Exhibit 10.18
CONFIDENTIAL PORTIONS OMITTED
AGREEMENT
FOR THE SUPPLY OF COAL
BETWEEN
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY (Buyer)
AND
SIGCORP FUELS, INC. (Seller)
December 17, 1997
TABLE OF CONTENTS
SECTIONS HEADINGS PAGE NO.
SECTION 1. TERM 1
SECTION 2. QUANTITY, ANNUAL PRICE REVISION, DELIVERIES 2
SECTION 3. SOURCE AND DELIVERY 3
SECTION 4. QUALITY 5
SECTION 5. WEIGHING, SAMPLING AND ANALYSIS 10
SECTION 6. PRICE 12
SECTION 7. INVOICES, BILLING AND PAYMENT 15
SECTION 8. FORCE MAJEURE 16
SECTION 9. AUDIT AND INSPECTION 20
SECTION 10. NOTICES 20
SECTION 11. RIGHT TO USE AND RESELL 21
SECTION 12. LIABILITY 21
SECTION 13. STATUS AND RELIANCE OF BUYER 22
SECTION 14. TERMINATION FOR DEFAULT 23
SECTION 15. CONSTRUCTION OF AGREEMENT 23
SECTION 16. INDEPENDENT CONTRACTOR 25
SECTION 17. PERMITS AND LICENSES 26
SECTION 18. CONFIDENTIALITY 26
THIS COAL SUPPLY AGREEMENT ("Agreement") entered into this 17th day of
December, 1997 by and between SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, a
public utility organized and existing under the laws of Indiana ("Buyer") and
SIGCORP FUELS, INC., an Indiana corporation ("Seller").
W I T N E S S E T H :
WHEREAS, Buyer is an electric utility which desires to purchase a supply of
coal of the quality hereafter described for use in its F.B.Culley Generating
Station at Yankeetown, Warrick County, Indiana, and;
WHEREAS, Seller desires to sell coal produced by its Cypress Creek Mine,
Warrick County, Indiana, to Buyer and Buyer desires to buy such coal from Seller
for the purposes of and in accordance with the provisions of this Agreement;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Seller agrees to sell and deliver and Buyer agrees to purchase and accept
delivery of coal of the quality and quantity hereinafter described and in
accordance with the terms and conditions set forth herein as follows:
SECTION 1. TERM
Section 1.1 Term. This Agreement shall commence on January 1, 1998, or upon
Contract filing with the Indiana Utility Regulatory Commission ("IURC") and the
Federal Energy Regulatory Commission ("FERC") and inaction or approval by the
IURC and FERC, whichever occurs earlier, and unless sooner terminated as
provided herein, shall continue until and including December 31, 2002. Buyer and
Seller acknowledge that the source of coal to be furnished under this Agreement
is a new mine operation to be developed subsequent to the execution of this
document. It is anticipated that deliveries will begin hereunder during the
fourth quarter of 1997. Accordingly, the initial term of this Agreement will
include calendar years 1998 through 2002 and any portion of 1997 in which coal
is produced by Seller from the Cyprus Creek Mine and delivered to Buyer. Buyer
shall have the right, but not the obligation, to renew this Agreement for an
additional five (5) year period, such right to be exercised by notice in writing
to Seller no later than six (6) months prior to the expiration of the initial
term of this Agreement.
SECTION 2. QUANTITY, ANNUAL PRICE REVISION, DELIVERIES
Section 2.1 Quantity.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
Section 2.2 Rate of Shipment.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
Section 2.3 Notification.
(a) Quarterly Delivery Schedule - By November 1 of each year, Buyer
shall specify by written notice to Seller the monthly quantities
to be delivered in the following calendar year subject to the
limitation contained in subparagraph (b). Quantities shall be
specified on quarterly schedules. Revisions to any quarterly
schedule shall be made by Buyer no later than the 1st of the
month preceding the start of that quarter. (Eg, March 1 for the
second quarter, etc.)
(b) Modification of Quantity - On or before November 1, Buyer may
change the Quantity to be delivered in the following year within
a range of +/- 10% of the Quantity specified in Section2.1 above.
SECTION 3. SOURCE AND DELIVERY.
Section 3.1 Source -
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
Section 3.2 Warranties of Operation and Reserves. Seller represents and
warrants that The Mine contains economically recoverable coal of a quality and
in quantities which will be sufficient to satisfy all the requirements of this
Agreement. Seller agrees and warrants that it is the legal owner of The Mine,
and that it will have or cause to have at The Mine adequate machinery, equipment
and other facilities to produce, prepare and deliver coal in the quantity and of
the quality required by this Agreement. Seller further agrees to operate and
maintain such machinery, equipment and facilities in accordance with good mining
practices so as to efficiently and economically produce, prepare and deliver
such coal, or to contract therefor. Seller agrees that Buyer is not providing
any capital for the purchase of such machinery, equipment and/or facilities and
that Seller shall operate and maintain same at its sole expense, including
Seller's acquisition of all required permits and licenses or Seller shall
contract therefor. Seller hereby dedicates to this Agreement from The Mine
sufficient reserves of coal meeting the quarterly delivery requirement and
quality specifications provided for herein.
Section 3.3 Non-Diversion of Coal. Seller agrees and warrants that it will
not, without Buyer's express prior written consent, use, mine or sell coal from
The Mine in a way that will reduce the economically recoverable balance of coal
in The Mine to an amount less than that required to be supplied to Buyer
hereunder.
Section 3.4 Truck Delivery, Title, Risk of Loss. Buyer and Seller hereby
select truck transportation as the method of shipment for all coal under this
Agreement. Coal will be delivered FOB Buyer's F. B. Culley Generating Station,
and title to and risk of loss of coal will pass to Buyer when the coal is
unloaded at the Culley Plant and placed on its stockpile (the "Delivery Point").
Seller will contract and pay for transportation from The Mine to the F. B.
Culley Generating Station and unloading from trucks onto Buyer's stockpile.
Section 3.5 Alternative Delivery Mode. Buyer shall be entitled, upon one
hundred twenty days (120) days prior notice to Seller, to change the specified
mode of delivery at its option for all or a portion of the Quantity. In the
event any such change will result in an adjustment to Seller's costs (increase
or decrease), Seller shall give Buyer prompt written notice thereof, such notice
to include a detailed statement and itemization of such costs, and Buyer and
Seller shall jointly make an adjustment to the Base Price of coal sold hereunder
if Buyer agrees to the adjustment, otherwise the mode of delivery shall not
change.
SECTION 4. QUALITY
Section 4.1 The coal delivered hereunder shall conform to the
specifications in Exhibit A attached hereto. The specifications in Exhibit A are
hereby made a part of, are a fundamental basis of this Agreement, and create an
express warranty by Seller that the coal shall conform in every respect to all
specifications. The coal shall have a top size of not larger than two (2)
inches. Intermediate sizes shall not be removed. Not more than 35% by weight of
each delivery shall be less than 1/4 inch in size. The fine content of the coal
shall be that resulting from the normal mining and preparation sizing of the
coal, and no fine screenings or slurry shall be added. The coal shall be
substantially uniform in quality and physical appearance and shall be free
flowing and substantially free from excess water and impurities such as, but not
limited to, rock, bone, wood, slate, earth, or metal.
Section 4.2 Change in Specification. Seller may, with the written
permission of Buyer, deliver coal which does not conform to the foregoing
Section 4.1 and the specifications in Exhibit A, provided that Buyer shall have
the right to take such reasonable measures and precautions as it deems necessary
to assure itself that any divergence in specifications does not adversely impact
the costs or operation of Buyer's F.B. Culley Generating Station.
Section 4.3 Rejection.
(a) A ("Shipment") is defined as the entire quantity of coal prepared
for delivery for which sampling and analysis has been performed
pursuant to Section 5.2. A shipment shall not include more than
5,000 tons.
(b) Seller shall notify Buyer prior to Buyer's receipt of any
shipment if such shipment fails to conform to the specifications
in Exhibit A. Buyer shall then have the option to accept or
reject such shipment (a "Nonconforming Shipment"). If Seller
fails to notify Buyer of a Nonconforming Shipment, then Buyer may
request service at any time or, if the Nonconforming Shipment of
coal is burnt, then Seller shall pay Buyer all costs, expenses
and damages therefor, including, but not limited to,
environmental costs, damages and expenses.
(c) In the event Buyer rejects any Nonconforming Shipment, Buyer
shall return the coal to Seller or, at Seller's request, divert
such coal to Seller's designee, all at Seller's cost. Buyer may
request replacement of the rejected coal by Seller within five
(5) working days with coal at least equal to the specifications
in Section4.1 and Exhibit A. If Seller fails to replace the
rejected coal within five (5) working days or the replacement
coal is rejected, Buyer may purchase an equivalent amount of
conforming specification coal from another source in order to
replace the rejected coal and Seller shall reimburse Buyer for
any amount by which the total delivered cost to Buyer of such
conforming coal purchased from another source exceeds the then
current delivered cost of coal under this Agreement. Seller shall
reimburse Buyer for any and all freight or transportation
expenses that it incurs for rejected coal.
(d) After receipt of notice from Seller of a shipment, or upon
Buyer's own discovery of a Nonconforming Shipment, Buyer may, by
notice to Seller, voluntarily elect to accept a Nonconforming
Shipment. If Buyer accepts a Nonconforming Shipment, the price
therefor shall be reduced by an amount mutually agreed upon by
Buyer and Seller, and the quantity Buyer is obligated to purchase
from Seller, shall be reduced in each calendar year by the amount
of any Nonconforming Shipment voluntarily accepted by Buyer.
(e) Failure to Give Notice - Failure on the part of Seller to give
Buyer advance notice of any nonconforming shipment as required in
(a) above shall constitute a default within the meaning of
Section 14 of this Agreement.
Section 4.4 Suspension and Termination.
(a) Buyer may, upon notice in writing, suspend future shipments if
sampling and analysis pursuant to Section 5.2 of this Agreement
indicates that a shipment of coal fails to meet any of the
specifications in Section 4.1 and in Exhibit A. Seller shall,
within 15 days, provide Buyer with reasonable assurances that
subsequent deliveries of coal shall meet or exceed such
specifications. If Seller fails to provide such assurances within
said 15 day period, or provides such assurance but does not
correct the violation(s) prior to the next scheduled shipment
after giving such assurance, Buyer may on 15 days notice,
terminate this Agreement without any cost or penalty to Buyer. If
Seller provides such assurances to Buyer's reasonable
satisfaction, shipments hereunder shall resume and any tonnage
deficiencies resulting from suspension may be made up by Seller,
with Buyer's approval, in accordance with a mutually agreed
schedule. Buyer shall not unreasonably withhold its acceptance of
Seller's assurances, or delay the resumption of shipments.
(b) Notwithstanding any other provisions of this Agreement, if the
coal specifications set forth in Exhibit A are adjusted at any
time due to new or revised applicable laws, rules or regulations,
Seller and Buyer agree to enter into negotiations in good faith
to arrive at a mutually agreeable price adjustment under which
Seller can continue to supply coal that conforms with such new
laws, rules or regulations and meets the adjusted specifications.
The parties shall also negotiate an agreement as to any necessary
lead time to permit the receipt and delivery of coal conforming
to the new specifications. If mutually agreeable terms cannot be
negotiated, either party may on not less than thirty (30) days'
notice, terminate this Agreement.
Section 4.5 Remedies. Seller shall be responsible for all costs incurred by
Buyer resulting from Seller's failure to comply with this Agreement. Buyer, at
its option, may allow Seller to supply replacement coal at the Base Price as
adjusted pursuant to Section 6; however, Buyer may procure coal to replace all
or any part of the quantity of coal which Seller has failed to deliver. The
Seller shall be liable to Buyer for the excess delivered cost occasioned by
Buyer's purchase of replacement coal and any other loss or damage directly
caused by the Seller's breach of this Agreement. Buyer may also recover damages
for all losses sustained as a result of Seller's breach of Agreement based upon
any applicable legal theory, including, but not limited to, environmental costs,
expenses, penalties, losses and damages. Buyer may deduct the excess cost, loss,
or damage from any amount due Seller under this Agreement and, if such amount is
insufficient, Buyer shall recover the balance due from Seller directly through
appropriate legal action.
Remedies provided under this Agreement shall be cumulative and in addition
to other remedies provided by law or in equity.
SECTION 5. WEIGHING, SAMPLING AND ANALYSIS
Section 5.1 Weights. The weight of the coal delivered hereunder shall be
determined on a per shipment basis by Buyer on the basis of scale weights at the
generating station unless another method is mutually agreed upon by the parties.
Such scales shall be duly certified by an appropriate testing agency and
maintained in an accurate condition. Seller shall have the right, at Seller's
expense and upon reasonable notice, to have the scales checked for accuracy at
any reasonable time or frequency. If the scales are found to be inaccurate, over
or under a tolerance range of 0.5%, either party shall pay to the other any
amounts owed due to such inaccuracy for a period not to exceed thirty (30) days
before the time any inaccuracy of scales is determined.
Section 5.2 Sampling and Analysis. The sampling and analysis of the coal
delivered hereunder shall be performed at Seller's expense at the Mine by an
independent commercial testing laboratory ("Independent Lab") mutually selected
by Buyer and Seller. The results thereof shall be accepted and used for the
quality and characteristics of the coal delivered under this Agreement. All
analyses shall be made in accordance with American Society of Testing Materials
("A.S.T.M.") or other mutually agreed to specifications. Samples for analysis
shall be taken in accordance with A.S.T.M. standards, may be composited, and
shall be taken with a frequency and regularity sufficient to provide accurate
representative samples of the deliveries made hereunder.
Each sample shall be divided into 3 parts and put into airtight containers,
properly labeled and sealed. One part shall be used for analysis by the
Independent Lab, one part shall be made available to Buyer as a check sample, if
Buyer in its sole judgment determines it is necessary, and one part ("Referee
Sample") shall be retained for a period of 30 days. Buyer shall be given timely
and routine copies of all analyses made by the Independent Lab. Seller will fax
results and relevant coal quality information to Buyer's designee and to its
Plant Manager, 24 hours prior to shipment. Buyer, on reasonable notice to Seller
shall have the right to have a representative present to observe the sampling
and analysis. Unless Buyer requests a Referee Sample analysis, the Independent
Lab analysis shall be used to determine the quality of the coal delivered
hereunder.
If any dispute arises within 30 days of the date of sampling, the Referee
Sample shall be submitted for analysis to another independent commercial testing
laboratory ("Second Lab") selected by Buyer. The analysis of the Second Lab
shall control to the extent provided in this Section. A dispute shall be deemed
not to exist and the Independent Lab analysis shall prevail if such analysis
differs from the analysis of the Second Lab by an amount equal to or less than
any of the following ("as received"):
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
SECTION 6. PRICE
Section 6.1 Price.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
Section 6.2 Revised Renewal Period Price.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
Section 6.3 Diesel Fuel Price Adjustment.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
Section 6.4 Government Impositions.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]
SECTION 7. INVOICES, BILLING AND PAYMENT
Section 7.1 Invoice Procedures for Coal Shipments. Seller shall invoice
Buyer twice each month at the current Base Price for all coal unloaded in the
previous calendar half-month.
Section 7.2 Payment Procedures for Coal Shipments. Payment for coal
unloaded shall be mailed within 15 days after receipt of invoice in form and
detail satisfactory to Buyer. Buyer shall mail all payments to Seller's account
as directed by Seller.
Section 7.3 Withholding. Buyer shall have the right to withhold from
payment of any billing or billings the amount of any sums which it is not able
in good faith to verify or which it otherwise in good faith disputes, such right
to withhold to continue for the duration of the dispute or inability to verify.
Buyer shall notify Seller promptly in writing of any such issue, stating the
basis of its claim and the amount it intends to withhold, and the parties agree
to review the matter in detail within ten (10) days after Seller's receipt of
such notice. In the event and to the extent that any dispute or verification
issue is resolved in Seller's favor, Seller shall add the unpaid amount to the
next invoice, plus interest at the prime rate of borrowed funds as published in
the most recently published edition of the Wall Street Journal for the period
between the date on which the amount would normally be paid and the actual
payment date, and Buyer shall pay such extra amount in accordance with the
procedures hereof. In the event and to the extent that any dispute or
verification issue is resolved in Buyer's favor, Seller shall promptly issue a
credit memorandum covering the amount in question.
Payment by Buyer, whether knowing or inadvertent, of any amount in dispute
shall not be deemed a waiver of any claims or rights by Buyer with respect to
any disputed amounts or payments made.
SECTION 8. FORCE MAJEURE
Section 8.1 Events of Force Majeure. Performance of the obligations of
either party hereto except as to any obligation by either party to make payment
to the other shall be excused to the extent prevented by an event of Force
Majeure. As used herein, an event of Force Majeure shall mean an act of God;
strike, lockout or other labor dispute; sabotage; fire; flood; war; riot or
insurrection; explosion; accident; embargo; blockade; inability to secure
supplies, fuel, power, governmental authorization or permit; unscheduled or
forced outages at the generating station (see Section 8.5 below); breakdown of
or damage to machinery, plants or equipment; interruption or shortage of
transportation arrangements or equipment; regulation, rule, law, order, act or
restraint of any civil or military authority; or any other event, whether of the
kind herein enumerated or otherwise, which is beyond the control and without the
fault or negligence of the party affected thereby and which wholly or partially
prevents, interrupts or delays performance hereunder. An event is beyond the
control of a party if it cannot be prevented or eliminated by the exercise of
due diligence or its prevention or elimination would be accomplished only at an
excessive or unreasonable cost.
The party claiming excuse hereunder shall give the other party prompt
notice of such event. As used herein, the term "Seller" shall include any party
mining, preparing, hauling, loading or transporting coal to Seller for resale to
Buyer under this Agreement. The party experiencing the Force Majeure shall use
its best efforts to remedy the Force Majeure as soon as practicable.
Section 8.2 Notice and Suspension. If because of Force Majeure either Buyer
or Seller is unable to carry out its obligations under this Agreement, such
party shall promptly give the other party written notice of the Force Majeure,
whereupon the obligations and liabilities of the party giving such notice and
the corresponding obligations of the other party shall be suspended to the
extent made necessary by and during the continuance of such Force Majeure.
Subject to the provisions of this Section if (a) a condition of Force
Majeure occurs, (b) mutual obligations are suspended as contemplated by the
paragraph next hereinabove, (c) such condition (alone or extended by other
conditions of Force Majeure) continues so that the mutual obligations remain
suspended for a period of six months, and (d) at the end of said six months or
at any time thereafter either party, in the exercise of reasonable judgment,
concludes that there is no likelihood of ending the condition(s) in the
immediate future, then either party may terminate this Agreement without
liability to the other party by giving to the other 90 days' notice in writing
of its intention to terminate.
Section 8.3 Deficiencies in Shipments. In the event Seller is prevented, in
whole or in part, from producing, processing or shipping coal hereunder due to
Force Majeure, deficiencies in shipments so resulting may be added to subsequent
shipments of like coal, but only if Seller is requested to do so by Buyer, and
then pursuant to a reasonable schedule provided to Seller by Buyer.
Section 8.4 Environmental Force Majeure. 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 relating to air
pollution or other environmental matters which will make it impossible or
commercially impracticable for Buyer to utilize 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, or change in the
interpretation or enforcement thereof, Buyer decides that it will be impossible
or commercially impracticable (uneconomical) for Buyer to utilize such coal,
Buyer shall so notify Seller, and thereupon Buyer and Seller shall promptly
consider whether corrective actions can be taken in the mining and preparation
of the coal at Seller's mine and/or in the handling and utilization of the coal
at Buyer's generating station; and if in Buyer's judgment such actions will not,
without unreasonable expense to Buyer, make it possible and commercially
practicable for Buyer to so utilize coal which thereafter would be delivered
hereunder without violating any applicable law, regulation, policy or order,
Buyer shall have the right, upon the later of 60 days' notice to Seller or the
effective date of such restriction, to terminate this Agreement without further
obligation hereunder on the part of either party. Any expense contemplated by
this Section shall be deemed unreasonable and the alternative under
consideration shall thereby be deemed impossible or commercially impracticable,
if it would result in a total cost to Buyer (including the cost of any equipment
amortized over its useful life), in using Seller's coal, in excess of the total
cost of using competitive fuels including, without limitation, coal from
alternative sources which are then reasonably available to Buyer and which can
be utilized in conformity with all such restrictions (including the cost of any
addition or modification to Buyer's generating station necessary to permit the
delivery and utilization of such fuel). The cost of using such fuels over the
remainder of the term of this Agreement, including anticipated increases in the
price of such other fuel and of any required modifications, adjustments or
additions to Buyer's generating station, shall be considered for purposes of
this Section. Buyer's decisions and opinions with respect to this Section 8.4
shall be final and not subject to question or dispute by Seller.
Section 8.5 Redirection of Coal. Notwithstanding any other provision of
this section, Buyer will have the absolute right and discretion, but in no event
any obligation, during any period of Force Majeure, to redirect shipments of
coal delivered under this Agreement to any of its generating stations, provided
that Buyer agrees to reimburse Seller for any additional transportation or
handling costs that are incurred by Seller to effect such redirected deliveries.
SECTION 9. AUDIT AND INSPECTION
Buyer shall have the right to inspect, review, and audit (or to have its
representatives inspect, review, and audit) at any time during regular business
hours, and upon reasonable notice so as not to disrupt any part of Seller's
operations, including, without limitation the source of Seller's coal,
management, and/or processes by which coal is mined, handled, processed, hauled,
sampled, analyzed and loaded hereunder.
Buyer shall maintain, and cause its representatives to maintain, all data
and information discovered pursuant to this Section in confidence except to the
extent that disclosure thereof may be required by law.
SECTION 10. NOTICES
Section 10.1 Form and Place of Notice. Any official notice, request for
approval or other document required to be given under this Agreement shall be in
writing, unless otherwise provided herein, and shall be deemed to have been
sufficiently given if delivered in person, transmitted by telegraph, telex, or
telecopier, or dispatched in the United States mail, postage prepaid, for
mailing by first class, certified, or registered mail, return receipt requested
and addressed as follows:
If to Seller:
President
SIGCORP Fuels, Inc.
20 N.W. Fourth Street
Evansville, IN 47741
If to Buyer:
President
Southern Indiana Gas and Electric Company
20 N. W. Fourth Street
Evansville, Indiana 47741
Section 10.2 Change of Person or Address. Either party may change the
person or address specified above upon giving notice to the other party of such
change.
SECTION 11. RIGHTS TO USE AND RESELL
Buyer shall have the unqualified right to resell all or any of the coal
purchased under this Agreement, and to use any and all such coal in any of its
generating stations including the transfer from one plant to another, all in
it's absolute discretion, provided that Buyer agrees to reimburse Seller for any
additional transportation or handling costs incurred by Seller to effect such
deliveries.
SECTION 12. LIABILITY
Section 12.1 Indemnity - Seller agrees to indemnify and save harmless
Buyer, its officers, directors, employees and representatives from any
responsibility and liability for any and all claims, demands, losses (including
reasonable attorney's fees) arising out of or resulting from any failure of the
coal sold hereunder to comply with any laws, regulations or ordinances,
including, without limitation, any laws, regulations or ordinances relating to
air quality or emissions standards, or which otherwise arise out of the acts or
omissions of Seller in the performance of this Agreement. Seller further agrees
to indemnify, defend and hold Buyer and its agents and employees harmless from
any claims, demands or liability of any kind or nature for injuries or damage to
any person or property arising out of or resulting from the performance of the
Agreement.
Section 12.2 Consequential Damages - In no event shall either party be
liable to the other or to any third party for any indirect, special or
consequential damages including, without limitation, those based on loss of
revenue, profit or business opportunity, whether or not either party had or
should have had any knowledge, actual or constructive, that such damages might
be incurred.
SECTION 13. STATUS AND RELIANCE OF BUYER
Seller recognizes that Buyer is a public utility which has power sales
contracts with other utilities and provides electrical service to customers
within the State of Indiana. Throughout this Agreement Buyer, its customers and
such other utilities will be relying on the continued operation of the
generating station as a source of electricity for their various needs. Seller
further acknowledges that an adequate and continuous fuel supply to the
generating station, at prices reasonably in conformity to then prevailing market
prices for coal comparable in quality to that sold hereunder, are essential to
Buyer's ability to provide electricity and services at affordable rates. By
signing this Agreement Buyer is placing reliance upon Seller to furnish a
significant portion of its fuel supply at competitive prices. Seller agrees, in
meeting its obligations hereunder, to give due consideration to the status and
reliance of Buyer and Buyer's customers.
SECTION 14. TERMINATION FOR DEFAULT
In the event of the failure of either party to comply with any material
obligation of this Agreement, either party shall have the right to terminate
this Agreement at any time by giving to the other 120 days' notice in writing of
its intention to do so, specifying the default complained of. At the expiration
of said 120 days, unless the party in default shall have made good such default,
the party not in default shall have the right at its election to terminate this
Agreement forthwith.
This right shall be in addition to the rights provided to either party in
other portions of this Agreement and by law, or in equity.
SECTION 15. CONSTRUCTION OF AGREEMENT
Section 15.1 Applicable Law. This Agreement shall be deemed to be executed
in the State of Indiana and shall be interpreted and enforced according to the
laws of the State of Indiana.
Only the courts in the State of Indiana shall have jurisdiction over this
Agreement and any controversies arising out of the Agreement. Any controversies
arising out of this Agreement shall be submitted only to the courts of the State
of Indiana.
Seller hereby submits to the jurisdiction of the courts in the State of
Indiana for the purposes of interpretation and enforcement of this Agreement.
Section 15.2 Headings. The paragraph headings appearing in this Agreement
are for convenience only and shall not affect the meaning or interpretation of
the Agreement.
Section 15.3 Waiver. The failure of either party to insist on strict
performance of any provision of this Agreement, or to take advantage of any
rights hereunder, shall not be construed as a waiver of such provision or right.
Section 15.4 Remedies Cumulative. Remedies provided under this Agreement
shall be cumulative and in addition to other remedies provided by law.
Section 15.5 Severability. If any provision of this Agreement is found
contrary to law or unenforceable by any court of law, the remaining provisions
shall be severable and enforceable in accordance with their terms, unless such
unlawful or unenforceable provision is material to the transactions contemplated
hereby, in which case the parties shall negotiate in good faith a substitute
provision.
Section 15.6 Binding Effect. This Agreement shall bind and inure to the
benefit of the parties and their successors and assigns.
Section 15.7 Assignment. Neither party may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party, which consent shall not be unreasonably withheld or denied; provided,
however, that Buyer shall have the right, without consent of Seller, to assign
all or any part of this Agreement to any company, controlling, controlled by, or
under common control with Buyer.
Section 15.8 Entire Agreement. This instrument contains the entire
Agreement between the parties as to coal produced and sold from the Coal
Property, and there are no representations, understandings or agreements, oral
or written, which are not included herein.
Section 15.9 Amendments. Except as otherwise provided herein, this
Agreement may not be amended, supplemented or otherwise modified except by
written instrument signed by parties hereto.
SECTION 16. INDEPENDENT CONTRACTOR
Seller shall be an independent contractor with respect to the work to be
performed hereunder. Neither Seller nor its subcontractors, nor the employees of
either, shall be deemed to be the servants, employees or agents of Buyer.
SECTION 17. PERMITS AND LICENSES
Both parties shall, at their own expense, obtain any necessary permits and
licenses in connection with the performance of their work, unless otherwise
specified in this Agreement, and shall be responsible for conducting the work in
accordance with the provisions of such permits and licenses.
SECTION 18. CONFIDENTIALITY
Subject to Buyer's obligations of disclosure to AMAX Coal Company under a
pre-existing agreement, Seller and Buyer agree to retain in confidence this
Agreement and any information obtained as a result of negotiation and
performance of this Agreement which either party identifies to the other as
being proprietary in nature. It is agreed and understood, however, that such
information may be disclosed when requested by a court or government agency, to
consultants or subcontractors of either of the parties subject to the same
conditions of confidentiality as provided herein, or as otherwise provided by
law, regulation, or administrative requirement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By: /s/ Ronald Jochum
-----------------------------------------
Ronald Jochum
Its: Vice President, Power Supply for SIGECO
ATTEST:
/s/ Susan Fester
- -------------------
Susan Fester
SIGCORP FUELS, INC.
By: /s/ Kent Stump
-----------------------------------------
Kent Stump
Its: President
ATTEST:
/s/ Kimberly Snow
- -------------------
Kimberly Snow
EXHIBIT A
SIGCORP FUELS, INC.
COAL SPECIFICATIONS
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]