EXHIBIT 10.81
F-95513
COAL SUPPLY AGREEMENT
THIS AGREEMENT, made and entered into effective the 1st day of April,
1995, by and between CONSOLIDATION COAL COMPANY, QUARTO MINING COMPANY,
▇▇▇▇▇▇▇ COAL COMPANY, CONSOL PENNSYLVANIA COAL COMPANY, GREENON COAL COMPANY
and NINEVEH COAL COMPANY, (hereafter collectively called Seller), being
Delaware corporations, with their principal offices in, Pittsburgh,
Pennsylvania, and KENTUCKY UTILITIES COMPANY, (hereafter called KU), a
Kentucky corporation, having its principal office at Lexington, Kentucky;
WITNESSETH:
That, in consideration of the mutual covenants and agreements herein
contained, the parties agree as follows:
SECTION I. TERM AND TERMINATION. Subject to the provisions of Section
XII, and unless sooner terminated as elsewhere herein provided, this
Agreement shall commence April 1, 1995 and end March 31, 2000.
SECTION II. QUANTITIES OF COAL TO BE SOLD, PURCHASED AND DELIVERED;
MANNER OF DELIVERIES.
1. As used in this Agreement, "ton" shall mean a short ton of 2,000 pounds
avoirdupois weight. "Month" shall mean a calendar month; and "Contract Year"
shall mean a period of twelve successive months commencing on any April 1 within
the term
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hereof. "As-received" shall mean at unloading at Ghent.
2. In accordance with and subject to all terms, provisions and
conditions herein, during the term hereof, Seller shall sell and ship to KU,
and KU shall purchase, receive and pay Seller for, a Base Quantity of
2,100,000 tons of coal. This Base Quantity shall be sold, purchased and
delivered in the quantities set forth below in subparagraph (a), as ratable
on a monthly basis as possible.
(a) During the term, the quantities of coal to be sold, purchased and
delivered hereunder shall be as follows:
PERIOD BASE QUANTITY
------ --------------
April 1, 1995 through 420,000 tons + 10% quarterly
March 31, 1996 -
April 1, 1996 through 420,000 tons + 10% quarterly
March 31, 1997 -
April 1, 1997 through 420,000 tons + 10% quarterly
March 31, 1998 -
April 1, 1998 through 420,000 tons + 10% quarterly
March 31, 1999 -
April 1, 1999 through 420,000 tons + 10% quarterly
March 31, 2000 -
(b) On or before March 1, June 1, September 1, and December 1 of each
contract year, KU may give Seller notice in writing that KU elects to
increase or decrease the tons of coal to be sold, purchased and delivered
hereunder during the next Contract Quarter (April 1, July 1, October 1 and
January 1), by an amount, up to 10,500 tons for the Quarter.
(c) Seller shall cooperate with KU in the scheduling of the loading of
barges so that the delivery of coal from Seller
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may be coordinated with other barge deliveries to the Ghent Generating
Station.
SECTION III. SOURCE AND SHIPMENT OF, AND TITLE TO, COAL.
1. The primary source of coal to supply the requirements of this
Agreement shall be the ▇▇▇▇▇▇▇▇▇ Mine and the ▇▇▇▇▇▇▇ Mine in ▇▇▇▇▇▇▇▇
County, West Virginia. As necessary to comply with the quality requirements
of this Agreement, Seller may blend with coal from such primary sources, coal
from Seller's ▇▇▇▇▇▇▇▇, Mahoning Valley, ▇▇▇▇▇▇ and/or ▇▇▇▇▇ Fork Mines.
Seller may substitute comparable quality coal from other reserves that Seller
controls now or in the future, so long as such coal (A) is delivered to KU at
no greater delivered cost per million BTU including taxes, (B) is of a
quality and in conformity with the Specifications set forth in Section IV and
(C) prior written approval for such substitution has been obtained from KU.
2. Seller represents and warrants that the coal reserves now controlled
by Seller and Seller's production capacity are sufficient to satisfy all the
requirements of this Agreement. It is understood that some of the production
may be sold to purchasers other than KU; provided, however, that Seller
shall, at all times while this Agreement remains in effect, maintain
sufficient coal reserves and production capacity for Seller's full
performance of its obligations hereunder.
3. Seller shall prepare and load the coal into barges provided by KU's
barge carrier. Seller shall deliver the coal to
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KU f.o.b. barge at the loading facilities between M.P. 93.7 and 115.6 on the
Ohio River.
4. Coal mined, processed, and transported under this Agreement shall
comply with all applicable federal, state, and local laws and regulations.
SECTION IV. QUALITY AND SPECIFICATIONS OF COAL.
1. GENERAL. Coal delivered hereunder shall be:
(a) Predominantly washed coal meeting the Specifications set out in
Paragraph 2(a) below,
(b) free of extraneous material, crushed to the size of 2" x 0 with no
more than 55% classified as (less than 1/4") fines, with no ▇▇▇▇▇▇ or
other selected size or sizes or types of coal removed from the coal
delivered hereunder unless, and only to the extent, necessary to bring the
coal into compliance with Specifications herein.
2. SPECIFICATIONS.
(a) All coal received hereunder shall, on an as-received basis, meet the
following specifications:
Calorific Value 12,000 BTU/lb.
Ash 11.00% Maximum
Moisture 10.00% Maximum
Grindability (▇▇▇▇▇▇▇▇▇ Index) 50 Minimum
Ash Softening (H=1/2W)
(Temperature in reducing atmosphere) 2100DEG. F Minimum
Volatile Matter 32% Minimum
Fixed Carbon 43% Minimum
Sulfur 1.5% Minimum
SO2 Emission Limit * 6.25 lbs/MMBTU Maximum
Sizing 2" x 0
Fines (less than 1/4") 55% Maximum
Chlorine (Dry) 0.12% Maximum
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(b) All coal to be delivered hereunder, on an as-received basis, shall be
classified as rejectable at the qualities specified below:
Calorific Value 11,700 BTU/lb. Minimum
Ash 13.00% Maximum
Moisture 10.00% Maximum
Grindability (▇▇▇▇▇▇▇▇▇ Index) 45.00 Minimum
Ash Softening (H=1/2W)
(Temperature in reducing atmosphere) 21000 F Minimum
Volatile Matter 32% Minimum
Sulfur 1.5% Minimum
S02 Emission Limit * 6.25 lbs/MMBTU Maximum
Fines (less than 1/4") 55% Maximum
Chlorine (Dry) 0.16% Maximum
*SO2 = 20,000 X % Sulfur
-------------
BTU
(c) KU shall have the right to classify as rejectable any barge of coal
which, when sampled and analyzed in accordance with the provisions of
Section VIII, fails to meet the Specifications set out in Paragraph 2(b)
of this Section IV. If KU does reject coal failing to meet such
Specifications, Seller shall forthwith arrange for coal to be removed from
the barge or shipped to another purchaser at Seller's expense, including
but not limited to sampling and barge demurrage. If all coal received
hereunder by KU for three consecutive barges is classified by KU as
rejectable coal, or if KU has other reasonable grounds to anticipate that
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further shipments will be of rejectable coal, KU shall have the option of
stopping further shipments of coal by Seller until such time as Seller
furnishes to KU reasonable assurance that the quality of coal to be
shipped hereunder will meet the Specifications in Paragraph 2(a). In lieu
of rejecting the coal, KU may at its option purchase the rejected coal on
a "distress" basis mutually agreed upon.
(d) If 20-percent or more of monthly ratable shipments do not meet the
Specifications in Paragraph 2(a), KU shall also have the option of
stopping shipments until Seller furnishes reasonable assurance that the
quality of coal shipped hereunder meets the Specifications in Paragraph
2(a).
(e) SELLER HEREBY DISCLAIMS, AND BUYER HEREBY WAIVES, ANY AND ALL
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE.
SECTION V. PRICES OF COAL. Prices hereafter specified are to be paid by KU
to Seller for coal delivered and accepted hereunder and include any barge
fleeting or switching charges. Such prices shall not be increased before April
1, 1995, by increases in Seller's cost of Reclamation, Royalty expenses,
Severance Taxes, any other applicable Taxes, or any other costs included in the
Price f.o.b. Barge. After April 1, 1995, such prices shall be subject only to
the Adjustments herein specified.
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1. BEGINNING APRIL 1, 1995. The Price f.o.b. Barge to be paid by KU to
Seller for coal delivered and accepted hereunder, shipped by Seller from M.P.
93.7 to M.P. 115.6 on the Ohio River shall be as follows:
PERIOD COAL RECEIVED PRICE PER TON F.O.B. BARGE
---------------------- ---------------------------
April 1, 1995 through $18.00
March 31, 1996
April 1, 1996 through $18.40
March 31, 1997
April 1, 1997 through $18.75
March 31, 1998
April 1, 1998 through $19.15
March 31, 1999
April 1, 1999 through $19.50
March 31, 2000
Such prices shall remain fixed during each contract year.
2. The above price shall be subject to adjustment only in the event of
the enactment or change of any applicable federal or state statutes,
regulations, or other governmental impositions occurring after April 1, 1995,
which cause Seller's cost for providing coal to KU under this Agreement to
increase or decrease. Seller shall promptly notify KU of any such changes and
supply sufficient documentation for KU to verify any such changes. Such
adjustments shall be made effective on the first day of the calendar month
following the effective date of any change, (except when such change is
effective on the first day of the month in which case the adjustment shall be
made as of such date).
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SECTION VI. CALORIFIC, ASH AND MOISTURE ADJUSTMENTS.
1. As soon as practicable after the end of each month, KU shall
determine and report to Seller the weighted average calorific value, in BTU
per pound, the weighted average ash content, in percent, and weighted average
moisture content, in percent, from the weights of such coal determined as
provided in Section VII and from analyses thereof made as provided in Section
VIII. The debits or credits resulting from the calorific, ash and moisture
adjustments described in the following paragraphs (2), (3), (4), and (5) will
be made by the end of the following month.
2. CALORIFIC ADJUSTMENT. Such weighted average calorific value shall be
used in adjusting the price of coal in the following manner. The f.o.b. Barge
Price then in effect, specified and determined as provided in Section V, but
before any Ash or Moisture Adjustment provided for hereafter in this Section VI,
shall be adjusted to reflect variation from 12,000 BTU per pound in such
weighted average calorific value of the coal received, in arriving at the price
(exclusive of any Ash or Moisture Adjustment) to be paid by KU to Seller for
such coal, in accordance with the following formula (assuming, for purposes of
illustration, an f.o.b. Barge Price, prior to the Calorific Adjustment, of
$18.00):
ACTUAL BTU/LB. - 12,000 x $18.00 = Premium/Penalty Per Ton
-----------------------------
12,000
3. ASH ADJUSTMENT.
(a) If the monthly weighted average percent of ash for all
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receipt(s) received is less than 8.00%, the upward price adjustment shall be
$0.20/ton per percent with a base of 8.00%, I.E., ($0.20/ton x (8.00% -
monthly weighted ash %) = upward price adjustment).
Example: Monthly weighted average ash analysis is 5.80%,
$0.20/ton x (8.00% - 5.80%) = $0.44/ton is the upward price adjustment.
(b) If the monthly weighted average percent of ash is in excess of 11.00% and is
less than or equal to 12.00%, the downward price adjustment shall be $0.20/ton
per percent with a base of 11.00%, I.E., ($0.20/ton x (monthly weighted ash % -
11.00%) = downward price adjustment).
Example: Monthly weighted average ash analysis is 11.50%,
$0.20/ton x (11.50% - 11.00%) = $0.10/ton is the downward price adjustment.
(c) If the monthly weighted average percent of ash is greater than 12.00% and is
less than or equal to 13.00%, the downward price adjustment shall be $0.40/ton
per percent with a base of 11.00% I.E., ($0.40/ton x (monthly weighted ash % -
11.00%) = downward price adjustment).
Example: Monthly weighted average ash analysis is 12.50%, $0.40/ton x
(12.50% - 11.00%) = $0.60/ton is the downward price adjustment.
(d) If the monthly weighted average percent of ash is greater than 13.00%, the
downward price adjustment shall be $0.70/ton per
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percent with a basis of 11.00%, I.E., ($0.70/ton x (monthly weighted ash % -
11.00%) = downward price adjustment).
Example: Monthly weighted average ash analysis is 13.50%, $0.70/ton x
(13.50% - 11.00%) = $1.75/ton is the downward price adjustment.
4. MOISTURE ADJUSTMENT.
(a) If the monthly weighted average percent of moisture is in excess of 10.00%
and is less than or equal to 11.00%, the downward price adjustment shall be
$0.04/ton per percent with a base of 10.00%, I.E., ($0.04/ton x (monthly
weighted moisture % - 10.00%) = downward price adjustment). Example: Monthly
weighted average moisture analysis is 10.50%, $0.04/ton x (10.50% - 10.00%) =
$0.02/ton is the downward price adjustment.
(b) If the monthly weighted average percent of moisture is greater than 11.00%
and is less than or equal to 12.00%, the downward price adjustment shall be
$0.08/ton per percent with a base of 10.00%, I.E., ($0.08/ton x (monthly
weighted moisture % - 10.00%) = downward price adjustment). Example: Monthly
weighted average moisture analysis is 11.50%, $0.08/ton x (11.50% - 10.00%) =
$0.12/ton is the downward price adjustment.
(c) If the monthly weighted average percent of moisture is greater than 12.00%,
the downward price adjustment shall be $0.12/ton per percent with a base of
10.00%, I.E., ($0.12/ton x
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(monthly weighted moisture % - 10.00%) = downward price adjustment).
Example: Monthly weighted average moisture analysis is 12.50%, $0.12/ton x
(12.50% - 10.00%) = $0.30/ton is the downward price adjustment.
5. COMBINATION OF ADJUSTMENTS. The 11,700 BTU per pound Minimum Calorific
Value, 13.00% Maximum Ash, and 10.00% Maximum Moisture. Specifications in
Paragraph 2(b) of Section IV shall apply in the determination of coal
rejectability; but if KU receives and ▇▇▇▇▇ coal not meeting Specifications in
Paragraph 2(a) of Section IV, the actual BTU per pound, actual Ash content and
actual Moisture content of the coal shall be used in computation of the
Adjustments provided for in this Section VI. When the Calorific Adjustment, Ash
Adjustment, and Moisture Adjustment have been independently made as above
provided, the results shall be combined, and the final adjustment to the price
payable for such coal is so determined.
SECTION VII. WEIGHT DETERMINATIONS. The determinations of the weight of
the coal, for purposes of payment, shall be made with KU's belt scales at Ghent.
KU will provide to Seller by fax or other expeditious means, the barge weights,
as they become available. Said scales shall be inspected and certified in
accordance with the appropriate provisions of the laws of Kentucky. Seller shall
have the right to inspect at reasonable times and witness the certification of
said scales. If a
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discrepancy is found as a result of said inspection or certification, same
shall be resolved by mutual consent.
SECTION VIII. SAMPLING AND ANALYSIS.
1. The Seller has sole responsibility for quality control of the coal and
shall forward its loading quality to KU as soon after barge loading as
practicable. KU will, for purposes of payment, take a representative sample at
Ghent. Samples taken by KU, for purposes of payment, shall be taken in
accordance with KU's approved procedures of sampling. Each barge shall be
sampled and analyzed by KU. The analyses shall be performed in KU's laboratory
in accordance with KU's approved methods. Each barge sample shall be analyzed
for the as-received average moisture, ash, BTU and sulfur content. KU will
furnish Seller revisions of KU's approved sampling procedures.
2. KU shall compute the as-received weighted average moisture, ash, BTU
and sulfur content for all coal received during each calendar month. Such
calculations and payment of any premium/penalty adjustments will be delivered to
Seller before the end of the following month. The values so determined shall be
binding upon the parties unless and until it is established, by one or more
independent laboratories using the referee sample as designated in Section
VIII.3., that such analyses or calculations have been erroneous.
3. Prior to testing, each gross sample shall be divided into four equal
portions and used as follows: one shall be
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analyzed to determine the quality of the coal; one shall be available for
Seller (Seller sample); one shall be retained by KU, as the referee sample
for a period of 30 days. If requested by either party, such retained referee
sample will be sent to the location mutually agreed to for testing. All
testing of any such sample by third parties shall be at requester's expense
unless the results differ by more than the applicable ASTM reproducibility
standards, in such case, KU will pay for testing. If the independent
laboratory results differ by more than the applicable ASTM reproducibility,
independent laboratory results will govern.
4. KU shall provide to Seller, by mail or more expedient methods as
required, the as-received weighted average moisture, ash, BTU and sulfur content
of each barge received.
5. Seller shall have the right to inspect, observe the operation of any
sampling device or appurtenance thereto, sample crusher, reducer, sample
container, laboratory equipment or procedure of KU. A proven deficiency in KU's
sampling or testing procedures or facilities discovered by Seller shall be
brought to KU's attention, and KU shall take any needed corrective action.
SECTION IX. BILLING AND PAYMENT. Seller shall invoice KU for coal in each
shipment. Such invoices shall be itemized to the extent required by KU, and
shall be paid within 15 days after receipt of coal and receipt of invoice by KU.
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SECTION X. RECORDS AND AUDITS. Seller shall maintain accurate and
complete books of account and records regarding coal delivered hereunder. KU,
or independent consultants or firms designated by KU, shall have the right at
all times to observe and inspect Seller's operations, and at any reasonable
time or times to examine and audit all pertinent books of account and records
of Seller for the purpose of verifying transactions and matters hereunder. If
any such examination or audit discloses that an error has occurred and
resulted in an overpayment or underpayment hereunder, the amount thereof
shall be established and promptly paid, by the owing party, to the party
owed. This provision shall survive the termination or expiration of this
Agreement.
SECTION XI. COMPLIANCE WITH LAWS, REGULATIONS, POLICIES AND
RESTRICTIONS.
1. The parties recognize that, during the continuance of this Agreement,
legislative or regulatory bodies or the courts may adopt laws, regulations,
policies and/or restrictions which will make it impossible or commercially
impractical for Seller to continue delivery hereunder. If as a result of the
adoption of such laws, regulations, policies or restrictions, or change in
interpretation or enforcement thereof Seller decides that it will be impossible,
or economically or otherwise impracticable for Seller to continue delivery
hereunder, Seller shall so notify KU, and thereupon Seller and KU shall promptly
consider whether corrective actions can be taken in the mining and preparation
of
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the coal at Seller's mine and/or in the handling and utilization of the coal
at KU's Ghent Unit 1; and if in Seller's judgment such actions will not,
without unreasonable expense to Seller, make it possible and practical for
Seller to continue to deliver coal hereunder and without violating any
applicable law, regulation, policy or restriction, Seller shall have the
right, upon notice to KU, to terminate this Agreement without further
obligation hereunder on the part of either party; provided, however, that if
the impracticality of Seller's continuing to deliver coal hereunder is only
on economical grounds, KU may, at its option, prevent such termination by
agreeing to reimburse Seller for such expense to the extent that Seller deems
such expense to be unreasonable.
2. The parties also recognize that, during the continuance of this
Agreement, legislative or regulatory bodies or the courts may adopt laws,
regulations, policies and/or restrictions or change in interpretation or
enforcement thereof which will make it impossible or commercially impracticable
for KU to utilize in Ghent 1 Unit this or like kind and quality coal which
thereafter would be delivered hereunder. If as a result of the adoption of such
laws, regulations, policies or restrictions, KU decides that it will be
impossible or economically or otherwise impracticable for KU to utilize in KU's
Ghent Unit 1 coal which would be delivered hereunder, KU shall so notify Seller,
and thereupon KU and Seller shall promptly consider whether corrective actions
can
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be taken in the mining and preparation of the coal at the mine and/or in the
handling and utilization of the coal at KU's said Station; and if in KU's
judgment such actions will not, without unreasonable expense to KU, make it
possible and practical for KU to so utilize coal which thereafter would be
delivered hereunder and without violating any applicable law, regulation,
policy or order, KU shall have the right, upon notice to Seller, to terminate
this Agreement without further obligation hereunder on the part of either
party; provided, however, that, if the impracticality of KU's utilizing the
coal is only on economical grounds, Seller may, at its option, prevent such
termination by agreeing to reimburse KU for such expense to the extent that
KU deems such expense to be unreasonable.
SECTION XII. FORCE MAJEURES.
1. DEFINITION. The term "force majeure" as used herein shall mean any and
all causes reasonably beyond the control of the party failing to perform, such
as but not limited to acts of God, acts of the public enemy, insurrections,
riots, labor disputes, government closures, boycotts, labor and material
shortages, fires, explosions, floods, breakdowns or outages (including scheduled
outages for maintenance or repairs) of or damage to plants, equipment or
facilities, interruptions to power supplies or transportation, embargoes, and
acts of military or civil authorities, which wholly or partly prevent the
mining, processing, loading and/or delivering of the coal by Seller, or
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the receiving, accepting and/or utilizing of the coal by KU. As used in the
preceding sentence, the phrase "prevent the receiving or accepting" (of the
coal by KU) shall include, but not be limited to, breakdowns or outages of
the material handling systems at the Ghent Station. The parties recognize
that coal purchased by KU hereunder is intended by it for use in its Ghent
Unit 1. No breakdown or outage of any KU generating unit other than Ghent
Unit 1 shall constitute a force majeure hereunder; nor shall any asserted
ability of KU to use coal in any generating unit other than Ghent Unit 1 be
deemed to negate or eliminate a force majeure hereunder. As used in this
Paragraph, "scheduled outages for maintenance or repairs" includes, but is
not limited to, outages determined by KU to be necessary for warranty
inspections, periodic major overhauls, identification and/or correction of
causes of unsatisfactory performance including but not limited to failure to
meet environmental requirements, and/or performance of maintenance or repairs
reasonably believed to be necessary to the avoidance of involuntary or forced
outages. The outages do not include outages for normal maintenance performed
on an annual basis. For purposes of this Section XII, any force majeure
events which wholly or partly prevent the mining, processing, loading and/or
delivering of the coal by Seller from the ▇▇▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ mine(s)
shall be deemed to equally prevent the mining, processing, loading and/or
delivering of the coal by Seller from all other sources listed in Section
III.1.
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Each party shall promptly notify the other party following commencement of a
force majeure.
2. EFFECT HEREUNDER--GENERAL. If because of a force majeure either party
is unable to carry out any of its obligations under this Agreement (other than
the obligation to pay money in connection with performance of the Agreement),
and if such party shall promptly give to the other party written notice of such
force majeure, then the obligations of the party giving such notice and the
corresponding obligations of the other party shall be suspended to the extent
made necessary by such force majeure and during its continuance; provided,
however, that the party giving such notice shall act promptly in reasonable
manner to eliminate such force majeure. Either party shall have the right to
elect to suspend the production, delivery, receipt, acceptance and/or sale or
purchase of coal, as the case may be, for the period of time during which such
force majeure exists; and, in the event of a force majeure declared by Seller,
KU, if it so elects, shall have the right during such period to purchase coal
from other sources, and, in the event of a force majeure declared by KU, Seller,
if it so elects, shall have the right during such period to sell coal to others.
Any deficiencies in deliveries of coal hereunder caused by force majeures shall
not be made up except by mutual consent; but if Seller for any reason other than
a KU force majeure fails to deliver coal to KU pursuant to normal established
shipment schedules but does not
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notify KU of the occurrence of a force majeure, KU shall have the right to
require, but shall not be obligated to accept, make-up tonnages or deliveries
of tonnages so lost, at the price in effect when lost.
3. TERMINATION FOR PROTRACTED FORCE MAJEURE(S). If (A) a force majeure
occurs, (B) the obligations of the parties are suspended pursuant to provisions
of this Section XII, (C) such condition (alone or extended by other force
majeures) continues so that the obligations of the parties remain suspended for
a period of six months, and (D) at the end of such six months or at any time
thereafter during the continuance of the force majeure(s) the party other than
the party suffering the force majeure(s), in the exercise of reasonable
judgment, concludes that there is no likelihood of discontinuance in the
immediate future of the force majeure(s) or the resulting suspension of the
obligations of the parties, then such party may terminate this Agreement without
liability to the party suffering the force majeure(s) by giving to such party
sixty days written notice of intention to terminate, unless the force majeure(s)
are discontinued and the obligations are restored within such sixty days.
SECTION XIII. WAIVERS AND REMEDIES.
1. The failure of either party to insist in any one or more instances upon
strict performance of any provision of this Agreement by the other party, or to
take advantage of any of its
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rights hereunder, shall not be construed as a waiver by it of any such rights
with respect to any subsequent non-performance of such provision or other
matter hereunder; but the provision shall retain its effectiveness and
enforceability, and the rights of the parties shall continue and remain in
full force and effect.
2. If, at the time a party takes action hereunder requested or demanded
by the other party, the party taking the action gives written notice that it
is doing so under protest and without agreement as to the appropriateness of
the action, then the taking of the action, even if thereafter repeated
without further notice, shall not give rise to application of the principles
of contemporaneous construction by the parties.
3. Each remedy specifically provided for under this Agreement shall be
taken and construed as cumulative and in addition to every other remedy provided
for herein or by law.
4. Except with respect to a termination by either party pursuant to the
provisions of Section XV, no default by either party in the performance of
any of its covenants or obligations hereunder, which except for this
provision would be the legal basis for the right of rescission or termination
of this Agreement by the other party, shall give or result in such a right
unless and until the defaulting party shall fail to correct or take all such
actions as are necessary to correct such default within thirty days after
written notice of claim of such default is given to the defaulting party by
the other party.
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5. In no event shall either party be liable to the other for any
consequential damages as the result of any breach of warranty or default in
performance hereunder.
SECTION XIV. NOTICES.
1. Any notice, request, consent, demand, report or statement which is
given to, or served upon, any party under any provision of or in relation to
this Agreement, shall be in writing unless otherwise specifically provided
herein, and shall be treated as duly delivered when the same either is
personally delivered to the President or Vice President of KU in case of a
notice to KU, or personally delivered to the President or a Vice President of
Seller in the case of a notice to Seller, or is deposited in the United
States mail, postage prepaid, and properly addressed as follows:
If the notice is to KU,
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
Kentucky Utilities Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Copy to: President
Kentucky Utilities Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(or to such other person or such other address as KU shall have
designated by due notice to Seller),
and
If the notice is to Seller,
CONSOL, Inc.
Attn: Executive Vice President - Sales
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(or to such other person or such other address as Seller shall have
designated by due notice to KU).
2. Notwithstanding the provisions in Paragraph 1, any notice, request or
demand pertaining to routine matters of an operating nature may be delivered by
mail, messenger, telephone, telegraph, telecopy or orally to the party being
notified as may be appropriate, and, if given by telephone, telegraph, telecopy
or orally, shall be confirmed in writing as soon as practicable thereafter, if
the party to which the notice is given so requests in any particular instance.
3. CONSOL, Inc. ("CONSOL") shall administer this AGREEMENT exclusively on
behalf of Seller, to include as follows:
(a) the administration, of this Agreement;
(b) all payments by Buyer to Seller hereunder shall be made to CONSOL;
(c) all notices to be given or received by Seller shall be given or received by
CONSOL; and
(d) any amendment, supplement or modification to this Agreement shall be
negotiated by CONSOL, on behalf of Seller.
SECTION XV. ASSIGNMENT.
1. Except as part of any merger or consolidation involving any of the
companies comprising Seller, Seller shall not, without KU's prior written
consent, make any assignment or transfer of this Agreement, by operation of law
or otherwise, including any
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assignment or transfer as security for any obligation, and shall not assign
or transfer the performance of or right or duty to perform any obligation of
Seller hereunder; provided, however, that Seller may assign the right to
receive payments for coal directly from KU, as part of any accounts
receivable financing or other revolving credit arrangement which Seller may
have now or at any time during the term of this Agreement.
2. KU shall not, without Seller's prior written consent, assign this
Agreement or any right or the performance of or right or duty to perform any
obligation of KU hereunder; except that, without such consent, KU may assign
this Agreement in connection with and as part of a sale and transfer by KU of
all or a part interest in KU's Ghent Generating Station, or as part of a
merger or consolidation involving KU.
3. In the event of any assignment or transfer contrary to the
provisions of this Section XV, the party not making such assignment or
transfer may terminate this Agreement immediately.
SECTION XVI. HEADINGS NOT TO AFFECT CONSTRUCTION. The headings of the
Sections, Paragraphs and Subparagraphs of this Agreement are for convenient
reference, and do not constitute any part of the provisions hereof; nor shall
the heading control or affect the meaning, construction or effect of such
provisions.
SECTION XVII. WRITTEN INSTRUMENT CONTAINS ENTIRE AGREEMENT. This
written instrument contains the entire agreement between the parties in
respect of the subject matter; and there are no other
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understandings or agreements between the parties in respect thereof. Any
amendments to this agreement must be in writing and executed by both parties
to be effective.
SECTION XVIII. CONSTRUCTION OF AGREEMENT. This Agreement shall be
governed by and construed according to the laws of the State of Kentucky.
IN TESTIMONY WHEREOF, witness the signatures of the parties, as of the day
and year written first above.
CONSOLIDATION COAL COMPANY
QUARTO MINING COMPANY
▇▇▇▇▇▇▇ COAL COMPANY
CONSOL PENNSYLVANIA COAL COMPANY
GREENON COAL COMPANY
NINEVEH COAL COMPANY
By: /S/ SIGNED
----------------------------
Vice President, Consol, Inc.
Attorney in Fact
KENTUCKY UTILITIES COMPANY
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
President
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