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EXHIBIT 10.10
Contract 95P05 - 129636
CONTRACT FOR PURCHASE AND SALE OF COAL
THIS AGREEMENT, is made and entered into this 31st day of January,
1995, by and between TENNESSEE VALLEY AUTHORITY, a corporation organized and
existing under an Act of Congress (hereinafter called "TVA"), and Xxxxxxx County
Coal Corporation (hereinafter called "Contractor").
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter stated, the
parties hereto agree as follows:
Definitions: "Contract Year" shall mean a twelve-month period
commencing with the first day of the calendar month in which the Delivery
Commencement Date (as hereinafter defined) occurs.
"Delivery Commencement Date" shall be that date set forth in Section 1
hereof for commencement of deliveries. Such date may be changed only by
supplement to this contract that expressly refers to the term "Delivery
Commencement Date." The actual date of commencement of deliveries shall not
affect the Delivery Commencement Date.
"Contract Quarter" shall mean any of the four quarters of a Contract
Year.
"Contract Administrator" shall be that TVA representative designated to
administer the contract on behalf of TVA. This TVA representative is identified
in Section 12, Notices.
"Destination Plant" shall mean that TVA fossil-fired power plant
designated in the Request for Proposals under which this contract was awarded or
such other destination as TVA may elect under Subsection 14.g. of this contract.
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1. CONTRACT TERM: Delivery Commencement Date shall be July 1,
1995 and, subject to the provisions of Subsection 1.b. of this contract,
deliveries shall continue for six (6) contract years unless terminated by
agreement or as otherwise provided herein.
b. This contract may be reopened by either party ****** prior
to the ****** of the Delivery Commencement Date (said ****** date being
hereinafter referred to as "Reopener Date") for the purpose of renogotiating
price and other terms and conditions, or solely for the purpose of terminating
deliveries. The party desiring to exercise such reopener shall give the other
party written notice at least ****** prior to the Reopener Date. If this
reopener provision has been exercised and the parties fail to reach written
agreement at least ****** prior to the said Reopener Date, then this contract
will terminate on the said anniversary date.
2. QUANTITY:
a. Subject to TVA's right to reduce or increase quantities to
be delivered, as hereinafter provided, the quantity of coal to be sold and
purchased hereunder during each Contract Year shall be ****** nominal tons.
which shall be divided into four (4) equal amounts to determine the quantity of
coal to be delivered per Contract Quarter; provided, however each Contract
Quarter TVA may either increase or decrease such purchases from Contractor by an
amount up to ****** of the quantity of coal per Contract Quarter by giving at
least thirty (30) days' written notice prior to the beginning of each Contract
Quarter (said nominated quantity being hereinafter referred to as the "Nominated
Quarterly Quantity"). Such notice shall also indicate the quantities to be
delivered each month for the Contract Quarter. In establishing such monthly
quantities, subject to meeting the Nominated Quarterly Quantity, TVA may elect
as much as ****** of the Nominated
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Quarterly Quantity or as little as ****** of the Nominated Quarterly Quantity to
be delivered in any one month by providing notice in accordance with this
Section 2.a.
TVA shall not be required to accept any quantity of coal shipped during
a month that is in excess of the total monthly amount scheduled, but if TVA
accepts such excess quantity of coal, TVA may, upon written notice to
Contractor, require that such excess amount be deducted from the quantities to
be shipped during the following or subsequent month(s).
This contract is not and shall not be construed as a contract for all
of TVA's coal requirements for the Destination Plant. TVA reserves the right to
purchase coal from other suppliers in any amount during the term of this
contract.
b. Notwithstanding the provisions of a. above, if generation
of electricity at the Destination Plant is curtailed or interrupted for a period
of one week or more as a result of the operating requirements of TVA's
integrated electric generating system, including considerations of economic
dispatch of TVA's generating units, TVA may, from time to time, direct
Contractor to (i) suspend deliveries if the electric output of the Destination
Plant is interrupted or (ii) reduce scheduled shipments of coal by a percentage
equal to the percentage reduction in electric output of the Destination Plant
resulting from a curtailment. Such suspension or reduction in deliveries may
continue as long as generation at the Destination Plant is curtailed or
interrupted; provided, however, if TVA continues any such reduction or
suspension for more than one hundred eighty (180) days, Contractor may notify
TVA in writing of Contractor's intent to terminate this contract ninety (90)
days from the date of TVA's receipt of such written notice, and this contract
shall, upon the passing of such ninety-day (90-day) period, terminate without
further cost or obligation
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to either party, unless TVA shall have directed resumption of the suspended or
reduced deliveries within forty-five (45) days of TVA's receipt of Contractor's
notice of termination.
Except as provided in the preceding sentence, suspensions or reductions
under this subsection shall not affect the enforceability of this contract, and,
on termination of the suspension or reduction, shipments shall resume pursuant
to the terms and conditions of this contract. Both TVA and Contractor shall be
excused from their respective obligations hereunder with respect to deliveries
suspended or reduced pursuant to this section and such deliveries shall not be
rescheduled for delivery except by mutual consent of the parties.
c. TVA may exercise the remedies afforded it under Section 11,
Remedies, or as otherwise provided by law, in the event Contractor fails to
deliver coal as provided in this Section 2 or Section 3, Scheduling; provided,
however, in lieu of other remedies, TVA may elect to rescheduled for delivery
any deficiencies. This rescheduled coal shall be delivered in accordance with
the provisions of this contract and at the price in effect at the time during
which such deficiencies occurred.
3. SCHEDULING:
a. TVA shall provide Contractor with a monthly shipment
schedule indicating the dates and quantities of coal to be delivered to TVA
consistent with TVA's Nominated Quarterly Quantity and the requirements of
Subsection 2.a. Such schedule will be provided by TVA no later than fifteen (15)
days prior to the beginning of the affected month. Contractor shall deliver all
coal in accordance with such schedules. Provided Contractor provides at least
one hundred fifty (150) days' notice to TVA of the holiday and vacation periods
for its sources, TVA
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shall not schedule deliveries during such periods, unless such deliveries are
critical to the prudent operation of the plant(s) during such periods.
TVA maintains the right to coordinate all deliveries under this
contract and others for purposes of establishing a uniform daily delivery
schedule for placement at TVA plants.
b. Whether TVA or Contractor contracts for transportation
services necessary to transport coal purchased and sold hereunder to the
Destination Plant, unless otherwise agreed, it shall be Contractor's
responsibility to make timely arrangements for the availability of
transportation equipment for moving the coal at the scheduled rate of delivery.
Contractor shall be responsible for any demurrage that accrues at the loading
point as provided in Section 14, Transportation.
4. VARIATIONS, DELAYS, AND INTERRUPTIONS IN DELIVERIES:
a. Time of delivery is of major importance to TVA. Contractor
shall immediately notify TVA's Fuel Transportation department of any expected
deviation from the delivery schedule established in accordance with Section 2,
Quantity, and Subsection 3.a. of this contract and of the cause and extent of
deviation, except in the case of variations from schedule of up to ******.
b. Subject to the conditions hereinafter stated, neither party
shall be liable to the other for failure to mine, deliver, take, or unload coal
as provided for in this contract if such failure was due to supervening causes
beyond its control and not due to its own negligence, and which cannot
reasonably be overcome by the exercise of due diligence. Such causes shall
include by way of illustration, but not limitation: acts of God or of the public
enemy; insurrection; riots; strikes; nuclear disaster; partial or total outages
of coal-fired units; floods;
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accidents; major breakdown of equipment or facilities (including emergency
outages of equipment or facilities to make repairs to avoid breakdowns thereof
or damage thereto); fires; industry-wide shortages of carriers' equipment;
embargoes; orders or acts of civil or military authority; or industry-wide
shortages of materials and supplies. Nor shall TVA be obligated to take coal
hereunder so long as such causes wholly or partially prevent the unloading,
stockpiling, or burning of coal at the plant to which deliveries are consigned
at the time the cause occurs, in which case, TVA shall have no obligation to
consign deliveries to another plant. Nor shall the refusal of either party to
settle a strike on terms other than it considers satisfactory preclude the
strike from being considered an excusable cause. TVA shall have the right, but
not the obligation, to require Contractor to make up any tonnage not delivered
in accordance with this section.
Contractor's delays due to delays of its subcontractors will not be
excusable under this provision unless the delay of the subcontractor was also
due to causes beyond the control and without the fault of the subcontractor,
such as the causes listed above. The failure by Contractor or its subcontractor
to obtain and maintain all federal, state, and other regulatory agency coal
mining permits, certificates, and licenses shall not excuse Contractor from any
obligation under this contract. The provisions of this Subsection b. shall not
excuse a party unless such party failing to deliver or take coal shall give
written notice to the other of such failure and furnish full information as to
the cause and probable extent thereof within ten (10) calendar days after the
failure first occurs. In the case of the Contractor, said ten-day (10-day)
period shall begin with the day following that on which tonnage first becomes
deficient under the established delivery
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schedule. In the case of TVA, this period shall begin on the day following that
on which TVA first fails to take coal duly and properly delivered. Failure to
give such notice and furnish such information within the time specified shall be
deemed a waiver of all rights under this provision with respect to tonnage
scheduled for delivery prior to the date such notice and information are
actually furnished.
In the event of partial failure to deliver, take, or unload coal which
is excusable under this subsection, the parties shall prorate deliveries or
receipts of coal in substantially the same proportion based upon contractual
commitments, (e.g. a fifty percent (50%) reduction in receiving or production
capacity would result in a fifty percent (50%) reduction in scheduled deliveries
for each supplier or consumer). However, the parties shall not be obligated to
prorate a reduction in receipts or deliveries under coal supply contracts not
affected by the failure because they have different modes of delivery or have
substantially different quality requirements, or because their scheduled
delivery dates are not affected by the failure. During the periods TVA may
experience such failures to take or unload coal, Contractor shall be permitted
to sell such coal normally intended for TVA. In the case of the period during
which Contractor may experience such failures to deliver coal, TVA may purchase
replacement coal. The disabling effects of such failures to deliver, take, or
unload coal shall be corrected by the party experiencing such failure as soon as
and to the extent reasonably practicable.
If a party's excused failure to deliver or receive coal in amounts
substantially in conformance with the schedule established under Section 2,
Quantity, and Subsection 3.a. continues for a period exceeding one-hundred
eighty (180) days, the other party may terminate
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this contract. In the event of such a termination, neither party shall have any
further liability to the other except for those liabilities which may have
accrued with respect to performance or defaults prior to said termination.
c. TVA is currently planning to perform certain
maintenance/repairs to the plant(s) during the term of this agreement as set
forth in Appendix A. TVA, by providing at least forty-five (45) days' prior
written notice to Contractor, shall have the right to refuse any shipments
otherwise scheduled for delivery during such maintenance periods and shall have
no obligation to accept such shipments at a later time. If TVA is unable to
complete the maintenance/repairs to the plant during the period(s) set forth in
Appendix A, then TVA's failure to take coal during such extended period shall be
excused under Subsection 4.b.
5. SOURCE:
a. The source of coal delivered under this contract is of
major importance to TVA. The provisions of this contract pertaining to coal
quality and quantity requirements, price adjustments, federal and state
legislation, and other matters are directly related to the source of coal. As
used in this Section 5, "Source Area" shall mean the total coal reserve areas
outlined in the Specific Location Map(s) provided with the Term Coal Proposal;
provided, that, within the Source Area, only the area(s), for surfaced-mined
coal, or mine opening(s), for underground-mined coal, covered by the mining
permit(s) listed in the Term Coal Proposal is an "Authorized Source" of coal for
delivery under this contract. The mine area(s) and/or opening(s) located within
the Source Area shown on the Specific Location Map(s), but not covered by the
mining permit(s) listed in the Term Coal Proposal, may become an Authorized
Source under the following procedures as mining progresses and the appropriate
permit(s) and license(s) are
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obtained. Contractor shall notify TVA in writing at least forty-five (45) days
in advance of its intention to deliver coal from any additional area(s) or mine
opening(s) in the Source Area which is not then authorized. TVA may, if it deems
it is in TVA's best interests, authorize such areas, but is under no obligation
to do so. TVA reserves the right to require Contractor to furnish any
information and/or any guarantees TVA deems necessary bearing on the ability of
the source to meet the requirements of this contract and to make that
information a part of this contract.
b. Contractor shall immediately notify TVA in writing of any
events affecting the size or location of the Authorized Source(s). All
Authorized Sources under this contract shall be in compliance with the Federal
Mine Safety and Health Act of 1977, as amended, all state and federal
reclamation laws, including the Surface Mining Control and Reclamation Act of
1977, as amended, and regulations issued under such laws. If Contractor fails to
comply with this requirement, whether or not coal from such Authorized Source is
then being delivered hereunder, TVA may exercise its rights under Section 11,
Remedies.
c. Contractor expressly assumes the risk that the Authorized
Source(s) will permit the production of coal in such quantities and of such
quality as will meet the requirements of this contract. Coal shall not be
delivered from any other source(s), or shipped from any other origin(s), or
mined by any other producer(s) or subcontractor(s), unless authorized by TVA in
writing prior to delivery.
d. Regardless of the cause of or reason for a request by
Contractor to approve a new Authorized Source, TVA shall be under no obligation
to approve the tendered source as an Authorized Source, and TVA may withhold its
approval on any basis or bases that TVA may deem appropriate, including purely
economic considerations.
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6. PRICE:
a. TVA shall pay Contractor ****** (hereinafter referred to as
the Base Price) f.o.b. railcar Dotiki mine loadout for each net ton of coal
purchased and delivered under this contract, plus or minus such adjustments as
herein provided. The Base Price remains constant.
7. SAMPLING AND ANALYSIS:
a. The sampling location shall be the Destination Plant unless
TVA notifies Contractor in writing that samples will be taken at other
locations. TVA shall determine how much coal is to be sampled and the lot size
of each sample. Contractor may be present at the taking of samples, but TVA
shall be under no obligation to notify Contractor to be present.
b. Sampling and analysis shall be conducted generally in
accordance with the methods described in the latest published edition of the
Annual Book of ASTM Standards, volume 05.05. Contractor has observed the
sampling equipment and facilities at the Destination Plant or has taken such
other steps as Contractor deems appropriate to familiarize itself with such
equipment and facilities, and Contractor waives any claim, demand, defense, or
objection thereto based on any lack of conformance of such equipment and
facilities to the requirements of this Section 7, provided they are properly
maintained during the term of this contract.
c. Analysis data shall be promptly made available to
Contractor through access to a computer system or, at TVA's option, such data
may be provided by other means. Moisture, ash, and sulfur values shall be
reported to the nearest hundredth (.01) of a percent. Heat content in Btu/lb
shall be reported to the nearest whole Btu/lb. SO2 content shall be calculated
and reported to the nearest hundredth (.01) of a pound.
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d. All samples (except washability samples) collected by TVA
shall be divided into at least two parts and put in suitable airtight
containers, the first container in each case to be used by TVA, or its
designated commercial laboratory, and the second container in each case to be
held available by TVA for a period of not less than forty-five (45) days from
actual sampling date of the coal by TVA, properly sealed and labeled, to be
analyzed if a dispute arises between TVA and Contractor. If Contractor wishes to
dispute a sample or analysis, it shall notify TVA in writing within such
forty-five day (45-day) period. If Contractor fails to provide such notice of
dispute within such forty-five day (45-day) period, Contractor shall be deemed
to have waived any claim or defense based on errors or omissions in the sampling
or analysis operations as to the affected samples. TVA reserves the right to
collect sample(s) of coal delivered for washability analysis at any time. TVA,
subsequent to the loading and release of the train by Contractor, will endeavor,
but is not required, to notify Contractor that samples will be collected from
such train for the purpose of performing a washability analysis. Any such
washability sample shall be taken by an independent third party laboratory in
accordance with the latest annual book of ASTM standards.
e. Contractor shall also sample and analyze, or obtain
services of a third party to sample and analyze, all shipments of coal to TVA
under this contract. These analyses shall specify, at a minimum, the total
moisture content, the ash content (as-received), the heat content Btu/lb
(as-received), and the sulfur content (as-received), and must be electronically
transmitted to both the Destination Plant and the Contract Administrator in a
format acceptable to TVA. These analyses are required in order to provide
information on the contents of coal received by TVA prior to unloading. TVA
reserves the right not to unload coal at the Destination Plant until
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after the appropriate analysis is received. Contractor shall be responsible for
any demurrage charges incurred by TVA as the result of Contractor's failure to
transmit the analyses when and as required. TVA may reject coal based on these
analyses; however, nothing in this Subsection e. shall affect in any way TVA's
rights to appropriate contractual actions and adjustments for quality based on
samples collected and analyzed in accordance with Subsections a. and b. of this
Section 7.
f. In the event TVA does not sample at least forty percent
(40%) of the tonnage received for a quarterly adjustment, the Contractor's
samples shall be used for the quality adjustment(s) for such quarter under
Section 8, Adjustments for Quality, provided all Contractor samples for such
quarter meet all criteria below:
(1) One-hundred percent (100%) of shipments shall have been
sampled and analyzed in accordance with the methods described in the latest
published edition of the Annual Book of ASTM Standards, volume 05.05.
(2) Sample system shall have been bias tested at least every
twelve (12) months. The testing procedure and precision must be approved by TVA.
(3) Sample analysis and other data required by TVA to match
data with shipment shall be provided to TVA in a format approved by TVA.
(4) The lot size for each sample shall be by barge for barge
coal, by trainload for rail coal, and by daily delivery for truck coal.
(5) Analysis for each sample shall have been received by TVA
by electronic data interchange within seven (7) days of collection of said
sample.
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(6) The sampling system shall be located in an area acceptable
to TVA such that the sample collected for shipment is collected only from coal
that is loaded for said shipment.
If TVA samples ten percent (10%) or more but less than forty percent
(40%) of the tonnage received, and if any of Contractor's samples for the
affected quarter do not meet all of the above criteria, TVA samples shall be
used for said quarterly adjustment(s). If TVA samples less than ten percent
(10%) of the tonnage received and any of Contractor's samples do not meet all of
the above criteria, no adjustment for quality will be made for said quarter.
8. ADJUSTMENT FOR QUALITY:
a. As used in this Section 8, a "Quarterly Average Value"
shall mean the weighted average value of the appropriate quality component
determined from all samples collected in accordance with Subsections 7.a. and
7.b. during a calendar quarter based, at TVA's election, on the tonnage, number
of railcars, or barges represented by the samples.
b. For the coal accepted in each calendar quarter, an
adjustment, calculated to the nearest cent per ton and using the Base Price,
shall be applied to the contract price to account for variations in the
Quarterly Average Value for as-received Btu/lb compared to the Guaranteed
Specification for as-received Btu/lb. This adjustment shall in no way be
affected by contract price adjustments under Section 10, Contract Price
Adjustments hereof. (See Exhibit I for example of calculations.)
c. For the coal accepted in each calendar quarter, an
adjustment, calculated to the nearest cent per ton at a rate of ****** per ton
for each percentage point the Quarterly Average Value of ash (on a dry basis)
exceeds the Guaranteed Average Specification for ash. The
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calculation shall be prorated to cover any fractional percentage (see Exhibit I
for example of calculations).
d. As soon as practicable after the end of each calendar
quarter, TVA shall submit to Contractor a report showing the Quarterly Average
Values and any adjustments determined under this Section 8 of the contract. The
number of tons of coal received by TVA which are subject to adjustment shall be
multiplied by said adjustments, and any resulting amount shall be paid promptly
(or credited to the extent of any offsetting debit) to the party to whom it is
due. The assessment of adjustments in accordance with the foregoing does not in
any way impair TVA's rights under the contract or at law with respect to any
failure by Contractor to meet the Guaranteed Analysis that gives rise to such
adjustments.
9. QUALITY AND SPECIFICATIONS:
a. Contractor guarantees that all coal delivered under this
contract shall conform to the following specifications as determined by sampling
and analyses performed in accordance with Section 7, Sampling and Analysis:
GUARANTEED SUSPENSION/REJECTION
SPECIFICATIONS SPECIFICATIONS
Total Moisture Not more than ******% ******%
---------- ----------------
Sulfur (as-received) Not more than ******% ******%
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Sulfur (as -received) Not less than ******% ******%
---------- ----------------
Ash (dry basis) Not more than ******% ******%
---------- ----------------
Btu/lb (as-received) Not less than ****** ******
---------- ----------------
b. The coal as-received shall have a top size not greater
than two ****** or less than ******, with at least ****** of the product larger
than ******, and with at least ****** of the product larger than ******. Such
sizes shall be determined by using screens
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with square openings. Coal shall not exhibit a temperature in excess of ******,
and it, for a raw coal prior to washing, shall be substantially free from mining
impurities and scrap such as drill bits, pieces of scrap metal or plate,
plastic, rubber, rope, cloth, wire, cable, bone, slate, earth, rock, pyrite,
wood, or water, which can be kept out or removed with the exercise of reasonable
care during mining and loading. It shall be loaded in a manner that will ensure
reasonably uniform consistency as to size and quality and shall not contain
slurry pond material (washer tailings), gob pile material (mine refuse),
petroleum-coke, oxidized coal, or blends of such materials, or create excessive
amounts of dust during the unloading and transferring to storage.
c. Contractor guarantees that all coal delivered under this
contract shall conform to the following Washability Specifications determined by
sampling and analyses performed in accordance with Section 7, Sampling and
Analysis:
WASHABILITY
SPECIFICATIONS
Lbs. of SO2 per million Btu (1) Not more than ******
-------------------
Sulfur (dry) Not more than ******%
-------------------
Sulfur (dry) Not less than ******%
-------------------
Ash (dry) Not more than ******%
-------------------
Btu/lb (dry) Not less than ******
-------------------
Volatile Matter (dry) Not less than ******%
-------------------
Chlorine (dry) Not more than ******%
-------------------
Btu Recovery Not less than ******%
-------------------
Product Yield Not less than ******%
-------------------
Grindability (Xxxxxxxxx Index) Not less than ******
-------------------
Add fusion temperature reducing atmosphere
Initial Not less than ******o
-------------
Softening Not less than ******o
-------------
Hemispherical Not less than ******o
-------------
Fluid Not less than ******o
-------------
Fluid Not more than ******o
-------------
Specific Gravity ******
(1) at ******
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d. If any coal (barge, trainlot, or daily delivery for trucks)
delivered fails to meet the Suspension/Rejection Specifications of Subsections
9.a., or the requirements of Subsection 9.b. on the basis of visual inspection
or laboratory analysis, TVA may reject the coal at the source, loading point, or
Destination Plant. TVA's acceptance of any amount of coal which does not meet
these requirements shall not constitute a waiver of any right which TVA may have
under this contract or as provided by law on account of the delivery of such
coal. Any such coal accepted shall be assessed liquidated damages at the rate of
****** per ton plus any additional adjustments resulting from its inclusion in
determining the quarterly average values. In case of rejection of any coal in
accordance with this section, TVA will immediately notify Contractor of the
rejection and of the cause of rejection. In the case of coal rejected after
loading, unless the cause for rejection is corrected, Contractor shall promptly
remove the coal from the carrier's equipment or from TVA premises, as the case
may be, at Contractor's expense. Contractor shall reimburse TVA for any
additional transportation costs, demurrage, equipment repair costs, or handling
expenses incurred by TVA in connection with any such rejection. TVA shall not be
under any obligation or liability to assist Contractor in any corrective actions
required to remedy the cause for rejection.
e. If any coal (barge, trainlot, or daily delivery for trucks)
delivered fails to meet the Suspension/Rejection Specifications stated in
Subsection 9.a, the requirements of Subsection 9.b, or the Washability
Specifications in Subsection 9.c, TVA shall have the right to refuse to accept
further deliveries from any or all mine sources authorized under the contract
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until Contractor provides assurance satisfactory to TVA that Contractor will
comply with the requirements of Subsection 9.a, b, and c. Such assurance must be
given in writing within seven (7) days after the beginning of such suspension.
If Contractor (1) fails to provide such assurance within the time specified, (2)
provides such assurance but does not correct the deficiencies that resulted in
the breach of Subsection 9.a. or Subsection 9.b. within seven (7) days after
giving such assurance, or (3) fails on two (2) occasions in any twelve (12)
month period to meet the Washability Specifications set forth in Subsection 9.c,
TVA may then terminate Contractor's right to make further deliveries under this
contract. Contractor shall be responsible for all costs or damages incurred by
TVA resulting from Contractor's failure to comply with the contract
requirements. Damages or excess reprocurement cost may be determined in
accordance with Section 11, Remedies.
f. If the normal operations in conformance with the design
capabilities of the Destination Plant cannot be accomplished with the coal
delivered hereunder, although the coal complies with the quality and size
requirements of this Section 9, TVA may then terminate Contractor's right to
make further deliveries, and this contract shall be canceled without further
obligation or liability to either party. In the event of such a termination, the
Contractor may be given a reasonable opportunity to remedy the cause for
termination, which may include the offer of replacement coal. However, TVA is
not obligated to accept offers of replacement coal.
10. CONTRACT PRICE ADJUSTMENTS
a. Effective the first day of the second Contract Year and
each such first day of each Contract Year thereafter, the then current adjusted
price of coal shipped under this contract
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will be increased by ****** of the Base Price specified in Section 6, Price, as
such price may be modified under Subsection d. or e., below.
b. (1) In the event of enactment or amendment, after the
proposal closing date for the requisition under which this contract was awarded
(or in the case of establishment of a new Base Price under Subsection l.b. or
Subsections d. or e., below, after the effective date of such new Base Price),
of a federal or state statute that assesses on a per ton basis a tax, fee, or
other similar charge on the coal delivered hereunder ("Law Changes "),
Contractor shall notify TVA of such Law Changes and supply from its records
information satisfactory to TVA showing the effect, if any, of these Law Changes
upon the cost per ton of furnishing coal under this contract. If a Law Change
increases Contractor's cost of providing coal to TVA, a contract price increase
shall be made by TVA for such Law Changes effective on the later of (a) the date
TVA receives Contractor's notice of the Law Change or (b) the date Contractor's
cost of providing coal is increased by the Law Change. If a Law Change decreases
Contractor's cost of providing coal to TVA, a price decrease shall be made by
TVA for such Law Change effective on the date such Law Change could be utilized
to reduce Contractor's costs whether or not Contractor actually reduces such
costs on such date. This Section 10.b. (1) does not apply to (i) promulgation or
amendment of rules and regulations except to the extent such promulgation or
amendment results from a Law Change, or (ii) to implementation of statutes or
amendments to statutes that are enacted on or before the proposal closing date
as described above.
(2) If (i) a price adjustment requested by Contractor
under this Subsection b. would result in a contract price increase exceeding
****** of the Base Price, or (ii) a combination of price adjustments under this
Subsection b. and any other provision of this
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contract that collectively come into effect during any one-year period would
result in a contract increase exceeding ****** of the Base Price, then TVA may,
at its sole discretion, terminate the contract upon sixty (60) days' written
notice given after such an adjustment(s) is requested by Contractor.
c. The increase or decrease under each subsection shall be
calculated separately to the nearest one-tenth (1/10) cent per ton. Any changes
(including a recalculation of a previously granted tentative price adjustment)
considered applicable by Contractor shall be reported to TVA by Contractor with
appropriate data necessary to verify the change. Contractor must furnish such
supporting evidence as may be requested by TVA. A request for a price adjustment
considered applicable by Contractor must be submitted to TVA with appropriate
documentation within one hundred eighty (180) days of the date Contractor incurs
a cost change. Failure to do so shall constitute a waiver of Contractor's right
to any upward adjustment. No items of adjustment shall be duplicated or included
under more than one of the adjustment provisions. Any overpayment made under
these provisions may be deducted from any amounts otherwise due Contractor.
Contractor agrees that, in the event TVA reimburses Contractor under
this Section 10 for a cost incurred by Contractor and it is later determined
that Contractor is entitled to recover such cost from a third party, at TVA's
request Contractor shall use its best efforts to recover such cost and upon such
recovery shall reimburse TVA for amounts previously paid by TVA based on said
cost. Reasonable costs incurred by Contractor in pursuing such recovery at TVA's
request shall be reimbursed by TVA; provided that where Contractor and/or other
purchasers from Contractor also receive a benefit from pursuing such recovery,
the cost thereof shall be equitably shared.
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d. If at any time TVA determines that the adjusted price in
effect under this contract exceeds by ****** or more the Fair Market Price for
coal under agreements similar to this contract with respect to term, quality,
and quantity, TVA may reopen this contract for the purpose of establishing a new
price which does not exceed the Fair Market Price. The determination of Fair
Market Price for the purpose of invoking this provision shall be made by TVA
based on available pricing information with respect to Transactions and Offers,
as hereinafter defined. In the event TVA invokes this provision, both parties
will, in good faith, attempt to renegotiate the contract price to Fair Market
Price within thirty (30) days of TVA's notification.
If the parties fail to reach agreement within said 30-day period, a new
price will be determined under this contract through arbitration. A panel of
three (3) arbitrators shall be appointed consisting of one (1) arbitrator
appointed by each of the parties and the two (2) arbitrators so chosen
appointing a third disinterested person to act as chair of the panel of
arbitrators. In the event the two (2) arbitrators cannot agree upon a third
arbitrator, the third arbitrator shall be selected by the parties from a list of
arbitrators furnished by the American Arbitration Association. If the parties
cannot agree on the third arbitrator from such list within ten (10) days after
receipt of the list, the third arbitrator shall be selected by the American
Arbitration Association from such list.
The panel of arbitrators shall determine the per ton Fair Market Price
of coal scheduled for delivery hereunder, taking into consideration Transactions
entered into and Offers made during the 90 days preceding the date of TVA's
notice. "Transactions" and "Offers" shall mean transactions and offers for sale
and purchase of coal of quality comparable to that to be supplied
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hereunder, which coal is to be supplied during the period for which the
redetermined price is to be effective, in quantities and under terms and
conditions substantially similar to those of this contract. The arbitrators
shall also consider reasonably probable conditions of the market for coal of
this quality and quantity during that period and other pertinent information as
they may deem necessary. As soon as practicable, the arbitrators shall report
the per ton Fair Market Price as agreed by at least two (2) of them and said
Fair Market Price shall become the contract price retroactive to the date
determined by the arbitrators as appropriate. If at least two (2) of the
arbitrators cannot agree, the arbitrators shall report as the determined price,
the median of the three (3) prices as fair market by the respective arbitrators,
and the median price so reported shall become the Base Price effective as of the
date of TVA's notice. Contractor and TVA shall equally share the cost of
arbitration.
e. In the event TVA's transportation cost for shipment of coal
delivered hereunder increases during any one-year period at a rate greater than
****** of the transportation cost in effect at the time of contract award, TVA
may terminate the Contractor's right to proceed under this contract without
further obligation or liability to either party hereunder or at law by giving
Contractor sixty (60) days' advance notice of such cancellation any time within
one year after TVA begins incurring such cost increase. However, in lieu of
termination, Contractor may elect to reduce the Base Price of coal to cover the
increased portion of the transportation cost above the aforementioned limit, in
which case the contract shall remain in full force and effect. Contractor's
election must be set forth in writing within thirty (30) days of TVA's notice of
termination. Such election by Contractor shall be irrevocable and binding for
that increase and,
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shall be effective as of the date of notification by TVA of the cost increase.
TVA may invoke the provisions of this Subsection e. each and every time its
costs exceed the limit set forth above.
11. REMEDIES:
a. This Subsection 11.a. does not apply to a situation where
another contract provision provides a different procedure, such as Subsection
9.e. If TVA in good faith believes that Contractor has failed to comply with any
term or condition of this contract, the Contract Administrator shall give
Contractor oral notice, to be followed by written confirmation, of any such
violation.
(i) If Contractor fails to correct a curable contract
violation within seven (7) days of first notice, TVA shall have the right to
suspend Contractor's right to make further deliveries until Contractor provides
adequate assurance to TVA that Contractor will comply with all provisions of
this contract, such assurance to be given in writing within seven (7) days after
such suspension. If Contractor fails to provide such adequate assurance within
the time specified or timely provided such assurance but Contractor does not
correct the curable contract violation(s) within seven (7) days after giving
such assurance, TVA shall have the right, but not the obligation, to terminate
Contractor's right to make further deliveries under this contract.
(2) In the case of a contract violation by
Contractor that is not curable (including, but not limited to, violations of
Section 5, Source, of this contract, or of Section 6, Officials Not to Benefit
of the General Long-Term Contract Conditions), upon providing notice as
described above, TVA shall have the immediate right, but not the obligation, to
terminate or suspend for up to thirty (30) days, Contractor's right to make
further deliveries under this contract. If TVA suspends Contractor's right to
make further deliveries, then, upon expiration of
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said thirty (30-day) period, TVA shall either direct Contractor to continue
performance of this contract or terminate Contractor's right to make further
deliveries.
b. Contractor shall be responsible for all costs or damages
incurred by TVA resulting from Contractor's failure to comply with the contract
requirements. TVA may, at its option, purchase in the open market or by contract
or otherwise procure coal to replace all or any part of that which the
Contractor has failed to deliver, or that as to which its right to deliver was
terminated or suspended. Except as provided in Xxxxxxx 0, Xxxxxxxxxx, Xxxxxx,
and Interruptions in Deliveries Subsection b., Contractor shall be liable to TVA
for the excess cost occasioned by such purchase(s) and any other loss or damage
caused by Contractor's breach of the contract, including, but without limitation
to, liability incurred by TVA with respect to the transportation or other
handling of the coal. In the alternative, TVA may determine the loss or damage
sustained by Contractor's breach of contract by other methods as provided by
law. In addition to all other means of recovery, TVA may deduct any such excess
costs and damages from any amount otherwise due Contractor.
Unless TVA determines that the following method of calculating damages
is not practical and TVA notifies the Contractor in writing that TVA's damages
will be calculated in some other commercially reasonable manner, (1) such part
of the highest priced coal (of comparable quality under one or more contracts)
which TVA purchases at the next awarding of term or spot contracts for delivery
to any fossil plant in the TVA system as would be required to replace coal which
was scheduled for delivery under this contract after the date the Contractor's
right to make deliveries under this contract was terminated shall be deemed to
have been purchased as replacement coal for Contractor's account; and (2) for
unexcused deficiencies occurring before
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termination or contract expiration, such part of the highest priced coal (of
comparable quality under one or more Contracts) for which TVA awards spot
contracts in the week following each such deficiency, for delivery to any plant
in the TVA system, as equals the quantity of Contractor's deficiency shall be
deemed to have been purchased as replacement coal for Contractor's account. If
no spot coal was purchased before contract termination or expiration, TVA shall
determine damages for all unexcused deficiencies in the manner provided in item
(1) above, whether such deficiencies accrued before or after termination or
expiration.
c. If TVA suspends or terminates Contractor's right to make
further deliveries hereunder or under any other provision of this contract and
such suspension or termination is finally determined in accordance with Section
18, Disputes, to have been improper, then Contractor's sole remedy for such
improper termination or suspension shall be to require rescheduling of all coal
Contractor was prevented from delivering due to such termination or suspension,
such coal to be rescheduled for delivery on dates acceptable to both parties,
but in any event not later than contract expiration. The price to be paid for
such rescheduled coal shall be that in effect at the time of delivery.
12. NOTICES: Unless otherwise provided for in the Agreement, any
contractual notice required to be given to either party shall be deemed duly
given by registered, certified, or first-class mail, telecopy or telegram, to
the intended party at the following address or at such changed address as may
from time to time be designated in a notice similarly delivered or mailed.
Except as expressly provided herein, any notice shall be deemed to have been
given when sent. Communications by telecopy, or telegram shall be confirmed by
depositing a copy of
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the same in the post office for transmission by registered, certified, or
first-class mail in any envelope properly addressed as follows:
In the case of Contractor to:
General Manager - Central Region Sales
Xxxxxxx County Coal Company
In Care of Mapco Coal Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
In the case of TVA to:
Xx. Xxxxx Xxxxx, Contract Administrator
Tennessee Valley Authority
Fossil Fuels
0000 Xxxxxx Xxxxxx, XX 0X
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Either party may, by written notice to the other, change the representative or
the address to which such notices and communications are to be sent.
13. SHIPPING NOTICES:
a. For all rail-delivered coal Contractor shall forward to the
Plant Manager a daily notification, in duplicate, as to coal shipped. This
shipping notice must include the contract number, traffic control numbers,
railcar numbers, origin, name of mine, size of coal, shipping date, and
approximate date of arrival. In addition, Contractor must complete the xxxx of
lading (provided by TVA), and forward this document to the railroad and plant
for proper identification. TVA shall have the right to require Contractor to
transmit all of the above-referenced information via electronic data transfer
direct to TVA's computer system.
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b. For all barge-delivered coal Contractor shall forward to
the individual named in the consigning instructions, Plant Manager, and Terminal
Supervisor, if applicable, a daily notification, in duplicate, as to coal
shipped. This shipping notice must include the contract number, barge numbers,
origin, name of mine, size of coal, shipping date, and approximate date of
arrival. TVA shall have the right to require Contractor to transmit all of the
above-referenced information via electronic data transfer direct to TVA's
computer system.
c. Contractor must take whatever steps are necessary to ensure
that shipping notices arrive at the plant prior to delivery of the coal. The
plant will not unload coal until a correct shipping notice is received and
Contractor will be responsible to carrier or TVA for any demurrage charges
resulting from delays due to late notification.
d. By 10:00 a.m. Eastern Time each Monday, Contractor must
forward by fax a weekly shipping notice to the Contract Administrator. This
shipping notice shall include the contract number, release number, tonnage
shipped by day for the previous week, and mine name. If TVA's weights govern,
estimated weights are satisfactory. Any difference from the schedule established
by TVA pursuant to Section 3 must be explained.
14. TRANSPORTATION:
a. TVA reserves the right to specify reasonable limitations on
the type and size of transportation equipment, the method of transportation
(including trainload lots and bargeload lots where lots are necessary to provide
the lowest transportation rate possible), and the exact routing to be used even
though transportation charges are prepaid. TVA may reject any shipment made in
disregard of such specifications. If the contract is awarded upon the basis of a
price or prices which include transportation charges in whole or in part to
destination (f.o.b. destination
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contract), title to the coal (except in the case of accelerated payments to
Small Coal Operators) and risk of loss and damage shall remain with Contractor
until delivery in acceptable condition by the carrier at destination.
b. For all coal to be delivered hereunder, it shall be
Contractor's responsibility to furnish loading devices which shall be suitable
and fit for the purpose contemplated in this contract. Contractor shall be
governed by carrier's instructions regarding the height and distribution of the
load, weight of cargo, and other instructions which carrier deems necessary for
safe transportation. Contractor shall allow carrier's inspection of loaded
equipment to assure compliance with carrier's loading instructions.
c. For all coal purchased, it shall be Contractor's
responsibility to visually inspect the transportation equipment prior to each
loading and ascertain that the equipment is empty and suitable for loading. Any
equipment found mechanically unsound for loading or contaminated with material
shall not be loaded. Contractor shall be responsible for all costs incurred by
TVA, including the cost of any coal lost in transit, resulting from Contractor's
failure to exercise such diligence.
d. For all coal purchased for delivery by rail, whether f.o.b.
railcar or f.o.b. destination fossil plant, Contractor shall be responsible for
loading each car to the appropriate capacity as required by the rail carrier. In
addition, each trainload shipment tendered under this contract shall be loaded
to the minimum trainload weight as required by the rail carrier. Contractor's
account will be charged with any penalties assessed to TVA because of
Contractor's failure to observe any minimum weight loading requirements. The
gross weight of each car shall not exceed the maximum allowed by the carrier. If
cars are found to be loaded in excess of such
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maximum, it shall be Contractor's responsibility to correct the load at
Contractor's expense, including but not limited to, Contractor's payment to the
carrier of a per car switching charge, as well as any demurrage charges which
may accrue while the car or cars await correction in load.
e. For all coal to be delivered hereunder, whether f.o.b.
origin or f.o.b. Destination Plant, Contractor shall be responsible for any
demurrage that accrues at any loading point as a result of Contractor or its sub
Contractors not being prepared to load the coal as scheduled. The carrier shall
invoice Contractor and Contractor shall pay said carrier for all origin
demurrage charges which accrue at the loading point(s). TVA has contracted for
the transportation services, the free time and demurrage requirements are set
out in CSX's Tariff CSXT 8200-E, as amended from time to time.
f. The explicit obligation of this contract is that it will be
performed in accordance with all applicable laws. Therefore, transportation of
coal by Contractor to barge or rail loading facilities or, if applicable, to the
Destination Plant shall comply with applicable highway laws and regulations
governing the weight of vehicles. If any Contractor fails to comply with such
laws or regulations, TVA shall have the same rights provided under Section 9.
Quality and Specifications, for failure to meet the requirements thereof,
including but not limited to the right to reject coal delivered in overweight
trucks. To insure compliance with this provision and to help protect the roads
and highways, TVA may require that Contractor furnish a copy of the "certified"
truck weight ticket. Regardless of the actual weight of any truck coal received,
the maximum gross weight that can be recorded for a single truck will be limited
to the applicable maximum weight enforced by law. Any weight exceeding that
maximum weight may be deducted from the total weight of coal used for payment
purposes.
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g. TVA reserves the right to ship to any plant any coal
purchased f.o.b. any shipping point. For coal purchased f.o.b. any plant or
shipping point, TVA may from time to time direct deliveries to any other plant
or shipping point, and if such deliveries cause an increase or decrease in the
transportation cost borne by Contractor in performing this contract, an
adjustment shall be made in the contract price to reflect the changes in such
cost. In addition, for coal purchased f.o.b. railcar and/or f.o.b. barge, TVA
may, by giving prior written notice to Contractor as soon as possible but not
later than thirty (30) days in advance, change the transportation mode of
delivery.
15. PAYMENTS, INVOICES: Payments under this contract are subject to the
provisions of the Prompt Payment Act (31 U.S.C. Sections 3901-3907). Payments as
are provided for in the contract or by law will be made by check or Electronic
Fund Transfer (EFT) if a participation agreement has been established between
TVA and Contractor. Except as provided for under TVA's Small Coal Operators
Assistance Program, EFTs will be made not more than thirty-four (34) calendar
days, and checks will be mailed not more than thirty (30) calendar days; after
the later of (1) receipt of a proper invoice(s) by TVA at the Accounts Xxxxxxx
Xxxxxxxxxx, X.X. Xxx 00000, Xxxxxxxxx, Xxxxxxxxx 00000-0000 or (2) receipt and
unloading of the coal at TVA's fossil plants. In preparing invoices, Contractor
shall multiply the number of tons delivered by the Base Price applicable at the
f.o.b. point of delivery plus or minus any adjustments that have been made
effective under contract provisions.
For purposes of this provision only, "proper invoice" shall mean a
numbered and dated invoice containing the complete name of Contractor, agent's
name (if any), contract number, breakdown code, total amount due, correct
weights (as defined below), traffic control number,
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shipping date, mine at which the coal was produced, together with any
documentation required to be submitted therewith by any other provision of the
contract.
16. WEIGHTS
a. Unless TVA determines circumstances require determination
by other methods, all coal delivered to destination by barge shall be weighed by
TVA on belt scales which are maintained and periodically calibrated by TVA or
third parties for accuracy.
b. Where at TVA's election coal is weighed by Contractor at
origin, Contractor shall notify TVA immediately upon the occurrence of
inaccurate weighing or absence of actual weighing. Contractor shall certify such
notification in writing to TVA within seven (7) working days of the date of each
such occurrence. Such certification shall identify each affected coal shipment
by contract number, breakdown code, shipping point, traffic control number,
shipping date, and car or barge number(s). Contractor's account shall be
adjusted for any coal inaccurately weighed, or not weighed, and by the amount of
the carrier's weighing charge in effect at the time of shipment. Such adjustment
to be made at whatever time such occurrence(s) becomes known to TVA. In the
absence of scale weights from Contractor, TVA and Contractor will mutually agree
by what means the weight of coal delivered hereunder shall be determined.
Contractor shall reimburse TVA for any cost or expense charged to or incurred by
TVA as a result of the absence of appropriate scale weights from Contractor.
While TVA may not undertake to weigh all coal received, it may at its option,
check weigh any coal received. In the event billed (invoiced) weights vary from
TVA weights by more than one and one-half percent (1-1/2%), TVA's weights will
govern.
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If TVA has elected to have Contractor weigh the coal pursuant to
Subsection b., scale tests shall be performed more often than quarterly when
requested by TVA. TVA shall be responsible for the cost of additional requested
tests unless the results thereof show that the scale failed to conform to
certification standards, in which event Contractor shall be responsible for such
costs. The aggregate weights determined during any payment period shall be
acceptable as the quantity of coal sold and purchased during such period for
which invoices are to be rendered and payments to be made.
TVA shall have the right to have a representative present at any and
all times during TVA loadings to observe determination of weights. If TVA should
at any time question the accuracy of the weights thus determined, TVA shall so
advise Contractor and Contractor shall permit TVA's representatives to test
Contractor's weighing devices or methods. If such tests show the weighing
devices to be in error, or if the weighing devices otherwise are determined to
be in error, the weighing devices shall be adjusted to an accurate condition. In
the event TVA and Contractor are unable to agree upon such tests and
adjustments, or the devices or methods thereof, the weighing devices and methods
shall be tested and adjusted to a condition of accuracy by a qualified third
party, mutually chosen by TVA and Contractor, and the cost of the testing and
adjusting by such third party shall be shared equally by TVA and Contractor.
If Contractor's weighing devices or methods are determined to be in
error over 0.5%, an appropriate adjustment shall be made to the affected weights
and related invoices and payments. Such adjustments shall be made retroactively
to a date midway between the date on which the weighing devices were last tested
and calibrated and the date on which the inaccuracy in
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weighing methods or devices was first questioned and prospectively until the
date on which the weighing methods and devices are corrected.
c. All scales used to determine the governing weight of coal
shall be maintained and operated in accordance with the National Institute of
Standards and Technology Handbook 44.
17. CONTRACT ADMINISTRATOR/CONTRACTING OFFICER: The Vice President
of Fuel Supply and Engineering has designated the Contract Administrator who
administers this contract for TVA as his/her duly authorized representative to
act on behalf of TVA for all purposes in the administration of this contract,
such designation to continue until revoked or modified by the Vice President of
Fuel Supply and Engineering. The Contract Administrator shall serve as TVA's
"Contracting Officer" with respect to matters arising under terms of this
contract that provide for action by the Contracting Officer.
18. DISPUTES:
a. This contract is subject to the Contract Disputes Act
of 1978, Public Law Xx. 00-000, 00 Xxxx. 0000 ("xxx Xxx"), and TVA's
implementing regulations published at 18 C.F.R. pt. 1308 as they may be amended
from time to time.
b. Any dispute relating to this contract, whether arising
before or after completion of performance, including disputes as to any alleged
violation or breach thereof, which is not settled or disposed of by agreement of
the parties shall be decided by the Disputes Contracting Officer (who shall be
appointed by the TVA Vice President of Fuel Supply and Engineering) on the basis
of the contract file and any other facts which he/she may deem pertinent. Any
claim by Contractor shall be submitted in accordance with the Act and TVA's
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implementing regulations. The Disputes Contracting Officer shall reduce his/her
decision to writing and promptly mail or otherwise furnish a copy thereof to
Contractor. Within ninety (90) calendar days from the receipt of such copy,
Contractor may appeal to the TVA Board of Contract Appeals by mailing or
otherwise furnishing the Disputes Contracting Officer a written notice of
appeal. Following the filing of a notice of appeal, the TVA Board of Contract
Appeals shall arrange for the decision of the appeal in accordance with the Act
and TVA's implementing regulations. The decision of the IVA Board of Contract
Appeals on any question of law shall not be final or conclusive, but the
decision on any question of fact shall be final and conclusive, unless
determined by a court of competent jurisdiction to have been fraudulent, or
arbitrary, or capricious, or so grossly erroneous as to necessarily imply bad
faith, or not supported by substantial evidence.
c. In lieu of an appeal to the TVA Board of Contrast Appeals
from the decision of the Disputes Contracting Officer, Contractor may bring an
action against TVA directly on the claim in a United States District Court with
proper jurisdiction and venue pursuant to 28 U.S.C. Section 1337. Such an action
shall be brought within twelve (12) months from the date of receipt by
Contractor of the Disputes Contracting Officer's decision hereunder.
d. Pending final decision of an appeal, an action, or final
settlement, the decision of the Disputes Contracting Officer shall govern the
respective rights and obligations of the parties as to the matter in dispute
and, if directed to do so in the decision, Contractor shall proceed diligently
with the performance of the contract in accordance with the Disputes Contracting
Officer's decision; provided, that the decision of the Disputes Contracting
Officer
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shall be final and conclusive and not subject to review by any forum, tribunal,
or Government agency, unless an appeal or action is timely commenced as
authorized herein.
e. Contractor agrees that TVA's termination or suspension of
Contractor's right to make deliveries under the contract, TVA's withholding of
monies due under the contract, or TVA's pursuit of other remedies specifically
provided for herein shall not constitute relief under TVA's implementing
regulations at 18 C.F.R. part 1308, as to which TVA must initiate the disputes
process prior to or after effecting; provided, however, nothing in this
Subsection e. shall restrict Contractor from pursuing its right to a Contracting
Officer's decision and other relief available pursuant to this Section 18 with
respect to any such termination, suspension, withholding, setoff, or other
remedy exercised by TVA.
19. CLEAN AIR ACT AND OTHER ENVIRONMENTAL REQUIREMENTS: In the event of
enactment, implementation, amendment, or enforcement of the Clean Air Act
including the 1990 Clean Air Act Amendments, or any other applicable federal,
state, or local air pollution control or environmental law, rule, or requirement
which causes the continued use of the coal purchased under this contract to be
inconsistent with (i) TVA's air pollution control strategies, as they may be
modified for meeting such air pollution control or environmental requirements,
or (ii) an administrative or judicial order, TVA may cancel this contract with
no further obligation or liability hereunder or at law by giving Contractor
ninety (90) days' advance notice of such cancellation. In the case of
inconsistency with TVA's air pollution control strategies, the parties will
attempt to renegotiate the contract during such notice period to provide for
delivery of coal that will be of a quality consistent with TVA's new air
pollution control strategies. In the event
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the parties do not reach agreement on such a renegotiated contract within the
90-day notice period, the cancellation notice given by TVA shall remain in
effect and the contract shall terminate at the end of such period. In no event
will TVA be obligated to divert deliveries to any alternate coal-fired fossil
plant in TVA's system.
20. CONTRACT COMPONENTS: The attached Term Coal Proposal; General
Long-Term Contract Conditions; Appendix A; :Exhibit I; Requirement for
Certificate of Procurement Integrity (ID- 49B); Requirement for Certificate of
Procurement Integrity (ID-50); Subcontracting Plan; and Specific Location
Map(s), constitute parts of this contract.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the aforesaid date by their duly authorized representatives.
ATTEST: Contractor:
By:
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Title:
----------------------
ATTEST: TENNESSEE VALLEY AUTHORITY
By:
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Title:
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