COAL SUPPLY AGREEMENT
THIS IS A COAL SUPPLY AGREEMENT (THE "AGREEMENT") DATED DECEMBER 15, 1995
BETWEEN LG&E POWER MARKETING INC., a California corporation, 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Buyer") and W.B. COAL COMPANY, INC., an
Ohio corporation, 000 Xxxx Xxxxx Xxxxxx, 00xx xxxxx, Xxxxxxxx, Xxxx 00000, and
WINDSOR COAL COMPANY, a West Virginia corporation, X.X. Xxx 00, Xxxx Xxxxxxx,
Xxxx Xxxxxxxx 00000 ("Producer" and collectively with W.B. Coal Company, Inc.
the "Seller").
RECITALS
A. The Buyer entered into a contract with Ohio Edison Company ("Ohio
Edison") under which Buyer shall supply coal for the operation of Ohio Edison's
Burger Plant located in Xxxxx Xxxx, Xxxx, Xxxx Xxxxx Xxxx Xxxxx 000.0 and Ohio
Edison's Mansfield Plant, located in Shippingsport, Pennsylvania, Ohio River
Mile Point 33.2 (collectively the "Plant") and under which Ohio Edison will
convert such coal to electric power and deliver such electric power to Buyer
(the "Ohio Edison Agreement").
B. Buyer and Seller wish to enter into this Agreement to enable Buyer to
fulfill all of its coal supply requirements under the Ohio Edison Agreement.
AGREEMENTS
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 the date
this Agreement is fully executed and shall continue through December 31, 1996.
SECTION 3. QUANTITY.
Section 3.1 BASE QUANTITY. Except as adjusted under Section 3.3, Seller
shall sell and deliver and Buyer shall purchase and accept delivery of 945,000
tons during the term hereof (the "Base Quantity").
Section 3.2 DELIVERY SCHEDULE. During the months of January through
March, Seller shall deliver 75,000 tons per month; and during the months of
April through December, Seller shall deliver 80,000 tons per month. Subject to
Section 3.3 and the timely delivery of barges by Buyer or Buyer's barging
contractor, such quantities shall be shipped in accordance with such schedule.
Time is of the essence with respect to the schedule so established; and failure
by Seller to deliver in a timely fashion shall constitute a material breach
within the meaning of Section 15 of this Agreement. As used in this Agreement,
all references to a month shall mean a calendar month.
Section 3.3 ADJUSTMENTS. Buyer shall have the right to change the monthly
delivery schedule and the Base Quantity as follows. Upon thirty (30) days prior
written notice to Seller, Buyer shall have the right to increase or decrease the
Base Quantity (80,000 tons) for any months between April and December by up to
20,000 tons so that the minimum quantity for such months will be 60,000 tons and
the maximum quantity for such months will be 100,000 tons.
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SECTION 4. SOURCE.
Section 4.1 SOURCE. The coal sold hereunder shall be supplied from
geological seam Pittsburgh #0, Xxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxx Xxxxxxxx (the
"Coal Property").
Section 4.2 ASSURANCE OF OPERATION AND RESERVES. Seller represents and
warrants that the Coal Property contains coal of a quality and in quantities
which will be sufficient to satisfy all the requirements of this Agreement.
Section 4.3 NON-DIVERSION OF COAL. Seller agrees and warrants that it
will not, without Buyer's express prior written consent, use or sell coal from
the Coal Property in a way that will reduce the balance of coal in the Coal
Property to an amount less than that required to be supplied to Buyer hereunder.
SECTION 5. DELIVERY. The coal shall be delivered to Buyer F.O.B. barge at
the Windsor dock at mile point 78 on the Ohio River (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 the Plant. Any resulting savings in
such transportation costs shall be retained by Buyer.
Title to and risk of loss of coal sold will pass to Buyer and the coal will
be considered to be delivered when barges containing the coal are disengaged by
Buyer's barging contractor from the loading dock, subject to Buyer's rejection
rights set forth in Section 6.3. Buyer or its contractor shall furnish suitable
open xxxxxx barges in accordance with a mutually agreeable delivery schedule
provided by Buyer to Seller. Seller shall arrange and pay for all costs of
transporting the coal from the mines to the loading docks and loading and
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trimming the coal into barges to the proper draft and the proper distribution
within the barges. Buyer shall arrange for transporting the coal by barge from
the loading dock to its generating station(s) and shall pay for the cost of such
transportation. For delays caused by Seller in handling the scheduling of
shipments with Buyer's barging contractor, Seller shall be responsible for any
demurrage or other reasonable penalties assessed by said barging contractor
against Buyer which accrue at the Delivery Point, including the demurrage,
penalties for loading less than the specified minimum tonnage per barge, or
other penalties assessed for barges not loaded in conformity with applicable
requirements. Buyer shall be responsible to deliver barges in as clean and dry
condition as practicable. Seller shall require of the loading dock operator
that the barges and towboats provided by Buyer or Buyer's barging contractor be
provided convenient and safe berth free of wharfage, dockage and port charges;
that while the barges are in the care and custody of the loading dock, all U.S.
Coast Guard regulations and other applicable laws, ordinances, rulings, and
regulations shall be complied with, including adequate mooring and display of
warning lights; that any incidental water in the cargo boxes of the barges be
pumped out as practicable by the loading dock operator prior to loading; that
the loading operations be performed in a workmanlike manner and in accordance
with the reasonable loading requirements of Buyer and Buyer's barging
contractor; and that the loading dock operator carry landing owners or
wharfinger's insurance with basic coverage of not less than $300,000.00 and
total of basic coverage and excess liability coverage of not less than
$1,000,000.00, and provide evidence thereof to Buyer in the form of a
certificate of
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insurance from the insurance carrier or an acceptable certificate of self-
insurance with requirement for 30 days advance notification of Buyer in the
event of termination of or material reduction in coverage under the insurance.
SECTION 6. QUALITY.
Section 6.1 SPECIFICATIONS. The coal delivered hereunder shall conform to
the following specifications on an "as received" basis:
Rejection Limits
Specifications Weighted Average (per shipment)
--------------------------------------------------------------------------------
BTU/LB. min. 12,200 LESS THAN 11,900
LBS/MMBTU:
MOISTURE max. 8.0 GREATER THAN 8.5
ASH max. 9.5 GREATER THAN 9.8
SULFUR (Low Sulfur Months)* max. 3.00 GREATER THAN 3.80
SULFUR (High Sulfur Months)* max. 3.50 GREATER THAN 3.80
SULFUR min. 0.82 LESS THAN 0.82
Size (3" x 0"): max. 3X0 GREATER THAN 3X0
Top size (inches)
Fines (% by wgt)
Passing 1/4" screen max. 45 GREATER THAN 50**
% BY WEIGHT:
VOLATILE min. 37 LESS THAN 36
GRINDABILITY (HGI) min. 50 LESS THAN 50
(HGI)
ASH FUSION TEMPERATURE (DEG. F) (ASTM D1857)***
REDUCING ATMOSPHERE
Initial Deformation min. 2040 min. 1950
Softening (H=W) min. 2090 min. 1980
Softening (H=1/2W) min. 2150 min. 2070
Fluid min. 2340 min. 2340
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* "Low Sulfur Months" shall mean the months of January, February, and July
through November; and "High Sulfur Months" shall mean the months of March
through June and December.
** 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 fifty per cent (50%) by weight of coal that will pass through a screen
having circular perforations one-quarter (1/4) of an inch in diameter.
*** The Ash Fusion Temperature specifications shall apply only if Ohio
Edison is experiencing an operational problem at the Plant related to ash
fusion.
Note: As used herein GREATER THAN means greater than:
LESS THAN means less than.
Section 6.2 DEFINITION OF "SHIPMENT". As used herein, a "shipment" shall
mean one barge load or a barge lot load in accordance with Buyer's sampling and
analyzing practices.
Section 6.3 REJECTION. For each shipment, Seller will provide to Buyer
approximate "as loaded" coal quality information for weight, moisture, ash,
sulfur, and BTU/lb. by notice sent by telecopier to Buyer prior to the time the
shipment arrives at the Plant. 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
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Seller's receipt of 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 of similar quality from another source in
order to replace the rejected coal. Seller shall reimburse Buyer for (i) any
amount by which the actual price plus transportation costs to Buyer of such coal
purchased from another source exceed the price of such coal under this Agreement
plus transportation costs to Buyer from the Delivery Point; and (ii) any and
all transportation, storage, handling, or other expenses that have been incurred
by Buyer for rightfully rejected coal. This remedy is in addition to all of
Buyer's other remedies under this Agreement and under applicable law and in
equity for Seller's breach as provided in Section 21.4.
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 foreign materials or excess
moisture or fines which limit loading and/or handling ability, then such non-
conforming coal shall be deemed accepted by Buyer; however, the quantity Seller
is obligated to sell to Buyer under the Agreement may or may not be reduced by
the amount of each such non-conforming shipment at Buyer's sole option and the
shipment shall nevertheless be considered "rejectable" under Section 6.4.
Further, for shipments containing extraneous materials, which include, but are
not limited to, slate, rock, wood, corn husks, mining materials, etc., the
estimated weight of such materials shall be deducted from the weight of that
shipment.
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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 two (2) months in a
six (6) month period, or if nine (9) barge shipments in a month are rejectable
by Buyer, Buyer may upon notice confirmed in writing and sent to Seller by
certified mail, suspend future shipments except shipments already loaded into
barges. Seller shall, within 10 business days of Seller's receipt of Buyer's
written notice, provide Buyer with reasonable assurances that subsequent monthly
deliveries of coal shall meet the Guaranteed Monthly Weighted Averages set forth
in Section 6.1 and that the source will not exceed the rejection limits set
forth in Section 6.1. If Seller fails to provide such assurances within said 10
day period, Buyer may terminate this Agreement by giving written notice of such
termination at the end of the 10 day period. A waiver of this right for any one
period by Buyer shall not constitute a waiver for subsequent periods. If Seller
provides such assurances to Buyer's reasonable satisfaction, shipments hereunder
shall resume and any tonnage deficiencies resulting from suspension may be made
up at Buyer's sole option. Buyer shall not unreasonably withhold its acceptance
of Seller's assurances, or delay the resumption of shipment. If Seller, after
such assurances, again fails to meet any of the Guaranteed Monthly Weighted
Averages for any one (1) month within the next six (6) months or if six (6)
barge shipments are rejectable within any one (1) month during such six (6)
month period, then Buyer may terminate this Agreement and exercise all its other
rights and remedies under applicable law and in equity for Seller's breach as
provided in Section 21.4.
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Section 6.5 WARRANTY DISCLAIMER. SELLER EXPRESSLY DENIES ANY IMPLIED
WARRANTIES OR EXPRESS WARRANTIES EXCEPT AS SET FORTH HEREIN. SELLER DOES NOT
WARRANT OR REPRESENT THAT THE COAL TO BE SOLD WILL BE FIT FOR ANY PARTICULAR
PURPOSE.
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 Ohio Edison without expense to Seller on
the basis of accurate scale weights at the Plant. Buyer shall exert
commercially reasonable efforts to cause Ohio Edison to operate and maintain its
scales in accordance with industry accepted standards and to allow Seller to be
present and observe such weighing. In the event the scales are determined to be
in error, an appropriate adjustment to price shall be made retroactively for a
period of no more than 30 days.
Section 7.2 SAMPLING AND ANALYSIS. The sampling and analysis of the coal
delivered hereunder shall be performed by Ohio Edison and shall be accepted and
used for the quality and characteristics of the coal delivered under this
Agreement. All analyses shall be made in Ohio Edison's laboratory without
expense to Seller in accordance with industry-accepted standards. If Seller
should at any time question the correctness of either the sampling or the
analyses made by Ohio Edison, Buyer shall exert commercially reasonable efforts
to cause Ohio Edison to allow Seller to challenge the same by written notice.
Thereafter, Buyer shall exert commercially reasonable efforts to cause Ohio
Edison to allow Seller to have a representative observe the sampling and/or to
receive a split of
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the original laboratory sample taken. To meet this requirement, Buyer shall
exert commercially reasonable efforts to cause Ohio Edison to retain the
remaining portion of the sample for a period of forty-five (45) days after the
sample is collected, so that Seller (and/or a mutually agreed upon commercial
laboratory employed by Seller at Seller's cost) may obtain and analyze a portion
of such sample. The results of such commercial testing laboratory's analysis
shall be accepted as the quality and characteristics of such coal if the
difference between Ohio Edison's results and such laboratory's results are
beyond allowable ASTM tolerances.
Section 7.3 REPORTING. Buyer shall either provide the results of Ohio
Edison's weighing, sampling, and analysis of any coal delivered hereunder to
Seller immediately upon Buyer's receipt of the same or have Ohio Edison provide
such results to Seller at the same time Ohio Edison provides such results to
Buyer. Buyer shall exert commercially reasonable efforts to cause the results
of Ohio Edison's weighing, sampling, and analysis of the coal delivered
hereunder to be delivered to Seller within ten (10) days after Ohio Edison's
unloading of such coal.
SECTION 8. PRICE.
Section 8.1 BASE PRICE. The base price ("Base Price") of the coal to be
sold hereunder will be firm and will be $.7730/MMBTU during the Low Sulfur
Months (as defined in Section 6.1) and $.7040/MMBTU during the High Sulfur
Months (as defined in Section 6.1).
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Section 8.2 QUALITY PRICE DISCOUNTS.
(a) The Base Price is based on coal meeting the Guaranteed Monthly
Weighted Average specifications for ash, sulfur, and moisture and the Rejection
Limits (per shipment) for BTU/lb as set forth in Section 6.1. Quality price
discounts shall be applied for each specification each month and will be as
follows:
ASH: $0.75/ton for each full 1 lb./MMBTU in excess of 8.5 lb./MMBTU.
SULFUR: $2.75/ton for each 1% or portion thereof in excess of 3% during
the Low Sulfur Months and in excess of 3.7% during the High
Sulfur Months, respectively. This discount will be applied on a
proportionate basis. For example, if, during a Low Sulfur Month,
actual sulfur is 3.2%, the price discount will be $0.55 per ton
(.2x$2.75).
MOISTURE: $0.25/ton for each full 1.00% in excess of 9.0% moisture.
BTU/LB: $0.50/ton for each full 50 BTU/lb below 11,900 BTU/lb applied on
a per shipment basis.
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:
LG&E Power Marketing Inc.
00000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: President
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with a copy to:
Louisville Gas and Electric Company
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000
Attention: Director, Fuels Procurement and Administration
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 month by the fifteenth of the following month.
Section 9.3 PAYMENT PROCEDURES FOR COAL SHIPMENTS. Payment for coal
unloaded in a month shall be mailed by overnight mail 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 payments to W.B. Coal
Company, Inc., 000 Xxxx Xxxxx Xxxxxx, 00xx xxxxx, Xxxxxxxx, Xxxx 00000.
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.
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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 mine roof
falls, or due to force majeures declared by Ohio Edison which affect Ohio
Edison's conversion of coal to electric power under the Ohio Edison Agreement,
which are beyond the reasonable control and without the fault or negligence of
the party affected thereby, then the obligations of both parties hereto shall be
suspended to the extent made necessary by such event; provided that the affected
party gives written notice to the other party as early as practicable of the
nature and probable duration of the force majeure event. The party declaring
force majeure shall exercise due diligence to avoid and shorten the force
majeure event and will keep the other party advised as to the continuance of the
force majeure event. During such force majeure event Seller shall not reduce
deliveries to Buyer and sell coal to any third party to whom it is not
contractually obligated to sell coal at the time of 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.
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Tonnage deficiencies resulting from a force majeure event shall be made up
at Buyer's sole option on a mutually agreeable schedule.
SECTION 11. CHANGES. Buyer may, by mutual agreement with Seller, at any
time by written notice pursuant to Section 12 of this Agreement, make changes
within the general scope of this Agreement in any one or more of the following:
quality of coal or coal specifications, quantity of coal, method or time of
shipments, place of delivery (including transfer of title and risk of loss),
method(s) of weighing, sampling or analysis and such other provision as may
affect the suitability and amount of coal for the Plant.
If any such changes makes necessary or appropriate an increase or decrease
in the then current price per ton of coal, or in any other provision of this
Agreement, an equitable adjustment shall be made in: price, whether current or
future or both, and/or in such other provisions of this Agreement as are
affected directly or indirectly by such change, and the Agreement shall
thereupon be modified in writing accordingly.
Any claim by the Seller for adjustment under this Section 11 shall be
asserted within thirty (30) days after the date of Seller's receipt of the
written notice of change, it being understood, however that Seller shall not be
obligated to proceed under this Agreement as changed until an equitable
adjustment has been agreed upon. The parties agree to negotiate promptly and in
good faith to agree upon the nature and extent of any equitable adjustment.
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SECTION 12. NOTICES.
Section 12.1 FORM AND PLACE OF NOTICE. Unless otherwise specifically
provided herein, any official notice, request for approval or other document
required to be given under this Agreement shall be in writing, unless otherwise
provided herein, and shall be deemed to have been sufficiently given when
delivered in person, transmitted by facsimile or other electronic media,
delivered to an established mail service for same day or overnight delivery, or
dispatched in the United States mail, postage prepaid, for mailing by first
class, certified, or registered mail, return receipt requested, and addressed as
follows:
If to Buyer: LG&E Power Marketing Inc.
00000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: President
With a copy to: Louisville Gas and Electric Company
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn.: Director, Fuels Procurement and Administration
If to Seller: Windsor Coal Company
c/o American Electric Power Service Corporation
Xxx Xxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxx 00000-0000
Attn.: Senior Vice President Fuel Supply
AND
W.B. Coal Company, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxxx
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Section 12.2 CHANGE OF PERSON OR ADDRESS. Either party may change the
person or address specified above upon giving written notice to the other party
of such change.
SECTION 13. RIGHT TO RESELL. Buyer shall have the unqualified right to
sell all or any of the coal purchased under this Agreement to any third party
and for purposes other than the operation of the Plant.
SECTION 14. INDEMNITY AND INSURANCE.
Section 14.1 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, or legal
actions for personal injuries, property damage and pollution (including
reasonable inside and outside attorney's fees) relating to the barges provided
by Buyer or Buyer's contractor while such barges are in the care and custody of
the loading dock or loading facility.
Section 14.2 INSURANCE. Seller agrees to carry insurance coverage or
self-insurance 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.
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(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 15. TERMINATION FOR DEFAULT.
Subject to Section 6.4, if either party hereto commits a material breach of
any of its obligations under this Agreement at any time, then the other party
has the right to give written notice describing such breach and stating its
intention to terminate this Agreement no sooner than 30 days after the date of
the notice (the "notice period"). If such material breach is curable and the
breaching party cures such material breach within the notice period, then the
Agreement shall not be terminated due to such material breach. If such material
breach is not curable or the breaching party fails to cure such material breach
within the notice period, then this Agreement shall terminate at the end of the
notice
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period in addition to all the other rights and remedies available to the
aggrieved party under this Agreement and at law and in equity, as provided in
Section 21.4.
SECTION 16. 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 sale
of Seller's coal to Buyer hereunder.
SECTION 17. DOCUMENTATION AND RIGHT OF AUDIT.
Seller and Buyer shall maintain all records and accounts pertaining to
payments, quantities, quality analyses, and source for all coal supplied under
this Agreement for a period lasting through the term of this Agreement and for
two years thereafter. Seller and Buyer shall have the right at no additional
expense to the other party 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 18. COAL PROPERTY VISITS. 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 visit 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 visit the Coal Property. Any such Visitors shall make every
reasonable effort to comply with Seller's regulations and rules regarding
conduct on
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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 visit the Coal Property 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. JOINT AND SEVERAL LIABILITY. The obligations and liabilities
of Seller under this Agreement shall be the joint and several obligations and
liabilities of W.B. Coal Company, Inc. and Windsor Coal Company.
SECTION 20. CONFIDENTIALITY AND PUBLICITY. Except as required by law or
government regulation, the existence and the provisions of this Agreement shall
be held in confidence by Seller and Buyer and shall not be disclosed by Seller
or Buyer (or any affiliates of Seller or Buyer) to any third party except as
authorized in writing by the other party. Neither party (including its
affiliates) shall issue news releases, generate publicity, or otherwise make
statements to the media concerning the existence or provisions of this Agreement
without first obtaining the written approval of the other party.
SECTION 21. MISCELLANEOUS.
Section 21.1 APPLICABLE LAW. This Agreement shall be construed in
accordance with the laws of the State of Kentucky, and all questions of
performance of obligations hereunder shall be determined in accordance with such
laws.
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Section 21.2 HEADINGS. The paragraph headings appearing in this Agreement
are for convenience only and shall not affect the meaning or interpretation of
this Agreement.
Section 21.3 WAIVER. The failure of either party to insist on strict
performance of any provision of this Agreement, or to take advantage of any
rights hereunder, shall not be construed as a waiver of such provision or right.
Section 21.4 REMEDIES. In the event of a breach of this Agreement, the
aggrieved party shall have all the remedies specifically provided in this
Agreement in addition to all other remedies provided by law or in equity.
However, in no event shall either party be liable to the other party for any
special, indirect, or consequential damages, subject to Section 14.1.
Section 21.5 SEVERABILITY. If any provision of this Agreement is found
contrary to law or unenforceable by any court of law, the remaining provisions
shall be severable and enforceable in accordance with their terms, unless such
unlawful or unenforceable provision is material to the transactions contemplated
hereby, in which case the parties shall negotiate in good faith a substitute
provision.
Section 21.6 BINDING EFFECT. This Agreement shall bind and inure to the
benefit of the parties and their successors and assigns.
Section 21.7 ASSIGNMENT. Neither party may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party, which consent shall not be unreasonably withheld or denied; provided,
however, that Buyer shall have the right, without consent of Seller, to assign
all or any part of this Agreement to any
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company, controlling, controlled by, or under common control with Buyer.
However such assignment shall not relieve Buyer of its obligations under the
Agreement.
Section 21.8 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties as to the subject matter hereof, and there are no
representations, understandings or agreements, oral or written, which are not
included herein.
Section 21.9 AMENDMENTS. Except as otherwise provided herein, this
Agreement may not be amended, supplemented or otherwise modified except by
written instrument signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
LG&E POWER MARKETING INC. W.B. COAL COMPANY, INC.
By: By:
---------------------------- ---------------------------------
Title: Title:
---------------------------- ---------------------------------
Date: Date:
---------------------------- ---------------------------------
WINDSOR COAL COMPANY
By:
----------------------------
Title:
----------------------------
Date:
----------------------------
21
