CONTRACT 00-000-000
EXHIBIT 10.46
SPOT COAL SUPPLY AGREEMENT
This is a spot coal supply agreement (the "Agreement") dated June 1,
1996 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 June 1, 1996 and shall
continue through December 31, 1996.
SECTION 3. QUANTITY; OPTION
SECTION 3.1 Quantity. Seller shall sell and deliver and Buyer shall
purchase and accept delivery of 100,000 tons of coal per month. Such
coal shall be delivered in accordance with reasonable delivery
schedules to be submitted by Buyer as necessary.
SECTION 3.2 Option.
(a) Buyer shall have an option (the "Option") to extend the
term of this Agreement through December 31, 1997 (the period January 1, 1997 to
December 31, 1997
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being hereinafter referred to as the "Option Period") under the terms and
conditions set forth in subsection (b) below. Buyer shall exercise the Option by
giving notice to Seller ("the Option Notice") by November 1, 1996 of its
exercise of the Option.
(b) If Buyer exercises the Option:
(i) The quantity to be delivered hereunder during the
Option Period shall be as designated by Buyer in its Option Notice but shall be
no greater than one million tons and no less than 750,000 tons. Such coal shall
be delivered ratably over the Option Period in accordance with reasonable
delivery schedules to be submitted by Buyer as necessary.
(ii) The base price of the coal to be sold and
purchased during the Option Period will be $.70500/MMBTU.
(iii) Except as specifically set forth in (i) and
(ii) above, all provisions of this Agreement shall remain in effect during the
Option Period.
SECTION 4. SOURCE
SECTION 4.1 Source. The coal sold hereunder shall be supplied from
geological seams Indiana 5 and 6, Kindill 1 and 2 Mines, Pike County, Indiana
(the "Coal Property").
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.
SECTION 4.3 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
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of the quality required by this Agreement, and such inability is not caused by a
force majeure event as defined in SECTION 10, then Buyer will have the option of
requiring that Seller 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 DELIVERY. The coal shall be delivered to Buyer F.O.B.
railcar at the rail loading facility near Enosville, Indiana on the Norfolk
Southern Railway (the "Delivery Point"). 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 retained by Buyer.
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. Buyer or its contractor shall furnish suitable
railcars 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 owned or leased by Buyer while such railcars are in
Seller's control
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or custody. Seller shall comply with the applicable provisions of Buyer's rail
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 one dollar ($1) per gallon for each application of freeze
conditioning agent or side release agent, as the case may be. Seller shall
invoice Buyer for all such treatments which occur in a calendar month by the
fifteenth of the following month; and payment shall be mailed by the 25th of
such following month or within ten days after receipt of Seller's invoice,
whichever is later.
SECTION 6. QUALITY
SECTION 6.1 Specifications. The coal delivered hereunder shall
conform to the following specifications on an "as received" basis:
Guaranteed Monthly Rejection Limits
Specifications Weighted Average (per shipment)
--------------------------------------------------------------------------------
BTU/LB. min. 11,000 < 10,700
LBS/MMBTU:
----------
MOISTURE max. 13.0 > 14.0
ASH max. 9.0 > 10.5
SULFUR max. 3.1 > 3.3
SULFUR min. 2.2 < 2.0
CHLORINE max. 0.05 > 0.10
FLUORINE max. 0.006 > .01
NITROGEN max. 1.20 > 1.50
ASH/SULFUR RATIO min. 2.5:1 < 2.5:1
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Size (3" x 0"):
Top size (inches)* max. 3x0 > 3x0
Fines (% by wgt)
Passing 1/4" screen max. 45 > 55
% BY WEIGHT:
------------
VOLATILE max. 38 > 40
VOLATILE min. 30 < 29
FIXED CARBON max. 46 > 48
FIXED CARBON min. 35 < 30
GRINDABILITY (HGI) min. 52 < 50
BASE ACID RATIO (B/A) max. .50 > .60
SLAGGING FACTOR** max. 1.90 > 2.10
FOULING FACTOR*** max. 0.50 > 1.00
ASH FUSION TEMPERATURE ((DEG.)F) (ASTM D1857)
-----------------------------------------------
REDUCING ATMOSPHERE
-------------------
Initial Deformation min. 1950F min. 1900F
Softening (H=W) min. 2005F min. 1975F
Softening (H=1/2W) min. 2050F min. 2000F
Fluid min. 2135F min. 2100F
OXIDIZING ATMOSPHERE
--------------------
Initial Deformation min. 2300F min. 2200F
Softening (H=W) min. 2330F min. 2280F
Softening (H=1/2W) min. 2425F min. 2300F
Fluid min. 2490F min. 2375F
* 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 Weight(Dry))
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*** Fouling Factor (R(f))=(B/A) x (Percent Na(2)0 by Weight(Dry))
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 > means greater than:
< means less than.
SECTION 6.2 DEFINITION OF "SHIPMENT". As used herein, a "shipment"
shall mean one barge load, a barge lot load, or one unit trainload, in
accordance with Buyer's actual 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, Buyer shall return the coal to Seller or, at Seller's request, divert
such coal to Seller's designee, all at Seller's cost. Seller shall replace
the rejected coal within five (5) 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 (as
adjusted under SECTION 8.3 for coal of the
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quality actually supplied by the other source) 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 price shall be adjusted in accordance with SECTION 8.3 and the quantity
Buyer is obligated to purchase from Seller, at Buyer's sole option, shall
be reduced by the amount of each such non-conforming shipment. 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 one or more of the Guaranteed
Monthly Weighted Averages set forth in SECTION 6.1 for any one month during the
term of this Agreement, or if 3 barge shipments in a 7 day period are rejectable
by Buyer, of if Buyer receives at generating station(s) 2 rail shipments which
are rejectable in any 10 day period, Buyer may, upon notice confirmed in writing
and sent to Seller by certified mail, terminate this Agreement
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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 method is mutually agreed
upon by the parties. Such scales shall be duly certified 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 inaccurate, over or under the tolerance range allowable for the
scale, 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 reliable and industry
accepted standards. Samples for analyses shall be taken by any reliable and
industry accepted standard 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
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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.
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
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CONTRACT #00-000-000
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.
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 Price. The base price (the "Base Price") of the coal
to be sold hereunder will be $.70000/MMBTU.
SECTION 8.2 Quality Price Adjustments.
(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:
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CONTRACT #00-000-000
DISCOUNT VALUES
---------------
$/MMBTU
-------
BTU/LB 0.2604
$/LB./MMBTU
-----------
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 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.
Guaranteed Monthly
Weighted Average Discount Point
---------------- --------------
BTU/LB min.11,000 10,700
LB/MMBTU
---------
SULFUR max. 3.1 3.2
ASH max. 9.0 9.5
MOISTURE max. 13.0 14.0
For example, if the actual Monthly Weighted Average of ash equals
10.0 lb/MMBTU, then the applicable discount would be (10.0 lb. - 9.0 lb.) x
$0.0083/lb./MMBTU = $.0083/MMBTU.
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CONTRACT #00-000-000
SECTION 8.3 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
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 Procedures for Coal Shipments. Seller shall
invoice Buyer at the Base Price, minus any quality price discounts, for all
coal unloaded in a calendar month by the fifteenth of the following month.
SECTION 9.3 Payment Procedures for Coal Shipments. Payment for coal
unloaded in a calendar month shall be mailed by the 25th of the month following
the month of unloading or within ten days after receipt of Seller's invoice,
whichever is later. Buyer shall mail all
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CONTRACT #00-000-000
payments to Seller's account at X.X. Xxx 000, 000 Xxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000, Attn: Xxxxxx Xxxxxxxx.
SECTION 9.4 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 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
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, fires, floods, earthquakes, or the failure of Norfolk Southern Railway
Company ("NS") to transport the coal from the Delivery Point for any reason
other than Buyer's breach of its agreement with NS, 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
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CONTRACT #00-000-000
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 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 11. NOTICES
SECTION 11.1 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:
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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
SECTION 11.2 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. RIGHT TO SELL Buyer shall have the unqualified right to
sell all or any of the coal purchased under this Agreement.
SECTION 13. INDEMNITY AND INSURANCE
SECTION 13.1 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 attorney's fees) (i) relating to the barges or railcars provided
by Buyer or Buyer's contractor while such barges or railcars are in the care
and custody of the loading dock or loading facility, (ii) due to any failure
of Seller to comply with laws, regulations or ordinances, or (iii) due to the
acts or omissions of Seller in the performance of this Agreement.
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SECTION 13.2 Insurance. Seller agrees to carry insurance coverage with
minimum limits as follows:
(1) Commercial General Liability, including Completed
Operations and Contractual Liability, $1,000,000 single limit liability.
(2) Automobile General Liability, $1,000,000 single limit
liability.
(3) In addition, Seller shall carry excess liability insurance
covering the foregoing perils in the amount of $4,000,000 for any one
occurrence.
(4) 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 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.
SECTION 14. 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
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notice describing such breach and stating its intention to terminate this
Agreement no sooner than 15 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 15. 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 16. DOCUMENTATION AND RIGHT OF AUDIT
Seller shall maintain all records and accounts pertaining to payments,
quantities, quality analyses and source of 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 2 years thereafter.
SECTION 17. 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 00 XXX XXXXXXX 60-
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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 CRF
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 CRF 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 18. 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 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
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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 19. MISCELLANEOUS
SECTION 19.1 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 19.2 HEADINGS. The paragraph headings appearing in this
Agreement are for convenience only and shall not affect the meaning of
interpretation of this Agreement.
SECTION 19.3 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 19.4 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 19.5 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 transactions contemplated
hereby, in which case the parties shall negotiate in good faith a substitute
provision.
SECTION 19.6 BINDING EFFECT. This Agreement shall bind and inure to the
benefit of the parties and their successors and assigns.
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SECTION 19.7 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, that 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 19.8 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 19.9 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
LOUISVILLE GAS AND ELECTRIC
KINDILL MINING, INC. COMPANY
By: __________________________ By: ________________________________
E. Xxxxx Xxxxx, Xxxxx Xxxxxxx, Vice President &
President General Manager
Wholesale Electric Business
Date: __________________________ Date: ________________________________
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CONTRACT #00-000-000
00-000-000
Page 1 of 2
EXHIBIT A
SAMPLE COAL PAYMENT CALCULATIONS
Total Evaluated Coal Costs for Contract No. 00-000-000
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For contracts supplied from multiple "origins", each "origin" will be calculated
individually
SECTION I BASE DATA
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1) Base F.O.B. price per ton: $15.40 /ton
1a) Tons of coal delivered: ________ tons
2) Guaranteed average heat content: 11,000 B.T.U./LB.
2r) As received monthly avg. heat content: ________ B.T.U./LB.
2a) Energy delivered in M.M.B.T.U.: ________ MMBTU
[(Line 1a)*2,000 lb./ton*(Line 2r)]*MMBTU/1,000,000 BTU
2b) Base F.O.B. price per M.M.B.T.U.: $________ /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 3,100 LBS./MMBTU
3r) As received monthly avg. sulfur ________ LBS./MMBTU
4) Guaranteed monthly avg. max. ash 9,000 LBS./MMBTU
4r) As received monthly avg. ash ________ LBS./MMBTU
5) Guaranteed monthly avg. max. moisture 13,000 LBS./MMBTU
5r) As received monthly avg. moisture ________ LBS./MMBTU
SECTION II DISCOUNTS
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Assign a (-) to all discounts (round to five (5) decimal places)
6d) B.T.U./LB.: If line 2r is less than 11,000 BTU/lb.
{1-[(line 2r)/(line 2)]}*$0.2604/MMBTU
{1-[( )/( )]}*$0.2604 = $________ /MMBTU
7d) SULFUR: If line 3r is greater than 3,200 lbs./MMBTU
[(line 3r)-(line 3)]*$0.1232/lb sulfur
[( )-( )]*$0.1232 = $________ /MMBTU
8d) ASH: If line 4r is greater than 9,500 lbs./MMBTU
[(line 4r)-(line 4)]*$0.0083/xx xxx
[( )-( )]*$0.0083 = $________ /MMBTU
9d) MOISTURE: If line 5r is greater than 14,000 lbs./MMBTU
[(line 5r)-(line 5)]*$0.0016/lb moisture
[( )-( )]*$0.0016 = $________ /MMBTU
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Contract #00-000-000
00-000-000
Page 2 of 2
SECTION III TOTAL PRICE ADJUSTMENTS
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Determine total Discounts as follows:
Assign a (-) to all Discounts and enter number for:
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)
$________/MMBTU + $________/MMBTU = $________
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)
$________ + $________ = $________
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