EXHIBIT 3.118
OPERATING AGREEMENT
PEABODY DEVELOPMENT LAND HOLDINGS, LLC
THIS OPERATING AGREEMENT (this "Agreement") is made and entered into as
of the 16th day of February, 2000 by and between (i) PEABODY DEVELOPMENT
COMPANY, a Delaware corporation with its principal offices at 000 X. Xxxxxxxx
Xx., Xx. Xxxxx, XX 00000 ("PDC") and (ii) PEABODY HOLDING COMPANY, INC., a New
York corporation, with its principal offices at 000 Xxxxxx Xxxxxx, Xxxxx 000,
Xx. Xxxxx, XX 00000 ("PHCI"). PDC and PHCI are hereinafter collectively referred
to with PHCI as the "Members" and each individually as a "Member". For purposes
of this Agreement, the term "Member" shall include any party then acting in such
capacity in accordance with the terms of this Agreement.
RECITALS
A. PDC and PHCI desire to form a limited liability company under the
Delaware Limited Liability Company Act ("Act") to be known as "Peabody
Development Land Holdings, L.L.C." (the "Company") for the purposes set out in
this Agreement.
B. PDC and PHCI desire to set out in this Agreement their respective
rights, duties and liabilities with respect to such limited liability company.
NOW, THEREFORE, in consideration of the Recitals and the mutual
covenants and undertakings set forth herein, PDC and PHCI agree as follows:
ARTICLE 1
FORMATION
1.1 Formation. The Members do hereby form the Company as a limited
liability company under the Act for the purposes and term set out in this
Agreement. To effect the formation of the Company, the Members have executed and
duly recorded certificate of formation in the form attached hereto as Exhibit
1.1 (the "Articles").
1.2 Name.
The Company will do business under the name "Peabody
Development Land Holdings, LLC". The Members shall execute and file the Articles
and such other certificates as shall be required under the Act and under the
laws of each state in which the Company is required or desires to be qualified
to do business.
1.3 Principal Office. The principal office of the Company shall
initially be at 000 X. Xxxxxxxx Xx., Xx. Xxxxx, Xxxxxxxx. The principal office
may hereafter from time to time be moved to such other place in the United
States of America as may be designated by the "Managing Member", as hereinafter
defined, with written notice to all Members. The books and
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records of the Company shall be maintained at the Company's principal place of
business, or such other location in the United States of America as determined
by the Managing Member with written notice to all Members.
1.4 Term. The duration of the Company is perpetual, or until
liquidation in accordance with the terms of this Agreement for the Company or as
required by the Act.
1.5 Property Ownership. All assets and property owned by the
Company, whether real or personal, tangible or intangible, shall be held in the
name of the Company.
ARTICLE 2
PURPOSES AND NON-COMPETITION
2.1 Purposes. The Company is formed to conduct reserve holdings
and all other physical operations (other than office operations) solely to (i)
in the State of Illinois in which the coal reserves contributed by the Members
are located and logical extensions of those reserves as the members unanimously
agree and (ii) any other areas in which the Members unanimously agree to hold
coal reserves (the areas referred to in (i) and (ii) above are hereinafter
referred to as the "Project Area"). The purposes of the Company are limited to
the following coal-related purposes:
(a) The acquisition of coal reserves in the Project Area;
(b) The development and conduct of underground mining,
processing and shipping operations relative to the acquired coal reserves,
either directly with employees of the Company or through contract miners;
(c) The permitting and bonding (either directly or through one
of its Members) of all coal mining, processing and shipping operations on or
relating to the acquired coal reserves and the completion of reclamation
obligations relative to the coal mining, processing or shipping operations
conducted on or relating to the acquired coal reserves;
(d) The purchasing, selling, brokering, processing and/or
shipping of coal from whatever source in the Project Area;
(e) The acquisition of existing businesses, operating solely
in the Project Area, relating to the mining, processing, selling or shipping of
coal;
(f) To employ personnel necessary for the conduct of the
business of the Company;
(g) The investment of the income earned by the Company prior
to distribution to the Members;
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(h) The borrowing of money, the leasing of assets and/or the
granting of liens and security interests in assets of the Company; and
(i) All other activities necessary, appropriate, incidental or
desirable in connection with the foregoing, or otherwise contemplated in this
Agreement.
The purposes of the Company shall not be extended, by implication or
otherwise, beyond the purposes set forth in this Section 2.1 without the prior
written approval of the Members. Without limiting the foregoing, the Company may
not, without the prior written approval of all Members: (i) incur any
indebtedness or liabilities, or make any guaranties of any kind or nature,
binding upon the Company, or (iii) acquire any assets or properties of any kind
or nature except the assets contributed to the Company by the Members in
accordance with this Agreement.
2.2 Other Activities. PDC and PHCI, and all current and future
Affiliates of PDC and PHCI, may engage in, or possess an interest in, other
business ventures of any nature and description whatsoever, independently or
with others, whether or not competitive with those of the Company.
(b) Each Member shall be liable for the acts of any of its
Affiliates which are in violation of the terms of this Section 2.2, without
regard to the legal relationship between such Member and such Affiliate.
(c) For purposes of this Agreement, the term "Affiliate" shall
mean any individual, corporation, partnership, limited liability company or
other entity which, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, another individual,
corporation, partnership, limited liability company or other entity.
2.3 Term. The duration of the Company is perpetual, or until
liquidation in accordance with the terms of this Agreement or as required by the
Act.
2.4 Property Ownership. All assets and property owned by the
Company, whether real or personal, tangible or intangible, shall be held in the
name of the Company unless otherwise determined by the Membership Committee.
ARTICLE 3
CAPITAL CONTRIBUTIONS
3.1 Initial Capital Contributions.
(a) Contemporaneously with the execution of this Agreement PDC
has contributed to the capital of the Company the coal assets listed on Exhibit
3.1 hereof, which is the agreed value of the initial capital contribution of PDC
to the Company.
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(b) Contemporaneously with the execution of this Agreement
PHCI has contributed to the capital of the Company the coal assets listed on
Exhibit 3.1 hereof, which is the agreed value of the initial capital
contribution of PHCI to the Company.
(c) PDC shall initially have a 99% interest in the Company,
and PHCI shall initially have a 1% interest in the Company.
3.2 No Liability of Interest Holders. Except as otherwise
specifically provided in the Act, or as may exist under separate existing
written agreements as to a Member, no Member shall have any personal liability
for the obligations of the Company. Further, no Member shall be obligated to
contribute additional capital to the Company.
3.3 Interest on Capital Contributions. No Member shall be entitled
to interest on any capital contributions made to the Company.
3.4 Withdrawal of Capital. No Member shall be entitled to withdraw
any part of its capital contributions to the Company, or receive any
distributions from the Company, except as provided in this Agreement. No Member
shall be entitled to demand or receive any property from the Company other than
cash, except as otherwise expressly provided for herein.
3.5 Capital Accounts. There shall be established on the books of
the Company a capital account ("Capital Account") for each Member. It is the
intention of the Members that such Capital Account be maintained in accordance
with the provisions of Treas. Reg. Section 1.704- l(b)(2)(iv), and this
Agreement shall be so construed. Accordingly, such Capital Account shall
initially be credited with the initial capital contribution of the Member and
thereafter shall be increased by (i) any cash or the fair market value of any
property contributed by such Member (net of any liabilities assumed by the
Company or to which the contributed property is subject) and (ii) the amount of
all net income (whether or not exempt from tax) and gain allocated to such
Member hereunder, and decreased by (i) the amount of all net losses allocated to
such Member hereunder (including expenditures described in section 705(a)(2)(B)
of the Internal Revenue Code of 1986, as amended ("Code"), or treated as such an
expenditure by reason of Treas. Reg. Section 1.704-l(b)(2)(iv)(i)) and (ii) the
amount of cash, and the fair market value of property (net of any liabilities
assumed by such Member or to which the distributed property is subject),
distributed to such Member pursuant to this Agreement. If a Member transfers all
or any part of such Member's interest (capital, profits and otherwise) in the
Company ("Membership Interest") in accordance with the terms of this Agreement,
the Capital Account of the transferor shall become the Capital Account of the
transferee to the extent of the interest transferred.
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ARTICLE 4
ACCOUNTING
4.1 Books and Records. The Managing Member shall cause the Company
to maintain full and accurate books and records at the Company's principal place
of business, showing all receipts and expenditures, assets and liabilities, net
income or loss, and all other records necessary for recording the Company's
business and affairs, including those required to be kept under the Act and
those sufficient to record the allocations and distributions to the Members
provided for in this Agreement. Such books and records shall be maintained in
accordance with generally accepted accounting principles; provided that adequate
records concerning the maintenance of Capital Accounts in accordance with Treas.
Reg. Section 1.704-l(b)(2)(iv) shall be simultaneously maintained by the
Company. Such books and records shall be open to the inspection and examination
of each Member by its duly authorized representatives at all reasonable times.
4.2 Fiscal Year. The fiscal year of the Company shall commence on
April 1 st and end on March 31st ("Fiscal Year").
4.3 Reports.
(a) Within 45 days after the close of each Fiscal Year of the
Company, the Company shall furnish to each Member a report of the business and
operations of the Company during such Fiscal Year. Unless otherwise agreed to by
the Members, such report shall contain financial statements prepared by the
Company which are audited by certified public accountants employed by the
Company. The certified public accountant for the Company shall be the same as
retained by PDC.
(b) Within 10 business days after the close of each calendar
month, the Company shall furnish to each Member a report of the business and
operations of the Company for such calendar month. Unless otherwise agreed to by
the Members, such report shall contain unaudited financial statements prepared
by the Company, be in such form as the Members may require and shall include a
balance sheet as of the end of such calendar month, a statement of the net
income or net loss of the Company for such calendar month and such other
information as in the judgment of the Managing Member shall be reasonably
necessary for the Members to be advised of the results of the Company's
operations and its financial condition.
4.4 Tax Returns. The Managing Member shall cause all required
federal, state and local partnership income, franchise, property and other tax
returns, including information returns, to be timely filed with the appropriate
office of the relevant taxing jurisdiction or agency. In order to accommodate
the following provision regarding review of drafts of the Federal and state
income tax returns of the Company, the Company shall seek each year (if
necessary) a three month extension of the date on which such returns must be
filed. With respect to the Federal and state income tax returns of the Company,
the Company shall submit to each Member drafts of the proposed returns as soon
as possible, but in no event later than sixty days following the close of the
Fiscal Year, to permit review and approval of such returns by each Member prior
to filing.
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All expenses incurred in connection with such tax returns and information
returns, as well as for the reports referred to in Section 4.3 hereof, shall be
expenses of the Company.
4.5 Member's Request for Additional Information. The Company shall
also furnish to any Member such other reports of the Company's operations and
conditions as may reasonably be requested by either of the Members. The Members
shall have the right at any time to visit the offices and operations of the
Company and inspect and audit records of the Company.
4.6 Tax Matters Partner. PDC shall be the "Tax Matters Partner"
(as defined in the Code) for the Company. The Tax Matters Partner shall have the
authority granted a tax matters partner under the Code. The Tax Matters Partner
shall not take any action binding another Member without first notifying, and
receiving the concurrence of, such Member. All expenses of the Tax Matters
Partner incurred in serving as Tax Matters Partner shall be Company expenses and
shall be paid by the Company. The Company shall indemnify the Tax Matters
Partner for, and hold the Tax Matters Partner harmless from, any and all
judgments, fines, amounts paid in settlement and expenses (including attorneys'
fees) reasonably incurred by the Tax Matters Partner in any civil, criminal or
investigative proceeding in which the Tax Matters Partner is involved or
threatened to be involved by reason of being the Tax Matters Partner, provided
that the Tax Matters Partner acted in good faith, within what the Tax Matters
Partner reasonably believed to be within the scope of the Tax Matters Partner's
authority and for a purpose which the Tax Matters Partner reasonably believed to
be in the best interests of the Company or the Members. The Tax Matters Partner
shall not be indemnified under this provision against any liability to the
Company or its Members to which the Tax Matters Partner would otherwise be
subject by reason of gross negligence or willful misconduct.
4.7 Revaluation of Company Property. If there shall occur (i) an
acquisition of a Membership Interest for more than a de minimis capital
contribution, or (ii) a distribution (other than a de minimis distribution) to a
Member in consideration for a Membership Interest, the Member committee may
revalue the assets of the Company at their then fair market value and adjust the
Capital Accounts of the Members in the same manner as provided in Section 8.3 in
the case of a property distribution. If there is a reallocation pursuant to this
Section 4.7, then net income and net loss shall thereafter be adjusted for
allocations of depreciation (cost recovery) and gain or loss in accordance wit
the provisions of Treas. Reg. Section 1.704-l(b)(2)(iv)(f) and (g), and the
Members' distributive shares of depreciation (cost recovery) and gain or loss
computed in accordance with the principles of section 704(c) of the Code and
the regulations promulgated thereunder using the method selected by the
Membership Committee.
ARTICLE 5
BANK ACCOUNTS AND EXCESS FUNDS
5.1 Bank Accounts. All funds of the Company shall be deposited in
its name into such checking or savings accounts, time certificates, short-term
money market funds or other investment as shall be designated by the Managing
Member. Withdrawals therefrom shall be made upon such signature or signatures
(or other authorization form) as determined by the Managing Member.
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5.2 Investment of Excess Funds. The Company may invest excess
funds not required in the Company's business, and not required to be distributed
pursuant to the terms of this Agreement, in short-term United States Government
obligations maturing within 1 year.
ARTICLE 6
ALLOCATION OF NET INCOME AND LOSS
6.1 Net Income and Net Loss.
(a) Except as otherwise provided in this Agreement, the net
income and net loss of the Company for each Fiscal Year shall be allocated 99%
to PDC and 1% to PHCI ("Allocation Interests").
(b) Notwithstanding anything herein to the contrary, if a
Member has a deficit balance in such Member's Capital Account (excluding from
such Member's deficit Capital Account any amount which such Member is obligated
to restore in accordance with Treas. Reg Section 1.704-l(b)(2)(ii)(c), as well
as any amount such Member is treated as obligated to restore under Treas. Reg.
Sections 1.704-2(g)(l) and 1.704-2(i)(5)) and unexpectedly receives an
adjustment, allocation or distribution described in Treas. Reg. Section
1.704-l(b)(2)(ii)(d)(4), (5) or (6), then such Member will be allocated items of
income and gain in an amount and manner sufficient to eliminate the deficit
balance in such Member's Capital Account as quickly as possible. If there is an
allocation to a Member pursuant to this Section 6.1(b), then future allocations
of net income pursuant to Section 6.1(a) shall be adjusted so that those Members
who were allocated less income, or a greater amount of loss, by reason of the
allocation made pursuant to this Section 6.1(b), shall be allocated additional
net income in an equal amount. It is the intention of the parties that the
provisions of this Section 6.1(b) constitute a "qualified income offset" within
the meaning of Treas. Reg. Sections 1.704-1(b)(2)(ii)(d), and such provisions
shall be so construed.
(c) If there is a net decrease in the Company's Minimum Gain
(within the meaning of Treas. Reg. Section 1.704-2(b)(2)) or Partner Nonrecourse
Debt Minimum Gain (within the meaning of Treas. Reg Section 1.704-2(i)(3))
during any Fiscal Year, each Member shall be allocated, before any other
allocations hereunder, items of income and gain for such Fiscal Year (and
subsequent Fiscal Years, if necessary), in an amount equal to such Member's
share (determined in accordance with Treas. Reg. Sections 1.704-2(g) and
1.704-2(i)(5), as applicable) of the net decrease in the Company's Minimum Gain
or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year;
provided, however, that no such allocation shall be required if any of the
exceptions set forth in Treas. Reg. Section 1.704-2(f) apply. It is the
intention of the parties that this provision constitute a "minimum gain
chargeback" within the meaning of Treas. Reg. Sections 1.704- 2(f) and
1.704-2(i)(4), and this provision shall be so construed.
(d) Notwithstanding anything herein to the contrary, the
Company's partner nonrecourse deductions (within the meaning of Treas.
Reg. Section 1.704-2(i)(2)) shall be allocated
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solely to the Member who has the economic risk of loss with respect to the
partner nonrecourse liability related thereto in accordance with the provisions
of Treas. Reg. Section 1.704-2(i)(l).
(e) Notwithstanding the provisions of Section 6.1 (a), no net
losses shall be allocated to a Member if such allocation would result in such
Member having a deficit balance in such Member's Capital Account (excluding from
such Member's deficit Capital Account any amount such Member is obligated to
restore in accordance with Treas. Reg. Section 1.704- l(b)(2)(ii)(c), as well as
any amount such Member is treated as obligated to restore under Treas. Reg.
Sections 1.704-2(g)(l) and 1.704-2(i)(5)). In such case, the net loss that would
have been allocated to such Member shall be allocated to the other Members to
whom such loss can be allocated without violation of the provisions of this
Section 6.1(e) in proportion to their respective Allocation Interests among
themselves.
(f) Notwithstanding the provisions of Section 6.1 (a) hereof,
to the extent losses are allocated to the Members by virtue of Section 6.1(e)
hereof, the net income of the Company thereafter recognized shall be allocated
to such Members (in proportion to the losses previously allocated to them
pursuant to Section 6.1(e) hereof) until such time as the net income of the
Company allocated to them pursuant to this Section 6.1(f) equals the net losses
allocated to them pursuant to Section 6.1(e) hereof.
(g) For Federal state and local income tax purposes only, with
respect to any assets contributed by a Member to the Company ("Contributed
Assets") which have an agreed fair market value on the date of their
contribution which differs from the Member's adjusted basis therefor as of the
date of contribution, the allocation of depreciation and gain or loss with
respect to such Contributed Assets shall be determined in accordance with the
provisions of Section 704(c) of the Code and the regulations promulgated
thereunder using the traditional method with curative allocations within the
meaning of Treas. Reg. Section 1.704-3(c). For purposes of this Agreement, an
asset shall be deemed a Contributed Asset if it has a basis determined, in whole
or in part, by reference to the basis of a Contributed Asset (including an asset
previously deemed to be a Contributed Asset pursuant to this sentence).
Notwithstanding the foregoing, if the gain from the sale of any Contributed
Asset is being reported on the installment method for income tax purposes, then
the total amount of gain which is to be recognized by each of the Members in
accordance with the above provision in all taxable years shall be computed and
the amount of gain to be recognized by each of the Members in each year shall be
in proportion to the total gain to be recognized by each of the Members in all
taxable years.
6.2 Allocation of Excess Nonrecourse Liabilities. For purposes of
section 752 of the Code and the regulations thereunder, the excess nonrecourse
liabilities of the Company (within the meaning of Treas. Reg. Section
1.752-3(a)(3)), if any, shall be allocated to each Member in accordance with
their respective Allocation Interests.
6.3 Allocations in Event of Transfer. In the event of the transfer
of a Member's Membership Interest (in accordance with and subject to the
provisions of this Agreement) in the Company at any time other than at the end
of a Fiscal Year, or the admission of a new Member at any time other than the
end of a Fiscal Year, or the making by the Members of disproportionate
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capital contributions, the periods before and after such transfer, admission or
disproportionate capital contributions shall be treated as separate fiscal
years, and the Company's net income, net loss and credits for each of such
deemed separate fiscal years shall be allocated in accordance with the Members'
respective Allocation Interests for each of such deemed separate fiscal years.
ARTICLE 7
DISTRIBUTIVE SHARES AND
FEDERAL INCOME TAX ELECTIONS
7.1 Distributive Shares. For purposes of Subchapter K of the Code,
the distributive shares of the Members of each item of Company taxable income,
gains, losses, deductions or credits for any Fiscal Year shall be in the same
proportions as their respective shares of the net income or loss of the Company
allocated to them pursuant to Section 6.1 hereof. Notwithstanding the foregoing,
to the extent not inconsistent with the allocation of gain provided for in
Section 6.1, gain recognized by the Company which represents ordinary income by
reason of recapture of depreciation, cost recovery or depletion deductions for
Federal income tax purposes shall be allocated to the Member (or the Member's
successor in interest) to whom such depreciation, cost recovery or depletion
deduction to which such recapture relates was allocated.
7.2 Elections. Any and all elections required or permitted to be
made by the Company under the Code, including the election provided for in
section 754 of the Code, shall be made in accordance with the decisions of the
Managing Member.
7.3 Partnership Treatment. It is intended that the Company shall
be treated as a partnership for purposes of Federal, state and local income tax
or other taxes, and the Members shall not take any position or make any
election, in a tax return or otherwise, inconsistent with such treatment.
ARTICLE 8
DISTRIBUTIONS
8.1 Net Cash Flow. For purposes of this Agreement, the term "Net
Cash Flow" for any period shall mean the excess, if any, of (a) the gross
receipts of the Company, over (b) the sum of all cash operating expenses paid by
the Company for such period, including, but not by way of limitation, salaries,
taxes, interest, insurance premiums, royalties, rentals, utilities and fees.
8.2 Distribution of Net Cash Flow. The Net Cash Flow for each
month (other than Net Cash Flow arising in connection with the liquidation of
the Company, which Net Cash Flow shall be distributed as provided in Section
10.3 hereof) shall be distributed monthly by the 20th day of each calendar month
for Net Cash Flow through the end of the previous month, unless the Members
otherwise agree in writing. All such distributions of Net Cash Flow shall be
distributed to the Members in accordance with their Allocation Interests as of
the close of the period with respect to which the Net Cash Flow is being
distributed.
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8.3 Property Distributions. If any property of the Company, other
than cash, is distributed by the Company to a Member (in connection with the
liquidation of the Company or otherwise), then the fair market value of such
property shall be used for purposes of determining the amount of such
distribution. The difference, if any, of such fair market value over (or under)
the value at which such property is carried on the books of the Company shall be
credited or charged to the Capital Accounts of the Members in accordance with
the ratio in which the Members share in the gain and loss of the Company
pursuant to Section 6.1 hereof. The fair market value of the property
distributed shall be agreed to by the Members; provided that, if the Members
cannot so agree, the issue shall be submitted to arbitration as provided in
Article 14 hereof. If any such property is distributed other than in exchange
for a Membership Interest, such property shall be distributed in the same manner
as if it were Net Cash Flow.
ARTICLE 9
COMPANY MANAGEMENT
9.1 Managing Member. (a) Except as expressly provided in Section
9.2 and otherwise herein, management of the Company shall be vested in PDC (the
"Managing Member"). The Managing Member may only be removed or replaced with the
unanimous consent of the Members. Except for matters to be approved of, or
consented to, by the Members under this Agreement, the Managing Member shall
have full, exclusive, and complete discretion, power and authority, subject in
all cases to the terms of this Agreement and the requirements of applicable law,
to manage, control, administer, and operate the business and affairs of the
Company for the purposes herein stated, and to make decisions affecting the
business and affairs of the Company. All Members reserve fully all rights
granted to the Members under this Agreement and to the extent of such rights,
the power and authority of each Member shall be superior to the authority and
power of the Managing Member.
(b) Service Agreements; Compensation. The Company, through the
Managing Member, may enter into a service agreement with PDC to provide
management and staff services required by the Company at no cost to the Company.
The Managing Member shall not enter into or bind the Company to any other
contract, agreement or obligation without the prior written consent of both
Members. No Member shall be entitled to compensation for performing its
obligations as a Member or acting as the Managing Member.
(c) Acts by Members. Except for rights vested in the Members,
neither Member shall take, or commit the Company to take, any action, either in
its own name in respect of the Company or in the name of the Company, unless the
Managing Member has approved the same, under the authority granted herein.
(d) Management of Workforce. No Member shall have any right,
power or obligation to exercise any control over the hiring of miners or over
the workforce of the Company, including, but not limited to, any employment
benefits or other terms and conditions of employment for the employees of the
Company, and all such matters are delegated to the
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management employees of the Company. PDC and PHCI shall take no part in, and
shall have no right, power or obligation with respect to, any matter relating to
the hiring of miners.
9.2 Membership Committee. (a) The Members of the Company shall be
represented on a committee (the "Membership Committee") initially comprised of
two representatives of PDC and one representative of PHCI. Each representative
shall be entitled to one vote on decisions or actions of the Membership
Committee.
(b) Approval Rights. Actions which require the unanimous
approval of the Members will include:
(i) Approval of the Capital and Operating Budgets;
(ii) Liquidation and/or dissolution of the Company;
(iii) Replacement or removal of the Managing Member;
(iv) Admission of a new Member;
(v) Any additional mandatory capital contribution;
(vi) Expulsion of any Member;
(vii) Merger or consolidation with another person;
(viii) Authorization for any transaction, agreement or action
unrelated to the Company's purpose as set forth in the Articles of Organization,
that otherwise contravenes this Agreement;
(ix) Any amendment to this Agreement.
(c) Meetings of the Membership Committee. Meetings of the
membership Committee shall be held at least quarterly unless the Membership
Committee otherwise agrees. Meetings of the Membership Committee shall also be
held upon call by any member. Each Member must be present to constitute a quorum
and convene a meeting of the Membership Committee. Meetings of the membership
committee may, if both Members consent, be held by telephone conference in which
each Member can hear all other Members, or in such other manner as shall be
agreed to by the Members.
(d) Rules of the Membership Committee. The Membership
Committee is authorized to adopt rules concerning the conduct of the affairs of
the Membership Committee and the Company.
9.3 Applicant Violator System. Each Member represents and warrants
that such member, its officers, shareholders, members, subsidiaries, affiliates
and any other entity that can be attributed to it under the "ownership and
control" regulations issued by the office of Surface Mining (collectively,
"Member Entities") are not currently permit blocked under the Surface Mining
Control and Reclamation Act of 1977 ("SMCRA"). No Member will allow to exist any
violation of SMCRA or any comparable state law at any operation of a member
Entity that would cause any other Member or its Member Entities to be permit
blocked. Any Member Entity which becomes permit blocked under SMCRA or any
comparable state law shall provide written notice of such event to the other
members within five (5) days and shall take any and all actions necessary for
the removal of such permit block within twenty (20) days; provided,
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however, that if the permit block does not then or thereafter adversely affect
the other members (by permit block or otherwise), the permit blocked entity may
contest the permit block in good faith and by appropriate legal proceedings,
provided further, however, that if the permit block does adversely affect the
other members (by permit block or otherwise), the non-permit block Member(s) may
(i) undertake to remove the condition causing the permit block, at the permit
block Member's expense or (ii) purchase such permit block Member's interest in
the Company at the then book value of such permit blocked Member's interest.
ARTICLE 10
DISSOLUTION
10.1 Dissolution. The Company shall dissolve upon, but not before,
the first to occur of the following:
(a) The consent of both Members to dissolve the Company; or
(b) The dissolution of the Company under the Act by virtue of
an event which cannot be waived by the parties.
The Company may only be dissolved in accordance with the foregoing and the
Members waive dissolution of the Company on account of any event described in
the Act which may be superceded by the terms of this Agreement. Dissolution of
the Company shall be effective upon the date on which the event giving rise to
the dissolution occurs, but the Company shall not terminate until the assets of
the Company have been distributed as provided in Section 10.3. Prior to the
liquidation and termination of the Company, the business of the Company, and the
obligations of the Members relative to the Company, shall continue to be
governed by this Agreement.
10.2 Liquidation and Winding Up Upon Dissolution. If the Company
is dissolved, the Company shall be wound up and liquidated in accordance with
the requirements of law and the following provisions:
(a) The right to wind up the Company's affairs and to
supervise its liquidation shall be exercised jointly by all Members (the
"Liquidators").
(b) Upon dissolution, the Liquidators shall ensure that an
account is taken as soon as practicable of all property, assets and liabilities
of the Company.
(c) Each Member shall pay to the Company all amounts owed by
it to the Company.
(d) The assets and property of the Company or the proceeds of
any sale thereof, together with contributions received pursuant to Section
10.2(c) hereof, shall be applied by the Liquidators in accordance with Section
10.3 hereof.
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10.3 Distributions Upon Liquidation. Upon the dissolution of the
Company, the assets of the Company shall be sold (or distributed in kind, at the
option of the Liquidators) in an orderly fashion, and the proceeds thereof shall
be distributed, on or before the later to occur of (i) the close of the
Company's taxable year, or (ii) 90 days following the date of such dissolution,
as follows:
(a)First: To the payment and discharge of all of the Company's
debts and liabilities, to the necessary expenses of
liquidation, to a cash reserve for the completion of
the reclamation obligations of the Company and to the
establishment of a cash reserve which the Members
determine to create for unmatured and/or contingent
liabilities and obligations of the Company.
(b)Second: To the payment and discharge of all of the Company's
debts and liabilities to Members, pro-rata in
accordance with their respective unpaid principal
balances.
(c)Third: To the Members in accordance with their Capital
Accounts; provided, however, that if the Liquidators
establish any reserves in accordance with the
provisions of Section 10.3(a), then the distributions
pursuant to this Section 10.3(c) (including
distributions of such reserve) shall be pro rata in
accordance with the balances of the Members' Capital
Accounts.
No Member shall be required to contribute any property to the Company or any
third party by reason of having a negative Capital Account.
ARTICLE 11
ASSIGNMENT; OPTIONS
11.1 Assignment of Member's Interest. Except as provided below, no
Member may withdraw, sell, assign, transfer, pledge, grant a security interest
in, encumber or otherwise dispose of, all or any part of its Membership Interest
in the Company without the unanimous prior written consent of all of the
Members. Any attempted withdrawal, sale, assignment, transfer, pledge, grant,
encumbrance or disposition not permitted by prior written agreement of all
Members shall be null and void ab initio and of no force and effect. Each Member
may collaterally assign to a financial institution granting credit to the
Company or its Affiliates, any or all rights of such Member under this
Agreement.
ARTICLE 12
RELATIONSHIP WITH COMPANY
12.1 Promotion of Company. Each Member shall use reasonable efforts
to promote the activities of the Company and to ensure its success.
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12.2 Information. Subject to any applicable restriction of law,
both Members shall be fully and currently informed of the activities of the
Company. To the extent that there are any applicable laws or regulations which
would have the effect of limiting the right of a Member to be so informed, the
other Member shall use all reasonable efforts to obtain waivers thereof in favor
of the Company and the Member so limited and, failing the obtaining of such
waivers, the Members shall make such arrangements as shall be practicable to
preserve to the Company the benefits of the contracts or projects to which such
secrecy agreements or laws or regulations relate. Each Member shall not, except
as required by law and except for disclosure to its officers, directors,
employees, shareholders, partners, attorneys, accountants, and Affiliates (who
shall be bound by the confidentiality provisions of this Agreement), divulge to
any person any confidential or proprietary information concerning the business
of the Company including, without limitation, the terms of this Agreement.
ARTICLE 13
GOVERNING LAW
13.1 This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.
ARTICLE 14
ARBITRATION
14.1 Any claim or dispute between the Members which arises out of
or relates to this Agreement shall be arbitrable. All such arbitrable matters
shall arbitrated in accordance with the rules of the American Arbitration
Association. The cost of such arbitration shall be borne equally by the Members.
The pendency of any arbitration proceeding shall stay any right of a Member to
take any action in regard to the other Member which is based upon a claim
involved in the matter being arbitrated, but such stay shall not affect the
obligations of the parties hereunder to continue with performance of this
Agreement except to the extent of the matter being arbitrated.
ARTICLE 15
NOTICES
15.1 Addresses. All notices, consents, elections, requests,
reports, demands and other communications hereunder shall be in writing and
shall be personally delivered or mailed by registered or certified, first-class
mail, postage prepaid, or sent by confirmed facsimile transmission or by a
reputable overnight courier service such as Federal Express,
to PDC:
Peabody Development Company
000 X. Xxxxxxxx Xx.
Xx. Xxxxx, XX 00000
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Attn: President
to PHCI:
000 Xxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxx, XX 00000
Attention: President
or to such other address or to such other person as a Member shall have last
designated by notice to the other Member.
15.2 Effective Date. All notices, consents, elections, requests,
reports and other documents authorized or required to be given pursuant to this
Agreement shall be effective as of the date received by the recipient or
addressee for purposes of calculating the time within which the other Member is
obligated to respond, and upon mailing as required in Section 15.1 hereof for
all other purposes. If a Member refuses to accept delivery of any notice sent in
accordance with Section 15.1 hereof, such Member shall nevertheless be deemed to
have received such notice for purposes of this Section 15.2 on the date such
refusal first occurred.
ARTICLE 16
MISCELLANEOUS
16.1 Binding on Successors. Except as otherwise provided in this
Agreement, this Agreement shall be binding upon and inure to the benefit of the
Member(s) and their successors and assigns.
16.2 Amendments. This Agreement shall not be amended or modified except
with the unanimous consent of the Member(s) as evidenced by a written instrument
executed by all Members.
16.3 Waiver and Consent. No consent or waiver, express or employed, by
a Member to or of any breach or default by the other Member in the performance
of its obligations hereunder shall be deemed or construed to be a consent or
waiver to or of any other breach or default in the performance by such other
Member of the same or any other obligation of such Member hereunder.
16.4 Waiver of Dissolution under the Act. Any dissolution of the
Company shall occur only as provided herein, and each Member hereby waives and
renounces its rights, if any, under the Act to seek a court decree of
dissolution, to seek the appointment of a liquidator of the Company, and to seek
a partition of any Company property.
16.5 Relationship of the Members. The relationship between the Members
shall be limited to the performance of the transactions contemplated by this
Agreement and by the
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Articles, and in accordance with their terms. Nothing herein shall be construed
to authorize a Member to act as general agent for any other Member.
16.6 Further Assurances. The Member(s) shall execute and deliver such
further instruments and do such further acts and things as may be required to
carry out the intent and purpose of this Agreement.
16.7 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance is invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provisions to other persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.
16.8 Agreement in Counterparts. This Agreement may be executed in as
many counterparts as may be deemed necessary and convenient. Each counterpart
when so executed shall be deemed an original, but all counterparts shall
constitute one and the same instrument.
16.9 Entire Agreement. This Agreement and the Articles contain the
entire agreement between the parties hereto relative to the Company. Exhibits
are incorporated into this Agreement by reference.
16.10 No Third Party Beneficiary. Except as specifically set forth
herein, this Agreement is made solely and specifically between and for the
benefit of the parties hereto, and their respective permitted successors and
assigns, and no other person will have any rights, interest, or claims hereunder
or be entitled to any benefits under or on account of this Agreement as a third
party beneficiary or otherwise.
IN WITNESS WHEREOF, the parties hereto have duly caused the execution
of this Agreement by their duly authorized officers, as of the day and year
first above written.
PEABODY DEVELOPMENT COMPANY
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
TITLE: Vice President & Treasurer
PEABODY HOLDING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
TITLE: Vice President & Treasurer
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