Common use of Governmental Adjustments Clause in Contracts

Governmental Adjustments. There shall be adjustments made from time to time in the Base Prices to reflect changes in Seller’s actual costs as of the date incurred because of governmental regulatory events which affect the coal industry on a national, regional, state or local level occurring or continuing to have an effect on or after ****, which are beyond the direct control of Seller and which after said date change Seller’s expenses or required capital expenditures, affect productivity at the Sources supplying coal under this Confirmation, or otherwise change Seller’s actual cost at the Sources (“Governmental Adjustment”). Government regulatory events shall include, by way of illustration, but not **** INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. limitation: new or amended or restated Federal, State or local legislation or regulation, or the interpretation of the application thereof by courts, administrative agencies, or any other body having jurisdiction relating to mining, mine safety, environmental, or other matters directly affecting Seller’s costs at the Source mines. If a Governmental Adjustment increases or decreases Seller’s costs of producing Coal from any of the Source mines covered by this Confirmation, there shall be added to or subtracted from the Base Prices from time to time adjustments to reflect the change in Seller’s costs because of such Governmental Adjustment, based upon actual production costs and productivity experienced at the respective Source mines before and after the Governmental Adjustment. Should capital items be affected by such a change, adjustments shall be based upon Seller’s computation of actual expenditures (or reasonable estimates thereof) subject to audit by Buyer for capital items, the useful life of such items, interest relating to the purchase or carrying thereof and actual productivity experienced at the Source mines before and after the change. The Parties recognize that there may be Governmental Adjustment claims for both ongoing compliance costs and fixed per ton fees and/or taxes, which shall be referred to as Governmental Adjustment Components as defined by Section 4.1.4.5.1 and Section 4.1.4.5.2 below. The Governmental Adjustment Component of the West Kentucky Base Price (or West Kentucky Adjusted Base Price, as the case may be) shall be based upon the actual cost per ton incurred at the Dotiki, Warrior and/or Elk Creek mines for Governmental Adjustment, weight averaged based upon the number of tons supplied to Buyer from each Source mine (“West Kentucky Governmental Adjustment Component”). The Governmental Adjustment Component of the Illinois Base Price (or Illinois Adjusted Base Price, as the case may be) shall be based upon the actual cost per ton incurred at the Pattiki mine (“Illinois Governmental Adjustment Component”). The Governmental Adjustment Components of the 2013 Base Prices and subsequent Contract Year Base Prices shall be estimated by Seller and mutually agreed to by the Parties on or before the immediately preceding August 1. The Parties shall review the Governmental Adjustment Components on a quarterly basis and Seller shall advise if any Governmental Adjustment has affected the Source mining operations, in which event Seller shall provide an estimate of the cost to be incurred as a result of the Governmental Adjustment in sufficient detail for Buyer’s review. The Parties then shall mutually agree to adjust the Governmental Adjustment Component if necessary. Such Governmental Adjustments shall be itemized on Schedule 2 for West Kentucky Base Price and Schedule 3 for Illinois Base Price.

Governmental Adjustments. There shall be adjustments made from time to time in the Base Prices to reflect changes in Seller’s actual costs as of the date incurred because of governmental regulatory events which affect the coal industry on a national, regional, state or local level occurring or continuing to have an effect on or after ****, which are beyond the direct control of Seller and which after said date change Seller’s expenses or required capital expenditures, affect productivity at the Sources supplying coal under this Confirmation, or otherwise change Seller’s actual cost at the Sources (“Governmental Adjustment”). Government regulatory events shall include, by way of illustration, but not **** INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. limitation: new or amended or restated Federal, State or local legislation or regulation, or the interpretation of the application thereof by courts, administrative agencies, or any other body having jurisdiction relating to mining, mine safety, environmental, or other matters directly affecting Seller’s costs at the Source mines. If a Governmental Adjustment increases or decreases Seller’s costs of producing Coal from any of the Source mines covered by this Confirmation, there shall be added to or subtracted from the Base Prices from time to time adjustments to reflect the change in Seller’s costs because of such Governmental Adjustment, based upon actual production costs and productivity experienced at the respective Source mines before and after the Governmental Adjustment. Should capital items be affected by such a change, adjustments shall be based upon Seller’s computation of actual expenditures (or reasonable estimates thereof) subject to audit by Buyer for capital items, the useful life of such items, interest relating to the purchase or carrying thereof and actual productivity experienced at the Source mines before and after the change. The Parties recognize that there may be Governmental Adjustment claims for both ongoing compliance costs and fixed per ton fees and/or taxes, which shall be referred to as Governmental Adjustment Components as defined by Section 4.1.4.5.1 and Section 4.1.4.5.2 below. The Governmental Adjustment Component of the West Kentucky Base Price (or West Kentucky Adjusted Base Price, as the case may be) shall be based upon the actual cost per ton incurred at the Dotiki, Warrior and/or Elk Creek mines for Governmental Adjustment, weight averaged based upon the number of tons supplied to Buyer from each Source mine (“West Kentucky Governmental Adjustment Component”). The Governmental Adjustment Component of the Illinois Base Price (or Illinois Adjusted Base Price, as the case may be) shall be based upon the actual cost per ton incurred at the Pattiki mine (“Illinois Governmental Adjustment Component”). The Governmental Adjustment Components of the 2013 Base Prices and subsequent Contract Year Base Prices shall be estimated by Seller and mutually agreed to by the Parties on or before the immediately preceding August 1. The Parties shall review the Governmental Adjustment Components on a quarterly basis and Seller shall advise if any Governmental Adjustment has affected the Source mining operations, in which event Seller shall provide an estimate of the cost to be incurred as a result of the Governmental Adjustment in sufficient detail for Buyer’s review. The Parties then shall mutually agree to adjust the Governmental Adjustment Component if necessary. Such Governmental Adjustments shall be itemized on Schedule 2 for West Kentucky Base Price and Schedule 3 for Illinois Base Price.