Common use of PRICE DISCOUNTS Clause in Contracts

PRICE DISCOUNTS. (a) The Base Price is based on coal meeting or exceeding the Guaranteed Monthly Weighted Average specifications as set forth in SECTION 6.1. Quality price discounts shall be applied for each specification each month to reflect failures to meet the Guaranteed Monthly Weighted Averages set forth in SECTION 6.1, as determined pursuant to SECTION 7.2, subject to the provisions set forth below. The discount values used are as follows: DISCOUNT VALUES --------------- $/MMB.T.U. ---------- B.T.U./LB. 0.2604 $/LB./MMB.T.U. -------------- SULFUR 0.1232 ASH 0.0083 MOISTURE 0.0016 (b) Notwithstanding the foregoing, for each specification each month, there shall be no discount if the actual Monthly Weighted Average meets the applicable Discount Point set forth below. However, if the actual Monthly Weighted Average fails to meet such applicable Discount Point, then the discount shall apply and shall be calculated on the basis of the difference between the actual Monthly Weighted Average AND THE GUARANTEED MONTHLY WEIGHTED AVERAGE pursuant to the methodology shown in Exhibit A attached hereto. CONTRACT #00-000-000 (i) KINDILL 1 RAW COAL ------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS --------------- B.T.U./lb. min. 10,900 10,700 LBS./MMB.T.U. ------------- Ash max. 13.76 15.50 Moisture max. 13.76 15.50 Sulfur max. 5.05 5.35 (ii) KINDILL 1 CLEAN COAL --------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS -------------- B.T.U./lb. min. 11,250 11,050 LBS./MMB.T.U. ------------- Ash max. 10.25 11.00 Moisture max. 11.75 12.25 Sulfur max 3.55 3.90 (iii) WHITE CHURCH COAL ----------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS -------------- B.T.U./lb. min. 11,000 10,850 LBS./MMB.T.U. ------------- Ash max. 10.45 10.65 Moisture max. 11.82 12.00 Sulfur max. 3.18 3.22 CONTRACT #00-000-000 For example, for White Church Coal, if the actual Monthly Weighted Average of sulfur equals 3.3 lb/MMB.T.U., then the applicable discount would be (3.3 lb. - 3.18 lb.) X $0.1232/lb/MMB.T.U. = $.01478/MMB.T.U..

PRICE DISCOUNTS. (a) The Base Price is based on coal meeting or exceeding the Guaranteed Monthly Weighted Average specifications as set forth in SECTION Section 6.1. Quality price discounts shall CONTRACT #00-000-000 be applied for each specification each month to reflect failures to meet the Guaranteed Monthly Weighted Averages set forth in SECTION Section 6.1, as determined pursuant to SECTION Section 7.2, subject to the provisions set forth below. The discount values used are as follows: DISCOUNT VALUES --------------- $/MMB.T.U. ---------- B.T.U./LB/MMBTU BTU/LB. 0.2604 $/LB./MMB.T.U. -------------- /LB./MMBTU SULFUR 0.1232 ASH 0.0083 MOISTURE 0.0016 (b) Notwithstanding the foregoing, for each the BTU/LB specification each month, there shall be no discount if the actual Monthly Weighted Average meets the applicable Discount Point set forth below. However, if the actual Monthly Weighted weighted Average fails to meet such applicable Discount Point, then the discount shall apply and shall be calculated on the basis of the difference between the actual Monthly Weighted Average AND THE GUARANTEED MONTHLY WEIGHTED AVERAGE pursuant to the methodology shown in Exhibit A attached hereto. CONTRACT #00-000-000 (i) KINDILL 1 RAW COAL ------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS --------------- B.T.U./lb. min. 10,900 10,700 LBS./MMB.T.U. ------------- Ash max. 13.76 15.50 Moisture max. 13.76 15.50 Sulfur max. 5.05 5.35 (ii) KINDILL 1 CLEAN COAL --------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS -------------- B.T.U./lb. min. 11,250 11,050 LBS./MMB.T.U. ------------- Ash max. 10.25 11.00 Moisture max. 11.75 12.25 Sulfur max 3.55 3.90 (iii) WHITE CHURCH COAL ----------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS -------------- B.T.U./lb. min. ----------------------------------------------------------------------------- BTU/LB WASHED BLEND RAW WASHED BLEND RAW ----------------------------------------------------------------------------- 11,000 10,850 LBS./MMB.T.U. ------------- Ash max. 10.45 10.65 Moisture max. 11.82 12.00 Sulfur max. 3.18 3.22 10,600 10,300 10,800 10,400 10,100 CONTRACT #00-000-000 For example, for White Church Coal, if the actual Monthly Weighted Average of sulfur BTU/LB for Washed Coal equals 3.3 lb/MMB.T.U.10,700, then the applicable discount would be (3.3 lb. - 3.18 lb.) [1-(10,700/11,000)] X $0.1232/lb/MMB.T.U. .2604 MMBTU = $.01478.00710/MMB.T.U..MMBTU.

PRICE DISCOUNTS. (a) The Base Price is based on coal meeting or exceeding the Guaranteed Monthly Weighted Average specifications as set forth in SECTION Section 6.1. Quality price discounts shall be applied for each specification each month to reflect failures to meet the Guaranteed Monthly Weighted Averages set forth in SECTION Section 6.1, as determined pursuant to SECTION Section 7.2, subject to the provisions set forth below. The discount values used are as follows: DISCOUNT VALUES --------------- $/MMB.T.U. ---------- B.T.U./LB/MMBTU ------- BTU/LB. 0.2604 $/LB./MMB.T.U. -------------- /LB./MMBTU ----------- SULFUR 0.1232 ASH 0.0083 MOISTURE 0.0016 (b) Notwithstanding the foregoing, for each specification each month, there shall be no discount if the actual Monthly Weighted Average meets the applicable Discount Point set forth below. However, if the actual Monthly Weighted Average fails to meet such CONTRACT #00-000-000 applicable Discount Point, then the discount shall apply and shall be calculated on the basis of the difference between the actual Monthly Weighted Average AND THE GUARANTEED MONTHLY WEIGHTED AVERAGE pursuant to the methodology shown in Exhibit A attached hereto. CONTRACT #00-000-000 (i) KINDILL 1 RAW WASHED COAL ------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ ----------- Guaranteed Monthly Weighted Average Discount Point ---------------- -------------- SPECIFICATIONS --------------- B.T.U./lb. min. 10,900 10,700 LBS./MMB.T.U. ------------- Ash max. 13.76 15.50 Moisture max. 13.76 15.50 Sulfur max. 5.05 5.35 (ii) KINDILL 1 CLEAN COAL --------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS -------------- B.T.U./lb. BTU/LB min. 11,250 11,050 LBS./MMB.T.U. ------------- Ash 11,000 LB/MMBTU: --------- SULFUR max. 10.25 11.00 Moisture 2.75 3.0 ASH max. 11.75 8.25 9.5 MOISTURE max. 12.25 Sulfur max 3.55 3.90 (iii) WHITE CHURCH 13.75 BLEND COAL ----------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ ---------- Guaranteed Monthly Weighted Average Discount Point ---------------- -------------- SPECIFICATIONS -------------- B.T.U./lb. BTU/LB min. 11,000 10,850 LBS./MMB.T.U. ------------- Ash 11,200 10,900 LB/MMBTU: --------- SULFUR max. 10.45 10.65 Moisture 3.05 3.30 ASH max. 11.82 12.00 Sulfur 9.00 10.50 MOISTURE max. 3.18 3.22 12.00 13.50 CONTRACT #00-000-000 For example, for White Church Washed Coal, if the actual Monthly Weighted Average of sulfur equals 3.3 3.05 lb/MMB.T.U.MMBTU, then the applicable discount would be (3.3 3.05 lb. - 3.18 2.75 lb.) X $0.1232.1232/lb/MMB.T.U. MMBTU = $.01478.03696/MMB.T.U..MMBTU.

PRICE DISCOUNTS. (a) The Base Price is based on coal meeting or exceeding the Guaranteed Monthly Weighted Average specifications as set forth in SECTION 6.1. Quality For each coal quality, quality price discounts shall be applied for each specification each month to reflect failures to meet the Guaranteed Monthly Weighted Averages set forth in SECTION 6.1, as determined pursuant to SECTION 7.2, subject to the provisions set forth below. The discount values used are as follows: DISCOUNT VALUES --------------- $/MMB.T.U. ---------- B.T.U./LB/MMBTU ------------ BTU/LB. 0.2604 $/LB./MMB.T.U. -------------- /LB./MMBTU ------------- SULFUR 0.1232 ASH 0.0083 MOISTURE 0.0016 (b) Notwithstanding the foregoing, for each specification each month, there shall be no discount if the actual Monthly Weighted Average meets the applicable Discount Point set forth below. However, if the actual Monthly Weighted Average fails to meet such applicable CONTRACT #00-000-000 Discount Point, then the discount shall apply and shall be calculated on the basis of the difference between the actual Monthly Weighted Average AND THE GUARANTEED MONTHLY WEIGHTED AVERAGE pursuant to the methodology shown in Exhibit A attached hereto. QUALITY A COAL CONTRACT #00-000-000 (i) KINDILL 1 RAW COAL ------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS 000 Guaranteed Monthly Weighted Average Discount Point ------------------------- --------------------- --------------- B.T.U./lb. min. 10,900 10,700 LBS./MMB.T.U. ------------- Ash max. 13.76 15.50 Moisture max. 13.76 15.50 Sulfur max. 5.05 5.35 (ii) KINDILL 1 CLEAN COAL --------------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS -------------- B.T.U./lb. BTU/LB min. 11,250 11,050 LBS./MMB.T.U. ------------- Ash 10,800 LB/MMBTU: SULFUR max. 10.25 11.00 Moisture 3.244 3.344 ASH max. 11.75 12.25 Sulfur max 3.55 3.90 (iii) WHITE CHURCH 10.67 11.67 MOISTURE max. 9.50 10.50 QUALITY B COAL ----------------- GUARANTEED MONTHLY WEIGHTED AVERAGE DISCOUNT POINT ------------------ -------------- SPECIFICATIONS -------------- B.T.U./lb. Guaranteed Monthly Weighted Average Discount Point ------------------------- --------------------- --------------- BTU/LB min. 11,000 10,850 LBS./MMB.T.U. ------------- Ash 11,250 10,100 LB/MMBTU: SULFUR max. 10.45 10.65 Moisture 3.95 3.95 ASH max. 11.82 12.00 Sulfur 16.00 16.00 MOISTURE max. 3.18 3.22 10.00 11.00 CONTRACT #00-000-000 For example, for White Church Quality A Coal, if the actual Monthly Weighted Average of sulfur equals 3.3 lb/MMB.T.U.3.544 lb./MMBTU, then the applicable discount would be (3.3 3.544 lb. - 3.18 3.244 lb.) X $0.1232.1232/lb/MMB.T.U. MMBTU = $.01478.03696/MMB.T.U..MMBTU.