Exhibit (10)(i)89
THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.
TERM COAL PURCHASE AGREEMENT
BETWEEN
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
AND
ARCH COAL SALES COMPANY, INC., AGENT
FOR THE INDEPENDENT OPERATING SUBSIDIARIES OF
ARCH COAL, INC.
CENTRAL XXXXXX CONTRACT # 21102
TABLE OF CONTENTS
Article Page
I. TERM OF AGREEMENT 2
II. DELIVERIES 3
III. SPECIFICATIONS & QUALITY & WEIGHTS 8
IV. PRICE AND PAYMENT 11
V. ADJUSTMENT IN PRICE FOR QUALITY 13
VI. SAMPLING AND ANALYSIS 15
VII. FREEZE CONDITIONING 18
VIII. CHANGES IN LAW 18
IX. OTHER GOVERNMENTAL LEGISLATION, REGULATIONS AND ORDERS 19
X. FORCE MAJEURE 21
XI. FAVORED NATION 23
XII. RESERVES 23
XIII. EMPLOYEE INTEREST 24
XIV. WAIVER 24
XV. NOTICES 25
XVI. GOVERNING LAW 26
XVII. FINALITY 26
XVIII. AMENDMENTS 26
XIX. TITLES 26
XX. INTERPRETATION 27
XXI. AGREEMENT FOR BENEFIT OF PARTIES ONLY 27
XXII. ASSIGNMENT - TERMINATION 27
XXIII. NO IMPLIED WARRANTIES 28
XXIV. LIMITATION ON DAMAGES 28
XXV. COUNTERPARTS 28
XXVI. REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES 29
ATTACHMENT I: ROSETON DOCK AND XXXXXX RIVER LIMITATIONS AND
VESSELS THAT HAVE CALLED AT THE ROSETON DOCK
This Agreement, made and entered into as of the 1ST day of
April, 1999 by and between Central Xxxxxx Gas & Electric Corporation, a New York
corporation, with its principal office at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx
Xxxx 00000-0000, (hereinafter referred to as "Buyer") and Arch Coal Sales
Company, Inc., a Delaware corporation, Agent for the Independent Operating
Subsidiaries of Arch Coal, Inc., with its principal xxxxxx xx Xxxx Xxxxx Xxx,
Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000, (hereinafter referred to as "Seller").
WITNESSETH
WHEREAS, Xxxxx Xxxxx Coal Company, ("Xxxxx Xxxxx"), an
independent operating subsidiary of Arch Coal, Inc., has mining and loading
facilities known as the Xxxxx Xxxxx Operations (Primary Source) and Whereas
Seller markets coal from other independent operating subsidiaries of Arch Coal,
Inc. (Secondary Sources), (such Xxxxx Xxxxx and other Arch subsidiaries
facilities being collectively referred to herein as the "Operations") and which
Operations (except as hereinafter provided) are the source of coal to be sold
and purchased hereunder; and,
WHEREAS, Seller is the authorized agent for the independent
operating subsidiaries of Arch Coal, Inc. and is duly authorized to contract for
the sale of coal on behalf of such subsidiaries and otherwise represent such
subsidiaries, all as hereinafter set forth; and,
WHEREAS, Buyer is a consumer of coal and desires to purchase
coal from Seller; and,
WHEREAS, the parties hereto wish to enter into a coal supply
agreement based on the terms and conditions hereof.
NOW THEREFORE, the parties hereto for good and valuable mutual
consideration, and intending to be legally bound, hereby agree as follows:
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ARTICLE I
TERM OF AGREEMENT
The term of this Agreement shall be for a period commencing 1
April 1999 and continuing until midnight, 31 December 2001, unless sooner
terminated as provided for herein.
In recognition of the pending Auction of the Danskammer
Generating Station, and to provide the successful purchaser in such Auction (the
"New Owner") with maximum flexibility, Seller agrees to forgo deliveries under
this Agreement in contract year 2001 provided written notice electing such
cancellation is received from the New Owner by July 1, 2000.
2
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 38,000 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.
Subject to Article IV, Price and Payment, the annual cargoes are shown
below;
1st Cargo
Year Firm Cargoes Option Cargoes Loaded By
---- ------------ -------------- ---------
1999 4 2 May 30
2000 6 3 March 31
2001 6 3 March 31
OPTION CARGOES: Every third cargo each year will be an
Option Cargo. Delivery of any Option Cargo shall be subject to; (1) Buyer's need
for additional coal and (2) Seller's acceptance of revised pricing equal to the
lower of (i) the delivered cost per million BTU's of quoted spot coal for the
calendar quarter in which delivery is to occur; (ii) other fuel that can be used
in the Danskammer coal- burning units; or (iii) the equivalent cost of purchased
energy. Prices quoted by Buyer and accepted by Seller include all transportation
components. Buyer shall provide pricing for the Option Cargoes when scheduling
same and Seller shall have until the fifteenth (15th) of the month following to
indicate acceptance of the Option Cargo pricing. If Buyer fails to quote an
Option Cargo price at the time of scheduling, the Option Cargo will be priced at
the then existing Base Price as specified herein.
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. 38,000 tons)
will be banked in a tonnage
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account. From time to time, Buyer will provide Seller the right to ship all or a
portion of the banked tons towards its spot coal requirements. If Seller elects
not to match the competitive spot price (on a delivered cost per million BTU
basis), the tonnage account will be reduced by the amount which was offered by
Seller under a valid spot coal solicitation. 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.
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
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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 writen 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.
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
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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.
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.
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
6
CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
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.
7
CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
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 D 3173
Volatiles % XX XX XX D 3175
Fixed Carbon % XX XX XX D 3172
Ash % X.X -- XX.X D 3174
BTU/LB XX,XXX XX,XXX -- D 3286
Sulphur % X.XX X.XX X.XX D3177/4239
SO2 (LBS./MMBTU) X.XX -- X.X Calculated
Grind (HGI) XX XX (1) XX D 409-85
Ash Fusion (Reducing)
(I.D., Deg. F) X,XXX X,XXX -- D 1587
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) 0.7% Maximum
Volatiles 30% Minimum
Ash Fusion (I.D. - Degrees F) 2,500 Minimum(1)
Grind (HGI) 43 Minimum
Gross Calorific Value (BTU/LB) 2,750 Minimum
SO2/Million BTU 1.1 LBS. Maximum
(1) Lower value subject to approval by Buyer.
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 analyses (as provided in Article VI) to exceed the individual
shipment rejection limits.
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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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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
PRICE AND PAYMENT
Section 1. Price: The Base Price of the Firm cargoes of
coal sold hereunder is fixed at $ XX.XX per short ton DES Roseton Dock. Option
Cargoes will be priced in accordance with ARTICLE II, Section 1.
Section 2. Price Reopener: On or before July 1st 1999 & 2000,
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 31st of the then current contract year if
negotiations for the following year have not been completed by October 31st.
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.
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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. 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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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
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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CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
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 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 ton shall be paid to
Seller for each X.X% Ash Value variation below X.X%. If the Ash Value is greater
than X.X% but less than X% then a penalty of $.XXX per ton shall be deducted
from the Price for each X.X% Ash Value variation in excess of X.X%. If the Ash
Value is greater than X% but less than XX% then a penalty of $.XX per ton for
each X.X% of ash greater than X.X% shall be deducted from the Price.
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ARTICLE VI
SAMPLING AND ANALYSES
A recognized independent laboratory ("Independent
Laboratory"), experienced in the sampling and analyzing of coal, shall be
mutually agreed upon by Buyer and Seller, and shall be engaged by each Party to
perform the sampling, sample preparation, and analysis of the coal shipped
hereunder from the Primary Source. The Independent Laboratory shall sample
shipments at the Operations and it shall perform its sampling and analysis in
accordance with standards approved by the American Society for Testing and
Materials ("ASTM"). Buyer reserves the right to request additional sampling and
analysis from that required herein for coal shipped from a Secondary Source.
During the loading of the rail cars at domestic operations, or
barges or ships for offshore cargoes, sample increments shall be collected by
the most reliable, practical and mutually agreeable procedures in accordance
with either ASTM D2234 (manual) or D4702 (mechanical). The frequency and mass of
the increments shall be in accordance with ASTM standards. The Independent
Laboratory shall divide the sampled material into four (4) sample splits
identified as follows: (a) Laboratory analysis, (b) Referee split, (c) Seller's
split and (d) Buyer's split. The Buyer or Buyer's Agent shall have access to
witness all sampling, sample preparation, screen testing and sealing of samples.
The Independent Lab shall provide upon request the splits of the train samples
to the Buyer or Buyer's Agent and/or Seller as soon as the sample is prepared.
The Independent Laboratory shall properly identify, seal, and retain the referee
splits of each train sample for a period of 60 days so that the Buyer or Seller
may analyze such samples. The Buyer's Agent will be permitted to place a
suitable seal on Referee samples.
The composite sample for each train shall be analyzed by the
Independent Laboratory for total moisture, ash, sulfur, volatile, and gross
calorific value (BTU/LB) (Proximate Analysis) and the results (wet & dry)
reported to Seller and Buyer/Buyer's Agent upon completion of testing. The
certified analysis shall be the weighted mathematical average for each train's
values for moisture, ash, volatile, sulfur,
15
and calorific value.
A physical composite sample of the trains comprising a vessel
cargo shall be prepared and analyzed by the Independent Laboratory for
grindability index (HGI), ash fusion temperature, mineral ash, mercury and
ultimate analysis. The cost of the laboratory services for such sampling and
analyzing of the coal in each shipment shall be paid for by the Buyer and
Seller, equally.
If the Buyer or Seller should question the correctness of the
analyses made by the Independent Laboratory, they may, within 30 days after the
Vessel unloading, notify the other Party in writing to request that the Referee
splits be analyzed by a second mutually agreeable Independent Laboratory. This
notification should specify which analytical parameter or parameters are in
dispute. The Independent Laboratory shall provide the Referee Laboratory with
the properly identified sealed Referee train samples.
The integrity of the moisture in reserve samples is the most
difficult to preserve. Therefore, if the moisture value is in dispute, the
governing result will be the higher of the averaged value reported by the
Independent and Referee Laboratory. Other analytical parameters shall be
determined on a 'dry basis' and corrected to the 'as received' basis using the
governing moisture.
The following are the acceptable tolerance for other test
parameters: Ash +/- 0.3%; Sulphur +/- 0.03%; Volatile +/- 0.5%; Calorific Value
+/- 100 BTU/LB Dry Basis; Ash Fusion Temperature I.D. +/- 75 Degrees F. and HGI
3. Should the results fall within these tolerances, the results of the
Independent Laboratory will stand. Should the results fall outside the
tolerance, then the Referee analyses shall be the governing result.
16
Should the grindability (HGI) result be in dispute, the
Referee Laboratory will prepare the physical composite sample from the Referee
samples to perform the HGI test. If the HGI test result of the Referee
Laboratory is within tolerance (3), the original laboratory result will stand.
If out of tolerance, the Referee results will be the governing analysis.
The cost of this Referee analysis will be paid by the Party
requesting the check analysis.
Neither Party shall require the other Party to use equipment
or procedures which exceed the requirements of ASTM.
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ARTICLE VII
FREEZE CONDITIONING
Section 1. Freeze Conditioning Agent: Seller shall apply a
freeze conditioning agent ("FCA") at no cost to Buyer in conformance with the
directives of the origin railroad and good industry practice.
Section 2. Buyer's Approval: Seller shall use an FCA with a
Diethylene Glycol base that has been preapproved in writing by Buyer. Seller
shall have the right to use any of the approved FCA's but shall not change from
one FCA to another without notifying Buyer, such notification to be confirmed in
writing. On or before October 1st of each contract year Seller shall provide
updated Material Safety Data Sheets (MSDS) for each FCA anticipated for use on
contract deliveries. Buyer will thereafter provide Seller with an updated list
of approved FCA's.
ARTICLE VIII
CHANGES IN LAW
Seller hereby certifies that it is in substantial compliance
with the rules, practices and standards issued by any governmental agencies
having jurisdiction with respect to applicable legislation, regulations, rules
or mandates which were in effect as of 23 June 1998.
Seller and Buyer recognize that this coal purchase is of
limited duration with annual price reopeners and therefore agree that there
shall be no inter-year adjustment in price as a result of enactment,
modification, or revision of any federal, state or local legislation or
regulations, rules or mandates issued pursuant thereto after such above date,
which affects the bituminous coal industry with respect to the reclamation,
conservation, environmental protection, mine safety, mine working conditions and
practices, ventilation, health, employee retirement programs, occupational
hazards, research and reclamation and conservation of mine areas, which
increases or decreases Seller's cost of producing coal under this Agreement.
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ARTICLE IX
OTHER GOVERNMENTAL LEGISLATION, REGULATIONS AND ORDERS
Section 1. Compliance with Law: Each Party shall use its best
efforts to comply with the provisions of all applicable federal, state and other
governmental laws and any applicable orders and/or regulations, or any
amendments or supplements thereto, which have been, or may at any time be,
issued by a governmental agency.
Section 2. Effect Upon Buyer's Obligations: The Parties hereto
recognize the possibility that, during the Term of this Agreement, federal,
state or local legislative or regulatory bodies or the courts may impose or
enforce regulations, restrictions or standards, or revise existing regulations,
restrictions or standards which in Buyer's sole discretion will make it
impossible or impractical for Buyer to utilize the coal thereafter to be
delivered hereunder at the Danskammer Plant. Such regulations or restrictions
could pertain to, but would not necessarily be limited to coal quality. If any
such regulations or restrictions are imposed and if as a result thereof Buyer,
in its sole discretion, decides that it will be impossible or impractical for
Buyer to utilize the coal, Buyer shall so advise Seller and thereupon Buyer and
Seller shall promptly consider what corrective steps they can take in the mining
and preparation of the coal and in the handling and combustion of the coal at
the Danskammer Plant, and if in Buyer's judgment such steps will not, without
unreasonable expense to Buyer, make it possible and practical for Buyer to
utilize the coal thereafter to be delivered hereunder without violating such
regulations or restrictions, Buyer shall have the right, upon notice to Seller,
to terminate this Agreement without further obligation to Seller hereunder.
Section 3. Effect Upon Seller's Obligations: In the event of
the enactment of any new federal, state or other governmental law, or the
promulgation of any regulation or order thereunder which may prohibit (or
restrict so as to effectively prohibit) mining, processing or shipping, as may
be applicable, of the coal specified in this Agreement, Seller shall be relieved
of its obligation upon the effective date of implementation (compliance date) of
such law, regulation or order to deliver the total quantity of coal to be
delivered under this Agreement to the extent of the amount of tonnage
represented by the percentage of production of such mining, processed or
19
shipped coal so affected by such law, regulation or order to the total amount of
coal produced, and processed to meet the quantity requirements of this
Agreement.
Section 4. Election to Reduce Tonnage or Terminate: In the
event either party elects to invoke Section 2 or 3, above, the party so invoking
shall notify the other party in writing and said notice shall state the
notifying party's election to terminate this Agreement or reduce the tonnage to
be delivered thereunder, effective on a specified date, which said date shall
not be earlier than the effective date of the implementation (compliance date)
of such law, regulation or order giving rise to the termination; provided,
however, that notwithstanding anything to the contrary herein, said specified
date shall in no event be earlier than sixty days after the date of delivery of
said notice.
Section 5. Effect of Termination: If either party elects to
terminate this Agreement under the provisions of Section 2, 3 and/or 4 of this
Article , then no party shall have, after the effective date of such
termination, any further obligation or liability under this Agreement ,
provided, however, that such termination shall not affect any rights or
obligations existing under this Agreement for coal shipped or required to be
shipped prior to the effective date of said termination.
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ARTICLE X
FORCE MAJEURE
No Party shall be subject to liability to the other Party for
failure to perform in conformity with this Agreement where such failure results
from an event or occurrence beyond the control of the party affected thereby,
whether foreseen, foreseeable or unforeseeable, which wholly or partially
prevents the mining, preparation, loading or shipping of coal by Seller or the
receiving, unloading or utilization of coal by Buyer. Such events shall include,
by way of illustration but not by way of limitation, acts of God, war,
insurrection, riots, nuclear disaster, strikes, labor disputes, labor and
material shortages, fires, explosions, floods, river freezeups, breakdowns or
damage to mines, plant equipment or facilities (including emergency outages of
equipment or facilities to make repairs to avoid breakdowns thereof or damage
thereto), interruptions to transportation, railway car shortages, embargoes,
orders or acts of civil or military authority, laws, regulations or
administrative rulings. The provisions of the above sentence shall not excuse a
Party from performing unless such Party shall give reasonable notice to the
other Party and furnish reasonable information as to the cause of inability to
perform and probable extent thereof within ten (10) calendar days after such
cause occurs. Failure to give such notice and furnish such information within
the time specified shall be deemed a waiver of all rights under this Article for
such period of time during which notice was not given. No suspension or
reduction by reasons of force majeure shall invalidate the remainder of this
Agreement but, on the removal of the cause, shipments shall resume at the
specified rate. During such periods when force majeure conditions result in a
reduction in deliveries, Seller shall equitably prorate shipments among its
customers. Nothing herein contained shall be construed as requiring Seller or
Buyer to accede to any demands of labor, or labor unions, or suppliers, or other
parties which Seller or Buyer considers unacceptable. Deficiencies in shipments
so caused shall not be made up except by mutual consent.
If circumstances arise such that a vessel delivering coal
under this Agreement, is prevented from discharging all or part of its cargo at
the discharge port, by reason of breakdown or failure of the shore-side
equipment that is necessary to receive and take away the cargo from the vessel,
then in order to mitigate economic
21
CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
loss the Buyer shall have the right, by notice in writing to Seller, to order
the vessel to a safe and accessible berth or anchorage (the substitute berth)
where she can safely discharge without risk, in which event upon the completion
of cargo unloading, at such substitute berth or anchorage, all conditions of the
applicable Xxxx of Lading shall apply.
If Buyer declares a substitute berth, then time shall stop
counting twelve (12) hours after declaration, or when the vessel sails,
whichever is sooner and shall recommence when the vessel tenders notice at the
substitute berth or anchorage. Time is to count at the substitute berth as it
would have at the original berth, with exception of turn time. Total time used
at the discharging berths will be the sum of time at the original berth (Roseton
Dock) and the time used at the substitute berth.
In the event that Buyer declares a substitute berth or
anchorage for the vessel to discharge or complete discharge, Buyer to compensate
Seller as follows:
All reasonably incurred vessel diversion costs including
out-of-pocket costs such as pilot dues, tug assistance, port
harbor dues, etc., plus the actual cost of the vessel used in
such diversion at a rate not to exceed $ XX,XXX per day
calculated on a pro rata basis. The total of the vessel diversion
costs as identified above plus the actual cost of the vessel used
in such diversion shall not exceed $ XX,XXX per occurrence.
All loss of value of coal carried aboard the vessel (calculated
using Buyer's DES coal price as the basis).
If circumstances arise such that Seller is unable to make
delivery of the contracted volume of coal, for any reason, then in order to
mitigate economic loss, Seller will compensate Buyer for coal not shipped as
follows:
All freight, diversion, demurrage, testing and other expenses.
The differential between the value of coal to be delivered
(calculated using Buyer's DES coal price as the basis) and the
cost of replacement coal or energy as delivered to the Danskammer
Plant.
22
ARTICLE XI
FAVORED NATION
If, during the Term of this Agreement, Seller enters into a
term coal sales agreement with another domestic U.S. utility company for
Seller's direct sale to such other utility, and such agreement contains terms
and conditions which are substantially the same as this Agreement's terms and
conditions, including, without limitation, provisions for; (1) a term which ends
within two years of the initial Term of this Agreement; (2) delivery and
acceptance of coal with the same quality and quantity; and (3) Seller's price
per ton of such coal thereunder is less than the price per ton under this
Agreement, then Seller shall notify Buyer in writing within sixty (60) days of
Seller's entering into such agreement. Then, upon Buyer's written notice, Seller
shall promptly agree to an amendment of this Agreement to afford Buyer pricing
provisions substantially the same as such other contract, provided however, any
such amendment shall include terms and conditions as favorable to Seller as are
included in such other contract.
ARTICLE XII
RESERVES
The Coal reserves owned by or otherwise available to Seller
are located in Xxxxx and Xxxxx Counties, West Virginia and are accessible to the
Norfolk Southern Railway and are part of the mining properties constituting the
Primary Sources. The total quantity of suitable and economically recoverable
coal of the quality to meet Seller's maximum obligation to Buyer under this
Agreement is equal to the annual tons each year times the number of years
remaining in the contract Term as per Article I contained herein. Seller shall
not enter into other agreements for the production and sale of coal from the
above reserves which production and sale would reduce or impair the amount of
reserves required to meet its obligations during the remaining Term of this
Agreement.
23
Buyer shall have the right from time to time, whenever deemed
desirable by Buyer, to audit at Buyer's expense; (1) said reserves owned or
otherwise available to Seller; and (2) Seller's commitments for the purpose of
determining if Seller has sufficient reserves which are not otherwise committed
to comply with the reserve requirements of this Agreement. Buyer may at its
discretion have any such audit conducted by an independent firm or firms
acceptable to Seller.
ARTICLE XIII
EMPLOYEE INTEREST
Seller represents to Buyer that Seller has not given and will
not give, directly or indirectly, anything of value to any employee or other
representative of Central Xxxxxx Gas & Electric Corporation with the view of
securing this Agreement or obtaining favorable treatment with respect to the
performance of this Agreement. If such representation is untrue, or becomes
untrue, Buyer shall have the right to declare this Agreement null and void or to
terminate it, to xxx for damages and to take such other action as may be
provided by law. If Seller obtains knowledge at any time that any such employee
has a direct or indirect interest in Seller or its affiliates, (excluding
routine purchases in the open market by such employee of securities issued by
Seller or its parent corporations) it will immediately inform Buyer of such
fact.
ARTICLE XIV
WAIVER
The failure of any party to insist in any one or more
instances upon strict performance of any of the provisions of this Agreement or
to take advantage of any of its rights hereunder shall not be construed as a
future waiver of any such provisions or the relinquishment of any such rights,
but the same shall continue and remain in full force and effect for the term of
this Agreement.
24
ARTICLE XV
NOTICES
Notices and other communications provided for or required
herein shall be given (effective, if written, when presented for delivery by
postal authorities when sent by postage prepaid, certified mail) or by facsimile
as follows:
TO BUYER:
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
000 XXXXX XXXXXX
XXXXXXXXXXXX, XXX XXXX 00000-0000
ATTENTION: XX. XXXXXX X. DU BOIS, JR.
DIRECTOR OF FUELS
PHONE: (000) 000-0000
FAX: (000) 000-0000
TO SELLER:
ARCH COAL SALES COMPANY, INC.
XXXX XXXXX XXX, XXXXX 000
XX. XXXXX, XXXXXXXX 00000
ATTENTION: XX. XXXX X. XXXXX
PHONE: (000) 000-0000
FAX: (000) 000-0000
25
ARTICLE XVI
GOVERNING LAW
This Agreement shall be construed, enforced and performed in
accordance with the laws of the State of New York.
ARTICLE XVII
FINALITY
This Agreement is intended as the final, complete and
exclusive statement of the terms of the Agreement among the Parties. The Parties
agree that parol or extrinsic evidence may not be used to vary or contradict the
express terms of this Agreement. No waiver of any provision hereof shall be
effective, unless set forth in a written instrument authorized and executed with
the same formality as this Agreement.
ARTICLE XVIII
AMENDMENTS
This Agreement may be modified or amended at any time by
mutual agreement of the parties, provided that such modification or amendment
shall be in writing and executed by the duly authorized representatives of the
parties.
ARTICLE XIX
TITLES
The titles of the articles and sections of this Agreement have
been inserted as a matter of convenience for reference only.
26
ARTICLE XX
INTERPRETATION
No understandings, agreements or trade customs not expressly
stated in or required to be applied in accordance with the terms of this
Agreement shall be binding on the Parties in the interpretation or performance
hereof unless such understandings, agreements or trade customs are reduced to
writing and signed by the respective Parties.
ARTICLE XXI
AGREEMENT FOR BENEFIT OF PARTIES ONLY
Buyer agrees to indemnify, including reasonable attorneys
fees, defend, and hold Producer/Seller harmless from any and all claims of any
broker, consultant, finder or like agent with whom Buyer has dealt, or is
alleged to have dealt, regarding this Agreement. Producer/Seller agrees to
indemnify, including reasonable attorneys' fees, defend, and hold Buyer harmless
against any and all claims of any broker, consultant, finder or like agent with
whom Producer/Seller has dealt, or is alleged to have dealt regarding this
Agreement.
ARTICLE XXII
ASSIGNMENT - TERMINATION
All of the rights and obligations of this Agreement shall
inure to and be binding upon the legal representatives, successors and permitted
assigns of the Parties hereto. No assignment shall impose upon the non-assigning
Party any obligation or burden in excess of those obligations or burdens as
exist between the original Parties to this Agreement. This Agreement or any
interest herein shall not be assigned without the prior written consent of the
other Parties, which consent shall not be unreasonably withheld.
27
Subject to the provisions of the Federal Bankruptcy Code, this
Contract shall not be deemed an asset of either Seller or Buyer and, upon five
(5) days prior written notice, either such Party may terminate this Agreement
without penalty at any time in the event the other such Party enters into any
voluntary or involuntary receivership, bankruptcy, or insolvency proceedings in
any applicable national jurisdiction.
ARTICLE XXIII
NO IMPLIED WARRANTIES
Seller's only warranties with respect to performance of its
obligations hereunder are those expressly set forth in this Agreement and no
implied warranties, including fitness for a particular purpose, shall be implied
therefrom.
ARTICLE XXIV
LIMITATION ON DAMAGES
Except as provided herein, neither party shall be liable for
any indirect, special, consequential, or punitive damages arising in connection
with the performance or nonperformance of any obligations under this Agreement.
ARTICLE XXV
COUNTERPARTS
This Agreement is being executed in several counterparts, each
of which is an original and all of which together constitute but one and the
same Agreement.
28
ARTICLE XXVI
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Each party warrants and represents to the other that:
(i) it has all requisite power, authority, licenses,
permits, permissions, approvals and franchises, corporate or otherwise, to
execute and deliver this Agreement and perform its obligations hereunder;
(ii) its execution, delivery, and performance of this
Agreement has been duly authorized by, or is in accordance with, its organic
instruments, this Agreement has been duly executed and delivered for it by the
signatories so authorized, and this Agreement constitutes its legal, valid and
binding obligation enforceable in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights in
general and by general principles of equity;
(iii) its execution, delivery, and performance of this
Agreement will not result in a breach or violation of, or constitute a default
under, any agreement, lease or instrument to which it is a party or by which it
or its properties may be bound or affected; and
(iv) it has not received any notice, nor to the best of its
knowledge is there pending or threatened any notice, of any violation of any
applicable laws, ordinances, regulations, rules, decrees, awards, permits or
orders which would materially adversely affect its ability to perform hereunder.
29
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/ Xxxxx X. Page______________________________________
ITS Executive Vice President - Energy Resources and Development
SELLER: ARCH COAL SALES COMPANY, INC.
BY _____/s/ Xxxx X. Eaves_______________________________________
ITS ____President_______________________________________________
30
Attachment I
Roseton Dock and Vessel Limitations:
- LOA - 890 Feet Maximum
- Beam - No Restriction
- Water Depth in Berth - 36+ Feet MLW
(Operational Draft 31 Feet MLW Channel at Haverstraw is Limiting)
Current List of Vessels which have Delivered Coal to Roseton:
- Ambassador
- Atlas
- Bauta
- Ballangen
- Xxxxxxxx Xxxxxxxxxx
- Energy Enterprise
- Nelvana
- Xxxxxxxxx
