Exhibit (10) (i) 85
AMENDMENT IV TO THE AGREEMENT
FOR THE SALE AND PURCHASE OF COAL
THIS AMENDMENT ("AMENDMENT"), dated as of December 29, 2000 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 as AMENDED ("Amendment III")
on November 1, 1999 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 III of the AGREEMENT provides that
beginning July 1, 2000, BUYER and SELLER shall commence good faith negotiations
with respect to the price of coal for the next Contract Year; and
WHEREAS, notice was duly given and BUYER and SELLER entered into
good faith negotiations; and
WHEREAS, after completion of good faith negotiations, BUYER and
SELLER desire to amend the AGREEMENT to provide for the pricing of coal and
certain other AGREEMENT provisions;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
ARTICLE II (TERM OF AGREEMENT), ARTICLE IV (SPECIFICATION & QUALITY
& WEIGHT), ARTICLE VI (BASE PRICE) and ARTICLE VII (ADJUSTMENT IN PRICE FOR
QUALITY) 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
The Term of this AGREEMENT shall be for the period commencing
January 1, 1997 and continuing until midnight, December 31, 2002, 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.
ARTICLE III
DELIVERIES
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 Buyer requires the coal and
provides notice that an Incremental Vessel will be taken when scheduling
deliveries for a calendar quarter. In addition, Buyer will provide notice by
July 1, 2001 that the XXXXX (X) Incremental Vessel will be required sometime
during the remainder of the year. The XXXXXXX (X), XXXXXXXXX (XX) and XXXXXXXXX
(XX) vessels will be Incremental Vessels subject to the provisions herein.
Incremental Tonnage will be priced at the Base Price as provided in Article VI.
One of the XXX (X) firm Supplemental Coal vessels (see Article VI herein) shall
be scheduled in the first half of the year and the XXXXXX vessel shall be
scheduled in the last six months of the year.
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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. Seller
will not be required to ship more than two Vessels in any one month.
On or before 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 notice of acceptance of an Incremental Vessel if one falls in
the quarter. 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.
The Seller reserves the right to re-offer any unshipped Incremental
Tonnage to the Buyer at another 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.
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Section 3. DELIVERY SCHEDULE LIMITATIONS: Both Firm and Incremental
Tonnage can be delivered during the same quarter, but Seller will not be
obligated to deliver more than XXXX (X) 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: Seller's
Vessel shall offload cargo at a minimum rate of XXX Metric (XXX Short) Tons per
hour. Buyer and Seller shall negotiate an acceptable allowance should a vessel
fail to meet this minimum discharge rate.
ARTICLE IV
SPECIFICATION & QUALITY & WEIGHT
Section 1. ORIGIN: The coal shall be from the Producer's operations
as per the component blends indicated and meet the specifications as per
Attachment I:
Blend A Blend B
Santander XX% XX%
Tachira XX% XX%
Mina Norte XX% XX%
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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 annual maximum of XX% of the two coal blend.
Higher percentages of Santander in blend A will command the same price per short
ton. If the secondary component of annual coal loadings exceeds XX%, Seller will
refund Buyer the difference between the actual weighted annual component price
times the tonnage shipped and actual charges for the same tonnage. Individual
coal loadings with greater than XX% of the secondary component or those using a
three coal blend that results in a lower price per net ton using the weighted
component price per MMBtu (See Attachment III) will be so priced provided the
cargo is accepted by Central Xxxxxx. Any coal loadings so priced shall be
excluded from the annual determination of the percentage of secondary coal
component.
The three 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%. 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.
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ARTICLE VI
BASE PRICE
Section 1. The Base Price in Contract Year 2001 for XXXXXXXX (XX)
coal shipments (XX firm plus X incremental - totaling approximately XXX,XXX
metric tons) shipped under the terms of this Agreement will be $XX.XX DES per NT
for Blend A and Blend B.
Subsequent to the completion of negotiations, Buyer requested and
Seller agreed to XXXXX (X) additional coal shipments (Supplemental Coal) in 2001
(X firm plus X incremental - totaling approximately XX,XXX metric tons). These
will be priced at $ XX.XX DES per net ton for Blend A and Blend B.
Buyer has requested and Seller has agreed to ship Blend A in
contract year 2001 however Seller reserves the option to ship Blend B in the
event that coal stocks or vessel availability make Blend A untenable.
Section 2. On or before July 1, 2001, Buyer and Seller will enter
into negotiations to fix the Base Price for coal delivered hereunder for the
ensuing year. Seller has agreed to negotiate a Master Purchase Agreement (MPA)
with Dynegy Inc., which will assume Buyer's rights under this contract in early
2001. This Agreement will terminate on December 31, 2001, if negotiations for
the following year have not been completed by September 1.
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ARTICLE VII
ADJUSTMENT IN PRICE FOR QUALITY
Section 1. BTU VALUE: The Price to be paid to Seller by Buyer is
based upon coal with XX,XXX BTU/LB heat content (As Received 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 XX,XXX and 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 , 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;
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 XXX percent (X%)
by weight of the "as received" analysis of the coal. If the Ash Value is between
XXX percent and XXX percent, 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
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
President
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Attachment III
Base Prices/Blend:
=========================== === ============= === =========== === =============
COMPONENT $/MMBTU MIN % MAX %
--------------------------- --- ------------- --- ----------- --- -------------
Mina Norte A $X.XXX XX XX
B $X.XXX XX XX
Norte de Santander A $X.XXX XX XX
B $X.XXX XX XX
Tachira A $X.XXX XX XX
B $X.XXX XX XX
=========================== === ============= === =========== === =============
Weighted Prices per short ton determined using the above $/MMBtu and the
guaranteed contract Btu/Lb .
A = Price for initial XX Cargoes ($ XX.XX)
B = Price for additional XX Cargoes ($ XX.XX)
