Adjustment for Inflation. The Coal Prices per ton set forth in Section 8 shall be increased or decreased for each percentage point of change, or proportionately for fractional parts of a percentage point of change, to reflect changes in the following indices. The Coal Price will be allocated per the index weights detailed below. Changes shall become effective semi annually as of January 1, and July 1 of each year, beginning July 1, 2005, and shall be based upon the preliminary indices for November and May respectively. The index base and base amounts shall be the following: * Portion omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. CPI (W) ** 30 % 186.8 Preliminary November 2004 PPI industrial Commodities - Less Fuel & Pwr** 32 % 154.9 Preliminary November 2004 #2 Diesel Fuel wpu 0573- 03** 8 % 159.7 Preliminary November 2004 GDP-1PD*** 15 % 108.452 Q3 2004 Prime Rate**** 15 % 5.25 December 31, 2004 ** U.S. Department of Labor, Bureau of Labor Statistics, Not Seasonally Adjusted. *** U.S. Department of Commerce, Bureau of Economic Analysis, Price Indexes for Gross Domestic Product, Expanded D / Table 1.5.4 / Seasonally Adjusted. **** Prime Rate of interest as reported in the money rates section of the Wall Street Journal for the last business day of the quarter — as published on the subsequent business day. The impact of the semi-annual escalations, on a net basis, as weighted above shall not impact the Base Price until they exceed an Embedded Escalation Deadband, on a semi-annual basis, as follows: Escalation Date Increase Increase Jul 1, 2005 [ * ] [ * ] Jan 1, 2006 [ * ] [ * ] Jul 1, 2006 [ * ] [ * ] Jan 1, 2007 [ * ] [ * ] Jul 1, 2007 [ * ] [ * ] Notwithstanding anything contained herein to the contrary, in no event shall the Coal Price as adjusted pursuant to this agreement at any time be less than the original Coal Price stated in Section 8, by calendar year, as set forth above . If the basis for any of the index numbers is changed, said index shall be adjusted to take into account such changed basis. In the event any designated index is discontinued or altered, becomes unavailable, or is no longer applicable, the Parties shall undertake to agree on a substitute index or a substitute method of cost adjustment which most closely matches the economic structure of the discontinued or altered index. If the Parties fail to reach agreement on the substitute index or method within 90 days, then the substitute index or substitute method of * Portion omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.
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Adjustment for Inflation. The Coal Prices Price per ton Ton set forth in Section 8 hereinabove shall be increased or decreased for each percentage point of change, or proportionately for fractional parts of a percentage point of change, to reflect changes in the following indices. The Coal Price will be allocated adjusted per the index weights indexes as weighted and detailed below. Changes shall become effective semi semi-annually as of January 1, 1 and July 1 of each year, beginning July January 1, 20052008, and shall be based upon the preliminary indices for November of the prior year and May of the current year, respectively. The Gross Domestic Product-Implicit Price Deflator (GDP-IPD) shall be the preliminary indices for the third quarter of the prior year, and first quarter of the current year, respectively. The Prime Rate index shall be based on the Prime Rate on the 15th day of December and June, respectively. The index base and base amounts shall be the following: * *Portion omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. Index Weight Index Base CPI (W) *Urban Wage Earners and Clerical Workers-All Items cwur0000sa0* 30 30% 186.8 198.544 Preliminary November 2004 February 2007 PPI industrial Industrial Commodities - Less Fuel & Pwr** 32 32% 154.9 169.0 Preliminary November 2004 February 2007 #2 Diesel Fuel wpu 0573- 03wpu057303 ** 8 8% 159.7 193.5 Preliminary November 2004 GDP-1PDFebruary 2007 GDP-IPD *** 15 15% 108.452 Q3 2004 116.890 Q4 2006 Preliminary Prime RateRate **** 15 15% 5.25 December 318.25 March 29, 2004 *2007 * U.S. Department of Labor, Bureau of Labor Statistics, Not Seasonally Adjusted, 1982-84 = 100% basis. *** U.S. Department of Labor, Bureau of Labor Statistics, Not Seasonally Adjusted, 1982 = 100% basis, preliminary basis. ***U.S. Department of Commerce, Bureau of Economic Analysis, Price Indexes for Gross Domestic Product, Expanded D Product - Implicit Price Deflator / Table 1.5.4 1.1.9 / Seasonally Adjusted, 2000 = 100% basis, preliminary release. **** Prime Rate of interest as reported in the money rates section of the Wall Street Journal for the last business day of the quarter — - as published on the subsequent business day. The impact of the semi-annual escalations, on a net basis, as weighted in the table above shall not impact the Base Coal Price until they exceed an the Embedded Escalation Deadband, Deadband of three percent (3%) per year on a semi-annual basisbasis as follows (detail provided in Exhibit B-1, as follows: Escalation Date Increase Increase Jul 1, 2005 [ * ] [ * ] Jan 1, 2006 [ * ] [ * ] Jul 1, 2006 [ * ] [ * ] Jan which is attached hereto and incorporated by this reference). JUL 1, 2007 [ $ * ] [ $ * ] Jul JAN 1, 2007 [ 2008 $ * ] [ $ * ] JUL 1, 2008 $ * $ * JAN 1, 2009 $ * $ * JUL 1, 2009 $ * $ * JAN 1, 2010 $ * $ * JUL 1, 2010 $ * $ * JAN 1, 2011 $ * $ * JUL 1, 2011 $ * $ * JAN 1, 2012 $ * $ * JUL 1, 2012 $ * $ * *Portion omitted pursuant to request for confidential treatment filed separately with the Securities and Exchange Commission. Notwithstanding anything contained herein to the contrary, in no event shall the Coal Price as adjusted pursuant to this agreement Section 9 at any time be less than the original Coal Price stated in Section 8Price, by calendar year, as set forth above in Section 8 above. If the basis for any of the index numbers is changed, said index shall be adjusted to take into account such changed basis. In the event any designated index is discontinued or altered, becomes unavailable, or is no longer applicable, the Parties shall undertake to agree on a substitute index or a substitute method of cost adjustment which most closely matches the economic structure of the discontinued or altered index. If the Parties fail to reach agreement on the substitute index or method within 90 ninety (90) calendar days, then the substitute index or substitute method of * Portion omitted pursuant cost adjustment shall be submitted to a request for confidential treatment arbitration and filed separately with resolved. The values to perform the Securities and Exchange Commissioncalculations set forth in this section shall be rounded to three decimal places.
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