AGREEMENT BETWEEN ALABAMA POWER COMPANY
AND COVOL TECHNOLOGIES, INC.
FOR THE SALE AND PURCHASE OF COAL
TABLE OF CONTENTS
PAGE
1.01 MUTUAL OBLIGATIONS......................................... 1
2.01 DEFINITIONS................................................ 1
3.01 TERM OF AGREEMENT.......................................... 2
4.01 BASE PRICE PER TON OF CCP (BASE TONNAGE)................... 2
4.02 BASE PRICE PER TON OF CCP (OPTION TONNAGE)................. 2
4.03 ADJUSTMENTS - GENERAL...................................... 2
4.04 GOVERNMENTAL IMPOSITIONS................................... 2
4.05 CALORIFIC VALUE ADJUSTMENT................................. 2
4.06 EXCESS ASH ADJUSTMENT...................................... 3
4.07 EXCESS MOISTURE ADJUSTMENT................................. 4
5.01 BILLING AND PAYMENT........................................ 4
6.01 SHIPMENT: TRUCK............................................ 5
6.02 SHIPMENT: BARGE............................................ 6
6.03 FREIGHT CHARGES. TITLE AND RISK OF LOSS - BARGE DELIVERIES. 7
6.04 FREIGHT CHARGES. TITLE AND RISK OF LOSS - TRUCK DELIVERIES. 7
7.01 QUANTITY REQUIREMENTS (BASE TONNAGE)....................... 7
7.02 QUANTITY REQUIREMENTS (OPTION TONNAGE)..................... 7
8.01 WEIGHING................................................... 8
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9.01 GUARANTEED SPECIFICATIONS.................................. 8
9.02 TERMINATION OF AGREEMENT BY BUYER FOR OPERATIONAL
PROBLEMS........................................................ 9
10.01 SAMPLING AND ANALYSIS..................................... 10
11.01 REJECTION OF CCP FOR CCP QUALITY DEFICIENCIES............. 10
11.02 SUSPENSION OF SHIPMENTS FOR DEFICIENCIES.................. 11
11.03 TERMINATION OF AGREEMENT FOR DEFICIENCIES................. 13
11.04 CANCELLATION.............................................. 13
12.01 BUYOUT OPTION............................................. 14
13.01 CANCELLATION FOR UNREMEDIED BREACH........................ 14
13.02 START UP REQUIREMENTS..................................... 14
14.01 FORCE MAJEURE............................................. 15
15.01 CHANGES IN ENVIRONMENTAL RELATED REQUIREMENTS............. 17
16.01 WARRANTIES................................................ 20
17.01 INDEPENDENT CONTRACTOR.................................... 20
18.01 BINDING EFFECT............................................ 21
19.01 ASSIGNMENTS............................................... 20
20.01 ACCOUNTING AND AUDIT...................................... 21
21.01 SITE VISITS; COAL PROPERTY................................ 21
22.01 WAIVER.................................................... 22
23.01 REMEDIES FOR BREACH....................................... 22
24.01 REMEDIES CUMULATIVE....................................... 22
25.01 NOTICES................................................... 22
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26.01 AGENT FOR PURCHASER....................................... 23
27.01 CAPTIONS.................................................. 23
28.01 APPLICABLE LAW............................................ 24
29.01 COMPLIANCE WITH LAWS AND REGULATIONS...................... 24
30.01 ENTIRE AGREEMENT.......................................... 24
31.01 CONFIDENTIAL AND PROPRIETARY INFORMATION.................. 24
32.01 CONTRACT TERMS BINDING ON PARTIES' EMPLOYEES' SUPPLIERS
AND SUB-CONTRACTORS............................................. 25
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AGREEMENT BETWEEN ALABAMA POWER COMPANY
AND COVOL TECHNOLOGIES, INC.
FOR THE SALE AND PURCHASE OF COAL
This Agreement is made and entered into this _ day of ___________
1996 by and between ALABAMA POWER COMPANY, a corporation organized and existing
under the laws of the State of Alabama, and having its principal office in the
City of Birmingham, Alabama ("PURCHASER") and COVOL TECHNOLOGIES, INC., a
corporation organized and existing under the laws of the State of Delaware,
("SELLER").
WHEREAS, PURCHASER, an electric public utility, owns and operates power
generating stations which require large quantities of coal; and
WHEREAS, SELLER owns or otherwise controls the COVOL Process (as
hereinafter defined) from which SELLER desires to process and sell coal to
PURCHASER.
NOW, THEREFORE, in consideration of the premises and covenants herein.
PURCHASER and SELLER agree as follows:
1.01 MUTUAL OBLIGATIONS. SELLER agrees to process coal into the Covol
Coal Product (CCP) and sell such Covol Coal Product to PURCHASER and PURCHASER
agrees to buy Covol Coal Product from SELLER on the terms and conditions and in
the quantities and quality set forth herein.
2.01 DEFINITIONS. The following definitions shall apply in this
Agreement:
a. "Contract Year" shall mean each calendar year during the term
of this Agreement.
b. "Ton" or "ton" shall mean two thousand pounds avoirdupois
weight.
c. "Base Price" is the price calculated as provided in Section
4.01 and 4.02 herein.
d. "Billing Price" is the Base Price as adjusted pursuant to
Section 4.03 and 4.05.
e. "COVOL Coal Product" (CCP) is a coal briquette produced from
coal fines utilizing the Covol Process.
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f. "COVOL Coal Process "is a proprietary process developed and
patented by Covol whereby coal fines are converted into a
synthetic fuel in the form of a high quality briquette.
g. A "Shipment" shall occur when SELLER delivers CCP in
sufficient quantities into a barge or truck.
3.01 TERM OF AGREEMENT. The term of this Agreement shall be for a
period of five contract years commencing on January 1, 1997 and shall continue
in full force and effect during the five years unless earlier terminated or
extended according to the provisions of this Agreement. PURCHASER shall have the
unilateral right to extend this Agreement for two additional five (5) year
consecutive periods by giving Seller l80 days notice prior to the end of the
then current term. Purchaser must exercise the first five year option in order
to have the right to the second five year term.
4.01 BASE PRICE PER TON OF CCP (BASE TONNAGE). The Base Price per
Ton of CCP, effective January l, 1997 is 1) $22.00 per ton plus the freight
charges (to be mutually agreed upon by November 30, 1996) f.o.b. Plant for CCP
delivered by truck to any of PURCHASER's Plants or Transloading Facilities, or
2) $23.00 per ton f.o.b. barge for CCP loaded in the Port Birmingham area. The
Base Price is subject to adjustment as provided for herein. It is understood
that the Base Price includes all costs for mining, processing, marketing or
quality control work necessary to meet the quantity or quality specifications
hereof.
4.02 BASE PRICE PER TON OF CCP (OPTION TONNAGE). The Base Price
per Ton of CCP for option tonnage as described in Section 7.02 shall be mutually
agreed upon.
4.03 ADJUSTMENTS - GENERAL. The Billing Price shall be adjusted January
1 of each calendar year using a fixed escalation rate of one percent (1%)
annually for the first five (5) year period, with the initial adjustment to be
effective January 1, 1998. Such adjustment shall be calculated by applying a
multiplier of 1.01 to the prior year's Billing Price. The annual escalation rate
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applicable to each five (5) year option shall be mutually agreed upon by the
parties.
4.04 GOVERNMENTAL IMPOSITIONS. The parties agree that the cost of
any and all Government Impositions will be the sole responsibility of SELLER.
4.05 CALORIFIC VALUE ADJUSTMENT. The amount to be paid by
PURCHASER for the CCP delivered under this Agreement shall be adjusted on the
basis of the actual "as received" Calorific value of the CCP as determined from
the samples taken and analyzed in accordance with Section 10.01 and Annex D
hereof. The Calorific Value Adjusted Price for CCP shipped from SELLER and
accepted by PURCHASER during any calendar month shall be determined as follows:
The monthly weighted average "as received" Calorific value of all CCP received
by PURCHASER hereunder during the calendar month shall be divided by the Minimum
Calorific Value Specification of 12,000 Btu/lb, as set forth in Section 9.01.
The resulting quotient shall be multiplied by the then-current Billing Price
determined by PURCHASER. The resulting product shall then be added to or
subtracted from the then-current Billing Price.
PURCHASER shall submit to SELLER analyses of CCP received and
computations of the Calorific value adjustments to substantiate such
adjustments. The Calorific value adjustment mechanism is further detailed and
illustrated in Annex A, and such adjustments shall be made in accordance with
Annex A.
4.06 EXCESS ASH ADJUSTMENT. In addition to other adjustments, the price
per Ton to be paid by PURCHASER for CCP delivered under this Agreement shall be
adjusted downward in proportion to the ash content in excess of 14%. This
adjustment shall be subtracted from the Calorific Value Adjusted Price of such
CCP and shall be based upon the "as received" ash content of CCP shipped each
month. The amount per Ton of this excess ash adjustment shall be calculated
according to the following formula:
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The adjustment shall be $0.25 per Ton multiplied by the portion of a
percent by which the "as received" ash content of CCP supplied hereunder exceeds
14% by an amount up to 0.99%. The adjustment shall be $0.45 per Ton multiplied
by the number of percentage points (or portions thereof) by which the "as
received" ash content of CCP supplied hereunder exceeds 14% by an amount of
1.00% or more. No adjustment shall be made if the "as received" ash content is
less than 14%. The excess ash adjustment is further detailed and illustrated in
Annex B and such adjustments shall be made in accordance with Annex B. This
adjustment in price is in addition to any other remedies provided under this
Agreement or at law.
4.07 EXCESS MOISTURE ADJUSTMENT. In addition to other adjustments, the
price per Ton to be paid by PURCHASER for CCP delivered under this Agreement
shall be adjusted downward in proportion to the moisture content as described
below. This adjustment shall be subtracted from the Calorific Value Adjusted
Price of such CCP and shall be based upon the "as received" moisture content for
the CCP each month. The amount per Ton of this excess moisture adjustment shall
be calculated according to the following formula:
The adjustment shall be $0.25 per Ton multiplied by the number of
percentage points (or portions thereof by which the "as received" moisture
content of CCP supplied hereunder exceeds 8%. No adjustment shall be made if the
"as received" moisture content is less than 8%. The excess moisture adjustment
is further detailed and illustrated in Annex C and such adjustments shall be
made in accordance with Annex C. This adjustment in price is in addition to any
other remedies provided under this Agreement or at law.
5.01 BILLING AND PAYMENT. For all CCP delivered by barge, SELLER shall
provide PURCHASER with a multiple copy shipping notice form that accurately
describes each Shipment. Such form shall be prepared by SELLER to incorporate
SELLER's name, shipment date, destination point, origin, PURCHASER's
transportation contract identification, barges by number, purchase
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order number, weight and any other applicable data which may be reasonably
required. One copy of such form shall be retained by SELLER, and the remaining
copies shall be transmitted to the carrier at the time the barges are moved.
Upon delivery, the carrier shall forward such form to PURCHASER's destination
plant. In addition, promptly after loading each barge Shipment, SELLER shall fax
PURCHASER a notice of shipment which shall include SELLER'S name, barge numbers,
tonnage shipped, date of shipment, and other such information as pertinent and
required by PURCHASER from time to time.
For CCP delivered by truck, SELLER will provide properly completed
shipping notices with each truck delivery on forms furnished by PURCHASER.
Payment at the then current Billing Price for CCP delivered during the
periods consisting of the first fourteen ( 14) days of each month and from the
fifteenth day through the end of the month will be made within ten (10) days
after the close of the period.
Within fifteen (15) days after the close of each calendar month, a
report shall be submitted by PURCHASER to SELLER showing the computation of
adjustments required to determine the Billing Price to be paid for CCP received
during the preceding month, and in the event of any underpayment or overpayment,
the difference shall be applied to SELLER's account.
6.01 SHIPMENT: TRUCK. Where delivery of CCP is by truck, Seller will
arrange for the proper dump trucks or dump trailers to transport the CCP to the
delivery point specified in the Purchase Order. Such dump trucks and dump
trailers shall not have cross beams installed in the cargo area that could
damage the sampling auger and all trucks will be required to have in-cab
tailgate releases. Additionally, all trailers will be required to have a RF
(Radio Frequency) tag attached. All trucks and trailers operated on properties
of Purchaser shall comply with all applicable federal and state safety
standards. If required by Purchaser, each vehicle shall be furnished an identity
number, which must be affixed to the vehicle, to gain admittance to the
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designated delivery point. Seller will employ or utilize only competent
commercially licensed truck drivers and will be responsible for compliance by
such drivers with PURCHASER's rules and requirements, including speed limits and
weight limits on roads within PURCHASER's properties. Such drivers shall comply
with the requirements for loading, transporting, weighing, sampling and
unloading of CCP delivered hereunder, in the manner and at locations on
PURCHASER's properties as given by the manager of the designated delivery point
or his representative, and such drivers will cooperate with PURCHASER's
CCP-receiving employees and other suppliers in a manner so as not to interfere
with any of PURCHASER's operations. CCP may be delivered to the designated
delivery point according to the then current operating schedule for CCP receipts
in effect at the delivery point. It shall be SELLER's responsibility to
determine the schedule in effect and comply therewith in all respects.
The operation of vehicles which are excessively heavy in weight has an
adverse effect on roads within PURCHASER's properties. CCP shall be delivered on
PURCHASER's properties in dump trucks or dump trailers having gross vehicle
weights including cargo not exceeding 44,000 pounds for two axles, 66,000 pounds
for three axles, 82,500 pounds for four axles, 88,000 pounds for five axles and
92,400 pounds for six axles. Any truck shipment exceeding the applicable gross
vehicle weight may be rejected. PURCHASER at its option may accept overweight
trucks but in such case PURCHASER will only be obligated to pay for the cargo
amount which combined with the vehicle weight equals the gross load limit as
outlined herein.
6.02 SHIPMENT: BARGE. At any time during the term of this agreement
PURCHASER may require SELLER, upon thirty (30) days notice, to deliver all or a
portion of the CCP sold hereunder by barge from the barge loading facility in
the Port Birmingham area to PURCHASER'S other facilities or other destinations
within the Southern electric system as specified by PURCHASER.
Shipment and receipt of CCP under this Agreement shall be made in
accordance with the PURCHASER barge contracts. If any applicable barge contract
is amended supplemented or replaced,
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subsequent shipments and receipts shall be made in accordance with the terms of
the applicable barge contract, as amended, supplemented or replaced.
Shipping schedules shall be coordinated by PURCHASER'S and SELLER'S
Transportation Coordinators in accordance with monthly quantities of CCP to be
delivered under this Agreement. SELLER shall load the equipment in a timely and
appropriate manner that coincides with the loading times specified in the
applicable barge contract.
6.03 FREIGHT CHARGES, TITLE AND RISK OF LOSS - BARGE DELIVERIES.
PURCHASER shall pay all freight and other charges imposed by the Barge Carrier
applicable to the destination of the shipment. Title to and risk of loss of the
CCP shall pass to PURCHASER at the time the CCP is loaded into barges in the
Port Birmingham area.
6.04 FREIGHT CHARGES, TITLE AND RISK OF LOSS - TRUCK DELIVERIES. SELLER
shall pay all freight and other charges imposed by the trucking company
delivering the CCP to PURCHASER'S designated plant. SELLER shall bear the risk
of loss of each shipment until each shipment has been properly unloaded at
PURCHASER'S designated plant and title shall remain with SELLER until each
shipment is properly unloaded at PURCHASER'S designated plant.
7.01 QUANTITY REQUIREMENTS (BASE TONNAGE). For the period January 1,
1997 through December 31, 1999, PURCHASER will purchase 250,000 tons per year
(20,833 tons per month). In addition, PURCHASER shall have the right to purchase
monthly nominations up to an additional 20,833 tons per month for each six (6)
month period beginning in January and July during this period by notifying
SELLER sixty (60) days in advance of each six (6) month period. For the period
January 1, 2000 through December 31, 2001, PURCHASER shall have the right to
purchase up to 41,667 tons per month for each six (6) month period during this
period by notifying SELLER sixty (60) days in advance of each six (6) month
period.
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In the event that PURCHASER desires to buy spot coal, at any time
during the term of this Agreement, SELLER shall have the right of first refusal
on the amount of tons between the monthly nomination and 41,667 tons per month.
7.02 QUANTITY REQUIREMENTS (OPTION TONNAGE). SELLER shall give
PURCHASER right of first refusal on option tonnage between 41,667 and 83,333
tons per month. Otherwise, option tonnage may be supplied by SELLER and
purchased by PURCHASER by mutual agreement. Option tonnage pricing will be
described in Section 4.02.
8.01 WEIGHING. For CCP loaded in the Port Birmingham area weighing will
be done in the Port Birmingham area by Combustion Testing & Engineering, Inc.
For CCP delivered to PURCHASER by truck, the weight of CCP delivered
and sold hereunder shall be determined by PURCHASER at the destination on truck
scales, certified in accordance with the procedures and requirements of the
State of Alabama Division of Weights and Measures. Said trucks shall be weighed
loaded and empty and the difference shall be the net weight of the CCP
delivered.
9.01 GUARANTEED SPECIFICATIONS. The CCP sold by SELLER hereunder shall
be three inches and under in size (3 " x 0") as defined in the then-current ASTM
Designation D-43 1 Standard for Designating Size of CCP; shall not contain
greater than twenty percent (20%) particles less than one quarter (1/4) inch in
size (if, in PURCHASER'S sole judgment, handling problems occur at the
destination because of size consistency, SELLER agrees to take reasonable
corrective action acceptable to PURCHASER); shall be substantially free of bone,
slate, shale, rock, dirt, and clay, and substantially free of extraneous
material, including, but not limited to, plastic, rubber, iron, wood and other
waste materials; and shall conform to the following on an "as received" basis:
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As Received Guaranteed
Specifications Per Shipment
Max. % Moisture (total) 8.0
Max. % Ash 14.0
Max. Sulfur lbs/MMBtu 0.60
Min. % Volatile Matter 30
Min. Ash Fusion Temp. 2400(degrees)F
Softening (H=W Reduc. Atmos.)
Min. Grindability 50
Min. Calorific Value (Btu/lb) 12,000
9.02 TERMINATION OF AGREEMENT BY BUYER FOR OPERATIONAL PROBLEMS.
PURCHASER and SELLER acknowledge that as of the date of this Agreement, CCP is a
new product which has not been commercially used as a fuel for electric
generating plants and that certain operational problems may arise in the future
with respect to the handling or use of CCP at one or more of the Plants. If, in
PURCHASER's sole judgment exercised in good faith, the handling or use of CCP
causes or creates any problem in the operation of any Plant, then PURCHASER may
terminate this Agreement by notifying SELLER, as provided in Section 23.01, at
least thirty days prior to the effective date of termination. Upon such
termination, PURCHASER shall have no further obligation to SELLER under this
Agreement, except with respect to payments for Shipments made prior to such
termination. Notwithstanding any other provision of this Agreement, PURCHASER
shall not be required to operate or maintain any Plant outside of normal
operating procedures in order to handle or use CCP at such Plant, nor shall
PURCHASER be required to make any capital modifications or additions to such
Plant in order to accommodate the handling or use of CCP at such Plant. If, in
PURCHASER's sole judgment exercised in good faith. the quality or
characteristics of
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CCP are incompatible with other coal purchased for use at any Plant, then
PURCHASER may terminate this Agreement pursuant to this Section 9.02.
10.01 SAMPLING AND ANALYSIS. PURCHASER shall collect representative
samples at the unloading site of each shipment of CCP shipped by truck; in
addition, SELLER shall collect representative samples for CCP loaded in barges
at the Port Birmingham loading facility. Samples shall be collected in
accordance with procedures and methods which are based on ASTM standards and
mutually acceptable to PURCHASER and SELLER. PURCHASER shall analyze all samples
of CCP collected by PURCHASER and SELLER in accordance with procedures set forth
in the attached Annex D. PURCHASER shall have the right at its option, however,
to contract with an independent, qualified, commercial testing laboratory to
perform the analyses of the samples referred to above. SELLER may observe any
sampling, sample preparation, and/or analysis performed by PURCHASER or its
designated commercial laboratory. PURCHASER may observe any sampling and/or
sample preparation performed by SELLER for samples taken in the Port Birmingham
area. If in PURCHASER's sole opinion operational problems occur, with the
sampling, sample preparation, and/or procedure. the parties will discuss steps
to resolve the operational problem including modifications to the COVOL Coal
Process.
All samples collected shall be divided by PURCHASER into at least two
(2) parts and put in suitable airtight containers, the first container in each
case to be used for analysis by PURCHASER, or its designated commercial
laboratory, and the second container in each case to be held available by
PURCHASER for a period of thirty (30) days from actual date of receipt of CCP by
PURCHASER, properly sealed and labeled, to be analyzed if a dispute arises
between PURCHASER and SELLER.
11.01 REJECTION OF CCP FOR CCP QUALITY DEFICIENCIES. In addition to
and not as a limitation upon other rights of PURCHASER hereunder, PURCHASER
shall have the right to refuse and reject any Shipment of CCP under any one or
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more of the following circumstances: (a) the Shipment fails by analysis
(including in-transit analysis as provided for in Section 11.01) to comply with
any one or more of the Guaranteed Specifications set forth in Section 9.01; (b)
the Shipment fails in any manner to comply with the CCP size specified in
Section 9.01; (c) the Shipment is delivered in equipment other than as specified
herein; (d) the Shipment contains extraneous material; or (e) the Shipment fails
to comply with the loading requirements set forth in Sections 6.01 and 6.02.
PURCHASER shall give prompt notice to SELLER of any such rejection of Shipments.
After receipt of such notification, SELLER shall not resume Shipments until CCP
quality or other condition causing rejection has been corrected to PURCHASER'S
satisfaction. In the event that PURCHASER rejects any Shipment, SELLER shall
immediately remove, at SELLER's expense, such Shipment from PURCHASER'S
facilities or from transportation equipment and shall reimburse PURCHASER for
all costs and expenses, including (but not limited to) transportation costs,
incurred by PURCHASER in connection with such Shipment. PURCHASER may deduct all
such costs and expenses from any sum owed by PURCHASER to SELLER.
The foregoing notwithstanding, it shall be the responsibility of SELLER
to ensure that the sulfur content of CCP delivered does not exceed the
Guaranteed Specification for sulfur provided in Section 9.01 and failure to do
so shall constitute a material breach of SELLER's obligation and guarantee.
SELLER acknowledges that the delivery of CCP exceeding the guaranteed sulfur
content may cause PURCHASER to incur substantial damages and have fines or
penalties assessed against it by regulatory agencies, and SELLER further
acknowledges that in the event of such breach, PURCHASER may pursue any and all
remedies available at law and under this Agreement.
In addition to the provisions set forth in Section 10.01 regarding
sampling, PURCHASER shall have the right to take samples of Shipments while they
are in transit and to analyze such samples, for the purpose of determining
whether to accept or to reject any such Shipments for failure to comply with the
Guaranteed Specifications set forth in Section 9.01 or other terms and
conditions
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of this Agreement. If any of such Shipments are accepted, the samples taken in
transit and results of such analyses shall not be used for other purposes and
shall not affect PURCHASER's right to collect samples of such shipment(s) at the
unloading facility.
11.02 SUSPENSION OF SHIPMENTS FOR DEFICIENCIES. In addition to and not
in limitation of the rights set forth above in Section 11.01, PURCHASER shall
have the right to suspend Shipments immediately, by giving verbal or written
notice to SELLER, under any one or more of the following circumstances: (a) any
Shipment fails to comply with any one or more of the Guaranteed Specifications
set forth in Section 9.01 (b) any Shipment contains extraneous material; (c) any
Shipment fails to comply with the CCP size requirements specified in Section
9.01, or (d) any Shipment fails to comply with the loading requirements set
forth in Sections 6.01 and 6.02. Shipments in transit at the time of
notification of suspension may be accepted, at PURCHASER's sole option. After
notice of any such suspension, PURCHASER may terminate this Agreement unless
SELLER gives reasonable assurance within fifteen (15) days after receipt of said
notice that it will and can comply with the Guaranteed Specifications stated in
Section 9.01 and the other requirements of this Agreement. Four (4) or more
suspensions in any 90-day period shall be deemed a material breach of this
Agreement, for which PURCHASER shall have the unilateral right, exercised in its
sole discretion, to immediately terminate this Agreement by giving notice of the
termination to SELLER as provided in Section 25.01. Assurance by SELLER that it
can comply may, at PURCHASER's option, be provided by means of a complying test
Shipment scheduled and sampled by such method as shall be acceptable to
PURCHASER or by other means acceptable to PURCHASER. All special handling costs,
including (but not limited to) stockpile segregation, transportation routing
etc., associated with the test Shipment shall be borne by SELLER. If analysis by
PURCHASER shows the test Shipment to be in compliance with each of the
requirements set forth herein, deliveries shall be permitted to resume.
PURCHASER shall have the sole right to determine if SELLER shall be allowed to
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make up any tonnage not delivered during the period Shipments were suspended.
The price to be paid for any such make-up tonnage is the price that would have
been in effect at the time the CCP was originally scheduled to be delivered
under the terms of this Agreement. For purposes of this Section 11.02, the
make-up of tonnage not delivered during any suspension shall be made up on a
pro-rata, monthly basis as specified by PURCHASER in writing to SELLER.
If PURCHASER does not receive, within fifteen (15) days of the date of
the notice of suspension provided in this Section 11.02, adequate assurance of
SELLER's ability to deliver CCP which complies with the requirements set forth
herein or if the test Shipment fails to comply with such requirements, PURCHASER
shall so notify SELLER of such failure and may, at PURCHASER's option, terminate
this Agreement immediately by giving notice of the termination to SELLER as
provided in Section 25.01. In the event of rejection of any Shipment followed by
termination of this Agreement, SELLER shall reimburse PURCHASER for any and all
transportation costs associated with rejected Shipments and/or termination which
may be incurred by PURCHASER and shall promptly remove all such rejected
Shipments at SELLER's expense. PURCHASER's rights of rejection, suspension and
termination set forth in this Agreement are in addition to any other remedies
provided by this Agreement or at law for SELLER's failure to deliver CCP in
compliance with this Agreement.
11.03 TERMINATION OF AGREEMENT FOR DEFICIENCIES. In addition to and not
as a limitation upon other rights of PURCHASER, if twenty percent (20%) of
Shipments delivered during a thirty (30) consecutive day period, following
notice of deficiency to SELLER given pursuant to Sections 11.01 and 11.02, fails
to comply with any one or more of the Guaranteed Specifications set forth in
Section 9.01, then such failure shall constitute a material breach of this
Agreement; and PURCHASER shall have the right to terminate this Agreement
immediately by giving notice of the termination to SELLER as provided in Section
25.01.
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In the event PURCHASER terminates this Agreement under this Section
11.03 or Section 11.02 or suspends Shipments pursuant to the provisions of
Section 11.02, and in addition to PURCHASER's other rights and remedies under
this Agreement or as provided at law, SELLER shall be liable to PURCHASER for
breach of this Agreement and shall reimburse PURCHASER for any and all costs
incurred by PURCHASER under this Agreement and other contracts with
transportation contractors which result from such termination or suspension of
Shipments.
11.04 CANCELLATION. In addition to and not in limitation of the rights
set forth above in Sections 11.01, 11.02, and 11.03 and the rights and remedies
available at law and under other provisions of this Agreement, PURCHASER shall
have the right to cancel the remaining Shipments to be delivered under this
Agreement immediately by giving written notice to SELLER, as provided in Section
25.01, under any one or more of the following circumstances: (a) thirty percent
(30%) of Shipments of CCP delivered by SELLER fail to comply with any one (1) or
more of the Guaranteed Specifications set forth in Section 9.01 averaged over
two (2) consecutive calendar months; or (b) SELLER engages in any fraudulent or
illegal conduct in connection with its performance under this Agreement.
12.01 BUYOUT OPTION. At any time during the term of this Agreement,
PURCHASER may terminate this Agreement by giving SELLER 180 days' notice thereof
as provided in Section 25.01; and within 180 days of giving such notice,
PURCHASER shall pay SELLER an amount equal to ten percent ( 10%) of the initial
Base Price per ton effective January 1, 1997 multiplied by the remaining Tons
scheduled to be delivered under this Agreement. Upon SELLER's receipt of such
payment, this Agreement shall terminate without any further liability to either
party hereunder, except with respect to CCP delivered prior to such termination.
13.01 CANCELLATION FOR UNREMEDIED BREACH. In the event of the
failure of either party to comply in good faith with any or all of its
respective obligations as set forth in this
14
Agreement, the party not in default shall have the right to cancel this
Agreement at any time by giving notice of its intention to do so to the other
party as provided in Section 25.01, which notice shall specify the default. At
the expiration of thirty (30) days after the date of such notice, unless the
party in default shall have cured such default, the party not in default shall
have the right, at its sole election, to cancel this Agreement immediately with
no liability therefor.
In addition to and not as a limitation upon other rights of PURCHASER
or SELLER hereunder, either party may elect, at its sole option, to forego its
right to terminate this Agreement upon the other party's default under this
Agreement, as provided in this Section 13.01, and may require, in lieu of
cancellation, the other party to perform its obligations according to the terms
and conditions of this Agreement.
13.02 START UP REQUIREMENTS. If SELLER fails to meet Section 29 of IRS
code requirements by January 1, 1997 or to meet either the quantity or quality
requirements by April 1, 1997, PURCHASER may terminate this agreement in its
entirety from written notice to SELLER pursuant to Section 25.01.
14.01 FORCE MAJEURE. "SELLER's Force Majeure" as used herein shall mean
a cause reasonably beyond the control of SELLER which, wholly or in substantial
part, prevents the mining, processing, loading or delivery of CCP. "PURCHASER's
Force Majeure" as used herein shall mean a cause reasonably beyond the control
of PURCHASER which, wholly or in substantial part, directly or indirectly
prevents or restricts the unloading, storing or burning of CCP by PURCHASER at
PURCHASER's facilities. Examples (without limitation) of force majeure are the
following: acts of God; acts of the public enemy; insurrections; riots; strikes;
labor disputes; work stoppages; fires; explosions; floods; electric power
failures; breakdowns of or damage to generating or preparation plants;
interruptions to or contingencies of transportation, including (but not limited
to) force majeure as defined in the applicable tariff rail contract; embargoes;
and orders or acts of civil or military
15
authority (including, without limitation, a city or county ordinance, an act of
a state legislature, or an act of the United States Congress); provided,
however, for the purposes of this Agreement, force majeure shall not include,
and neither party hereto shall be excused from performance because of, the
development or existence of economic conditions which may adversely affect the
anticipated profitability of such party's activities hereunder, acts or
omissions of such party which constitute mismanagement or fraud on the part of
such party, or reduced productivity of labor employed by such party in its
activity hereunder.
If, because of PURCHASER's Force Majeure, PURCHASER is unable to carry
out its obligations under this Agreement, and if PURCHASER gives SELLER notice
of such force majeure as provided in Section 25.01, the obligations and
liabilities of PURCHASER and the corresponding obligations of SELLER shall be
suspended to the extent made necessary by and during the continuance of such
force majeure; provided, however, that the disabling effects of such force
majeure shall be eliminated as soon as and to the extent possible (except that
either party may settle any of its own labor disputes, strikes, or terminate any
of its own lockouts in its sole discretion).
If, because of SELLER's Force Majeure, SELLER is unable to carry out
its obligations under this Agreement, and if SELLER gives PURCHASER notice of
such force majeure as provided in Section 25.01, the obligations and liabilities
of SELLER and the corresponding obligations of PURCHASER shall be suspended to
the extent made necessary by and during the continuance of such force majeure;
provided, however, that the disabling effects of such force majeure shall be
eliminated as soon as and to the extent possible (except that either party may
settle any of its own labor disputes, strikes, or terminate any of its own
lockouts in its own sole discretion).
Any deficiencies in the production, sale or purchase of CCP hereunder
caused by force majeure shall be made up at PURCHASER's sole option. If
PURCHASER desires, the term of this Agreement may be extended to make up any
such force majeure deficiencies.
16
It is agreed that in the event that any valid act, law, ordinance, rule
or regulation of a municipality, county, state or the United States government,
or final judicial decision, judgment or order, is adopted or passed after
January 1, 1995, which either (a) directly prohibits the processing contemplated
hereunder or (b) directly or indirectly imposes significant burdens or
restrictions upon the burning or use of such CCP by PURCHASER to the extent that
PURCHASER is unable or would not be allowed to utilize such CCP feasibly and
economically in PURCHASER's sole discretion at any of its electric generating
plants or would be allowed to utilize such CCP only after the installation or
substantial renovation of plant equipment, then the existence and implementation
of such act, law, ordinance, rule, regulation, decision, judgment or order shall
constitute an event of permanent force majeure whereupon this Agreement may be
terminated by the party so affected upon notice to the other party.
Notwithstanding the provisions of this Section 14.01, a party not
claiming force majeure may terminate this Agreement upon notice to the other
party and without liability to the other party whenever all of the following
circumstances exist: (a) a condition of force majeure occurs which causes the
mutual obligations to be suspended as provided above with respect to the total
quantity of CCP to be supplied; (b) such condition (alone or extended by other
conditions of force majeure) continues so that the mutual obligations remain
suspended for a period of six (6) consecutive months; and (c) at the end of said
six (6) consecutive months or at any time thereafter, the party not claiming
force majeure, in the exercise of reasonable judgment, concludes that there is
little likelihood of ending the condition(s) in the immediate future. The party
not claiming force majeure may exercise such right of termination by giving
ninety (90) days' notice, as provided in Section 25.01, of its intention to
terminate to the other party.
15.01 CHANGES IN ENVIRONMENTAL RELATED REQUIREMENTS. The term
"environmental related requirement," as used in this Agreement, means the
17
following: (a) any prohibition, restriction, or limitation related to the
quality of CCP which PURCHASER may burn, including any constituent
specification, at any or all of its electric generating plants, or to the type
or amount of emissions from any or all such plants; (b) any rule or requirement
affecting the permissible means for complying with any such prohibition,
restriction or limitation; or (c) any imposition of a cost, fee, tax or other
economic burden on PURCHASER relating to (i) the production of electricity
(generally or by means of CCP-fired steam electric generation), (ii) the
quantity of CCP purchased and/or burned by PURCHASER, (iii) any constituent
specification of CCP purchased by PURCHASER, or (iv) the type or amount of
emissions from PURCHASER's electric generating plants. The term shall also be
deemed to include PURCHASER's strategy for compliance with environmental related
requirements. A change in environmental related requirements shall be deemed to
have occurred in any one or more of the following circumstances: (a) there is
any increase or decrease in existing environmental related requirements; (b)
PURCHASER, in the exercise of its sole judgment. decides to change its strategy
for compliance with any existing environmental related requirements; or (c) a
new environmental related requirement is imposed on PURCHASER as a result of any
federal or state statute, local ordinance, administrative regulation or ruling,
court order, or any revision in any interpretation or implementation thereof. It
is recognized that a change in environmental related requirements upon PURCHASER
may occur even though stated as a restriction or limitation on, or requirement
of, PURCHASER and its affiliates or some other group of utilities. It is further
recognized that any change in environmental related requirements may affect
PURCHASER in a general way and may not be directed at specific plants, fuels,
fuel supplies or other operating conditions. In the event of a change in
environmental related requirements, PURCHASER shall, in its sole judgment,
determine how to comply with such change and whether PURCHASER's use of the CCP
to be supplied hereunder has been adversely impacted. The provisions of this
Section 15.01 are intended to provide rights in addition to the rights provided
in Section 14.01.
18
The price, specifications, quantity and destination of CCP purchased
hereunder are predicated on environmental related requirements in effect as of
the effective date hereof. In the event and whenever after the effective date
hereof, there is a change in environmental related requirements, PURCHASER shall
determine whether such change has had or may have an adverse impact on its use
of the CCP purchased hereunder. It is agreed that any change in environmental
related requirements which has one or more of the following effects shall be
deemed to have an adverse impact on PURCHASER's use of the CCP purchased
hereunder, even though the statute, regulation, ruling or ordinance may allow
PURCHASER a choice of options for complying with such changed environmental
related requirements (which choice may include the payment of a fee or tax in
lieu of the installation of equipment, or utilization of CCP of different
constituent specifications, the reduction in the overall use of CCP by PURCHASER
or the acquiring of an emission allowance or credit): (a) the change imposes a
fee, tax, or other economic burden on PURCHASER relating to the constituent
specifications of CCP purchased or burned by it or on the type or amount of
emissions from PURCHASER's electric generating plants; (b) the change directly
or indirectly prevents or restricts PURCHASER from utilizing the CCP purchased
hereunder in one or more of its electric generating plants; (c) the change
requires PURCHASER to install equipment (such as flue gas desulfurization
equipment or particulate removal equipment) at one or more of its electric
generating plants in order to comply with such change; or (d) the change
requires or permits PURCHASER to utilize CCP of a quality (including, but not
limited to, sulfur) different from that specified in Section 9.01 or requires
the use of a fuel other than CCP.
If PURCHASER determines that a change in environmental related
requirements has had or may at a future date have an adverse impact on its use
of the CCP purchased hereunder, PURCHASER shall so notify SELLER as provided in
Section 25.01. Upon receipt of such notice, SELLER shall have the right, at its
option, to propose within thirty (30) days after receipt of such
19
notice, any steps available to SELLER in its processing of the CCP, in the
supply of substitute CCP, in the change in the price of the CCP, or other
measure which would result in as low a delivered cost of fuel at PURCHASER's
electric generating plant as PURCHASER could achieve by purchasing reasonably
available substitute fuel, taking into consideration any fees, taxes, costs, or
other economic burdens imposed on the use of CCP by PURCHASER. In the event
PURCHASER, in its sole judgment, determines that SELLER cannot achieve this
result, then PURCHASER may terminate this Agreement upon ninety (90) days'
notice thereof as provided in Section 25.01. PURCHASER shall have the right to
give such notice of termination at a time chosen by PURCHASER either before or
after the effect of a change in environmental related requirements.
The parties hereto acknowledge that this Agreement is based on the
assumption that the CCP to be delivered hereunder will enable PURCHASER to
comply with the provisions of the Clean Air Act Amendments of 1990, judicial and
administrative interpretations thereof, and regulations promulgated thereunder
which exist as of January 1, 1995. If, at any time during the term of this
Agreement, PURCHASER determines, in its sole judgment, that any operational or
environmental compliance problem will result from the components or
characteristics of SELLER's CCP or the products of its combustion (including,
but not limited to, nitrogen oxide emissions) or any other constituent or
property of the CCP not otherwise specified herein, SELLER and PURCHASER shall
immediately enter into discussions in a good faith effort to resolve the
problem. If such discussions fail to resolve such problem in a manner which, in
PURCHASER's sole judgment, is reasonable and would not impose an unreasonable
additional expense to PURCHASER, then PURCHASER shall have the right to
terminate this Agreement by giving SELLER 30 days notice of PURCHASER's
intention to do so as provided in Section 25.01. No expense contemplated by this
Section 15.01 shall be deemed reasonable if it would result in a delivered price
of CCP hereunder in excess of the delivered price of competitive fuels or
sources then available to PURCHASER.
20
16.01 WARRANTIES. SELLER warrants that it has title or control of CCP
in sufficient quantity and quality to satisfy the requirements of this
Agreement, including without limitation the Guaranteed Specifications of Section
9.01. SELLER warrants that no outside sales to others will diminish the
production of CCP to be supplied under this Agreement.
17.01 INDEPENDENT CONTRACTOR. This Agreement is a contract for the sale
and purchase of CCP. The parties recognize and agree that SELLER is not an agent
or employee of PURCHASER nor any affiliate of PURCHASER and that SELLER is
independent of any managerial or other control or direction by PURCHASER and is
free to perform, by such means and in such manner as SELLER may choose, all work
in pursuance of commitments hereunder.
18.01 BINDING EFFECT. This Agreement shall bind and inure to the
benefit of the parties and their successors and assigns, as permitted under
Section 19.01.
19.01 ASSIGNMENTS. Neither party may assign its rights under this
Agreement without the non-assigning party's prior written approval. However,
notwithstanding the above, PURCHASER may assign its rights, duties, obligations
and interests in and to this Agreement to a subsidiary, affiliate or sister
corporation; provided, however, that PURCHASER shall not be thereby relieved of
its responsibilities or obligations hereunder. Furthermore, notwithstanding the
above, SELLER may assign its rights, duties, obligations and interests in and to
this Agreement to a parent, subsidiary, affiliate or sister corporation,
provided, however, that SELLER shall not be thereby relieved of its
responsibilities or obligations hereunder. This Agreement shall likewise apply
to any successor of either PURCHASER or SELLER.
IA addition to the above rights, PURCHASER may exercise its right to
divert Shipments to other destinations under Section 6.01 or 6.02 without
SELLER's consent or approval.
20.01 ACCOUNTING AND AUDIT. SELLER shall keep full and complete
books and records of its costs and expenses relating to the sale and delivery of
CCP under this Agreement in accordance
20
with sound and generally accepted accounting principles and shall retain such
books and records for at least three (3) years after this Agreement is
terminated or expires. SELLER shall also preserve in an orderly manner the
records supporting all charges and adjustments to the Billing Price hereunder
and shall make such records available to PURCHASER, its accountants, auditors or
other authorized representatives, who shall, after giving adequate notice, be
afforded access to and be permitted to examine such records at all reasonable
times during normal business hours. In the event, upon audit, it is determined
that claims made by SELLER for adjustments in price which were allowed to go
into effect by PURCHASER were not properly calculated, adjustments shall be made
promptly In billings hereunder for current CCP deliveries to reflect proper
amounts of such adjustments; or if no billings are then due, payments reflecting
the difference between the proper amounts determined by audit and the amounts
paid shall be made. It is expressly understood and agreed that the provisions of
this Section 20.01 shall survive the termination or expiration of this
Agreement.
21.01 SITE VISITS; CCP PROPERTY. PURCHASER or its designated agent
shall have the right at all times, at its sole risk and expense, to enter upon
the SELLER's property and/or other appropriate locations, whether such entry is
announced or unannounced, for any of the following purposes: (a) to observe and
examine the method, equipment and manner of mining, producing, storing, washing,
blending, crushing, loading, unloading, transporting, sampling, weighing,
analyzing, and other handling of CCP to be sold and delivered under this
Agreement; (b) to take samples of CCP for PURCHASER's analyses; or (c) in
connection with any accounting, audit, or examination of SELLER's records.
PURCHASER's representative shall check in with the appropriate personnel at the
entrance to SELLER's facility prior to entering onto SELLER's property. No
observation or examination by PURCHASER shall be deemed as a waiver of any of
PURCHASER's rights or relieve SELLER of any obligation of this Agreement.
22.01 WAIVER. The failure of either party to insist on strict
performance of any provision of this Agreement, or to take advantage of any
right hereunder, shall not be construed as a waiver of such provision or right.
Time is of the essence of this Agreement.
21
23.01 REMEDIES FOR BREACH. In the event of a breach for which PURCHASER
terminates this Agreement or a breach resulting from SELLER's failure to deliver
the amount of CCP required under this Agreement, SELLER shall be liable to
PURCHASER for the difference between the market price of coal available at the
time of such breach and the price provided for hereunder with regard to all
conforming CCP not delivered under this Agreement. The market price of such
replacement coal shall be determined conclusively to be the highest incremental
cost to PURCHASER for coal of similar quality purchased during the three (3)
months following breach by SELLER, whether or not such incremental coal v;as for
the exact quantities, quality and delivery periods for CCP remaining to be
delivered hereunder. This remedy shall be in addition to other remedies for
breach available to PURCHASER under this Agreement or at law.
24.01 REMEDIES CUMULATIVE. Except as otherwise provided herein,
remedies provided under this Agreement shall be cumulative and in addition to
other remedies provided at law or in equity.
25.01 NOTICES. With the exception of SELLER's invoices or shipping
notices as required by Section 5.01, any notice, request, protest, consent,
demand, report or statement given by one party to the other shall be in writing
and deemed duly received seventy-two (72) hours after it is deposited in the
United States mail, by certified mail, postage prepaid, and properly addressed
as follows:
(1) If the notice is to PURCHASER, to:
Vice President, Fuel Services
Southern Company Services, Inc.
P. O. Box 2625
14N-8163
Birmingham, AL 35202
22
With copy to:
Alabama Power Company
P. O.Box 2641
Birmingham, AL 35291-0480
Attention: Manager - Fuel Services
(or to such other person or addresses as PURCHASER shall have designated in
writing to SELLER).
NOTE: Escalation notices should not be copied to Alabama Power Company.
(2) If the notice is to SELLER, to:
(or to such other person or address as SELLER shall have designated in writing
to PURCHASER).
26.01 AGENT FOR PURCHASER. Southern Company Services, Inc., an Alabama
corporation, is agent for PURCHASER and is designated to act for and on behalf
of PURCHASER for the purpose of giving or receiving any notice, demand or
request required or authorized by this Agreement, for the purpose of designating
the quantity, size, destination and routing of Shipments to be made from time to
time to PURCHASER hereunder, and for such other purposes as may Tom time to time
be designated by PURCHASER. PURCHASER may change agent by giving notice thereof
to SELLER as provided in Section 25.01.
27.01 CAPTIONS. The captions to sections hereof are for convenience
only and shall not be considered in construing the intent of the parties.
28.01 APPLICABLE LAW. All questions concerning the execution,
construction, performance, breach or enforcement of this Agreement shall be
construed under the substantive laws of the State of Alabama and not just the
Alabama laws regarding conflicts of laws.
29.01 COMPLIANCE WITH LAWS AND REGULATIONS. In connection with the
23
performance of this Agreement, SELLER agrees to comply in all material respects
with governmental laws and regulations, including (but not limited) to those set
forth in Annex E attached hereto. SELLER agrees and warrants that it or its
agent will acquire and maintain, in a timely manner, all licenses and permits
required by governmental authorities to engage in the mining, processing, and
selling of CCP and to otherwise perform its obligations under this Agreement.
30.01 ENTIRE AGREEMENT. This instrument contains the entire Agreement
between the parties; and there are no representations, understandings or
agreements, oral or written, which are not included herein. This Agreement
cannot be changed except by duly authorized representatives of both parties in
writing.
31.01 CONFIDENTIAL AND PROPRIETARY INFORMATION. The terms and
conditions (including, but not limited to prices) set forth in this Agreement
are considered by both PURCHASER and SELLER to be confidential and proprietary
information. Neither party shall disclose any such information to any third
party without advance written consent of the other (which consent shall not be
unreasonably withheld) except where such disclosure may be required by law,
regulation or regulatory agencies having jurisdiction over SELLER or PURCHASER
or is required in connection with the assertion of a claim or defense in
judicial or administrative proceedings involving the parties hereto, in which
event the party intending to make such disclosure shall advise the other in
advance and cooperate to the extent practicable to minimize the disclosure of
any such information. For purposes of this Section 31.01, the term "third party"
shall not include a parent, subsidiary, affiliate or sister corporation of
either party hereto.
32.01 CONTRACT TERMS BINDING ON PARTIES' EMPLOYEES' SUPPLIERS AND
SUB-CONTRACTORS. Each party shall require each of its employees, suppliers, and
sub-contractors performing obligations under the Agreement or having access to
the Agreement in the performance of duties for such party to be bound by the
terms and conditions of the Agreement, including without
24
limitation the terms containing obligations and responsibilities respecting CCP
Property and confidentiality of information.
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized "hereunto.
ATTEST: PURCHASER
/s/ Shirley A. Thomas Ben M. Gutten
Assistant Secretary Its: Executive Vice President
Date Executed April 15, 1996
ATTEST: SELLER
/s/ Michael S. Bodon /s/ Kirby Cochran
Secretary Its: President
Date Executed April 16, 1996
04/11/96 8:30:52AM
25
Annex A
Reference to Section 4.05
COMPUTATION OF CALORIFIC VALUE ADJUSTMENT
TO THE BILLING PRICE
This adjustment is to adjust the amount per ton to be paid by PURCHASER for CCP
delivered in each month as a result of the extent by which the Calorific value
of such is greater than or is less than 12,000 Btu's per pound of coal.
Determination of the Calorific Value Adjustment is made as follows:
(X) (Y) (Z)
Base Factor Hypothetical Months
At the At a At a
Specification Month's Month's
Calorific Calorific Calorific
Value of Value of Value of
12 000 Btu/lb 12 200 Btu/lb 11.800 Btu/lb
ITEM
1. Per ton -
FOB Price
(Billing Price) $ 22.00 $ 22.00 $ 22.00
2. Calorific Btu Value
Per Pound 12,000 12,200 11,800
3. Calorific Adjustment 12,200 11,800
Fraction 12,000 12,000
4. Calorific Adjustment
Factor 1.017 .983
1
Continued
Annex A
Reference to Section 4.05
COMPUTATION OF CALORIFIC VALUE ADJUSTMENT
TO THE BILLING PRICE
(X) (Y) (Z)
Base Factor Hypothetical Months
At the At a At a
Specification Month's Month's
Calorific Calorific Calorific
Value of Value of Value of
12.000 Btu/lb 12.200 Btu/lb 11.800 Btu/lb
ITEM
5. Adjusted Basis 22.37 21.63
Figures used in Columns (x), (y) and (z) of Items 1 through 6 are purely
hypothetical and are used for illustrative purposes only.
2
Annex B
Reference to Section 4.06
COMPUTATION OF EXCESS ASH ADJUSTMENT
The adjustment to the Billing Price to be paid by PURCHASER on a per ton basis
for coal for which the actual "as received" ash content that exceeds 14.00% is
calculated as follows:
Assume that the following Shipments are received:
Actual Per Train
"As Received"
Month Ash Content
No. 1 13.50%
No. 2 15.50%
No. 3 14.50%
Examples of Calculations
(a) Adjustment for Shipment No. 1
No adjustment because the "as received" ash content is less than 14.00%
(b) Adjustment for Shipment No. 2
$.45 x (15.50 - 14.00) = $.68 per ton
(c) Adjustment for Shipment No. 3
$.25 x (14.50 - 14.00) = $.13 per ton
3
Annex C
Reference to Section 4.07
COMPUTATION OF EXCESS MOISTURE ADJUSTMENT
The adjustment to the Billing Price to be paid by PURCHASER on a per ton basis
for coal for which the actual "as received" moisture content that exceeds 8.00%
is calculated as follows:
Assume that the following Shipments are received:
Actual Per Train
"As Received"
Month Moisture Content
No. 1 7.50%
No. 2 9.50%
Examples of Calculations
(a)Adjustment for Shipment No. 1
No adjustment because the "as received" moisture content is less than
8.00%
(b) Adjustment for Shipment No. 2
(9.50 - 8.00) x $.25 = $.375 per ton
4
Annex D
Reference to Section 10.01, 4.05
COAL SAMPLE PREPARATION AND ANALYSIS LABORATORY
PROCEDURES
Procedures utilized by Alabama Power Company for coal sample preparation and
analysis will be performed manually or by utilization automated equipment which
conforms with the referenced ASTM Standards:
1. Total Moisture in Coal - (Air drying will be
continued for predetermined time necessary
to achieve a loss in weight or no more than
0.1 percent per hour). ASTM D-2013
2. Preparing Coal Samples for Analysis ASTM D-2013
3. Moisture in the Analysis Sample of Coal ASTM D-3173
4. Ash in the Analysis Sample of Coal ASTM D-3174
5. Gross Calorific Value of Coal by the ASTM D-2015
Adiabatic Bomb Calorimeter or
Gross Calorific Value of Coal by the ASTM D-3286
Isoperibol Bomb Calorimeter
6. Total Sulfur in the Analysis Sample of Coal ASTM D-4239
Using High Temperature Tube Furnace
Combustion Method
7. Volatile Matter in the Analysis Sample of Coal ASTM D-3175
8. Fusibility of Coal Ash ASTM D-1857
9. Grindability of Coal by The Hardgrove ASTM D-409
Grindability Machine Method (No. 8 coal
samples will be used for this analysis)
10. Fixed Carbon is a calculated value. Fixed ASTM D-5142
Carbon is the resultant of the summation of or ASTM D-3172
percentage moisture, ash and volatile matter
subtracted from 100. All percentages used in
the calculation must be on the same moisture basis.
5
Continued
Annex D
Reference to Section 10.01, 4.05
COAL SAMPLE PREPARATION AND ANALYSIS LABORATORY
PROCEDURES
11. Nitrogen in Me Analysis Sample of Coal ASTM D-5373
or ASTM D-3179
12. Calculating Coal Analyses from As-Determined ASTM D-3180
to Different Basis
6
Annex E
AGREEMENT AND CERTIFICATION OF COMPLIANCE
WITH FEDERAL LAWS AND REGULATIONS
Alabama Power Company is a government contractor under an Area-Wide Utilities
Service Contract with the General Services Administration of the United States
Government. The Seller agrees that the provisions referred to below shall, as if
set forth herein in full text, be incorporated into and form a part of every
contract or purchase order as may be entered into between the Seller and Alabama
Power Company after the date set out below if the amount and circumstances of
each such contract or purchase order meet the criteria set out in each of the
provisions referred to below for incorporation of the provision into contracts
or purchase orders between Alabama Power Company and others.
(1) 52.219-8 Utilization of Small Business Concerns and Small
Disadvantaged Business Concerns
(2) 52.219-8 Small Business and Small Disadvantaged Business
Subcontracting Plan
(3) 52.220 3 Utilization of Labor Surplus Area Concerns
(4) 52.220-4 Labor Surplus Area Subcontracting Program
(5) 52.222 4 Contract Work Hours and Safety Standards Act -
Overtime Compensation - General
(6) 52.222-26 Equal Opportunity
(7) 52.222-35 Affirmative Action for Special Disabled and Vietnam
Era Veterans
(8) 52.222-36 Affirmative Action for Handicapped Workers
(9) 52.223-2 Clean Air and Water
This Agreement shall remain in effect and binding upon the Seller. Upon the
Seller's request, Alabama Power Company will provide the full text of any of the
above provisions of clauses incorporated herein by reference.
Name of Contractor:____________________________________(Firm)
By:__________________________________________________(Individual's Name)
Its:__________________________________________________(Title)
Date:_________________________________________________
8