Common use of Additional Governmental Adjustment Cost Clause in Contracts

Additional Governmental Adjustment Cost. In addition to the Governmental Adjustment Cost described in Section 4.1.4.5.1., the Base Prices as of January 1, 2013 shall include the cost of ongoing compliance with all Governmental Adjustments, as interpreted and enforced at the Source mines, referred to as the “Additional Governmental Adjustment Cost”. The Additional Governmental Adjustment Cost shall also include any modifications that result in an incremental change to the Federal Black Lung Tax Fee and the Federal Reclamation Fee that occur on or after the Confirmation Effective Date. For Contract Year 2013, the Parties shall mutually agree by August 1, 2012 to an estimated ongoing 2013 Additional Governmental Adjustment Cost which will be used for billing purposes during 2013 for each Source mine. The average total estimated cost per ton of all Additional Governmental Adjustment Cost for the Source mines shall be based on the weighted average of the aggregate tons to be delivered during 2013 (“AGAC Estimate”). Each year thereafter, the Parties will agree by August 1 of the current Contract Year to the next Contract Year’s AGAC Estimate and the individual Source mines’ Additional Governmental Adjustment Cost for billing purposes. The Parties shall review this AGAC Estimate on a quarterly basis and Seller shall advise Buyer if any new laws or regulation have affected the Source mines, in which event the Parties may then mutually agree to adjust the AGAC Estimate if necessary. Each year, the Parties shall follow the following procedures to establish a maximum Additional Governmental Adjustment Cost for the annual base load quantity delivered during the next Contract Year (“Base Annual Cap”). If the AGAC Estimate is $**** per ton, or less, then $**** per ton shall be the Base Annual Cap. If the AGAC Estimate is greater than $**** per ton, then Buyer shall have the following two options: 1) if Buyer agrees to such AGAC Estimate, then that AGAC Estimate shall be the Base Annual Cap for the next Contract Year, or 2) if Buyer does not agree to the AGAC Estimate, then Buyer may give written notice to terminate the Confirmation at the end of the current Contract Year. If Buyer elects termination, Seller may within five (5) Business Days after receipt of Buyer’s notice of termination, withdraw its request for recovery of the AGAC Estimate, in which event the Base Annual Cap for the next Contract Year shall be $**** per ton and Seller and Buyer shall continue to perform under this Confirmation and the Base Contract. If Seller does not withdraw such request, then the Confirmation shall terminate effective December 31 of the Contract Year during which Seller has provided Buyer the AGAC Estimate and neither Party shall have any further rights or obligations under this Confirmation other than those with respect to performance required hereunder prior to the effective date of such termination. The Base Annual Cap shall exclude any adjustments which apply under the provisions of Section 4.1.2.1 and Section 4.1.4.4., which shall be in addition to the Base Annual Cap.