Exhibit 10 (i) 88
THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
AMENDMENT III TO THE AGREEMENT
FOR THE SALE AND PURCHASE OF COAL
THIS AMENDMENT ("AMENDMENT"), dated as of November 1, 1999 TO THAT
AGREEMENT ("AGREEMENT") FOR THE SALE AND PURCHASE OF COAL made and entered into
as of the 1st day of December 1996 and as AMENDED ("AMENDMENT I") ON November 1,
1997 and ("AMENDMENT II") ON November 1, 1998 and between CENTRAL XXXXXX GAS &
ELECTRIC CORPORATION, (herein-after referred to as "BUYER") and INTER-AMERICAN
COAL N.V., (hereinafter referred to as "PRODUCER") and INTER-AMERICAN COAL,
INC., (hereinafter referred to as "SALES AGENT"). PRODUCER and SALES AGENT are
hereinafter collectively referred to as "SELLER".
WITNESSETH:
WHEREAS, Article VI of Amendment II of the AGREEMENT provides that
beginning July 1, 1999, 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 II (TERM OF AGREEMENT), ARTICLE IV (SPECIFICATION & QUALITY
& WEIGHT), ARTICLE VI (BASE PRICE) and ARTICLE VII (ADJUSTMENT IN PRICE FOR
QUALITY) of AMENDMENT II of the AGREEMENT shall be respectively amended in their
entirety and ARTICLE III (DELIVERIES) of the AGREEMENT shall be amended as
indicated, all to read as follows:
ARTICLE II
TERM OF AGREEMENT
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The Term of this AGREEMENT shall be for the period commencing
January 1, 1997 and continuing until midnight, December 31, 2001, unless sooner
terminated as provided for herein. This AGREEMENT shall terminate automatically,
without further obligation or liability to either party, except for payments for
coal delivered, at the end of the Term.
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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
In recognition of the pending Auction of the Danskammer Generating
Station, and to provide the new ownership with maximum flexibility, Seller
agrees to forgo deliveries under this AGREEMENT in Contract Year 2001 upon six
months advance notice from the New Owners.
ARTICLE III
DELIVERIES
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Section 1. Quantities/Delivery Schedule: Except for as provided for
below, the quantity of coal sold and purchased hereunder shall be a Firm tonnage
of XXX,XXX Metric Tons (+ or - 10%) per year. In addition, there will be up to
XX,XXX Metric Tons (+ or - 10%) per year called Incremental Tonnage which will
be sold and purchased hereunder provided that the delivered cost per million
Btu's of oil, natural gas or spot coal usable at Buyer's Danskammer Plant or the
equivalent price of replacement electric energy exceeds the applicable Base
Price of coal in delivered cost per million Btu's at appropriately applied heat
rates.
The Sales Agent/Seller will assume that one Vessel per month of a nominal
XX,XXX Metric Tons (+ or - 10%) will be shipped under this Agreement. The third
Vessel in the first and
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fourth quarter will deliver Incremental Tonnage provided (1) Buyer requires the
tonnage and (2) Buyer and Seller have agreed on the price for said tonnage as
per the notification procedure described herein.
On or before the the first day of the Notice Month, Buyer will
provide to Seller the fifteen (15) day delivery window for each Vessel for the
following quarter as well as a notice of the Incremental Price for the third
Vessel to be shipped if the schedule is for the first or the fourth quarter. The
Seller is obligated to deliver Incremental Tonnage quoted at the Base Price . On
the first working day of each month of the quarter or fifteen (15) days prior to
each Vessel's ETA, whichever is sooner, the lay days will be reduced to a ten
(10) day window and fifteen (15) days prior to ETA the lay days will be reduced
to a seven (7) day window. Vessel's ETA will be narrowed by the Vessel owner.
Seller will provide notice to the Buyer on or before the fifteenth
day of the Notice Month as to whether Incremental Tonnage will be shipped at the
quoted price. If the Seller accepts the quoted price, the coal will be shipped
as scheduled, with the Incremental tonnage at the quoted price and the Firm
tonnage at the Base Price. The Seller reserves the right to re- offer any
unshipped Incremental Tonnage to the Buyer at another
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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
time in the ensuing twelve (12) months (commencing with the quarter during which
the unshipped Incremental Tonnage would otherwise have been shipped) at the Base
Price. In each such instance, Buyer will then have the option to accept that
Incremental Tonnage or permanently cancel that Incremental Tonnage.
Section 3. Delivery Schedule Limitations: All Firm Tonnage in a
quarter will be delivered before any Incremental Tonnage is delivered. Both Firm
and Incremental Tonnage can be delivered during the same quarter, but Seller
will not be obligated to deliver more than three (3) XX,XXX Metric Ton shipments
of coal during any one quarter, unless otherwise mutually agreed. There will be
a minimum of fifteen (15) calendar days between shipment releases from the Load
Port unless otherwise mutually agreed.
Section 9.1 Vessel Failure to Discharge at Minimum Rate: Should
Seller's Vessel fail to offload cargo at a minimum rate of X,XXX Metric Tons per
hour, Buyer shall receive a reduction of U.S. $ .XX per NT for each NT so
delivered by said Vessel. This reduction is over and above any allowances
previously provided herein.
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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
ARTICLE IV
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SPECIFICATION & QUALITY & WEIGHT
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Section 1. Origin: The coal shall be from the
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Producer's operations as per the component blends indicated and
meet the specifications as per Attachment I:
Blend A Blend B
Santander XX% XXX%
Tachira XX% X%
Mina Norte X% X%
BUYER and SELLER agree that SELLER's Norte de Santander (Santander)
coal shall be the primary component (XX % minimum) for each shipment under this
agreement. Tachira coal shall be the secondary component (XX% maximum). Blend A
above will be shipped unless another blend (B or other) is mutually agreed. The
prices for coal shipped as provided in Article VI will prevail provided the
secondary coal is limited to a maximum of 30% of the two coal blend. Higher
percentages of Santander in blend A will command the same price per short ton.
Coal loadings with greater than XX% of the secondary coal or those using a three
coal blend that results in a lower price per net ton will be priced at the
weighted component price per MMBtu (See Attachment III) provided the cargo is
accepted by Central Xxxxxx.
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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
The two incremental cargoes will be priced in accordance with the contract
provisions for incremental tonnage which will be subject to adjustment as
provided above if the secondary coal is greater than XX%. The difference between
the Base Price of coal and the weighted component price shall be deducted from
the agreed incremental price. Mutually agreed shipments of coal blends not
provided herein shall be priced at the weighted component price per MMBtu or as
mutually agreed between Buyer and Seller.
ARTICLE VI
BASE PRICE
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Section 1. The Base Price for coal shipped under the terms of this
Agreement will be $XX.XX DES per NT for Blend A and $XX.XX per NT for Blend B
for the Contract Year 2000. Buyer has requested and Seller has agreed to ship
Blend A in contract year 2000 however Seller reserves the option to ship Blend B
in the event that coal stocks or vessel availability make Blend A untenable.
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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
Section 2. On or before July 1, 2000, Buyer and Seller will enter
into negotiations to fix the Base Price for coal delivered hereunder for the
ensuing year. This Agreement will terminate on December 31, 2000, if
negotiations for the following year have not been completed by October 1.
ARTICLE VII
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ADJUSTMENT IN PRICE FOR QUALITY
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Section 3. Adjustment for Ash Value: The Price to be paid to Seller
by Buyer is based upon coal with an ash content (Ash Value) of XXXXX percent
(X%) by weight of the "as received" analysis of the coal. If the Ash Value is
between X.X% and X.X%, there will be no adjustment for Ash Value. If the Ash
Value is less than X.X%, then a premium of $.XXX per net ton shall be paid to
Seller for each .X% Ash Value variation below X.X%. If the Ash Value is greater
than X.X%, then a penalty of $X.XXX per net ton shall be deducted from the Price
for each .X% Ash Value variation in excess of X.X%.
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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
Senior Vice President
Regulatory Affairs, Financial Planning And Accounting
PRODUCER: INTER-AMERICAN COAL N.V.
BY:
/s/ Xxxxxx X. X. van den Xxxx
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Xxxxxx X. X. van den Xxxx
ITS: President and Chief Executive Officer
SALES AGENT: INTER-AMERICAN COAL, INC.
BY: /s/ Xxxxxx X. X. van den Xxxx
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Xxxxxx X. X. van den Xxxx
ITS: President
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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
Attachment III
Base Price/Blend:
Component $/MMBtu Min % Max %
Mina Norte $X.XXX X XX
Norte de Santander $X.XXX XX XXX
Tachira $X.XXX X XX
Weighted Prices per short ton determined using the above $/MMBtu
and the guaranteed contract Btu/Lb .
