EXHIBIT 10.76
CONTRACT #00-000-000
COAL SUPPLY AGREEMENT
This is a coal supply agreement (the "Agreement") dated July 1, 1997
between LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky corporation, 000 Xxxx
Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Buyer") and KINDILL MINING, INC.,
an Indiana corporation, 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000 ("Seller").
The parties hereto agree as follows:
SECTION 1. GENERAL.
Seller will sell to Buyer and Buyer will buy from Seller steam coal
under all the terms and conditions of this Agreement.
SECTION 2. TERM.
The term of this Agreement shall commence on July 1, 1997 and shall
continue through December 31, 2006.
SECTION 3. QUANTITY.
SECTION 3.1 BASE QUANTITY. Seller shall sell and deliver and Buyer
shall purchase and accept delivery of the following annual base quantity of
coal ("Base Quantity"):
YEAR BASE QUANTITY (TONS)
1997 150,000
1998 900,000
1999 900,000
2000 900,000
2001 900,000
2002 900,000
2003 900,000
2004 900,000
CONTRACT #00-000-000
YEAR BASE QUANTITY (TONS)
2005 900,000
2006 900,000
SECTION 3.2 DELIVERY SCHEDULE. By November 1 of each year except 1997,
Buyer and Seller shall mutually agree and shall specify in writing the
quantities to be delivered in each month of the following year. For 1997, Buyer
and Seller shall mutually agree and shall specify in writing such delivery
schedule within ten (10) business days after this Agreement is fully executed.
Such quantities shall be shipped in accordance with such schedule. Time is of
the essence with respect to the schedule so established; and failure by Seller
to deliver in a timely fashion shall constitute a material breach within the
meaning of SECTION 16 of this Agreement.
SECTION 3.3 RIGHT OF FIRST REFUSAL.
(a) During the term of this Agreement, Buyer shall have the right of
first refusal to purchase any additional tonnage which Seller is not
contractually committed to sell to Buyer or a third party as of July 1, 1997
and which becomes available from the following sources (the "Additional
Tonnage"): (i) the Coal Property (as defined in SECTION 4.1); and (ii)
Indiana 5 and 6 seams from the South Xxxxxx Property, Pike County, Indiana.
Seller shall notify Buyer by the fifteenth of each month of the expected
Additional Tonnage for the succeeding three months. Included in this notice
Seller shall quote a price, coal quality and schedule for the Additional
Tonnage. If the aggregate price of the Additional Tonnage does not exceed one
million dollars ($1,000,000), Buyer shall, within two working days of
receiving the notice, give Seller notice of its intent to purchase or refusal
to purchase the Additional Tonnage. If the aggregate price of the
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CONTRACT #00-000-000
Additional Tonnage exceeds one million dollars ($1,000,000), Buyer shall,
within seven working days of receiving the notice, give Seller notice of its
intent to purchase or refusal to purchase the Additional Tonnage. Any
Additional Tonnage which Buyer exercises its right to purchase under this
SECTION 3.3 hereinafter shall be referred to as "Right of First Refusal
Tonnage."
(b) If Buyer refuses to purchase the Additional Tonnage or does not
accept the purchase of the Additional Tonnage within the aforementioned time
period, Seller shall be free to sell the Additional Tonnage to a third party at
an equivalent quality and at a price no lower than that quoted to Buyer. If
Seller obtains an offer from a third party to purchase at an equivalent quality
and at a lower price (or at a higher quality and at the same price) than that
quoted to Buyer which is acceptable to Seller, then Seller must offer Buyer the
new sale price or quality terms pursuant to the provisions of SECTION 3.3(a)
above. Within five working days after Seller enters into any contract with a
third party to sell the Additional Tonnage pursuant to this SECTION 3.3, Seller
shall give written confirmation to Buyer of the sale. Buyer shall have the right
to audit Seller's records to verify the sale and price of any such transactions
subject to appropriate confidentiality restrictions.
SECTION 3.4 OPTION TO INCREASE QUANTITY. In addition to Buyer's right of
first refusal set forth in SECTION 3.3, for each year of the agreement, Buyer
shall have the right to increase the quantity to be delivered hereunder by up to
an additional 400,000 tons. Buyer shall exercise such option by giving to Seller
notice stating Buyer's exercise of the option and specifying the increased
tonnage sixty (60) days prior to the end of each quarter; provided, however, the
maximum tonnage that can be nominated for delivery during the immediately
following quarter shall not be more than 100,000 tons. Buyer's exercise of the
option in any given quarter shall not obligate
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CONTRACT #00-000-000
Buyer to take delivery of the increased quantity in any following quarter or
any following year, and Buyer's failure to exercise the option in 1998 will
not negate Buyer's right to exercise the option in 1999 or thereafter. Any
additional tonnage which Buyer exercises its right to purchase under this
SECTION 3.4 hereinafter shall be referred to as "Option Tonnage" and shall be
subject to all the terms and conditions hereof (including price).
SECTION 4. SOURCE.
SECTION 4.1 SOURCE. The coal sold hereunder shall be supplied from
the following mines and geological seams (collectively, the "Coal Property"):
(i) from July 1, 1997 through December 31, 1997, Indiana 5 and 6 seams from
the Kindill 1 mine property, Pike County, Indiana; and (ii) from no later
than December 1, 1997 through December 31, 2006, Indiana 5 and 6 seams from
the Kindill 2 mine property (White Church Property), Pike County, Indiana.
Seller shall have the right to add coal reserves and/or add or expand
existing or new mining operations to the Coal Property during the term of
this Agreement so long as such mining operation or coal reserves are under
lease, ownership, or are managed or operated by Seller or one of its
affiliated companies. Seller shall notify Buyer at least 30 days in advance
of any election to make such changes to the Coal Property and update Seller's
mining plan as required under SECTION 4.4. Buyer shall have the right to
review and approve the changes to the Coal Property. Buyer's approval shall
not be unreasonably withheld provided the coal meets the quality and delivery
requirements of this Agreement. The price of coal shall not be changed from
that provided under SECTION 8 of this Agreement as a result of changes to the
Coal Property as provided hereunder, except that the provisions of SECTION 5
concerning deliveries at locations other than the Delivery Point shall apply.
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CONTRACT #00-000-000
SECTION 4.2 ASSURANCE OF OPERATION AND RESERVES. Seller represents
and warrants that the Coal Property contains economically recoverable coal of
a quality and in quantities which will be sufficient to satisfy all the
requirements of this Agreement. Seller agrees and warrants that it will have
at the Coal Property adequate machinery, equipment and other facilities to
produce, prepare and deliver coal in the quantity and of the quality required
by this Agreement. Seller further agrees to operate and maintain such
machinery, equipment and facilities in accordance with good mining practices
so as to efficiently and economically produce, prepare and deliver such coal.
Seller agrees that Buyer is not providing any capital for the purchase of
such machinery, equipment, facilities and/or Coal Property and that Seller
shall operate and maintain same at its sole expense, including all required
permits and licenses.
SECTION 4.3 NON-DIVERSION OF COAL. Seller agrees and warrants that it
will not, without Buyer's express prior written consent, use or sell coal
from the Coal Property in a way that will reduce the economically recoverable
balance of coal in the Coal Property to an amount less than that required to
be supplied to Buyer hereunder.
SECTION 4.4 SELLER'S PREPARATION OF MINING PLAN. Seller shall have
prepared a complete mining plan for the Coal Property with adequate
supporting data to demonstrate Seller's capability to have coal produced from
the Coal Property which meets the quantity and quality specifications of this
Agreement. Seller shall provide Buyer with two copies of such mining plan
which shall contain maps and a narrative depicting areas and seams of coal to
be mined and shall include (but not be limited to) the following information:
(i) reserves from which the coal will be produced during the term hereof and
the mining sequence, by year (or such other time intervals as mutually
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CONTRACT #00-000-000
agreed) during the term of this Agreement, from which coal will be mined;
(ii) methods of mining such coal; (iii) methods of transporting and, in the
event a preparation plant is constructed at the Coal Property, methods of
washing coal to insure compliance with the quantity and quality requirements
of this Agreement including a description and flow sheet of the preparation
plant; (iv) quality data plotted on the maps depicting data points and
isolines by ash, sulfur, and B.T.U.; (v) quality control plans including
sampling and analysis procedures to insure individual shipments meet quality
specifications; and (vi) Seller's aggregate commitments to others to sell
coal from the Coal Property during the term of this Agreement. Such complete
mining plan shall be delivered to Buyer on or before December 1, 1997.
Buyer's receipt of the mining plan or other information or data
furnished by Seller shall not in any way relieve Seller of any of Seller's
obligations or responsibilities under this Agreement; nor shall such review
be construed as constituting an approval of Seller's proposed mining plan as
prudent mining practices, such review by Buyer being limited solely to a
determination, for Buyer's purposes only, of Seller's capability to supply
coal on a long-term basis to fulfill Buyer's requirements of a dependable
coal supply.
Seller shall annually provide Buyer with a mining plan update
("Update") showing progress to date, conformity to original mining plan, and
then known changes in reserve data and planned changes in mining progression,
plans or procedures. The update shall be submitted annually on or before
December 1 of each year during the term of this Agreement.
SECTION 4.5 SUBSTITUTE COAL. Notwithstanding the above
representations and warranties, in the event that Seller is unable to produce
or obtain coal from the Coal Property in the quantity and of
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CONTRACT #00-000-000
the quality required by this Agreement, then Seller will have the option to
supply substitute coal from other facilities and mines under all the terms
and conditions of this Agreement including, but not limited to, the price
provisions of SECTION 8, the quality specifications of SECTION 6.1, and the
provisions of SECTION 5 concerning reimbursement to Buyer for increased
transportation costs. Seller's delivery of coal not produced from the Coal
Property without having received the express written consent of Buyer shall
constitute a material breach of this Agreement.
SECTION 5. DELIVERY.
SECTION 5.1 RAIL OR TRUCK DELIVERY. The coal shall be delivered to
Buyer at the following locations (collectively, the "Delivery Point"): (i)
between July 1, 1997 and December 31, 1997, F.O.B. railcar at the rail
loading facility located at Kindill 1, near Enosville, Indiana on the Algers,
Winslow, and Western / Norfolk Southern Railway; and (ii) beginning no later
than December 1, 1997, F.O.B. railcar or F.O.B. truck at the Kindill 2
loadout at Algers, Indiana, as specified from time to time by Buyer. Seller
may deliver the coal at a location different from the Delivery Point,
provided, however, that Seller shall reimburse Buyer for any resulting
increases in the cost of transporting the coal to Buyer's generating
stations. Any resulting savings in such transportation costs shall be shared
equally between Buyer and Seller.
Title to and risk of loss respecting coal will pass to Buyer and the
coal will be considered to be delivered when it is loaded into the railcars
at the rail loading facility or trucks, as the case may be. Buyer or its
contractor shall furnish suitable railcars or trucks in accordance with a
delivery schedule provided by Buyer to Seller. Seller shall be responsible
for and pay the cost of repairs for any damages caused by Seller to railcars
or trucks owned or leased by Buyer while
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CONTRACT #00-000-000
such railcars or trucks are in Seller's control or custody. Seller shall
comply with the applicable provisions of Buyer's rail or truck contractor's
tariff.
SECTION 5.2 FREEZE CONDITIONING. At Buyer's request, Seller shall
treat (or have treated) any shipment of coal hereunder with a freeze
conditioning agent approved by Buyer in order to maintain coal handling
characteristics during shipment. If requested by Buyer, Seller shall also
treat (or have treated) any railcars specified by Buyer with a side release
agent approved by Buyer. The price for each such requested chemical treatment
shall be an amount equal to Seller's cost of materials applied on a per
gallon basis for each application of freeze conditioning agent or side
release agent, as the case may be. Seller shall invoice Buyer for all such
treatment which occurred in a calendar month by the fifteenth of the
following month; and payment shall be mailed by the twenty-fifth of such
following month or within ten days after receipt of Seller's invoice,
whichever is later.
SECTION 6. QUALITY.
SECTION 6.1 SPECIFICATIONS.
(a) The coal delivered hereunder shall conform to the following
specifications on an "as received" basis:
GUARANTEED MONTHLY REJECTION LIMITS
SPECIFICATIONS WEIGHTED AVERAGE (PER SHIPMENT)
----------------------------------------------------------------------------------------------
CHLORINE max. 0.05 lbs/MMB.T.U. GREATER THAN 0.10
FLUORINE max. 0.006 lbs/MMBT.U. GREATER THAN 0.01
NITROGEN max. 1.20 lbs/MMBT.U. GREATER THAN 1.50
ASH/SULFUR RATIO min. 2.5:1 LESS THAN 2.5:1
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CONTRACT #00-000-000
GUARANTEED MONTHLY REJECTION LIMITS
SPECIFICATIONS WEIGHTED AVERAGE (PER SHIPMENT)
----------------------------------------------------------------------------------------------
SIZE (3" x 0"):
Top size (inches)* max. 3"x 0" GREATER THAN 3"x 0"
Fines (% by wgt)
Passing 1/4" screen max. 45% GREATER THAN 55%
% BY WEIGHT:
------------
VOLATILE max. 38.0% GREATER THAN 40.0%
VOLATILE min. 30.0% LESS THAN 29.0%
FIXED CARBON max. 46.0% GREATER THAN 48.0%
FIXED CARBON min. 35.0% LESS THAN 30.0%
GRINDABILITY (HGI) min. 52 LESS THAN 50
BASE ACID RATIO (B/A) max. .50 GREATER THAN .60
SLAGGING FACTOR** max. 1.90 GREATER THAN 2.10
FOULING FACTOR*** max. 0.50 GREATER THAN 1.00
ASH FUSION TEMPERATURE (DEG. F) (ASTM D1857)
--------------------------------------------
REDUCING ATMOSPHERE
-------------------
Initial Deformation min. 1950 min. 1900
Softening (H=W) min. 2005 min. 1975
Softening (H=1/2W) min. 2050 min. 2000
Fluid min. 2135 min. 2100
OXIDIZING ATMOSPHERE
--------------------
Initial Deformation min. 2300 min. 2200
Softening (H=W) min. 2330 min. 2280
Softening (H=1/2W) min. 2425 min. 2300
Fluid min. 2490 min. 2375
* All the coal will be of such size that it will pass through a
screen having circular perforations three (3) inches in diameter, but shall
not contain more than forty five percent (45%) by weight of coal that will
pass through a screen having circular perforations one-quarter (1/4) of an
inch in diameter.
** Slagging Factor (R(s))=(B/A) x (Percent Sulfur by WeightDry)
*** Fouling Factor (R(f))=(B/A) x (Percent Na(2)0 by WeightDry)
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CONTRACT #00-000-000
The Base Acid Ratio (B/A) is herein defined as:
BASE ACID RATIO (B/A) = (Fe(2)0(3) + Ca0 + Mg0 + Na(2)0 + K(2)0)
----------------------------------------
(Si0(2) + A1(2)0(3) + T10(2))
Note: As used herein GREATER THAN means greater than:
LESS THAN means less than.
(b) In addition to the specifications set forth in SECTION 6.1(a),
the coal delivered hereunder from the Kindill 1 mine property on a raw basis
("Kindill 1 Raw Coal") shall conform on an "as received" basis to the
following specifications:
GUARANTEED MONTHLY REJECTION LIMITS
SPECIFICATIONS WEIGHTED AVERAGE (PER SHIPMENT)
-------------- ------------------ -----------------
B.T.U./lb. min. 10,900 LESS THAN 10,600
LBS./MMB.T.U.
-------------
Ash max. 13.76 GREATER THAN 16.00
Moisture max. 13.76 GREATER THAN 16.00
Sulfur max. 5.05 GREATER THAN 5.50
(c) In addition to the specifications set forth in SECTION 6.1(a),
the coal delivered hereunder from the Kindill 1 mine property on a clean
basis ("Kindill 1 Clean Coal") shall conform on an "as received" basis to the
following specifications:
GUARANTEED MONTHLY REJECTION LIMITS
SPECIFICATIONS WEIGHTED AVERAGE (PER SHIPMENT)
-------------- ------------------ -----------------
B.T.U./lb. min. 11,250 LESS THAN 10,950
LBS./MMB.T.U.
-------------
Ash max. 10.25 GREATER THAN 11.50
Moisture max. 11.75 GREATER THAN 12.75
Sulfur max. 3.55 GREATER THAN 4.00
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CONTRACT #00-000-000
(d) In addition to the specifications set forth in SECTION 6.1(a),
the coal delivered hereunder from the Kindill 2 mine property (White Church
Property) ("White Church Coal") shall conform on an "as received" basis to
the following specifications:
GUARANTEED MONTHLY REJECTION LIMITS
SPECIFICATIONS WEIGHTED AVERAGE (PER SHIPMENT)
-------------- ------------------ -----------------
B.T.U./lb. min. 11,000 LESS THAN 10,750
LBS./MMB.T.U.
-------------
Ash max. 10.45 GREATER THAN 10.75
Moisture max. 11.82 GREATER THAN 12.50
Sulfur max. 3.18 GREATER THAN 3.27
(e) During 1997, Seller shall deliver either Kindill 1 Raw Coal or
Kindill 1 Clean Coal pursuant to Buyer's nomination. Buyer may change the
nominated qualities from time to time by giving to Seller at least thirty
(30) days advance notice of such change.
SECTION 6.2 DEFINITION OF "SHIPMENT". As used herein, a "shipment"
shall mean one barge load, a barge lot load, one unit trainload, or the
aggregate of the truckloads that are unloaded on any one day, in accordance
with Buyer's sampling and analyzing practices.
SECTION 6.3 REJECTION. Buyer has the right, but not the obligation,
to reject any shipment which fail(s) to conform to the Rejection Limits set
forth in SECTION 6.1 or contains extraneous materials. Buyer must reject such
coal within seventy-two (72) hours of receipt of the coal analysis provided
for in SECTION 7.2 or such right to reject is waived. In the event Buyer
rejects such non-conforming coal, title to and risk of loss of the coal shall
be considered to have never passed to Buyer and Buyer shall return the coal
to Seller or, at Seller's request, divert such coal to Seller's designee, all
at Seller's cost and risk. Seller shall replace the rejected coal within five
(5)
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CONTRACT #00-000-000
working days from notice of rejection with coal conforming to the Rejection
Limits set forth in SECTION 6.1. If Seller fails to replace the rejected coal
within such five (5) working day period or the replacement coal is rightfully
rejected, Buyer may purchase coal from another source in order to replace the
rejected coal. Seller shall reimburse Buyer for (i) any amount by which the
actual price plus transportation costs to Buyer of such coal purchased from
another source exceed the price of such coal under this Agreement plus
transportation costs to Buyer from the Delivery Point; and (ii) any and all
transportation, storage, handling, or other expenses that have been incurred
by Buyer for rightfully rejected coal. This remedy is in addition to all of
Buyer's other remedies under this Agreement and under applicable law and in
equity for Seller's breach.
If Buyer fails to reject a shipment of non-conforming coal which it
had the right to reject for failure to meet any or all of the Rejection
Limits set forth in SECTION 6.1 or because such shipment contained extraneous
materials, then such non-conforming coal shall be deemed accepted by Buyer;
however, the quantity Seller is obligated to sell to Buyer under the
Agreement may or may not be reduced by the amount of each such non-conforming
shipment at Buyer's sole option and the shipment shall nevertheless be
considered "rejectable" under SECTION 6.4. Further, for shipments containing
extraneous materials, which include, but are not limited to, slate, rock,
wood, corn husks, mining materials, metal, steel, etc., the estimated weight
of such materials shall be deducted from the weight of that shipment.
SECTION 6.4 SUSPENSION AND TERMINATION. If the coal sold hereunder
fails to meet two or more of the Guaranteed Monthly Weighted Averages set
forth in SECTION 6.1 for any two (2) consecutive months in a six (6) month
period, or if nine (9) barge shipments or nine (9) truck shipments in a 30
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CONTRACT #00-000-000
day period are rejectable by Buyer, or if Buyer receives at generating
station(s) two (2) rail shipments which are rejectable in any 30 day period,
Buyer may upon notice confirmed in writing and sent to Seller by certified
mail, suspend future shipments except shipments already loaded into barges
and/or railcars. Seller shall, within 10 days, provide Buyer with reasonable
assurances that subsequent monthly deliveries of coal shall meet or exceed
the Guaranteed Monthly Weighted Averages set forth in SECTION 6.1 and that
the source will exceed the rejection limits set forth in SECTION 6.1. If
Seller fails to provide such assurances within said 10 day period, Buyer may
terminate this Agreement by giving written notice of such termination at the
end of the 10 day period. A waiver of this right for any one period by Buyer
shall not constitute a waiver for subsequent periods. If Seller provides such
assurances to Buyer's reasonable satisfaction, shipments hereunder shall
resume and any tonnage deficiencies resulting from suspension may be made up
at Buyer's sole option. Buyer shall not unreasonably withhold its acceptance
of Seller's assurances, or delay the resumption of shipment. If Seller, after
such assurances, fails to meet any of the Guaranteed Monthly Weighted
Averages for any one (1) month within the next six (6) months or if three (3)
barge shipments or three (3) truck shipments or one (1) rail shipment are
rejectable within any one (1) month during such six (6) month period, then
Buyer may terminate this Agreement and exercise all its other rights and
remedies under applicable law and in equity for Seller's breach.
SECTION 7. WEIGHTS, SAMPLING AND ANALYSIS.
SECTION 7.1 WEIGHTS. The weight of the coal delivered hereunder shall
be determined on a per shipment basis by Buyer on the basis of scale weights
at the generating station(s) unless another
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CONTRACT #00-000-000
method is mutually agreed upon by the parties. Such scales shall be duly
reviewed by an appropriate testing agency and maintained in an accurate
condition. Seller shall have the right, at Seller's expense and upon
reasonable notice, to have the scales checked for accuracy at any reasonable
time or frequency. If the scales are found to be over or under the tolerance
range allowable for the scale based on industry accepted standards, either
party shall pay to the other any amounts owed due to such inaccuracy for a
period not to exceed thirty (30) days before the time any inaccuracy of
scales is determined.
SECTION 7.2 SAMPLING AND ANALYSIS. The sampling and analysis of the
coal delivered hereunder shall be performed by Buyer and the results thereof
shall be accepted and used for the quality and characteristics of the coal
delivered under this Agreement. All analyses shall be made in Buyer's
laboratory at Buyer's expense in accordance with industry-accepted standards.
Samples for analyses shall be taken by any industry-accepted standard,
mutually acceptable to both parties, may be composited and shall be taken
with a frequency and regularity sufficient to provide reasonably accurate
representative samples of the deliveries made hereunder. Seller represents
that it is familiar with Buyer's sampling and analysis practices, and finds
them to be acceptable. Buyer shall notify Seller in writing of any
significant changes in Buyer's sampling and analysis practices. Any such
changes in Buyer's sampling and analysis practices shall, except for industry
accepted changes in practices, provide for no less accuracy than the sampling
and analysis practices existing at the time of the execution of this
Agreement, unless the Parties otherwise mutually agree.
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Each sample taken by Buyer shall be divided into 4 parts and put into
airtight containers, properly labeled and sealed. One part shall be used for
analysis by Buyer; one part shall be used by Buyer as a check sample, if
Buyer in its sole judgment determines it is necessary; one part shall be
retained by Buyer until the 25th of the month following the month of
unloading (the "Disposal Date") and shall be delivered to Seller for analysis
if Seller so requests before the Disposal Date; and one part ("Referee
Sample") shall be retained by Buyer until the Disposal Date. Seller shall be
given copies of all analyses made by Buyer by the 12th day of the month
following the month of unloading. Seller, on reasonable notice to Buyer shall
have the right to have a representative present to observe the sampling and
analyses performed by Buyer. Unless Seller requests a Referee Sample analysis
before the Disposal Date, Buyer's analysis shall be used to determine the
quality of the coal delivered hereunder. The Monthly Weighted Averages shall
be determined by utilizing the individual shipment analyses.
If any dispute arises before the Disposal Date, the Referee Sample
retained by Buyer shall be submitted for analysis to an independent
commercial testing laboratory ("Independent Lab") mutually chosen by Buyer
and Seller. For each coal quality specification in question, a dispute shall
be deemed not to exist and Buyer's analysis shall prevail and the analysis of
the Independent Lab shall be disregarded if the analysis of the Independent
Lab differs from the analysis of Buyer by an amount equal to or less than:
(i) 0.50% moisture
(ii) 0.50% ash on a dry basis
(iii) 100 Btu/lb. on a dry basis
(iv) 0.10% sulfur on a dry basis.
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CONTRACT #00-000-000
For each coal quality specification in question, if the analysis of
the Independent Lab differs from the analysis of Buyer by an amount more than
the amounts listed above, then the analysis of the Independent Lab shall
prevail and Buyer's analysis shall be disregarded. The cost of the analysis
made by the Independent Lab shall be borne by Seller to the extent that
Buyer's analysis prevails and by Buyer to the extent that the analysis of the
Independent Lab prevails.
SECTION 8. PRICE.
SECTION 8.1 Base Price. The base price ("Base Price") of the coal to
be sold hereunder will be firm and will also be determined by the nominated
coal quality during 1997 and the year in which the coal is delivered as
defined in SECTION 5 in accordance with the following schedule:
(i) KINDILL 1 RAW COAL
-------------------
YEAR BASE PRICE ($ PER MMBTU)
---- ------------------------
1997 $0.70500
(ii) KINDILL 1 CLEAN COAL
--------------------
YEAR BASE PRICE ($ PER MMBTU)
---- ------------------------
1997 $0.81000
(iii) WHITE CHURCH COAL
-----------------
YEAR BASE PRICE ($ PER MMBTU)
---- ------------------------
1997 $0.81800
1998 $0.81800
1999 $0.81800
2000 $0.81800
2001 $0.84254
2002 $0.84254
2003 $0.84254
2004 $0.86782
2005 $0.86782
2006 $0.86782
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SECTION 8.2 QUALITY 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.
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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
18
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..
SECTION 8.3 PRICE REVIEW.The Base Price and all other terms and
conditions of this Agreement shall be subject to review for any reason at the
request of either party for revisions to become effective on January 1, 2001
and January 1, 2004. The party requesting such review shall give written
notice of its request to the other party between September 1 and October 1 of
the year preceding the effective January 1 date of the revision (the "Review
Year"). The parties shall then negotiate an agreement on new prices and/or
other terms and conditions between October 1 and December 1 of the Review
Year. If the parties do not reach an agreement by December 1 of the Review
Year, then this Agreement will terminate as of December 31 of the Review Year
without liability due to such termination for either party.
SECTION 8.4 PAYMENT CALCULATION. Exhibit A attached hereto shows the
methodology for calculating the coal payment and quality price discounts for
the month Seller's coal was unloaded by Buyer. If there are any such
discounts, Buyer shall apply credit to amounts owed Seller for the month the
coal was unloaded.
SECTION 9. INVOICES, BILLING AND PAYMENT.
SECTION 9.1 INVOICING ADDRESS. Invoices will be sent to Buyer at
the following address:
Louisville Gas and Electric Company
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000
Attention: Director, Fuels Procurement and Delivery
19
CONTRACT #00-000-000
With a copy to:
Louisville Gas and Electric Company
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000
Attention: Manager, Accounts Payable
SECTION 9.2 INVOICE AND BI-MONTHLY PAYMENT PROCEDURES. For all coal
delivered (as defined in SECTION 5 hereof) between the first and fifteenth
days of any calendar month, Buyer shall make preliminary payment by the
twenty-fifth day of such month. For all coal delivered between the sixteenth
and the last days of any calendar month, Buyer shall make preliminary payment
by the tenth day of the succeeding calendar month. Payment shall be made by
electronic funds transfer to Seller's account. Preliminary payment shall be
in the amount of seventy five percent (75%) of the then current price on a
dollar per ton basis as calculated by applicable coal type, guaranteed
monthly weighted average B.T.U., and the then current Base Price in cents per
MMB.T.U.. After the end of each calendar month, there will be a true-up as
follows. The amount due for all coal (based on the Base Price minus any
Quality Price Discounts) delivered during any calendar month shall be
calculated and compared to the sum of the preliminary payments made for coal
delivered during such month. The difference shall be paid by or paid to the
Seller, as applicable, by the twenty-fifth day of the following month.
SECTION 9.3 WITHHOLDING. Buyer shall have the right to withhold from
payment of any billing or xxxxxxxx (i) any sums which it is not able in good
faith to verify or which it otherwise in good faith disputes, (ii) any
damages resulting from or likely to result from any breach of this
20
CONTRACT #00-000-000
Agreement by Seller, and (iii) any amounts owed to Buyer from Seller. Buyer
shall notify Seller promptly in writing of any such issue, stating the basis
of its claim and the amount it intends to withhold.
Payment by Buyer, whether knowing or inadvertent, of any amount in
dispute shall not be deemed a waiver of any claims or rights by Buyer with
respect to any disputed amounts or payments made.
SECTION 10. FORCE MAJEURE.
SECTION 10.1 GENERAL FORCE MAJEURE. If either party hereto is delayed
in or prevented from performing any of its obligations or from utilizing the
coal sold under this Agreement due to acts of God, war, riots, civil
insurrection, acts of the public enemy, strikes, lockouts, failure of a piece
of Seller's equipment known as the 1370 Bucyrus Erie drag-line for at least
30 consecutive days, failure of Norfolk Southern Railway Corporation ("NS")
to transport the coal from the Delivery Point for any reason other than
Buyer's breach of its agreement with NS, fires, floods or earthquakes, which
are beyond the reasonable control and without the fault or negligence of the
party affected thereby, then the obligations of both parties hereto shall be
suspended to the extent made necessary by such event; provided that the
affected party gives written notice to the other party as early as
practicable of the nature and probable duration of the force majeure event.
The party declaring force majeure shall exercise due diligence to avoid and
shorten the force majeure event and will keep the other party advised as to
the continuance of the force majeure event. During any period in which
Seller's ability to perform hereunder is affected by a force majeure event,
Seller shall not deliver any coal to any other buyers to whom Seller's
ability to supply is
21
CONTRACT #00-000-000
similarly affected by such force majeure event unless contractually committed
to do so at the beginning of the force majeure event; and further shall
deliver to Buyer under this Agreement at least a pro rata portion (on a per
ton basis) of its total contractual commitments to all its buyers to whom
Seller's ability to supply is similarly affected by such force majeure event
in place at the beginning of the force majeure event. An event which affects
the Seller's ability to produce or obtain coal from a mine other than the
Coal Property will not be considered a force majeure event hereunder.
Tonnage deficiencies resulting from a force majeure event shall be
made up at Buyer's sole option on a reasonable schedule.
SECTION 10.2 ENVIRONMENTAL LAW FORCE MAJEURE. The parties recognize
that, during the continuance of this Agreement, legislative or regulatory
bodies or the courts may adopt environmental laws, regulations, policies
and/or restrictions which will make it impossible or commercially
impracticable for Buyer to utilize this or like kind and quality coal which
thereafter would be delivered hereunder. If as a result of the adoption of
such laws, regulations, policies, or restrictions, or change in the
interpretation or enforcement thereof, Buyer decides that it will be
impossible or commercially impracticable (uneconomical) for Buyer to utilize
such coal, Buyer shall so notify Seller, and thereupon Buyer and Seller shall
promptly consider whether corrective actions can be taken in the mining and
preparation of the coal at Seller's mine and/or in the handling and
utilization of the coal at Buyer's generating station; and if in Buyer's sole
judgment such actions will not, without unreasonable expense to Buyer, make
it possible and commercially practicable for Buyer to so utilize coal which
thereafter would be delivered hereunder without
22
CONTRACT #00-000-000
violating any applicable law, regulation, policy or order, Buyer shall have
the right, upon the later of 60 days notice to Seller or the effective date
of such restriction, to terminate this Agreement without further obligation
hereunder on the part of either party.
SECTION 11. CHANGES.
Buyer may, by mutual agreement with Seller, at any time by written
notice pursuant to SECTION 12 of this Agreement, make changes within the
general scope of this Agreement in any one or more of the following: quality
of coal or coal specifications, quantity of coal, method or time of
shipments, place of delivery (including transfer of title and risk of loss),
method(s) of weighing, sampling or analysis and such other provision as may
affect the suitability and amount of coal for Buyer's generating stations.
If any such changes makes necessary or appropriate an increase or
decrease in the then current price per ton of coal, or in any other provision
of this Agreement, an equitable adjustment shall be made in: price, whether
current or future or both, and/or in such other provisions of this Agreement
as are affected directly or indirectly by such change, and the Agreement
shall thereupon be modified in writing accordingly.
Any claim by the Seller for adjustment under this SECTION 11 shall be
asserted within thirty (30) days after the date of Seller's receipt of the
written notice of change, it being understood, however that Seller shall not
be obligated to proceed under this Agreement as changed until an equitable
adjustment has been agreed upon. The parties agree to negotiate promptly and
in good faith to agree upon the nature and extent of any equitable adjustment.
23
CONTRACT #00-000-000
SECTION 12. NOTICES.
SECTION 12.1 FORM AND PLACE OF NOTICE. Any official notice, request
for approval or other document required to be given under this Agreement
shall be in writing, unless otherwise provided herein, and shall be deemed to
have been sufficiently given when delivered in person, transmitted by
facsimile or other electronic media, delivered to an established mail service
for same day or overnight delivery, or dispatched in the United States mail,
postage prepaid, for mailing by first class, certified, or registered mail,
return receipt requested, and addressed as follows:
If to Buyer: Louisville Gas and Electric Company
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn.: Director, Fuels Procurement and Delivery
with a copy to: Louisville Gas and Electric Company
000 Xxxx Xxxxxxxx
P.O. Box 32020
Xxxxxxxxxx, Xxxxxxxx 00000
Attn.: Manager, Procurement Services
If to Seller: Kindill Mining, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Sales Manager
with a copy to: Kindill Mining, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Attn: Controller
24
CONTRACT #00-000-000
SECTION 12.2 CHANGE OF PERSON OR ADDRESS. Either party may change the
person or address specified above upon giving written notice to the other
party of such change.
SECTION 12.3 ELECTRONIC DATA TRANSMITTAL. Seller hereby agrees, at
Seller's cost, to electronically transmit shipping notices and/or other data
to Buyer in a format acceptable to and established by Buyer upon Buyer's
request. Buyer shall provide Seller with the appropriate format and will
inform Seller as to the electronic data requirements at the appropriate time.
SECTION 13. EARLY TERMINATION.
Each party hereto shall have the right of early termination for any
reason or no reason, in whole or in part, of its rights and obligations under
this Agreement as follows: The party desiring to exercise its right of early
termination shall give written notice thereof to the other party and pay the
price for early termination (the "Early Termination Price") as described
herein. Notice may be given by either party no later than September 1 of any
calendar year; and this Agreement will be terminated at the end of such year.
If this Agreement is terminated early in whole, then the Early Termination
Price shall be $3.50 times the Remaining Quantity. For the purposes of this
SECTION 13, the "Remaining Quantity" shall mean the Base Quantity plus any
Right of First Refusal Tonnage and Option Tonnage for the year immediately
preceding termination hereunder multiplied by the number of years until
December 31 of the next Review Year (as defined in SECTION 8.3) or the
termination date of this Agreement, whichever is earlier. For example, if
Buyer nominates an additional 200,000 tons of Option Tonnage for 1998, and if
Seller terminates this Agreement in whole effective December 31, 1998
pursuant to this SECTION 13, then Seller would owe Buyer $7,700,000
(1,100,000 x 2 x $3.50) under this SECTION 13. If this Agreement is
terminated
25
CONTRACT #00-000-000
early in part, then the Early Termination Price shall be $3.50 times the
total tonnage reduced from the Remaining Quantity. For example, if Buyer
nominates an additional 200,000 tons of Option Tonnage for 1998, and if
Seller terminates this Agreement in part effective December 31, 1998 by
reducing the Base Quantity from 900,000 to 500,000 tons, then Seller would be
obligated to deliver 700,000 tons in 1999 (500,000 tons Base Quantity plus
200,000 tons Option Tonnage) and would owe Buyer $2,800,000 (400,000 x 2 x
$3.50) under this SECTION 13. The Early Termination Price shall be paid in
four equal installments on January 1, April 1, July 1, and October 1 of the
year immediately succeeding the early termination. This provision is not
intended to limit, liquidate, or otherwise affect in any manner damages
recoverable for breach of this Agreement.
SECTION 14. RIGHT TO RESELL.
Buyer shall have the unqualified right to sell all or any of the coal
purchased under this Agreement.
SECTION 15. INDEMNITY AND INSURANCE.
SECTION 15.1 INDEMNITY. Seller agrees to indemnify and save harmless
Buyer, its officers, directors, employees and representatives from any
responsibility and liability for any and all claims, demands, losses, legal
actions for personal injuries, property damage and pollution (including
reasonable inside and outside attorney's fees) (i) relating to the barges,
trucks, or railcars provided by Buyer or Buyer's contractor while such
barges, trucks, or railcars are in the care and custody of Seller's loading
dock or loading facility, (ii) due to any failure of Seller to
26
CONTRACT
#00-000-000 comply with laws, regulations or ordinances, or (iii) due to the
acts or omissions of Seller in the performance of this Agreement.
SECTION 15.2 INSURANCE. Seller agrees to carry insurance coverage
with minimum limits as follows:
(a) Commercial General Liability, including Completed Operations and
Contractual Liability, $1,000,000 single limit liability.
(b) Automobile General Liability, $1,000,000 single limit liability.
(c) In addition, Seller shall carry excess liability insurance
covering the foregoing perils in the amount of $4,000,000 for any one
occurrence.
(d) Workers' Compensation and Employer's Liability with statutory
limits.
If any of the above policies are written on a claims made basis, then the
retroactive date of the policy or policies will be no later than the
effective date of this Agreement. Certificates of Insurance satisfactory in
form to the Buyer and signed by the Seller's insurer shall be supplied by the
Seller to the Buyer evidencing that the above insurance is in force and that
not less than thirty (30) calendar days written notice will be given to the
Buyer prior to any cancellation or material reduction in coverage under the
policies. The Seller shall cause its insurer to waive all subrogation rights
against the Buyer respecting all losses or claims arising from performance
hereunder. Evidence of such waiver satisfactory in form and substance to the
Buyer shall be exhibited in the Certificate of Insurance mentioned above.
Seller's liability shall not be limited to its insurance coverage.
27
CONTRACT #00-000-000
SECTION 16. TERMINATION FOR DEFAULT.
Subject to SECTION 6.4, if either party hereto commits a material
breach of any of its obligations under this Agreement at any time, then the
other party has the right to give written notice describing such breach and
stating its intention to terminate this Agreement no sooner than thirty (30)
days after the date of the notice (the "notice period"). If such material
breach is curable and the breaching party cures such material breach within
the notice period, then the Agreement shall not be terminated due to such
material breach. If such material breach is not curable or the breaching
party fails to cure such material breach within the notice period, then this
Agreement shall terminate at the end of the notice period in addition to all
the other rights and remedies available to the aggrieved party under this
Agreement and at law and in equity.
SECTION 17. TAXES, DUTIES AND FEES.
Seller shall pay when due, and the price set forth in SECTION 8 of
this Agreement shall be inclusive of, all taxes, duties, fees and other
assessments of whatever nature imposed by governmental authorities with
respect to the transactions contemplated under this Agreement.
SECTION 18. DOCUMENTATION AND RIGHT OF AUDIT.
Seller shall maintain all records and accounts pertaining to
payments, quantities, quality analyses, and source for all coal supplied
under this Agreement for a period lasting through the term of this Agreement
and for two years thereafter. Buyer shall have the right at no additional
expense to Buyer to audit, copy and inspect such records and accounts at any
reasonable time upon reasonable notice during the term of this Agreement and
for two years thereafter.
28
CONTRACT #00-000-000
SECTION 19. EQUAL EMPLOYMENT OPPORTUNITY.
To the extent applicable, Seller shall comply with all of the
following provisions which are incorporated herein by reference: Equal
Opportunity regulations set forth in 41 CFR SECTION 60-1.4(a) and (c)
prohibiting discrimination against any employee or applicant for employment
because of race, color, religion, sex, or national origin; Vietnam Era
Veterans Readjustment Assistance Act regulations set forth in 41 CFR SECTION
50-250.4 relating to the employment and advancement of disabled veterans and
veterans of the Vietnam Era; Rehabilitation Act regulations set forth in 41
CFR SECTION 60-741.4 relating to the employment and advancement of qualified
disabled employees and applicants for employment; the clause known as
"Utilization of Small Business Concerns and Small Business Concerns Owned and
Controlled by Socially and Economically Disadvantaged Individuals" set forth
in 15 USC SECTION 637(d)(3); and subcontracting plan requirements set forth
in 15 USC SECTION 637(d).
SECTION 20. COAL PROPERTY INSPECTIONS.
Buyer and its representatives and others as may be required by
applicable laws, ordinances and regulations shall have the right at all
reasonable times and at their own expense to inspect the Coal Property,
including the loading facilities, scales, sampling system(s), wash plant
facilities, and mining equipment for conformance with this Agreement. Seller
shall undertake reasonable care and precautions to prevent personal injuries
to any representatives, agents or employees of Buyer (collectively,
"Visitors") who inspect the Coal Property. Any such Visitors shall make every
reasonable effort to comply with Seller's regulations and rules regarding
conduct on the work site, made known to Visitors prior to entry, as well as
safety measures
29
CONTRACT #00-000-000
mandated by state or federal rules, regulations and laws. Buyer understands
that underground mines and related facilities are inherently high-risk
environments. Buyer's failure to inspect the Coal Property or to object to
defects therein at the time Buyer inspects the same shall not relieve Seller
of any of its responsibilities nor be deemed to be a waiver of any of Buyer's
rights hereunder.
SECTION 21. MISCELLANEOUS.
SECTION 21.1 APPLICABLE LAW. This Agreement shall be construed in
accordance with the laws of the State of Kentucky, and all questions of
performance of obligations hereunder shall be determined in accordance with
such laws.
SECTION 21.2 HEADINGS. The paragraph headings appearing in this
Agreement are for convenience only and shall not affect the meaning or
interpretation of this Agreement.
SECTION 21.3 WAIVER. The failure of either party to insist on strict
performance of any provision of this Agreement, or to take advantage of any
rights hereunder, shall not be construed as a waiver of such provision or
right.
SECTION 21.4 REMEDIES CUMULATIVE. Remedies provided under this
Agreement shall be cumulative and in addition to other remedies provided
under this Agreement or by law or in equity.
SECTION 21.5 SEVERABILITY. If any provision of this Agreement is
found contrary to law or unenforceable by any court of law, the remaining
provisions shall be severable and enforceable in accordance with their terms,
unless such unlawful or unenforceable provision is material to the
30
CONTRACT #00-000-000
transactions contemplated hereby, in which case the parties shall negotiate
in good faith a substitute provision.
SECTION 21.6 BINDING EFFECT. This Agreement shall bind and inure
to the benefit of the parties and their successors and assigns.
SECTION 21.7 ASSIGNMENT. Neither party may assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
other party, which consent shall not be unreasonably withheld or denied;
provided, however, Buyer shall have the right, without consent of Seller, to
assign all or any part of this Agreement to any company, controlling,
controlled by, or under common control with Buyer.
SECTION 21.8 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties as to the subject matter hereof, and there are
no representations, understandings or agreements, oral or written, which are
not included herein.
SECTION 21.9 AMENDMENTS. Except as otherwise provided herein, this
Agreement may not be amended, supplemented or otherwise modified except by
written instrument signed by both parties hereto.
31
CONTRACT #00-000-000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
LOUISVILLE GAS AND ELECTRIC
COMPANY KINDILL MINING, INC.
By: ___________________________ By: ___________________________
Xxxxxx Xxxxxxxx, Xx. Vice President
Power Operations Title: ___________________________
Date: ___________________________ Date: ___________________________
32
CONTRACT #00-000-000
Page 1 of 2
EXHIBIT A
KINDILL 2 (WHITE CHURCH COAL) SAMPLE COAL PAYMENT CALCULATIONS
TOTAL EVALUATED COAL COSTS FOR CONTRACT NO. 000-000-000
-------------------------------------------------------------------------------
For contracts supplied from multiple "origins", each "origin will be
calculated individually.
SECTION I BASE DATA
-------------------------------------- -----------------------
1) Base F.O.B. price per ton: $ 18.00 /ton
-----------------------
1a) Tons of coal delivered: tons
-----------------------
2) Guaranteed average heat content: 11,000 BTU/LB.
-----------------------
2r) As received monthly avg. heat content: BTU/LB.
-----------------------
2a) Energy delivered in MMBTU: MMBTU
-----------------------
[(Line 1a) *2,000 lb./ton*(Line 2r)] *MMBTU/1,000,000 BTU
[( ) *2,000 lb./ton*( )]*MMBTU/1,000,000 BTU
2b) Base F.O.B. price per MMBTU: $0.81800 /MMBTU
-----------------------
{[(Line 1)/(Line 2)]*(1 ton/2,000 lb.)]}*1,000,000 BTU/MMBTU
{[( /ton)/( BTU/LB)]*(1 ton/2,000 lb.)}*1,000,000 BTU/MMBTU
3) Guaranteed monthly avg. max. sulfur 3.180 LBS./MMBTU
-----------------------
3r) As received monthly avg. sulfur LBS./MMBTU
-----------------------
4) Guaranteed monthly avg. ash 10.450 LBS./MMBTU
-----------------------
4r) As received monthly avg. ash LBS./MMBTU
-----------------------
5) Guaranteed monthly avg. max. moisture 11.820 LBS./MMBTU
-----------------------
5r) As received monthly avg. moisture LBS./MMBTU
-----------------------
SECTION II DISCOUNTS
------------------------------------------- -----------------------
Assign a (-) to all discounts (round to (5) decimal places)
6d) BTU/LB.: If line 2r LESS THAN 10,850 BTU/lb. then:
{1-(line 2r)/(line 2)}*$0.2604/MMBTU
{1-( )/(11,000)}*$0.2604= $ /MMBTU
--------------
7d) SULFUR: If line 3r is greater than 3.22 lbs./MMBTU
[1-[(line 3r)-(line 3)]}*0.1232/lb. Sulfur
[1-[( )/(3.18)]}*0.1232= $ /MMBTU
--------------
8d) ASH: If line 4r is greater than 10.65 lbs./MMBTU
[1-[(line 4r)-(line 4)]}*0.0083/MMBTU
[1-[( )/(10.45)]}*0.0083= $ /MMBTU
--------------
9d) MOISTURE: If line 5r is greater than 12.00 lbs./MMBTU
[1-[(line 5r)-(line 5)]}*0.0016/MMBTU
[1-[( )/(11.82)]}*0.0016= $ /MMBTU
--------------
33
CONTRACT #00-000-000
Page 2 of 2
TOTAL PRICE
SECTION III ADJUSTMENTS
-------------------------------------------- --------------
Determine total Discounts as follows:
Assign a (-) to all discounts (round to (5) decimal places)
Line 6d: $_____________/MMBTU
Line 7d $_____________/MMBTU
Line 8d $_____________/MMBTU
Line 9d $_____________/MMBTU
10) Total Discounts (-):
Algebraic sum of above: $_____________/MMBTU
11) Total evaluated coal price = (line 2b) + (line 10)
12) Total discount price adjustment for Energy delivered:
(line 2a) * (line 10) (-)
$________/MMBTU + $____________/MMBTU = $__________
13) Total base cost of coal (line 2a) * (line 2b)
$________/MMBTU + $____________/MMBTU = $__________
14) Total coal payment for month (line 12) + (line 13)
$________/MMBTU + $____________ = $__________
34
