and instruments, and to perform any other act, as may be necessary and desirable in furtherance of the powers so authorized. A11 actions completed by such designated Person, and any documents executed thereby, shall be binding on the Company. Any such signed statement by a Manager, when delivered to any third party, shall be all the evidence such third party shall need concerning the capacity of a Person specifically so authorized to execute and deliver such documents and instruments and to perform such acts, and any such third party shall be entitled to rely upon such statement and shall not be required to inquire further as to any of the matters contained in such statement. 3.6 Protection of Manaeers for Acts of Agents. No Manager shall be held liable or otherwise responsible for any neglect, omission, or wrongdoing of any agent ernployed by the Managers on behalf of the Company provided such Manager uses reasonable care in the ernployment of the agent. 3.7 Liability. A Manager shall be personally liable to the Company for theft, fraud, bad faith, intentional misconduct, gross negligence or willful failure to perform a Manager's duties in accordance with this Agreement. 3.8 Loans from Members. The Managers may, from time to time, borrow money on behalf of the Company from one or more Members at arate of interest (not to exceed the maximum rate then permitted by applicable law) and with terms agreeable to the loan-making Members and the Managers. Notwithstanding anything in this Agreement to the contrary, all amounts thcu due and payable under any loan(s) from a Member shall be satisfied by the Company prior fo the making of any Distributions to the Members. Payments on any such loans made by the Company COMPANTY AGREEMENT App.A PAGE 002513 shall be first applied to any interest due on any loan with the balance of any payments to be credited against the outstanding principal balance of the loan. 3.9 Reimbursement of Managers. The Managers shall be entitled to reimbursernent for any reasonable expenses incurred in connection with the Company's business. These amounts shall be considered a Company expense and not a Distribution to the Member. 3.10 Compensation of Manasers. Each Manager shall receive compensation for their services as Managers in such amount as is fair and reasonable, as determined by a Majority-In-Interest of the Class A Members, taking into consideration the actual time devoted to the Company and administration of the Company, the relative financial benefit accruing to the Company as the result of the Manager's management, and any other relevant facts and circumstances. 3.ll Accounting Responsibilities of Managers. The Managers shall maintain proper books and records reflecting the assets, liabilities, investments, income, disbursements, principal, and transactions of the Company. These books and records shall be available for inspection during regular business hours by each Mernber or its representative. The Managers shall be free of any court accounting or supervision of the Company. 3.12 Tax Matters Partner. The Class A Members hereby appoint Thomas R. Durant as the "Tax Matters Partner" for purposes of Section 6231(a)(7) of the Code, with the authorization and requirernent to represent the Company in connection with all tax matters pertaining to the Company. 3.13 Devotion of Time. The Managers shall devote to the Company such time as may be necessary for the proper performance of their duties as set forth herein. No provision of this Agreement shall require the officers, directors, managers, or Affiliates of a Manager to devote their full time or activities to the conduct of the affairs of the Company. 3.14 Multiple Manaeers. In the event that there is more than one Manager of the Company, the rights and powers of the Managers hereunder shall be exercised by the Managers only in accordance with the affirmative Vote of the Managers. 3.15 Election of Manaeers. At each election for Managers evely Class A Member shall have the right to Vote in person or by proxy, the percentage of Mernbership Interest owned by such Mernber, as a Class A Mernber, for as many persons as there are Managers to be elected and for whose election such Member has a right to Vote. In other words, the Managers shall be elected by a Majority-In-Interest of the Class A Mernbers. 3.16 Term of Office. Each Manager shall hold office until (i) the Manager dies, or in the case of a Manager who is not an individual, the Manager dissolves, liquidates or otherwise ceases to exist under state law, (ii) the Manager resigns, (iii) the Manager is removed, or (iv) the Company is dissolved and terminated, excqlt as allowed to wind up the affairs of the Company under Section 10.1 of this Agreernent, Section 11.052 of the BOC, or other applicable law. COMPANTY AGREEMENT App.A PAGE 002614 3.17 Vacancies in Managers. Any vacancy occurring in the Managers shall be filled by a Majority-In-Interestof the Class A Members at an annual meeting or special meeting duly called and held for such purpose. 3.18 Chairman of the Manasers. At each annual meeting of the Managers, the Class A Members or the Managers may elect a Chairman of the Managers who shall hold office until the next succeeding annual meeting of the Managers and until the Chairman's successor is elected and qualified. The Chairman ofthe Managers shall preside at all meetings of the Managers and, in the absence of the President, at all meetings of the Mernbers. If no Chairman of the Managers is so elected, the President shall so act. 3.19 Resisration of Manaeers. Any Manager may resign by giving Notice to the President or the Secretary, or in lieu thereof to the remaining Managers, or if none exist to the Members. Such resignation shall take effect at the time specified therein, or immediately, if no time is specified therein. Unless other"wise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 3.20 Removal of Manaqers. A Manager may be removed at any time, with or without cause, by a Majority-In-Interest of the Class A Members, and thereby the term of office of such Manager shall automatically terminate. Such removal shall be effective upon the effective date of the action to remove the Manager even if a successor is not elected simultaneously. 3.21 Number and Oualifications of Managers. Managers need not be residents of the State of Texas or Mernbers of the Company. The number of Managers shall be two (2) until otherwise fixed by a Majority-In-lnterest of the Class A Members at an annual meeting or a special meeting duly called and held for such purpose. No decrease in the number of Managers shall have the effect of reducing the term of any incumbent Manager unless such Manager is removed as provided in Section 3.20. 3.22 Officers. (a) Election of OfEcers. The Managers may elect as officers of Company a President, a Secretary, a Vice President(s) and Treasurer. The Managers may elect or appoint such other officers and agents as they shall deem necessary, who shall be appointed for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Managers. Officers need not be a Mernber or Manager of Company or a resident of Texas. Any two or more offices may be held by the same Person. Each officer of Company shall hold office until his successor is chosen and is qualified in his stead or until his death, resignation or rernoval from office. Any vacancy in any office because of death, resignation, rernoval or otherwise may be filled by such person as is elected or appointed by the Majority vote of the Managers. The offrcers of Company shall not receive any compensation for their service as an officer unless such amount is approved by Majority-In-lnterest the Class A Members O) Authority and Duties. The officers of Company shall have the authority and shall exercise the powers and perform the duties specified below and as may be additionally specified by the Managers or this Agreement (and in all cases where the duties of any offtcer are COMPANTY AGREEMENT App.A 0027 PAGE 15 not prescribed by this Agreernent or the Managers, such officer shall follow the orders and instructions of the President): (i) President. The President of Company shall preside over the general and active management of the business of Company, and shall direct, manage and control the business of Company to the best of the President's ability. The President shall serve until resignation, the winding up of Company, or removal by the Managers and shall have full and complete authority, power and discretion to make any and all decisions and do any and all things that the President deerns to be reasonably required in furtherance of Company's business and objectives. Without limiting the generality of the foregoing, the President or such subordinate officer designated by the President, or any officer duly authorized by the Managers shall have the power and authority on behalf of Company: (A) to purchase liability and other insurance to protect Company's property and business; (B) to invest any Company funds temporarily (by way of example but not limitation) in time deposits, short-term governmental obligations, commercial paper or other investments; (C) to employ accountants, legal counsel, managing agents or other experts, employees or agents to perform services for Company and to compensate thern from Company funds; (D) to negotiate with employees and any labor organization representing employees of Company; and (E) to carry out all orders and resolutions of the Managers. (ii) Vice President. The Vice President of Company shall, in the absence or disability of the President, perform the duties and have the authority and exercise the powers of the President. The Vice President shall perform such other duties and have such other authority and powers as Managers may from time to time prescribe or as the President may from time to time delegate. No other officer of Company shall rank higher than Vice President except President. No other officer or Manager shall perform the duties of the President in the absence or disability of the President except the Vice President unless the Vice President is absent or disabled. (iii) Secretary. The Secretary shall attend all meetings of the Managers and Mernbers and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for any committee, if requested. The Secretary shall give, or cause to be given, notice of the meetings of the Managers and Mernbers where such notices are required by this Agreement or the BOC to be given. The Secretary shall be underthe supervision ofthe President and shall perform such other duties and have such other authority and powers as the Managers may from time to time prescribe or as the President may from time to time delegate. The Secretary, if any, shall, together with the COMPANY AGREEMENT App.A PAGE 002816 v President, if any, perform the duties of a Treasurer in the event a Treasurer is not elected or appointed. (iv) Treasurer. The Treasurer shall have the custody of Company funds and shall keep full and accurate accounts of receipts and disbursernents of Company, and shall deposit all monies and other valuable effects in the name and to the credit of Company in such depositories as may be designated by the Managers. The Treasurer shall disburse the funds of Company as may be ordered by the Managers, taking proper vouchers for such disbursements, and shall render to the President and Managers, at the regular meetings of the Managers, or whenever they may require it, an account of all transactions as Treasurer and ofthe financial condition of Company. If required by the Managers, the Treasurer shall give Comptrty abond in such form, in such sum, and with such surety or sureties as shall be satisfactory to the Managers for the faithful performance of the duties of office and for the restoration to Company, in case of death, resignation, retirernent or rernoval from office, of all books, papers, vouchers, money or other property of whatever kind in the Treasurer's possession or under his or her control belonging to Company. The Treasurer shall perform such other duties and have such other authority and powers as the Managers may from time to time prescribe or as the President may from time to time delegate. (c) Execution of Contracts. Subject to the limitations contained in this Agreerrent, the Manager(s), President or such subordinate offrcer or officers designated by the President or any ofEcer designated by the Managers shall have the authority to execute on behalf of Company all agreements, instruments, and documents, including, without limitation, checks, drafts, notes, and other negotiable instruments, mortgages, deeds of trusts, security agreements, financing statements, documents providing for the acquisition, mortgage or disposition of Company property, assignments, bills of sale, leases, partnership agreements, and any other instruments or documents necessary to effecfuate any actions which have been approved by the Members or the Managers (if such actions require under the BOC or this Agreement the approval of the Mernbers or the Managers) or by the President (if such actions do not require under the BOC or this Agreement the approval of the Members or the Managers). (d) General. (i) Removal. Any officer may be removed at any time by the Managers whenever in the Managers' judgment, the best interests of Company will be served thereby, but such removal will be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer shall not in itself create contract rights. (iD Resipnation. Any ofEcer may resign at arry time, subject to the right. or obligations under any existing contracts between the officer and Company, by giving written notice to the President or any Manager. An officer's resignation shall take effect at the time specified in the notice, and unless otherwise specified therein, the acceptance of such resignation shall not be n€cessary to make it effective. (iiD Vacancies. A vacancy in any office, however occurring, may be filled by the Managers. COMPA}IY AGREEMENT App.A PAGE 002917 (iv)Indemnification. Company shall indemnifuthe Managers, officers, and Members to the extent set forth inArticle V hereof. 3.23 Place and Manner of Meetines. All meetings, regular or special, of the Managers of Company may be held either within or without the State of Texas. The Managers may participate in such meetings by means of conference telephone or similar communications equipment by which all Persons participating in the meeting can hear each other, and participation in a meeting as provided herein shall constitute presence in person at such meeting, except where a Person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or conveneil. The Managers shall keep regular minutes of their proceedings. The minutes shall be placed in the minute book of Company. 3.24 Annual Meetines of Manaeers. The annual meeting of Managers shall be held, without further notice, immediately following the annual meeting of Members, and at the same place, or at such other time and place as shall be fixed with the consent in writing of all Managers. 3.25 Regular Meetings of Manaeers. Regular meetings of the Managers may be held without notice at such time and place either within or without the State of Texas as shall from time to time be determined by the resolution of a Majority of the Managers. 3.26 Special Meetines of Manaeers. Special meetings of the Managers may be called by any Manager on three (3) days' notice to each Manager, either personally or by mail, by ernail or telephone. 3.27 Ouorum. At all meetings of the Managers, the presence of a Majority of the Managers shall be necessary and sufficient to constitute a quorum for the transaction of business unless a greater number is required by law or by the Certificate of Formation. The act of a Majority of the Managers present at a meeting at which a quorum is present shall be the act of the Managers, except as otherwise provided by law, the Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of the Managers, the Managers present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quonrm shall be present. 3.28 Attendance and Waiver of Notice. Attendance of a Manager at any meeting shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Managers need be specified in the notice or waiver of notice of such meeting. 3.29 Action Without Meetins. Any action required by statute to be taken at a meeting of the Managers, or any action which may be taken at a meeting of the Managers, may be taken without a meeting, without notice and without a vote if a consent in writing, setting forth the action so taken, shall be signed by the Managers necessary to have at least the minimum number of votes COMPANTY AGREEMENT App.A PAGE 003018 that would be necessary to take the action at a meeting at which each Manager entitled to vote on the action is present and votes. Such consent shall have the same force and effect as a unanimous vote at a meeting. ARTICLE IV POWERS, RIGHTS AND LIABILITIES OF MEMBERS 4.1 No Manaeement Powers of Members. Except for any rights granted to the Class A Mernbers in this Agreonent, no Member (other than in its capacity as a Manager or an officer or other designated representative of a Manager, if applicable) shall have any power or authority whatsoever to participate in or vote on matters pertaining to the management of the Company, to act for or on behalf of the Company, to transact any business for the Company or sign for or otherwise bind the Company to any agreement or document, to do any act that would be binding on the Company, or to incur any expenditure on behalf of the Company. 4.2 Limitations on Members' Liability. No Mernber shall be personally liable to the Company, to any of the Mernbers, to the creditors of the Company, or to any third party for the debts, obligations, liabilities and/or losses of the Company, including under a judgment, decree or order of a court, solely as a result of being a Mernber. Notwithstanding the foregoing, a Member shall be liable to the Company for any damages the Company sustains as a result of the Member's theft from the Company, fraud perpetuated against the Company, bad faith perpetuated against the Company, intentional misconduct damaging the Company and gross negligence damaging the Company. 4.3 Permissible Competition and Other Activities. The Members, Managers and officers, and their respective managers, directors, officers, ernployees, agents and Affiliates may have other business interests and may engage in other activities in addition to those relating to the Company. The pursuit of such ventures, even if competitive with the business of the Company, shall not be deemed wrongful or improper, it being expressly understood that no such person shall be restricted in any way with regard to other activities, business or otherwise. No such person shall be obligated to offer any interest in such activities to the Company, and no such person shall be required to permit the Company or any Member, Manager, or officer of the Company to participate in any such activities. Any such persons shall be permiued by the terms of this Agreonent to transact any lawful business between themselves, and shall in no waybe affected by reason of the relationship between the Company and such persons whatsoever. 4.4 Place and Manner of Meetinss. All meetings of the Mernbers shall be held at the principal office of Company or at such other place within or without the State of Texas as may be determined by the Managers and set forth in the respective notice or waivers of notice of such meeting. Mernbers may participate in such meetings by means of conference telephone and similar communications equipment by means of which all Persons participating in the meeting can hear each other, and participation in a meeting as provided herein shall constitute waiver of notice of the same and presence in person at such meeting, except where a Person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. COMPA].ry AGREEMENT App.A PAGE 003119 4.5 Annual Meetines of Members. The annual meeting of the Mernbers of Company for the transaction of such other business as may properly come before the meeting shall be held at such time and date as shall be designated by the Managers from time to time and stated in the notice of the meeting. Such annual meeting shall be called in the same manner as provided in this Agreement for special meetings of the Mernbers, except that the purposes of such meeting need be enumerated in the notice of such meeting only to the extent required by law in the case of annual meetings. 4.6 Special Meetines of Members. Special meetings of the Members maybe called by the Managers or by the holders of not less than ten percent (10%\ of all the Membership Interests. Business transacted at all special meetings shall be confined to the purpose stated in the notice. 4.7 Notice of Meetines of Members. Written or printed notice stating the place, day and hour of the meeting and, in the case of special meetings, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the discretion of the Managers or the Person calling the meeting, to each Mernber of record entitled to vote at such meeting. 4.8 Ouorum. A Majority-In-Interest of each Class of Mernbers entitled to vote and present at a meeting, in person or by proxy, shall constifute a quonrm at all meetings of the Members, unless a greater percentage is otherwise provided by law or the Certificate of Formation. Once a quonrm is present at the meeting of the Members, the subsequent withdrawal from the meeting of any Member prior to adjournment or the refusal of any Mernber to vote shall not affect the presence of a quorum at the meeting. If however, such quonrm shall not be present at any meeting of the Members, the Members entitled to vote at such meeting shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the holders of the requisite amount of Membership Interests shall be present or represented. At any meeting of the Members at which a quorum is present, the vote of the holders of a Majority- In-Interest of each Class of Mernbers entitled to vote and present, in person or by proxy shall be the act of the Members, unless otherwise provided by the Certificate of Formation or this Agreement or required by law. Any vote of the Members entitled to vote may be taken viva voce orby show of hands unless someone entitled to vote objects, in which case written ballots shall be used. 4.9 Reeistered Members. Company shall be entitled to treat the holder of record of any Membership Interest as the holder of such Membership Interest for all puq)oses, and accordingly shall not be bound to recognize any equitable or other claim to or interest in such Mernbership Interest on the part of any other Person, whether or not it shall have express or other notice of such claim or interest, except as expressly provided by this Agreement or the laws of the State of Texas. 4.10 Proxies. A Member entitled to vote may vote either in person or by proxy executed in writing by the Mernber. A telegram, telex, cablegram, electronic mail or similar transmission by the Manber, or a photographic, photostatic, facsimile, or similar reproduction of a writing executed by the Member shall be treated as having been executed in writing for purposes of this Section. COMPA}.IY AGREEMENT App.A PAGE 0032 20 4.ll Conduct of Meetinqs. All meetings of the Mernbers shall be presided over by the chairman of the meeting, who shall be a Manager (or representative thereof) designated by a Majority of the Managers. The chairman of anymeeting of Members shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seemed to him in order. 4.t2 Fixine Record Dates for Matters Other than Consents to Actions. The Managers may fix in advance a record date for the purpose of determining Members entitled to notice of or to vote at ameeting of the Members (otherthan determining Mernbers entitled to consent to action by Mernbers proposed to be taken without a meeting of Members), the record date to be not less than ten (10) nor more than sixty (60) days prior to said meeting. In the absence of any action by the Members, the date upon which the notice of the meeting is mailed shall be the record date. 4.13 Fixed Record Dates for Consents to Action. Unless a record date shall have previously been fixed or determined pursuant to Section 4.12 hereof whenever action by Mernbers is proposed to be taken by consent in writing without a meeting of Members, if provided for by this Agreernent, the Managers may fix a record date for purposes of determining Members entitled to consent to that action, which record date shall not precede, and shall not be more than ten (10) days after, the date upon which the resolution fixing the record date as adopted by the Managers. If no record date has been fixed by the Managers and the prior action by the Managers is not required by the BOC, the record date for determining Mernbers entitled to consent to action in writing without a meeting shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to Company by delivery to its registered office, its principal place of business, or a Manager of Company having custody of the books in which proceedings of meetings of Members are recorded. Delivery shall be by hand or by certified or registered mail, return receipt requested. Delivery to Company's principal place of business shall be addressed to any Manager of Company. If no record date has been fixed by the Managers and prior action of the Managers is required by statute, the record date for determining Mernbers entitled to consent to action in writing without a meeting shall be at the close of business on the date on which the Managers adopt a resolution taking such prior action. 4.14 Actions Without a Meetine. Any action required by the BOC to be taken at a meeting of the Members, or any action which may be taken at a meeting of the Menrbers, maybe taken without a meeting, without prior notice, and without a vote if a written consent or consents in writing, setting forth the action so taken, shall have been signed by the Mernbers of each Class of Interest entitled to vote with respect to the action that is the subject maffer of the consent, and such consent shall have the same force and effect as a unanimous vote of the Members. Every written consent pursuant to this Section shall be signed, dated, and delivered in the manner required by, and shall become effective at the time and remain effective for the period specified by, the BOC. A telegram, telex, cablegram, or similar transmission by a Member, or a photographic, photostatic, facsimile, email transmission, or similar reproduction of a writing signed by a Menrber shall be regarded as signed by the Member for purposes of this Section. Prompt notice of the taking of any action by Manbers without a meeting by less than unanimous written consent shall be given to those Mernbers who do not consent in writing to the action. COMPANY AGREEMENT App.A PAGE 003321 4.15 Nature of Membership Interest. A Membership Interest is personal property. A Member shall have no interest in specific property of Company. 4.16 Rieht to Remove Dealer Operator. Notwithstanding any term or provision of this Agreement to the contrary, a Majority-In-Interest of the Class A Members shall have the right to immediately remove and replace the Dealer Operator of the Dealership upon written notice to the Dealer Operator, the Company, the Managers, the other Class A Members and the Class B Mernbers. In this regard, only written notice from the Majority-In-Interest of the Class A Members to the Dealer Operator, the Company, the Managers, the other Class A Members and the Class B Members is required and no prior action of the Members and/or Managers is necessary. ARTICLE V INDEMNIFICATION 5.1 Policv of Indernnification and Advancernent of Exoenses. (a) To the full extent permitted by Article 8.051 of the BOC, as amended from time to time, and by this Section 5.1, Company shall indemnify any Manager, officer, andlor Member of Company against judgments, penalties (including excise and similar taxes), fines, settlements, and reasonable expenses (including court costs and attomeys'fees) actually incurred by any such person who was, is or is threatened to be made a named defendant or respondent in a Proceeding because the person is or was a Manager, officer, and/or Member of Company, and shall advance to such person such reasonable expenses as are incurred by such person in connection therewith. O) Notwithstanding the provisions of Section 5.1(a) above, Company shall indemnifr a Manager, officer, and/or Member only if it is determined in accordance with Section 5.1(d) below that the Person: (i) conducted himself, herself or itself in good faith; (ii) reasonably believed (A) in the case of conduct in the Person's official capacity as a Manager, officer, and/or Mernber of Company, that the Person's conduct was in Company's best interest; and (B) in all other cases, that the Person's conduct was at least not opposed to Company's best interests; and (iii) in the case of any criminal proceeding, had no reasonable cause to believe his, her or its conduct was unlawful. AManager, officer and/or Member shall not be indernnified under this Section 5.1 in respect of a Proceeding (l) in which the Person is found liable on the basis that personal benefit was improperly received by such Person, whether or not the benefit resulted from an action taken in the Person's official capacity; or (2) in which the Person is found liable to Company. A Person strall be deemed to have been found liable in respect of any claim, issue or matter only after the Person shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. COMPANY AGREEMENT App.APAGE22 0034 (c) A Person may be indemnified by Company against judgments, penalties (including excise and similar taxes), fines, settlements, and reasonable expenses actually incurred by the Person in connection with the proceeding; but if the Person is found liable to Company or is found liable on the basis that personal benefit was improperly received by the Person, the indemnification (i) is limited to reasonable expenses actually incurred by the Person in connection with the proceeding, and (ii) shall not be made in respect of any proceeding in which the Person shall have been found liable for willful or intentional misconduct in the performance of his duty to Company. (d) A determination of indemnification under Section 5.1(a) above must be made: (i) by a Majority vote of a quorum consisting of Managers who at the time of the vote are not named defendants or respondents in the proceeding; (iD if such a quorum cannot be obtained, by special legal counsel selected by a Majority vote of all Managers; or (iii) by a Majority-In-Interest of the Class A Members in a vote that excludes the Membership Interest held by Managers who are named defendants or respondents in the proceeding. Authorization of indemnification and determination as to reasonableness of expenses must be made in the same manner as the determination that indernnification is permissible. 5.2 Definitions. For purposes of this Article V: (a) "Manager. officer. and/or Mernber" means any person who is or was a Manager, officer, and/or Member of Company and any person who, while a Manager, officer, and/or Member of Company, is or was serving at the request of Company as a manager, director, officer, partner, venturer, proprietor, trustee, ernployee, agent, or similar functionary of Company or of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, ernployee benefit plan, or other enterprise. O) "Procggdigg" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative, any appeal in such an action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding. 5.3 Non-Exclusive; Continuation. The indernnification provided by this Article V shall not be deemed exclusive of any other rights to which the person claiming indernnification may be entitled under any agreement, any vote of Managers or Mernbers or otherwise both as to any action in his or her official capacity and as to any action in another capacity while holding such position, and shall continue as to a person who shall have ceased to be a Manager, Member, officer, or COMPANTY AGREEMENT App.A PAGE 0035 23 employee of Company engaged in any other enterprise at the request of Company and shall inure to the benefit of the heirs, executors and administrators of such person. 5.4 Indemnification of Employees or Aeents. Company may indernnify and advance expenses to an onployee or agent who is not a Manager, Mernber or officer to such further extent, consistent with law, as may be provided by general or specific action of the Managers, or contract as permitted or required by common law. 5.5 Appearance as a Witness. Notwithstanding any other provision of this Article V Company may pay or reimburse expenses incurred by a Manager, offrcer and/or Member in connection with his or her appearance as a witness or other participation in a Proceeding at a time when he or she is not a named defendant or respondent in the Proceeding. 5.6 Insurance. Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as a Manager, Member, officer, employee, or agent of Company or is or was serving at the request of Company as a manager, director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic limited liability company, corporation, partnership, joint venture, sole proprietorship, trust, ernployee benefit plan, or other enterprise against any expense, liability, or loss, whether or not Company would have the power to indernnify such Person against such expense, liability, or loss under this Article V. 5.7 Member Notification. To the extent required by law, any indemnification of or advance of expenses to a Manager, officer and/or Mernber in accordance with this Article V shall be reported in writing to the Members with or before the notice or waiver of notice of the next Menrbers meeting or with or before the next submission to Members of a consent to action without a meeting, in any case, within the twelve (12) month period immediately following the date of the indemnification or advance. 5.8 Savings Clause. If this Article V or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then Company shall nevertheless indernnify and hold harmless each Manager, officer and/or Member or any other Person indemnified pursuant to this Article V as to costs, charges, and expenses (including reasonable attomeys' fees), judgment, fines, and amounts paid in settlernent with respect to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, to the fullest extent permiffed by any applicable portion of this Article V that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE VI MEMBERSHIP INTERESTS 6.1. Membership Interest. The Membership lnterest of Company shall be represented by the aggregate amount of the Members' Class A Mernbership Interest and Class B Membership lnterest which shall at all times equal one hundred percent (100%). The Class A Menrbers may establish additional series or classes of Membership Interest by adopting a resolution, setting forth the designation of the series or class and determining the designations, preferences, limitations and relative rights of the series or class of the Membership Interest. There must always be a class or COMPANY AGREEMENT App.A PAGE 0036 24 series of Membership Interest outstanding that has complete voting rights except as limited or restricted by voting rights conferred on some other class or series of outstanding Manbership Interest. As of the date of this Agreement, Company shall have the following classes of Membership Interest: (a) Class A Mernbership Interest. Company will have Class A Membership Interest which will be owned by the Class A Members, with the amount of Class A Mernbership Interest initially held by each Class A Mernber shown across from the name of such Class A Member on Schedule 1, as the same may be adjusted in accordance with this Agreement and the records of Company. Class A Mernbers shall be afforded all rights, privileges and obligations of a Member in accordance with the terms of this Agreernent, including the sole and exclusive right to vote one hundred percent (100%) of the voting rights of Company at a meeting of the Mernbers or Class A Members. O) Class B Membership Interest. Company will have Class B Mernbership Interest which will be owned by the Class B Members, with the amount of Class B Manbership Interest initially held by each Class B Mernber shown across from the name of such Class B Members on Schedule l, as the same may be adjusted in accordance with this Agreement and the records of Company. Class B Members shall be afforded all rights, privileges and obligations of a Member in accordance with the terms of this Agreement; provided, however, Class B Members shall not be entitled to participate in the management of Company or to vote on any matters except for the matters exclusively reserved to the note of all Mernbers as may be provided in this Agreement. 6.2 Prohibited Transfers of Membership Interests. Except as otherwise expressly permitted by this Agreement, or by the terms of the Buy-Sell Agreernent, no Member (nor its respective legal representatives, agents and fiduciaries) may transfer any Mernbership Interest, or any otherbeneficial interest therein. Any attanpted transfer or assignment in contravention of this Agreement shall have no force or effect and shall not be binding or recognized by the Company or any of its Members. 6.3 Assignee Treatment of Permitted Transferees. A Permitted Transferee of a Membership lnterest shall be an assignee for all purposes herein and shall not be treated as a Mernber for any purpose unless and until admitted as a Merrber as provided herein. A Permitted Transferee shall be entitled only to receive its respective share of Company Profits, Losses, and Distributions (if any), to which the respective assigning Member would otherwise be entitled. No transferee, assignee, or purchaser of a Member's Membership lnterest shall have any power or authority whatsoever to participate in or vote on matters pertaining to the managonent of the Company, to act for or on behalf of the Company, to transact any business for the Company or sign for or otherwise bind the Company to any agreement or document, to do any actthat would be binding on the CompanS to incur any expenditure on behalf of the Company or exercise any powers or duties granted to the Members hereunder, or to attend meetings of the Manbers, unless such transferee, assignee, or purchaser is first admitted to the Company as a Member as provided in this Agreernent. 6.4 Admission of New or Substitute Manrbers. Additional and/or substitute Merrbers COMPAI{Y AGREEMENT App.A 0037 PAGE 25 maybe admitted to the Company upon the affirmative unanimous Vote of all of the Members. A new and/or substitute Mernber duly admitted to the Company shall be subject to all of the terms and provisions of this Agreanent. A transferee or assignee of a Membership lnterest may request in writing to be admitted to the Company as a substitute Member. Each Mernber may, inits sole and absolute discretion, withhold its Vote for such transferee or assignee to be admitted as a Member. In addition, the Managers may require the applicant transferee or assignee to comply with additional conditions and requirements as provided by this Agreement. 6.5 Treatrnent of Nonpermitted Transferees. Any attempted assignment or transfer of a Membership Interest or any beneficial interest therein in contravention of this Agreement shall be of no force or effect and shall not be binding upon or recognized by the Company or any of its Members. The Company and its Members shall be entitled to treat the Mernber holding record ownership of the Membership lnterest as the absolute owner thereof, and shall be entitled to make all Distributions, if any, to such Member without any liability whatsoever to any purported assignee or transferee, and shall incur no liability for allocations of income, gain, loss, deduction or credit, or for transmittal of reports and notices required to be given to such Mernber. Such an alleged assignee shall have no right to require any information or account of the Company's transactions or to inspect the Company's books and records, tax return information, or any other Company information, documents, or other data associated with the Company. 6.6 Voting and Manaeement Riqhts of Transferred Interests. If a Member transfers a Membership Interest, such transferor shall lose all right to Vote and any other management right associated with that portion of the Mernbership Interest, the Economic Interest of which was transferred, and the transferee may obtain such rights only upon being admitted to the Company as a Member as provided under Section 6.4, and only to the extent of the rights pertaining to the Class to which such transferee is admitted. 6.7 Chanee of Control of Member. No Memberwhich is not an individual shall permit any of its equity owners to transfer any ownership interest in such Mernber without the affirmative unanimous Vote of the Menrbers, if such transfer would result in a Change of Control of such Meinber. As used in this Section, a transfer shall be deerned to cause a "Change in Control" of a Mernber if such transfer would, taking into account all prior transfers of equity ownership interests in such Mernber on a cumulative basis since the date of such Member's admission to the Company as a Mernber, result in fifty percent (50%) or more of the equity ownership interests in such Member being owned by Persons other than (i) the equity owners of such Mernber who were such as of the date of such Member's admission to the Company as a Member, or (ii) the Affiliates of such Mernber who were such as of the date of such Member's admission to the Company as a Mernber. 6.8 General Requirements for Transfer of Membership Interest. A Permitted Transfer of a Menrbership Interest shall be made subject to all the terms and conditions of this Agreernent and shall not be recognized by the Company or considered to have transferred title to the Mernbership Interest until the last day of the month in which the following requirements are met to the satisfaction of the Managers: (a) Written Assimment. A duly executed written instrument of assignment setting forth the assigning Member's assignment of its Membership Interest shall be glven to the COMPANY AGREEMENT App.A 0038 PAGE 26 Managers. Such written assignment shall include provisions whereby the assignee accepts and adopts the terms and provisions of this Agreement, including the assumption of any and all obligations of the assigning Member to the Company. (b) Securities Opinion. An opinion of counsel for the Company, prepared at the sole cost and expense of the assigning Member, satisfactory in form and substance to the Managers, to the effect that the transfer may be made without violation of the Securities Act of 1933, as amended, and all applicable federal and state securities laws, shall be delivered to the Managers, unless written waiver of this requirement is made by the Managers. (c) Tax Opinion. The assigning Member shall deliver to the Managers an opinion of counsel for the Company, prepared at the sole cost and expense of the assigning Mernber, and in form and substance satisfactory to counsel designated by the Managers, to the effect that (l) the tax status of the Company will not be adversely affected by the assignment, and (2) thatthe assignment will not cause a termination of the Company within the meaning of Section 708(b) of the Code, unless written waiver of this requirement is made by the Managers. (d) Other Instruments. The assigning Member and its assignee shall execute and acknowledge such other instruments as the Managers reasonably deern necessary or desirable to effect such assignment. (e) Transfer Fee. The assigning Member or assignee shall pay to the company a transfer fee to cover all reasonable expenses of the transfer, unless written waiver of this requirement is made by the Managers. 6.9 Pledse of Interest and First Refusal Riehts of Remainine Members. If a Member (the "P_lgdgins Member") desires to assign, pledge, or mortgage an Economic Interest in its Mernbership Interest (the "Pledeed Economic Interest") as collateral for a loan to such Member or its Affiliates, the provisions of this Section shall become applicable. (a) Consent to Pledse. The Pledging Member shall obtain the written consent of the Managers prior to such assignment, pledge, or mortgage, which consent shall not be unreasonably withheld. O) Acceptance of Terms. The assignee, pledgee, or mortgagee (the "Lender") must agree in writing to be bound by the terms of this Agreement, must agree to not sell the Pledged Economic Interest at a foreclosure sale or otherwise unless all parties are fully informed of the Company's and the Mernbers' rights under this Agreanent, and must agree that any Person who obtains an interest in the Pledged Economic Interest as a result of the loan, including through a foreclosure proceeding, shall also agree to be bound the terms of this Agreernent, including the rights of purchase provided herein. ARTICLE VII CONTRIBUTIONS TO CAPITAL AND CAPITAL ACCOUNTS 7 .l Capital Contributions. Each Member has contributed, and/or hereby contributes to the capital of the Cornpany those assets reflected on Schedule l, which Capital Contributions shall COMPANY AGREEMENT App.APAGE27 0039 be considered Required Capital Contributions. 7.2 Required Additional Capital Contributions. Except as otherwise provided in this Agreernent, no Member shall be required to make any additional Capital Contributions. 7.3 Voluntary Additional Capital Contributions. If and to the extent determined by the Managers that additional Capital Contributions are necessary or advantageous to carry out the purposes of the Company, the following provisions shall become applicable: (a) Notification. The Managers shall provide Notice to all Members of the request for additional Capital Contributions (the "Contribution Notice"). The Contribution Notice shall specify the aggregate amount of the requested additional Capital Contributions, the intended purposes(s) of the requested additional Capital Contribution and the amount requested of each Mernber (which requested amount, shall be in proportion to their respective Percentage Interests or in such other percentages as shall be determined by unanimous Vote of the Members). The Contribution Notice shall also set forth the period of time within which such requested Capital Contributions are to be completed, which period shall not be less than thirty (30) days from the date of the Contribution Notice or such shorter period of time as is reasonable under the circumstances. (b) Unanimous Vote. Such requested additional Capital Contributions, shall be made only upon the consent of the Mernbers by unanimous Vote, authorizing the additional Capital Contributions. In the event the Members do not unanimously consent to additional Capital Contributions, one or more Members may make loans to the Company pursuant to Section 7.15. (c) Adjustment to Percentage lnterests and Capital Accounts. In the event that the Mernbers unanimously consent to the requested additional Capital Contribution as provided in this Section, the Mernbers' Membership Interests will be adjusted (to the extent the additional Capital Contributions are not proportionate to the Mernbers' existing Membership Interests) taking into account the amount of the additional Capital Contributions and the fair market value of the other Company properties, as determined by a Majority-In-Interest of the Class A Members. The Members' Capital Accounts shall also be adjusted as provided in the Capital Account Provisions. (d) Contributions of Class A Mernbers. Unless otherwise agreed by a unanimous Vote of the Class A Members, any additional Capital Contributions made by the Class A Members, shall be deerned to be in respect of the contributing Class A Mernbers' Class B Membership Interest, if any, and if none, then in respect of a new Class B Mernbership Interest. 7.4 No Deemed Additional Capital Contributions. Unless otherwise agreed in writing, by the Mernbers, if: (i) a Member makes a payment to a creditor of the Company because of personal liability thereon; or (ii) a Mernber makes any payment to a creditor of the Company because of the personal guarantee by such Mernber, such Mernber shall have any rights of contribution and payment by the ranaining Mernbers as shall be available under applicable law and such payment shall not be deemed an additional Capital Contribution. 7.5 Riehts in Capital Contributions. No Mernber shall be entitled to a retum of any portion of its Capital Contributions or to receive any Distributions from the Company, except as COMPANY AGREEMENT App.APAGE 004028 specifically provided herein. No loan or advance made to the Company by any Member shall constitute a Capital Contribution. 7.6 Company Propertv. The Mernbers agree that all real and personal property contributed to, owned by or acquired by the Company shall constitute an asset of the Company and shall be considered Company property. No Member shall thereafter have any right with respect to Company property, and each Member expressly waives the right, if any, to require partition of any Company property or any part thereof. 7.7 Withdrawal. Except as otherwise expressly provided in this Agreement, no Msmber shall be entitled to withdraw from the Company as a Member prior to the termination of the Company. 7.8 Capital Accounts. A Capital Account shall be maintained for each Member. The Capital Accounts shall be maintained in accordance with the rules of Reg. $ 1.704-l(b)(2)(iv), which shall control over any inconsistent provisions of this Agreement. 7.9 General Increases. The Capital Account of a Member shall be increased by (i) such Member's Capital Contributions, (ii) the amount of Profits allocated to the Member and items of income or gain specially allocated to the Member, and (iii) the amount of any Company liabilities assumed by such Member or which are secured by any Company property distributed to such Member. 7.10 General Decreases. The Capital Account of a Member shall be decreased by (i) the amount of money and the Gross Asset Value of property distributed by the Company to the Member, (ii) the amount of Losses allocated to the Member and items of deduction specially allocated to the Member, and (iii) the amount of any liabilities of such Mernber assumed by the Company or which are secured by property contributed by such Mernber to the Company. 7 .ll Transfer of Membership Interest. In the event all or a portion of an interest in the Company is transferred in accordance with the terms of this Agreernent, the transferee of the Membership Interest or an Economic Interest therein shall succeed to the Capital Account relating to the Membership Interest or Economic Interest transferred. 7.12 Oil and Gas Properties. The Capital Accounts of all Members shall be adjusted for depletion based either on simulated or actual depletion as may be determined by the Managers, and gain or loss with respect to any oil or gas properties of the Company pursuant to the requirements of Reg. $$ 1.704-l(b)(2)(iv)(k)(2) and (k)(3). 7.13 Modifications. In the event the Managers shall determine that it is prudent to modiff the manner in which the Capital Accounts, or any decreases or increases thereto (including, without limitation, decreases or increases relating to liabilities that are secured by contributed or distributed property or that are assumed by the Company or the Mernbers), are computed in order to comply with the Treasury Regulations, the Managers may make such modification, provided that it is not likely to have a material effect on the amounts distributable to any Member upon the dissolution ofthe Company. The Managers also shall (i) make any adjustments that are necessary COMPANY AGREEMENT App.A PAGE 004129 or appropriate to maintain equality between the Capital Accounts of the Mernbers and the amount of Company capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Reg. $ 1.704-l(b)(2xivxg), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreernent not to comply with Reg. $ 1.704-1(b). 7.14 Restoration of Deficit Capital Accounts. ln the event any Member has a deficit balance in such Member's Capital Account upon liquidation of the Member's interest in the Company after making all adjustments thereto, such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any Person for any pu{pose whatsoever. 7.15 Loans From Mernbers. Loans by a Mernber to Company shall not be considered Capital Contributions. If any Member in its sole election loans funds to Company, (i.e., a cash advance in excess of the amounts required hereunder to be contributed by him or her to the capital of Company) which the Member elects to be charaeteized as a loan instead of a Capital Contribution, the making of such loan shall not result in any increase in the amount of the Capital Account of such Member. The amount of any such loan shall be a debt of Company to such Mernber, shall bear interest at a fluctuating rate of interest equal to the lesser of (a) ten percent O0%) per annum or (b) two percent (2%) in excess of the prime rate announced from time to time by Wall Street Journal, Money Rate Section or any successor thereof (but in no event higher than the maximum legal contractual rate permitted by law), and shall be payable or collectible only out of Company assets in accordance with the terms and conditions upon which such advances are made. The repayrnent of loans from a Mernber to Company upon liquidation shall be subject to the order of priority set forth in Section 10.2 hereof. 7.16 No Third Party Beneficiaries. The provisions of this Agreement regarding Class A Capital Contributions or loans by Monbers are solely for the benefit of the Members and are not enforceable by any creditor of Company or any other third parties, including, but not limited to, a receiver or a trustee in bankruptcy. ARTICLE VIII ALLOCATIONS, DISTRIBUTIONS, ELECTIONS A}[D REPORTS 8.1 Allocations of Profits and Lossgs. One hundred percent (100%) of the Profits and Losses of Company for each Fiscal Year shall be allocated among the Members in proportion to their respective percentage of Membership Interest in Company (the "General Allocation of Profits and Losses"). The General Allocation of Profits and Losses shall be subject to the limitations and special allocations contained in this Article VIII in the following order: (i) first to the Regulatory Special Allocations, if applicable, and (ii) second to the to the Special Curative Allocations. Any credits available for federal and state income tax purposes shall be allocated among the Mernbers in the same manner. 8.2 Allocations for Federal Tax Purposes. All Company income, gains, deductions, losses and credits for federal income tax purposes shall be allocated among the Members in the COMPANY AGREEMENT App.APAGE 004230 same manner as Profits and Losses are allocated under this Agreanent to the extent permitted by law and subject to the provisions of this Agreement. 8.3 Rezulatory Special Allocations. Notwithstanding the General Allocation of Profits and Losses, the provisions of this Section (collectively referred to as the "Rezulatory Special Allocations") shall be applicable to all Company allocations of Profits and Losses for each Fiscal Year in the following order: (a) Minimum Gain Chareeback Allocations. Except as otherwise provided in Reg. $ 1.704-2(D, if there is a net decrease in Company Minimum Gain during any Company Fiscal Year, each Mernber shall be specially allocated iterns of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Reg. $ 1.70a-2G)(2). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Reg. $$ 1.704-2(f)(6) and 1.704-2fr)(2). This Section 8.3(a) is intended to comply with the minimum gain chargeback requirement in Reg. $ 1.704-2(f) and shall be interpreted consistently therewith. O) Mernber Nonrecourse Debt Minimum Gain Chargeback Allocations. Except as otherwise provided in Reg. $ 1.704-2(D(4), if there is a net decrease in Member Minimum Gain attributable to a Mernber Nonrecourse Debt during any Company Fiscal Year, each Member who has a share of the Mernber Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Reg. $ 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member's share of the net decrease in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Reg. $ 1.704- 2(1)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Reg. $$ 1.704-2(i)(4) and 1.704-20)(2). This provision is intended to comply with the minimum gain chargeback requironent in Reg. 5 1.704-2(i)(a) and shall be interpreted consistently therewith. (c) Oualified Income Offset Allocations. In the event any Member unexpectedly receives any adjustments, allocations or distributions described in Reg. $$ 1.704-1(bX2XiD(dX4), (dX5) or (d)(6), items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Menrber as quickly as possible, provided that an allocation pursuant to this Section 8.3(c) shall be made only if and to the extent that any such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Agreement have been tentatively made as if this Section 8.3(c) was not in this Agreement. The allocation contained in this Section 8.3(c) shall be referred to herein as the "Qualified Income Offset Allocation." This provision is intended to be a "qualified income offset" as that temr is used in Reg. $ 1.70+1(bx2(iixd) and shall be interpreted consistently therewith. COMPANY AGREEMENT App.APAGE 00433I (d) Gross Income Allocations. In the event any Member has aCapital Account deficit at the end of any Company Fiscal Year which is in excess of the sum of (1) the amount such Member is obligated to restore (pursuant to the terms of such Mernber's promissory note payable to the Company or otherwise), and (2) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Reg. $$ 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 8.3(d) shall be made only if and to the extent that any such Member would have a Capital Account deficit in excess of such sum after all other allocations provided for in this Agreernent have been tentatively made as if the Qualified Income Offset Allocations and this Section 8.3(d) were not in this Agreernent. (e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year or other periods shall be allocated among the Members in proportion to their respective Percentage Interests. (0 Member Nonrecourse Deductions. Any Mernber Nonrecourse Deductions for any Fiscal Year or other period shall be allocated to the Members who bear the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Reg. $ 1.704-2(i)(l). (g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734b) or 743@) of the Code is required, pursuant to Reg. $$ 1.704-1(b)(2)(iv)(m)(2) or (m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Mernber in complete liquidation of its interest in'the Company, the amount of such adjustrnent to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated to the Members in accordance with their Percentage Interests (in the event that Reg. $ 1.704-1O)(2)(iv)(m)(2) applies), or to the Members to whom such distribution was made (in the event that Reg. $ 1.704-l(b)(2)(iv)(m)(4) applies). 8.4 Special Curative Allocations. The Regulatory Special Allocations are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Special Allocations shall be offset either with other Regulatory Special Allocations or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section. Therefore, notwithstanding any other provision of this Agreanent (other than the Regulatory Special Allocations), the Managers shall make such offsetting qpecial allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Menrber's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Special Allocations were not part of this Agreernent and all Company items were allocated among the Members in accordance with the General Allocation of Profits and Losses. In exercising their discretion under this Section, the Managers shall take into account future Regulatory Special Allocations under Section 8.3(a) and Section 8.3(b) that, although not yet made, are likely to offset other Regulatory Special Allocations previously made under Section 8.3(e) and Section 8.3(fl. The provisions of this Section shall be referred to as the COMPANTY AGREEMENT App.APAGE 004432 "Special Curative Allocations." 8.5 Special Allocation of Gain or Loss on Contributed Property. In accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Mernbers so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value at the time of contribution. In the event the Capital Accounts of the Members are adjusted due to a revaluation of Company property, subsequent allocations of income, gain, loss, and deduction with respect to such property shall take account of any variation between the adjusted basis of such property for federal income tax purposes and its fair market value in the same manner as under Section 70a@) of the Code and the Treasury Regulations thereunder. 8.6 Recapture Items. Anyportion of any income or gain attributable to the sale or other disposition of any depreciable Company property required to be recaptured as ordinary income shall, to the maximum extent possible in accordance with Section 704 of the Code and the Treasury Regulations thereunder, be allocated among the Members for tax purposes in the same ratio as the deductions grving rise to such recapture were allocated. Any recapfure of tax credit shall be allocated among the Members in accordance with Reg. $ 1.704-l(b)(4)(ii). 8.7 Allocations Within a Fiscal Year. For purposes of determining the Profits, Losses or any other iterns allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Managers using any permissible method under Section 706 of the Code and the Treasury Regulations thereunder. (a) Change or Transfer of Membership lnterest. If the Mernbership Interest of a Mernber changes or is transferred in compliance with the terms of this Agreement during a Fiscal Year of the Company, the change or transfer shall be deemed to be effective as of the end of the month in which such change or transfer occurs. Income, gain, losses and deductions recognized by the Company during such Fiscal Year shall be allocated between the Mernber and the assignee on the basis of the number of months the Mernber or its assignee owned the Membership Interest during the Fiscal Year unless the assignee and the Member agree otherwise and such agreement is approved by the Managers in their discretion. (b) Cash Basis Items. In the event the Company adopts the cash receipts and disbursements method of accounting, then a portion of any allocable cash basis iton, as defined in Section 706(d) of the Code, shall be assigned to each day of the period to which such item is attributable, and the portion assigned to any such day shall be allocated among the Meffrbers in proportion to their Percentage Interests at the close of such day. In the event all or a portion of a cash basis item is attributable to any period before or after the current tax year, it shall be allocated or capitalized as provided in Section 706(b) of the Code. 8.8 Distributions of Cash Available for Distribution. Subject to Section 3.8 and unless there has been a Dissolution Event, Distributions of the Cash Available for Distribution of the Company shall be determined and distributed, at such times as the Managers may determine that funds are available, but no less often than annually, to the Members in accordance with their COMPANIY AGREEMENT App.APAGE 004533 Percentage Interests. 8.9 Distributions Upon Liquidation: Upon a Dissolution Event, the net assets, if any, of the Company and any cash proceeds from the liquidation of any such assets, shall be applied, and Distributions shall be made, as follows: (a) Creditors First, to the payment of or provision for all debts, liabilities and obligations of the Company to any Person (including Members who are creditors of the Company), all in the priority provided for in the relevant sections of the BOC, and to the payment of the expenses of liquidation; O) Capital Accounts. Finally, to the Members in accordance with their positive Capital Account balances. (c) Compliance With Agreement. In the event the Company is "liquidated" within the meaning of Reg. $ 1.704-1(b)(2)(ii)(g), distributions provided herein shall be made in compliance with Reg. $ 1.704-l(bX2XiiXbX2). 8.10 Records and Reports. At the expense of Company, the Managers shall maintain records and accounts of all operations and expenditures of Company. At a minimum, Company shall keep at its principal place of business the following records: (a) A current list that states (i) The name and mailing address of each Mernber; and (ii) The Membership Interest owned by each Member; (b) Copies of the federal, state and local information or income or franchise tax returns for each of Company's six (6) most recent tax years; (c) A copy of the Certificate of Formation and this Agreement, all amendments or restatements, executed copies of any powers of attorney, and copies of any document that creates, in the manner provided by the Certificate of Formation or this Agreement, classes or groups of Mernbers; (d) Correct and complete books and records of account of Company; (e) Records of all proceedings and actions taken by the Manbers; and (D Any other books, records or documents required by the Boc or other applicable law 8.1 1 Retums and Other Elections. The Managers shall cause the preparation and timely filing of all tax retums required to be filed by Company pursuant to the Code and all other tax returns deemed necessary and required in each jurisdiction in which Company does business. All COMPANY AGREEMENT App.APAGE 004634 elections permitted to be made by Company under federal or state laws shall be made by the Manager. 8.12 Records Required by BOC: Rieht of Inspection. (a) Records Required. During the term of Company and for a period of six (6) years thereafter, the Managers, at the expense of Company, shall maintain in Company's principal place of business hereof all books, records and accounts of Company, including, without limitation, a current list of the names, addresses and Interests held by each of the Mernbers (including the dates on which each of the Members became a Member), copies of federal, state and local information or income or franchise tax returns for each of Company's six (6) most recent tax years, copies of this Agreement and the Certificate of Formation, including all amendments or restatements of each, and correct and complete books and records of account of Company, records of all proceedings and actions taken by the Mernbers and Managers and any other books, records or documents required by the BOC or other applicable law. All such books, records and accounts shall be kept separate and distinct from all other books and records of any other entity. O) Right of Inspection. On not less than two (2) Business Days' notice a Mernber or an Assignee of a Member's Interest (an "Elieible Pergon") may examine and copy in person or by the Eligible Person's representative, at the Eligible Person's expense, all books, records and accounts of Company. Upon written request by any Eligible Person made to the Managers at the address of Company's principal place of business hereof, Company shall provide to the Eligible Person without charge true copies of (i) this Agreement and the Certificate of Formation and all amendments or restatements of each, and (ii) any of the tax returns of Company described above. 8.13 Tax Refums and lnformation. The Managers shall prepare or cause to be prepared all federal, state and local income and other tax returns that Company is required to file. Within the shorter of (a) such period as may be required by applicable law or regulation, or (b) seventy- frve (75) days after the end of each calendar year, the Managers shall send or deliver to each Person who was a Member at any time during such year such tax information as shall be reasonably necessary for the preparation by such Person of his federal income tax return afld state income and other tax returns. 8.14 Delivery of Financial Statements to Members. As to each Fiscal Year of Compmy, the Managers shall send to each Member a copy of (a) a balance sheet of Company as of the end of the Fiscal Year, (b) an income statement of Company for such year, and (c) a statement showing the revenues distributed by Company to Members in respect of such Fiscal Year. Such financial statements shall be delivered by no later than ninety (90) days following the end of the Fiscal Year to which the statements apply. Unless a Member requests in writing prior to the end of the Fiscal Year to which the financial statements apply that the financial statements shall be audited, such statements need not be audited. ARTICLE IX CONFIDENTIALITY COMPANTY AGREEMENT App.APAGE 004735 9.1 Confidentiality of Information. Each Member shall be entitled to receive all information concerning Company and its business under the circumstances and subject to the conditions stated in this Agreement and the BOC. The Members agree, however, that due to contractual obligations, business concerns, or other considerations, that certain information regarding the business, affairs, Company property, and financial condition of Company shall be kept confidential and not provided to anyone other than other Mernbers, except as set out herein below. In addition, the Mernbers acknowledge that they may receive information regarding Company in the nature of trade secrets or that otherwise is confidential, the release of which may be damaging to Company or Persons with which it does business. Each Member shall hold in strict confidence any information it receives regarding Company that is identified as being confidential (and if that information is provided in writing, that is so marked) and may not disclose it to any Person other than another Mernber, except for disclosures compelled by law, or disclosures made to advisers or representatives of the Member (if they have agreed to be bound by the provisions of this Section). Mernbers agree that the provisions of this Section may be enforced by specifi c performance. ARTICLE X WINDING UP AND TERMINATION l0.l Windine Up. (a) Company shall be wound up upon the first of the following to occur: (D The unanimous written agreement of the Class A Members to wind up Company; (ii) The entry of a judicial order to wind up Company; or (iii) The occurrence of any other event that causes the winding up of a limited liability company under the BOC. (b) Upon winding up of Company, the business and affairs of Company shall terminate, and the assets of Company shall be liquidated under this Article X. (c) The winding up of Company shall be effective as of the day on which the event occurs gtving rise to the winding up, but Company shall not terminate until there has been a winding up of Company's business and affairs, and the assets of Company have been distributed as provided in Section 10.2 hereof. (d) Upon the winding up of Company, the Managers may cause any part or all of the assets of Company to be sold in such manner as the Managers shall upon written agreernent of the Managers determine in an effort to obtain the best prices for such assets; provided, however, that the Managers may distribute assets of, Company in kind to the Members to the extent practicable. COMPANY AGREEMENT App.APAGE 004836 (e) The death, insanity, retirernent, resignation, termination, withdrawal, bankruptcy, legal incapacity or termination of any Mernber shall not terminate Company if there is at least one (l) remaining Mernber. If there is not one (1) remaining Mernber, then the successors in interest to a Mernber's Mernbership lnterest (the Assignees) shall automatically be admitted as Members and Company shall not be wound up and terminated. 10.2 Liquidation. Company shall be wound up and liquidated as quickly as circumstances will allow. The assets of Company, to the extent thereof, shall be applied to Company liabilities in the following order: (a) To pay or provide for all amounts owing by Company to creditors other than Members in the order of priority as provided by law, and for expenses of winding up. (b) To pay or provide for all amounts owing by Company to Members other than for capital and profits. (c) To pay or provide for all amounts owing by Company to the Members, on a pro rata basis, for capital and for profits, as follows: (i) The Mernbers' Capital Accounts shall be adjusted as if the assets of Company were sold for an amount as determined by unanimous agreement among the Members or, failing unanimous agreement, the purchase price and the gain or loss therefrom allocated to the Mernbers according to Article VIII hereof. (iD Each Member shall be paid an arrrount equal to the amount of each Member's Capital Account. Distributions maybe made in cash or in kind. (iii) Any remaining assets shall be distributed to the Members in cash or in kind pro rata according to their respective Membership Interests; provided, however, that in the event that any Member owes to Company any account payable or debt of any kind at the time of distribution, then to the extent that the Member would be entitled to payment from Company for capital and profits and for other than capital and profits, such account payable or debt shall be distributed in kind to such Member as payment in the full amount of such account payable or debt and applied against the amounts owed by Company to such Member for capital and profits and for other than capital and profits. 10.3 Distributions in Kind. If any assets of Company are distributed in kind, such assets shall be distributed to the Members entitled thereto as tenants-in-common in the same proportions as the Mernbers would have been entitled to cash distributions if such property had been sold for cash and the net proceeds thereof distributed to the Members. ln the event that distributions in kind are made to the Members upon the winding up and liquidation of Company, the Capital Account balances of such Mernbers shall be adjusted to reflect the Members' allocable share of gain or loss which would have resulted if the distributed property had been sold at its fair market value. COMPANY AGREEMENT App.APAGE 004937 10.4 Certificate of Termination. When all liabilities and obligations of Company have been paid or discharged, or adequate provision has been made therefor, and all of the ranaining property and assets of Companyhavebeen distributed to the Members according to their respective rights and interests, the Certificate of Termination shall be executed on behalf of Company by the Managers or an authorized Member and shall be filed with the Secretary of State of Texas, and the Managers and Members shall execute, acknowledge and frle any and all other instruments necessary or appropriate to reflect the winding up and termination of Company. ARTICLE XI MISCELLAI\EOUS PROVISIONS I1 .l Notices. Any notices, claims or demands which any party is required or may desire to give to another under or in conjunction with this Agreement shall be in writing, and shall be glven by addressing the same to such other party(ies) at the address set forth on Schedule 1 of this Agreernent, and by: (i) depositing the same so addressed, postage prepaid, first class, certified or registered, in the United States mail (herein referred to as "Mailins"); (ii) overnight delivery by a nationally recognized overnight courier service (e.g. UPS, Federal Express); (iii) delivering the same personally to such other party(ies); or (iv) transmitting by facsimile and Mailing the original. Any notice shall be deerned to have been given three (3) U.S. Post Offrce delivery days following the date of Mailing; one day after timely delivery to an overnight courier; if by personal delivery, upon such delivery; or if by facsimile, the day of transmission if made within customary business hours, or if not transmitted within customary business hours, the following business day. Except as otherwise provided in this Agreement, any notice to Company shall be made to the registered agent at the registered office specified in this Agreernent with a copy to the other parties hereto. Any party may change the address or facsimile telephone number for notices to be sent to it by written notice delivered pursuant to the terrns of this Section I l.l. ll.2 Waiver of Notice. Whenever, by statute, the Certificate of Formation or this Agreernent, notice is required to be given to any Mernber or Manager, a waiver thereof in writing signed by the Person or Persons entitled to such notice, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Manager or Member at a meeting shall constitute a waiver of notice of such meeting, except where a Manager or Member attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. 11.3 Application of Texas Law. This Agreement and the application or interpretation hereof shall be governed exclusively by the laws of the State of Texas, and specifically the BOC. Venue for all matters pertaining to the Company shall be subject to the courts of Grapevine, Tarrant County, Texas. ll.4 No Action for Partition. No Member shall have any right to maintain any action for partition with respect to the property of Company. 11.5 Headings and Sections. The headings in this Agreement are inserted for convenience only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Agreement or any provision hereof. Unless the context requires otherwise, COMPANY AGREEMENT App.APAGE 005038 all references in this Agreement to Sections or Articles shall be deemed to mean and refer to Sections or Articles of this Agreement 11.6 Attorneys' Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and all other costs of litigation from the other party, which amounts may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose, and which amounts shall be in addition to any other relief which may be awarded. ll.7 Power of Attomey. Each Member hereby irrevocably constitutes and appoints the Managers as its attorney-in-fact, with full power of substitution and resubstitution, in the Member's name, to execute, consent to, swear to, acknowledge, deliver, record and file the following: (a) the Certificate of Formation and any amendments to such Certificate of Formation that the Managers deem appropriate, as well as any other instruments required by the laws of any state that the Managers deern appropriate to qualiff the Company to conduct or continue to conduct business in such state; O) any other instrument relating to the qualification or registration of the Company that the Managers deem appropriate; (c) all instruments required to effect the dissolution and termination of the Company including the execution and filing of Certificate of Termination with the Secretary of State as required by the BOC; (d) all reports, forms, and schedules that the Managers determine are required to be filed with any govemmental body, agency or instrumentality in connection with any Company activity; and (e) any other instrument that the Managers deem necessary and appropriate with respect to the business of the Company. This grant of the Power of Attorney is coupled with an interest and is irrevocable, and will expressly survive the death, dissolution, legal disability, incompetency, bankruptcy, retirement or withdrawal of any Member or the assignment of all or any portion of any Member's Monbership Interest. 11.8 Amendment of Certificate of Formation and this Asreefirent. Except as otherwise expressly set forth in this Agreonent, the Certificate of Formation of Company and this Agreement may be amended, supplanented or restated only upon the unanimous written consent of the Members. Upon obtaining the approval of any amendment to the Certificate of Formation, the Managers shall cause a Certificate of Amendment in accordance with the BOC to be prepared, and such Certificate of Amendment shall be executed by no less than one authorized Manager and shall be filed in accordance with the BOC. COMPANY AGREEMENT App.A PAGE 0051 39 I1.9 Numbers and Gender. Where the context so indicates, the masculine shall include ferninine and neuter, and the neuter shall include the masculine and feininine, the singular shall include the plural. 11.10 Bindine Effect. Except as herein otherwise provided to the contrary, this Agreement shall be binding upon and inure to the benefit of the Members, their distributees, heirs, legal representatives, executors, administrators, successors and permitted assigns. 11.11 Counteroarts. This Agreement may be executed in multiple counterparts, each of which shall be deerned to be an original and shall be binding upon the Member who executed the same, but all of such counterparts shall constitute the same Agreernent. ll.l2 Entire Asreement. This Agreement contains the entire agreement of the parties with respect to the transactions contemplated herein, and supersedes and replaces any prior oral or written agreements with respect to such transactions. 11.13 Lesal Construction. In case any one or more of the provisions contained in this Agreanent shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invaliditS illegality, or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. ll.l4 Execution of Additional Documents. Each Member, and its successors and permissible assigns, shall execute and deliver such other and further documents and instruments and take such further action as may be necessary or desirable to effectuate, perform and carry out the provisions of this Agreernent and the transactions contemplated herein, and to comply with all laws which may be applicable to the Company, its properties and activities. [SrcxnunE PAGE FoLLowsJ COMPA}.IY AGREEMENT App.APAGE 005240 IN WITNESS WHEREOE, the undersigned, being all the Mernbers and Managers of Company, do hereby agree to be bound by and to perform all of the terms and provisions set forth in this Agreement effective as of the date first above written. MANAGERS: R. Michael Jeffrey Sebastian CLASS A MEMBERS: 41",^KDr** Thomas R. Michael Jeffrey Sebastian CLASS B MEMBERS: Thomas R. Durant THE DURANT C DYNASTY TRUST By: 4 Trustee COMPANY AGREEMENT App.APAGE 00534I SCHEDULE 1 NAMES, INITIAL CAPITAL CONTRIBUTIONS AND MEMBERSHIP INTERESTS OF THE MEMBERS OF CLASSIC CHEVROLET WEST HOUSTON, LLC Members Initial Capital Contribution Membership Interest Thomas R. Durant $ Class A Membership 1101 W. State Highway ll4 Interest; 0.49% of Grapevine, Texas 76051 Membership Interests q Class A Membership Michael Jeffiey Sebastian 31 15 Southwest Freeway Interest; 0.51%o of Sugarland, Texas 77478 Membership Interests Michael Jeffrey Sebastian s C1ass B Membership l3 I 15 Southwest Freeway Interest; 39.49o/o of Sugarland, Texas 77478 Membership Interests Thomas R. Durant $ Class B Membership ll0l W. State Highway ll4 Interest 0.ll% of Grapevine, Texas 76051 Membership Interests The Durant Classic Dynasty Trust ( Class B Membership I101 W. State Highway 114 Interest; 59.40% of Grapevine, Texas 76051 Membership Interests SCHEDULE I TO COMPANYAGREEMENT PAGE SCHI-I App.A 0054 Z:\dfrvjxw\CllENTS\Durant\Tomg0l9\Target AN Hwy6\Entity Documents\CLASSSIC CHEVROLET WEST HOUSTON LlC\Classic Chevrolet Company Agreernent.docx Exhibit 2 App.A 0055 App.A 0056 App.A 0057 App.A 0058 App.A 0059 App.A 0060 App.A 0061 App.A 0062 App.A 0063 App.A 0064 App.A 0065 App.A 0066 App.A 0067 App.A 0068 App.A 0069 App.A 0070 App.A 0071 App.A 0072 App.A 0073 App.A 0074 App.A 0075 App.A 0076 App.A 0077 App.A 0078 App.A 0079 App.A 0080 App.A 0081 App.A 0082 App.A 0083 Exhibit 3 App.A 0084 App.A 0085 App.A 0086 Filed 9/18/2024 4:47 PM Beverley McGrew Walker District Clerk Fort Bend County, Texas Xenia Carbajal NO. 24-DCV-318087 IN THE MATTER OF § IN THE DISTRICT COURT THE MARRIAGE OF § § TIFFANY LYNN SEBASTIAN § AND § MICHAEL JEFFREY SEBASTIAN § § AND IN THE INTEREST OF § A CHILD § 387TH JUDICIAL DISTRICT _________________________________ § § CLASSIC CHEVROLET SUGAR LAND, LLC, § CLASSIC CHEVROLET WEST HOUSTON LLC, § CLASSIC ELITE BUICK GMC, INC, § 16835 CADET PARTNERS, LLC, § Co-Respondents § FORT BEND COUNTY, TEXAS COUNTERPETITION FOR DIVORCE 1. Discovery Level Discovery in this case is intended to be conducted under level 2 of rule 190 of the Texas Rules of Civil Procedure. 2. Objection to Assignment of Case to Associate Judge Counterpetitioner objects to the assignment of this matter to an associate judge for a trial on the merits or presiding at a jury trial. 3. Parties This suit is brought by MICHAEL JEFFREY SEBASTIAN, Counterpetitioner. The last three numbers of MICHAEL JEFFREY SEBASTIAN's driver's license number are The last three numbers of MICHAEL JEFFREY SEBASTIAN's Social Security number are TIFFANY LYNN SEBASTIAN is Petitioner/Counterrespondent. CLASSIC CHEVROLET SUGAR LAND, LLC is a Co-Respondent. CLASSIC CHEVROLET WEST HOUSTON, LLC is a Co-Respondent. CLASSIC ELITE BUICK GMC, INC is a Co-Respondent. 16835 CADET PARTNERS, LLC is a Co-Respondent. Co-Respondents CLASSIC CHEVROLET SUGAR LAND, LLC, CLASSIC CHEVROLET WEST HOUSTON, LLC, CLASSIC ELITE BUICK GMC, INC and 16835 CADET PARTNERS, LLC are collectively referred to as the “Classic Dealerships”) Sebastian – Counterpetition for Divorce Page 1 of 7 App.A 0087 Exhibit 4 4. Domicile Counterpetitioner has been a domiciliary of Texas for the preceding six-month period and a resident of this county for the preceding ninety-day period. 5. Service Tiffany Lynn Sebastian is the Petitioner/Counterrespondent in this divorce action. Service of this document may be had in accordance with Rule 21a, Texas Rules of Civil Procedure, by serving her attorneys of record, Bobby K. Newman, 3355 West Alabama, Suite 444, Houston, Texas 77098, and Randall B. Wilhite, 515 Post Oak Blvd, Suite 800, Houston, Texas 77027, via e- service as set forth below: Classic Chevrolet Sugar Land, LLC is a limited liability company in Texas and can be served with process through its registered agent, Thomas R. Durant, 1101 West State Highway 114, Grapevine, Texas 76051. Classic Chevrolet West Houston, LLC, is a limited liability company in Texas and can be served with process through its registered agent, Thomas R. Durant, 1101 West State Highway 114, Grapevine, Texas 76051. Classic Elite Buick GMC, Inc is a Texas corporation and can be served with process through its registered agent, Thomas R. Durant, 1101 West State Highway 114, Grapevine, Texas 76051. 16835 Cadet Partners, LLC is a limited liability company in Texas and can be served with process through its registered agent, Thomas R. Durant, 1101 West State Highway 114, Grapevine, Texas 76051. 6. Protective Order Statement No protective order under title 4 of the Texas Family Code, protective order under subchapter A of chapter 7B of the Texas Code of Criminal Procedure, or order for emergency protection under Article 17.292 of the Texas Code of Criminal Procedure is in effect in regard to a party to this suit and no application for any such order is pending. 7. Dates of Marriage and Separation The parties were married on or about July 4, 1999, and ceased to live together as spouses. 8. Grounds for Divorce The marriage has become insupportable because of discord or conflict of personalities between Counterpetitioner and Counterrespondent that destroys the legitimate ends of the marriage relationship and prevents any reasonable expectation of reconciliation. Petitioner/Counterrespondent is guilty of cruel treatment toward Counterpetitioner/Respondent of a nature that renders further living together insupportable. Sebastian – Counterpetition for Divorce Page 2 of 7 App.A 0088 9. Children of the Marriage At the time of this filing, there is no child under eighteen years of age or otherwise entitled to support who was born or adopted of this marriage, and none is expected as the child who was initially before the court is not over the age of eighteen and has graduated from high school. 10. Division of Community Property MICHAEL JEFFREY SEBASTIAN requests the Court to divide the estate of MICHAEL JEFFREY SEBASTIAN and TIFFANY LYNN SEBASTIAN in a manner that the Court deems just and right, as provided by law. MICHAEL JEFFREY SEBASTIAN should be awarded a disproportionate share of the parties' estate for the following reasons, including but not limited to: a) fault in the breakup of the marriage; b) community indebtedness and liabilities; c) tax consequences of the division of property; d) earning power, business opportunities, capacities, and abilities of the spouses; e) nature of the property involved in the division; f) wasting of community assets by his spouse; g) attorney's fees to be paid; and h) constructive fraud committed by a spouse. 11. Breach of Fiduciary Duty Petitioner, TIFFANY LYNN SEBASTIAN, as Respondent’s spouse, had a fiduciary relationship with and a fiduciary duty to Respondent, MICHAEL JEFFREY SEBASTIAN. As a result of their fiduciary relationship, Respondent reposed a special confidence in Petitioner, and Petitioner had a duty in equity and good conscience to act in good faith and with due regard for Respondent’s interests. TIFFANY LYNN SEBASTIAN, in violation of her fiduciary duty to Respondent, has breached her duty to Respondent on or around June 2024 and continuing thereafter, TIFFANY LYNN SEBASTIAN, without justification or excuse, willfully and intentionally breached her fiduciary duty by interfering with an existing contract between MICHAEL JEFFREY SEBASTIAN and the Classic Dealerships, including causing a triggering event under a Buy-Sell Agreement with the Classic Dealerships that affects the Community’s business interest in the Classic Dealerships . This action proximately resulted in damages to MICHAEL JEFFREY SEBASTIAN for which MICHAEL JEFFREY SEBASTIAN now seeks relief. Those damages include loss of compensation, loss of profits, loss of equity, mental anguish, and loss of reputation. TIFFANY LYNN SEBASTIAN acted with malice in engaging in this conduct, thus entitling MICHAEL JEFFREY SEBASTIAN to exemplary damages within the jurisdictional limits of this Court. MICHAEL JEFFREY SEBASTIAN prays for judgment against TIFFANY LYNN SEBASTIAN in a sum within the jurisdictional limits of this Court for his actual damages as alleged, for exemplary Sebastian – Counterpetition for Divorce Page 3 of 7 App.A 0089 damages, for prejudgment and postjudgment interest as allowed by law, for costs of court, and for general relief. 12. Tortious Interference with Business Relations On or around June 2024 and continuing thereafter, TIFFANY LYNN SEBASTIAN, without privilege or justification, engaged in conduct that intentionally and willfully interfered with the business relationship of MICHAEL JEFFREY SEBASTIAN and the Classic Dealerships. At the time that conduct occurred, MICHAEL JEFFREY SEBASTIAN had a reasonable expectation of a continuing business relationship with the Classic Dealerships and TIFFANY LYNN SEBASTIAN knew of that reasonable expectation. TIFFANY LYNN SEBASTIAN’s interference with the business relationship induced or caused the termination of this expectancy, including causing a triggering event under a Buy-Sell Agreement with the Classic Dealerships that affects the Community’s business interest in the Classic Dealerships. This action proximately resulted in damages to MICHAEL JEFFREY SEBASTIAN for which MICHAEL JEFFREY SEBASTIAN now seeks relief. Those damages include loss of compensation, loss of profits, loss of equity, mental anguish, and loss of reputation. TIFFANY LYNN SEBASTIAN acted with malice in engaging in this conduct, thus entitling MICHAEL JEFFREY SEBASTIAN to exemplary damages within the jurisdictional limits of this Court. MICHAEL JEFFREY SEBASTIAN prays for judgment against TIFFANY LYNN SEBASTIAN in a sum within the jurisdictional limits of this Court for his actual damages as alleged, for exemplary damages, for prejudgment and postjudgment interest as allowed by law, for costs of court, and for general relief. 13. Wrongful Interference with an Existing Contract On or around June 2024 and continuing thereafter, TIFFANY LYNN SEBASTIAN, without justification or excuse, willfully and intentionally interfered with an existing contract between MICHAEL JEFFREY SEBASTIAN and the Classic Dealerships. This action proximately resulted in damages to MICHAEL JEFFREY SEBASTIAN for which MICHAEL JEFFREY SEBASTIAN now seeks relief. Those damages include loss of compensation, loss of profits, loss of equity, mental anguish, and loss of reputation, as well as loss of value to the Community caused by TIFFANY LYNN SEBASTIAN’s conduct resulting in a triggering event under the Buy-Sell between the Classic Dealerships and the Community well before any expected sale of such interest. TIFFANY LYNN SEBASTIAN acted with malice in engaging in this conduct, thus entitling MICHAEL JEFFREY SEBASTIAN to exemplary damages within the jurisdictional limits of this Court. MICHAEL JEFFREY SEBASTIAN prays for judgment against TIFFANY LYNN SEBASTIAN in a sum within the jurisdictional limits of this Court for his actual damages as alleged, for exemplary Sebastian – Counterpetition for Divorce Page 4 of 7 App.A 0090 damages, for prejudgment and postjudgment interest as allowed by law, for costs of court, and for general relief. 14. Separate Property MICHAEL JEFFREY SEBASTIAN owns certain separate property that is not part of the community estate of the parties, and MICHAEL JEFFREY SEBASTIAN requests the Court to confirm that separate property as MICHAEL JEFFREY SEBASTIAN's separate property and estate. 15. Standing Order Counterpetitioner hereby provides notice to Counterrespondent that effective October 11, 2023, the Fort Bend County District Courts have issued the Standing Order Regarding Temporary Injunctions for the 328th, 387th, and 505th District Courts, of which Standing Order applies in every divorce and every suit affecting the parent-child relationship filed in Fort Bend County, Texas. A true and correct copy of this Standing Order was attached to the Original Petition for Divorce filed by TIFFANY LYNN SEBASTIAN on July 11, 2024, as “Exhibit P-1” and “Exhibit A”, both of which are attached again to this Counterpetition for Divorce and incorporated herein by reference for all intents and purposes. 16. Request for Temporary Orders Concerning Use of Property MICHAEL JEFFREY SEBASTIAN requests the Court, after notice and hearing, for the preservation of the property and protection of the parties, to make temporary orders and issue any appropriate temporary injunctions respecting the temporary use of the parties' property as deemed necessary and equitable, including but not limited to the following: Awarding MICHAEL JEFFREY SEBASTIAN the exclusive use and possession of the residence located at 25510 and 25702 Zion Lutheran Cemetery Road, Tomball, Texas 77375, as well as the furniture, furnishings, and other personal property at that residence, while this case is pending, and enjoining TIFFANY LYNN SEBASTIAN from entering or remaining on the premises of the residence and exercising possession or control of any of this personal property, except as authorized by order of this Court. Awarding MICHAEL JEFFREY SEBASTIAN exclusive use and control of any vehicle titled solely in his name or in his possession and enjoining TIFFANY LYNN SEBASTIAN from entering, operating, or exercising control over any vehicle titled solely in his name or in his possession. Awarding MICHAEL JEFFREY SEBASTIAN exclusive use and control of the yellow Yamaha golf cart currently garaged at 5002 Shiloh Lake Dr., Richmond, Texas 77407, and enjoining TIFFANY LYNN SEBASTIAN from entering, operating, or exercising control over the same. Awarding MICHAEL JEFFREY SEBASTIAN exclusive management and control of the parties’ financial accounts but limited by the standing injunctions of this Court. Awarding MICHAEL JEFFREY SEBASTIAN exclusive management and control of the business interests of the parties in the Classic Dealerships Sebastian – Counterpetition for Divorce Page 5 of 7 App.A 0091 Awarding MICHAEL JEFFREY SEBASTIAN the exclusive use of all credit cards held solely in his name. 17. Attorney's Fees, Expenses, Costs, and Interest It was necessary for MICHAEL JEFFREY SEBASTIAN to secure the services of LAURA D. DALE, a licensed attorney, and E. Michelle Bohreer, a licensed attorney, to prepare and prosecute this suit. To effect an equitable division of the estate of the parties and as a part of the division, judgment for attorney's fees, expenses, and costs through trial and appeal should be granted against Respondent and in favor of MICHAEL JEFFREY SEBASTIAN for the use and benefit of MICHAEL JEFFREY SEBASTIAN's attorney; or, in the alternative, MICHAEL JEFFREY SEBASTIAN requests that reasonable attorney's fees, expenses, and costs through trial and appeal be taxed as costs and be ordered paid directly to MICHAEL JEFFREY SEBASTIAN 's attorney, who may enforce the order in the attorney's own name. MICHAEL JEFFREY SEBASTIAN requests postjudgment interest as allowed by law. 18. Prayer Counterpetitioner MICHAEL JEFFREY SEBASTIAN prays that citation and notice issue as required by law and that the Court grant a divorce and all other relief requested in this petition. Counterpetitioner MICHAEL JEFFREY SEBASTIAN prays for attorney's fees, expenses, and costs as requested above. Counterpetitioner MICHAEL JEFFREY SEBASTIAN prays for general relief and all other relief to which Counterpetitioner is entitled based on the facts or pleadings of this case. Respectfully submitted, LAURA DALE & ASSOCIATES, P.C. _/s/ Laura D. Dale_________________________ LAURA D. DALE (LEAD COUNSEL) State Bar No. 24030270 [email protected] (Eservice only) MARJORIE A. MAXWELL State Bar No. 24060239 [email protected] (Eservice only) 1800 St. James Place, Suite 620 Houston, Texas 77056 Telephone: (713) 600-1717 Facsimile: (713) 600-1718 Attorneys for MICHAEL JEFFREY SEBASTIAN Sebastian – Counterpetition for Divorce Page 6 of 7 App.A 0092 BOHREER LAW FIRM PLLC E. Michelle Bohreer State Bar No. 06717100 Pritesh Soni State Bar No. 24063926 777 Post Oak Blvd., Ste 950 Houston, Texas 77056 Telephone: (832) 856-3006 Facsimile: (832) 856-2891 Emails: [email protected] [email protected] E-service: [email protected] CERTIFICATE OF SERVICE I certify that a true copy of this Counterpetition for Divorce was served in accordance with rule 21a of the Texas Rules of Civil Procedure on the following on September 18, 2024: Bobby K. Newman Bobby K. Newman, P.C. 3355 W. Alabama, Ste 444 Houston, Texas 77098 VIA E-SERVICE: [email protected] Randall B, Wilhite Fullenwider Wilhite, LLP 4265 San Felipe Drive, Suite 1400 Houston TX 77027 VIA E-SERVICE: [email protected] _/s/ Laura D. Dale_________________________ LAURA D. DALE Attorney for MICHAEL JEFFREY SEBASTIAN Sebastian – Counterpetition for Divorce Page 7 of 7 App.A 0093 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Martha Calderon on behalf of Laura Dale Bar No. 24030270 [email protected] Envelope ID: 92187898 Filing Code Description: Counter Claim/Cross Action/Interpleader/Intervention/Third Party Filing Description: Counterpetition for Divorce Status as of 9/19/2024 8:47 AM CST Associated Case Party: TiffanyLynnSebastian Name BarNumber Email TimestampSubmitted Status Bobby Newman [email protected] 9/18/2024 4:47:23 PM SENT Case Contacts Name BarNumber Email TimestampSubmitted Status Randall Wilhite 21476400 [email protected] 9/18/2024 4:47:23 PM SENT App.A 0094 Filed 12/3/2024 6:31 PM Beverley McGrew Walker District Clerk Fort Bend County, Texas Brette Sansom NO. 24-DCV-318087 IN THE MATTER OF § IN THE DISTRICT COURT THE MARRIAGE OF § § TIFFANY LYNN SEBASTIAN § AND § MICHAEL JEFFREY SEBASTIAN § § AND IN THE INTEREST OF § , A CHILD § § § MICHAEL JEFFREY SEBASTIAN and § TIFFANY LYNN SEBASTIAN, § INDIVIDUALLY, ON BEHALF OF THE § SEBASTIAN COMMUNITY ESTATE, § AND DERIVATIVELY ON BEHALF OF § THE CLASSIC DEALERSHIPS, and § 16835 CADET PARTNERS, LLC § Third-Party Plaintiff, § 387TH JUDICIAL DISTRICT § v. § § T. BENTLY DURANT, THOMAS R. § DURANT, and THE DURANT CLASSIC § DYNASTY TRUST § Third-Party Defendants, § § 8100 PARTNERS, LTD., AND § 8100 MANAGEMENT LLC § Nominal Third-Parties. § FORT BEND COUNTY, TEXAS THIRD-PARTY PETITION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW Michael Jeffrey Sebastian, Tiffany Lynn Sebastian, the Classic Dealerships (as defined below), and 16835 Cadet Partners, LLC (collectively, “Third Party Plaintiffs”) and file this Third-Party Petition. In support thereof, Third-Party Plaintiffs would respectfully show unto this Court the following: Exhibit 5 App.A 0095 I. DISCOVERY PLAN 1. Third-Party Plaintiffs intend to conduct discovery under Level 2 of Texas Rule of Civil Procedure 190. II. CLAIM FOR RELIEF 2. Third-Party Plaintiffs seek monetary relief of over $1,000,000 and non-monetary relief under Texas Rule of Civil Procedure 47. III. PARTIES Third-Party Plaintiffs 3. This suit is brought by Michael Jeffrey Sebastian (“Jeff Sebastian”), individually, and as a member of the community estate of Jeff Sebastian and Tiffany Sebastian (the “Sebastian Estate”). Jeff Sebastian is a natural person who resides in Fort Bend County, Texas, and may be served through the undersigned counsel. 4. This suit is also brought by Tiffany Sebastian (“Tiffany Sebastian”), individually, and as a member of the Sebastian Estate. Tiffany Sebastian is a natural person who resides in Fort Bend County, Texas, and may be served through the undersigned counsel. Tiffany Sebastian and Jeff Sebastian are sometimes referred to collectively herein as “the Sebastians.” 5. This suit is additionally brought by the Sebastians derivatively, on behalf of the following entities (collectively, the “Classic Dealerships”) against the Third-Party Defendants named herein. a. CLASSIC CHEVROLET SUGAR LAND, LLC, a Texas limited liability company whose principal office is located at 1101 State Highway 114, Grapevine, Texas b. CLASSIC CHEVROLET WEST HOUSTON, LLC, a Texas limited liability company whose principal office is located at 1101 State Highway 114, Grapevine, Texas 76099. c. CLASSIC ELITE BUICK GMC, INC., a Texas corporation whose principal office is located at 1101 State Highway 114, Grapevine, Texas 76099. 6. This suit is additionally brought by the Sebastians derivatively, on behalf of 16835 Cadet Partners, LLC (“Cadet”), a Texas limited liability company whose principal office is located at 1101 State Highway 114, Grapevine, Texas 76099. Third-Party Defendants 7. T. Bently Durant (“Bently Durant”) is Third-Party Defendant herein and a natural person who is a resident of Tarrant County, Texas. Bently Durant may be served at 1101 State Highway 114, Grapevine, Texas 76099, or wherever he may be found. 8. Thomas R. Durant (“Tom Durant”) is a Third-Party Defendant herein and a natural person who is a resident of Tarrant County, Texas. Bently Durant may be served at 1101 State Highway 114, Grapevine, Texas 76099, or wherever he may be found. 9. The Durant Classic Dynasty Trust (“Dynasty Trust”) is a Third-Party Defendant and a Texas trust. The Dynasty Trust may be served with process by serving its Trustee, Marin “Mark” Escamilla, at 1101 State Highway 114, Grapevine, Texas 76099, or wherever Trustee may be found. Bently Durant, Tom Durant, and the Dynasty Trust are sometimes collectively referred to herein as “the Durant Defendants.” Nominal Third Parties 1 The other Member of Classic Chevrolet Sugar Land, LLC were/are Defendants Bently Durant and the Durant Classic Dynasty Trust. 2 On January 1, 2018, Jeff Sebastian (and the Sebastian Estate) purchased a 30% Class A Membership Interest, and a 29.7% Class B Membership Interest, in Classic Chevrolet Sugar Land, LLC. 5 Buy-Out Agreement, Section III.6. 6 The Sebastians received separate loans from Defendant Dynasty Trust in varying amounts necessary to fund the initial purchases of their member shares in Cadet and each of the Classic Dealerships. The Buy- Sell Agreement dictates that the Sebastians are entitled to receive fair market value for their membership interests in Cadet and each of the Classic Dealerships in the event of a buy-out unless the associated purchase loan remains unpaid. In the event a particular purchase loan remains unpaid upon the exercise of a buy-out option, the membership shares that were purchased with such funds are only entitled to capital contribution cash-out. X. RULE 193.7 NOTICE 45. Pursuant to Texas Rule of Civil Procedure 193.7, the Third Party Plaintiffs’ hereby give notice to all parties that any documents produced may be used against the party producing the documents at any pretrial proceeding and/or trial of this matter without necessity of authenticating the documents. PRAYER For these reasons, the Sebastians, Cadet, and the Classic Dealerships pray that the Court, after notice and hearing or trial, render judgment, jointly and severally, against the Durant Defendants for the following: a. Actual damages; b. Consequential damages; c. A declaration in accordance with Section VI of this Complaint; d. Attorney fees; e. Litigation costs and costs of court; f. Pre-judgment and post-judgment interest; and g. All other relief to which Third Party Plaintiffs may be justly entitled, as law or in equity. Associated Case Party: MichaelJefferySebastian Name BarNumber Email TimestampSubmitted Status Marjorie Maxwell 24060239 [email protected] 12/3/2024 6:31:31 PM SENT Laura DDale [email protected] 12/3/2024 6:31:31 PM SENT Case Contacts Name BarNumber Email TimestampSubmitted Status Randall Wilhite 21476400 [email protected] 12/3/2024 6:31:31 PM SENT Charlotte Rainwater 24007889 [email protected] 12/3/2024 6:31:31 PM SENT Joseph DiCecco [email protected] 12/3/2024 6:31:31 PM SENT John Coselli III [email protected] 12/3/2024 6:31:31 PM SENT Dennis Slate 24029836 [email protected] 12/3/2024 6:31:31 PM SENT Nicholas Ocampo [email protected] 12/3/2024 6:31:31 PM SENT E Service [email protected] 12/3/2024 6:31:31 PM SENT E. Michelle Bohreer [email protected] 12/3/2024 6:31:31 PM SENT Lisa Lim [email protected] App.A 12/3/2024 6:31:31 PM 0110 SENT Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Lisa Lim on behalf of Joseph DiCecco Bar No. 5812520 [email protected] Envelope ID: 94904449 Filing Code Description: Counter Claim/Cross Action/Interpleader/Intervention/Third Party Filing Description: Third-Party Petition Status as of 12/4/2024 11:46 AM CST Case Contacts Lisa Lim [email protected] 12/3/2024 6:31:31 PM SENT Sharon Taylor [email protected] 12/3/2024 6:31:31 PM SENT Pritesh Soni [email protected] 12/3/2024 6:31:31 PM SENT Derek DRollins [email protected] 12/3/2024 6:31:31 PM SENT Joshua HNortham [email protected] 12/3/2024 6:31:31 PM SENT App.A 0111 Filed 12/20/2024 5:37 PM Beverley McGrew Walker District Clerk Fort Bend County, Texas Vanessa Vasquez NO. 24-DCV-318087 IN THE MATTER OF § IN THE DISTRICT COURT THE MARRIAGE OF § § TIFFANY LYNN SEBASTIAN § AND § MICHAEL JEFFREY SEBASTIAN § § AND IN THE INTEREST OF § , A CHILD § § § MICHAEL JEFFREY SEBASTIAN and § TIFFANY LYNN SEBASTIAN, § INDIVIDUALLY, ON BEHALF OF THE § SEBASTIAN COMMUNITY ESTATE, § AND DERIVATIVELY ON BEHALF OF § THE CLASSIC DEALERSHIPS, and § 16835 CADET PARTNERS, LLC § Third-Party Plaintiffs, § 387TH JUDICIAL DISTRICT § v. § § T. BENTLY DURANT, THOMAS R. § DURANT, THE DURANT CLASSIC § DYNASTY TRUST, MICHAEL A. § WARD, 8100 PARTNERS, LTD., 8100 § MANAGEMENT LLC, 8705 § PARTNERS, LTD., and 8705 § MANAGEMENT LLC § Third-Party Defendants. § § FORT BEND COUNTY, TEXAS FIRST AMENDED THIRD-PARTY PETITION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW Michael Jeffrey Sebastian, Tiffany Lynn Sebastian, the Classic Dealerships (as defined below), and 16835 Cadet Partners, LLC (collectively, “Third-Party Plaintiffs”) and file this First Amended Third-Party Petition. In support thereof, Third-Party Plaintiffs would respectfully show unto this Court the following: Interest, and a 29.7% Class B Membership Interest, in Classic Chevrolet Sugar Land, LLC. 3 On November 29, 2019, Jeff Sebastian (and the Sebastian Estate) purchased a 51% Class A Membership Interest, and a 39.49% Class B Membership Interest, in Classic Chevrolet West Houston, LLC. 4 On January 26, 2023, Jeff Sebastian (and the Sebastian Estate) purchased a 51% Class A Membership Interest, and a 19.49% Class B Membership Interest, in Classic Elite Buick GMC, Inc. Count 4 - Conversion 50. All of the preceding paragraphs are incorporated herein as though fully set forth below. 51. The Sebastians are entitled to certain property currently in the Durant Defendants’ possession and control – specifically, owner dividends and distributions from the revenues of Cadet and the Classic Dealerships. The Durant Defendants unlawfully obtained such monies by, without limitation, firing and excluding the Sebastians from Cadet and the Classic Dealerships, cutting their access to the Cadet and Classic Dealership books and records, and diverting/re- allocating millions of dollars owed to the Sebastians back to themselves and/or separate entities that they own and control. The Durant Defendants have additionally demanded that the Sebastians transfer their ownership interests in Cadet and the Classic Dealerships over to them in exchange for a fraction of their contractual and marketable value. 52. The Sebastians are entitled to recover their converted property from the Durant Defendants, as well as their actual and consequential damages caused thereby which exceed $10,000,000. Count 5 – Money Had and Received 53. All of the preceding paragraphs are incorporated herein as though fully set forth below. 54. The Durant Defendants are in receipt and possession of millions of dollars that in equity and good conscience belong to the Sebastians. Particularly, the Durant Defendants obtained such monies from the Sebastians by, without limitation, firing and excluding the Sebastians from Cadet and the Classic Dealerships, cutting their access to the Cadet and Classic Dealership books and records, and diverting/re-allocating millions of dollars owed to the Sebastians back to themselves Associated Case Party: MichaelJefferySebastian Name BarNumber Email TimestampSubmitted Status Marjorie Maxwell 24060239 [email protected] 12/20/2024 5:37:03 PM SENT Laura DDale [email protected] 12/20/2024 5:37:03 PM SENT E. MichelleBohreer [email protected] 12/20/2024 5:37:03 PM SENT Pritesh Soni [email protected] 12/20/2024 5:37:03 PM SENT E. Service [email protected] 12/20/2024 5:37:03 PM SENT Case Contacts Name BarNumber Email TimestampSubmitted Status App.A 0139 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Lisa Lim on behalf of Joseph DiCecco Bar No. 5812520 [email protected] Envelope ID: 95574422 Filing Code Description: Amended Filing Filing Description: First Amended Third-Party Petition Status as of 12/23/2024 8:40 AM CST Case Contacts Name BarNumber Email TimestampSubmitted Status Randall Wilhite 21476400 [email protected] 12/20/2024 5:37:03 PM SENT Charlotte Rainwater 24007889 [email protected] 12/20/2024 5:37:03 PM SENT Joseph DiCecco [email protected] 12/20/2024 5:37:03 PM SENT John Coselli III [email protected] 12/20/2024 5:37:03 PM SENT Dennis Slate 24029836 [email protected] 12/20/2024 5:37:03 PM SENT E Service [email protected] 12/20/2024 5:37:03 PM SENT E. Michelle Bohreer [email protected] 12/20/2024 5:37:03 PM SENT Sharon Taylor [email protected] 12/20/2024 5:37:03 PM SENT Lisa Lim [email protected] 12/20/2024 5:37:03 PM SENT Pritesh Soni [email protected] 12/20/2024 5:37:03 PM SENT Derek DRollins [email protected] 12/20/2024 5:37:03 PM SENT Joshua HNortham [email protected] 12/20/2024 5:37:03 PM SENT App.A 0140 Exhibit 7 App.A 0141 App.A 0142 App.A 0143 App.A 0144 App.A 0145 App.A 0146 App.A 0147 App.A 0148 App.A 0149 App.A 0150 App.A 0151 App.A 0152 App.A 0153 App.A 0154 App.A 0155 App.A 0156 App.A 0157 App.A 0158 App.A 0159 App.A 0160 App.A 0161 App.A 0162 App.A 0163 App.A 0164 App.A 0165 App.A 0166 App.A 0167 App.A 0168 App.A 0169 App.A 0170 App.A 0171 App.A 0172 App.A 0173 App.A 0174 App.A 0175 App.A 0176 App.A 0177 App.A 0178 App.A 0179 App.A 0180 App.A 0181 App.A 0182 App.A 0183 App.A 0184 App.A 0185 App.A 0186 App.A 0187 App.A 0188 App.A 0189 App.A 0190 App.A 0191 App.A 0192 App.A 0193 App.A 0194 App.A 0195 App.A 0196 App.A 0197 App.A 0198 App.A 0199 App.A 0200 App.A 0201 App.A 0202 App.A 0203 App.A 0204 App.A 0205 App.A 0206 App.A 0207 App.A 0208 App.A 0209 App.A 0210 App.A 0211 App.A 0212 App.A 0213 App.A 0214 App.A 0215 App.A 0216 App.A 0217 App.A 0218 App.A 0219 App.A 0220 App.A 0221 App.A 0222 App.A 0223 App.A 0224 App.A 0225 App.A 0226 App.A 0227 App.A 0228 App.A 0229 App.A 0230 App.A 0231 App.A 0232 App.A 0233 App.A 0234 App.A 0235 App.A 0236 App.A 0237 App.A 0238 App.A 0239 App.A 0240 App.A 0241 App.A 0242 App.A 0243 App.A 0244 App.A 0245 App.A 0246 App.A 0247 App.A 0248 App.A 0249 App.A 0250 App.A 0251 Exhibit 8 App.A 0252 Derek D. Rollins 9201 N. Central Expressway A LIMITED LIABILITY PARTNERSHIP Fourth Floor ATTORNEYS & COUNSELORS Dallas, Texas 75231 (214) 780-1400 (Main) (214) 780-1401(Fax) [email protected] February 21, 2025 VIA EMAIL TO [email protected] E. Michelle Bohreer Bohreer Law Firm PLLC 777 Post Oak Blvd. Suite 950 Houston, Texas 77056 RE: Classic Chevrolet West Houston, LLC – Purported Notice of Special Meeting of Managers Ms. Bohreer: I write in response to your client’s purported February 18, 2025 Notice of Special Meeting of Managers (“the Notice”) of Classic Chevrolet West Houston, LLC (“the Company”). The Notice states that it is issued pursuant to Section 3.26 of the Company Agreement, dated as of November 29, 2019 (“the Agreement”). Pursuant to the Notice, Mr. Sebastian apparently intends to convene a purported meeting of the Company Managers on Saturday, February 22, 2025 at 10:30 a.m., at The Law Office of Richard L. Tate, 206 S. 2nd St., Richmond, TX. According to the Notice, the stated purpose of the meeting is (i) the removal of Thomas R. Durant as a Manager pursuant to Section 3.20 of the Agreement; (ii) the appointment of a new Manager if Mr. Durant is removed; (iii) removal of Mr. Durant as the Company President; (iv) appointment of Mr. Sebastian as the Company President; and (v) compensation of the Managers. As you are well aware, on July 22, 2024, a vote of no confidence in Mr. Sebastian’s management of the Company was taken by the members holding a majority in interest in the Company pursuant to that certain BuySell Agreement (“the BuySell”). As a result of the vote of no confidence, Mr. Sebastian was suspended, and then later permanently removed from all positions with the Company, including without limitation as an officer, employee, and Manager of the Company pending the repurchase of his interests in the Company pursuant to the BuySell. These facts were confirmed by you in written correspondence to the Company, Mr. Durant, and others dated September 17, 2024. Accordingly, Mr. Sebastian has no standing to notice or participate in any special meeting of the Company. Indeed, neither Sebastian has the authority to take the proposed actions set forth in the Notice, which require a unanimous vote of the Managers. See Company Agreement, §§ 1.1(bb), 3.14. Furthermore, attendance of all Company Managers is required to meet a Quorum pursuant to section 3.27 of the Company Agreement. Exhibit 9 App.A 0253 Shackelford, McKinley & Norton, LLP Dallas Austin Fort Worth Houston New Orleans Michelle Bohreer, Esq. February 19, 2025 Page 2 For each of the foregoing independent reasons, Mr. Sebastian’s purported attempt notice a special meeting of the Company Managers is ineffective and unauthorized, as are any and all actions that Mr. Sebastian purports to take during any such meeting. Accordingly, Mr. Durant will not be attending the meeting, nor recognizing any purported actions taken during the same. Sincerely, Derek D. Rollins cc: Client Joe DiCecco (via Email) Mitch Little (via Email) Shackelford, McKinley & Norton, LLP App.A 0254 Dallas Austin Fort Worth Houston New Orleans NO. 24-DCV-318087 IN THE MATTER OF § IN THE DISTRICT COURT OF THE MARRIAGE OF § § TIFFANY LYNN SEBASTIAN § AND § MICHAEL JEFFREY SEBASTIAN § § AND IN THE INTEREST OF § , A CHILD § § § MICHAEL JEFFREY SEBASTIAN and § TIFFANY LYNN SEBASTIAN, § INDIVIDUALLY, ON BEHALF OF THE § SEBASTIAN COMMUNITY ESTATE, AND § DERIVATIVELY ON BEHALF OF THE § CLASSIC DEALERSHIPS, and 16835 § CADET PARTNERS, LLC, § Third-Party Plaintiff, § 387TH JUDUCIAL DISTRICT § v. § § T. BENTLEY DURANT, THOMAS R. § DURANT, and THE DURANT CLASSIC § DYNASTY TRUST, § Third-Party Defendants, § § 8100 PARTNERS, LTD., AND § 8100 MANAGEMENT LLC, § Nominal Third-Parties. § FORT BEND COUNTY, TEXAS JOINT EMERGENCY APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY INJUNCTION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, Petitioner TIFFANY LYNN SEBASTIAN (“Tiffany”) and Respondent MICHAEL JEFFREY SEBASTIAN (“Jeff” and collectively “the Sebastians”), and file this Joint Emergency Application for Temporary Restraining Order and Temporary Injunction under Tex. R. Civ. P. 680 et seq. and in support thereof shows the following: Factual Background 1. The Sebastians own the controlling management interest in Classic Chevrolet West Houston, LLC, with the right to control all management decisions related to the same. Jeff owns the controlling management interest in Classic Elite Buick GMC, Inc., giving him management control. The Sebastians also own a collective thirty (30%) percent ownership interest in Co-Defendants/Nominal Third-Party, Classic Chevrolet Sugar Land, LLC. The Community’s ownership interest in these dealerships (collectively, “Classic Dealerships”), along with ownership interests in other entities addressed in footnote 1 below Sebastian--Emergency Application for TRO Exhibit 10 App.A 0255 P a g e |1 represent more than ninety percent (90%) of the value of the Community estate.1 2. On July 22, 2024, the Third-Party Defendants (specifically the Durant Defendants as referred to herein) illegally kicked Jeff out of the dealerships. This action triggered the terms of a Buy-Sell Agreement signed by Jeff, Tiffany and the Third-Party Defendants on July 21, 2023. A copy of the Buy-Sell Agreement is attached hereto as EXHIBIT 1 and incorporated herein by reference. Tiffany was illegally ousted from the dealerships on September 13, 2024. Under the terms of the Agreement, on or before the 90th day following a Specified Event, the “remaining members” are to notify Respondent/Counter-Petitioner/Third-Party Plaintiff if any such members desire to buy all or part of the Community’s interests in any of the Classic Entities. 3. Since Jeff’s wrongful removal, the Third-Party Defendants have continued to ignore the law, refused to comply with the Buy-Sell Agreement that Third-Party Defendants insisted Jeff and Tiffany sign, and to date, have refused, despite multiple requests, to comply with the obligations under the Texas Business Organization Code, to provide access to the books and records of the Classic Chevrolet Sugar Land, LLC, Classic Chevrolet West Houston, LLC and Classic Elite Buick GMC, INC. (collectively, “Classic Dealerships”). 4. The entire process under the Buy-Sell Agreement should have concluded within 180-days of Jeff’s removal. It has been more than n 200-days since the wrongful acts that occurred on July 22, 2024, with Jeff and Tiffany no closer to being paid the Fair Market Value the Community is owed under the Buy- Sell Agreement. The Community’s appraiser must have access to corporate financial books and records to determine the fair market value of the entities per the terms of the Buy-Sell Agreement. The Third- Party Defendants continue to delay and put up roadblocks, causing irreparable harm to the community estate. 5. Additionally, and most urgently, Jeff learned on February 13, 2025, that he remains the “Dealer Principal” of record for all three Classic Dealerships. The Dealer Principal is responsible and accountable for all rules, audits, and liability pertaining to consumer lenders, floorplan lenders, the manufacturer, warranty companies, the Department of Motor Vehicles, the Federal Trade Commission and other state and federal agencies. As the Dealer Principal, Jeff is personally exposed to significant legal and financial 1 Effective January 1, 2018, Jeff and Tiffany purchased thirty (30%) percent of the Class A Member Interests and twenty-nine and 70/100 (29.70%) percent of the Class B Member Interests in Classic Chevrolet Sugar Land, LLC. Jeff and Tiffany own a collective thirty (30%) percent ownership interest in Co- Respondent/Nominal Third-Party, Classic Chevrolet Sugar Land, LLC. The remaining members of Co-Defendants/Nominal Third-Party, Classic Chevrolet Sugar Land, LLC are Third-Party Defendants, Thomas R. Durant (.69% Class A and 14.31% Class B); T. Bently Durant (.01% Class A and .99% Class B) and The Durant Classic Dynasty Trust (54% Class B). Effective October 10, 2019, Classic Chevrolet West Houston, LLC was formed. Jeff and Tiffany `own 51% of the Class A membership interests giving them control of all management decisions related to Classic Chevrolet West Houston, LLC. Jeff and Tiffany own 39.6% of the Class B Interests. Two of the Third-Party Defendants own the remaining interest: Thomas R. Durant (.49% Class A and .11% Class B) and The Durant Classic Dynasty Trust (59.4% Class B). Classic Chevrolet West Houston, LLC is governed by its Company Agreement. At all relevant times, Jeff was a Manager and Officer of Classic Chevrolet West Houston, LLC, owning controlling management interest. Third-Party Defendant, Thomas R. Durant, was a Manager and Officer of Classic Chevrolet West Houston, LLC. Third-Party Defendant, T. Bently Durant, was an officer and general counsel of Classic Chevrolet West Houston, LLC. Classic Elite Buick GMC, Inc. was formed on January 26, 2023. Jeff owns 51% of the Class A shares (giving him management control) and 19.49% of the Class B Shares. Tiffany owns 20% of the Class B Shares. Classic Elite Buick GMC, Inc is governed by its Bylaws effective March 15, 2023. Jeff is a director, as is Petitioner/Counter-Respondent, Tiffany, as well as Third- Party Defendants, Thomas R. Durant and T. Bently Durant, as well as Marin “Mark” Escamilla, who is also trustee of Third-Party Defendant, The Durant Classic Dynasty Trust. In addition to Respondent/Counter-Petitioner/Third-Party Plaintiff’s (and the Community) ownership in the Classic Dealerships, they own an interest in 8100 Partners, Ltd., and 8100 Management, LLC., along with the Third-Party Defendants, Thomas R. Durant and T. Bently Durant and The Durant Classic Dynasty Trust. Likewise, Jeff and Tiffany own an interest in Co-Respondent/Nominal Third-Party, 16835 Cadet Partners, LLC, (collectively, the “Classic Entities”). The Classic Dealerships, represent the single largest asset in the community estate. On May 1, 2023, Classic Elite Buick GMC, Inc. entered into a Lease Agreement (“Lease”) with 16835 16835 Cadet Partners, LLC (“Cadet”), the owner of the real property upon which the Classic Dealerships operates at 16835 Katy Freeway. The Class A Shareholders of Cadet are Jeff and Defendant, Thomas R. Durant, and the Class B Shareholders of Cadet are Jeff Tiffany and Third-Party Defendant, The Durant Classic Dynasty Trust. Sebastian--Emergency Application for TRO App.A 0256 P a g e |2 risks. He is liable, without limitation, for compliance with employment and labor laws, state regulations, the terms of franchise agreements, operational and manufacturer requirements, employee conduct, advertising regulations, truth-in-lending, and consumer protection laws. 6. Since Jeff’s illegal removal, multiple detrimental events have occurred that underscore the growing liability that he faces as Dealer Principal. Manufacturer Customer Service Scores have plummeted. Alarming reviews are being posted online, including one that describes an employee threatening a customer. The dealerships withdrew from the Better Business Bureau. Classic Chevrolet Sugar Land, LLC has fallen into financial turmoil. Finance chargebacks have skyrocketed, increasing by more than 300% since Jeff was illegally removed. This drastic increase alone is a glaring red flag, signaling substantial exposure and risk from lenders, manufacturers, consumers, warranty companies, and regulatory agencies. 7. Additional land has been purchased for the Classic Elite Buick GMC, Inc. dealership over which Jeff has management control. Jeff has been denied any information for financing despite his liability for the same. The Third-Party Defendants (specifically the Durant Defendants as referred to herein) have made transfers of assets and incurred obligations with the actual intent to hinder, delay, or defraud the Sebastians concerning the value of their interests. 8. Third Party Co-Defendants wrongfully terminated the Sebastians’ pay, diverted millions of dollars of approved distributions, and terminated access to corporate emails and financial records, thereby triggering the terms of the Buy-Sell Agreement. 9. Jeff notified Third-Party Defendants of the Specified Event (triggering event) under the Buy-Sell Agreement and made a formal request to inspect the books and records of each of the Classic Dealerships. Both the notice and request were ignored by the Third-Party Defendants. 10. On October 15, 2024, Third-Party Defendant Durant Classic Dynasty Trust, sent a letter to offer to purchase the community’s interest in one of the Classic Entities in a manner contrary to the Buy-Sell Agreement and at a fraction of its value. The Durant Classic Dynasty Trust’s October 15th letter triggered the mandatory calculation of the Fair Market Value of the entities under the terms of the Buy-Sell Agreement and the purchase mechanism set forth therein. 11. Despite repeated efforts of the Sebastians and their legal counsel, the Classic Entities have stonewalled and refused to comply with the very Buy-Sell Agreement that the Classic Entities’ general counsel and interest holder, T. Bently Durant, prepared and insisted that the Sebastians sign without any changes. Until the process under the Buy-Sell Agreement is acted upon and the Fair Market Values of the entities are established or the Sebastians become free to sell their interest to an interested third-party, the divorce proceedings are effectively stalled. 12. Given that so much time has passed and no progress has been made under the Buy-Sell Agreement, which calls for closing within 180-days of notice of intent to purchase, and that Jeff remains liable for essentially all aspects of dealership operations, the Sebastians jointly seek this emergency relief as the harm that the Sebastians and their estate is being subjected to on a daily basis is irreparable. 13. Since Jeff’s wrongful and illegal removal, the Third-Party Defendants have continued to ignore the law, blatantly refused to comply with the parties’ Buy-Sell Agreement, and have refused, despite multiple requests to comply with the mandatory obligations under the Texas Business Organization Code to provide access to the books and records of the Classic Dealerships. Sebastian--Emergency Application for TRO App.A 0257 P a g e |3 14. Not only are the Sebastians’ expert appraisers entitled to access to the businesses’ financial records and books under the terms of the parties’ Buy Sell Agreement, the Sebastians are entitled to these records under the Texas Business Organization Code. 15. Even so, the Third-Party Defendants continue to delay access to and put up roadblocks to corporate records in violation of the Sebastians’ absolute rights to access those records which are needed to value their interest so that this court may proceed with the parties’ right to divorce and the award of the community estate. 16. Additional land has been purchased for the Classic Elite Buick GMC, Inc. dealership over which Jeff has management control, yet Jeff has been denied any information regarding financing despite his liability for the same. 17. The Third-Party Defendants, specifically the Durant Defendants, have transferred assets and incurred obligations with the actual intent to hinder, delay, or defraud the Sebastians concerning the value of their stock holdings, which constitutes 90% of the community estate’s value. 18. The Durant Defendants, in their capacity as de facto “governing persons” of Cadet and the Classic Dealerships, since the unlawful and unjustifiable exclusion of the Sebastians, have taken actions that are wrongful, illegal, oppressive, and fraudulent and have misapplied or wasted property of Cadet and the Classic Dealerships. See Tex. Bus. & Com. Code § 11.404(A)(1)(C) and (D). 19. Despite bearing the burden of all risk and liability associated with the dealerships and entities, Jeff is receiving no income whatsoever and neither is Tiffany. The Sebastians are being forced to drain their savings just to survive, while the Third-Party Defendants continue to stall compliance with the Buy-Sell Agreement and needlessly and intentionally escalate the costs of this litigation. 20. The defendants have caused and will continue to cause immediate and irreparable harm to plaintiffs unless immediately restrained and enjoined. PLAINTIFFS’ PETITION 21. On December 20, 2024, Third-Party Plaintiffs filed their First Amended Third-Party Petition (“Petition”) in this action. In their Petition, plaintiff alleges the following causes of action against defendant that are pertinent to this application: a. Breach of Fiduciary Duty: The Third-Party Defendants have breached their fiduciary duties owed to the Sebastians, 16835 Cadet Partners, LLC, and the Classic Dealerships, by, without limitation, (i) conspiring to obstruct the Sebastians’ ability to successfully operate Cadet and the Classic Dealerships, (ii) disparaging the Sebastians to one another and the public, both personally and professionally, (iii) conspiring to and illegally and unjustly purporting to fire the Sebastians from their employment with Cadet and the Classic Dealerships, (iv) conspiring to and illegally cutting the Sebastians’ access to the corporate and financial information of Cadet and the Classic Dealerships, (v) conspiring to and breaching the Membership and Management Agreements of Cadet and the Classic Dealerships, (vi) conspiring to and illegally refusing to make Cadet and Classic Dealership Member distributions, and (vii) illegally diverting Member/Shareholder profit from Cadet and the Classic Dealerships to unapproved and wasteful projects that directly benefit the Durant Defendants and their separate interests at the expense of the Sebastians, Cadet, and the Classic Dealerships. These breaches of fiduciary duties owed have caused, and continue to cause, in excess of $10,000,000 in damages to the Sebastians (including the Sebastian community estate), Cadet, and the Classic Sebastian--Emergency Application for TRO App.A 0258 P a g e |4 Dealerships. The Sebastians are therefore entitled to recover actual damages, the equitable remedy of disgorgement, and exemplary damages. b. Breach of Contract: Management Agreements--Third-Party Defendants have materially breached terms valid and enforceable contracts that govern the management and operation of the Classic Dealerships (“Management Agreements”). Particularly, and without limitation, the Durant Defendants caused the Sebastians to be removed from their employment/management positions at Cadet and the Classic Dealerships without complying with the voting and approval requirements set forth in the Management Agreements. The Durant Defendants have also caused Cadet and the Classic Dealerships to engage in acts and expenditures that are directly adverse to the necessary and/or advisable interests of the Sebastians, Cadet, and the Classic Dealerships, and in breach of the Management Agreements, including (i) causing the Classic Dealerships to spend millions of dollars on wasteful capital improvements to properties that the Classic Dealerships do not own (and which are instead majority-owned by the Durant Defendants), (ii) preventing Cadet and the Classic Dealerships from paying dividends/distributions to their owners, (iii) decreasing the Classic Dealerships’ revenue and profitability, and (iv) damaging the Classic Dealerships’ valuable relationships and ability to transact business within the industry. These material breaches of the Management Agreements have caused and continue to cause in excess of $10,000,000 in damages to the Sebastians (their community estate), Cadet and the Classic Dealerships. c. Breach of Contract: Buy-Sell Agreement—Third-Party Defendants are in direct breach and violation of the Buy-Sell Agreement that governs certain rights and restrictions pertaining to the sale or transfer of the parties’ ownership interests in Cadet and the Classic Dealerships, including a rendition of the purchase options and the means/methods of determining share price if such options are validly exercised. In particular, the Buy-Sell Agreement stipulates that an option to purchase the Sebastians’ interest in Cadet and the Classic Dealerships shall arise upon the occurrence of certain events, including “the cessation of the performance of the Dealership Business Duties of the Sebastians (including termination of either of the Sebastians as an officer or Manager of the LLC)”. Purportedly, Jeff Sebastian was terminated on July 22, 2024, which, by contract, would have expressly triggered the applicable Buy-Sell Agreement and established the Valuation Date. In October, 2024, incident to the Sebastians’ unlawful firing/exclusion, Defendant Dynasty Trust, by and through its Trustee, Mark Escamilla, issued an “Exercise of Option to Purchase” letter (“Exercise Notice”) to the Sebastians stating that it was electing to repurchase all of the Sebastians’ interest in Cadet and the Classic Dealerships. However, no valid triggering event had occurred that would render that kind of involuntary repurchase demand an available option for Defendant Dynasty Trust. Furthermore, the repurchase price demanded was and is directly opposed to the valuation method dictated by the Buy-Sell Agreement. As such, the repurchase demand made by Defendant Dynasty Trust is in direct breach and violation of the Buy-Sell Agreement and has caused, and continues to cause, direct financial damage to the Sebastians in excess of $10,000,000 for which they seek recovery by this lawsuit. d. Conversion: The Sebastians are entitled to certain property currently in the Durant Defendants’ possession and control – specifically, owner dividends and distributions from the revenues of Cadet and the Classic Dealerships. The Durant Defendants unlawfully obtained such monies by, without limitation, firing and excluding the Sebastians from Cadet and the Classic Dealerships, cutting their access to the Cadet and Classic Dealership books and records, and diverting/reallocating millions of dollars owed to the Sebastians back to themselves and/or separate entities that they own and control. The Durant Defendants have additionally demanded that the Sebastians transfer their ownership interests in Cadet and the Classic Dealerships over to them in exchange for a fraction of their contractual and marketable value. The Sebastians are Sebastian--Emergency Application for TRO App.A 0259 P a g e |5 entitled to recover their converted property from the Durant Defendants, as well as their actual and consequential damages caused thereby which exceed $10,000,000. e. Money Had and Received: The Durant Defendants are in receipt and possession of millions of dollars that in equity and good conscience belong to the Sebastians. Particularly, the Durant Defendants obtained such monies from the Sebastians by, without limitation, firing and excluding the Sebastians from Cadet and the Classic Dealerships, cutting their access to the Cadet and Classic Dealership books and records, and diverting/re-allocating millions of dollars owed to the Sebastians back to themselves and/or separate entities that they own and control. The Durant Defendants have additionally demanded that the Sebastians transfer their ownership interests in Cadet and the Classic Dealerships over to them in exchange for a fraction of their contractual and marketable value. the Sebastians are entitled to recover such monies from the Durant Defendants, as well as their actual and consequential damages caused thereby which exceed $10,000,000. f. Fraudulent Transfer: The Durant Defendants made transfers and incurred obligations with the actual intent to hinder, delay, or defraud the Sebastians concerning value of their stock. The Durant Defendants made transfers to and incurred obligations from entities that are owned and controlled by the Durant Defendants, such as the Real Estate Defendants. Thus, the Real Estate Defendants are insiders under the definition of the Texas Uniform Fraudulent Transfer Act (“TUFTA”), Tex. Bus. & Com. Code section 24.001, et seq. See Tex. Bus. & Com. Code § 24.002(7). Therefore, these transfers of assets from the Classic Dealerships to the Real Estate Defendants by the Durant Defendants are fraudulent as to the Sebastians. The transfers were done with actual intent because (1) the transfers were to insiders; (2) the Durant Defendants ostensibly retained possession or control of the property transferred after the transfer; (3) the transfer was concealed from Plaintiff; (4) the Durant Defendants have absconded and concealed the assets; (5) upon information and belief, the Classic Dealerships received no consideration for the assets transferred; and (6) the transfer occurred proximate to the incursion of a substantial payout to the Sebastians as a result of the divorce proceedings. See Tex. Bus. & Com. Code § 24.005(b). Therefore, the Sebastians seek (1) avoidance of the transfer(s) or obligation(s) to the extent necessary to satisfy their claims; (2) an attachment or other provisional remedy against the asset(s) transferred or other property of the transferee in accordance with the applicable Texas Rules of Civil Procedure and the Civil Practice & Remedies Code relating to ancillary proceedings; and/or (3) subject applicable principles of equity and in accordance with applicable rules of civil procedure: (A) an injunction against further disposition by the debtor or a transferee, or both, of the asset(s) transferred or of other property; (B) appointment of a receiver to take charge of the asset transferred or other property of the transferee; or (C) any other relief the circumstances may require. See Tex. Bus. & Com. Code § 24.008(a). The Sebastians also request that the court award them the costs and reasonable attorney fees as are equitable and just incurred by the Sebastians in the prosecution of their rights. See Tex. Bus. & Com. Code § 24.013. ARGUMENT AND AUTHORITY IN SUPPORT OF APPLICATION FOR ISSUANCE OF EX PARTE TEMPORARY RESTRAINING ORDER AND INJUNCTIVE RELIEF 1. Court’s Authority to Issue Ex Parte Temporary Restraining Order This court has authority to grant a temporary restraining order without notice to the adverse party if “it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before notice can be served and a hearing had thereon.” Tex. R. Civ. P. 680. Sebastian--Emergency Application for TRO App.A 0260 P a g e |6 Irreparable injuries are those for which the injured party cannot be adequately compensated by damages or for which damages cannot be measured by a pecuniary standard. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). 2. Immediate and Irreparable Harm to Plaintiffs As shown by the attached Declarations of the Sebastians, the wrongful conduct of the defendants described above has caused and will continue to cause immediate and irreparable harm to plaintiffs before notice can be served on defendant and a hearing held on plaintiff’s application for a temporary injunction, in that: a. The Durant Defendants will continue to interfere with Jeff’s legal right and mandatory obligation to control all management decisions related to Classic Chevrolet West Houston, LLC; b. The Durant Defendants will continue to interfere with Jeff’s legal right and mandatory obligation to control all management decisions related to Classic Elite Buick GMC, Inc.; c. Jeff will continue to be exposed to all risk and liability associated with operations and actions over which he is currently being denied any control despite his legal right of control; d. The Durant Defendants will continue to transfer all profits, and additional revenues generated by Cadet and Classic Dealerships to themselves and the various entities that they own and control; e. The Durant Defendants will continue to implement inventory pricing and sales policies that significantly depress Cadet and the Classic Dealerships’ revenues and profits; f. The Durant Defendants will continue to implement contracting, spending, pricing, and sales protocols that depress the equitable value of Cadet and the Classic Dealerships; g. The Durant Defendants will initiate additional transactions that negatively impact Cadet and the Classic Dealerships’ ability to conduct business in the local automotive industry; h. The Durant Defendants will continue to deny Member/Shareholder access to Cadet and Classic Dealerships’ books and records; i. The Durant Defendants will continue to deny Member/Shareholder access to Cadet and Classic Dealerships’ budgets and accounting; j. The Durant Defendants will continue to ignore the law and refuse to comply with the Buy-Sell Agreement. 3. Terms of Requested Temporary Restraining Order To prevent the immediate and irreparable harm to plaintiffs described above, plaintiffs request that the court issue a temporary restraining order restraining the defendants, including the defendant’s agents, servants, employees, independent contractors, attorneys, representatives, and those persons or entities in active concert or participation with them (collectively, the “Restrained Parties”), as follows, pending a hearing on the plaintiff’s application for a temporary injunction: a. Enjoin any interference with Jeff’s legal right to control all management decisions related to Sebastian--Emergency Application for TRO App.A 0261 P a g e |7 Classic Chevrolet West Houston, LLC; b. Enjoin any interference with Jeff’s legal right to control all management decisions related Classic Elite Buick GMC Inc.; c. Enjoin any interference with any of Jeff’s acts as Dealer Principal; d. Enjoin any disposition of any asset owned by Cadet and the Classic Dealerships; e. Enjoin dissipation of any assets owned by Cadet and Classic Dealerships; f. Enjoin the use, spending and/or transfer of any profits and/or additional revenues generated by Cadet and Classic Dealerships; g. Enjoin denial of Member/Shareholder access to Cadet and Classic Dealerships’ books and records; h. Enjoin denial of Member/Shareholder access to Cadet and Classic Dealerships’ budgets and accounting; i. Order compliance with all terms of the Buy-Sell Agreement; j. Order compliance with all terms of the mechanism for determining Fair Market Value pursuant to the Buy-Sell Agreement; k. Order compliance with all terms of the Bylaws and Company Agreements; l. Order reporting to this Court as to compliance under the Buy-Sell Agreement every twenty (20) days beginning on the date that this Court grants this Temporary Restraining Order; 4. Plaintiffs Will Furnish Bond Plaintiff is willing to post a reasonable bond as a condition for the injunctive relief requested in this application and requests the court to set the amount of such bond. 5. APPLICATION FOR ISSUANCE OF TEMPORARY INJUNCTION After notice to the defendant and an opportunity for hearing, the court may issue a temporary injunction to preserve the status quo pending a trial on the merits of the action. See Tex. R. Civ. P. 681; Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The court may issue a temporary injunction if the plaintiff pleads and proves: a. A cause of action against the defendant. b. A probable right to the relief sought. c. A probable, imminent, and irreparable injury before trial on the merits can be held. Butnaru, 84 S.W.3d at 204 6. Cause of Action Against Defendants In Third-Party Plaintiffs First Amended Third-Party Petition, plaintiff have alleged causes of action against Sebastian--Emergency Application for TRO App.A 0262 P a g e |8 defendant as set forth above in section “Plaintiffs Petition” beginning at paragraph 21 of this Application. 7. Probable Right to Relief Sought As shown by the attached Declaration of Jeff Sebastian, plaintiffs have a probable right to the relief sought against defendants on the causes of action alleged in the First Amended Third-Party Petition in that the Sebastians indisputably own the controlling management interest of Classic Chevrolet West Houston, LLC and Classic Elite Buick GMC, Inc. Jeff has the right to control all management decisions of these entities which he is clearly being denied and has been denied since July 22, 2024. Jeff learned on February 23, 2025, that he remains personally liable and responsible for the conduct of the Classic dealerships as the “Dealer Operator” The Sebastians have express contractual rights under the valid and enforceable Bylaws and Company Agreements and Buy-Sell Agreement of which the Defendants are in direct breach and violation. 8. Probable, Imminent, Irreparable Injury to Plaintiff As shown by the attached Declaration of Jeff Sebastian, the wrongful conduct of the defendants described above has caused and will continue to cause immediate and irreparable harm to plaintiffs before trial on the merits and entry of judgment in this action, in that: a. The Durant Defendants will continue to interfere with Jeff’s legal right to control all management decisions related to Classic Chevrolet West Houston, LLC; b. The Durant Defendants will continue to interfere with Jeff’s legal right to control all management decisions related Classic Elite Buick GMC, Inc.; c. Jeff’s will continue to be exposed to all risk and liability associated with operations and actions over which he is currently being denied any control despite his legal right of control; d. The Durant Defendants will continue to transfer all profits, and additional revenues generated by Cadet and Classic Dealerships to themselves and the various entities that they own and control; e. The Durant Defendants will continue to implement inventory pricing and sales policies that significantly depress Cadet and the Classic Dealerships’ revenues and profits; f. The Durant Defendants will continue to implement contracting, spending, pricing, and sales protocols that depress the equitable value of Cadet and the Classic Dealerships; g. The Durant Defendants will initiate additional transactions that negatively impact Cadet and the Classic Dealerships’ ability to conduct business in the local automotive industry; h. The Durant Defendants will continue to deny Member/Shareholder access to Cadet and Classic Dealerships’ books and records; i. The Durant Defendants will continue to deny Member/Shareholder access to Cadet and Classic Dealerships’ budgets and accounting; j. The Durant Defendants will continue to ignore the law and refuse to comply with the Buy-Sell Agreement. Sebastian--Emergency Application for TRO App.A 0263 P a g e |9 9. Terms of Requested Temporary Injunction To prevent the immediate and irreparable harm to plaintiffs described above, plaintiffs request that the court issue a temporary injunction restraining the defendants and the Restrained Parties (as defined above), as follows, pending trial on the merits and entry of judgment in this action: a. Enjoin any interference with Jeff’s legal right to control all management decisions related to Classic Chevrolet West Houston, LLC; b. Enjoin any interference with Jeff’s legal right to control all management decisions related Classic Elite Buick GMC, Inc.; c. Enjoin any interference with any of Jeff’s acts as Dealer Principal d. Enjoin any disposition of any asset owned by Cadet and the Classic Dealerships; e. Enjoin dissipation of any assets owned by Cadet and Classic Dealerships; f. Enjoin the use, spending and/or transfer of any profits and/or additional revenues generated by Cadet and Classic Dealerships; g. Enjoin denial of Member/Shareholder access to Cadet and Classic Dealerships’ books and records; h. Enjoin denial of Member/Shareholder access to Cadet and Classic Dealerships’ budgets and accounting; i. Mandate immediate compliance with all terms of the Buy-Sell Agreement; j. Mandate immediate compliance with all terms of the mechanism for determining Fair Market Value pursuant to the Buy-Sell Agreement; k. Mandate immediate compliance with all terms of the Bylaws and Company Agreements; l. Mandate reporting to this Court as to compliance under the Buy-Sell Agreement every twenty (20) days, beginning on the date that this Court grants this Temporary Restraining Order. WHEREFORE, the plaintiff requests that the court grant this application and provide the following relief to plaintiff: Entry of an ex parte temporary restraining order, as set forth in Section 3, “Terms of Requested Temporary Restraining Order”, a.-l. of this application, pending hearing of plaintiff’s application for a temporary injunction; After notice and hearing, entry of a temporary injunction, as set forth in Section 9, “Terms of Requested Temporary Injunction”, a.-l. of this application, pending trial on the merits and entry of judgment in this action; and Any other relief to which the plaintiff may be justly entitled. Sebastian--Emergency Application for TRO App.A 0264 P a g e | 10 Respectfully submitted, BOHREER LAW FIRM PLLC E. Michelle Bohreer State Bar No. 06717100 Pritesh Soni State Bar No. 24063926 777 Post Oak Blvd., Suite 950 Houston, Texas 77056 Telephone: (832) 856-3006 Facsimile: (832) 856-2891 Emails:[email protected] [email protected] E-service: [email protected] /s/ Richard L. Tate Richard L. Tate State Bar No. 19664460 206 South Second Street Richmond, Texas 77469 Tel. (281) 341-0077 Fax (281) 341-1003 [email protected] LAURA DALE & ASSOCIATES, P.C. _/s/ Laura D. Dale_________________________ LAURA D. DALE (LEAD COUNSEL) State Bar No. 24030270 [email protected] (Eservice only) MARJORIE A. MAXWELL State Bar No. 24060239 [email protected] (Eservice only) 1800 St. James Place, Suite 620 Houston, Texas 77056 Telephone: (713) 600-1717 Facsimile: (713) 600-1718 ATTORNEYS FOR THIRD-PARTY PLAINTIFF, MICHAEL JEFFREY SEBASTIAN, INDIVIDUALLY, ON BEHALF OF THE SEBASTIAN COMMUNITY ESTATE, AND DERIVATIVELY ON BEHALF OF THE CLASSIC DEALERSHIPS Sebastian--Emergency Application for TRO App.A 0265 P a g e | 11 SCHEEF & STONE, L.L.P. /s/ J. Mitchell Little J. Mitchell Little State Bar No. 24043788 [email protected] Steven Ovando State Bar No. 24128862 [email protected] 2600 Network Blvd., Suite 400 Frisco, Texas 75034 (214) 472-2100 Telephone (214) 472-2150 Facsimile ATTORNEYS FOR THIRD PARTY PLAINTIFF TIFFANY LYNN SEBASTIAN CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the foregoing document has been delivered or forwarded to all counsel and unrepresented persons as listed below, [ ] by personal delivery or receipted delivery service, or [ ] by certified or registered mail, return receipt requested, by depositing the same, postpaid, in an official deposit under the care and custody of the United States Postal Service, or [ ] by facsimile to the recipient’s facsimile number identified below, or [ X ] by e-service to the recipient’s email address identified below and the electronic transmission was reported as complete, on this the 21st day of February 2025, in accordance with the Rule 21a of the Texas Rules of Civil Procedure: Bobby K. Newman Laura Dale Bobby K. Newman PC Laura Dale & Associates P.C. 3355 W Alabama St., Suite 444 1800 Saint James Place, Suite 620 Houston, TX 77098 Houston, Texas 77056 Email: [email protected] Telephone: 713-489-6674 Facsimile: 713-600-1718 Email: [email protected] Randall B. Wilhite Fullenweider Wilhite ATTORNEYS FOR RESPONDENT / 515 Post Oak Blvd., Suite 800 COUNTER-PETITIONER, MICHAEL Houston, TX 77027 JEFFREY SEBASTIAN Email: [email protected] ATTORNEY FOR PETITIONER / COUNTER-RESPONDENT, TIFFANY LYNN SEBASTIAN Sebastian--Emergency Application for TRO App.A 0266 P a g e | 12 Joseph W. DiCecco J. Mitchell Little State Bar No. 05812520 State Bar No. 24043788 [email protected] [email protected] John A. Coselli Steven Ovando State Bar No. 24100163 State Bar No. 24128862 [email protected] [email protected] Jill Evangelista SCHEEF & STONE, L.L.P. State Bar No. 24010505 2600 Network Blvd., Suite 400 [email protected] Frisco, TX 75034 DICECCO LAW PARTNERS PLLC Telephone: 214-472-2100 777 Post Oak Blvd., Suite 900 Facsimile: 214-472-2150 Houston, TX 77056 ATTORNEYS FOR THIRD-PARTY Telephone: 713-496-1700 PLAINTIFF, TIFFANY LYNN SEBASTIAN, Facsimile: 713-589-3392 INDIVIDUALLY, ON BEHALF OF THE ATTORNEYS FOR THIRD-PARTY SEBASTIAN COMMUNITY ESTATE, AND PLAINTIFF, TIFFANY LYNN SEBASTIAN, DERIVATIVELY ON BEHALF OF THE INDIVIDUALLY, ON BEHALF OF THE CLASSIC DEALERSHIPS SEBASTIAN COMMUNITY ESTATE, AND DERIVATIVELY ON BEHALF OF THE CLASSIC DEALERSHIPS Derek D Rollins State Bar No. 24029803 Lucas Peterson State Bar No. 24121469 Shackelford, McKinley & Norton LLP 9201 N Central Expressway, Fourth Floor Dallas, TX 75231 Telephone: 214-780-1400 Facsimile: 214-780-1401 Email: [email protected] [email protected] and Timothy D. Zeiger State Bar No. 22255950 Shackelford, McKinley & Norton LLP 2600 Via Fortuna, Suite 150 Austin, Texas 78746 Telephone:512-469-0900 Facsimile: 512-469-0930 Email: [email protected] ATTORNEYS FOR THIRD-PARTY DEFENDANTS, T. BENTLY DURANT, THOMAS R. DURANT, THE DURANT CLASSIC DYNASTY TRUST, MICHAEL A. WARD, 8100 PARTNERS, LTD., 8100 MANAGEMENT LLC, 8705 PARTNERS, LTD., 8705 MANAGEMENT LLC, CLASSIC CHEVROLET SUGAR LAND, LLC, CLASSIC CHEVROLET WEST HOUSTON, Sebastian--Emergency Application for TRO App.A 0267 P a g e | 13 LLC, CLASSIC ELITE BUICK GMC, INC., AND 16835 CADET PARTNERS, LLC E. Michelle Bohreer Sebastian--Emergency Application for TRO App.A 0268 P a g e | 14 App.A 0269 App.A 0270 App.A 0271 App.A 0272 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 "1" BUYSELL AGREEMENT FOR INTERESTS IN CLASSIC CHEVROLET SUGAR LAND, LLC CLASSIC CHEVROLET WEST HOUSTON LLC CLASSIC ELITE BUICK GMC, LLC. 16835 CADET PARTNERS, LLC App.A 0273 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 TABLE OF CONTENTS ARTICLE I. 1 GENERAL PROVISIONS 1 Section 1.1. Interests Subject to Agreement 1 Section 1.2. General Definitions for Agreement 2 (a) "Code" 2 (b) "Disability" 2 (c) "Family Members" 2 (d) "Family Trust" 2 (e) "Restricted Interests" 2 (f) "Transfer" 3 Section 1.3. Successor Rights and Obligations of Trust Beneficiaries 3 ARTICLE II. 3 RESTRICTIONS ON LIFETIME TRANSFERS OF INTERESTS 3 Section 2.1. Restrictions on Lifetime Transfers 3 Section 2.2. Lifetime Right of First Refusal 4 (a) Transferor’s Notice 4 (b) Option Granted 4 (c) Interest Covered by Options 4 Section 2.3. Remaining Parties' Option to Purchase Interest 4 (a) Option Period 4 (b) Exercise of Option 5 (c) Release of Option 5 (d) Sale Without Release of Option 5 Section 2.4. LLC's Option to Purchase Interest 5 (a) Option Period 5 (b) Exercise of Option 5 (c) Release of Option 5 Section 2.5. Purchase and Sale of Offered Interest 6 (a) Closing Date of Purchase and Sale 6 (b) Terms of Closing 6 Section 2.6. Expiration of Lifetime Transfer Restrictions 6 Section 2.7. Conditional Exemption of Transfers to Family Members, Family Trusts and Martial Trusts 7 Section 2.8. Special Exemption of Transfers to Family Partnerships 7 ARTICLE III. 8 PURCHASE OPTIONS WITH RESPECT TO Sebastians’s RESTRICTED 8 INTERESTS UPON OCCURRENCE OF SPECIFIED EVENTS 8 Section 3.1. Purchase and Sale Options 8 (a) Spouse's Interest In Restricted Non-Membership Interests 8 App.A 0274 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 Page (b) References to "Sellers" 8 Section 3.2. Right of First Refusal 8 (a) Notice 8 (b) Option Granted 9 (c) Interests Covered by Options 9 Section 3.3. Remaining Parties’ Option to Purchase Sebastians’s Restricted Interests 9 (a) Option Period 9 (b) Exercise of Option 9 Section 3.4. LLC's Option to Purchase Sebastians’s Restricted Interests 9 (a) Option Period 9 (b) Exercise of Option 10 Section 3.5. Determination of Purchase Price by Agreement 10 Section 3.6. Alternative Determination of Purchase Price While Guarantee in Effect 10 (a) Acquisition Loan 10 (b) Purchase Price During Term of Loan Guaranty 10 Section 3.7. Alternative Determination of Purchase Price if Loan No Longer Outstanding 10 (a) Failure to Agree on Appraiser 11 (b) Multiple Appraisal 11 (c) Costs of Appraisal 11 Section 3.8. Payment of Purchase Price 11 (a) Closing Date 11 (b) Terms of Purchase Price 11 (c) Prepayment Privilege 11 (d) Execution of Documents 12 Section 3.9. Determination of Disability 12 (a) By Mutual Agreement 12 (b) In the Event of Disagreement 12 ARTICLE IV. 12 DEATH OR DIVORCE OF A SPOUSE OF A PARTY 12 Section 4.1. Effect of Death or Divorce 12 Section 4.2. Party’s Option to Purchase Restricted Interests 13 (a) Option Period 13 (b) Exercise of Option 13 Section 4.3. Business' Option to Purchase Restricted Interests 13 (a) Option Period 13 (b) Exercise of Option 14 Section 4.4. Determination of Purchase Price 14 (a) Divorce 14 (b) Death 14 Section 4.5. Payment of Purchase Price 14 377019 2 App.A 0275 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 Page (a) Closing Date of Purchase/Sale 14 (b) Terms of Purchase Price 14 (c) Prepayment Privileges 15 ARTICLE V. 15 MISCELLANEOUS PROVISIONS 15 Section 5.1. Filing of Agreement 15 Section 5.2. Notice Provision 15 Section 5.3. Amendment of Agreement 15 Section 5.4. Specific Performance 15 Section 5.5. Attorney Fees 16 Section 5.6. Termination of Agreement 16 Section 5.7. Binding Effect 16 Section 5.8. Execution of Multiple Agreements 16 Section 5.9. Provisions Severable 16 Section 5.10. Construction of Agreement 17 Section 5.11. Entire Agreement 17 Section 5.12. Execution of Additional Documents 17 Section 5.13. Incorporation by Reference of Exhibits 17 Section 5.14. Effective Date 17 SIGNATURES 19 EXHIBIT "A" RESTRICTED INTERESTS 20 EXHIBIT "B" PROMISSORY NOTE 21 EXHIBIT "C" NOTICE ADDRESSES 23 377019 3 App.A 0276 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 BUYSELL AGREEMENT FOR INTERESTS IN CLASSIC CHEVROLET SUGAR LAND, LLC CLASSIC CHEVROLET WEST HOUSTON LLC CLASSIC ELITE BUICK GMC, LLC. 16835 CADET PARTNERS, LLC THIS BUYSELL AGREEMENT FOR INTERESTS IN CLASSIC CHEVROLET SUGAR LAND, LLC, CLASSIC CHEVROLET WEST HOUSTON LLC. CLASSIC ELITE BUICK GMC, LLC. 16835 CADET PARTNERS, LLC (the "Agreement") is executed by and between CLASSIC CHEVROLET SUGAR LAND, LLC, CLASSIC CHEVROLET WEST HOUSTON LLC. CLASSIC ELITE BUICK GMC, Inc. 16835 CADET PARTNERS, LLC all Texas limited liability companies (the “LLC”), (the “Business”), and by THOMAS R. DURANT ("DURANT"), Michael Jeffrey Sebastian and Tiffany Sebastian ("Sebastians"), and THE DURANT CLASSIC DYNASTY TRUST, created by a Trust Agreement dated January 31, 2000 (the "DYNASTY TRUST") (collectively referred to as the “Owners”) to provide for the orderly disposition of their respective member equity interests in the LLC. The LLC and the Owners, may also be referred to collectively in this Agreement as the "Parties" or individually as a "Party". The Agreement has been modified to covered multiple LLC’s and owners, with the intent that it jointly and severally apply to each legal entity and person herein so that the provisions below may be applied where applicable to just one owner, or just one entity, as well as to multiple owners. For this purpose, the term Sebastians may refer to either Michael Jeffrey Sebastian, or Tiffany Sebastian individually, or both collectively as may be necessary to effectuate the intent of this agreement. RECITALS App.A 0277 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 1. The primary business of the LLC is the ownership and operation of an automobile dealership. Sebastians’s primary duties are the management of such automobile dealership activities (“Dealership Business Duties”). 2. The Parties desire to impose certain restrictions on the disposition of interests in the LLC, as provided herein. ARTICLE I. GENERAL PROVISIONS Section I.1. Interests Subject to Agreement . The Parties to this Agreement have agreed that it is in their individual and collective best interests to maintain their collectively owned business assets between themselves in order to provide stability for long term planning purposes, to permit their continued consolidated management thereof, and to provide a mechanism by which the Parties can implement an efficient business successor and continuity plan with respect to such assets. Accordingly, all member equity interests in the LLC now owned or hereafter acquired by the Parties (the "Restricted Membership Interests") shall be subject to the terms and provisions of this Agreement. Section I.2. General Definitions for Agreement . The following terms shall have the indicated meanings in this Agreement: (a) "Code" : References in this Agreement to "Code" shall mean the Internal Revenue Code of 1986, as amended. (b) "Disability" : References in this Agreement to the “Disability” of Sebastians shall mean the physical and/or mental inability of Sebastians to perform the ordinary and regularly assigned duties in carrying out the Business Duties. The Disability status of 2 App.A 0278 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 Sebastians may be determined by the mutual agreement of the LLC and Sebastians [or his representatives]. In this regard, the LLC shall be fully protected and shall have no liability whatsoever for transacting any business with the spouse, custodian or guardian of Sebastians, whether such custodian or guardian is natural or court-appointed. In the event of a disagreement between the LLC and Sebastians [or Sebastians’s representatives] as to Sebastians’s condition or ability to carry out such employment responsibilities and duties, the LLC shall select a competent, independent medical doctor who shall render a professional opinion as to whether or not Sebastians is subject to Disability as defined herein. The opinion and decision of such medical doctor shall be binding upon both the LLC and Sebastians [and Sebastians’s representatives]. The LLC shall bear the costs and expenses of obtaining such professional opinion. (c) "Family Members" : References in this Agreement to "Family Members" shall mean the Owners and each of the respective spouses and all of the respective descendants of the Owners. (d) "Family Trust" : Any references in this Agreement to "Family Trust" shall mean any trust of which the sole beneficiaries are one or more Family Members. (e) "Restricted Interests" : References in this Agreement to the "Restricted Interests" shall mean collectively all of the Restricted Membership Interests owned by the Parties including but not limited to those Restricted Interests specified on the attached Exhibit “A”. (f) "Transfer" : References in this Agreement to "Transfer" [or "Transferred"] shall mean any sale, transfer, assignment, pledge, encumbrance, alienation or any other disposition or hypothecation of Restricted Interests. Section I.3. Successor Rights and Obligations of Trust Beneficiaries . All of the Restricted Interests subject to this Agreement are currently owned by the Parties. The Parties hereby agree that all of the rights, obligations and purchase and sale provisions of this Agreement shall be applicable to the respective successors of the Parties if and to the extent that all or any part of such Restricted Interests are distributed by any of the Parties to their permissible successors and further that this Agreement shall be construed and interpreted 3 App.A 0279 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 thereafter to continue to subject such distributed Restricted Interests to the provisions of this Agreement. ARTICLE II. RESTRICTIONS ON LIFETIME TRANSFERS OF INTERESTS Section II.1. Restrictions on Lifetime Transfers . No Restricted Interests or any interest in any Restricted Interests shall be Transferred while such Restricted Interests are owned by the Parties without (i) the prior written consent of all of the Parties, or (ii) complying with the conditions and provisions of this Article. Neither the LLC nor its members, managers or officers shall deliver any certificate representing Restricted Interests, execute any agreement affecting Restricted Interests, transfer any Restricted Interests on the LLC's books, or otherwise act to create new rights in Restricted Interests, except in compliance with this Agreement and any attempt to do so shall be void and of no force or effect. Section II.2. Lifetime Right of First Refusal . The following provisions shall become applicable in the event a Party proposes to Transfer (referred to in this Article II as the "Transferor") all or any part of its Restricted Interests to other than a Family Member or Family Trust, subject to the limitations and conditions set forth in Section 2.6, below. For purposes of this Article II, whoever among the Parties is not the Transferor, and owns an interest in the LLC, shall be referred to as the "Remaining Parties". (a) Transferor’s Notice : The Transferor shall first give written notice [the "Option Notice"] to the Remaining Parties and the LLC, identifying the prospective transferee(s) and setting forth in reasonable detail the consideration to be received and the terms and conditions on which the Transfer is proposed to be made, accompanied by copies of any information furnished to or by the prospective transferee(s). 4 App.A 0280 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 (b) Option Granted : The Option Notice shall automatically grant to the Remaining Parties the option to purchase the Restricted Interests proposed to be transferred pursuant to the Transfer [the "Offered Interest"] for the same consideration and on the same terms and conditions as contained in the Option Notice. (c) Interest Covered by Options : The respective options may be exercised as to all or any part of the Offered Interest. Section II.3. Remaining Parties' Option to Purchase Interest . The Remaining Parties shall have the option to purchase all or any part of the Offered Interest pursuant to the follow provisions: (a) Option Period : The Remaining Parties may exercise their option to purchase the Offered Interest at any time on or before NINETY (90) days after receipt of the Option Notice [referred to in this Article II as the “Option Period”]. In the event that the Transferor Transfers the Offered Interest to a non-Family Member transferee [the “Transferee”] without the consent of all of the parties [excluding the Transferor], the Transferee shall take the Offered Interest subject to the Remaining Party’s option to purchase, and the Transferred Offered Interest will be deemed to be owned by the Transferor for purposes of applying Sections 2.2 and 2.3 of this Agreement. (b) Exercise of Option : The Remaining Parties shall give written notice within such Option Period to the Transferor of its election to purchase the Offered Interest. Such notice shall be given on or before NINETY (90) days prior to the purchase date proposed by the Remaining Party in such notice. (c) Release of Option : Upon the unanimous decision of the Remaining Parties, the Remaining Parties may give written notice within such Option Period to the Transferor of its election to release its option and therefore allow the Transferor to transfer the Offered Interest to the non-Family Member purchaser. The Transferor’s proposed Transfer shall be subject to the option granted to the respective Business in Section 2.4 of this Agreement. (d) Sale Without Release of Option : If the Transferor transfers the Offered Interest to a non-Family Member purchaser and the Remaining Parties have not released their option pursuant to Section 2.3(c) above, then the non-Family Member purchaser takes the Offered 5 App.A 0281 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 Interest subject to the option of the Remaining Party, and the LLC, described in Sections 2.2, 2.3 and 2.4 of this Agreement. Section II.4. LLC's Option to Purchase Interest . In the event the Remaining Parties do not purchase all of the Offered Interest, then the LLC shall have the option to purchase the remaining Offered Interest pursuant to the following provisions: (a) Option Period : The LLC may exercise its option to purchase the remaining Offered Interest at any time within the THIRTY (30) day period [the “30-Day Period”] beginning at the earlier of [1] the date the final Remaining Party has released his or her respective option pursuant to Section 2.3(c), above, or [2] the date the Option Period expires as described in Section 2.3(a), above. (b) Exercise of Option : The LLC shall give written notice within such 30-Day Period to the Transferor of its election to purchase the Offered Interest. Such notice shall be given at least THIRTY (30) days prior to the purchase date proposed by the LLC in such notice. (c) Release of Option : Upon the decision of the LLC, it may give written notice within such 30-Day Period to the Transferor of its election to release its option and therefore allow the Transferor to transfer the Offered Interest to the non-Family Member purchaser. The Transferor shall have NINETY (90) days to sell the Offered Interest after the LLC has given written notice of its release of the option. Section II.5. Purchase and Sale of Offered Interest . The purchase and sale of the Offered Interest shall be completed pursuant to the following provisions in the event the Remaining Parties or LLC exercise their respective options to purchase the Offered Interest: (a) Closing Date of Purchase and Sale : The Transferor and Remaining Party shall agree upon a mutually convenient time and place for the closing. Unless agreed otherwise, the closing, however, must be within TEN (10) days after the Transferor’s receipt of the last written election by the Remaining Parties and/or the LLC. (b) Terms of Closing 6 App.A 0282 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 : The Offered Interest shall be purchased for the consideration equal to the net book value of such Offered Interests, such value to be determined by the accountant regularly engaged by the LLC. Section II.6. Expiration of Lifetime Transfer Restrictions . Subject to (b) below, the Transferor shall have the right to Transfer the Offered Interest or any portion thereof to the Transferee named in the Option Notice; provided that the Remaining Parties, and the LLC, have released their respective options to purchase such Offered Interests or any portion thereof or the time for exercise of such option otherwise expires without exercise thereof; and provided further that the Transfer is made for the same consideration and on the same terms and conditions contained in the Option Notice. The Transferor’s right to transfer such Offered Interest shall continue for a period of NINETY (90) days after either the final Remaining Parties has given written notice of his or her release of the option specified in this Article II, or the applicable Option Period for the Remaining Parties is allowed to lapse without exercise; and the LLC have either provided written notification declining to exercise the option in Section 2.4 or the applicable 30-Day Period for the LLC is allowed to lapse without exercise. If the Offered Interest is not transferred within such NINETY (90) day period, or if the Transferor desires to change the Transferee, consideration, terms or conditions contained in the Option Notice, then the Transferor must reoffer the Restricted Interests in accordance with the provisions of this Article II. Section II.7. Conditional Exemption of Transfers to Family Members, Family Trusts and Martial Trusts . The Transferor may transfer all or any part of its Restricted Interests to a Family Member and/or a Family Trust without first offering such Interests to the Remaining Party or the LLC. 7 App.A 0283 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 A Party, as well as any spouse of a Party who acquires an ownership interest in any LLC, may transfer all or any part of its Restricted Interests to a trust for the benefit of the spouse of such Transferor [the “Marital Trust”] provided that (1) such spouse is provided lifetime benefits from such Marital Trust, and (2) by the terms of such Marital Trust Agreement, the Restricted Interests thereof shall be distributed to or held in further trust for one or more Family Members. All transferee Family Members, Family Trusts and Marital Trusts shall take the Restricted Interests subject to all of the terms, provisions and conditions of this Agreement, including, but not limited to, all of the restrictions, conditions, options and sale obligations contained in this Agreement. Section II.8. Special Exemption of Transfers to Family Partnerships . Each Party may transfer all or any part of his or her Restricted Interests to one or more partnerships [“Family Partnerships”] provided that all general partner interests therein are continuously owned by a Party, directly or indirectly through an LLC or other entity which is the general partner (and by a spouse of a Party who has a community property interest therein). A Family Partnership which owns any Restricted Interests shall be subject to all of the terms and provisions of this Agreement, including but not limited to the mandatory and optional sale and purchase provisions as hereinafter provided, and this Agreement shall be interpreted in a manner consistent with the intent of the Parties to subject such Restricted Interests owned by a Family Partnership to the terms and provisions of this Agreement. ARTICLE III. PURCHASE OPTIONS WITH RESPECT TO Sebastians’S RESTRICTED INTERESTS UPON OCCURRENCE OF SPECIFIED EVENTS 8 App.A 0284 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 Section III.1. Purchase and Sale Options . Upon the occurrence of a specified event, all Restricted Interests owned by Sebastians shall be subject to the purchase options provided by this Article as herein granted to DURANT and the DYNASTY TRUST (referred to in this Article as the "Remaining Parties") and the LLC. The following items are specified events for purposes of this Article: (i) the death of Sebastians; (ii) the Disability of Sebastians; (iii) the cessation of the performance of the Dealership Business Duties of Sebastians (including termination of either of the Sebastians as an officer or Manager of the LLC); or (iv) a vote of no confidence in the Sebastians by members who hold a majority of the interest in the LLC. The Sebastians, the legal representatives of Sebastians’s estate and/or other successors in interest (in the event of Sebastians’s death), Sebastians’s attorney-in-fact, custodian, guardian or other representative (in the event of Sebastians’s disability or cessation of his performance of his Business Duties) shall be referred to as the "Sellers" for purposes of this Article. (a) Spouse's Interest In Restricted Non-Membership Interests : At the occurrence of any of the events set forth in Section 3.1 with respect to Sebastians, his spouse's community property and/or separate property interests in the Restricted Interests [if any] shall be subject to the purchase and sale option provisions of this Agreement. (b) References to "Sellers" : References in this Article to "Sellers", as defined above, shall also include Sebastians’s spouse and/or his transferees. Section III.2. Right of First Refusal . The following provisions shall become applicable upon the occurrence of a specified event: (a) Notice : Sebastians or Sebastians’s estate, as the case may be, shall give written notice [the "Option Notice"] within NINETY (90) days of Sebastians’s death or disability to the Remaining Parties and the LLC, setting forth the identity of Sebastians and his 9 App.A 0285 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 date of death or disability. In the event of the cessation of performance of Sebastians’s Dealership Business Duties, the Remaining Parties shall notify Sebastians of such cessation and commencement of the Option Period with respect thereto. (b) Option Granted : The Option Notice shall automatically grant to the Remaining Parties and the LLC options to purchase, in the order specified below, the Restricted Interests owned by the Sellers upon the date of death or disability of Sebastians ["Sebastians’s Restricted Interests"]. (c) Interests Covered by Options : The respective options may be exercised by the Remaining Parties as to all or any part of Sebastians’s Restricted Interests. Section III.3. Remaining Parties’ Option to Purchase Sebastians’s Restricted Interests . Upon the occurrence of any of the events set forth in Section 3.1, the Remaining Parties shall have the first option to purchase Sebastians’s Restricted Interests pursuant to the following provisions: (a) Option Period : The Remaining Parties may exercise their option to purchase Sebastians’s Restricted Interests, as described above, at any time within NINETY (90) days after receipt of the Option Notice or notification by the Remaining Parties of the cessation of Sebastians’s Dealership Business Duties. (b) Exercise of Option : The Remaining Parties shall each give written notice within such option period to Sebastians’s estate of their respective election to purchase Sebastians’s Restricted Interests. The failure of the Remaining Parties to notify Sebastians, or Sebastians’s estate, as the case may be, within this option period of their election to exercise their option shall constitute a waiver of the option. Section III.4. LLC's Option to Purchase Sebastians’s Restricted Interests . In the event the Remaining Parties do not purchase all of Sebastians’s Restricted Interests, then the LLC shall have the option to purchase the remaining portion of Sebastians’s Restricted Interests pursuant to the following provisions: 10 App.A 0286 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 (a) Option Period : The LLC may exercise its option to purchase the remaining portion of Sebastians’s Restricted Interests at any time within THIRTY (30) days after the termination of the last option period specified by Section 3.3, above. (b) Exercise of Option : The LLC shall give written notice within such option period to Sebastians’s estate of its election to purchase the remaining portion of Sebastians’s Restricted Interests. The failure of the LLC to notify Sebastians’s estate within this option period of its election to exercise its option shall constitute a waiver of the option. Section III.5. Determination of Purchase Price by Agreement . The purchase price for Sebastians’s Restricted Interests shall be determined by the mutual agreement of the respective Purchasers and Sellers; provided, however, the Purchasers and Sellers shall be bound to the agreed upon valued described below. Section III.6. Alternative Determination of Purchase Price While Guarantee in Effect . If such parties fail to mutually agree upon a purchase price for such Restricted Interests and the following provisions in (a) and (b) do not apply, then the purchase price shall be determined by the provisions of Section 3.7. (a) Acquisition Loan : In the initial formation of each LLC, Sebastians financed his Capital Contributions by obtaining a loan from The Durant Classic Dynasty Trust (the "Loan"). (b) Purchase Price During Term of Loan Guaranty So long as the Loan remains unpaid, the Parties hereby agree that the applicable Purchase Price for Sebastians’s Restricted Interests shall be equal to the lower of: (i) the amount of Sebastians’s initial contribution to the LLC for his Restricted Membership Interest or (ii) the appraised value as determined by the appraisal procedures set forth in Section 3.7(a)-(c). This provision only applies to the specific LLC where the acquisition loan is still in effect and does not extend to other LLC’s when their loan has been paid in full either by refinancing through a third party or by payment in full satisfaction of the loan. 11 App.A 0287 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 Section III.7. Alternative Determination of Purchase Price if Loan No Longer Outstanding . In the event the Loan is repaid in full, and the Remaining Parties and/or the LLC exercise their respective options to purchase Sebastians’s Restricted Interests under this Article and the respective parties cannot mutually agree upon a purchase price thereof, then the purchase price of Sebastians’s Restricted Interests shall be the appraised fair market value of such interests determined by an independent appraiser selected by the mutual agreement of the Sellers and the persons or entities entitled to purchase the Restricted Interests under this Agreement (the "Purchasers"), subject to the following provisions: (a) Failure to Agree on Appraiser : In the event the Sellers and the Purchasers fail to mutually agree on an independent appraiser, the fair market value of Sebastians’s Restricted Interests shall be determined by a Multiple Appraisal as provided in Section 3.6(b), below. (b) Multiple Appraisal : In the event that a Multiple Appraisal is required under this Agreement, the Sellers shall collectively select one appraiser, and the Purchasers shall collectively select one appraiser. The two appraisers shall then attempt to agree on the required determination of fair market value. If the two appraisers cannot agree upon the required determination, they shall appoint a third appraiser, and the three appraisers shall determine the required fair market value by majority vote. The decision of the appraisers shall be binding on all parties. Any appraiser shall be independent and regionally recognized as an expert appraiser. (c) Costs of Appraisal : All appraisals, legal and accounting costs incurred for purposes of the appraisal shall be paid ONEHALF (1/2) by the Sellers and ONEHALF (1/2) by the Purchasers. The appraiser or appraisers may retain such additional appraisers, advisors and experts as they deem reasonably necessary and may rely on the opinion of such additional appraisers, advisors and experts. Any additional costs incurred shall be treated as costs of the appraisal of the fair market value of the Restricted Interests. Section III.8. Payment of Purchase Price 12 App.A 0288 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 . The purchase price of Sebastians’s Restricted Interests for purposes of this Article shall be paid pursuant to the following provisions: (a) Closing Date : The closing shall occur on or before ONE HUNDRED EIGHTY (180) days following the date of the specified event, and at a time and place mutually agreeable to Sellers and the Purchasers. In the event that the purchase price has not been determined by such date, then closing shall occur on or before TEN (10) days after the determination of the purchase price. (b) Terms of Purchase Price : Each respective Purchaser shall deliver at closing a Promissory Note(s), dated as of the Closing Date, the principal amounts of which shall be equal to such pro rata share of the purchase price for each Seller, the form and substance of the Promissory Note(s) being the same as the attached Exhibit "B". (c) Prepayment Privilege : The respective Purchasers shall have the sole and absolute right to prepay all or any part of the purchase price at any time without penalty. The Parties further agree that each Purchaser shall have the unilateral option to elect thereafter to pay interest on the unpaid principal at the prevailing interest rate at the time. (d) Execution of Documents : The Sellers and the respective Purchasers agree to execute any and all additional documents reasonably necessary to complete the closing as contemplated herein. Section III.9. Determination of Disability . The Disability status of Sebastians shall be determined pursuant to the following provisions: (a) By Mutual Agreement : The Disability status of Sebastians may be determined by mutual agreement of the remaining Parties and Sebastians or his respective representatives. The remaining Parties shall be fully protected and shall have no liability whatsoever for transacting any business with the custodian or guardian of Sebastians, whether such custodian or guardian is natural or court-appointed. (b) In the Event of Disagreement : In the event of a disagreement between the remaining Parties and Sebastians, or his representatives, as to the condition or the ability of Sebastians to carry out his duties, the remaining Parties shall select a competent, independent medical doctor, who shall render a professional opinion as to whether or not Sebastians is subject 13 App.A 0289 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 to Disability as defined in this Agreement. The opinion and decision of such medical doctor shall be binding upon both the remaining Parties, and Sebastians or his representatives. The costs and expenses of obtaining such professional opinion, shall be borne equally by the remaining Parties, collectively, and Sebastians or his representatives. ARTICLE IV. DEATH OR DIVORCE OF A SPOUSE OF A PARTY Section IV.1. Effect of Death or Divorce . In the event the marital relationship of one of the Parties who owns Restricted Interests is terminated by divorce or by the death of his or her spouse, any Restricted Interests owned by such individual that do not pass to the respective Party, Family Members (other than his or her spouse) or a Family Trust, shall be subject to the options contained in this Article. Section IV.2. Party’s Option to Purchase Restricted Interests . The Party who was married (the "Married Party") to the divorced or deceased spouse shall have the option to purchase all or any portion of such Restricted Interests for the purchase price (as determined in Section 4.4 below) of the Restricted Interests determined as of the end of the month preceding the date on which a final judgment of divorce was entered or the date of death, whichever the case may be, pursuant to the following provisions: (a) Option Period : The Married Party may exercise his option to purchase any part of the Restricted Interests at any time within NINETY (90) days after the latter of: [1] the date on which a final judgment of divorce is entered or the date of death, as the case may be; and [2] the date of the determination of the purchase price of the Restricted Interests. (b) Exercise of Option : The Married Party shall give written notice within such option period to the divorced spouse or the representatives of the deceased spouse's estate [or other successors in interest] and to the LLC of the number of Restricted Interests which he or she agrees to purchase. The failure of the Married Party to notify the divorced spouse or the representatives of the deceased spouse's estate [or other successors in 14 App.A 0290 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 interest] and the LLC within this period of the Married Party's election to exercise his option shall constitute a waiver of the option. Section IV.3. Business' Option to Purchase Restricted Interests . In the event the Married Party does not purchase all of the Restricted Interests, then the LLC shall have the option to purchase all or any portion of such remaining Restricted Interests for the purchase price (as determined in accordance with Section 4.4 below) of the Restricted Interests determined as of the end of the month preceding the date on which a final judgment of divorce was entered or the date of death, whichever the case may be, pursuant to the following provisions: (a) Option Period : The LLC may exercise its option to purchase any part of such remaining Restricted Interests at any time within NINETY (90) days after the latter of: [1] the date on which a final judgment of divorce is entered or the date of death, as the case may be; and [2] the date of the determination of the purchase price of the Restricted Interests. (b) Exercise of Option : The LLC shall give written notice within such option period to the divorced spouse or the representatives of the deceased spouse's estate [or other successors in interest] of the number of Restricted Interests which it agrees to purchase. The failure to notify the divorced spouse or the representatives of the deceased spouse's estate [or other successors in interest] within this period of its election to exercise its option, shall constitute a waiver of the option. Section IV.4. Determination of Purchase Price . The purchase price of the Restricted Interests purchased under the terms of this Article shall be determined as follows: (a) Divorce : In the event of the divorce between the Married Party and his spouse, the purchase price shall be the amount determined by the court having jurisdiction over the divorce proceeding, or if such court does not make such determination, the amount as agreed upon by and between the Married Party [or the LLC] and his or her spouse. If the divorce court does not make such a value determination and the Married Party and his or her spouse do not agree upon the valuation, then the 15 App.A 0291 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 purchase price shall be the amount determined in accordance with Section 3.7 [with the Married Party and/or the LLC and his spouse each paying onehalf of the related costs]. (b) Death : In the event of the death of a Married Party’s spouse, the purchase price shall be the amount as agreed upon by and between the Married Party [or the LLC] and his or her deceased spouse's estate, or if they do not so agree, then the purchase price shall be the amount determined in accordance with Section 3.7 [with the Married Party and/or the LLC and his deceased spouse's estate each paying onehalf of the related costs]. Section IV.5. Payment of Purchase Price . In the event the Married Party and/or the LLC exercise their options to purchase all or any portion of such Restricted Interests, the purchase price shall be paid pursuant to the following provisions: (a) Closing Date of Purchase/Sale : The Married Party and/or the LLC shall give the divorced spouse or the representatives of the deceased spouse's estate [or other successors in interest] written notice of the time and place of the closing. The closing shall be within THIRTY (30) days after the divorced spouse or the representatives of the deceased spouse's estate [or other successors in interest] receives the last written election by the Married Party and/or the respective LLC of their elections to exercise their options. (b) Terms of Purchase Price : The Married Party and/or the LLC shall pay the total purchase price at closing by the execution and delivery of a promissory note or notes at closing, the terms and provisions of which are the same at the form which is attached as Exhibit "B" to this Agreement. (c) Prepayment Privileges : The Married Party and/or the LLC shall have the sole and absolute right to prepay all or any part of the purchase price at any time, without penalty. The Parties further agree that each Purchaser shall have the unilateral option to elect thereafter to pay interest on the unpaid principal at the prevailing interest rate at the time. 16 App.A 0292 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 ARTICLE V. MISCELLANEOUS PROVISIONS Section V.1. Filing of Agreement . An executed copy of this Agreement shall be filed with the Managers of the LLCs. Section V.2. Notice Provision . Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement shall be deemed to have been effectively given and received on the date personally delivered to the respective Party to whom it is directed, or when deposited by registered or certified mail, with postage and charges prepaid and addressed to the Party at the address set forth in Exhibit "C" to this Agreement. A Party may change its notice address by delivering a written change of address to all of the other Parties in the manner set forth in this Section. Section V.3. Amendment of Agreement . No amendment, modification or alteration of the terms of this Agreement shall be binding unless in writing, dated subsequent to the date of this Agreement, and executed by all the Parties. Section V.4. Specific Performance . The Parties hereby agree that it is impossible to measure in money the damages which will accrue to a Party by reason of a failure to perform any of the obligations under this Agreement. Therefore, if any Party shall institute any action or proceeding to enforce the provisions of this Agreement, any person against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such person shall not urge in any such action or proceeding the claim or defense that such remedy at law exists. Section V.5. Attorney Fees 17 App.A 0293 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 . If any action at law or equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing Party shall be entitled to recover reasonable attorney's fees and all other costs and expenses of litigation from the other Party, which amounts may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose, and which amounts shall be in addition to any other relief which may be awarded. Section V.6. Termination of Agreement . This Agreement shall terminate upon the mutual written agreement of the Parties. Section V.7. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the Parties to this Agreement and their respective estates, legal representatives, successors, transferees, heirs and assigns. Section V.8. Execution of Multiple Agreements . This Agreement may be executed in several counterparts, and all so executed shall constitute one Agreement, binding on all of the Parties hereto, notwithstanding that all of the Parties are not a signatory to the original or the same counterpart. Section V.9. Provisions Severable . In the event any sentence, paragraph, provision, Section or Article of this Agreement is declared by a court of competent jurisdiction to be void, such sentence, paragraph, provision, Section or Article shall be deemed severed from the remainder of the Agreement and the balance of the Agreement shall remain in effect. Section V.10. Construction of Agreement . This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Title or captions contained in this Agreement are inserted only as a matter of convenience 18 App.A 0294 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 and reference. Such titles and captions shall not be construed to define, limit, extend or describe the scope or the intent of any provision of this Agreement. This Agreement shall not be strictly construed against any Party. Whenever required by the context hereof, the singular shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders, and vice versa; and the word "person" shall include an estate, trust, corporation, partnership, or other form of business entity when necessary. Section V.11. Entire Agreement . This Agreement constitutes the entire understanding of the Parties and supersedes all prior understandings, whether written or oral, between the Parties with respect to the subject matter of the Agreement. Section V.12. Execution of Additional Documents . The Parties, their legal representatives, executors, successors and assigns, hereby agree to execute such other and further documents and instruments and take such further action as may be necessary or desirable to carry out the purpose of this Agreement and to comply with all laws which may be applicable to the Restricted Interests, the Policies, and the LLC. Section V.13. Incorporation by Reference of Exhibits . All Exhibits referred to in this Agreement are hereby incorporated in this Agreement by reference for all purposes. Section V.14. Effective Date . This Agreement is executed on the dates set opposite the signatures below, but is effective as of May 1, 2023. 19 App.A 0295 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 DATES: SIGNATURES: 6/16/2023 THOMAS R. DURANT 7/20/2023 Michael Jeffrey Sebastian 7/21/2023 Tiffany Sebastian THE DURANT CLASSIC DYNASTY TRUST 6/15/2023 By: Marin “Mark” Escamilla, Trustee CLASSIC CHEVROLET SUGAR LAND, LLC CLASSIC CHEVROLET WEST HOUSTON LLC CLASSIC ELITE BUICK GMC, LLC. 16835 CADET PARTNERS, LLC 6/16/2023 By: Thomas R. Durant, President 20 App.A 0296 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 CONSENT OF SPOUSES For purposes of binding my current and/or future community and/or other interests in the Restricted Interests, if any, I hereby acknowledge that I have reviewed, understand and agree to the terms and provisions of this Agreement. DATES: SIGNATURES: 6/15/2023 SUSAN R. DURANT 7/20/2023 MICHAEL JEFFREY SEBASTIAN 7/21/2023 TIFFANY SEBASTIAN 21 App.A 0297 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 EXHIBIT "A" RESTRICTED INTERESTS MEMBER CLASS PERCENTAGE Thomas R. Durant Class A 0.7% Michael Jeffrey Sebastian Class A 0.3% The Durant Classic Dynasty Trust Class B 69.3% Michael Jeffrey Sebastian Class B 29.7% Example membership interest structure. Ownership interest varies with each LLC. 22 App.A 0298 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 EXHIBIT "B" PROMISSORY NOTE Date: Maker: Maker’s Mailing Address (including county): Payee: Place for Payment (including county): Principal Amount: ($ ) Annual Interest Rate on Unpaid Principal from Date of Note: The applicable Federal rate as determined for purposes of Section 7872(f)(2)(B) of the Internal Revenue Code of 1986, as amended, as of the date of this Note, which rate is PERCENT ( %) per annum. Terms of Payment (principal and interest): Interest on the unpaid principal on this note shall be payable in FIVE (5) equal annual installments commencing ONE (1) year after the date hereof. All principal plus any accrued interest shall be paid on or before FIVE (5) years from the date hereof. Annual Interest Rate on Matured, Unpaid Amounts: Applicable Federal Rate, as determined above, compounded annually Maker promises to pay to the order of Payee at the place for payment and according to the terms of payment the principal amount plus interest at the rates stated above. All unpaid amount shall be due by the final scheduled payment date. App.A 0299 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 Maker shall have the right to prepay this Note at any time in whole or in part without penalty. Partial prepayments shall be applied first to accrued but unpaid interest, and then to the outstanding principal balance of this Note. Maker shall have the absolute and unilateral right to redesignate the interest rate, applicable to the unpaid principal after each such prepayment, in effect for the month during which such prepayment of principal is made by Maker. On default of in the payment of this note and Maker’s failure to cure the default within NINETY (90) days after written notice from payee of the default, it shall become immediately due at the election of Payee. Except for such written notice of default, Maker and each surety, endorser and guarantor waive all demands for payment, presentations for payment, notices of intention to accelerate maturity, protest and notices of protest to the extent permitted by applicable law. If this note is given to any attorney for collection, or if suit is brought for collection, or if it is collected through probate, bankruptcy or other judicial proceedings, then Maker shall pay Payee reasonable attorneys' fees in addition to other amounts due. Reasonable attorneys' fees shall be due unless either party pleads otherwise. This Note shall be subject to the terms of that certain BUYSELL AGREEMENT dated ____________, 2009. Nothing in this note shall authorize the collection of interest in excess of the highest rate allowed by law. MAKER: [Exhibit OnlyNot For Execution] , Maker 24 App.A 0300 DocuSign Envelope ID: CCF86877-B234-44AB-BBF3-4D7334912B03 EXHIBIT "C" NOTICE ADDRESSES THOMAS R. DURANT 1101 SH 114, P.O. Box 1717 Grapevine, TX 76051 SUSAN R. DURANT 1101 SH 114, P.O. Box 1717 Grapevine, TX 76051 Michael Jeffrey Sebastian and Tiffany Sebastian THE DURANT CLASSIC DYNASTY TRUST c/o Mark Escamilla, Trustee 1101 SH 114, P.O. Box 1717 Grapevine, TX 76051 CLASSIC CHEVROLET SUGAR LAND, LLC 1101 SH 114, P.O. Box 1717 Grapevine, TX 76051 App.A 0301 Motion GRANTED AND Order filed February 21, 2025. In The Fifteenth Court of Appeals ____________ NO. 15-25-00019-CV ____________ IN RE T. BENTLY DURANT; THOMAS R. DURANT; THE DURANT CLASSIC DYNASTY TRUST; MICHAEL A. WARD; 8100 PARTNERS, LTD.; 8100 MANAGEMENT LLC; 8705 PARTNERS, LTD.; 8705 MANAGEMENT LLC; CLASSIC CHEVROLET SUGAR LAND LLC; CLASSIC CHEVROLET WEST HOUSTON, LLC; CLASSIC ELITE BUICK GMC, INC.; AND 16835 CADET PARTNERS, LLC, Relators ORIGINAL PROCEEDING WRIT OF MANDAMUS Business Court Division 11A Trial Court Cause No. 25-BC11A-0001 ORDER On Friday, February 21, 2025, relators T. Bently Durant; Thomas R. Durant; The Durant Classic Dynasty Trust; Michael A. Ward; 8100 Partners, Ltd.; 8100 Exhibit 11 App.A 0302 Management LLC; 8705 Partners, Ltd.; 8705 Management LLC; Classic Chevrolet Sugar Land LLC; Classic Chevrolet West Houston, LLC; Classic Elite Buick GMC, Inc.; and 16835 Cadet Partners, LLC, filed a petition for writ of mandamus in this court. Relator asks this court to order the Honorable Stacy Rogers Sharp, Judge of the Business Court Division 11A, in Travis County, Texas, to set aside her order dated February 4, 2024, entered in trial court number 25-BC11A-0001, styled Sebastian v. Durant, No. 25-BC11A-0001. Relators have also filed a motion for temporary stay of proceedings below.1 It appears from the facts stated in the petition and motion that relator’s request for relief requires further consideration and that relator will be prejudiced unless immediate temporary relief is granted. We therefore GRANT relator’s motion and order that all proceedings in cause no. 25-BC11A-0001, Sebastian v. Durant (including proceedings on remand in cause no. 24-DCV-318087) be STAYED until a final decision by this court on relator’s petition for writ of mandamus, or until further order of this court. In addition, the court requests Tiffany and Michael Jeffrey Sebastian, the real parties-in-interest, to file a response to the petition for writ of mandamus on or before March 3, 2025. 2 Relators’ reply is due by March 13, 2025. PER CURIAM Panel consists of Chief Justice Brister and Justices Field and Farris. 1 See TEX. R. APP. P. 52.8(b), 52.10. 2 See id. R. 52.4. App.A 0303 BOHREER LAW FIRM PLLC 777 Post Oak Blvd., Suite 950 Houston, Texas 77056 832-856-3006 (Telephone) 832-856-2891 (Facsimile) www.bohreerlaw.com February 24, 2025 Via Email ([email protected]) Mr. Derek Rollins Shackelford, McKinley & Norton, LLP 9201 N. Central Expressway, 4th Floor Dallas, Texas 75231 Re: Cause No. 24-DCV-318087; IMMO Tiffany Lynn Sebastian and Michael Jeffrey Sebastian, et al; In the 387th Judicial District Court of Fort Bend County, Texas RULE 408: SETTLEMENT DISCUSSIONS Counsel, As of Saturday, February 22, 2025, Thomas R. Durant was removed as a Manager of Classic Chevrolet West Houston, LLC. He was also removed as President of Classic Chevrolet West Houston, LLC. Tiffany Sebastian was appointed to fill the Manager vacancy and Jeff Sebastian was appointed President of Classic Chevrolet West Houston, LLC. Reasonable compensation for the Managers was set at $15,000 per month as base compensation and 2% of the dealership gross. The first payment of compensation is due on February 28, 2025, for the base and by March 15, 2025 for two (2%) percent of February dealership gross. The Sebastians are excited to go back to the dealership and do what they love. They intend to fully exercise their rights under the applicable Company Agreement for Classic Chevrolet West Houston, LLC. The Sebastians will notify Ulysess of the compensation decided on Saturday. To be clear, unless and until Mr. Sebastian’s ownership is bought out under the terms of the Buy-Sell Agreement, Jeff does not wish to be replaced as “Dealer Principal”. He desires to fulfill that role as he previously did before his illegal expulsion. The Sebastians will next proceed with similar actions as to Classic Elite Buick ǀ GMC, LLC. before seeking Chevrolets guidance regarding Classic Chevrolet Sugar Land, LLC The Sebastians ask that we provide the Durants a final opportunity to honor the very Buy- Sell Agreement your letter of Friday, February 21, 2025 repeatedly references as enforceable. As of now, the Sebastians intend to be back at the dealership and proceed as outlined above. Likewise, the Sebastians will notify Chevrolet and General Motors of their return to control of Classic Chevrolet West Houston and Mr. Sebastian’s desire to continue as “dealer principal”. The only way the Sebastians are willing to change these plans is if an agreement to proceed forward under the Buy-Sell Agreement with specific dates for designation of appraisers; information being provided to appraisers as requested by the appraisers; deadline for FMV exchange; the selection Exhibit 12 App.A 0304 February 24, 2025 Page 2 of a third appraiser, if needed; and ultimately, closing is reached immediately. This agreement would be documented as an enforceable Rule 11 Agreement. The offer contained in the letter expires at 12:00 noon on Tuesday, February 25, 2025, and must be accepted in writing. Very Truly Yours, E. Michelle Bohreer cc: Jeff Sebastian (via email) Tiffany Sebastian (via email) Joe DiCecco (via email) John Coselli III (via email) Jill Evangelista (via email) Mitch Little (via email) Richard L. Tate (via email) App.A 0305 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Rebecca Duckworth on behalf of Derek Rollins Bar No. 24029803 [email protected] Envelope ID: 98420963 Filing Code Description: Petition Filing Description: Plaintiff's Verified Original and Emergency Application for Temporary Injunction and Permanent Injunction (Sebastian) Status as of 3/13/2025 12:22 PM CST Associated Case Party: Classic Chevrolet West Houston, LLC Name BarNumber Email TimestampSubmitted Status Rebecca DeeDuckworth [email protected] 3/13/2025 12:11:51 PM SENT John LucasPeterson [email protected] 3/13/2025 12:11:51 PM SENT Derek D.Rollins [email protected] 3/13/2025 12:11:51 PM SENT Timothy DZeiger [email protected] 3/13/2025 12:11:51 PM SENT App.A 0306 FILED TARRANT COUNTY 3/13/2025 10:28 AM 236-3627 46-25 THOMAS A. WILDER DISTRICT CLERK CAUSE NO. _ _ _ _ _ _ __ CLASSIC CHEVROLET WEST § IN THE DISTRICT COURT HOUSTON, LLC, § § Plaintiff, § § V. § JUDICIAL DISTRICT § MICHAEL JEFFREY SEBASTIAN AND § TIFFANY SEBASTIAN, § § Defendants. § TARRANT COUNTY, TEXAS TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING On this day the Court considered the Verified Original Petition and Emergency Application for Temporary Injunction and Permanent Injunction ("Verified Application"} of Plaintiff Classic Chevrolet West Houston, LLC ("Plaintiff'} against Defendants Michael Jeffrey Sebastian ("Jeff'} and Tiffany Lynn Sebastian ("Tiffany"} (collectively "Defendants"}. After reviewing the Verified Application and the attachments thereto and arguments of counsel, the Court makes the following findings: 1. The purported actions taken at the February 22, 2025 special meeting were unauthorized under the Company Agreement and are, therefore, null and void. 2. Defendants are prohibited from attempting to call, or otherwise participate in, any meetings of Plaintiffs members. 3. Defendants are prohibited from attempting to vote or engage in any managerial function associated with their membership interest(s} in Plaintiff, induding without limitation, entering the Dealership, giving instruction, direction, or orders to Dealership employees, or accessing or attempting to access any financial records of the Dealership. 4. Unless a Temporary Restraining Order is entered immediately enjoining Defendants Michael Jeffrey Sebastian and Tiffany Lynn Sebastian, their agents, servants, employees, and attorneys from the acts described herein, there is imminent danger Plaintiffs will suffer immediate and irreparable harm, loss, and damage in the form of disruption of business operations and financial and reputational harm directly resulting from the acts of Defendant. Exhibit 13 TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING App.A 0307 PAGE -1 5. Plaintiffs have no adequate remedy at law, due to the continuing nature of the damages and the extreme difficulty inherent in attempting to quantify the damages in monetary terms. 6. Plaintiffs are entitled to the issuance of a Temporary Restraining Order to protect and preserve the status quo until a hearing can be held on Plaintiffs' request for a Temporary Injunction. Plaintiffs have demonstrated a likelihood of success on the merits of this case and a balancing of the equities strongly favors an award of injunctive relief. IT IS, THEREFORE, ORDERED that each Defendant, together with his or her respective agents, employees, contractors, representatives, attorneys, and legal representatives, and all others in active concert or participation with each of them, is enjoined from engaging, directly or indirectly, through any person or entity, in any of the following activities: 1. Effecting or enforcing any of the purported actions taken at the February 22, 2025 special meeting. 2. Attempting to call, or otherwise participate in, any meetings of Plaintiffs members. 3. Attempting to vote or engage in any managerial function associated with their membership interest(s) in Plaintiff, including without limitation, entering the Dealership, giving instruction, direction, or orders to Dealership employees, or accessing or attempting to access any financial records of the Dealership. IT IS FURTHER ORDERED that, unless terminated earlier by this Court, this Temporary Restraining Order shall expire at close of business fourteen (14) days from the date of signing, unless within the time limit set out above, the Court extends the effectiveness of this Order in compliance with applicable law or it is extended by agreement of the parties. +'- IT IS FURTHER ORDERED that Defendants shall appear at the .2-'~udicial District Court of Tarrant County, Texas, Tom Vandergriff Civil Courts Building, 100 North Calhoun Street, Fort Worth, TX 76196 on t h e ~ day of J1lo,+, 2025, at ,2.!PJ? fl· m. to show cause, if any, why Temporary Injunction should not issue as requested by Plaintiff until final trial of this cause. App.A 0308 TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING PAGE-2 IT IS FURTHER ORDERED that this Temporary Restraining Order will not be effective unless and until Plaintiff executes and files with the Court a bond in conformity with the law, or a . c)P ~ cash deposit in lieu thereof, in the amount of$ I, ~OP . App.A 0309 TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING PAGE-3 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Rebecca Duckworth on behalf of Derek Rollins Bar No. 24029803 [email protected] Envelope ID: 98662859 Filing Code Description: Amended Filing Filing Description: Plaintiff's Verified First Amended Petition and Application for Temporary Injunction (Sebastian) Status as of 3/20/2025 8:15 AM CST Associated Case Party: MICHAELJEFFREYSEBASTIAN Name BarNumber Email TimestampSubmitted Status E. MichelleBohreer [email protected] 3/19/2025 5:43:51 PM SENT Associated Case Party: TIFFANYLYNNSEBASTIAN Name BarNumber Email TimestampSubmitted Status Mitch Little [email protected] 3/19/2025 5:43:51 PM SENT Steven Ovando [email protected] 3/19/2025 5:43:51 PM SENT Case Contacts Name BarNumber Email TimestampSubmitted Status Derek D.Rollins [email protected] 3/19/2025 5:43:51 PM SENT Timothy DZeiger [email protected] 3/19/2025 5:43:51 PM SENT Sharon Taylor [email protected] 3/19/2025 5:43:51 PM SENT Pritesh Soni [email protected] 3/19/2025 5:43:51 PM SENT E MichelleBohreer [email protected] 3/19/2025 5:43:51 PM SENT John LucasPeterson [email protected] 3/19/2025 5:43:51 PM SENT Rebecca DeeDuckworth [email protected] 3/19/2025 5:43:51 PM SENT App.A 0310 Elizabeth Swan Attachments: Transcript for corporate meeting.pdf From: Jeff Sebastian <[email protected]> Date: Wed, Mar 12, 2025 at 1:58 PM Subject: Classic Chevy Hwy 6 To: Ulises Duran <[email protected]>, Ulises Duran <[email protected]>, Wife <[email protected]> Ulises, I hope you're having a great day. Tiffany and I are currently working at the Highway 6 location. Effective immediately, as managers (see attachment), Tiffany and I will have the following compensation structure:  A base salary of $15,000 per month, starting March 12, 2025.  2% of the total store gross, beginning with the prior month's gross, paid on April 15, 2025. We have already scheduled a meeting with Chevrolet and are excited that over the coming days, we will be scheduling multiple meetings with staff, lenders, vendors, and others. In order to proceed as efficiently as possible, we need the following items from you as soon as possible: 1. Access to our emails 2. All daily and monthly financial reports and financial documents for Highway 6 3. Keys for Highway 6 4. Login access to all systems, including CRM, DMS, Vauto, Global Connect, etc. for Highway 6 5. Contact information for PBS 6. current new and used inventory for Highway 6. There will likely be additional requests, but this will be a good starting point. While I know you may have other things before this request, I would appreciate receiving these reports by 3 today if possible. Please send them as you run them. Additionally, we need to schedule a meeting with you as soon as possible. Excited to be working with you again. Best, Jeff and TIffany Reported By:· Lorraine Brazil Job #: 200787 App.B 0002 :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 1 · · · ·· · · · · ************************************* · · · ·· · · · · · · ·Special Meeting of Managers · · · ·· · · · · ·Classic Chevrolet West Houston, LLC · · · ·· · · · · · · · · · February 22, 2025 · · · ·· · · · · ************************************* · · · ·· · ·Special Meeting of Managers for Classic Chevrolet · · ·West Houston, LLC was held in the above on February 22, · · ·2025, from 10:30 a.m. to 10:52 a.m., before Lorraine · · ·Brazil, Texas CSR, Louisiana CCR, RPR, CRR, CBC, RMR, in · · ·and for the State of Texas, reported by machine · · ·shorthand, at the Law Offices of Richard L. Tate, · · ·Attorney At Law, 206 South 2nd Street, Richmond, Texas, · · ·pursuant to the Texas Rules of Civil Procedure. · · · · · · · · · · · BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0003 YVer1f :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 2 ·1 · · · · · · · · · A P P E A R A N C E S ·2 For Michael Jeffrey Sebastian: ·3 · · ·Ms. E. Michelle Bohreer · · ·· · ·Bohreer Law Firm, PLLC ·4 · · ·777 Post Oak Road · · ·· · ·Suite 950 ·5 · · ·Houston, Texas 77056 · · ·· · ·T: 713.446.4958 ·6 · · ·F: 713.526.8105 · · ·· · ·[email protected] ·7 · · ·And · · ·· · ·Mr. Richard L. Tate ·8 · · ·Attorney At Law · · ·· · ·206 South 2nd Street ·9 · · ·Richmond, Texas 77469 · · ·· · ·T: 281.341.0077 · · ·[email protected] BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0004 YVer1f :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 3 ·1 · · · · · · MR. SEBASTIAN:· All right.· It is 10:45 ·2 a.m. on Saturday, February 22nd, 2025.· I will be ·3 calling this meeting to order.· I am Michael Jeffrey ·4 Sebastian, a manager with the owner of 51 percent of ·5 the class A interests in Classic Chevrolet West ·6 Houston, LLC.· I served notice of this special ·7 meeting of managers in accordance with Section 3.26 ·8 of the company agreement and provided notice to my ·9 fellow manager, Thomas R. Durant, via Federal Express on February 18th, 2025. · · · · · · My counsel, E. Michelle Bohreer, provided notice to Mr. Durant's counsel of record via E-mail on the same day.· For the minutes, I am attaching the notice of special meeting along with a copy of the Federal Express label sending the same to Mr. Durant and a copy of the E-mail from my attorney. · · · · · · I note that Mr. Thomas R. Durant is not present despite the notice. · · · · · · As provided in the notice, the first matter for consideration is the removal of Thomas R. Durant as a manager of Classic Chevrolet West Houston, LLC as authorized by Section 3.20 of the company agreement. · · · · · · Is there any discussion? BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0005 YVer1f :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 4 ·1 · · · · · · Any discussion? ·2 · · · · · · (None.) ·3 · · · · · · MR. SEBASTIAN:· Hearing none, all in ·4 favor say "aye." ·5 · · · · · · MR. SEBASTIAN:· Aye, I vote any 51 ·6 percent class A interest in favor of removal. ·7 · · · · · · The second item to be considered is the ·8 filling of the vacancy in managers based on Mr. ·9 Durant's removal as authorized by Section 3.17 of the company agreement. · · · · · · Are there any nominations? · · · · · · Any discussions? · · · · · · (None.) · · · · · · MR. SEBASTIAN:· Hearing none, I vote my 51 percent class A interest in favor of Tiffany Sebastian.· Based on the company agreement, Tiffany Sebastian fills the vacancy of Thomas R. Durant as manager. · · · · · · The third matter to be addressed is removal of Thomas R. Durant as president of Classic Chevrolet West Houston, LLC pursuant to Section 3.22 of the company agreement. · · · · · · Is there any discussion? · · · · · · (None.) · · · · · · MR. SEBASTIAN:· Hearing none, as the BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0006 YVer1f :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 5 ·1 sole manager and 51 percent owner of the class A ·2 interests in Classic Chevrolet West Houston, I ·3 believe it is in the best interests of Classic ·4 Chevrolet West Houston for Mr. Durant to be removed ·5 as president. ·6 · · · · · · Is there any discussion? ·7 · · · · · · (Discussion off the record.) ·8 · · · · · · MR. SEBASTIAN:· Hearing none, as the ·9 sole manager and 51 percent owner of the class A interests in Classic Chevrolet West Houston, I believe it is in the best interests of Classic Chevrolet West Houston for Michael Jeffrey Sebastian to be appointed as president. · · · · · · I vote to appoint Michael Jeffrey Sebastian as president of Classic Chevrolet West Houston. · · · · · · All in favor say "aye." · · · · · · MS. SEBASTIAN:· Aye. · · · · · · MR. SEBASTIAN:· Aye. · · · · · · Michael Jeffrey Sebastian is now appointed as president pursuant to the terms of the company agreement. · · · · · · The fifth item to be considered is the compensation of the managers pursuant to Section 3.10 of the company agreement. BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0007 YVer1f :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 6 ·1 · · · · · · Is there any discussion?· Being manager ·2 -- being a manager is time consuming.· I think that ·3 a $15,000 per month base pay, plus two percent of ·4 the total store gross would be appropriate ·5 compensation for each manager.· I believe the ·6 manager should each receive $15,000 base pay ·7 immediately, with payment no later than February ·8 28th, 2025, and be paid two percent of the total ·9 store gross for February no later than March 15th, 2025.· The March base pay should be paid no later than March 5th, 2025 with the two percent of the total store gross to be paid by April 15th, 2025. · · · · · · As a manager and 51 percent owner of the class A interests in Classic Chevrolet West Houston, I believe an appropriate compensation for a manager of Classic Chevrolet West Houston is $15,000 per month salary, plus two percent of the total store gross. · · · · · · I vote to approve compensation of $15,000 per month base pay, plus two percent of the total store gross for each manager effective immediately. · · · · · · All in favor say "aye." · · · · · · MS. SEBASTIAN:· Aye. · · · · · · MR. SEBASTIAN:· Aye. BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0008 YVer1f :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 7 ·1 · · · · · · Based on the notice of special meeting, ·2 all the specific items have been addressed.· I would ·3 like to summarize the action taken at this special ·4 meeting.· First, Thomas R. Durant has been removed ·5 as manager of Classic Chevrolet West Houston, LLC. ·6 Second, Tiffany Sebastian is appointed to fill the ·7 vacancy caused by the removal of Thomas R. Durant. ·8 Third, Thomas R. Durant is removed as president of ·9 Classic Chevrolet West Houston.· Fourth, Michael Jeffrey Sebastian is appointed as president of Classic Chevrolet West Houston.· And, finally, Michael Jeffrey Sebastian and Tiffany Sebastian as managers shall receive compensation of $15,000 per month base pay and two percent of the total store gross with payment due for February to be paid no later than February 28th, 2025 and February percentage of gross by March 15th.· March base to be paid by March 5, 2025 and two percent of total store gross by March 15th, 2025, with each month thereafter to follow the same payment schedule. · · · · · · Based on that, I declare the special meeting adjourned. · · · · · · · · · · · * * * * * BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0009 :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 8 ·1 COUNTY OF HARRIS ) ·2 STATE· OF· TEXAS ) ·3 · · · · · · · · ·REPORTER'S CERTIFICATE ·4 · · ·I, LORRAINE BRAZIL, Certified Shorthand Reporter in ·5 and for the State of Texas, hereby certify that this ·6 transcript is a true record of the testimony given. ·7 · · ·I further certify that I am neither attorney nor ·8 Counsel for, related to, nor employed by any of the ·9 parties to the action in which this testimony was taken. 10 Further, I am not a relative or employee of any attorney 11 of record in this cause, nor do I have a financial 12 interest in the action. 13 · · ·Subscribed and sworn to on this the 24TH day of 14 FEBRUARY, 2025. 15 16 · · ·· · · · · · · · · _______________________________ 17 · · · · · · · · · LORRAINE BRAZIL, Texas CSR 3119 · · ·· · · · · · · · · Louisiana CCR # 2011027 18 · · · · · · · · · Certified Livenote Reporter · · ·· · · · · · · · · NCRA Certified Realtime Reporter 19 · · · · · · · · · NCRA Registered Merit Reporter · · ·· · · · · · · · · BrazilCo, Inc. 20 · · · · · · · · · Expiration Date:· 4-30-2026 · · ·· · · · · · · · · Firm Registration:· No. 667 21 · · · · · · · · · 9119 Highway 6 South, Suite 230 · · ·· · · · · · · · · Missouri City, Texas· 77459 22 · · · · · · · · · Tel: 713.496.3344 · · ·· · · · · · · · · Fax: 713.496.3341 23 24 25 BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0010 :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 9Index: $15,000..gross agreement 3:8,24 4:10, $ 16,22 5:22,25 D appoint 5:14 $15,000 6:3,6,16,20 7:13 day 3:13 appointed 5:13,21 7:6, 10 declare 7:21 1 discussion 3:25 4:1,23 approve 6:19 5:6,7 6:1 10:45 3:1 April 6:12 discussions 4:12 15th 6:9,12 7:17,19 attaching 3:14 due 7:15 18th 3:10 attorney 3:17 Durant 3:9,16,18,22 4:17, authorized 3:23 4:9 20 5:4 7:4,7,8 2 aye 4:4,5 5:17,18,19 6:23, Durant's 3:12 4:9 24,25 2025 3:2,10 6:8,10,11,12 7:16,18,19 E B 22nd 3:2 E-MAIL 3:13,16 28th 6:8 7:16 base 6:3,6,10,20 7:14,17 effective 6:21 based 4:8,16 7:1,21 Express 3:10,15 3 Bohreer 3:11 3.10 5:25 F C 3.17 4:9 favor 4:4,6,15 5:17 6:23 3.20 3:23 calling 3:3 February 3:2,10 6:7,9 3.22 4:21 caused 7:7 7:15,16 3.26 3:7 Chevrolet 3:5,22 4:21 Federal 3:9,15 5:2,4,10,12,15 6:14,16 7:5, 9,11 fellow 3:9 BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0011 :· Corporate Meeting Certified Copy -· [] JOB #200787:· CORPORATE MEETING· FEBRUARY 22, 2025 Page 10Index: Hearing..West minutes 3:13 Saturday 3:2 H month 6:3,17,20 7:14,19 schedule 7:20 Hearing 4:3,14,25 5:8 Sebastian 3:1,4 4:3,5,14, N 16,17,25 5:8,12,15,18,19, Houston 3:6,23 4:21 5:2, 20 6:24,25 7:6,10,12 4,10,12,16 6:14,16 7:5,9, nominations 4:11 Section 3:7,23 4:9,21 11 note 3:18 5:24 notice 3:6,8,12,14,19,20 sending 3:15 I 7:1 served 3:6 immediately 6:7,22 sole 5:1,9 interest 4:6,15 O special 3:6,14 7:1,3,21 interests 3:5 5:2,3,10,11 specific 7:2 order 3:3 6:14 owner 3:4 5:1,9 6:13 store 6:4,9,12,17,21 7:14, item 4:7 5:23 18 items 7:2 summarize 7:3 P J paid 6:8,10,12 7:15,18 T pay 6:3,6,10,20 7:14 Jeffrey 3:3 5:12,14,20 terms 5:21 7:10,12 payment 6:7 7:15,20 Thomas 3:9,18,21 4:17, percent 3:4 4:6,15 5:1,9 20 7:4,7,8 L 6:3,8,11,13,17,20 7:14,18 Tiffany 4:15,16 7:6,12 percentage 7:17 label 3:15 time 6:2 present 3:19 LLC 3:6,23 4:21 7:5 total 6:4,8,12,17,21 7:14, president 4:20 5:5,13,15, 18 21 7:8,10 M provided 3:8,12,20 V manager 3:4,9,22 4:18 pursuant 4:21 5:21,24 5:1,9 6:1,2,5,6,13,15,21 vacancy 4:8,17 7:7 7:5 R vote 4:5,14 5:14 6:19 managers 3:7 4:8 5:24 7:13 receive 6:6 7:13 W March 6:9,10,11 7:17,18, record 3:12 5:7 19 removal 3:21 4:6,9,20 7:7 West 3:5,22 4:21 5:2,4,10, matter 3:21 4:19 12,15 6:14,16 7:5,9,11 removed 5:4 7:4,8 meeting 3:3,7,14 7:1,4,22 Michael 3:3 5:12,14,20 S 7:9,12 Michelle 3:11 salary 6:17 BrazilCo - Making Your Case™ 713.496.3344 Austin | Baton Rouge | Dallas | Houston | New Orleans [email protected] App.B 0012 FILED TARRANT COUNTY 3/13/2025 10:28 AM 236-3627 46-25 THOMAS A. WILDER DISTRICT CLERK CAUSE NO. _ _ _ _ _ _ __ CLASSIC CHEVROLET WEST § IN THE DISTRICT COURT HOUSTON, LLC, § § Plaintiff, § § V. § JUDICIAL DISTRICT § MICHAEL JEFFREY SEBASTIAN AND § TIFFANY SEBASTIAN, § § Defendants. § TARRANT COUNTY, TEXAS TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING On this day the Court considered the Verified Original Petition and Emergency Application for Temporary Injunction and Permanent Injunction ("Verified Application"} of Plaintiff Classic Chevrolet West Houston, LLC ("Plaintiff'} against Defendants Michael Jeffrey Sebastian ("Jeff'} and Tiffany Lynn Sebastian ("Tiffany"} (collectively "Defendants"}. After reviewing the Verified Application and the attachments thereto and arguments of counsel, the Court makes the following findings: 1. The purported actions taken at the February 22, 2025 special meeting were unauthorized under the Company Agreement and are, therefore, null and void. 2. Defendants are prohibited from attempting to call, or otherwise participate in, any meetings of Plaintiffs members. 3. Defendants are prohibited from attempting to vote or engage in any managerial function associated with their membership interest(s} in Plaintiff, induding without limitation, entering the Dealership, giving instruction, direction, or orders to Dealership employees, or accessing or attempting to access any financial records of the Dealership. 4. Unless a Temporary Restraining Order is entered immediately enjoining Defendants Michael Jeffrey Sebastian and Tiffany Lynn Sebastian, their agents, servants, employees, and attorneys from the acts described herein, there is imminent danger Plaintiffs will suffer immediate and irreparable harm, loss, and damage in the form of disruption of business operations and financial and reputational harm directly resulting from the acts of Defendant. App.C 0001 TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING PAGE -1 5. Plaintiffs have no adequate remedy at law, due to the continuing nature of the damages and the extreme difficulty inherent in attempting to quantify the damages in monetary terms. 6. Plaintiffs are entitled to the issuance of a Temporary Restraining Order to protect and preserve the status quo until a hearing can be held on Plaintiffs' request for a Temporary Injunction. Plaintiffs have demonstrated a likelihood of success on the merits of this case and a balancing of the equities strongly favors an award of injunctive relief. IT IS, THEREFORE, ORDERED that each Defendant, together with his or her respective agents, employees, contractors, representatives, attorneys, and legal representatives, and all others in active concert or participation with each of them, is enjoined from engaging, directly or indirectly, through any person or entity, in any of the following activities: 1. Effecting or enforcing any of the purported actions taken at the February 22, 2025 special meeting. 2. Attempting to call, or otherwise participate in, any meetings of Plaintiffs members. 3. Attempting to vote or engage in any managerial function associated with their membership interest(s) in Plaintiff, including without limitation, entering the Dealership, giving instruction, direction, or orders to Dealership employees, or accessing or attempting to access any financial records of the Dealership. IT IS FURTHER ORDERED that, unless terminated earlier by this Court, this Temporary Restraining Order shall expire at close of business fourteen (14) days from the date of signing, unless within the time limit set out above, the Court extends the effectiveness of this Order in compliance with applicable law or it is extended by agreement of the parties. +'- IT IS FURTHER ORDERED that Defendants shall appear at the .2-'~udicial District Court of Tarrant County, Texas, Tom Vandergriff Civil Courts Building, 100 North Calhoun Street, Fort Worth, TX 76196 on t h e ~ day of J1lo,+, 2025, at ,2.!PJ? fl· m. to show cause, if any, why Temporary Injunction should not issue as requested by Plaintiff until final trial of this cause. App.C 0002 TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING PAGE-2 IT IS FURTHER ORDERED that this Temporary Restraining Order will not be effective unless and until Plaintiff executes and files with the Court a bond in conformity with the law, or a . c)P ~ cash deposit in lieu thereof, in the amount of$ I, ~OP . App.C 0003 TEMPORARY RESTRAINING ORDER AND ORDER SETTING HEARING PAGE-3 CAUSE NO. 236-362746-25 CLASSIC CHEVROLET WEST § IN THE DISTRICT COURT HOUSTON, LLC, § § Plaintiff, § § 236th JUDICIAL DISTRICT v. § § MICHAEL JEFFREY SEBASTIAN AND § TIFFANY SEBASTIAN, § TARRANT COUNTY, TEXAS § Defendant. DEFENDANTS’ JOINT MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND TO THE HONORABLE JUDGE OF SAID COURT: COME NOW Defendants Michael Jeffrey Sebastian and Tiffany Sebastian (“Defendants”) and file this Joint Motion to Transfer Venue and, subject thereto, Emergency Motion to Dissolve Temporary Restraining Order and for Action on Bond. In support, Defendants assert as follows: I. INTRODUCTION On Friday, March 13, 2025, Plaintiff misled this Court into granting a Temporary Restraining Order (“TRO”) even though Plaintiff knew it should have sought relief in Fort Bend County, Texas—the county of Defendants’ domicile and the county of the court with dominant jurisdiction over this matter. The acts for which Plaintiff seeks a permanent injunction and sought a TRO is the subject of a lawsuit in the 387 th Judicial District Court of Fort Bend County. On the Friday before the Fort Bend County District Court—i.e., the court of dominant jurisdiction—was to order that a receiver take control over Plaintiff and two other Classic dealerships, Plaintiff and its current counsel obtained a stay of the Fort Bend County case pending an appeal to the 15 th Court of Appeals. Now, during the stay requested and obtained by Plaintiff, Plaintiff attempts to DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0001 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 1 take over this litigation and lead this Court into error. This Court should not allow itself to be used in this way and must dismiss and vacate the TRO entered in error and send the Plaintiff and its alleged need for relief back to the Fort Bend County court, the court of dominant jurisdiction. II. ARGUMENTS & AUTHORITIES A. Venue is not Proper in this Court, and the Court Should Transfer this Case to Fort Bend, County. 1. Legal Standard “Generally, the plaintiff chooses the venue of the case, and the plaintiff’s choice of venue cannot be disturbed if the suit is initially filed in a county of proper venue.” Sazy v. J.R. Birdwell Constr. and Restoration, L.L.C., No. 05–19–01351–CV, 2021 WL 1220122, at *2 (Tex. App.— Dallas Apr. 1, 2021, pet. filed). The defendant may challenge a plaintiff’s choice of venue through a motion to transfer venue under Rule 86, which must “state that the action should be transferred to another specified county of proper venue because: (a) The county where the action is pending is not a proper county[.]” TEX. R. CIV. P. 86(3). The motion must also “state the legal and factual basis for the transfer of the action and request transfer of the action to a specific county of mandatory or proper venue.” Id. Verification of the Motion is not required, though it may include supporting affidavits. Id. Rule 87 mandates that “[t]he determination of a motion to transfer venue shall be made promptly by the court[.]” T EX. R. CIV. P. 87.1. “Except on leave of court each party is entitled to at least 45–days’ notice of a hearing on the motion to transfer,” and any response to the motion or opposing affidavits must be filed “at least 30 days prior to the hearing[.]” Id. As the parties seeking to maintain venue in Collin County under Section 15.002 (the general venue statute), Plaintiffs have the initial burden to establish prima facie proof that venue is maintainable in this county. TEX. R. CIV. P. 87.2(a); Ford Motor Co. v. Johnson, 473 S.W.3d DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0002 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 2 925, 928 (Tex. App.—Dallas 2015, pet. denied) (“Once the defendant specifically challenges the plaintiff’s choice of venue, the plaintiff has the burden to present prima facie proof that venue is proper in the county of suit.”). Plaintiffs’ prima facie burden is satisfied by properly pleading venue facts and supporting them (to the extent they are specifically denied by Defendants) with affidavits and other “duly proved attachments” that fully and specifically set forth the facts to support any venue allegations. Sazy, 2021 WL 1220122, at *3 (citing Ford Motor Co., 473 S.W.3d at 928 and TEX. R. CIV. P. 87.3(a)). 2. The Mandatory Venue Provision Outlined in Section 65.023 of the Texas Civil Practice and Remedies Code Lead to Fort Bend County. The mandatory venue provision for suits seeking injunctive relief applies here. See TEX. CIV. PRAC. & REM. CODE §§ 15.016, 65.023. This statute applies “only to suits in which the relief sought is purely or primarily injunctive.” In re Cont’l Airlines, Inc., 988 S.W.2d 733, 736 (Tex. 1998) (orig. proceeding) (emphasis added). More precisely, the mandatory venue provision applies when, as here, “the petition discloses that the issuance of a perpetual injunction is the primary and principal relief sought [.]” Brown v. Gulf Television Co., 157 Tex. 607, 306 S.W.2d 706, 708 (1957). In this context, “primary,” of course, “means first in order of rank or importance.” In re Fox River Real Est. Holdings, Inc., 596 S.W.3d 759, 765 (Tex. 2020) (orig. proceeding). Section 65.023(a) accordingly does not apply if the requested injunctive relief is merely ancillary to other relief sought or is not the dominant purpose or central focus of the lawsuit. Id. (recognizing the legislature “did not intend for the tail to wag the dog”). It stands to reason that the “true nature of the lawsuit turns on the facts alleged in the petition, the rights asserted, and the relief sought.” Airvantage, LLC v. TBAN Properties #£1, L.T.D., 269 S.W.3d 254, 258 (Tex. App.—Dallas 2008, no pet.). DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0003 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 3 Plaintiff’s request for a temporary injunction and permanent injunction are “primarily injunctive.” When a plaintiff alleges it has no adequate remedy at law—and thus purports it is entitled to injunctive relief—equitable relief is the primary remedy sought, and venue is controlled by the injunction statute. Brown, 157 Tex. 607, 306 S.W.2d at 709. The bottom line: the primary purpose of Plaintiff’s Original Petition is injunctive, where it advances the pervading theme that it has no adequate remedy at law. Subject to an exception not at issue here, section 65.023(a) provides that venue in the defendant’s county of domicile is mandatory in an injunction suit: “[A] writ of injunction against a party who is a resident of this state shall be tried in a district or county court in the county in which the party is domiciled.” As the Texas Supreme Court has acknowledged, the “statute placing venue for injunction suits in the county of the defendant’s domicile is mandatory.” In re Continental Airlines, Inc., 988 S.W.2d 733, 736 (Tex. 1998) (orig. proceeding). Here, Tarrant County is not the County where Defendants are domiciled: they are domiciled in Fort Bend County, Texas. Simply put, the mandatory venue provision outlined in section 65.023 in Texas Civil Practice and Remedies Code applies here, and thus venue is proper in Fort Bend County, Texas. Indeed, under no circumstance is Tarrant County District Court the proper court to determine the claims raised by the Plaintiff herein. As stated above, the Texas Civil Practice and Remedies Code establishes the mandatory venue for a request for an injunction such as the one brought by Plaintiff. In certain circumstances, this section has been found to be jurisdictional, with courts finding that a court in a county other than the county in which prior actions occurred lacked jurisdiction. McVeigh v. Lerner, 849 S.W.2d 911, 914 (Tex .App.—Houston [1st Dist.] 1993, writ denied). Butron v. Cantu, 960 S.W.2d 91, 94-95 (Tex. App.—Corpus Christi 1997, no DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0004 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 4 writ). The Texas Supreme Court has instructed that no court other than one in a county that is the county of domicile of at least one defendant should issue an injunction over such defendant(s). See TEX. CIV. PRAC. & REM. CODE §§ 15.016, 65.023. In re Cont’l Airlines, Inc., 988 S.W.2d 733, 736 (Tex. 1998) (orig. proceeding). Here, Tarrant County is not the county where either of the Defendants are domiciled. The Defendants are domiciled in Fort Bend County, Texas and Harris County, Texas, a fact well known to Plaintiff. Simply put, jurisdiction and the mandatory venue provision outlined in section 65.023 in Texas Civil Practice and Remedies Code compel this Court to transfer this case to Fort Bend County, Texas and dismiss and vacate its TRO. B. The Court Should Refuse to Exercise Jurisdiction in Deference to the Court of Dominant Jurisdiction. Contrary to Plaintiff’s argument at the March 13, 2025 Temporary Restraining Order hearing, while this Court may have inferior jurisdiction, the 387 th District Court in Fort Bend County is the court of dominant jurisdiction. In instances where inherently interrelated suits are pending in two counties, the court in which suit was first filed acquires dominant jurisdiction. In re J.B. Hunt Transport, Inc., 492 S.W.3d 287, 294 (Tex. 2016) (orig. proceeding); Gonzalez v. Reliant Energy, Inc., 159 S.W.3d 615, 622 (Tex. 2005); Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 248 (Tex. 1988) (overruled in part on other grounds by J.B. Hunt, 492 S.W.3d at 292 (modifying Wyatt’s statement of the compulsory-counterclaim rule)). Under these circumstances, the general rule is that the court in the second action (here, this Court) must abate the suit. J.B. Hunt, 492 S.W.3d at 294; Wyatt, 760 S.W.2d at 247. “This first- filed rule flows from ‘principles of comity, convenience, and the necessity for an orderly procedure in the trial of contested issues.’” J.B. Hunt, 492 S.W.3d at 294 (quoting Wyatt, 760 S.W.2d at 248). DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0005 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 5 Even more significant, though, a court must have jurisdiction to enter a temporary restraining order. See, e.g., Shor v. Pelican Oil & Gas Mgmt., LLC, 405 S.W.3d 737, 743 (Tex. App.—Houston [1st Dist.] 2013, no pet.). And when a court issues an “order which actively interferes with the exercise of jurisdiction” by a court possessing dominant jurisdiction, the court commits error and mandamus relief is appropriate. Perry v. Del Rio, 66 S.W.3d 239, 258 (Tex. 2001) (granting mandamus relief to direct a district court to move a trial setting so that another court that already exercised jurisdiction over different cases involving nearly identical issues, parties, and witnesses could first consider those cases). The Defendants file this emergency motion to ask this Court to dismiss and vacate the TRO that Plaintiff wrongly caused this Court to grant solely for the purpose of venue shopping. Here, the Fort Bend County case is deeply intertwined with this case, since it involves the same parties, claims and subject matter; thus, the Fort Bend County court is the court of dominant jurisdiction. As illustrated in Exhibit 5 of Plaintiff’s Original Petition, the First Amended Third- Party Petition deals with the same parties and the same subject matter. In fact, the Third Party- Petition requests precisely the same declaratory relief requested here. Thus, the Fort Bend County court, where Michael Jeffrey Sebastian and Tiffany Lynn Sebastian individually and on behalf of The Classic Dealerships (which includes Plaintiff) request the same declaratory relief sought here, has, without question, dominant jurisdiction over this matter—meaning, this Court has no jurisdiction, let alone jurisdiction to enter a Temporary Restraining Order. In fact, the Defendants herein sought a Temporary Restraining Order and Temporary Injunction in the 387 th District Court related to the control of Plaintiff and two other Classic Dealerships. The Temporary Injunction hearing was set for February 24, 2025. On February 21, 2025, Plaintiff herein sought to stay the Fort Bend County case pending appeal of an issue heard by the business court. The DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0006 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 6 Fort Bend County Court issued a TRO on February 21, 2024, but vacated the same because of the appellate court’s stay. Bringing this action in Tarrant County is sheer gamesmanship and blatant venue shopping, something Section 65.023 of the Texas Civil Practice and Remedies Code prevents. The Court of dominant jurisdiction did address the issue of control of the Plaintiff on an emergency basis and was prepared for a full hearing on February 24, 2025. Plaintiff’s actions alone caused the cancellation of this hearing. This Court should not allow its jurisdiction to be misused to gain an advantage in an already pending case. C. The Court Should Dissolve the Temporary Restraining Order and Grant Defendants Relief Upon the Bond. Because the Fort Bend County Court clearly has dominant jurisdiction over this case, the parties, and issues presented before it in Plaintiff’s Original Petition, the Court should defer to the court of dominant jurisdiction and dissolve the March 13, 2025 Temporary Restraining Order. Pursuant to Rule 680 of the Texas Rules of Civil Procedure, “On two days’ notice to the party who obtained the temporary restraining order without notice or on such shorter notice tot hat party as the court may prescribe, the adverse party may appear and move its dissolution or modification and in that event the court shall proceed to hear and determine such motion as expeditiously as the ends of justice require.” At this Court’s invitation, Defendants have filed this motion to dissolve the temporary restraining order on jurisdictional grounds. Pursuant to Rule 684 of the Texas Rules of Civil Procedure, Defendants request action upon Plaintiff’s bond in the amount of money and costs incurred in obtaining dissolution of the Temporary Restraining Order. III. CONCLUSION & PRAYER Based on Texas Civil Practice and Remedies Code section 65.023 and the dominant jurisdiction of the 387th District Court in Fort Bend County, this Court should transfer this matter DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0007 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 7 to Fort Bend, County Texas, dissolve the Temporary Restraining Order signed on March 13, 2024, and advise Plaintiff in no uncertain terms that this Court will not be used as part of an effort by the Plaintiff to circumvent the court of dominant jurisdiction and the prior litigation filed by Defendants. For these reasons, Defendants Michael Jeffrey Sebastian and Tiffany Sebastian request that the Court grant their Motion to Transfer Venue and, subject thereto, and Emergency Motion to Dissolve Temporary Restraining Order and for Action on Bond, transfer this case to Fort Bend County, Texas, dissolve the Temporary Restraining Order, grant them relief upon the bond, and grant them any other relief to which they are justly entitled. DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0008 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 8 Respectfully submitted, SCHEEF & STONE, L.L.P. By: /s/ J. Mitchell Little J. Mitchell Little State Bar No. 24043788 [email protected] Steven Ovando State Bar No. 24128862 [email protected] 2600 Network Blvd., Suite 400 Frisco, Texas 75034 (214) 472-2100 Telephone (214) 472-2150 Telecopier ATTORNEYS FOR DEFENDANT TIFFANY SEBASTIAN BOHREER LAW FIRM PLLC E. Michelle Bohreer State Bar No. 06717100 Pritesh Soni State Bar No. 24063926 777 Post Oak Blvd., Suite 950 Houston, Texas 77056 Telephone: (832) 856-3006 Facsimile: (832) 856-2891 Emails: [email protected] [email protected] E-service: [email protected] ATTORNEYS FOR DEFENDANT MICHAEL JEFFREY SEBASTIAN DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0009 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 9 CERTIFICATE OF SERVICE The undersigned hereby certifies that on March 17, 2025, a true and correct copy of the foregoing instrument was served on all counsel of record via electronic service. /s/ Steven Ovando Steven Ovando DEFENDANTS’ MOTION TO TRANSFER VENUE AND, SUBJECT THERETO, EMERGENCY MOTION TO DISSOLVE App.D 0010 TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND Page | 10 236-362746-25 FILED TARRANT COUNTY 3/20/2025 8:55 AM CAUSE NO. 236-362746-25 THOMAS A. WILDER DISTRICT CLERK CLASSIC CHEVROLET WEST § IN THE DISTRICT COURT HOUSTON, LLC, § § Plaintiff, § § 236th JUDICIAL DISTRICT v. § § MICHAEL JEFFREY SEBASTIAN AND § TIFFANY SEBASTIAN, § TARRANT COUNTY, TEXAS § Defendant. DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, AND MOTION FOR TEMPORARY STAY TO THE HONORABLE JUDGE OF SAID COURT: COME NOW Defendants Michael Jeffrey Sebastian and Tiffany Sebastian (“Defendants”) and file this Supplemental Emergency Motion to Dissolve Temporary Restraining Order and for Action on Bond, and Motion for Temporary Stay, which was filed after Defendants filed their Motion to Transfer Venue in accordance with the due order of pleading. In support, Defendants assert as follows: I. INTRODUCTION The Plaintiff knowingly used this Court as a pawn in its dilatory tactics aimed at causing Defendants to spend money after the Plaintiff and its cohorts wrongfully deprived Defendants of pay and distributions related to the Defendants’ ownership interest in Plaintiff and other Classic dealerships. On Friday, March 13, 2025, Plaintiff misled this Court into granting a Temporary Restraining Order (“TRO”) even though Plaintiff knew it should have sought relief in Fort Bend County, Texas—the county of Defendants’ domicile and the county of the court with dominant jurisdiction over this matter. The acts for which Plaintiff seeks a permanent injunction and sought DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0001 AND MOTION FOR STAY Page | 1 a TRO is the subject of a lawsuit in the 387 th Judicial District Court of Fort Bend County. On the Friday before the Fort Bend County District Court—i.e., the court of dominant jurisdiction—was to order that a receiver take control over Plaintiff and two other Classic dealerships (a TRO had actually been entered which the trial court vacated out of deference to the 15h Court of Appeals, , Plaintiff and its current counsel obtained a stay of the Fort Bend County case pending an appeal to the 15th Court of Appeals. Now, during the stay requested and obtained by Plaintiff, Plaintiff attempts to take over this litigation and lead this Court into error. This Court should not allow itself to be used in this way and must dismiss and vacate the TRO entered in error and send the Plaintiff and its alleged need for relief back to the Fort Bend County court, the court of dominant jurisdiction.1 On March 19, 2025, Plaintiff amended its Original Petition and Application for Temporary Injunction, attempting to recast its claims into a pleading that does not primarily seek injunctive relief in light of its declaratory judgment claim. But that attempt failed. Indeed, Texas courts have repeatedly held that the dominant purpose of the suit can be injunctive even when there is a request for declaratory relief. See, e.g., Billings v. Concordia Heritage Ass’n., 960 S.W.2d 688, 693 (Tex. App.—El Paso 1997, writ denied); KJ Eastwood Invs., Inc. v. Enlow, 923 S.W.2d 255, 257–58 (Tex. App.—Fort Worth 1996, orig. proceeding); Michalski v. Mutual Bldg. & Loan Ass’n, 449 S.W.2d 834, 836 (Tex. App.—Fort Worth 1970, no writ); Guion v. Gibson, 439 S.W.2d 715, 715, 717 (Tex. App.—Houston [14 th Dist.] 1969, no writ). This principle applies with even greater force when,, as here, the 1 On Tuesday, March 18, 2025, because of Plaintiff’s gamesmanship and inconsistent positions regarding the need for all matters between the parties to be addresses solely by the Business Court, the Sebastians filed an emergency motion to lift the stay previously granted by the 15th Court of Appeals. The 15th Court of Appeals has ordered a response be filed by noon on Friday, March 21. DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0002 AND MOTION FOR STAY Page | 2 declaratory action seeks to determine the rights and obligations of all interest holders. See e.g., In Re FPWP CP LLC, (citing No. 05-16-01145-CV, 2017 WL 461355, at *1 (Tex. App.—Dallas Jan. 25, 2017, no pet.) (mem. op.)). In such cases, the pleading is still considered principally injunctive as it was in FPWP CP LLC. Id. II. ARGUMENTS & AUTHORITIES A. Venue is not Proper in this Court, and the Court Should Transfer this Case to Fort Bend, County. 1. Legal Standard “Generally, the plaintiff chooses the venue of the case, and the plaintiff’s choice of venue cannot be disturbed if the suit is initially filed in a county of proper venue.” Sazy v. J.R. Birdwell Constr. and Restoration, L.L.C., No. 05–19–01351–CV, 2021 WL 1220122, at *2 (Tex. App.— Dallas Apr. 1, 2021, pet. filed). The defendant may challenge a plaintiff’s choice of venue through a motion to transfer venue under Rule 86, which must “state that the action should be transferred to another specified county of proper venue because: (a) The county where the action is pending is not a proper county[.]” TEX. R. CIV. P. 86(3). The motion must also “state the legal and factual basis for the transfer of the action and request transfer of the action to a specific county of mandatory or proper venue.” Id. Verification of the Motion is not required, though it may include supporting affidavits. Id. Rule 87 mandates that “[t]he determination of a motion to transfer venue shall be made promptly by the court[.]” T EX. R. CIV. P. 87.1. “Except on leave of court each party is entitled to at least 45–days’ notice of a hearing on the motion to transfer,” and any response to the motion or opposing affidavits must be filed “at least 30 days prior to the hearing[.]” Id. As the parties seeking to maintain venue in Collin County under Section 15.002 (the general venue statute), Plaintiffs have the initial burden to establish prima facie proof that venue DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0003 AND MOTION FOR STAY Page | 3 is maintainable in this county. TEX. R. CIV. P. 87.2(a); Ford Motor Co. v. Johnson, 473 S.W.3d 925, 928 (Tex. App.—Dallas 2015, pet. denied) (“Once the defendant specifically challenges the plaintiff’s choice of venue, the plaintiff has the burden to present prima facie proof that venue is proper in the county of suit.”). Plaintiffs’ prima facie burden is satisfied by properly pleading venue facts and supporting them (to the extent they are specifically denied by Defendants) with affidavits and other “duly proved attachments” that fully and specifically set forth the facts to support any venue allegations. Sazy, 2021 WL 1220122, at *3 (citing Ford Motor Co., 473 S.W.3d at 928 and TEX. R. CIV. P. 87.3(a)). 2. The Mandatory Venue Provision Outlined in Section 65.023 of the Texas Civil Practice and Remedies Code Lead to Fort Bend County. The mandatory venue provision for suits seeking injunctive relief applies here. See TEX. CIV. PRAC. & REM. CODE §§ 15.016, 65.023. This statute applies “only to suits in which the relief sought is purely or primarily injunctive.” In re Cont’l Airlines, Inc., 988 S.W.2d 733, 736 (Tex. 1998) (orig. proceeding) (emphasis added). More precisely, the mandatory venue provision applies when, as here, “the petition discloses that the issuance of a perpetual injunction is the primary and principal relief sought [.]” Brown v. Gulf Television Co., 157 Tex. 607, 306 S.W.2d 706, 708 (1957). In this context, “primary,” of course, “means first in order of rank or importance.” In re Fox River Real Est. Holdings, Inc., 596 S.W.3d 759, 765 (Tex. 2020) (orig. proceeding). Section 65.023(a) accordingly does not apply if the requested injunctive relief is merely ancillary to other relief sought or is not the dominant purpose or central focus of the lawsuit. Id. (recognizing the legislature “did not intend for the tail to wag the dog”). It stands to reason that the “true nature of the lawsuit turns on the facts alleged in the petition, the rights asserted, and the DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0004 AND MOTION FOR STAY Page | 4 relief sought.” Airvantage, LLC v. TBAN Properties #£1, L.T.D., 269 S.W.3d 254, 258 (Tex. App.—Dallas 2008, no pet.). Plaintiff’s request for a temporary injunction and permanent injunction are “primarily injunctive.” When a plaintiff alleges it has no adequate remedy at law—and thus purports it is entitled to injunctive relief—equitable relief is the primary remedy sought, and venue is controlled by the injunction statute. Brown, 157 Tex. 607, 306 S.W.2d at 709. The bottom line: the primary purpose of Plaintiff’s Original Petition is injunctive, where it advances the pervading theme that it has no adequate remedy at law. Subject to an exception not at issue here, section 65.023(a) provides that venue in the defendant’s county of domicile is mandatory in an injunction suit: “[A] writ of injunction against a party who is a resident of this state shall be tried in a district or county court in the county in which the party is domiciled.” As the Texas Supreme Court has acknowledged, the “statute placing venue for injunction suits in the county of the defendant’s domicile is mandatory.” In re Continental Airlines, Inc., 988 S.W.2d 733, 736 (Tex. 1998) (orig. proceeding). Here, Tarrant County is not the County where Defendants are domiciled: they are domiciled in Fort Bend County, Texas. Simply put, the mandatory venue provision outlined in section 65.023 in Texas Civil Practice and Remedies Code applies here, and thus venue is proper in Fort Bend County, Texas. Indeed, under no circumstance is Tarrant County District Court the proper court to determine the claims raised by the Plaintiff herein. As stated above, the Texas Civil Practice and Remedies Code establishes the mandatory venue for a request for an injunction such as the one brought by Plaintiff. In certain circumstances, this section has been found to be jurisdictional, with courts finding that a court in a county other than the county in which prior actions occurred DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0005 AND MOTION FOR STAY Page | 5 lacked jurisdiction. McVeigh v. Lerner, 849 S.W.2d 911, 914 (Tex .App.—Houston [1st Dist.] 1993, writ denied). Butron v. Cantu, 960 S.W.2d 91, 94-95 (Tex. App.—Corpus Christi 1997, no writ). The Texas Supreme Court has instructed that no court other than one in a county that is the county of domicile of at least one defendant should issue an injunction over such defendant(s). See TEX. CIV. PRAC. & REM. CODE §§ 15.016, 65.023. In re Cont’l Airlines, Inc., 988 S.W.2d 733, 736 (Tex. 1998) (orig. proceeding). Here, Tarrant County is not the county where either of the Defendants are domiciled. The Defendants are domiciled in Fort Bend County, Texas and Harris County, Texas, a fact well known to Plaintiff. Simply put, jurisdiction and the mandatory venue provision outlined in section 65.023 in Texas Civil Practice and Remedies Code compel this Court to transfer this case to Fort Bend County, Texas and dismiss and vacate its TRO. B. The Court Should Refuse to Exercise Jurisdiction in Deference to the Court of Dominant Jurisdiction. Contrary to Plaintiff’s argument at the March 13, 2025 Temporary Restraining Order hearing, while this Court may have inferior jurisdiction, the 387 th District Court in Fort Bend County is the court of dominant jurisdiction. In instances where inherently interrelated suits are pending in two counties, the court in which suit was first filed acquires dominant jurisdiction. In re J.B. Hunt Transport, Inc., 492 S.W.3d 287, 294 (Tex. 2016) (orig. proceeding); Gonzalez v. Reliant Energy, Inc., 159 S.W.3d 615, 622 (Tex. 2005); Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 248 (Tex. 1988) (overruled in part on other grounds by J.B. Hunt, 492 S.W.3d at 292 (modifying Wyatt’s statement of the compulsory-counterclaim rule)). Under these circumstances, the general rule is that the court in the second action (here, this Court) must abate the suit. J.B. Hunt, 492 S.W.3d at 294; Wyatt, 760 S.W.2d at 247. “This first- DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0006 AND MOTION FOR STAY Page | 6 filed rule flows from ‘principles of comity, convenience, and the necessity for an orderly procedure in the trial of contested issues.’” J.B. Hunt, 492 S.W.3d at 294 (quoting Wyatt, 760 S.W.2d at 248). Even more significant, though, a court must have jurisdiction to enter a temporary restraining order. See, e.g., Shor v. Pelican Oil & Gas Mgmt., LLC, 405 S.W.3d 737, 743 (Tex. App.—Houston [1st Dist.] 2013, no pet.). And when a court issues an “order which actively interferes with the exercise of jurisdiction” by a court possessing dominant jurisdiction, the court commits error and mandamus relief is appropriate. Perry v. Del Rio, 66 S.W.3d 239, 258 (Tex. 2001) (granting mandamus relief to direct a district court to move a trial setting so that another court that already exercised jurisdiction over different cases involving nearly identical issues, parties, and witnesses could first consider those cases). The Defendants file this emergency motion to ask this Court to dismiss and vacate the TRO that Plaintiff wrongly caused this Court to grant solely for the purpose of venue shopping. Here, the Fort Bend County case is deeply intertwined with this case, since it involves the same parties, claims and subject matter; thus, the Fort Bend County court is the court of dominant jurisdiction. As illustrated in Exhibit 5 of Plaintiff’s Original Petition, the First Amended Third- Party Petition deals with the same parties and the same subject matter. In fact, the Third Party- Petition requests precisely the same declaratory relief requested here. Thus, the Fort Bend County court, where Michael Jeffrey Sebastian and Tiffany Lynn Sebastian individually and on behalf of The Classic Dealerships (which includes Plaintiff) request the same declaratory relief sought here, has, without question, dominant jurisdiction over this matter—meaning, this Court has no jurisdiction, let alone jurisdiction to enter a Temporary Restraining Order. In fact, the Defendants herein sought a Temporary Restraining Order and Temporary Injunction in the 387 th District Court related to the control of Plaintiff and two other Classic Dealerships. The Temporary DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0007 AND MOTION FOR STAY Page | 7 Injunction hearing was set for February 24, 2025. On February 21, 2025, Plaintiff herein sought to stay the Fort Bend County case pending appeal of an issue heard by the business court. The Fort Bend County Court issued a TRO on February 21, 2024, but vacated the same because of the appellate court’s stay. Bringing this action in Tarrant County is sheer gamesmanship and blatant venue shopping, something Section 65.023 of the Texas Civil Practice and Remedies Code prevents. The Court of dominant jurisdiction did address the issue of control of the Plaintiff on an emergency basis and was prepared for a full hearing on February 24, 2025. Plaintiff’s actions alone caused the cancellation of this hearing. This Court should not allow its jurisdiction to be misused to gain an advantage in an already pending case. C. The Court Should Dissolve the Temporary Restraining Order and Grant Defendants Relief Upon the Bond. Because the Fort Bend County Court clearly has dominant jurisdiction over this case, the parties, and issues presented before it in Plaintiff’s Original Petition, the Court should defer to the court of dominant jurisdiction and dissolve the March 13, 2025 Temporary Restraining Order. Pursuant to Rule 680 of the Texas Rules of Civil Procedure, “On two days’ notice to the party who obtained the temporary restraining order without notice or on such shorter notice tot hat party as the court may prescribe, the adverse party may appear and move its dissolution or modification and in that event the court shall proceed to hear and determine such motion as expeditiously as the ends of justice require.” At this Court’s invitation, Defendants have filed this motion to dissolve the temporary restraining order on jurisdictional grounds. Pursuant to Rule 684 of the Texas Rules of Civil Procedure, Defendants request action upon Plaintiff’s bond in the amount of money and costs incurred in obtaining dissolution of the Temporary Restraining Order. D. The Court should Grant a Stay Over This Matter. DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0008 AND MOTION FOR STAY Page | 8 Defendants, individually and on behalf of Plaintiff and two other Classic dealerships, sued several entities and individuals (“Fort Bend Defendants”) in their divorce proceeding in 387th Judicial District Court of Fort Bend County, Texas (the” 387th Case” or “Fort Bend Case”) after the Fort Bend Defendants improperly ousted Defendants and took control of the businesses related to various car dealerships. The Fort Bend Defendants immediately removed the claims brought against them in the Fort Bend Case to the business court claiming that the dispute between the parties belonged in the newly created Business Court even though it was not removable by statute. After considering the parties’ motions and arguments, the Honorable Stacy Rogers Sharp granted the remand back to the Fort Bend District Court. The Fort Bend Defendants then filed a mandamus and sought an emergency stay of the Fort Bend Case. The Fort Bend Court granted a Temporary stay on February 21, 2025. Contradicting their own arguments that the Business Court has jurisdiction over the parties’ disputes to obtain a stay against Defendant’s attempt to obtain injunctive relief, the Fort Bend Defendants then filed this lawsuit in the Tarrant County District Court on March 13, 2025, and obtaining their own injunctive relief barring Defendants from participating in their own business, after the Fort Bend Defendants deprived Defendants from obtaining relief that included the appointment of a receiver over the Plaintiff and the other Classic Dealerships. . While the dispute between Defendants and the Fort Bend Defendants remains waiting for decisions of the 15th Court of Appeals, this Court should refrain from taking any action. As set forth above, the Plaintiff knowingly filed in the wrong court, a court of inferior jurisdiction to Fort Bend County and a court that does not include a county of domicile of either of the Sebastians. This Court should dissolve the TRO and grant a stay of these proceedings until the appellate court has made such determination. DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0009 AND MOTION FOR STAY Page | 9 III. CONCLUSION & PRAYER Based on Texas Civil Practice and Remedies Code section 65.023 and the dominant jurisdiction of the 387th District Court in Fort Bend County, this Court should transfer this matter to Fort Bend, County Texas, dissolve the Temporary Restraining Order signed on March 13, 2024, and advise Plaintiff in no uncertain terms that this Court will not be used as part of an effort by the Plaintiff to circumvent the court of dominant jurisdiction and the prior litigation filed by Defendants. Alternatively, the Court should stay these proceedings in light of the emergency motion before the appellate court. For these reasons, Defendants Michael Jeffrey Sebastian and Tiffany Sebastian request that the Court grant their Emergency Motion to Dissolve Temporary Restraining Order and for Action on Bond, and stay this proceeding pending the actions of the 15 th Court of Appeals and thereafter a hearing on the Sebastians’ Motion to Transfer Venue, unless this Court sue sponte transfers this case to Fort Bend County, Texas, dissolve the Temporary Restraining Order, grant them relief upon the bond, and grant them any other relief to which they are justly entitled. DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0010 AND MOTION FOR STAY Page | 10 Respectfully submitted, SCHEEF & STONE, L.L.P. By: /s/ J. Mitchell Little J. Mitchell Little State Bar No. 24043788 [email protected] Steven Ovando State Bar No. 24128862 [email protected] 2600 Network Blvd., Suite 400 Frisco, Texas 75034 (214) 472-2100 Telephone (214) 472-2150 Telecopier ATTORNEYS FOR DEFENDANT TIFFANY SEBASTIAN BOHREER LAW FIRM PLLC E. Michelle Bohreer State Bar No. 06717100 Pritesh Soni State Bar No. 24063926 777 Post Oak Blvd., Suite 950 Houston, Texas 77056 Telephone: (832) 856-3006 Facsimile: (832) 856-2891 Emails: [email protected] [email protected] E-service: [email protected] ATTORNEYS FOR DEFENDANT MICHAEL JEFFREY SEBASTIAN DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0011 AND MOTION FOR STAY Page | 11 CERTIFICATE OF SERVICE The undersigned hereby certifies that on March 20, 2025, a true and correct copy of the foregoing instrument was served on all counsel of record via electronic service. /s/ Steven Ovando Steven Ovando DEFENDANTS’ SUPPLEMENTAL EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER AND FOR ACTION ON BOND, App.E 0012 AND MOTION FOR STAY Page | 12 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Jeri Hamman on behalf of Mitch Little Bar No. 24043788 [email protected] Envelope ID: 98672776 Filing Code Description: Motion (No Fee) Filing Description: Defendants' Supplemental Emergency Motion to Dissolve Temporary Restraining Order and for Action on Bond, and Motion for Temporary Stay Status as of 3/20/2025 9:59 AM CST Associated Case Party: MICHAELJEFFREYSEBASTIAN Name BarNumber Email TimestampSubmitted Status E. MichelleBohreer [email protected] 3/20/2025 8:55:31 AM SENT Associated Case Party: TIFFANYLYNNSEBASTIAN Name BarNumber Email TimestampSubmitted Status Mitch Little [email protected] 3/20/2025 8:55:31 AM SENT Steven Ovando [email protected] 3/20/2025 8:55:31 AM SENT Case Contacts Name BarNumber Email TimestampSubmitted Status Derek D.Rollins [email protected] 3/20/2025 8:55:31 AM SENT Timothy DZeiger [email protected] 3/20/2025 8:55:31 AM SENT Sharon Taylor [email protected] 3/20/2025 8:55:31 AM SENT Pritesh Soni [email protected] 3/20/2025 8:55:31 AM SENT E MichelleBohreer [email protected] 3/20/2025 8:55:31 AM SENT John LucasPeterson [email protected] 3/20/2025 8:55:31 AM SENT Rebecca DeeDuckworth [email protected] 3/20/2025 8:55:31 AM SENT App.E 0013 FILED TARRANT COUNTY 236-362746-25 3/20/2025 7:42 AM THOMAS A. WILDER CAUSE NO. 236-362746-25 DISTRICT CLERK CLASSIC CHEVROLET WEST § IN THE DISTRICT COURT HOUSTON, LLC, § § Plaintiff, § § v. § 236th JUDICIAL DISTRICT § MICHAEL JEFFREY SEBASTIAN AND § TIFFANY SEBASTIAN, § § Defendants. § TARRANT COUNTY, TEXAS PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER VENUE AND TO DISSOLVE TEMPORARY RESTRAINING ORDER TO THE HONORABLE JUDGE OF SAID COURT: Plaintiff Classic Chevrolet West Houston, LLC (“Plaintiff”) files its Response to Defendants’ Motion to Transfer Venue and, Subject Thereto, Emergency Motion to Dissolve Temporary Restraining Order and For Action on Bond (“the Motion”), and would respectfully show the Court the following: SUMMARY 1. On March 13, 2025, this Court signed a Temporary Restraining Order (the “TRO”) that temporarily preserves the status quo ante of the operation of Plaintiff’s motor vehicle dealership (the “Dealership”) – its peaceable operation free from Defendants’ interference. On March 17, 2025, Defendants jointly filed their “Emergency” Motion, which does not explain why the TRO’s preservation of the status quo represents any emergency, but which (1) asserts that the court with dominant jurisdiction is the 387th District Court in Fort Bend County, Texas (the “387th District Court”), 1 and (2) seeks to dissolve the TRO as a result. 1 The Fort Bend case, which as discussed in Plaintiff’s petition is currently stayed by order of the Fifteenth Court of Appeals, has a cause number of 24-DCV-318087 (“the Fort Bend Action”). App.F 0001 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 1 2. Initially, section 65.023 of the Texas Civil Practice and Remedies Code, cited by Defendants as conferring mandatory venue over this case to the 387th District Court, does not apply here because the relief sought by Plaintiff is not primarily injunctive. First and foremost, Plaintiff seeks a declaratory judgment as to Defendants’ voting and managerial rights (or lack of rights) under Plaintiff’s Company Agreement. See Company Agreement, Ex. 1 to Plaintiff’s First Am. Pet. (filed March 19, 2025). Ancillary to that, Plaintiff seeks temporary injunctive relief to preserve the status quo of the Dealership’s operation pending a decision on the merits – namely, that it be permitted to remain open for business as it has for the past six-plus months, without interference from Defendants. 3. The 387th District Court has not acquired dominant jurisdiction over this dispute for at least three independent reasons. First, the Fort Bend Action is not “inherently interrelated” to the instant case because the actions which necessitated Plaintiff’s claims in this case— Defendants’ unauthorized disruption of Dealership operations—are independent of the claims asserted in Fort Bend Action. Second, venue for the Fort Bend Action is not proper in Fort Bend County because (1) Defendants’ claim for the appointment of a receiver for the Dealership and two other motor vehicle dealerships in the Fort Bend Action implicates Section 64.071 of the Texas Civil Practice & Remedies Code, a mandatory venue provision requiring the request for the appointment of a receiver to be brought in county of the corporation’s principal office (i.e., Tarrant County), and (2) the general venue rule also requires the Fort Bend Action to be brought in Tarrant County because all or a substantial portion of the events giving rise to Defendants’ claims in that case occurred in Tarrant County, where the defendants in that case reside and operate. Third, conferring dominant jurisdiction over this action on the 387th District Court would improperly delay and/or prevent a prompt and full adjudication of Plaintiff’s claims for ancillary relief in this case, resulting in irreparable and immeasurable harm to the Dealership’s business operations. See Perry v. Del Rio, 66 S.W.3d 239, 250 (Tex. 2001) (the “first-filed rule admits of exceptions when App.F 0002 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 2 its justifications fails, as when the first court does not have the full matter before it, or when conferring dominant jurisdiction on the first court will delay or even prevent a prompt and full adjudication ….”). 4. For these reasons, the Court should deny the Motion in its entirety. ARGUMENT AND AUTHORITIES A. Section 65.023 of the Texas Civil Practice and Remedies Code does not apply because the relief sought by Plaintiff in this case is not primarily injunctive. 5. Initially, as Defendants note in the Motion, a motion to transfer venue requires a minimum 45-day notice period of the hearing on motions to transfer to the nonmovant, unless otherwise granted by leave of court. TEX. R. CIV. P. 87. Defendants have not requested leave of court to obtain their hearing on the Motion, which seeks to transfer this case to the 387th District Court, prior to the requisite 45-day notice period. 6. In any event, the temporary injunctive relief requested by Plaintiff is ancillary to the declaratory judgment action because the injunctive relief is sought solely to maintain the status quo ante (i.e., the peaceable operation of the dealership) pending resolution of the declaratory judgment sought. In re FPWP GP LLC, No. 05-16-01145-CV, 2017 WL 461355, at *3 (Tex. App.—Dallas Jan. 25, 2017, no pet.) (“When the injunctive relief is sought simply to maintain the status quo pending resolution of the lawsuit, then the injunctive relief is ancillary to the relief sought and [mandatory venue] section 65.023 does not apply.”); see also In re City of Corpus Christi, 13–12–00510–CV, 2012 WL 3755604, at **1, 5 (Tex. App.—Corpus Christi Aug. 29, 2012, orig. proceeding) (mem. op.) (injunctive relief ancillary to declaratory relief where plaintiff sought only temporary injunctive relief pending final hearing of the merits of the declaratory judgment action); In re Adan Volpe Props., Ltd., 306 S.W.3d 369, 377–78 (Tex. App.—Corpus Christi 2010, orig. proceeding) (holding that request for injunctive relief was ancillary in libel action in which declaratory judgment was also sought where injunction was sought to maintain status quo until libel suit could be resolved); App.F 0003 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 3 Shuttleworth v. G & A Outsourcing, Inc., No. 01–08–00650–CV, 2009 WL 277052, at **1, 4 (Tex. App.—Houston [1st Dist.] Feb. 5, 2009, no pet.) (holding that temporary injunction to prevent party from using, disseminating, or destroying confidential information was ancillary to suit against former employee for violation of non-compete and non-solicitation agreements where injunction sought to preserve evidence for trial and plaintiff sought substantial damages on contract and tort claims). 7. Plaintiff’s live pleading does not seek a permanent injunction. When a party “does not plead for a permanent injunction, the injunctive relief is ancillary to the other relief sought.” FPWP, 2017 WL at *3; see also In re Cont’l Airlines, 988 S.W.2d at 736-37 (section 65.023 inapplicable and injunctive relief ancillary to prayer for declaratory relief where the plaintiff did not pray for permanent injunctive relief, the pleadings would not support a permanent injunction, the controversy can be fully resolved by declaratory judgment, and “throughout the pleading the only requests for court action ask the trial court to declare the parties' rights under the contract.”); Flewellen v. Brownfield State Bank & Tr. Co. of Brownfield, 517 S.W.2d 384, 388 (Tex. Civ. App.—Amarillo 1974, no writ) (“The petition demonstrates that the principal and primary relief sought is to establish by the court's decree the correlative rights of the plaintiff and the defendants for possession and disposition of the cotton grown by Weiss, and the respective priorities thereto, and that the injunctive relief sought is only incidental to such main relief and to protect and enforce the rights so established.”). B. The 387th District Court has not acquired dominant jurisdiction over this case. 8. To support a finding that the 387th District Court acquired dominant jurisdiction over this case, this Court must find both that (1) this case and the Fort Bend County Action are “inherently interrelated,” and (2) that venue is proper in Fort Bend County. In re Red Dot Bldg. Sys., Inc., 504 S.W.3d 320, 322 (Tex. 2016) (“In instances where inherently interrelated suits are pending in two counties, and venue is proper in either county, the court in which suit was first filed acquires dominant jurisdiction.”) (emphasis added). When both elements are shown to exist, the “general rule” is that the court in the second action must abate the suit. Id. App.F 0004 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 4 1. The Fort Bend Action is not inherently interrelated with this case. 9. “To determine if claims are inherently interrelated, triggering dominant jurisdiction, we are guided by the compulsory-counterclaim rule.” In re Happy State Bank, No. 02-17-00453-CV, 2018 WL 1918217, at *4 (Tex. App.—Fort Worth Apr. 23, 2018, no pet.) (citing In re J.B. Hunt Transp., Inc., 492 S.W.3d 287, 292–93 (Tex. 2016); TEX. R. CIV. P. 97(a) (compulsory counterclaim rule)). Rule of Procedure 97 provides, in pertinent part: a pleading shall state as a counterclaim any claim within the jurisdiction of the court, not subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim … TEX. R. CIV. P. 97(a); see also In re Happy State, 2018 WL at *4 (“A counterclaim is compulsory if the claim: (1) is within the jurisdiction of the court, (2) was not the subject of a pending action when the original suit was commenced, (3) is mature and owned by the defending party at the time the pleading is filed, (3) arose out of the same transaction or occurrence that is the subject matter of the opposing party’s claim, (4) is against an opposing party in the same capacity, and (5) does not require the presence of third parties over whom the court cannot acquire jurisdiction.”) (emphasis added). 10. As a threshold matter, no defendant has filed an answer or any other pleading subject to the due-order-of-pleading rules in the Fort Bend Action. The only pleading filed by the defendants in the Fort Bend Action is their Notice of Removal to the Business Court, which is not subject to due- order-of-pleading rules. See TEX. GOV’T CODE § 25A.006(i) (“Removal of a case to the business court is not subject to the statutes or rules governing the due order of pleading”); id. (j) (“Removal of a case does not waive a defect in venue or constitute an appearance to determine personal jurisdiction”); TEX. R. CIV. P. 355(d) (“A notice of removal to the business court is not subject to due order of pleading rules. Filing a notice of removal does not waive a defect in venue or constitute an appearance waiving a challenge to personal jurisdiction.”). App.F 0005 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 5 11. Moreover, Plaintiff’s claims in the instant case do not arise from the same transaction or occurrence that form the basis of Defendants’ claims in the Fort Bend Action. Indeed, as alleged in their First Amended Third-Party Petition filed in the Fort Bend Action on December 20, 2024, Defendants complain of actions arising out of, inter alia, a July 22, 2024 vote of no-confidence in Jeff’s continued management of the Dealership by Plaintiff’s principals, and to Defendants’ asserted rights under the Buy-Sell Agreement between the parties and their request for the appointment of a receiver over the Dealership. See Defendants’ First Amended Petition, Ex. 6 to Plaintiff’s First Am. Pet., ¶¶ 31 (complaining that Defendants were wrongfully terminated and removed from management of the Dealership in July and September 2024); 44 (“the Buy-Sell Agreement stipulates that an option to purchase the Sebastians’ interest in [the various motor vehicle dealerships, including the Dealership] shall arise upon the occurrence of certain events … Jeff Sebastian was terminated on July 22, 2024, which … expressly triggered the applicable Buy-Sell Agreement”); 48-49 (seeking declaratory judgment as to the parties’ rights under the Buy-Sell Agreement), 74-79 (requesting the appointment of a receiver for the Dealership). 12. By contrast, the necessity of Plaintiff’s request for a declaratory judgment regarding the effect of Defendants’ actions after their voting rights were lost under the Dealership’s Company Agreement did not accrue until after the filing of Defendants’ operative petition in the Fort Bend Action, namely, their purported seizure of control of the Dealership. See Plaintiff’s First Am. Pet. (filed March 19, 2025), ¶¶ 15-16 (explaining that Jeff’s request for the appointment of a receiver over the Dealership in the Fort Bend Action triggered an involuntary transfer of his voting rights under Plaintiff’s Company Agreement), 19-20, 23 (describing the unauthorized actions Defendants purported to take under the Company Agreement, namely removing Thomas R. Durant as Plaintiff’s President and Manager), 24 (describing Defendants’ disruption of Plaintiff’s business operations upon unauthorized entrance onto Dealership property on March 12, 2025). App.F 0006 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 6 13. Further, Plaintiff is not a named defendant in the Fort Bend Action – Defendants purport to sue derivatively on behalf of Plaintiff, but Plaintiff is not named as a defendant in that case. Therefore, the claims at issue in this case are not asserted by and between these parties “in the same capacity,” negating the compulsory counterclaim rule’s application here. A stakeholder in an organization, including a beneficial owner, can bring a derivative action on behalf of the entity. When the stakeholder does so, the suit is not in an individual capacity, but as a representative of the entity and must be brought in that representative, or derivative capacity. Pike v. Texas EMC Mgmt., LLC, 610 S.W.3d 763, 775-76 (Tex. 2020); Mossler v. Nouri, No. 03–08–00476–CV, 2010 WL 2133940, at *7 (Tex. App.⸺Austin May 27, 2010, pet. denied). Legally, the individual suing derivatively is a different and separate person from the same individual in any other capacity. Elizondo v. Tex. Nat. Res. Conservation Comm’n, 974 S.W.2d 928, 931 (Tex. App.—Austin 1998, no pet.). 14. For the foregoing reasons, the Fort Bend Action is not so “inherently interrelated” with Plaintiff’s claims in this case as to confer dominant jurisdiction over this case to Fort Bend County, where Defendants initially filed claims against certain individuals and entities that are not even a party to this case. 2. Venue for the claims asserted in the Fort Bend Action is not maintainable in Fort Bend County. 15. Venue is not proper in Fort Bend County for the Fort Bend Action, but due to the unique procedural posture of the Fort Bend Action, the defendants in that case (which do not include Plaintiff) have not had an opportunity to move for transfer to the proper venue – Tarrant County. Further complicating matters is the fact that Defendants’ claims in the Fort Bend Action were not properly joined with their interspousal divorce claims, but the defendants in that case have similarly been prevented from seeking a severance of the claims against them from the Defendants’ interspousal divorce claims. App.F 0007 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 7 16. In their operative petition in the Fort Bend Action, Defendants plead that venue is mandatory in Fort Bend County pursuant to Section 64.071 of the Texas Civil Practice & Remedies Code and Section 11.402 of the Texas Business Organizations Code because Defendants seek to appoint a receiver for the Dealership and two other motor vehicle dealership also owned and operated by Plaintiff’s principals, and they allege that Fort Bend County is where the principal offices of those dealerships are located. See Defendants’ First Amended Petition in Fort Bend Action, Ex. 6 to Plaintiff’s First Am. Pet., ¶ 18; cf. Defendants’ Original Third Party Pet. in Fort Bend Action, Ex. 5 to Plaintiff’s First Am. Pet., ¶¶ 5-6 (noting that the principal office of the Dealership is in Tarrant County, Texas); TEX. CIV. PRAC. & REM. CODE § 64.071 (mandatory venue for action for appointment of corporate receiver is county where the corporation’s principal office is located); TEX. BUS. ORGS. CODE § 11.402 (district courts in county where a domestic entity’s registered office or principal place of business is located has jurisdiction to appoint a receiver in certain enumerated instances). 17. In the Fort Bend Action, Defendants also suggest that venue is “proper” in Fort Bend County pursuant to Sections 15.002 and 15.005 of the Texas Civil Practice & Remedies Code “as it is the county in which the underlying divorce occurred, and it is where all or a substantial part of the events or omissions giving rise to the claim[s] occurred.” Defendants’ First Am. Pet. in Fort Bend Action, Ex. 6 to Plaintiff’s First Am. Pet., ¶ 17; TEX. CIV. PRAC. & REM. CODE § 15.002 (general venue rule providing that, where a mandatory venue provision does not apply, lawsuits are proper in the county where “all or a substantial part of the events or omissions giving rise to the claim occurred,” in the county of the defendant’s residence, in the county of the defendant’s principal office, or if none of the foregoing apply, in the county where the plaintiff resided at the time of accrual of the claims that are the subject of the suit) (emphasis added); Id. § 15.005 (“[i]n a suit in which the plaintiff has established proper venue against a defendant, the court also has venue of all the defendants in all claims or actions arising out of the same transaction, App.F 0008 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 8 occurrence, or series of transactions or occurrences.”). Trial courts “shall transfer an action to another county of proper venue if the county in which the action is pending is not a proper county ….” TEX. CIV. PRAC. & REM. CODE § 15.063. 18. In actions “governed by a statute prescribing mandatory venue, the action ‘shall be brought in the county required by the statute.’” Fortenberry v. Great Divide Ins. Co., 664 S.W.3d 807, 811 (Tex. 2023) (quoting TEX. CIV. PRAC. & REM. CODE § 15.016). A mandatory venue provision applicable to one claim in a lawsuit involving multiple claims confers mandatory venue over all claims involved in the lawsuit, provided that such claims are properly joined in the lawsuit with the claim to which the mandatory venue provision applies. See TEX. CIV. PRAC. & REM. CODE § 15.004 (“In a suit in which a plaintiff properly joins two or more claims or causes of action arising from the same transaction, occurrence, or series of transactions or occurrences, and one of the claims or causes of action is governed by [a] mandatory venue provision[] … the suit shall be brought in the county required by the mandatory venue provision.”). 19. “Proper” venue, on the other hand, refers to the general venue rule or the permissive-venue provisions, which apply when there is no applicable mandatory venue provision. See TEX. CIV. PRAC. & REM. CODE § 15.001(b); O’Quinn v. Hall, 77 S.W.3d 438, 448-49 (Tex. App.—Corpus Christi 2002, no pet). Importantly, venue is determined by facts as they existed when the cause of action accrued. TEX. CIV. PRAC. & REM. CODE § 15.006; Fortenberry, 664 S.W.3d at 811. 20. An action to appoint a receiver for a Texas corporation “shall” be brought in the county where the corporation’s “principal office” is located. TEX. CIV. PRAC. & REM. CODE § 64.071; see also Perryman, 546 S.W.3d at 131 (“the phrase ‘shall bring suit’ is ‘unmistakably mandatory’”). “Principal office” is defined as “a principal office of a corporation … in which the decision makers for the organization within this state conduct the daily affairs of the organization.” App.F 0009 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 9 TEX. CIV. PRAC. & REM. CODE § 15.001(a). “The mere presence of an agency or representative does not establish a principal office.” Id. 21. “To establish venue based on a principal office, plaintiffs must show the employees in the county where the lawsuit was filed (1) are the ‘decision makers’ for the company, and (2) have ‘substantially equal responsibility and authority’ relative to other company officials within the state.” Ford Motor Co. v. Johnson, 473 S.W.3d 925, 929 (Tex. App.—Dallas 2015, pet. denied) (quoting and citing In re Missouri Pacific R. Co., 998 S.W.2d 212, 217, 220 (Tex. 1999)). “‘Decision makers’ who conduct the daily affairs are different kinds of officials than agents or representatives, and ‘daily affairs’ does not mean relatively common, low-level management decisions.” Id. (citing Mo. Pac. at 217). 22. Here, both before and after the events allegedly giving rise to Defendants’ claims against the defendants in the Fort Bend Action, the final decision-makers with respect to all significant events affecting the business operations of the Dealership made those decisions in Tarrant County, Texas. See Ex. A, Affidavit of T. Bently Durant, ¶ 3. Moreover, according to Defendants, the alleged actions that give rise to their application for the appointment of a receiver for the Dealership were taken by Defendants “since,” i.e., after, the Sebastians’ alleged “exclusion” from the Dealership. Defendants’ First Am. Pet. in Fort Bend Action, Ex. 6 to Plaintiff’s First Am. Pet., ¶ 74. In other words, the Sebastians admit that their cause of action for the appointment of a receiver did not accrue until the Sebastians’ involvement in the affairs of the Classic Dealerships ceased. Cf. TEX. CIV. PRAC. & REM. CODE § 15.006 (“A court shall determine the venue of a suit based on the facts existing at the time the cause of action that is the basis of the suit accrued.”). While Defendants may dispute that such actions were permitted under the organizational documents of Plaintiff, they cannot seriously dispute that such actions were taken by the defendants in the Fort Bend Action where they reside and operate – Tarrant County, Texas. Ex. A, App.F 0010 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 10 Affidavit of T. Bently Durant, ¶¶ 3-4. Accordingly, the mandatory venue for the Fort Bend Action is Tarrant County, Texas. 23. Moreover, Defendants cannot meet their burden to prove that Plaintiff maintains any office or presence in Fort Bend County. Id., ¶¶ 6-8; see Fortenberry, 664 S.W.3d at 811 (once a defendant challenges the plaintiff’s venue choice, the “plaintiff bears the burden to present prima facie proof that venue is maintainable in the county of suit ….”). This is because Plaintiff’s sales and service facility is located at 8100 S. Texas 6, Houston, TX 77083, which is in Harris County, Texas. Id., ¶ 6. 24. Thus, venue for the claims asserted Fort Bend Action is mandatory in Tarrant County, Texas, as that is where the principal office of the Dealership, and other motor vehicle dealerships subject to Defendants’ claims in the Fort Bend Action, are located. Therefore, Defendants’ initiation of their claims against Plaintiff’s principals in the 387th District Court did not confer dominant jurisdiction upon it because venue was not, and is not, proper in that court. 3. Conferring dominant jurisdiction over this case to the 387th District Court would improperly hinder Plaintiff’s ability to seek a prompt and full adjudication of Plaintiff’s ancillary claims to preserve the status quo in this case. 25. Additionally, conferring dominant jurisdiction over this case to the 387th District Court would improperly delay and/or prevent a prompt and full adjudication of Plaintiff’s claims for ancillary relief in this case. See Perry v. Del Rio, 66 S.W.3d 239, 250 (Tex. 2001) (the “first-filed rule admits of exceptions when its justifications fails, as when the first court does not have the full matter before it, or when conferring dominant jurisdiction on the first court will delay or even prevent a prompt and full adjudication ….”). 26. Here, because of the Fifteenth Court of Appeals’ stay of the Fort Bend Action, Plaintiff was prohibited from seeking any relief from the 387th District Court when its causes of action in this case accrued during the stay. Moreover, the stay notwithstanding, had Plaintiff filed in the 387th District Court, Plaintiff would have invited argument that it waived its objection to venue in Fort Bend App.F 0011 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 11 County. See TEX. R. CIV. P. 86 (“The motion objecting to improper venue may be contained in a separate instrument filed concurrently with or prior to the filing of a movant’s first responsive pleading ….”). Accordingly, applicable law and the real-world implications of Plaintiff’s business continuing to be disrupted by Defendants necessitated Plaintiff’s filing of this action in this Court – the alternative, allowing Defendants to continue to disrupt and cause irreparable harm to Plaintiff’s economic and reputational interests until the Fifteenth Court of Appeals’ stay is lifted, was not an option Plaintiff could afford to take. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests that the Court deny the Motion in its entirety, and that Plaintiff be awarded all other equity to which it may show itself justly entitled, whether by law or in equity. Respectfully submitted, /s/ Timothy D. Zeiger Derek D. Rollins State Bar No. 24029803 Lucas Peterson State Bar No. 24121468 SHACKELFORD, MCKINLEY & NORTON, LLP 9201 N. Central Expressway 4th Floor Dallas, Texas 75231 214-780-1400 [email protected] [email protected] Timothy D. Zeiger State Bar No. 22255950 [email protected] 2600 Via Fortuna, Suite 150 Austin, Texas 78746 (512) 469-0900 AND James E. Key App.F 0012 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 12 State Bar No. 24012958 HARRIS, FINLEY & BOGLE, P.C. 777 Main Street, Suite 1800 Fort Worth, Texas 76102 817-870-8735 (direct) 817-333-1182 (fax) [email protected] ATTORNEYS FOR PLAINTIFF CERTIFICATE OF SERVICE The undersigned certifies that on March 19, 2025, a true and correct copy of the above and foregoing was served in accordance with Rule 21a on all counsel of record. /s/ Timothy D. Zeiger Timothy D. Zeiger App.F 0013 PLAINTIFF’S RESPONSE TO DEFENDANTS’ JOINT MOTION TO TRANSFER AND EMERGENCY APPLICATION FOR TEMPORARY INJUNCTION AND PERMANENT INJUNCTION PAGE 13 EXHIBIT A App.F 0014 App.F 0015 App.F 0016 App.F 0017 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Rebecca Duckworth on behalf of Derek Rollins Bar No. 24029803 [email protected] Envelope ID: 98670238 Filing Code Description: No Fee Documents Filing Description: Plaintiff's Response to Defendants' Joint Motion to Transfer Venue and to Dissolve Temporary Restraining Order (Sebastian) Status as of 3/20/2025 9:06 AM CST Associated Case Party: MICHAELJEFFREYSEBASTIAN Name BarNumber Email TimestampSubmitted Status E. MichelleBohreer [email protected] 3/20/2025 7:42:43 AM SENT Associated Case Party: TIFFANYLYNNSEBASTIAN Name BarNumber Email TimestampSubmitted Status Mitch Little [email protected] 3/20/2025 7:42:43 AM SENT Steven Ovando [email protected] 3/20/2025 7:42:43 AM SENT Case Contacts Name BarNumber Email TimestampSubmitted Status Derek D.Rollins [email protected] 3/20/2025 7:42:43 AM SENT Timothy DZeiger [email protected] 3/20/2025 7:42:43 AM SENT Sharon Taylor [email protected] 3/20/2025 7:42:43 AM SENT Pritesh Soni [email protected] 3/20/2025 7:42:43 AM SENT E MichelleBohreer [email protected] 3/20/2025 7:42:43 AM SENT John LucasPeterson [email protected] 3/20/2025 7:42:43 AM SENT Rebecca DeeDuckworth [email protected] 3/20/2025 7:42:43 AM SENT App.F 0018 FILED TARRANT COUNTY 236-3627 46-25 3/20/2025 9: 19 AM THOMAS A. WILDER DISTRICT CLERK CAUSE NO. 236-362746-25 § CLASSIC CHEVROLET WEST § IN THE DISTRICT COURT OF HOUSTON, LLC, § Plaintiff, § § v. § § TARRANT COUNTY, TEXAS MICHAEL JEFFREY SEBASTIAN AND § TIFFANY SEBASTIAN, § Defendants. § § § 236TH JUDICIAL DISTRICT ORDER GRANTING DEFENDANTS' EMERGENCY MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER, ~ ~ FOR--Ae:f--lGN-ON BONB AND STAY OF PROCEEDINGS On this day came on for consideration the Defendants, Michael Jeffrey Sebastian and Tiffany Sebastian's ("Sebastians") Emergency Motion to Dissolve Temporary Restraining Order and for Action on Bond (the "Motion"). The Court after considering the pleadings, the motion and response, and hearing arguments of counsel, is of the opinion the Motion should be GRANTED. It is therefore ORDERED, ADJUDGED AND DECREED that Defendants, Michael Jeffrey Sebastian and Tiffany Sebastian's Motion is hereby GRANTED. It is further ORDERED, ADJUDGED AND DECREED that the Temporary Restraining Order entered on March 13, 2025 at 2:07 p.m. is hereby dissolved. It is further . ORDERED, ADJUDGED AND DECREED that a stay o [ E th proceeding t h i is GRANTED ~~ pending the actions of the 15 Court of AppeaI7-!lfld-..thefeaft ~±~, l,e-.Sel,o,!i ' • -~~ Transfer Venue.-lt-ts-fttrtner 'l App.G 0001 ORDEREB;-A-BH:f~ DECREEDthtt~fendaHts ee graHted relief upoR the SIGNED this ;lt}t/tday of_-----L-~--'------' 2025 in Fort Worth, Texas. aPRESloING Sitting b~signment Derek D. Rollins cc: Client Shackelford, McKinley & Norton, LLP Dallas Austin Fort Worth Houston New Orleans App.H 0001 App.H 0002 App.H 0003 App.H 0004 App.H 0005 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Rebecca Duckworth on behalf of Derek Rollins Bar No. 24029803 [email protected] Envelope ID: 98729814 Filing Code Description: Response Filing Description: Relators' Response to Real-Parties-In-Interest's Emergency Motion to Reconsider the Stay Granted by the Court Status as of 3/21/2025 10:45 AM CST Case Contacts Name BarNumber Email TimestampSubmitted Status Jeri Hamman [email protected] 3/21/2025 10:35:12 AM SENT Melissa Diaz [email protected] 3/21/2025 10:35:12 AM SENT Walker StevenYoung [email protected] 3/21/2025 10:35:12 AM SENT Rebecca DeeDuckworth [email protected] 3/21/2025 10:35:12 AM SENT K. Elizabeth Swan [email protected] 3/21/2025 10:35:12 AM SENT Derek D. Rollins [email protected] 3/21/2025 10:35:12 AM SENT Timothy D.Zeiger [email protected] 3/21/2025 10:35:12 AM SENT Lucas Peterson [email protected] 3/21/2025 10:35:12 AM SENT Rosa Balderas [email protected] 3/21/2025 10:35:12 AM SENT E. Michelle Bohreer [email protected] 3/21/2025 10:35:12 AM SENT Pritesh Soni [email protected] 3/21/2025 10:35:12 AM SENT J. Mitch Little [email protected] 3/21/2025 10:35:12 AM SENT Steven Ovando [email protected] 3/21/2025 10:35:12 AM SENT John Coselli, II [email protected] 3/21/2025 10:35:12 AM SENT Jill K.Evangelista [email protected] 3/21/2025 10:35:12 AM SENT Joseph W.DiCecco [email protected] 3/21/2025 10:35:12 AM SENT Hon. Stacy RogersSharp [email protected] 3/21/2025 10:35:12 AM SENT