Contract # F-98627
Amendment #1
AMENDMENT NO. ONE TO CONTRACT
THIS AMENDMENT NO. ONE IS entered into effective as of November 16, 1998,
by and between KENTUCKY UTILITIES COMPANY (hereinafter referred to as "KU"),
whose address is: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
RESOURCES, INC. a Kentucky corporation and a subsidiary of AEI Holding Company,
Inc., with a principal address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Assignor") AEI COAL SALES COMPANY, INC., a Kentucky corporation
("Seller"), and AEI HOLDING COMPANY, INC., a Delaware corporation ("Guarantor").
In consideration of the agreements herein contained, the parties hereto
agree as follows:
1.0 MODIFICATIONS TO AGREEMENT
The Agreement heretofore entered into by KU and Assignor, dated effective
December 31, 1997, and identified by the Contract Number set forth above
(hereinafter referred to as "Agreement"), is hereby amended as follows:
1.1 KU hereby consents to Assignor's assignment and Seller's assumption
of all Assignor's right, title and interest in and to the Agreement,
pursuant to that certain Assignment and Assumption Agreement dated
November 16, 1998, between Assignor and Seller. KU's consent is
expressly conditioned on: (a) Seller's assumption of all Assignor's
obligations under the Agreement; and (b) Guarantor's guaranty of
Seller's obligations as set forth in that certain Guaranty Agreement
given by Guarantor to KU in connection with Seller's assumption of
Assignor's obligations. Hereinafter, references to "Seller" in the
Agreement, as amended hereby, shall be deemed to be references to
AEI Coal Sales Company, Inc.
1.2 Section II.2, Quantities, is hereby revised to provide that the Base
Quantity shall be defined as 1,600,000 tons of coal.
1.3 Section II.2(a) is hereby revised to provide that the quantities of
coal to be sold, purchased and delivered during the period of
December 15, 1998 through December 31, 1999 shall be 800,000 tons.
1.4 In Section IV.2 (a), Specifications, the as-received quality
specifications for Calorific value, Ash and SO2 are hereby revised
to provide that the following specifications shall be applicable
beginning on December 15, 1998, and continuing through the end of
the term:
Calorific Value 11,800 BTU/lb.
Ash 13.00% Maximum
SO2 3.00 Lbs. SO2/MMBtu Maximum
Contract # F-98627
Amendment #1
1.5 In Section IV.2.(b), the as-received quality specification for SO2
classified as rejectable are hereby revised to provide that the
following specification shall be applicable beginning on December
15, 1998, and continuing through the end of the term:
SO2 3.75 Lbs. SO2/MMBtu Maximum
1.6 In Section V.1, Prices of Coal, the price per ton F.O.B. rail car
beginning on December 15, 1998, will be as follows:
December 15, 1998 through
December 31, 1999 $21.73 per ton
1.7 Section VI. (2) Calorific Adjustment and Section VI. 4 (a) SO2
Adjustment, are hereby revised to provide that beginning on December
15, 1998, and continuing through the end of the term, the following
specifications shall be applicable:
Section VI.(2). Calorific Adjustment. Such weighted average
calorific value shall be used in adjusting the price of coal
in the following manner. The F.O.B. Railcar Price then in
effect, specified and determined as provided in Section V, but
before any Ash or SO2 Adjustment provided for hereafter in
this Section VI, shall be adjusted to reflect variation from
11,800 BTU per pound in such weighted average calorific value
of the coal received, in arriving at the price (exclusive of
any Ash or SO2 Adjustment) to be paid by KU to Seller for such
coal, in accordance with the following formula (assuming, for
purposes of illustration, an adjusted price, prior to the
Calorific Adjustment, of $21.73):
Actual BTU/lb. - 11,800 x $21.73 = Premium/Penalty Per Ton.
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11,800
Section VI.(4). SO2 Adjustment.
(a) Such weighted average SO2 value shall be used in
adjusting the price of coal in the following manner. The
price of coal accepted containing a monthly weighted
average SO2 in excess of the 3.00 Lbs./MMBtu guarantee
will be adjusted downward according to the following
formula:
(Actual SO2 - 3.00)(Actual Btu/lb.) = $ per ton downward adjustment
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9434
Example: Monthly weighted average SO2 = 3.50;
monthly weighted BTU per lb. = 12,000:
SO2 Guarantee = 3.00.
Contract # F-98627
Amendment #1
(3.50 - 3.00) (12,000.) = $0.64 per ton downward adjustment
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9434
1.8 Section VI.5, Combination of Adjustments, is hereby revised to add
the following sentence: "Beginning on December 15, 1998, and
continuing through the remainder of the term of the Contract, the
reference to SO2 set forth in this shall be revised to indicate an
SO2 of 3.00 lbs./MM BTU Maximum."
2.0 STATUS OF AGREEMENT
As amended herein, the Agreement is hereby ratified and shall continue in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
on the day and year written, but effective as of the day and year first set
forth above.
KENTUCKY UTILITIES COMPANY ▇▇▇▇▇▇ RESOURCES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
EVP - Power Generation Chairman
Date: 01/08/99 Date: 01/06/99
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AEI COAL SALES COMPANY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President
Date: 01/06/99
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