Document:

Purchase and Sale Agreement

 Exhibit 10.17 
  
 EXECUTION COPY 
  

  
 PURCHASE AND SALE AGREEMENT 
  
 between 
  
 CARBONTRONICS SYNFUELS INVESTORS, L.P., 
 as Buyer 
  
 and 
  
 CARBONTRONICS, LLC, 
 as Seller 
  
 Dated 
 as of June 16, 1998 
  

 TABLE OF CONTENTS 

					
	 	  	 	  	Page

	ARTICLE I
	
	DEFINITIONS
			
	 Section 1.01.
	  	 Definitions
	  	1
	
	ARTICLE II
	
	PURCHASE
			
	 Section 2.01.
	  	 Sale and Purchase of Membership Interest
	  	7
	 Section 2.02.
	  	 Adjustment Amounts
	  	12
	 Section 2.03.
	  	 Deferred Contingent Payments
	  	13
	 Section 2.04.
	  	 Pledge of Partnership Interest
	  	14
	 Section 2.05.
	  	 Excluded Rights
	  	14
			
	 	  	ARTICLE III	  	 
	
	REPRESENTATION AND WARRANTIES OF THE SELLER
			
	 Section 3.01.
	  	 Membership Interests
	  	15
	 Section 3.02.
	  	 Membership of the Purchased Companies
	  	15
	 Section 3.03.
	  	 Organization
	  	15
	 Section 3.04.
	  	 Qualifications, etc.
	  	15
	 Section 3.05.
	  	 Third Party Indebtedness
	  	16
	 Section 3.06.
	  	 Real and Personal Property Owned or Leased
	  	16
	 Section 3.07.
	  	 Financial Position
	  	16
	 Section 3.08.
	  	 Absence of Certain Changes or Events
	  	16
	 Section 3.09.
	  	 Insurance
	  	16
	 Section 3.10.
	  	 Commitments
	  	17
	 Section 3.11.
	  	 Legal Proceedings
	  	17
	 Section 3.12.
	  	 Taxes
	  	17
	 Section 3.13.
	  	 Compliance with Laws
	  	18
	 Section 3.14.
	  	 Environment
	  	18
	 Section 3.15.
	  	 Organization; Due Authorization; Binding Obligation
	  	19
	 Section 3.16.
	  	 Non-Contravention
	  	19
	 Section 3.17.
	  	 Regulatory Approvals
	  	19
	 Section 3.18.
	  	 Election with Respect to Purchased Companies
	  	19
	 Section 3.19.
	  	 Liabilities
	  	19
	 Section 3.20.
	  	 Conduct of Operations
	  	20
	 Section 3.21.
	  	 Designs and Drawings
	  	20
	 Section 3.22.
	  	 Licenses, Permits, Etc.
	  	20
	 Section 3.23.
	  	 No Tax-Assisted Financing
	  	21
	 Section 3.24.
	  	 IRS Ruling
	  	21
	 Section 3.25.
	  	 Certain Expectations
	  	21
	 Section 3.26.
	  	 Books and Records
	  	22
	 Section 3.27.
	  	 Projections
	  	22

  

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	 	  	 	  	Page

	 Section 3.28.
	  	 Production Capacity of Synthetic Coal Facilities
	  	22
	
	ARTICLE IV
	
	REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
			
	 Section 4.01.
	  	 Organization
	  	22
	 Section 4.02.
	  	 Due Authorization of the Partnership; Binding Obligation
	  	23
	 Section 4.03.
	  	 Non-Contravention
	  	23
	 Section 4.04.
	  	 Regulatory Approvals
	  	23
	 Section 4.05.
	  	 Investment Intent
	  	23
	 Section 4.06.
	  	 Legal Proceedings
	  	24
	 Section 4.07.
	  	 Availability of Funds
	  	24
	
	ARTICLE V
	
	FURTHER AGREEMENTS AND ASSURANCES
			
	 Section 5.01.
	  	 Confidentiality
	  	24
	 Section 5.02.
	  	 Reports and Financial Statements
	  	25
	
	ARTICLE VI
	
	CONDITIONS TO THE PURCHASE
			
	 Section 6.01.
	  	 No Legal Proceedings
	  	25
	 Section 6.02.
	  	 Assignment of Membership Interests
	  	25
	
	ARTICLE VII
	
	CONDITIONS TO THE SALE
			
	 Section 7.01.
	  	 No Legal Proceedings
	  	26
	 Section 7.02.
	  	 Payment of Purchase Price
	  	26
	ARTICLE VIII
	EVENTS OF DEFAULT
	 Section 8.01.
	  	 Events of Default
	  	26
	 Section 8.02.
	  	 Partnership’s Obligation to Take Action Against Defaulting Limited Partner
	  	27
	
	ARTICLE IX
	
	CONSEQUENCES OF BREACH OF REPRESENTATIONS AND WARRANTIES AND COVENANTS
			
	 Section 9.01.
	  	 Consequence of Breach of Representations and Warranties and Covenants
	  	28

  

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	 	  	 	  	Page

	ARTICLE X
	
	TERMINATION OF AGREEMENT
			
	 Section 10.01.
	  	 Mutual Agreement
	  	28
	 Section 10.02.
	  	 Noncompliance; Nonperformance
	  	28
	
	ARTICLE XI
	
	MISCELLANEOUS
			
	 Section 11.01.
	  	 Entire Agreement
	  	29
	 Section 11.02.
	  	 Successors and Assigns
	  	29
	 Section 11.03.
	  	 Counterparts; Effectiveness
	  	29
	 Section 11.04.
	  	 Headings
	  	29
	 Section 11.05.
	  	 Amendment; Waiver; Requirement of Writing
	  	29
	 Section 11.06.
	  	 Notices
	  	29
	 Section 11.07.
	  	 Governing Law
	  	30
	 Section 11.08.
	  	 Exclusion of Consequential Damages
	  	30
	 Section 11.09.
	  	 No Third-Party Beneficiaries
	  	30
			
	 Exhibit A
	  	 Base Case
	  	 
	 Exhibit B
	  	 Form of Deferred Contingent Payment Note
	  	 

  

 iii 

 PURCHASE AND SALE AGREEMENT 
  
 THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of June 16, 1998, between CARBONTRONICS
SYNFUELS INVESTORS, L.P., a Delaware limited partnership (the “Partnership”), and CARBONTRONICS, LLC, a Delaware limited liability company (the “Seller”). 
  
 W I T N E S S E T H : 
  
 WHEREAS, the Seller is the sole member of each of the following limited
liability companies, each formed under the Delaware Limited Liability Company Act of 1992, as amended: PC Indiana Synthetic Fuel #2, L.L.C., PC Illinois Synthetic Fuel #2, L.L.C. and PC Kentucky Synthetic Fuel #3, L.L.C. (each a “Project
Company,” and, collectively, the “Project Companies”); 
  
 WHEREAS, with respect to each Project Company, the Seller’s 100% limited liability company interest therein together with all rights, powers and obligations of the Seller as a Member of such Project Company are, collectively, herein
referred to as the “Membership Interest;” 
  
 WHEREAS,
the Seller desires to sell, assign, transfer and convey and the Partnership desires to purchase and accept the Membership Interest in and become the sole Member of one or more of the Project Companies for the consideration and on the terms set forth
in this Agreement; 
  
 NOW, THEREFORE, in consideration of the
promises and of the mutual agreements hereinafter contained, the parties, intending to be legally bound, do hereby agree as follows: 
  
 ARTICLE I. 
  
 DEFINITIONS 
  
 Section 1.01. Definitions. For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.01. Terms used herein and not defined herein shall have the meaning assigned thereto in
the Partnership Agreement. 
  
 “Adjustment Date”
means the first Quarterly Payment Date after June 30 of each year. 
  
 “Annual Adjustment Amount” means the amount which is determined under Section 2.02 (a) hereof as the adjustment to be made to the Contingent Payments otherwise due on the Adjustment Date. 

 “Base Case” means the pro forma economic projections of the expected financial results
of the Projects undertaken by each Purchased Company attached hereto as Exhibit A. 
  
 “Calendar Quarter” means, in each calendar year, each three-month period beginning with January, April, July or October. 
  
 “Capacity Warranty” has the meaning specified in Section 9.01 hereof. 
  
 “Capital Contributions” means the amounts contributed to the
Partnership by the Partners as provided in the Partnership Agreement. 
  
 “Cash Expenditures” means, with respect to any period, all disbursements of cash by the Partnership, including, but not limited to, payments of operating expenses, amounts payable by the Partnership as Contingent Payments
under this Agreement (determined without regard for the application of any provision hereof permitting or requiring all or any portion of such Contingent Payments to be deferred due to Operating Deficits), amounts paid as royalties or license fees
under the Sub-License Agreements or other agreements regarding technology utilized by the Purchased Companies or their subsidiaries, payments of principal and interest as it becomes due on indebtedness, amounts paid into escrow as security for
future liabilities, and amounts expended from releases from any such escrow; provided that, Cash Expenditures shall not include: (i) distributions to the Partners, or (ii) amounts expended or applied from Initial
Contributions, other than amounts expended or applied as working capital or otherwise to cover operating costs identified in the Project Construction Budget. 
  
 “Cash Receipts” means, with respect to any period, all cash receipts of the Partnership from the operation of all or any of the Projects
or the sale of fuels produced thereby and any other cash receipts from Partnership operations or assets including operations and assets of the Purchased Companies and subsidiaries thereof, plus Quarterly Contributions, plus that portion of the
Initial Contributions contributed and expended or applied as working capital or otherwise to cover operating costs, in each case not to exceed the amounts specified therefor in the Project Construction Budget, plus interest received on any Reserves
or accounts of the Partnership or the Purchased Companies or their subsidiaries, plus amounts released from any escrow established as security for future liabilities; provided that, Cash Receipts shall not include proceeds of
borrowings. 
  
 “Closing” means, with respect to
any Project Company, the transfer of the Membership Interest to the Partnership and the payment to the Seller of the Initial Payment. 
  
 “Closing Date” means the date and time as of which a Closing actually takes place. 
  

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 “Code” means the Internal Revenue Code of 1986, as amended, or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law. 
  
 “Contingent Payment” means, (i) with respect to each Calendar Quarter, the Contingent Payment due on the Quarterly Payment Date following the end of such Calendar Quarter all as provided in
Section 2.01(e) and (ii) the payment due on the Final Adjustment Date. 
  
 “Deferred Contingent Payments” means (i) all amounts of Contingent Payments which, under Section 2.03, are not paid on the Quarterly Payment Date when such amounts become due and
(ii) interest on the deferred amount until paid. 
  
 “Encumbrance” means any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on
use, voting, transfer, receipt of income, or exercise of any other attribute of ownership; provided, however, that the term Encumbrance shall not include any rights or interests arising under the Option Agreement. 
  
 “Environmental Law” means any Legal Requirement which
relates to or otherwise imposes liability or standards of conduct concerning mining or reclamation of mined land, discharges, emissions, releases or threatened releases of noises, odors or any pollutants, contaminants or hazardous or toxic wastes,
substances or materials, whether as matter or energy, into ambient air, water or land, or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, or hazardous or toxic wastes, substances or materials. 
  
 “Estimated Tax Credits” has the meaning specified in Section 2.01(e). 
  
 “Event of Bankruptcy” means, for any entity: 
  
 (a) that such entity shall fail generally to, or admit in writing its inability to, pay its obligations as they become due; or 
  
 (b) a proceeding shall have been instituted in a court having jurisdiction in
the premises seeking a decree or order for relief in respect of such entity in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other similar official of such entity or for any substantial part of its property, or for ,the winding-up or liquidation of its affairs and such proceeding shall not have been dismissed, or
such execution or similar process shall not be 

  

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released, vacated or fully bonded, within 60 days after commencement, filing or levy, as the case may be; or 
  
 (c) the commencement by such entity of a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or such entity’s consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such entity or for any substantial part of its property, or any general assignment for the benefit of creditors. 
  
 “Final Adjustment Amount” means the adjustment to be paid on
the Final Adjustment Date which amount is to be determined under Section 2.02(b) hereof. 
  
 “Final Adjustment Date” means June 1, 2008 (or, if Tax Credits are unavailable by reason of the repeal or amendment of Section 29 of the Code, June 30 of the year following the year in
which the Tax Credits are last available as a result of such repeal or amendment). 
  
 “Final Determination” has the meaning specified in Section 2.01(j)(3). 
  
 “General Partner” means the general partner of the Partnership, initially Carbontronics Fuels, LLC, a Delaware limited liability company.

  
 “Governmental Body” means any of the
following: 
  
 (d) nation, state, county, city,
town, village, district, or other jurisdiction of any nature; 
  
 (e) federal, state, local, municipal, foreign, or other government; 
  
 (f) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity
and any court or other tribunal); 
  
 (g)
multi-national organization or body; or 
  
 (h)
body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature. 
  

“Initial Payment” means, with respect to the Membership Interests in all three of the Project Companies, the sum of $1,500,000, which
amount is payable in a single installment in the amount set forth in Section 2.01(d). 
  

 4 

 “IRS” means the Internal Revenue Service or its successor. 
  
 “IRS Ruling” has the meaning ascribed thereto in the
Partnership Agreement. 
  
 “IRS Ruling Request”
has the meaning ascribed thereto in the Partnership Agreement. 
  
 “Legal Requirement” means any federal, state, local, municipal, foreign, international, multinational or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute or treaty.

  
 “Limited Partner” means a limited partner of
the Partnership. 
  
 “Maximum Tax Credit Amount at
Risk” has the meaning specified in Section 2.01(j)(4). 
  
 “Member” means, with respect to each Project Company, the entity which is the sole member of such limited liability company. 
  
 “Membership Interest” means, with respect to each Project Company, the 100% limited liability company interest therein held by the sole
Member of such Project Company, including, without limitation, such Member’s rights in the income and loss of the Project Company and the rights to receive distributions of assets (liquidating or otherwise) and allocations and the right and
power and obligations as the sole member of such Project Company to manage and control the business, affairs and properties of the Project Company and all rights as the sole member of such Project Company to control subsidiaries of such Project
Company. 
  
 “Milestones” has the meaning
ascribed to such term in the Partnership Agreement. 
  
 “Operating Deficit” means, for any period, the amount, if any, by which Cash Expenditures exceed Cash Receipts. 
  
 “Operating Gain” means, for any period, the amount, if any, by which Cash Receipts exceed Cash Expenditures. 
  
 “Option Agreement” means the Option Agreement dated as of
June 16, 1998 between the Partnership and Carbontronics Fuels, LLC pursuant to which Carbontronics Fuels, LLC has an option to purchase, on or for a period after January 1, 2008, the Membership Interest in one or more of the Purchased
Companies. 
  
 “Partners” means, collectively,
the General Partner and all limited partners of the Partnership. 
  

 5 

 “Partnership” means Carbontronics Synfuels Investors, L.P., a Delaware limited
partnership. 
  
 “Partnership Agreement” means
the Amended and Restated Agreement of Limited Partnership dated as of June 16, 1998 among Carbontronics Fuels, LLC as general partner and those persons from time to time admitted as limited partners. Except as otherwise expressly provided
herein, all references to the Partnership Agreement shall be to such agreement as it is in effect on the date hereof, without regard for any amendments or supplements thereto after the date hereof made without the prior written consent of the
Seller. 
  
 “Permitted Encumbrances” means
(i) liens for taxes that are not yet due and payable, (ii) liens that are being contested in good faith and by appropriate proceedings which have the effect of staying the execution of such liens, (iii) materialmen’s,
mechanic’s, worker’s, repairmen’s, employees’, carriers’, warehousemen’s and other like liens relating to the construction of the Projects, so long as the same relate to amounts that are not more than 30 days past due,
and (iv) exceptions to title listed in the title insurance policies in effect for the sites on which the synthetic fuel production facilities owned by the Project Companies are being constructed. 
  
 “Project” means, with respect to each Purchased Company,
each synthetic fuel production facility and associated feedstock preparation facility developed and operated by such Purchased Company or a subsidiary of such Purchased Company and described in Schedule 1.01 hereto. 
  
 “Project Company” means any one of the following limited
liability companies, each of which is a Delaware limited liability company: (1) PC Indiana Synthetic Fuel #2, L.L.C., (2) PC Illinois Synthetic Fuel #2, L.L.C. and (3) PC Kentucky Synthetic Fuel #3, L.L.C. 
  
 “Project Companies” means, collectively, all of the Project
Companies. 
  
 “Purchase Price” has the meaning
specified in Section 2.01(a). 
  
 “Purchased
Company” means any Project Company the Membership Interest in which is acquired by the Partnership as provided in Section 2.01 of this Agreement. 
  

“Qualified Fuels” means qualified fuels as defined in Section 29(c) of the Code. 
  
 “Quarterly Payment Date” means the date following the end of
each Calendar Quarter on which the Contingent Payment is due as provided in Section 2.01(h). 
  

 6 

 “Reserves” means reserves established and maintained from time to time by the General
Partner or by the Purchased Companies or a subsidiary thereof, in amounts deemed adequate and sufficient from time to time by the General Partner or the manager of the respective Purchased Companies or subsidiary for working capital and to pay
taxes, insurance, repairs, replacements or renewals or other costs and expenses incident to the Partnership’s or the Purchased Company’s (or subsidiary’s) business. 
  
 “Sale or Refinancing” means any sale or refinancing transaction not in the ordinary course of business of a
Project Company or the Partnership as more fully described in the Partnership Agreement and including, specifically, proceeds of a sale of a Membership Interest including a sale under the Option Agreement. 
  
 “Sale or Refinancing Proceeds” means all cash receipts of
the Partnership arising from a Sale or Refinancing less those amounts described in the Partnership Agreement. 
  
 “Seller” means Carbontronics, LLC, a Delaware limited liability company. 
  
 “Tax Credits” means the tax credits provided by Section 29 of the Code. 
  
 “Tax Event” has the meaning specified in
Section 2.01(j)(2). 
  
 “Unit” has the
meaning ascribed to such term in the Partnership Agreement. 
  
 ARTICLE II. 
  
 PURCHASE 
  
 Section 2.01. Sale and Purchase of Membership Interest.

  
 (a) Subject to the terms and conditions set forth in this
Agreement, the Partnership shall purchase and the Seller shall sell, assign, transfer and convey the Membership Interest in one or more of the Project Companies. The Purchase Price of the Membership Interest in each Project Company shall include two
components: (1) the Initial Payment, which shall be payable in one installment, which shall be payable in accordance with paragraph (d) below, and (2) Contingent Payments due on each Quarterly Payment Date through and including the
Quarterly Payment Date which follows the Calendar Quarter ended on December 31, 2007 and on the Final Adjustment Date. 
  

 7 

 (b) The Partnership shall purchase the Membership Interest in the Project Companies and shall exercise
such right on June 29, 1998. 
  
 (c) Subject to the
terms and conditions of this Agreement, at the Closing with respect to the sale of the Membership Interest in a Project Company, the Seller will sell, assign, transfer and convey all of the Seller’s rights, title and interest in the Membership
Interest in such Project Company to the Partnership and take such action as shall be required to cause the Partnership to be admitted as the sole Member of each such Purchased Company, and the Partnership will purchase, assume and accept the
Membership Interest from the Seller and will pay, in full, the Initial Payment and all of the Contingent Payments as they become due for the Membership Interest in such Project Company. On the Closing Date with respect to the purchase of the
Membership Interest in a Project Company, all right, title and interest of the Seller in the Membership Interest in such Project Company shall be transferred, assigned and conveyed to the Partnership, the Partnership shall be admitted as the sole
Member of such Project Company and all interest of the Seller in the Membership Interest and in the Purchased Company shall be released by the Seller. 
  
 (d) On the Closing Date, with respect to the Membership Interest in each Project Company purchased on such date, the Partnership shall pay in full and in
immediately available funds the Initial Payment in the amount of $1,500,000. 
  
 (e) The Partnership shall, as further consideration for each Membership Interest purchased hereunder, be required to make and agrees to make Contingent Payments to the Seller in the amounts set forth in this
Section 2.01(e). The Contingent Payments shall be due and payable on each Quarterly Payment Date and on the Final Adjustment Date. The Contingent Payments in respect of the Membership Interest in a given Project shall commence on the Quarterly
Payment Date immediately following the Calendar Quarter in which the first Qualified Fuel produced by such Project is sold and end with the Final Adjustment Date. Subject to Article IX hereof, with respect to each Calendar Quarter, the Contingent
Payment due on the Quarterly Payment Date immediately following such Calendar Quarter shall be an amount equal to (i) fifty percent (50)% of the aggregate Estimated Tax Credits generated by Projects during that portion of such Calendar Quarter
when the respective Project Companies were Purchased Companies and (ii) with respect to the Contingent Payment due on the Adjustment Date, plus or minus the product of (x) fifty percent (50)% multiplied by (y) the Annual
Adjustment Amount. The term “Estimated Tax Credits,” for any Calendar Quarter, as used in this Agreement, means the sum of the Tax Credits, as in accordance with Section 3.1(e) of the Partnership Agreement; and, as
adjusted following review by the Seller as provided herein and by the Partners’ Accountant as provided in Section 3.1(f) of the Partnership Agreement. Notwithstanding the foregoing, the Seller agrees that the Partnership shall not be in

  

 8 

 
default under this Agreement in respect of its failure to make any Contingent Payment for the Membership Interest in a Project Company (x) unless and
until the date the conditions set forth in Section 3.1(g) in the Partnership Agreement have been satisfied or waived, and (y) unless all Contingent Payments due on or prior to such date have not been paid in full (subject to the other
provisions of this Agreement) within five days after such date. 
  
 (f) The final Contingent Payment shall be due on the Final Adjustment Date and shall be in the amount of the Final Adjustment Amount if such Final Adjustment Amount is a positive amount. 
  
 (g) The General Partner shall prepare its calculation of the Estimated Tax
Credits and the Contingent Payment for each Calendar Quarter at the same time that the General Partner prepares its calculation of the amount of the Quarterly Contribution as provided in Section 3.1(e) of the Partnership Agreement and shall
submit a report showing the Partnership’s determination of the Contingent Payment to the Seller at the same time as the General Partner submits the report described in Section 3.1(f) of the Partnership Agreement to the Partners’
Accountant for review. 
  
 (h) The Contingent Payment with respect
to each Calendar Quarter shall be due to the Seller not later than five days after the Quarterly Contribution for such Calendar Quarter is due to the Partnership from the Partners under the terms of Section 3.1(f) of the Partnership Agreement.
Such due date for Contingent Payments, being the date which is five days after the Quarterly Contribution Date, is herein referred to as the “Quarterly Payment Date.” 
  
 (i) If the Seller objects to the General Partner’s calculation of any Contingent Payment, the Seller shall notify the
Partnership within two weeks after the Partnership has submitted the report to the Seller. If the Seller disputes the Partnership’s calculations, the Partnership shall, in good faith, consider the issues raised or in dispute and discuss such
issues with the Seller and attempt to reach a mutually satisfactory agreement, taking into account as well, any issues raised by the Partners’ Accountant and if such dispute is promptly resolved, the adjusted amount agreed upon shall be the
Contingent Payment due. If the dispute is not promptly resolved, the Partnership shall pay, on the Quarterly Payment Date, the amount not in dispute. Thereafter, the Seller, the General Partner and the Partners’ Accountant shall select an
independent entity qualified and knowledgeable in the area to resolve the dispute and, upon resolution of the dispute, if it is determined that additional Quarterly Contributions are due from the Partners, the corresponding additional amount shall
be paid to the Seller within five days of the date the additional amount of the Quarterly Contributions is due to the Partnership from the Partners. 
  

 9 

 (j) (1) If the Partnership advises the Seller in writing that a Tax Event has occurred, all payments
of Contingent Payments thereafter up to an amount equal to the aggregate Maximum Tax Credit Amount At Risk shall be made into an escrow account for the benefit of the Seller (but owned by the Partnership) on terms whereby the amounts held in escrow
will be released on the joint signatures of the Seller and the Partnership (which shall require the approval of a Majority in Interest of the Limited Partners, as such term is defined in the Partnership Agreement) in the following circumstances, and
in the following amounts: 
  
 (i) upon a Final
Determination with respect to a Partner or Partners and a Calendar Quarter or Calendar Quarters that Tax Credits are disallowed, the product of (x) the sum of (I) the amount disallowed, plus (II) any interest and penalties
(including without limitation substantial understatement penalties and any penalties for underpayment of estimated taxes to the extent attributable to Tax Credits arising from the Partnership) due with respect to any such Calendar Quarters related
to such Tax Credits, multiplied by (y) the applicable percentage under Section 2.01(e) hereof, shall be released from the escrow to the relevant Partner or Partners so long as the relevant Partner or Partners certifies that
(A) the amount being released is in the same proportion as the amounts escrowed hereunder bear to all amounts placed into escrow following a Tax Event under this Agreement and the Sub-License Agreements, and (B) all actions necessary to
cause the proportionate amounts escrowed under the Sub-License Agreements to be released have been taken or are being taken contemporaneously; and 
  
 (ii) if there is no longer an extant Tax Event as determined in accordance with the final sentence of paragraph (2) below, the
amounts remaining in escrow after application of (i) above shall be released to the Seller. 
  
 (2) For purposes of this Agreement, “Tax Event” means (i) the issuance of any information document request related to Tax Credits
arising from the operations of the Partnership or the Purchased Companies, or any other reasonable indication of an intention by the IRS to examine or disallow any portion of such Tax Credits, but in each case only if the IRS continues to make
inquiries or persists in its examination after the IRS has been provided with a copy of the private letter ruling(s) issued to the Partnership, (ii) the Partnership’s or Seller’s becoming aware that the IRS has questioned or otherwise
implicated the ability of the proprietary process licensed under the Sub-License Agreements to produce Qualified Fuels at any other synthetic fuel production project, or (iii) except with respect to matters addressed in clause (i) or
(ii) above, a Majority in Interest of the Limited Partners reasonably determines, after consultation with Seller and such experts as Seller may provide, and taking into consideration the existence of the rulings received in response to the IRS
Ruling Request, that it is more likely than 
  

 10 

 not that the IRS will disallow all or a portion of Tax Credits. Any Tax Event arising under this Section 2.01(j) (2)
shall cease on the earlier of (A) a Final Determination, (B) when the Partnership (with the approval of a Majority in Interest of the Limited Partners or, if a Limited Partner objecting to the same delivers an opinion of nationally recognized tax
counsel that it is more likely than not that the IRS will disallow Tax Credits, with the approval of all the Limited Partners) and the Seller agree that the tax issue giving rise to the Tax Event has been resolved, or (C) solely with respect to a
Tax Event arising under clause (iii) above, more than one year passes without an examination of Tax Credits of the Partnership commencing or another Tax Event occurring. 
  
 (3) For purposes of this Agreement, “Final Determination” means, with respect to Tax Credits related to the
Partnership, 
  
 (i) unless an adjustment is
proposed with respect to any such Tax Credits, the expiration of the applicable statute of limitations for the relevant tax period and Partner; 
  
 (ii) unless an administrative appeal or a judicial proceeding is initiated by the Partnership or the affected Partner, the date ninety
days after the issuance of a notice of deficiency; 
  
 (iii) unless judicial proceedings are initiated by the Partnership or the affected Partner, a final decision with respect to the proposed adjustment by an IRS appeals officer, as evidenced by the issuance of a 90-day letter, 870-AD or like
notice and the expiration of the period for initiating judicial proceedings; 
  
 (iv) unless appealed by the Partnership or the affected Partner, a final decision with respect to the proposed adjustment by the United States Tax Court, Court of Federal Claims or the appropriate Federal District
Court and the expiration of the period for filing an appeal of such decision; 
  
 (v) a final decision of a United States Court of Appeals with respect to the proposed adjustment, unless a petition for certiorari to the United States Supreme Court has been applied for and is pending or has been
granted with respect to such decision; 
  
 (vi)
denial of certiorari by, or final decision of, the United States Supreme Court; or 
  
 (vii) the settlement of a proposed adjustment as evidenced by a closing agreement. 
  

 11 

 (4) For purposes of this Agreement, “Maximum Tax Credit Amount At Risk” means the amount
reasonably determined by any affected Partner to be potentially subject to disallowance by the IRS following a Tax Event, plus interest and substantial understatement penalties, which amount shall not exceed the product of (x) the sum of
(I) the Tax Credits claimed by such Limited Partner with respect to the operations of the Partnership and the Project Companies for all open tax years (so long as such claims are consistent with the applicable final tax return of the
Partnership as to any such tax year), it being understood that such amount is not limited to amounts directly implicated by the Tax Event (since an audit of one issue related to Tax Credits could result in a disallowance of other such credits for
the same or a subsequent period, or on other grounds discovered later), plus (II) any interest and penalties payable by such affected Partner (to the extent attributable to Tax Credits arising from the Partnership), multiplied by
(y) the applicable percentage under Section 2.01(e) hereof. 
  
 (5) Each of the Seller and the Partnership agrees that, promptly after obtaining knowledge thereof, it will give prompt notice of any matter that is or could become a Tax Event or that the IRS has commenced an examination of any other
synthetic fuel production project utilizing the proprietary process licensed under the Sub-License Agreements, and the parties as promptly thereafter as practicable shall meet to discuss in good faith whether a Tax Event in fact exists or will
likely occur and the consequences thereof. 
  
 Section 2.02.
Adjustment Amounts. (a) Each year, following the publication by the IRS of the revised inflation adjustment factor and the reference price, and following the filing of the Partnership’s federal income tax return (A) the
Estimated Tax Credits for each Calendar Quarter of the preceding calendar year shall be recomputed, using such revised factor and taking into account the effect of the operation of Section 29(b)(1) of the Code based on such reference price, but
otherwise using the same information used to determine the Estimated Tax Credits for such periods, except as necessary to cause the aggregate Estimated Tax Credits not to exceed the Tax Credits actually reported on the Partnership’s federal
income tax return; and (B) the Estimated Tax Credits for the first Calendar Quarter of the then current calendar year shall be recomputed using such revised inflation adjustment factor. The General Partner shall then determine the difference
between (x) the Estimated Tax Credits for the preceding calendar year and the first Calendar Quarter of the current calendar year, as recomputed using the revised information as set forth in this Section 2.02(a) and (y) the Estimated
Tax Credits as originally determined for the four Calendar Quarters in the preceding calendar year and the first Calendar Quarter of the current calendar year. The product of (I), the difference between (x) and (y) in the preceding
sentence, multiplied by (II) the applicable percentage under Section 2.01 (e) hereof, is the “Annual Adjustment Amount.” If the Annual Adjustment Amount is a positive amount, it shall be 

  

 12 

 
added to the amount of the Contingent Payment otherwise due on the Adjustment Date and if the Adjustment Amount is a negative number, such amount shall be
used to reduce the Contingent Payment otherwise due on the Adjustment Date, or if the Adjustment Amount is negative and exceeds the amount of the Contingent Payment otherwise due on such date, the excess amount shall be successively credited against
Contingent Payments as they otherwise become due thereafter. 
  
 (a) In the calendar year in which the Final Adjustment Date occurs, following the publication of the revised inflation adjustment factor and the reference price applicable to the immediately preceding calendar year and following the filing
of the Partnership’s federal income tax return, the Estimated Tax Credits for each Calendar Quarter of such immediately preceding calendar year shall be recomputed, using such revised factor and taking into account the effect of the operation
of Section 29(b)(1) of the Code based on such reference price, but otherwise using the same information used to determine the Estimated Tax Credits for such periods, except as necessary to cause the aggregate Estimated Tax Credits not to exceed
the Tax Credits actually reported on the Partnership’s federal income tax return. The General Partner shall then determine the difference between (x) the Estimated Tax Credits for such calendar year as recomputed using the revised
information as set forth in this Section 2.02(b) and (y) the Estimated Tax Credits as originally determined for the four Calendar Quarters in such calendar year. The product of (I), the difference between (x) and (y) in the
preceding sentence, multiplied by (II) the applicable percentage under Section 2.01(e) hereof, is the “Final Adjustment Amount.” The Final Adjustment Amount, if positive, shall be due from the Partnership to the Seller
as the final Contingent Payment on the Final Adjustment Date. If the Final Adjustment Amount is negative, the amount thereof shall be paid by the Seller to the Partnership on the Final Adjustment Date. 
  
 Section 2.03. Deferred Contingent Payments. (a) To the
extent, for any Calendar Quarter, the Partnership experiences an Operating Deficit, the Partnership, with respect to the Contingent Payment due on the Quarterly Payment Date following such Calendar Quarter, shall be permitted to defer payment of the
Contingent Payment due on such date up to the amount of the Operating Deficit for such Calendar Quarter. Any such amount deferred as provided in this Section 2.03 together with interest thereon is herein referred to as a “Deferred
Contingent Payment.” Any amount of a Contingent Payment which is deferred shall continue as an obligation of the Partnership and shall bear interest at the rate of six percent per annum, compounded annually, until paid. If, for any Calendar
Quarter, the Partnership experiences an Operating Gain and there are Deferred Contingent Payments outstanding, the Partnership shall, on or before the Quarterly Payment Date immediately following such Calendar Quarter, pay to the Seller the lesser
of (i) the amount of such Operating Gain for the Calendar Quarter and (ii) the aggregate amount of unpaid Deferred Contingent Payments including 

  

 13 

 
accrued and unpaid interest. Any payments made with respect to Deferred Contingent Payments shall be credited first to accrued and unpaid interest, and then
to the principal amount of the unpaid Deferred Contingent Payments. All Deferred Contingent Payments not paid prior to such date shall become due and payable and shall be paid to the Seller on January 2, 2009. The Partnership agrees that, to
the extent it sells assets, including, but not limited to, a sale of a Membership Interest under the terms of the Option Agreement or otherwise, the Sale or Refinancing Proceeds will be used first to pay any unpaid Deferred Contingent Payments
before such amounts are used for any other purpose of the Partnership. The obligation of the Partnership to pay the Deferred Contingent Payment shall be evidenced by a promissory note substantially in the form of Exhibit B hereto. 
  
 Section 2.04. Pledge of Partnership Interest. The Partnership
agrees that as a condition to the admission of each Limited Partner, it will (i) obtain from such Limited Partner a written instrument by which such Limited Partner becomes bound by the terms of the Partnership Agreement (as the same is amended
or restated from time to time), (ii) obtain a pledge of such Limited Partner’s Units to secure payment of the Quarterly Contributions and a written security agreement executed by and enforceable against the Limited Partner in which the
Limited Partner pledges its Units and such other security as the Partnership shall deem appropriate to secure the Limited Partners’ obligations under the Partnership Agreement, and (iii) as security, take possession of and hold until all
payments due hereunder have been paid, the certificate evidencing the Units of such Limited Partner. 
  
 Section 2.05. Excluded Rights. The Seller and the Partnership acknowledge that the Purchase Price has been determined on the basis of the
actual performance of the binder technology which is licensed to each of the Project Companies from Carbontec Energy Corporation (“Carbontec”), which performance is believed by the Seller to be below the levels that had been warranted by
Carbontec (the “Warranty Claim”). The Seller and the Partnership agree that any claim in respect of the Warranty Claim against Carbontec constitutes an asset excluded from the purchase and sale made hereby, directly or indirectly, and the
Partnership agrees to cause the Project Companies to enter into such documents as may be reasonably requested by the Seller confirming the release of any claims by the Project Companies with respect thereto. 
  

 14 

 ARTICLE III. 
  
 REPRESENTATIONS AND WARRANTIES OF THE SELLER 
  
 The Seller hereby represents and warrants to the Partnership, as of the date hereof and as of each Closing Date, as follows: 
  
 Section 3.01. Membership Interests. The Seller (a) is the owner,
free and clear of any Encumbrances, of a 100% Membership Interest in each of the Purchased Companies and (b) subject to the terms and conditions of this Agreement, will sell, transfer, assign and deliver good and valid title to each such
Membership Interest and shall withdraw as a Member of each of the Project Companies in which the Partnership purchases the Membership Interest and relinquish all rights with respect thereto and will take such action as is required to admit the
Partnership as the sole Member of each Purchased Company in which the Partnership acquires the Membership Interest. At each Closing the Partnership will acquire good and valid title to the Membership Interest purchased, free and clear of any
Encumbrances. It is, however, understood and agreed that the Membership Interests are subject to a purchase option granted to Carbontronics Fuels, LLC, under the terms of the Option Agreement. 
  
 Section 3.02. Membership of the Purchased Companies. Each of the
Purchased Companies has only one Member and all limited liability company interest and all rights, title and interest of the Member in such Purchased Company is represented and transferred with the Membership Interest and the admission of the
Partnership as the sole member of the Purchased Company. Except for rights granted to the Partnership under this Agreement and to Carbontronics Fuels, LLC under the Option Agreement, there are no outstanding options, warrants or other rights to
purchase, obtain or acquire, or any outstanding securities or obligations convertible into or exchangeable for, or any voting agreements with respect to, the Membership Interest in the Purchased Companies. Each of the Purchased Companies is governed
by and operates under the terms of a Limited Liability Company Operating Agreement and the Limited Liability Company Operating Agreement of each Purchased Company either does or at the Closing will provide that such Purchased Company shall be a sole
member limited liability company. True and complete copies of the certificate of formation of each of the Purchased Companies and of the Limited Liability Company Operating Agreement of each of the Purchased Companies have heretofore been delivered
to or made available to the Partnership. 
  
 Section 3.03.
Organization. Each of the Purchased Companies is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with full power and authority to own its properties, including its
respective Project, to carry on its business as presently conducted by it and as to be conducted upon completion of its respective Project and to own, lease and operate its properties in the places where its properties are owned, leased or operated
or are to be owned, leased or operated. 
  
 Section 3.04.
Qualifications, etc. Schedule 3.04 attached hereto sets forth each jurisdiction in which each of the Purchased Companies is duly qualified to do business and in good standing. Neither the character of the properties owned or held 

  

 15 

 
under lease or license by the Purchased Companies nor the nature of the business conducted by the Purchased Companies or to be conducted by the Purchased
Companies requires any qualification in any other jurisdiction, except any such jurisdiction wherein the failure to be so qualified would not have a material adverse effect on such Purchased Company or its ability to operate its Project. 

 
 Section 3.05. Third Party Indebtedness. Except as set forth on
Schedule 3.05 hereto, none of the Purchased Companies has any indebtedness for money borrowed from third parties (including the Seller and the Seller’s Affiliates). None of the Purchased Companies has outstanding any loans to, or any
commitments to make loans to, any third parties (including the Seller and the Seller’s Affiliates). 
  
 Section 3.06. Real and Personal Property Owned or Leased. An identification of (a) all real property owned by or leased by the Purchased
Companies, and (b) except with respect to personal property acquired under the terms of the EPC Contracts, each other material piece of equipment or goods owned or leased by the Purchased Companies, is set forth on Part A of Schedule 3.06
hereto; all of such property and the other assets of the respective Purchased Companies (collectively, the “Assets”), are in good condition and repair, ordinary wear and tear excepted, and the relevant Purchased Company has good and
marketable title to (or a valid leasehold interest in, as applicable) each of its respective Assets, free and clear of all Encumbrances except Permitted Encumbrances and except as set forth on Part B of Schedule 3.06 hereto. 
  
 Section 3.07. Financial Position. Schedule 3.07 attached hereto
contains the unaudited balance sheet of each of the Purchased Companies as of June 16, 1998 (collectively, the “Balance Sheets”). The Balance Sheets have been prepared in accordance with generally accepted accounting principles and
present fairly, in all material respects, the assets and liabilities of the Purchased Companies as of such date. 
  
 Section 3.08. Absence of Certain Changes or Events. Since the date of the Balance Sheets described in Section 3.07 above, there has not
been any material adverse change in the properties, assets, business, financial condition or results of operations of any Purchased Company except as set forth on Schedule 3.08 hereof. 
  
 Section 3.09. Insurance. The assets, business and operations of each Purchased Company are insured in accordance
with prudent industry practices with respect to loss due to casualty and other risks, in amounts and coverages reasonable in the circumstances. Schedule 3.09 attached hereto sets forth a complete and accurate list of all casualty, directors and
officers liability, general liability (including product liability) and other types of insurance maintained by the Purchased Companies, together with the carriers and liability 

  

 16 

 
limits for each such policy. Each policy is in full force and effect, there are no defaults or conditions which with the passage of time, the giving of
notices or both, would become defaults under any such policies, and no written or oral notice has been received by any Purchased Company or the Seller from any insurance carrier purporting to cancel or reduce coverage under any such policy. The
Purchased Companies are current in all premiums or other payments due thereunder. 
  
 Section 3.10 Commitments. Schedule 3.10 attached hereto sets forth a complete and accurate list of all agreements, contracts, leases (whether of real or personal property), options, commitments,
arrangements and understandings, whether oral or written (including any and all amendments thereto) to which any of the Purchased Companies is a party, including, but not limited to, (a) licenses for technology, (b) agreements for the
purchase of feedstock and other raw materials, (c) operating agreements, (d) engineering procurement and construction contracts, (e) management services agreements, (f) employment contracts and contracts with consultants and
other independent contractors, (g) contracts with Affiliates of the General Partner and (h) all other material contracts. All such contracts, agreements, leases, commitments, arrangements or understandings are on commercially reasonable
and arms-length terms, and the sale of Membership Interests in the relevant Purchased Companies will not constitute a breach or default under any such contracts. Neither the Purchased Companies nor, to the knowledge of the Seller, any of the other
parties thereto (other than with respect to the matter described on Part B of Schedule 3.06 hereto) is in material default, thereunder and, to the knowledge of the Seller, no event has occurred which with the giving of notice or the lapse of time or
both would constitute a material default, under any such agreements, contracts, leases, commitments, arrangements or understandings. 
  
 Section 3.11. Legal Proceedings. None of the Purchased Companies or the Seller is engaged in or is a party to, or, to the Seller’s
knowledge, threatened with, any suit, investigation, legal action or other adverse proceeding, before any court, administrative agency, arbitration panel or other similar authority (whether or not covered by insurance). There is no outstanding
order, ruling, decree, judgment or stipulation by or with any court, administrative agency, arbitration panel or other similar authority, or any litigation pending or, to the Seller’s knowledge, threatened, (i) against the Seller or any of
the Purchased Companies. 
  
 Section 3.12. Taxes. All
federal, state and local tax returns, reports, declarations, statements and other documents required to be filed by or with respect to the Purchased Companies in respect of all taxes, including income, franchise, sales, property, payroll and other
taxes, levies, imposts and duties of any nature whatsoever (“Taxes”) have been filed with the appropriate tax authorities, such documents are true, accurate and complete in all material respects and all amounts 

  

 17 

 
shown by such documents to be due and payable have been paid. None of the Purchased Companies has any liability for taxes, or for any interest or penalties
in respect thereof which, if due and payable, have not been paid or will not be paid at or prior to the Closing with respect to such Purchased Company. There are no pending, or to the Seller’s knowledge, threatened, claims or assessments
against any Purchased Company in respect of Taxes, or interest or penalties, other than claims or assessments for which adequate reserves have been provided. 
  
 Section 3.13. Compliance with Laws. (a) Each Purchased Company has complied in all material respects, and is now in compliance with in
all material respects, all federal, state and local laws, ordinances and regulations applicable to such Purchased Company with respect to which the Purchased Company was required to comply on or prior to the date of this Agreement, (b) no
written claims or written complaints from any Governmental Body or other parties have been received by any Purchased Company and, to the knowledge of the Seller, none is threatened, that any Purchased Company is in violation of any applicable
building, zoning, occupational safety and health, or similar law, ordinance or regulation in relation to its plants, structures or other buildings or equipment, or the operation thereof, or of any applicable fair employment, equal opportunity or
similar law, ordinance or regulation (other than any such violation that could not reasonably be expected to have a material adverse effect on such Purchased Company), and (c) none of the Purchased Companies has received written notice from any
Governmental Body of any pending proceedings to take all or any part of the assets of the Purchased Companies (whether leased or owned) by condemnation or right of eminent domain and, to the knowledge of the Seller, no such proceedings are
threatened. 
  
 Section 3.14. Environment. 

 
 (a) Except as set forth on Schedule 3.14 attached hereto, the Purchased
Companies are in compliance with all applicable Environmental Laws in effect as of the date hereof and, no condition exists or event has occurred which would constitute or give rise to any material non-compliance under any applicable Environmental
Law. 
  
 (0).1 The Purchased Companies have timely filed all
reports and notifications, if any, required to be filed on or prior to the date of this Agreement with respect to their properties and facilities and have generated and maintained all records and data, if any, required prior to the date of this
Agreement under all applicable Environmental Laws. Except as set forth on Part B of Schedule 3.22 attached hereto, the Purchased Companies are not required to obtain any additional permits, licenses or authorizations under any applicable
Environmental, Law. 
  

 18 

 Section 3.15. Organization; Due Authorization; Binding Obligation. The Seller is a Delaware
limited-liability company having all requisite power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Seller of this Agreement have
been duly authorized by all necessary action on its part. This Agreement has been duly and validly Executed and delivered by the Seller. This Agreement is the valid and binding obligation of the Seller, enforceable in accordance with its terms,
subject to the qualification, however, that enforcement of the rights and remedies created hereby is subject to bankruptcy and other similar laws of general application relating to or affecting the rights and remedies of creditors and that the
remedy of specific enforcement or of injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought. 
  
 Section 3.16. Non-Contravention. The execution, delivery and performance of this Agreement by the Seller and the consummation by the Seller of
the transactions contemplated hereby do not and will not, with or without the giving of notice or the lapse of time, or both, violate, conflict with, result in the breach of or accelerate the performance required by any of the terms, conditions or
provisions of the Certificate of Formation or the Limited Liability Company Operating Agreement of the Seller, the Certificate of Formation or the Limited Liability Company Operating Agreement of any of the Purchased Companies or any covenant,
agreement or understanding to which any Purchased Company or the Seller is a party or any order, ruling, decree, judgment or arbitration award, or any law, rule, regulation or stipulation, to which any Purchased Company or the Seller is subject or
constitute a default thereunder or result in the creation of any lien, charge or encumbrance upon any of the properties or assets of any Purchased Company, other than violations, conflicts, breaches, accelerations, defaults, liens, charges or
encumbrances which are not material. 
  
 Section 3.17.
Regulatory Approvals. None of the Purchased Companies or the Seller is required to file, seek or obtain any governmental notice, filing, authorization, approval, order or consent, or any bond in satisfaction of any governmental regulation in
connection with the execution, delivery and performance of this Agreement by the Seller or, except for normal renewals, in order to prevent termination of any material right, privilege, license or agreement of any Purchased Company. 
  
 Section 3.18. Election with Respect to Purchased Companies. The
Seller is the sole Member of each of the Purchased Companies and has made no election to treat any of the Purchased Companies as a corporation for federal income tax purposes. 
  
 Section 3.19. Liabilities. All liabilities (whether accrued, absolute, contingent, known, unknown, derivative or
otherwise) of each Purchased Company are (a) reflected on its respective Balance Sheet (except for liabilities incurred in the ordinary course subsequent to the date of the unaudited balance sheets attached as Schedule 3.07), or (b) listed on
any schedule hereto. 
  

 19 

 Section 3.20. Conduct of Operations. The business and operations of each Purchased Company
have, since the date of organization of such Purchased Company, been conducted (a) in a prudent and commercially reasonable manner, and (b) in compliance with all applicable federal, state and local laws including, without limitation, such
laws relating to coal mine health and safety and other laws relating to or affecting coal mine activity and labor and employment matters, except where the failure to so comply could not reasonably be expected to have a material adverse effect on the
Purchased Company. All existing contracts or commitments of each Purchased Company for the purchase of goods or services are on terms which are commercially reasonable, arms-length and commensurate with the goods or services provided or to be
provided. 
  
 Section 3.21. Designs and Drawings. The
feedstock facilities and the synthetic fuel production facilities for each Project, if constructed in accordance with the designs and construction drawings in respect thereof, will have the operational capabilities to produce Qualified Fuels of a
quality expected to satisfy the requirements of the marketplace for synthetic coal-based fuels, and the capacities to produce Qualified Fuels as contemplated in the Base Case. 
  
 Section 3.22. Licenses, Permits, Etc. All licenses, permits and other governmental approvals and all private
consents which have been obtained in connection with the construction and operation of any Project to the date of this Agreement are set forth in Part A of Schedule 3.22; all such licenses, permits, approvals and consents are in full force and
effect, there are no breaches or defaults by the relevant Purchased Company under any thereof, or conditions which with the passage of time or the giving of notice or both would give rise to such a breach or default, and the sale by the Seller of
the respective Purchased Companies to the Buyer as contemplated in this Agreement will not result in a breach or default, or require further consent, under the terms of any thereof, in each case other than any breach or default that could not
reasonably be expected to have a material adverse effect on any Purchased Company. All governmental permits, licenses and other authorizations required to be obtained or waived in connection with the further development, construction, equipping and
operation of the respective Projects are set forth on Part B of Schedule 3.22 attached hereto. The Seller reasonably expects that all additional licenses, permits, other governmental approvals and private consents that are necessary or advisable for
the construction of, operation of, and sale of synthetic coal-based fuels produced by, each Project will be obtained without undue delay or expense so as to permit each Project to fulfill the requirements set forth in Section 3.1(g) of the
Partnership Agreement and operate so as to produce Qualified Fuel as contemplated in the Base Case. 
  

 20 

 Section 3.23. No Tax-Assisted Financing. None of the following exist with respect to any
Project: (i) grants described in Section 29(b)(3)(A) (i) of the Code; (ii) proceeds of issues of State or local government obligations described in Section 29(b)(3) (A)(ii) of the Code; or (iii) subsidized energy financing
described in Section 29(b)(3)(A)(iii) of the Code. 
  
 Section 3.24. IRS Ruling. The representations made by Pace Carbon Fuels, L.L.C. and Carbontronics Fuels, LLC and their representatives in obtaining the IRS Ruling and in submitting the IRS Ruling Request, respectively, were
correct in all material respects, and reflected an accurate statement of the material facts. The only written submissions to the IRS and the only written communications from the IRS in the course of such request are listed on Schedule 3.24.

  
 Section 3.25. Certain Expectations. The Seller
reasonably expects that each Project owned by a Purchased Company will be able to be placed in service, and will be placed in service, by June 30, 1998, and will be able to be operated as contemplated in the Base Case and consistent with (but
without limitation of) that expectation, the Seller reasonably believes that: 
  
 (a) there are no material physical, contractual or legal impediments to any Project meeting the requirements set forth in Section 3.1(g)(i) of the Partnership Agreement by June 30, 1998, and the operation of
any Project as contemplated in the Base Case 
  
 (b) each
Purchased Company has, or will have by June 30, 1998, full right and entitlement to possess, use and conduct operations on the properties on which its respective Project is located; 
  
 (c) all necessary or advisable rights of easement, access, ingress and egress, and transportation arrangements to and from
the Project sites will be able to be obtained without undue delay or cost, and in order to permit each Project to be constructed substantially in accordance with the requirements set forth in Section 3.1(g) of the Partnership Agreement and to
be operated substantially in accordance with the Base Case; 
  
 (d) there will be available to each Purchased Company sufficient feedstock to produce Qualified Fuels in the quantities and with the quality contemplated in the Base Case; 
  
 (e) the production and sale of Qualified Fuels by each Project, and the Tax Credits resulting therefrom, will be
substantially consistent with the Base Case; 
  
 (f) Carbontec
will assist in providing sufficient binder and technical support such that the Purchased Companies will be able to produce Qualified Fuels substantially in accordance with the Base Case and in compliance with the rulings 

  

 21 

 
received in response to the IRS Ruling Request and the requirements of the marketplace for synthetic coal-based fuels; 
  
 (g) the CarbontiteTM technology as used in each Project is able to
produce Qualified Fuels in compliance with the rulings requested in the IRS Ruling Request and the requirements of the marketplace for synthetic coal-based fuels; and 
  
 (h) the rulings requested in the IRS Ruling Request will be received. 
  
 Section 3.26. Books and Records. The books and records of each
Purchased Company have been maintained in a prudent manner so that the business and affairs of each Purchased Company are properly reflected therein. 
  
 Section 3.27. Projections. The Base Case is based on reasonable assumptions, and the Seller reasonably believes that the Partnership will be
able to pay Deferred Contingent Payments, if any, when due. 
  
 Section 3.28. Production Capacity of Synthetic Coal Facilities. Assuming completion of the applicable synthetic fuel production facility in accordance with the terms of the applicable EPC Contract and operation thereof by a
qualified operator, each Project owned by a Purchased Company will, in at least two consecutive Calendar Quarters occurring between the date hereof and December 31, 2000, be capable of producing at least 75,000 tons of Qualified Fuels per
Calendar Quarter in compliance with the rulings requested in the IRS Ruling Request. The failure of such Project to produce at least 75,000 tons of Qualified Fuels in compliance with the rulings requested in the IRS Ruling Request within such period
shall create a presumption that the representation and warranty in this Section 3.28 has been breached; provided, however, that the presumption may be rebutted by clear and convincing evidence that such failure was the result of
operations, it being the intent of the parties that this representation is a representation as to design, equipment and capacity. 
  
 ARTICLE IV 
  
 REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP 
  
 The Partnership hereby represents and warrants to the Seller as follows: 
  
 Section 4.01. Organization. The Partnership is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware, with all requisite power and authority to own and operate its business and properties and to consummate the transactions contemplated hereby. 
  

 22 

 Section 4.02. Due Authorization of the Partnership; Binding Obligation. The Partnership has
all requisite power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Partnership of this Agreement has been duly authorized by all
necessary action on the part of the Partnership. This Agreement has been duly and validly executed and delivered by the Partnership. This Agreement including, but not limited to, the obligation to pay the Initial Payment, each Contingent Payment and
all Deferred Contingent Payments, is the valid and binding obligation of the Partnership, enforceable in accordance with its terms, subject to the qualification, however, that enforcement of the rights and remedies created hereby is subject to
bankruptcy and other similar laws of general application relating to or affecting the rights and remedies of creditors and that the remedy of specific enforcement or of injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought. 
  
 Section 4.03.
Non-Contravention. The execution, delivery and performance of this Agreement by the Partnership and the consummation by the Partnership of the transactions contemplated hereby do not and will not, with or without the giving of notice or the
lapse of time, or both, violate, conflict with, result in the breach of or accelerate the performance required by any of the terms, conditions or provisions of the Partnership Agreement or any covenant, agreement or understanding to which the
Partnership is a party or any order, ruling, decree, judgment or arbitration award or, subject to the filings, registrations and notices referred to in Section 4.04, any law, rule, regulation or stipulation, to which the Partnership is subject
or constitute a default thereunder or result in the creation of any lien, charge or encumbrance upon any of the Partnership’s properties or assets. 
  
 Section 4.04. Regulatory Approvals. The Partnership is not required to file, seek or obtain any governmental notice, filing, authorization,
approval, order or consent or bond in satisfaction of any governmental regulation, in connection with the execution, delivery and performance of this Agreement by the Partnership, except such filings, registrations and notices as may be required
under state “blue sky” or securities laws in connection with any raising of capital by the Partnership necessary to consummate the purchase of the Membership Interests contemplated hereby. 
  
 Section 4.05. Investment Intent. The Partnership is acquiring the
Membership Interests for its own account for the purpose of being the sole Member of each Purchased Company and thereby directing the operations of the Project and not with a view to, or for sale or resale of the Membership Interests in any public
distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Membership Interests. 
  

 23 

 Section 4.06. Legal Proceedings. There is no outstanding order, ruling, decree, judgment or
stipulation, or any litigation pending or, to the Partnership’s knowledge, threatened against the Partnership which would have a material adverse effect on the ability of the Partnership to perform its obligations under this Agreement, or which
seeks to enjoin or obtain damages in respect of the consummation of the transactions contemplated hereby. 
  
 Section 4.07. Availability of Funds. The Partnership will have available to it on each Closing Date sufficient funds to enable it to
consummate the transactions contemplated by this Agreement. 
  
 ARTICLE V 
  
 FURTHER AGREEMENTS AND ASSURANCES

  
 Section 5.01. Confidentiality. If the transactions
contemplated by this Agreement shall be consummated, the Seller agrees that it shall, and shall cause each of its agents, representatives and employees to, for a period of three years following the final Closing Date hereunder (a) maintain in
confidence any and all proprietary and confidential information concerning the Purchased Companies and (b) refrain from using any such information for its own benefit or in competition with or otherwise to the detriment of the Partnership or its
affiliates or any of the Purchased Companies. It is understood that the Seller shall not have liability hereunder for disclosure or use of any such information which (i) is in or, through no fault of the Seller, its agents, representatives or
employees, comes into the public domain, or (ii) was acquired by the Seller from other sources after the Closing, provided such sources are not, to the knowledge of the Seller, prohibited from disclosing such information by legal, contractual or
fiduciary obligation to the Partnership, any affiliate of the Partnership, or any Purchased Company or (iii) the Seller is legally required to disclose. In the event that the Seller becomes compelled by legal or administrative process to
disclose any of such information, the Seller will provide the Partnership with prompt notice so that the Partnership may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Section 5.01. In
the event that such protective order or other remedy is not obtained, or that the Partnership waives compliance with the provisions of this Section 5.01, the Seller will furnish only that portion of such information which the Seller is advised,
by opinion of counsel, is legally required and will exercise reasonable efforts, at the Partnership’s expense, to obtain reliable assurance that confidential treatment will be accorded such information. Nothing herein shall be construed as
prohibiting the Seller from using such information in connection with (i) any claim against the Seller hereunder, (ii) any third party claims for which the Partnership is seeking indemnification 

  

 24 

 
from the Seller hereunder and (iii) any exercise by the Seller of any of its or his rights hereunder. 
  
 Section 5.02. Reports and Financial Statements. The Partnership
agrees to cause each Purchased Company to prepare and the Partnership will prepare (a) quarterly reports of synthetic fuel produced, and synthetic fuel sold to unaffiliated third parties, (b) quarterly reports of Cash Receipts and Cash
Expenditures (c) quarterly statements showing the calculation of Estimated Tax Credits and, for the applicable Calendar Quarters, the Annual Adjustment Amount and the Final Adjustment Amount and (d) annual financial statements, including
statements of cash flows. Such annual financial statements shall be prepared in accordance with generally accepted accounting practices. The Partnership shall provide the Seller with copies of all such reports within a reasonable time after the end
of each Calendar Quarter but not later than the submission of the report described in Section 3.1(f) of the Partnership Agreement to the Partners’ Accountant and all such financial statements within 90 days after the end of each calendar
year. 
  
 ARTICLE VI 
  
 CONDITIONS TO THE PURCHASE 
  
 The Partnership’s purchase of the Membership Interest in any one or more
of the Purchased Companies is subject to the satisfaction or waiver on or prior to the Closing Date on which such Membership Interest in such Purchased Company is purchased of the following conditions (provided that, if the Partnership pays the
first installment of the Initial Payment for a Membership Interest, such payment shall constitute conclusive evidence that each of the following conditions has been satisfied or waived): 
  
 Section 6.01. No Legal Proceedings. No Governmental Body shall have commenced any judicial proceeding to
restrain or prohibit or otherwise challenge the transactions contemplated by this Agreement and, in the case of any action commenced by other than a Governmental Body, no preliminary or permanent injunctive order issued by any United States federal
or state court of competent jurisdiction which prevents the consummation of the transactions contemplated by this Agreement shall have been issued and remain in effect. 
  
 Section 6.02. Assignment of Membership Interests. The Seller shall have executed and delivered to the
Partnership such documents or instruments as the Partnership may reasonably request to evidence the assignment of the Membership Interests to the Partnership and the admission of the Partnership as the sole Member of the Purchased Company.

  

 25 

 ARTICLE VII 
  
 CONDITIONS TO THE SALE 
  
 The sale by the Seller of the Membership Interest in any Purchased Company hereunder is subject to the satisfaction, or waiver on or prior to the Closing
Date with respect to the sale of such Membership Interest of the following conditions (provided that, if the Seller executes and delivers such documents as the Partnership reasonably requests to evidence the Seller’s transfer of the Membership
Interest and the admission of the Partnership as the sole Member of the Purchased Company, such execution and delivery shall constitute conclusive evidence that each of the following conditions has been satisfied or waived): 
  
 Section 7.01. No Legal Proceedings. No Governmental Body shall
have commenced any judicial proceeding to restrain or prohibit or otherwise challenge the transactions contemplated by this Agreement and, in the case of any action commenced by other than a Governmental Body, no preliminary or permanent injunctive
order issued by any United States federal or state court of competent jurisdiction which prevents the consummation of the transactions contemplated by this Agreement shall have been issued and remain in effect. 
  
 Section 7.02. Payment of Purchase Price. The Partnership shall
have tendered for delivery to the Seller the amount required by Section 2.01 as the first installment of the Initial Payment due at Closing and shall have provided evidence to the Seller satisfactory to the Seller, that each Limited Partner has
executed and delivered the Partnership Agreement and the Security Agreement, and that the Partnership holds the collateral required by Section 2.04 of this Agreement. 
  
 ARTICLE VIII 
  
 EVENTS OF DEFAULT 
  
 Section 8.01. Events of Default. Upon the occurrence and continuance of any of the following events (each an “Event of
Default”) : 
  
 (a) Payments by the
Partnership. Failure by the Partnership to pay in full (i) any Contingent Payment due herein on the Contingent Payment Date (except to the extent such payment may be deferred under the terms of Section 2.03 of this Agreement) and
continuation of such failure for five days after the Contingent Payment Date, (ii) failure to pay any Deferred Contingent Payment when due under the terms of Section 2.03 of this Agreement or (iii) failure by the Partnership to pay
the Final Adjustment Amount, if positive, on the Final Adjustment Date; or 
  

 26 

 (0).1 Bankruptcy Proceedings of the Partnership or the General Partner. There
shall occur an Event of Bankruptcy with respect to the Partnership or the General Partner; provided that, if such Event of Bankruptcy involves involuntary proceedings against the Partnership or the General Partner, no Event of Default hereunder
shall occur unless such proceeding or petition shall not be dismissed, or such execution or similar process shall not be released, vacated or fully bonded, within sixty (60) days after commencement, filing or levy, as the case may be; and provided
further that an Event of Bankruptcy of the General Partner shall not constitute an Event of Default hereunder if, as provided in Section 9.1(a)(ii) of the Partnership Agreement, such Event of Bankruptcy does not cause a dissolution of the
Partnership; or 
  
 (0).2 Covenants by the
Partnership. Failure by the Partnership to observe or perform (i) any of the covenants or agreements in Section 5.02 hereof or (ii) any other covenant or agreement contained herein and not constituting an Event of Default under
any other clause of this Article VIII; provided, that such failure shall have continued for 60 days after the Seller shall have given written notice of such failure to the Partnership; 
  
 then, at any time during the continuance of any Event of Default, except as provided by Section 8.02 hereof, the Seller may proceed to
enforce its rights by any means permitted by applicable law, including bringing an action to enforce payment, for damages and/or for specific performance by the Partnership of any of the Partnership’s obligations under this Agreement.

  
 Section 8.02. Partnership’s Obligation to Take
Action Against Defaulting Limited Partner. The Partnership agrees that if the Partnership defaults on the payment of any amounts due hereunder and such default is the result of the default by any Limited Partner in making a Quarterly
Contribution, then the Partnership shall, if the default has not been cured within 30 days of the occurrence thereof, promptly proceed (i) to foreclose upon the security provided by such Defaulting Partner, sell (to an entity which meets the
requirements of and subject to the restrictions and conditions set forth in Article VIII of the Partnership Agreement) the Units of such Defaulting Partner and/or such, other security as has been provided by such Defaulting Partner and use the
proceeds thereof to cure the payment default to the Seller or (ii) the Partnership shall foreclose upon the Units of the Defaulting Partner and deliver the Units to the Seller. If the default is cured by payment or if the Units of the
Defaulting Partner are delivered free and clear to the Seller, the default hereunder caused by such Defaulting Partner’s default shall be cured and the Seller shall take no further action with respect thereto. 
  

 27 

 ARTICLE IX 
  
 CONSEQUENCES OF BREACH OF REPRESENTATIONS 
 AND
WARRANTIES AND COVENANTS 
  
 Section 9.01. Consequence of
Breach of Representations and Warranties and Covenants. Except as provided in the next sentence hereof, to the extent that the Partnership is damaged from time to time as a result of any breach of, or inaccuracy in, any representation or
warranty contained in Article III hereof or the breach of any covenant contained in this Agreement the Partnership may withhold from any Contingent Payment due hereunder the amount reasonably determined by the Partnership to be necessary to recover
such damages. All funds so withheld shall be maintained by the Partnership in Permitted Interim Investments (as defined in the Partnership Agreement) until released to the appropriate party (together with the earnings thereon) upon final resolution
of the matter (which resolution shall require the approval of a Majority in Interest of the Limited Partners) or as directed by a court of applicable jurisdiction. In case of a breach of the representation and warranty set forth in Section 3.28
hereof (the “Capacity Warranty”), the amount of each Contingent Payment due under Section 2.01 (e) with respect to the Project as to which the breach occurred shall be reduced on a permanent basis to 40%, in each case as
liquidated damages and not as a penalty. The Partnership and Seller agree that the sole remedy for any breach of the Production Warranty shall be the price reduction set forth in the immediately preceding sentence. 
  
 ARTICLE X 
  
 TERMINATION OF AGREEMENT 
  
 Section 10.01. Mutual Agreement. This Agreement may be terminated at any time prior to the first Closing by mutual written agreement of the
Partnership and the Seller. 
  
 Section 10.02.
Noncompliance; Nonperformance. This Agreement may be terminated by written notice by the Partnership to the Seller or by the Seller to the Partnership, without prejudice to the terminating party’s rights to claim damages or other relief,
if (i) (A) any of the material terms, covenants or conditions of this Agreement to be complied with or performed at or before the first Closing by the party to whom notice is addressed shall not have been complied with or performed by the Closing
Date, (B) such noncompliance or nonperformance shall be such as would entitle the terminating party to decline to consummate the transaction, and (C) such noncompliance or nonperformance shall not have been waived by the party giving
notice of termination or (ii) the first Closing shall not have occurred on or prior to June 20, 1998. 
  

 28 

 ARTICLE XI 
  
 MISCELLANEOUS 
  
 Section 11.01. Entire Agreement. This Agreement (including the Schedules attached hereto) constitutes the entire agreement and understanding
of the parties relating to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, relating to the subject matter hereof. 
  
 Section 11.02. Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by the Partnership without the prior written consent of the Seller. 
  
 Section 11.03. Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 
  
 Section 11.04. Headings. The headings in this Agreement are included for convenience of reference only and shall not in any way affect the
meaning or interpretation of this Agreement. 
  
 Section 11.05. Amendment; Waiver; Requirement of Writing. This Agreement cannot be amended, changed, modified, released or discharged, and no performance, term or condition can be waived in whole or in part, except by a writing
signed by the party against whom enforcement of the amendment, change, modification or waiver is sought. Any term or condition of this Agreement may be waived at any time by the party hereto entitled to the benefit thereof. No delay or failure on
the part of any party in exercising any rights hereunder, and no partial or single exercise thereof, will constitute a waiver of such rights or of any other rights hereunder. 
  
 Section 11.06. Notices. Any notice, request, consent, waiver or other communication required or permitted
hereunder shall be effective only if it is in writing and personally delivered or sent by certified or registered mail, postage prepaid, or by nationally recognized overnight courier, addressed as set forth below: 
  
 If to the Seller: 
  
 Carbontronics, LLC 
 4401 Fair Lakes Court, Suite 400 
 Fairfax,
Virginia 22033 
 Attention: President 
  

 29 

 If to the Partnership: 
  
 Carbontronics Synfuels Investors, L.P. 
 c/o Carbontronics Fuels, LLC 
 4401 Fair Lakes Court, Suite 400 
 Fairfax, Virginia 22033 
 Attention: President

  
 with a copy to each Limited Partner at the address specified
therefor in the Partnership Agreement (as amended from time to time). 
  
 or such
other person or address as the addressee may have specified in a notice duly given to the sender as provided herein. Such notice or communication shall be deemed to have been given as of the date received by the recipient thereof. 
  
 Section 11.07. Governing Law. This Agreement shall be construed
in accordance with and governed by the laws of the State of Delaware applicable to agreements made and to be performed wholly within such jurisdiction. 
  
 Section 11.08. Exclusion of Consequential Damages. Neither party, its Affiliates nor their respective employees, agents or subcontractors
shall be liable to the other party, its Affiliates or their respective employees, agents or subcontractors, whether based in contract, in tort (including negligence and strict liability), under warranty, or otherwise, for any consequential,
indirect, punitive, incidental, exemplary or special loss or damage whatsoever, including without limitation, loss of use, loss of productive resources, loss of opportunity or anticipated profits, damages to good will or reputation or punitive or
speculative damages. The inclusion of this provision has been a material inducement for each of the parties to enter into this Agreement. 
  
 Section 11.09. No Third-Party Beneficiaries. Nothing in this Agreement will be construed as giving any person, firm, corporation or other
entity, other than the parties hereto and their successors and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof. 
  

 30 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be duly
executed by their respective officers or partners thereunto duly authorized, as of the date first above written. 
  

									
	 	  	 CARBONTRONICS SYNFUELS INVESTORS, L.P.

			
	 	  	 By:
	 	 CARBONTRONICS FUELS, LLC
 Its General Partner

					
	 	 	 	  	 	 	By:	 	 /s/ Timothy F. Sutherland

	 	 	 	  	 	 	 	 	 Name: Timothy F.Sutherland

	 	 	 	  	 	 	 	 	 Title: President

			
	 	 	 	  	 CARBONTRONICS, LLC

					
	 	 	 	  	 	 	By:	 	 /s/ Timothy F. Sutherland

	 	 	 	  	 	 	 	 	 Name: Timothy F. Sutherland

	 	 	 	  	 	 	 	 	 Title: President

  

 31Limited Liability Company Operating Agreement of Carbontronics II, LLC

 Exhibit 10.18 
  
 LIMITED LIABILITY COMPANY OPERATING AGREEMENT 
 OF 
 CARBONTRONICS II, LLC 
  
 THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this
“Agreement”) is made and entered into as of January 29, 1998, by and among C.C. Pace Capital, L.L.C, (“C.C. Pace Capital”), a Delaware limited liability company, Carbon Resources, Inc., a Delaware corporation (“Carbon
Resources”), Meridian Energy Corporation, a Massachusetts corporation (“Meridian Energy”), Meridian investments, Inc., a Massachusetts corporation (“Meridian Investments”), and Coal Investors, LLC, a Delaware limited
liability company (“Coal Investors”). 
  
 WHEREAS, the
parties formed Carbontronics II, LLC (the “Company”) as a Delaware limited liability company on January 22, 1998 by filing a certificate of formation pursuant to the Limited Liability Company Act of 1992 of the State of Delaware: and

  
 WHEREAS, this Agreement is being entered into by the Members
in order to set forth in their entirety the terms and conditions with respect to the operation of the Company. 
  
 NOW, THEREFORE, in consideration of the mutual, rights and obligations set forth herein and other good and valuable consideration, the receipt, adequacy
and sufficiency of which each Member hereby acknowledges, the Members, intending to be legally bound, hereby agree as follows: 
  
 ARTICLE I 
 DEFINITIONS

  
 Section 1.1 Unless otherwise defined herein, capitalized
terms used throughout this Agreement shall have the respective meanings set forth below: 
  
 “Act” means the Delaware Limited Liability Company Act of 1992, and any successor statute, as the same may be amended from time to time. 
  
 “Adjusted Capital Account Deficit” means with respect to any Member, the deficit balance, if any, in such
Member’s Capital Account as of the end of the relevant fiscal year, after giving effect to (i) credit to such Capital Account of any amounts which such Member is obligated to restore pursuant to any provisions of this Agreement or is deemed to
be obligated to restore pursuant to Treasury Regulations §§ 1.704-2(g)(1) and 1.704-2(i)(5), and (ii) debit to such Capital Account of the items described in Treasury Regulations §§ 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6). The definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations § 1.704-1(b)(2)(ii) and shall be interpreted consistently therewith.

 “Agreement” means this Limited Liability Company Operating Agreement of Carbontronics
II, LLC, dated as of January     , 1998, as the same may be amended, modified or supplemented from time to time. 
  
 “Capital Account” means, with respect to each Member, the capital account maintained for such Member pursuant to Section 4.2 hereof.

  
 “Capital Contribution” means, with respect to
each Member, the initial contribution made by such Member as set forth on Exhibit A hereto and each additional contribution, if any, made by such Member to the capital of the Company. 
  
 “Carbontee Sub License Agreement” means the Sub-License Agreement, dated May 9, 1997, between Carbontee
Energy Corporation and Pace Carbon Fuels, L.L.C. 
  
 “Certificate” has the meaning set forth in Section 2.1 hereof. 
  
 “Code” means the United States Internal Revenue Code of 1986, and any successor statute, as amended from time to time. 
  
 “Company” means Carbontronics II, LLC, a Delaware limited liability company. 
  
 “Dispose,” “Disposing,” or
“Disposition” means a sale, assignment, transfer, exchange, mortgage, pledge, grant of a security interest or other disposition or encumbrance (including, without limitation, by operation of law, but excluding any transfer occurring
as a result of a technical dissolution), or the acts thereof. 
  
 “Entity” means any corporation, limited liability company, partnership, limited partnership, joint venture, trust, estate or other entity. All references to an Entity shall be deemed to include its successors and assigns,
to the extent such succession or assignment, is not restricted herein or by the Act. 
  
 “Management Committee” shall mean the committee, which shall act by majority vote unless otherwise stated herein, consisting of Timothy F. Sutherland (or other person designated by C.C. Pace Capital,
L.L.C.), Frederick J. Murrell (or other person designated by Carbon Resources, Inc.), and Douglas E. Miller (or other person designated by Meridian Energy, Meridian Investments and Coal Investors, LLC). 
  
 “Member” or “Members” means any Person that
has been admitted as a Member pursuant to the terms hereof. 
  
 “Member Nonrecourse Debt Minimum Gain” shall have the meaning set forth in Treas. Reg. § 1.704-(i)(2) (determined by substituting, “Member” for “partner” as used therein). 
  
 “Member Nonrecourse Deductions” shall have the meaning set
forth in Treas. Reg. §§ 1.704-2(i)(I) and 1.704-2(i)(2) (substituting “Member” for “partner” as used therein). 
  

 2 

 “Member’s Percentage” means the percentage equaling the ratio of (a) the Membership
Interest of the Member for whom the percentage is calculated, divided by (b) the sum of the Membership Interest of the Member for whom the percentage is calculated, divided by (b) the sum of the Membership Interests of all the Members in the
Company. 
  
 “Membership Interest” means the
ownership interest of a Member in the Company, which shall be expressed as a percentage, which ownership interest includes, without limitation, a Member’s share of the Income and Loss of the Company and a Member’s rights to receive
distributions of assets (liquidating or otherwise) and allocations according to such Member’s Percentage, and a Member’s right to receive information and to consent to or approve such actions or omissions of the Company or another Member
with respect to which the consent or approval of such Member is required. 
  
 “Minimum Gain” has the meaning set forth in Treas. Reg. § 1.704-2(d). Minimum Gain shall be computed separately for each Member in a manner consistent with the Treasury Regulations under Code
Section 704(b). 
  
 “Nonrecourse Deductions” has
the meaning set forth in Treas. Reg. § 1.704-2(b)(1). 
  
 “Person” means any natural Person or Entity. 
  
 “Profits” or “Losses” means, for each fiscal year or part thereof, the Company’s taxable income or loss for such year determined in accordance with accordance with Code § 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss) with the following adjustments: (i) any income of the Company that is exempt from U.S.
federal income tax shall be added to such taxable income or loss; and (ii) any expenditures of the Company described in Code § 705(a)(2)(B) or treated as such pursuant to Treasury Regulation § 1.704-1(b)(2)(iv)(i) shall be subtracted from
such taxable income or loss. 
  
 “Tax Matters
Partner” has the meaning set forth in Section 7.1 hereof. 
  
 “Transferee” has the meaning set forth in Section 4.3(i) hereof. 
  
 “Transferor” has the meaning set forth in Section 4.3(i) hereof. 
  
 “Treasury Regulations” or “Treas Reg.” means the regulations promulgated by the United States Department of the Treasury
with respect to the Code, or corresponding provisions of future regulations as such regulations may be amended from time to time. 
  
 “Working Capital Loan” has the meaning set forth in Section 5.1 hereof. 
  
 Section 1.2 Construction. (g) As used herein, the singular shall include the plural and all references herein to one
gender shall include the others, as the context requires. 
  

 3 

 (b) Unless otherwise expressly provided, all references to “Articles,” “Sections.”
“Exhibits.” “Appendices” or “Annexes” are to Articles, Sections, Exhibits, Appendices or Annexes of this Agreement. 
  
 (c) Unless otherwise provided herein all references herein to the consent, approval or agreement of the Members shall mean the consent, approval or
agreement of the Members holding a majority of the Membership interest. 
  
 (d) The headings and captions are used in this Agreement for convenience only and shall not be considered when determining the meaning of any provisions of this Agreement. 
  
 ARTICLE II 
 FORMATION; OFFICES; TERM 
  
 Section 2.1.
Formation of the Company. The Members hereby agree to continue the Delaware limited liability Company known as “Carbontronics II, LLC” formed on January 22, 1998 by the filing of a certificate of formation (the
“Certificate”) under and pursuant to Section 18-201 of the Act and filing of a copy of the Certificate in the Office of the Secretary of State of Delaware. 
  
 Section 2.2 Name. The name of the Company is “Carbontronics” II, LLC” or such other name as the
Members may determine from time to time and all Company business shall be conducted in such name or such other names that comply with applicable law and as the Members may designate from time to time. 
  
 Section 2.3 Registered Agent; Principal Office in the United States; Other
Offices. The registered office of the Company in the State of Delaware shall be the initial registered office designated in the Certificate or such other office (which need not be a place of business of the Company) as the Members may designate
from time to time in the manner provided by law. The registered agent of the Company in the State of Delaware shall be the initial registered agent designated in the Certificate or such other Person or Persons as the Members may designate from time
to time in the manner provided by law. The location of the principal place of business of the Company shall be c/o Meridian Energy Corporation, 1266 Furnace Brook Parkway, Quincy, MA 02169, or such other location within or without the United States
as the Members may designate from time to time, and the Company shall maintain at such location such records and other information as is described in paragraph (a) of Section 18-305 of the Act. The Company shall have such other offices within or
without the United States as the Members may determine. 
  
 Section 2.4. Purpose. The purpose of the Company is to: (a) assign or sub-license to Carbontronics, LLC to develop four projects, which will be eligible for Section 29 tax credits, rights under the Carbontee Sub-License Agreement to
exploit the Carbontite technology; (b) to assign or sub-license to C.C. Pace Capital, L.L.C. (or its affiliates), Carbon Resources, Inc. (or its affiliates) and Meridian Energy (or its affiliates) for two projects each, which will have the

  

 4 

 capacity of approximately 600,000 tons /year/project, rights (as may be acquired by the Company) to exploit the Carbonate
technology, provided the Company obtains a carried interest or sub-license fee of 15% in connection with each of the six projects; and (c) assign or sub-license to any entity, which shall be approved by the Company, any other rights obtained by the
Company in connection with the Carbonate technology, provided the Company obtains a reasonable carried interest or sub-license fee for such assignment or sub-license. This Agreement shall not be amended to provide for any additional purposes except
with the written consent of all Members. 
  
 Section 2.5
Term. The term of the Company commenced on January 22, 1998 and shall continue until terminated in accordance with the terms hereof. 
  
 Section 2.6 No Partnership Intended. Other than for purposes of determining the status of the Company under the Code and the Treasury Regulations
and under any applicable State, municipal or other income tax law of regulation, the Members intend that the Company not be a partnership, limited partnership or joint venture and this Agreement shall not be construed to suggest otherwise; provided,
however, that if the courts of any jurisdiction having jurisdiction over the Company or any of its properties do not recognize the Company as a limited liability company, for purposes of any action or suit to which the Company is a party or to which
its properties are subject or for any other purpose, the Members intend that the Company is a limited partnership in such jurisdiction and shall promptly take such steps as are necessary to reflect such intention. 
  
 ARTICLE III 
 MEMBERS; OWNERSHIP; DISPOSITION OF INTERESTS 
  
 Section 3.1 Members; Membership Interests. The Members of the Company are C.C. Pace Capital, Carbon Resources, Meridian Energy, Meridian
Investments, and Coal Investors, each of which is hereby admitted to the Company, and any other Entity as may be properly admitted as a Member pursuant to the terms hereof. The Membership Percentage of each party hereto shall be as shown on
Exhibit A attached hereto. 
  
 Section 3.2
Property. (a) All property owned by the Company, whether real or personal, tangible or intangible, and wherever located, shall be deemed to be owned by the Company as an entity, and no Member, individually, shall have any ownership of such
property. The Company may hold its property in its own name or in the name of a nominee, which may be one of the Members or an affiliate thereof, or any trustee or agent designated by the Members. 
  
 (b) C.C. Pace Capital, L.L.C. and Carbon Resources, Inc., as the members of
Pace Carbon Fuels, L.L.C., shall cause Pace Carbon Fuels, L.L.C. to assign to the Company the Carbonte Sub-License Agreement. 
  
 Section 3.3 Disposition of Membership Interests. (a) No Membership Interest may be Disposed of, in whole or in part, without the prior written
consent of all of the Members, which consent may be withheld by any such Member in its sole discretion. 
  

 5 

 (b) The Person to which a Membership Interest is sold, assigned, transferred or exchanged shall have no
right to be admitted as a Member of the Company unless (i) the Membership Interest is sold, assigned, transferred or exchanged by a Member who was properly admitted as such pursuant to the terms hereof. (ii) each Member effecting the sale,
assignment, transfer or exchange and the Person to whom the Membership Interest is sold, assigned, transferred or exchanged executes and delivers a document to the other Members containing a representation and warranty by each Member effecting such
sale, assignment, transfer or exchange and the Person to which such Membership Interest is sold, assigned, transferred or exchanged to the effect that such sale, assignment, transfer or exchange was made in accordance with all laws and regulations,
including securities laws, applicable to such Member or Person, as appropriate, and (iii) all of the requirements of Section 3.3(c) hereof are satisfied with respect to such admission. 
  
 (c) Subject to the proviso in Section 3.3(a) above, a Person to whom a Membership Interest is sold, assigned, transferred or
exchanged shall be admitted as a Member of the Company if (i) all of the existing Members consent to such admission, which consent may be withheld by any such Member in its sole discretion, and (ii) the Members receive a document setting forth (A)
the notice and payment address and facsimile number of the Person to be admitted to the Company as a Member, (B) the written acceptance by such Person of all the terms and provisions of this Agreement, (C) an agreement by such Person to perform and
discharge timely all of the obligations and liabilities in respect of the Membership Interest being obtained, (D) a power of attorney in the form of Section 9.1 hereof executed by such Person and (E) the effective date of the sale, assignment,
transfer or exchange. 
  
 Section 3.4 Admission of Additional
Members. Additional Persons may be admitted as Members in the Company, without the sale, assignment, transfer or exchange by an existing Member of all or any part of its Membership Interest, only with the consent of all of the existing Members,
which consent may be withheld by any such Member in its sole discretion, and upon the making of such Capital Contribution, if any, as all of the existing Members shall require from such Person. In such event, the Member’s Percentage of the
existing and the additional Member or Members shall be adjusted or assigned, as the case may be, in accordance with the written agreement of all Members including the additional Member or Members. 
  
 Section 3.5 Liability of Members. No Member shall have any personal
liability for any obligation of the Company, whether such obligations arise in contract, tort or otherwise, except to the extent that any such obligations are expressly assumed in writing by such Member. 
  
 Section 3.6 Resignation or Withdrawal of Members. A Member does not
have the right or power to resign or withdraw form the Company as a Member unless an additional Member or Members have been properly admitted in accordance with Section 3.3 or 3.4 hereof such that there are at all times a minimum of two Members in
the Company. 
  

 6 

 ARTICLE IV 
 CAPITAL CONTRIBUTIONS AND ACCOUNTS 
  
 Section 4.1 Capital Contributions. (a) The Members shall make their initial respective Capital Contributions as set forth in Exhibit A and, thereafter, except with respect to any additional Members as provided
in Section 6.4, no Member shall have any obligation to contribute to the capital of the Company. Upon making its initial Capital Contribution, as provided in Exhibit A and as provided under the terms of Section 3.4 with respect to any additional
Members, each Member shall be entitled to its Membership Interest in the Company. 
  
 (b) Except as may be required by law or upon dissolution of the Company, or in respect of any negative balance resulting from a withdrawal of capital or a distribution in contravention of this Agreement, at no time
during the term of the Company shall a Member with a negative balance in its Capital Account have any obligation to the Company or to the other Members to restore such negative balance. 
  
 Section 4.2 Capital Accounts. Each Member’s Capital Account shall be maintained on the books of the Company for
each Member and the balance of each Member’s Capital Account shall be initially equal to such Member’s capital contribution act forth in Section 4.1(a) hereof, and shall be (i) increased by (A) the aggregate amount of such Member’s
additional Capital Contributions to the Company, (B) the fair market value of property contributed by such Member to the Company after the date hereof, net of liabilities secured by such property that the Company is considered to assume or take
subject to under § 752 of the Code, and (C) Profits and terms of income and gain allocated to such Member in accordance with its Membership Interest, and (ii) shall be decreased by (A) cash distributions to such Member from the Company, (B) the
fair market value of property distributed in kind to such Member, net of liabilities secured by such property that such Member is deemed to assume or take subject to under Code § 752, and (C) Losses and items of loss or deduction allocated to
such Member in accordance with its Membership Interest. The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with § 1.704-1 (b) of Treasury Regulations pursuant to the Code and shall be
interpreted and applied in a manner consistent with such regulation. To the extent such provisions are inconsistent with such regulations or are incomplete with respect thereto, the Capital Accounts of the members shall be maintained in accordance
with such regulations. 
  
 Section 4.3 Allocation of Profits
and Losses. (a) Profits and Losses of the Company for each fiscal year shall be allocated pro rata to the Members according to each Member’s Percentage. 
  
 (b) Every item of income, gain, loss, deduction, credit or tax preference entering into the computation of Profits and
Losses, or applicable to the period during which such Profits or Losses were recognized, shall be considered allocated to each Member in the same proportion as Profits or Losses are allocated to such Members. 
  
 (c) [Intentionally Omitted]. 
  

 7 

 (d) Distributions to the Members shall be shared pro rata according to each Member’s
Percentage. Unless each of the Members otherwise agrees to the contrary, all net cash flow available for distribution shall be distributed to the Members promptly following the end of each fiscal quarter of the Company. Immediately prior to a
distribution of property other than cash, the Capital Accounts shall be adjusted as provided in Treasury Regulation §1.704-1(b)(2)(iv)(f). 
  
 (e) Nonrecourse Deductions for any fiscal year or other period shall be specifically allocated to the Members in the same proportion as net Profits and
net Losses are allocated under Section 4.3 hereof in such year. Any Member Nonrecourse Deductions for any fiscal year or other period shall be specifically allocated to the Member who bears the economic risk of loss with respect to the Member
Nonrecourse Deductions, attributed in accordance with Treas. Reg. §1.704-2(l). In order to comply with the “minimum gain chargeback” requirements of Treas. Reg. §§ 1.704-2(f)(1) and 1.704 2(i)(4), and notwithstanding any
other provision of this Agreement to the Contrary. In the event there is a net decrease in a Member’s share of Minimum Gain and/or Member Nonrecourse Debt Minimum Gain during a Company taxable year, such Member shall be allocated items of
Income and gain for that year (and if necessary, other years) as required by and in accordance with Treas. Reg. §§ 1.704-2(f)(1) and 1.704-2(1)(4) before any other allocation is made. It is the intent of the parties hereto that any
allocation pursuant to this Section 4.3(e) shall constitute a “minimum gain chargeback” under Treas. Reg. §§ 1.704-2(f) and 1.704-2(i)(4). 
  

(f) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code § 734(b) or Code § 743(b) is required,
pursuant to Treasury Regulations § 1.704-1 (b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to Treasury
Regulations § 1.704-1(b)(2)(iv)(m). 
  
 (g) The allocation of
Profits and Losses, pursuant to this Section 4.3, shall not result in any Member having and Adjusted Capital Account Deficit at the end of any fiscal year. 
  
 (h) In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations §§
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company gross income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury
Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 4.3(h) shall be made only if and to the extent that such Member would have an Adjusted Capital Account
Deficit after making all other allocations provided for hereunder on the basis that the allocation provisions of this Section 4.3(h) are of no force or effect and such allocation does not create or increase an Adjusted Capital Account Deficit of any
other Member. 
  

 8 

 (i) If a Membership Interest has been Disposed of during a fiscal year, distributions and allocations
shall be made, as among the party or parties Disposing of the Membership Interest (the “Transferor(s)”) and the party or parties to whom the Membership Interest is Disposed (the “Transferee(s)”), to the Person owning the
Membership Interest on the date of the distribution. Profits, Losses and items allocated under this Section 4.3 (other than income or loss from a capital event) shall be allocated by the number of days each Person held the Membership Interest
(except if the Transferor and the Transferee agree to the contrary and so advise the other Members in writing within 10 days after the end of the fiscal year in which the assignment occurs) and Profits or Losses from any capital event shall be
allocated to the holder of the Membership Interest on the day the capital event occurred during such fiscal year. 
  
 (j) In connection with any distribution, whether upon winding up of the Company or otherwise and whether or not it shall constitute a return of capital,
no Member shall have the right to demand or receive property other than cash, although the liquidator may distribute property other than cash. No Member shall have priority over any other Member either as to the return of its Capital Contribution or
as to allocation of Profits or Losses of the Company. 
  
 (k) If
any Company property has a book value different from its adjusted tax basis to the Company for U.S. federal income tax purposes (whether by reason of the contribution of such property to the Company, the revaluation of such property hereunder, or
otherwise), allocations of taxable income, gain, loss and deductions under this Section 4.3(k) with respect to such asset shall take account of any variation between the adjusted tax basis of such asset for federal income tax purposes and its book
value in the same manner as under Code Section 704(c) or the principle set forth in Treasury Regulation § 1.704-1(b)(2)(iv)(g), as the case may be. Each item of income, gain, loss, deduction and credit and all other items governed by Code
§ 702(a) shall be allocated among the Members in proportion to the allocation of Profits, Losses and other items to such Members hereunder, provided that any gain recognized from any Disposition of a Company asset which is treated as ordinary
income because it is attributable to the recapture of any depreciation or amortization shall be allocated among the Members in the same ratio as the prior allocations of Profits, Losses or other items which include such depreciation or amortization,
but not in excess of the gain otherwise allocable to each such Member. Except as set forth in this Section 4.3(k), allocations for tax purposes of items of income, gain, loss and deduction, and credits and basis therefor, shall be made in the same
manner as allocations for book purposes as set forth in Section 4.3(a) hereof. Allocations pursuant to this Section 4.3(k) are solely for purposes of federal, state and local income taxes and shall not affect, or in any way be taken into account in
computing, any Member’s Capital Account or share of Profits, Losses, other items or distributions pursuant to any provision of this Agreement. 
  
 ARTICLE V 
 WORKING CAPITAL LOANS

  
 Section 5.1 Working Capital Loans. (a) The
Management Committee may from time to time, but not more frequently than once in any calendar month, request each Member to make a working capital loan (each a “Working Capital Loan”) to the Company. Such request 
  

 9 

 shall specify the amount requested, the date such Working Capital Loan shall be made and the Entity or account (which may
be an account maintained by the Company) to which the proceeds thereof shall be paid, and shall further state that the proceeds of the Working Capital Loan will be utilized to pay only authorized expenses of the Company. Upon the receipt of an
authorized request for a Working Capital Loan, each Member may, but shall not be obligated to, fund their respective portions of such Working Capital Loan pro rata with their respective Membership Interests. Should any Member decline to fund
its portion of a request for a Working Capital Loan, then the Members funding their respective portions of the Working Capital Loan shall have the right, but not the obligation, to fund the non-funding Member’s portion of the Working Capital
Loan on a pro rata basis in accordance with their Membership Percentages (or in such other amounts as such Members may determine). 
  
 (b) Interest shall accrue on the outstanding principal balance of the Working Capital Loans at a variable rate per annum equal to London Interbank Offered
Rate (“LIBOR”) in effect from time to time, plus 300 basis points. The initial interest rate shall be based on LIBOR in effect on the first banking day of the month in which such Working Capital Loan is requested. Any change in the
interest rate for Working Capital Loans resulting from a change in LIBOR shall be effective on the first banking day of the first month following the month in which such change occurs. Interest on Working Capital Loans shall be compounded monthly.
Interest and principal on Working Capital Loans shall be payable out of available net cash flow of the Company on the first banking day of each month prior to any payments of principal and interest in respect of Development Loans and to any
distributions to Members. After payment of all interest then due on outstanding Working Capital Loans, remaining available net cash flow shall be applied to repay the outstanding principal amount of Working Capital Loans. 
  
 ARTICLE VI 
 MANAGEMENT AND OPERATION; INDEMNITIES 
  
 Section 6.1 Operation and Management. The Management Committee shall have authority to manage and control the business, affairs, and properties of
the Company, to make all decisions regarding the same and to perform all other acts or activities customary or incident to the management of the Company’s business. The Management Committee shall have full power and authority to do all things
deemed necessary or desirable in its sole discretion, to conduct the business of the Company in the name of the Company including, without limitation: 
  

	 	(a)	the negotiation and execution on terms deemed desirable to the Company and the performance of any contracts, conveyances or other instruments that it considers useful or necessary
to the conduct of Company business activities or the implementation of its powers under this Agreement; 

  

	 	(b)	the selection and dismissal of employees and outside attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or
hiring; 

  

 10 

	 	(c)	the maintenance of such insurance for the benefit of the Company as it deems necessary; and 

  

	 	(d)	the control of any matters affecting the rights and obligations of the Company, including the conduct of litigation and the incurring of legal expenses and the settlement of claims
and litigation. 

  
 Specifically, the Management
Committee shall be responsible for administration of the day-to-day affairs of the Company and shall be authorized to do on behalf of the Company all things which, in its reasonable judgment, are necessary, proper or desirable to carry out such
responsibility, including but not limited to the right, power and authority from time to time to do the following: 
  

	 	(i)	To pay any and all fees and to make any and all expenditures, not to exceed $5,000 in each instance or $50,000 in the aggregate in any year, which it deems necessary or appropriate
in connection with the organization of the Company, the Disposition of Membership Interests, the management of the affairs of the Company, and the carrying out of its obligations and responsibilities under this Agreement and the Act, and to enforce
all rights of the Company; 

  

	 	(ii)	To enter into, execute, acknowledge and deliver any and all contracts, agreements or other instruments necessary or appropriate to carry on the business of the Company as set forth
herein; 

  

	 	(iii)	To file all applications by the Company for, or accept, necessary permits, licenses and other governmental approvals, or any amendment to or withdrawal or termination of such
applications or governmental approvals. 

  
 So long
as the Management Committee maintains the administrative powers granted hereunder, it shall: 
  

	 	(i)	take all actions which may be necessary or appropriate for continuing the Company’s valid existence as a limited liability company under the laws of the State and of each other
jurisdiction in which such existence is necessary to enable the Company to conduct the business in which it is engaged; 

  

	 	(ii)	devote to the Company such time as may be necessary for the proper performance of its duties hereunder; 

  

	 	(iii)	prepare or cause to be prepared and file on or before the due date (or any extensions thereof) any and all federal, state or local tax returns required to be filed by the Company,
and cause the Company to pay any taxes payable by the Company; and 

  

 11 

	 	(iv)	cause the Company to maintain liability and casualty insurance in amounts and with coverages consistent with prudent commercial standards and with insurers of recognized
responsibility, with each such policy naming each Member as an additional insured. 

  
 Section 6.2 Financial Management. The Management Committee shall also be responsible for all financial management of the Company and shall be
authorized to do on behalf of the Company all things which, in its reasonable judgment, are necessary, proper or desirable to carry out such responsibility, including but not limited to the right, power and authority from time to time to do the
following: 
  

	 	(i)	To establish and maintain one or more accounts for and in the name of the Company in such financial institutions as it may from time to time designate, subject to Section 7.5
hereof; 

  

	 	(ii)	To cause to be made the payments in respect of Working Capital Loans under Section 5.1 hereof and periodic distributions to the Members required by and in accordance with the
provisions of this Agreement and to provide an accurate accounting thereof to each Member at the time of each such payment and distribution; and 

  

	 	(iii)	With respect to all of its obligations, powers and responsibilities under this Section 6.2, in execute and deliver, for and on behalf of the Company, such notes and other evidences
of indebtedness, contracts, agreements, assignments, deeds, leases, loan agreements, mortgages, deeds of trust and other security instruments and agreements as it is authorized to execute and deliver pursuant to this Section 6.2, all on such terms
and conditions as it deems proper. 

  
 The
Management Committee shall have full power and authority to do all things deemed necessary or desirable in its sole discretion, to conduct the financial management of the Company in the name of the Company including, without limitation: 

 

	 	(a)	the making of expenditures, the borrowing of money, the guaranteeing of indebtedness and other liabilities, the issuance of evidences of indebtedness, and the incurring of any
obligations it deems necessary or advisable for the conduct of the business activities of the Company; 

  

	 	(b)	the acquisition, Disposition, mortgage, pledge, encumbrance, hypothecation, or exchange of any or all of the assets of the Company; 

  

	 	(c)	the use of the assets of the Company (including, without limitation, cash on hand) for any purpose it sees fit, including, without limitation, the financing of operations of the
Company, the lending of funds to other Persons, the repayment of obligations of the Company, the conduct of additional Company business activities and the acquisition of properties and other assets; and 

  

 12 

	 	(d)	the distribution of cash or other assets of the Company. 

  
 Section 6.3 Prohibited Actions. Unless the members of the Management Committee unanimously agree, the Management Committee shall not take any of
the following actions: 
  

	 	(a)	the formation of any limited or general partnerships, joint ventures, corporations, or other relationships that it deems desirable, and the contribution to such partnerships, joint
ventures or corporations of assets and properties of the Company. 

  

	 	(b)	during the course of any calendar year, sell, lease, abandon, mortgage or pledge, or otherwise dispose of, in a transaction or series of transactions, two and one-half percent
(2.5%) or more of the then fair market value of the assets of the Company (except for the sale of other assets which are replaced by assets of an equivalent or greater value or have become obsolete or of no further value to the operation of the
Company and except in connection with any security interest granted in all or any portion of the Company’s assets pursuant to the terms of any loan agreement or other instrument approved by all the Members), or merge or consolidate the Company
with any other Person; 

  

	 	(c)	enter into any agreement with a term greater than one year if the cost or value of the goods or services to be acquired by the Company pursuant thereto could reasonably be expected
to exceed an aggregate of $25,000 per year, other than agreements made in the ordinary course of the Company’s business and other than agreements which are expressly consented to in advance by all of the Members; 

  

	 	(d)	terminate or dissolve or wind up the Company; 

  

	 	(e)	commence a voluntary proceeding in bankruptcy in the name of the Company or make a general assignment for the benefit of creditors; 

  

	 	(f)	possess any assets of the Company, or assign or transfer rights in specific assets of the Company to itself or for other than a Company purpose; 

  

	 	(g)	confess a judgment against the Company which makes it impossible to carry on the business of the Company, or otherwise settle or compromise any action, suit or claim requiring the
payment by the Company of any amount in excess of $10,000; provided, however, that Pace Capital shall have no authority to settle any such action, suit or claim that admits any criminal violation or material allegation of wrongdoing or misconduct;

  

 13 

	 	(h)	admit a substitute Member or additional Member except in accordance with the provisions of Section 3.4 hereof; 

  

	 	(i)	cause the Company to make a loan to it or any of its affiliates; 

  

	 	(j)	make any loans, guaranties or extensions of credit; 

  

	 	(k)	transact any business with any Member or any affiliate thereof for goods or services, except where such transaction is effectuated on terms not less favorable to the Company than
would be available in a bona fide arms-length transaction with a Person that is not a Member or an affiliate thereof; 

  

	 	(l)	conduct or carry on the business of the Company through any entity other than the Company; 

  

	 	(m)	incur indebtedness for borrowed money (including the assumption or guaranty of a third party obligation) by the Company other than in the ordinary course of business, if the
aggregate amount outstanding of all indebtedness of the Company would exceed $25,000; 

  

	 	(n)	make any capital expenditure or acquire assets for the Company at a cost of more than $10,000 for any single capital expenditure, acquisition, expansion or modification or $25,000
in the aggregate for any series of capital expenditures, acquisitions, expansions or modifications, excluding however any payment relating to replacement or repair in the ordinary course of business; 

  

	 	(o)	elect to be governed by any amendment to the Act or by a succeeding or successor statute of a State governing limited liability companies; 

  

	 	(p)	select or modify the terms of employment of the managing director of the Company; 

  

	 	(q)	make any expenditure for the acquisition by or on behalf of the Company of any interest in real property (whether by lease, purchase or otherwise); or 

  

	 	(r)	make any expenditure for the acquisition by or on behalf of the Company to acquire any membership or other ownership interest or right in any other Person (whether by purchase,
option, or otherwise). 

  

 14 

 Section 6.4 Unanimous Decisions. Notwithstanding any other provisions of this Agreement to the
contrary, the following decisions or actions shall require the unanimous consent of the Members: 
  
 (a) Entry into any business activity or undertaking other than those purposes set forth in Section 2.4 of this Agreement; 
  
 (b) Except to the extent that such amounts are paid in accordance with
written agreements in effect on the date of this Agreement, payment of salaries or fees directly or indirectly to any Member or any affiliate or employee of a Member; 
  
 (c) Sale or other Disposition of all or substantially all of the assets of the Company; 
  
 (d) Upon the Disposition of one or more of the companies listed in Section
2.4 or the assets of one or more of those companies, the incurrence of any liability or costs which would reduce by more than $100,000 per year the amount of proceeds to be distributed to the Members; 
  
 (e) The amendment of this Agreement in any manner; 
  
 (f) The transfer of any Membership Interest or the addition of any member;

  
 (g) The performance of any act that would subject the Members
to liability in any jurisdiction beyond the limits of each Member’s Membership Interest; and 
  
 (h) The refraining from performing any act if such failure would subject the Members to liability in any jurisdiction beyond the limits of each
Member’s Membership Interest. 
  
 Section 6.5
Indemnities. (1) No Member, in its capacity as such, shall be liable, responsible or accountable in damages or otherwise to the Company or to any successor, assignee or transferee thereof for any act or omission performed or omitted by it in
good faith pursuant to authority granted to it by this Agreement and in a manner reasonably believed by it to be within the scope of authority granted to it by this Agreement and in the best interests of the Company. 
  
 (2) The Members do not guarantee, and shall not be liable for, the return of
all or any portion of the Capital Contribution of any Member or the payment of any distributions to any Member (or any assignee, successor or transferee thereof), it being expressly agreed that any such return of all or any portion of a Capital
Contribution or payment of distributions shall be made solely from the assets of the Company (which shall not include any right of contribution from the Members) in accordance with this Agreement. 
  
 (3) The Company shall indemnify, defend and hold harmless (i) each Member, as
such, and (ii) any of the Company’s agents, employees, advisors and consultants, in their respective as such, from and against any loss, liability, damage, cost or expense 
  

 15 

 (including reasonable attorneys’ fees and expenses) arising out of or in defense of any demands, claims or lawsuits
(derivative and otherwise) against the Company or such other Person, in or as a result of or relating to its capacity, actions or omissions or an affiliate thereof or as an officer, director, employee or controlling Person of any of them, or as an
officer, manager, agent, employee, advisor or consultant of the Company, concerning the business or activities undertaken on behalf of the Company; provided, however, that there shall be no Indemnification hereunder to the extent that the acts or
omissions of the Members or such other Person (x) were not taken or made in accordance with the standard set forth in Section 6.5(a) hereof, (y) constitute gross negligence, intentional misconduct or fraud, or (z) have violated such other standard
of conduct as under applicable law prevents indemnification hereunder. 
  
 (4) The Members and any other Person indemnified by the Company pursuant to Section 6.5(c) hereof shall be entitled to receive, upon request, advances to cover the costs of defending any claim or action against such Person; provided,
however, that such advances shall be repaid to the Company, with interest, to the extent the actions or omissions of such Member or other Person are found by a court of competent jurisdiction upon entry of a final judgment not to have been taken or
made in accordance with the standard set forth in Section 6.5(a) hereof or constitute gross negligence, intentional misconduct or fraud. All rights of the Members and others to indemnification hereunder shall survive the dissolution of the Company
and the removal, dissolution or insolvency of any of the Members or the death, retirement, removal, dissolution, incompetency or insolvency of an agent, employee, advisor, consultant or other indemnifiable Person, provided that a claim for
indemnification hereunder is made by or on behalf of the Person seeking such indemnification prior to the time distribution in liquidation of the assets of the Company is made. 
  
 (5) If the Company is made a party to any claim, dispute or litigation or otherwise incurs any loss, liability, damage, cost
or expense by reason of the breach of the standard set forth in Section 6.5(a) hereof or due to an act or omission constituting gross negligence, intentional misconduct or fraud by any Member or such other Person as has been indemnified under
Section 6.5(c) hereof, such Member or other Person shall indemnify and reimburse the Company for all loss, liability, damage, cost and expense incurred thereby (including reasonable attorney’s fees and expenses); provided, however, that such
Member or other Person shall have been found by a court of competent jurisdiction upon entry of a final judgment to have violated such standard or taken such act or made such omission. 
  
 (6) The liability of the Company under this Section 6.5 is limited to the assets of the Company. 
  
 ARTICLE VII 
 TAX MATTERS 
  
 Section 7.1 Tax Returns; Tax Matters. Partner. (a) The Company shall file a partnership tax return in the United States at the end of each fiscal year and for tax purposes it is the intent of the Members that the Company be taxed as
a partnership in the United States for 
  

 16 

 U.S. federal, state, and local tax purposes. The Members shall appoint one Member to be the “Tax Matters
Partner” for U.S. federal income tax purposes pursuant to Section 6231 of the Code with respect to all taxable years of the Company. The Tax Matters Partner shall prepare or cause to be prepared all tax returns required of the Company.

  
 (b) The Tax Matters Partner shall, to the extent permitted by
applicable law and regulations, and upon obtaining any necessary approval of the United States Commissioner of Internal Revenue, elect to use such methods of depreciation, and make all other U.S. federal income tax elections in such manner, as it
determines to be most favorable to the Members. The Tax Matters Partner shall at the Company’s expense defend all tax audits and litigation with respect to the Company’s tax returns, and shall not undertake any act which would cause the
books, records, or tax returns of the Company or the Members to be inconsistent with such acts, elections and steps taken by the Company. 
  
 (c) The Tax Matters Partner shall, upon the written request of any Member, cause the Company to file an election under Code Section 754 and the Treasury
Regulations thereunder to adjust the basis of the Company’s assets under Code Section 734(b) or 743(b) and a corresponding election under the applicable sections of U.S. state and local law. 
  
 Section 7.2 Accounting of Profits and Losses. The Company shall
maintain its books and records and shall determine all items of Profits and Losses and distributions on an accrual basis in accordance with principles applicable in determining taxable income or loss for federal income tax purposes for partnerships
and consistent with accounting methods used by the Company in determining taxable income or loss for U.S. federal income tax purposes. The Company shall also keep all other records necessary or convenient to record the Company’s business and
affairs and sufficient to record the determination and allocation of all Profits, Losses, distributions and other amounts as may be provided for herein. 
  
 Section 7.3 Financial Statements. Within one hundred twenty (120) days after the end of each fiscal year, there shall be prepared and delivered to
each Member a financial statement for the Company consisting of the following: (a) income statements and balance sheets for such fiscal year showing separately the computation of Profits or Losses; (b) the amount of the distributions to the Members
and the effect of such distributions on the balance sheet of the Company and the Capital Accounts of each Member; and (c) a report setting forth in sufficient detail all such information and data with respect to the business transactions effected by
or involving the Company during such fiscal year as shall enable each Member to prepare all its tax returns in accordance with all relevant laws, rules and regulations then prevailing. 
  
 Section 7.4 Books and Records. The books and records of the Company shall be available to each Member or its
representatives for inspection and audit upon reasonable notice during normal business hours at the principal office of the Company. The Company shall cause the auditors to cooperate in such inspection and audit and to provide any of their work
papers requested in connection therewith. 
  

 17 

 Section 7.5 Bank Accounts. The operating bank accounts of the Company shall be maintained in such
bank or banks as may be designated and withdrawals from said accounts shall be made as the Members shall determine. The funds of the Company shall be deposited in such account or accounts as are designated by the Members. The Members may, at their
discretion, deposit funds of the Company in a central disbursing account maintained by or in the name of one of the Members in which funds of other Persons are also deposited, provided that at all times books of account are maintained which show the
amount of funds of the Company on deposit in such account and interest accrued with respect to such funds as credited to the Company. 
  
 Section 7.6 Fiscal Year. The fiscal year of the Company shall end on the 31st day of December of each calendar year. 
  
 ARTICLE VIII 
 DISSOLUTION AND WINDING-UP 
  
 Section 8.1 Events of Dissolution. The Company shall be dissolved and its affairs shall be wound up upon the first to occur of any of the following: 
  
 (a) the written consent of all Members; or 
  
 (b) the entry of a degree of judicial dissolution under Section 18-802 of the
Act. 
  
 Section 8.2 Distribution of Assets. 
  
 Upon the occurrence of one of the events set forth in Section 8.1 hereof, the remaining
Members of the Company shall appoint one or more liquidator(s) and the liquidator(s) shall distribute the assets of the Company in the following order of priority: 
  
 first, payments of, or adequate provision for, the debts and obligations of the Company to its
creditors, including sales commissions and other expenses incident to any sale of the assets of the Company; 
  
 second, establishment of such reserves as the remaining Members or the liquidator may deem reasonably necessary for any contingent
or unforeseen liabilities or obligations of the Company; 
  
 third, payment of loans to the Company by a Member, pro rata, according to the relative amounts of such unpaid loans; 
  
 fourth, the balance, if any, of the assets of the Company to the Members having positive Capital Accounts pro rata in accordance
with their relative respective positive Capital Accounts after taking into account the allocation of all Profits or Losses allocated pursuant to this Agreement for the fiscal year(s) in which the Company is liquidated; and 
  

 18 

 fifth, the balance, if any, of the assets of the Company to the Members pro rata
in accordance with their respective Member’s Percentages. 
  
 The reserves established pursuant to provision “second” above shall be paid over to a bank or other financial institution, to be held in escrow for the purpose of paying any such contingent or unforeseen liabilities or obligations
and, at the expiration of such period as the remaining Members or the liquidator deems advisable, such reserves shall be distributed to the Members or their assigns in the priority set forth in provisions “third” through “fifth”
above. 
  
 Section 8.3 In-Kind Distributions. The
liquidator(s) may make distributions of the Company’s assets in kind. The choice of which, if any, Company assets are to be distributed in kind shall be within the sole discretion of the liquidator(s) and shall be binding upon all Members. The
costs of liquidation shall be borne as a Company expense. Until final distribution, the liquidator(s) shall continue to operate the Company properties with all the power and authority of the Members. With respect to any assets distributed in kind,
such assets shall be deemed to have been sold at fair market value for purposes of applying the Profit and Loss provisions of this Agreement. 
  
 ARTICLE IX 
 MISCELLANEOUS

  
 Section 9.1 Power of Attorney. Each Member, by
execution of this Agreement or a counterpart hereof, irrevocably constitutes and appoints Carbon Resources, with full power of substitution, its agent and attorney-in-fact in its name, place and stead to make, execute, swear to, verify, acknowledge,
amend, file, record, deliver and publish (a) any certificate of limited liability company or amendments to any certificate of limited liability company required to be filed by or on behalf of the Company pursuant to the Act, (b) a counterpart of any
amendment to this Agreement for the purpose of substituting as a Member an assignee or assignees of a Member or for the purpose of admitting a Transferee or an additional Member, (c) a counterpart of this Agreement for the purpose of filing or
recording such counterpart, if necessary, in any jurisdiction in which the Company may own property or transact business, (d) all certificates and other instruments necessary to qualify or continue the Company as a limited liability company in the
jurisdictions where the Company may own property or transact business, (e) any other instrument which is now or which may hereafter be required by law to be filed by or on behalf of the Company which does not increase the obligations of any Member,
and (f) any other certificates or instruments necessary, advisable or appropriate to conduct the business and affairs of the Company which do not increase the obligations of any Member. The power of attorney granted by this Section 9.1 is
irrevocable and shall survive the assignment or transfer by any Member of all or any part of its interest in the Company (including its Membership Interest) and, being coupled with an interest, shall survive the incapacity or other legal disability
of each such Member. Any Person dealing with the Company may, without further inquiry, conclusively presume and rely upon the fact that any certificate or instrument described in this Section 9.1 and executed by such agent and attorney-in-fact is
authorized, valid and binding. 
  

 19 

 Section 9.2 Notices. Except as otherwise expressly provided in this Agreement, all notices,
demands, requests, or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be given either (a) in person, (b) by United States mail, certified or registered, return receipt requested,
postage prepaid, (c) by prepaid telegram, telex, cable, telecopy, or similar means (with signed confirmed copy to follow by mail in the same manner as prescribed by clause (a) or (b) above), or (d) by expedited delivery service (charges prepaid)
with proof of delivery, to the parties at the addresses shown on Exhibit A. 
  
 Section 9.3 Amendment. This Agreement may be changed, modified or amended only by an instrument in writing duly executed by all the Members. 
  
 Section 9.4 Partition. Each of the Members hereby irrevocably waives, to the extent it may lawfully do so, any right
that such Member may have to maintain any action for partition with respect to the Company property. 
  
 Section 9.5 Waivers and Modifications. (a) This Agreement constitutes the entire agreement of the Members with respect to the subject matter hereof
and supersedes any and all prior and contemporaneous contracts, understandings, negotiations and agreements with respect to the Company and the subject matter hereof, whether oral or written. 
  
 (b) Any waiver or consent, express, implied or deemed, to or of any breach or
default by any Person in the performance by that Person of its obligations with respect to the Company or any action inconsistent with this Agreement is not a consent or waiver to or of any other breach or default in the performance by that Person
of the same or any other obligations of that Person with respect to the Company or any other such action. Failure on the part of a Person to complain of any act of any Person or to declare any Person in default with respect to the Company,
irrespective of how long that failure continues, does not constitute a waiver by that Person of its rights with respect to that Person or its rights with respect to that default until the applicable statute of limitations period has lapsed. All
waivers and consents hereunder shall be in writing and shall be delivered to the other Members in the manner set forth in Section 9.2 hereof. A Member may grant or withhold any waiver or consent in its absolute sole discretion. 
  
 Section 9.6 Severability. Every provision in this Agreement is
intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of this Agreement. If any provision of this Agreement or the
application thereof to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision to other Persons or circumstances is not affected thereby, and that provision
shall be enforced to the greatest extent permitted by law. 
  
 Section 9.7 No Third-Party Beneficiaries. Subject to the restrictions set forth in Section 3.3 hereof, this Agreement is binding on and insures to the benefit of the Members and their respective heirs, legal representatives,
successors and assigns. Nothing in this Agreement shall provide any benefit to any third party or entitle any third party to any claim, cause of action, remedy or right of any kind, it being the intent of the Members that this Agreement shall not be
construed as a third-party beneficiary contract. 
  

 20 

 Section 9.8 GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. 
  
 Section 9.9 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each
Member shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and those transactions. 
  
 Section 9.10 Arbitration. The Members agree that any claim or
controversy arising hereunder, which the Members are unable to resolve in good faith, shall be finally resolved and settled exclusively by arbitration in the Washington, D.C. area by a panel or three (3) arbitrators under the American Arbitration
Association’s Commercial Arbitration Rules then in effect. The arbitrators shall have authority to enter an award which includes injunctive relief or specific performance; provided, however, the arbitrators shall have no authority to award
punitive or exemplary damages against any Member. 
  
 Section 9.11
Recourse. The sole recourse of the Company or any Member for performance of the obligations of a particular Member hereunder shall be against such Member and its assets and not against any assets or property of any present or future
shareholder, officer, employee, servant, executive, director, agent, authorized representative or affiliate of such Member. 
  
 Section 9.12 Counterparts. This Agreement may be executed in multiple counterparts with the same effect as if both signing Members had signed the
same document. All counterparts shall be construed together and constitute the same instrument. 
  

 21 

 Section 9.13 Attorneys’ Fees. Should any Member employ an attorney for the purpose of
enforcing this Agreement in any lawful arbitral or judicial proceeding, the prevailing Member shall be entitled to receive from the other Party reimbursement for all attorney’s fees and costs. A “Prevailing Party” means a Party
prevailing on all material issues in dispute as determined by the trier of fact. 
  
 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement as of the date first set forth above. 
  

			
	C.C. PACE CAPITAL, L.L.C.
	By Its Members:
	
	C.C. PACE RESOURCES, INC.
		
	By:	 	 /s/ Thomas E. [ILLEGIBLE]

	Name:	 	Thomas E. [ILLEGIBLE]
	Title:	 	Senior Vice President
	
	CHELSEA VIRGINIA, L.L.C.
		
	By:	 	 /s/ James R. Treptow

	Name:	 	James R. Treptow
	Title:	 	Managing Member
	
	CARBON RESOURCES, INC.
		
	By:	 	 /s/ Frederick J. Murrall

	Name:	 	Frederick J. Murrall
	Title:	 	President
	
	MERRIDIAN ENERGY CORPORATION
		
	By:	 	 /s/ Douglas E. Miller

	Name:	 	Douglas E. Miller
	Title:	 	President

  

 22 

			
	MERIDIAN INVESTMENTS, INC.
		
	By:	 	 /s/ John F. Boc

	Name:	 	John F. Boc
	Title:	 	President
	 	 	 
	COAL INVESTORS, L.L.C.
	By Its Members:
	
	CHELSEA VIRGINIA, L.L.C.
		
	By:	 	 /s/ James R. Treptow

	Name:	 	James R. Treptow
	Title:	 	Managing Member
	
	 /s/ John F. Boc

	John F. Boc
	
	 /s/ John P. Cascy

	John P. Cascy
	
	 /s/ John P. McDonbugh

	John P. McDonbugh

  

 23 

 EXHIBIT A 
  

							
	 Member

	  	Member’s Percentage

	 	 	Amount of
Capital Contributions

	 C.C. Pace Capital, L.L.C.
	  	33.33	%	 	$	333.30
	 4401 Fair Lakes Court
	  	 	 	 	 	 
	 Suite 400
	  	 	 	 	 	 
	 Fairfax, Virginia 22033
	  	 	 	 	 	 
			
	 Carbon Resources, Inc.
	  	33.33	%	 	$	333.30
	 111 3rd Ave., West
	  	 	 	 	 	 
	 Suite 140
	  	 	 	 	 	 
	 Bradenton, FL 34205
	  	 	 	 	 	 
			
	 Meridian Energy Corporation
	  	11.34	%	 	$	113.40
	 1266 Furnace Brook Parkway
	  	 	 	 	 	 
	 Quincy, Massachusetts 02169
	  	 	 	 	 	 
			
	 Meridian Investments, Inc.
	  	5.33	%	 	$	53.30
	 1266 Furnace Brook Parkway
	  	 	 	 	 	 
	 Quincy, Massachusetts 02169
	  	 	 	 	 	 
			
	 Coal Investors, L.L.C.
	  	16.67	%	 	$	166.70
	 c/o 1266 Furnace Brook Parkway
	  	 	 	 	 	 
	 Quincy, Massachusetts 02169

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