Exhibit (10) (i) 84
AMENDMENT II TO THE AGREEMENT
FOR THE SALE AND PURCHASE OF COAL
This Amendment ("Amendment"), dated as of December 22, 2000 to that
Agreement ("Agreement") for the sale and purchase of coal made and entered into
as of the 1st day of April 1999 and Amendment I thereto dated as of November 1,
1999 as between Central Xxxxxx Gas & Electric Corporation, (hereinafter referred
to as "Buyer") and Arch Coal Sales Company, Inc., Agent for the Independent
Operating Subsidiaries of Arch Coal, Inc., (hereinafter referred to as
"Seller").
WITNESSETH:
WHEREAS, Article IV of the Agreement provides that beginning July 1,
2000, Buyer and Seller shall commence good faith negotiations with respect to
the price of coal for the next Contract Year; and
WHEREAS, notice was duly given and Buyer and Seller entered into
good faith negotiations; and
WHEREAS, after completion of good faith negotiations, Buyer and
Seller desire to amend the Agreement to provide for the pricing of coal and
certain other Agreement provisions;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
ARTICLE I, (TERM OF AGREEMENT), ARTICLE II, (DELIVERIES), ARTICLE
III, (SPECIFICATIONS & QUALITY & WEIGHTS), ARTICLE IV (PRICE & PAYMENT) AND
ARTICLE V (ADJUSTMENT IN PRICE FOR QUALITY) of the Agreement shall be
respectively amended in their entirety for contract year 2001. The remaining
ARTICLES of the Agreement shall remain in full force and affect. The amended
ARTICLES shall read as follows:
ARTICLE I
TERM OF AGREEMENT
The term of this Agreement shall be extended through calendar year
2002, unless sooner terminated as provided for herein and provided that Dynegy,
Inc. (see below) and Seller negotiate a Master Purchase Agreement (MPA) to cover
purchases and sales hereunder in 2002.
Dynegy Inc. is the announced winner in the Auction of the Danskammer
Generating Station and will take Title thereto once the necessary regulatory
approvals have been secured. It is currently anticipated that those approvals
will come in the 1st quarter of calendar year 2001. At that time Central Xxxxxx
shall assign its rights under the contract to Dynegy in conformance with Article
XXII of the Agreement.
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ARTICLE II
DELIVERIES
Section 1. QUANTITIES/DELIVERY SCHEDULE: The quantities of coal to
be sold and purchased hereunder shall be stated in terms of Cargoes, with each
cargo consisting of XX,XXX Net Tons (+ or - 5% ). The total annual quantity
shall include Firm Cargoes and Option Cargoes. Delivery of all cargoes shall be
made by oceangoing vessels during ten (10) day layday periods scheduled by Buyer
two (2) months prior to the delivery month.
The contract as written and amended provides for coal deliveries to
the Roseton Dock by oceangoing vessels. Amendment II allows Buyer to elect to
purchase the Option Cargoes on the basis of an FOB Mine Loadout Price (See
Article IV, Section 1). If Buyer exercises that option, or if circumstances
necessitate an all rail move to Buyer's Plant, Buyer and Seller will negotiate
an amendment covering the terms and conditions which will govern said movements.
If Buyer elects the FOB Mine Loadout price, the same two month scheduling notice
is required.
Subject to Article IV, PRICE AND PAYMENT, the annual cargoes are shown below;
1st Cargo
Year Firm Cargoes Option Cargoes Loaded By
---- ------------ -------------- ---------
2001 X X March 31
2002 X X March 31
OPTION CARGOES: Every third cargo each year will be an Option Cargo.
Option Cargoes shall be subject to Buyer's request for same in conformance with
the scheduling provisions contained herein. Option cargoes will be priced at the
Base Price noted in Article IV, Section I. Buyer may elect to purchase only the
Option Cargoes at the FOB Mine Loadout price provided in Article IV.
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Upon Buyer's written request, Seller can elect to skip an Option
Cargo delivery and replace it with the delivery of a Firm Cargo obligation. The
quantity represented by the skipped cargo (i.e. XX,XXX tons) will be banked in a
tonnage account. From time to time, Buyer will provide Seller the opportunity to
ship all or a portion of the banked tons towards its coal requirements at the
then current Base Price or some other mutually agreed price. The banked tonnage
account will be zeroed out, with no remaining obligations thereto for either
Buyer or Seller, upon an event as provided herein that causes the termination of
this agreement.
For water-borne deliveries, the Buyer will provide to Seller the ten
(10) day delivery window for the Vessel. Ten (10) days prior to the scheduled
arrival, the vessel's ETA will be reduced to a five (5) day window by the
Seller.
Buyer will be scheduling and receiving other deliveries of coal and
oil during the Contract Term. The Roseton Dock which is used for both oil and
coal deliveries can handle only one vessel at a time. Therefore, if Seller's
vessel arrives outside of its five (5) day delivery window and within the time
frame of another scheduled fuel delivery, Seller will hold Buyer harmless as to
any and all demurrage charges associated with either delivery, for those charges
which are the direct result of Seller's vessel arrival outside of its allotted
window.
Section 1.2 Limitations on Quantities: Not withstanding any of the
above, Buyer will not be obligated to purchase coal from Seller under this
Agreement if Buyer is unable to utilize such coal at its Danskammer Plant
because of Economic or Environmental reasons.
Section 2. PASSAGE OF TITLE: The coal purchased hereunder shall be
delivered solely by water or combination of rail and water to Buyer (basis DES
Roseton Dock - Incoterms 1990). Title to and risk of loss of the coal supplied
hereunder shall pass to Buyer as coal passes from the vessel's conveyor into the
receival xxxxxx at the Roseton Dock.
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Section 3. QUALITY NOTIFICATION: The Parties recognize the Buyer's
need to know the quality of the coal prior to receipt of the shipment at the
Danskammer Plant and notice thereof shall be provided to Buyer in accordance
with Article VI hereof.
Section 4. Foreign Cargoes: In the case of any foreign cargoes
offered by Seller and accepted by Buyer, the Seller shall submit, two days prior
to loading, a written loading plan which lists the source of the coal
inventories at the load facility, the average (or projected) quality of each
pile, and the quantity of each pile to be loaded. The loading plan should
include a brief description of the method to be used to blend the coals into a
homogenous mixture prior to loading. The Buyer or Buyer's agent shall have
access to the Seller's facilities to inspect the coal inventory and loading
equipment and shall have the option of collecting and analyzing samples of the
individual piles prior to loading. The coal blend shall be sampled in 5,000-ton
sub-lots as it is loaded and analyzed expeditiously by a mutually agreed upon
independent coal testing laboratory. The Seller shall notify the Buyer by
telephone, telegram, or TWX of the average "as received" analytical results of
the shipment within 48 hours of the load date. The additional results (AFT, HGI,
Ultimate Analysis and Mineral Ash Analysis) of the composite sample shall be
reported within 72 hours.
Section 5. SHIPPING NOTICE: For each shipment of coal hereunder,
Seller shall promptly mail or courier to Buyer's Danskammer Plant and to the
Roseton Administrative Offices, Central Xxxxxx Gas & Electric Corporation,
000-000 Xxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, a shipping notice showing weight,
type of car and number of each railway car contained in the shipment, shipping
date and origin mine; or in the case of water-borne deliveries the B/L date,
total B/L weights, name of Vessel and ETA Roseton Dock. Both rail and water
detail will be provided in the case of rail/water shipments.
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Section 6. DELIVERY BY RAIL/WATER: This Agreement is based on the
loading of railcars at Seller's Operations and movement of those cars to a port
for loading on a vessel and ultimate delivery DES at the Roseton Dock. The
Seller is responsible for both the rail and vessel movements. Coal deliveries to
the Roseton Dock can only be made in Belt Self Unloading Vessels that meet the
Roseton Dock and Xxxxxx River limitations as described in Attachment I herein.
However, the Seller and its Agents are responsible for the safe passage of
Vessels under their control in all waters and any limitations thereon, whether
or not they are included in Attachment I. Should the loss of either of these
transportation components prevent Seller from making a scheduled delivery
forcing the Buyer to replace the lost tonnage, then Buyer will not be required
to makeup the replaced tonnage.
Buyer will provide a safe berth, free of wharfage or dockage
charges, to which Vessels may proceed and from which they may depart, and where
they may always lie safely afloat. With assistance as necessary from Buyer's
dockside personnel (Buyer will provide shore-side labor for line handling during
docking/undocking procedures), it shall be the responsibility of Seller to
secure the Vessel to Buyer's berth prior to such discharging of coal. Vessels
can be berthed/deberthed any time during the day or night and docking/undocking
will only be constrained through directions given by the docking/undocking pilot
if such a pilot is required.
If upon arrival of the Vessel, the discharge berth at Roseton Dock
is open and ready to receive the Vessel for immediate docking, Seller's Vessel
will tender its notice of readiness to start discharging coal provided that the
Vessel is in all respects ready to start discharging coal from its conveyor boom
into Buyer's dockside xxxxxx. Buyer will receive the coal from the tip of the
Vessel's conveyor at an average minimum rate of X,XXX short tons/hour and a
maximum rate not to exceed X,XXX short tons/hour. Buyer's belt scale results
will be used as documentation of the Vessel's unloading rate. In addition,
Seller will be responsible for demurrage charged by other vessels held out due
to Seller's Vessel"s inability to offload at an average minimum rate of X,XXX
short tons per hour and/or by Seller's Vessel arrival outside of its five (5)
day delivery window.
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Any delays experienced shore-side preventing the Vessel from
achieving its X,XXX short tons/hour average minimum rate will count as laytime.
Allowed laytime is defined as follows:
Cargo Size in Short Tons = allowed hours
------------------------
X,XXX Short Tons/Hour
If upon arrival of the Vessel, the discharge berth at Roseton Dock
is not available for immediate docking, Seller's Vessel will tender its notice
of readiness WIBON, WIFPON, WCCON from the closest practical safe anchorage and
laytime will start counting provided the Vessel arrives within Seller's five (5)
day delivery window and the Roseton Dock is occupied. Subsequent shifting time
from anchorage to berth will not count as laytime.
Section 7. IMPORTER OF RECORD: For substitute imported coal, Seller
will act as importer of record on behalf of Buyer. Usual and customary costs
incurred in clearing cargo will be reimbursed by Buyer to Seller as per a
statement from the Customs Broker.
Section 8. LIABILITY FOR CERTAIN SYSTEM DAMAGE: If Buyer's coal
unloading system or equipment is damaged or forced to shut down as the result of
receiving foreign or oversized material from the Vessel, then the Seller shall
be liable for any damage and/or delays associated with the unauthorized delivery
of this extraneous material.
Section 9. DEMURRAGE AT DISCHARGE BERTH: At the end of each calendar
year of the contract Term, Buyer and Seller will reconcile the deliveries for
the year to determine if Buyer has failed to receive all the contract coal at
the average rate as specified herein. If Buyer has used more time to receive the
annual tonnage than allowed, Buyer will reimburse Seller for excess laytime used
at the rate of USD $XX,XXX for each 24 hours, fractions prorata.
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ARTICLE III
SPECIFICATIONS & QUALITY & WEIGHTS
Section 1. ORIGIN: The Primary Source of coal for deliveries
hereunder shall be from the Xxxxx Xxxxx Operations and such coal shall meet the
specifications herein. Coals from other sources shall not be shipped without the
prior written approval of Buyer.
Section 2. AS RECEIVED QUALITY SPECIFICATIONS: The coal delivered
hereunder shall conform to the following Typical Specifications on an "as
received" basis determined on a per Vessel basis. The quality of the coal
delivered by Seller shall be determined in accordance with Article VI.
TYPICAL MINIMUM MAXIMUM ASTM METHOD
------- ------- ------- -----------
As Received:
Moisture % X XX D3173
Volatiles % XX XX XX D3175
Fixed Carbon % XX XX XX D3172
Ash % X.X -- X.X D3174
BTU/LB XX,XXX XX,XXX -- D3286
Sulphur % X.XX X.XX X.XX D3177/4239
SO2 (LBS./MMBTU) X.XX -- X.X Calculated
Grind (HGI) XX XX (1) XX D409-85
Ash Fusion (Reducing)
(I.D., Deg. F) X,XXX X,XXX -- D1587
Coal Fines:
(A) 1/4" Round Hole -- -- XX% D4749
(B) 35 Mesh U.S. Standard -- -- XX% D4749
(1) SUBJECT TO APPROVAL BY BUYER.
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THIS COAL SHALL BE FREE OF EXTRANEOUS MATERIAL AND SHALL HAVE A MAXIMUM TOP SIZE
OF TWO INCHES.
(A) Coal defined as zero times one quarter inch round hole.
(B) Coal fines defined as zero by 0.5 mm (35 mesh U.S. Standard sieve
or 32 mesh Xxxxx xxxxx).
Section 3. BUYER'S REMEDIES RELATED TO QUALITY SPECIFICATIONS: In
lieu of any other remedies related to Seller's failure to meet the quality
specifications provided for in Section 2 above, except for the price adjustments
for quality provided for in Article V herein, Buyer shall have the rights and
remedies described in this Section 3 upon Seller's failure to deliver coal in
accordance with the specifications set forth in Section 2 of this Article III.
Buyer's ability to use the coal being dependent on the
coal meeting the specifications set forth above, it is agreed that Buyer shall
have the right to reject any and all shipments which fail to meet any of the
individual shipment as received rejection limits shown below:
INDIVIDUAL SHIPMENT REJECTION LIMITS (AS RECEIVED)
--------------------------------------------------
Sulphur (By Weight) X.X% Maximum
Volatiles XX% Minimum
Ash % X% Maximum
Ash Fusion (I.D. - Degrees F) X,XXX Minimum(1)
Grind (HGI) XX Minimum
Gross Calorific Value (BTU/LB) XX,XXX Minimum
SO2/Million BTU X.X LBS. Maximum
(1) LOWER VALUE SUBJECT TO APPROVAL BY BUYER.
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Seller shall pay all freight, diversion, demurrage, testing and
other expenses in connection with any such rejected shipment, or shipments found
to be nonconforming, unless such shipment is accepted by Buyer. Furthermore,
Seller certifies that it will not make any shipment shown by sampling and
analysis (as provided in Article VI) to exceed the individual shipment rejection
limits.
Section 4. SELLER'S DUTY OF CARE: Seller shall, at all times
exercise reasonable care and diligence in its efforts to ship to Buyer coal
which conforms to the specifications as set forth above in Section 2. Nothing in
this Article III shall be construed to relieve Seller of its obligation to
conduct its mining and operations in a competent manner, consistent with good
industry practices, so as to produce coal which will meet the specifications as
set forth in Section 2 above.
Section 5. WEIGHTS: For rail/water deliveries, the Seller shall
submit to Buyer the certified rail weights provided by the origin carrier within
five (5) working days after the certified weights become available.
For water only deliveries, the weight of coal sold hereunder shall
be determined by an Independent Marine Survey(s) of the Vessel at the Load Port
or by Independent Marine Survey(s) at Buyer's Discharge Port if Seller's Vessel
has multiple Discharge Ports. The Buyer, Seller or their Agents reserve the
right to witness any or all Marine Surveys.
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ARTICLE IV
PRICE AND PAYMENT
Section 1. PRICE: The Base Price of the Firm cargoes of coal sold
hereunder is fixed at $ XX.XX per net ton DES Roseton Dock. Option Cargoes will
also be priced at $ XX.XX per net ton DES Roseton Dock or in accordance with
ARTICLE II, Section 1 if deferred through the Banked tonnage mechanism. The FOB
mine Loadout Base Price of coal sold hereunder is fixed at $ XX.XX per net ton.
The above pricing is for contract year 2001 only.
Section 2. PRICE REOPENER: On or before July 1st 2001, Buyer and
Seller will enter into negotiations to fix the Base Price for coal delivered
hereunder for the ensuing year. Unless otherwise agreed, this Agreement will
terminate on December 31, 2001 if negotiations for the following year have not
been completed by September 1st.
SUBMISSION OF ANALYSIS: In addition to Seller's notifications
provided for in Article II, Section 3, Seller shall submit to Buyer the
analytical data on said shipments from the Operations as obtained by the
Independent Laboratory for each shipment within five days after each shipment.
Section 3. INVOICE: An invoice for any adjustments for quality as
hereinafter defined, and all coal shipped from the Operations based on weights
determined in accordance with Article III Section 5 will be submitted by the
Seller to the Buyer. The coal shipped will be invoiced at the Price as defined
in ARTICLE IV, Section 1.
Section 4. TAXES: All taxes due on cargo in U.S.A. upon transfer of
title per Incoterms (1990) are for Buyer's account.
Section 5. VESSEL COSTS: All usual and customary Vessel costs,
including but not limited to docking, are for the account of the Seller (i.e.,
pilots, tugs).
Section 6. PAYMENT: Buyer shall make payment to Seller within thirty
(30) calendar days from vessel Xxxx of Lading Date or train release date if sale
is FOB mine Loadout. There shall be no discount for early payment. Payments due
on a Saturday shall be made on the prior Friday and those due on a Sunday shall
be made on the following Monday. Payments due on a Holiday shall be made on the
following week day.
Payment shall be made by wire transfer as directed by Seller upon
written notice to Buyer.
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ARTICLE V
ADJUSTMENT IN PRICE FOR QUALITY
Section 1. BTU VALUE (GROSS CALORIFIC VALUE AS RECEIVED BASIS -
BTU/LB): The Price to be paid to Seller by Buyer is based upon coal with XX,XXX
BTU/LB heat content (BTU Value) for each net ton of coal in each shipment. The
BTU Value of the coal sold hereunder may vary, and the Price for such coal shall
be adjusted to compensate for variations in BTU Value, as described below.
Section 2. ADJUSTMENT FOR BTU VALUE: If the BTU Value of the coal
shipment is between XX,XXX BTU/LB and XX,XXX BTU/LB (inclusive), there will be
no adjustment for BTU Value variation. If the BTU Value is less than XX,XXX
BTU/LB or greater than XX,XXX BTU/LB, the Price for a shipment shall be
adjusted, based upon variations from the XX,XXX BTU/LB BTU Value, as follows:
[a] For a coal shipment with a BTU Value greater than XX,XXX BTU/LB,
a premium shall be paid by Buyer to Seller at the rate of $X.XX per 100 BTU/LB,
fractions pro rata above XX,XXX BTU/LB;
[b] For a coal shipment with a BTU Value less than XX,XXX BTU/LB but
greater than XX,XXX BTU/LB, a penalty shall be deducted from the Price at the
rate of $X.XX per 100 BTU/LB, fractions pro rata below XX,XXX BTU/LB;
[c] For a coal shipment with a BTU Value less than XX,XXX BTU/LB but
greater than XX,XXX BTU/LB, a penalty shall be deducted from the Price at the
rate of $ .XX per 100 BTU/LB, fractions pro rata below XX,XXX BTU/LB.
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Section 3. ADJUSTMENTS FOR ASH VALUE: The Price to be paid to Seller
by Buyer is based upon coal with an ash content (Ash Value) of XXX percent (X%)
by weight of the "as received" analysis of the coal. If the Ash Value is between
X.XX% and X.XX% there will be no adjustment for Ash Value. If the Ash Value is
less than X.XX% then a premium of $.XX per ton shall be paid to Seller for each
X.X% Ash Value variation below X.X%. If the Ash Value is greater than X.XX% but
equal to or less than X% then a penalty of $.XX per ton shall be deducted from
the Price for each X.X% Ash Value variation in excess of X.X%. The maximum
premium/penalty shall be $ X.XX per ton.
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IN WITNESS WHEREOF, each Party hereto has caused this
Agreement to be executed in its behalf by its proper officer thereunder duly
authorized, all as of the day and year first above written.
BUYER: CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
BY /s/ XXXXXX X. UPRIGHT
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Xxxxxx X. Upright
ITS Senior Vice President - Regulatory Affairs, Financial Planning And
Accounting
SELLER: ARCH COAL SALES COMPANY, INC.
BY /s/ XXXXX X. XXXXXXXXX
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ITS REGIONAL VICE PRESIDENT
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