SECURlTlES AND EXCHANGE COMMlSSlON
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended
March 31, 1995 Commission File Number 1-3132-2
INDIANAPOLIS POWER & LIGHT COMPANY
(Exact name of Registrant as specified in its charter)
Indiana 35-0413620
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
25 Monument Circle
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrants's telephone number, including area code: 317-261-8261
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to the filing requirements for at least the
past 90 days. Yes X No
--------- ---------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding At March 31, 1995
----- -----------------------------
Common (Without Par Value) 17,206,630 Shares
INDIANAPOLIS POWER & LIGHT COMPANY
----------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
- -------------------------------
Statements of Income -
Three Months Ended March 31, 1995 and 1994 2
Balance Sheets - March 31, 1995 and
December 31, 1994 3
Statements of Cash Flows -
Three Months Ended March 31, 1995 and 1994 4
Notes to Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-7
PART II. OTHER INFORMATION 8-11
- ---------------------------
-1-
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Income
(In Thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1995 1994
-------------- --------------
<S> <C> <C>
OPERATING REVENUES:
Electric $ 164,347 $ 168,902
Steam 11,171 12,276
-------------- --------------
Total operating revenues 175,518 181,178
-------------- --------------
OPERATING EXPENSES:
Operation:
Fuel 43,667 44,588
Other 27,415 26,630
Power purchased 3,879 5,168
Purchased steam 1,984 2,200
Maintenance 14,691 15,015
Depreciation and amortization 21,381 20,221
Taxes other than income taxes 8,635 7,987
Income taxes - net 15,588 17,849
-------------- --------------
Total operating expenses 137,240 139,658
-------------- --------------
OPERATING INCOME 38,278 41,520
-------------- --------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 1,051 863
Other - net (379) (153)
Income taxes - net 185 319
-------------- --------------
Total other income - net 857 1,029
-------------- --------------
INCOME BEFORE INTEREST CHARGES 39,135 42,549
-------------- --------------
INTEREST CHARGES:
Interest 12,823 12,136
Allowance for borrowed funds used during construction (1,300) (1,150)
-------------- --------------
Total interest charges 11,523 10,986
-------------- --------------
NET INCOME 27,612 31,563
PREFERRED DIVIDEND REQUIREMENTS 795 795
-------------- --------------
INCOME APPLICABLE TO COMMON STOCK $ 26,817 $ 30,768
============== ==============
See notes to financial statements.
-2-
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
March 31 December 31
1995 1994
----------------- -----------------
ASSETS
------
<S> <C> <C>
UTILITY PLANT:
Utility plant in service $ 2,456,732 $ 2,415,531
Less accumulated depreciation 935,177 916,943
----------------- -----------------
Utility plant in service - net 1,521,555 1,498,588
Construction work in progress 193,799 191,010
Property held for future use 22,174 22,174
----------------- -----------------
Utility plant - net 1,737,528 1,711,772
----------------- -----------------
OTHER PROPERTY -
At cost, less accumulated depreciation 4,123 2,898
----------------- -----------------
CURRENT ASSETS:
Cash and cash equivalents 6,179 7,835
Accounts receivable (less allowance for doubtful
accounts 1995, $1,005 and 1994, $743) 46,536 47,978
Fuel - at average cost 39,058 37,161
Materials and supplies - at average cost 56,627 55,642
Prepayments and other current assets 1,814 8,176
----------------- -----------------
Total current assets 150,214 156,792
----------------- -----------------
DEFERRED DEBITS:
Unamortized Petersburg Unit 4 carrying charges 32,689 32,521
Unamortized redemption premiums and expenses on debt 28,159 27,577
Other regulatory assets 60,951 53,661
Miscellaneous 8,147 6,876
----------------- -----------------
Total deferred debits 129,946 120,635
----------------- -----------------
TOTAL $ 2,021,811 $ 1,992,097
================= =================
CAPITALIZATION AND LIABILITIES
------------------------------
CAPITALIZATION:
Common shareholder's equity:
Common stock $ 324,537 $ 324,537
Premium on 4% cumulative preferred stock 1,363 1,363
Retained earnings 406,260 399,862
----------------- -----------------
Total common shareholder's equity 732,160 725,762
Cumulative preferred stock 51,898 51,898
Long-term debt (less current maturities ----------------- -----------------
and sinking fund requirements) 654,128 654,121
----------------- -----------------
Total capitalization 1,438,186 1,431,781
----------------- -----------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper 30,701 26,400
Current maturities and sinking fund requirements 350 350
Accounts payable and accrued expenses 93,372 95,957
Dividends payable 21,230 20,834
Payrolls accrued 4,160 4,475
Taxes accrued 36,882 16,787
Interest accrued 11,307 14,859
Other current liabilities 10,930 8,823
----------------- -----------------
Total current liabilities 208,932 188,485
----------------- -----------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
Accumulated deferred income taxes - net 288,586 282,062
Unamortized investment tax credit 52,945 53,762
Accrued postretirement benefits 31,516 34,517
Miscellaneous 1,646 1,490
----------------- -----------------
Total deferred credits and other long-term liabilities 374,693 371,831
----------------- -----------------
COMMITMENTS AND CONTINGENCIES (NOTE 5)
TOTAL $ 2,021,811 $ 1,992,097
================= =================
See notes to financial statements.
</TABLE>
-3-
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1995 1994
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income $ 27,612 $ 31,563
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 21,659 20,502
Deferred income taxes and investment tax
credit adjustments, net 2,342 (681)
Allowance for funds used during construction (2,352) (2,013)
Decrease (increase) in certain assets:
Accounts receivable 1,442 (789)
Fuel, materials and supplies (2,882) 2,609
Other current assets 6,362 (401)
Increase (decrease) in certain liabilities:
Accounts payable (2,585) (4,420)
Taxes accrued 20,095 20,813
Other current liabilities (1,207) 458
-------------- --------------
Net cash provided by operating activities 70,486 67,641
-------------- --------------
CASH FLOWS FROM INVESTING:
Construction expenditures (44,387) (27,448)
Other (9,980) 273
-------------- --------------
Net cash used in investing activities (54,367) (27,175)
-------------- --------------
CASH FLOWS FROM FINANCING:
Issuance of long-term debt 40,000 180,000
Retirement of long-term debt - including premiums paid (40,800) (79,513)
Short-term debt - net 4,301 (90,000)
Dividends paid (21,215) (20,018)
Other (61) (2,094)
-------------- --------------
Net cash used in financing activities (17,775) (11,625)
-------------- --------------
Net increase (decrease) in cash and cash equivalents (1,656) 28,841
Cash and cash equivalents at beginning of period 7,835 8,349
-------------- --------------
Cash and cash equivalents at end of period $ 6,179 $ 37,190
============== ==============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 15,271 $ 10,234
============== ==============
Income taxes $ (4,558) $ 1,390
============== ==============
See notes to financial statements.
-4-
</TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
----------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. Indianapolis Power & Light Company is a subsidiary of IPALCO
Enterprises, Inc.
2. In the opinion of management these statements reflect all adjustments,
consisting of only normal recurring accruals, which are necessary to a
fair statement of the results for the interim periods covered by such
statements. Due to the seasonal nature of the electric utility
business, the annual results are not generated evenly by quarter during
the year. Certain amounts from prior year financial statements have
been reclassified to conform to the current year presentation. These
financial statements and notes should be read in conjunction with the
audited financial statements included in IPL's 1994 Annual Report on
Form 10-K.
3. LONG-TERM DEBT
On February 9, 1995, IPL issued First Mortgage Bonds, 6 5/8% Series,
due 2024, in the principal amount of $40 million. The net proceeds
were used to redeem on March 15, 1995, IPL's $40 million First Mortgage
Bonds, 10 5/8% Series, due 2014, at a redemption price of 102%.
Accrued interest was also paid at the time of redemption.
4. RATE MATTERS
In the retail electric rate case now pending before the Indiana Utility
Regulatory Commission (IURC), a prehearing conference was held on June
8, 1994, and an order was issued July 20, 1994, establishing a test
year ending June 30, 1994. IPL filed its case-in-chief on October 11,
1994. Hearings scheduled by the IURC on IPL's request were held from
February 7 through February 22, 1995. A procedural schedule has been
established with the last hearings scheduled to occur in August of
1995.
5. COMMITMENTS AND CONTINGENCIES (See Item 1. Legal Proceedings of Part II
-- Other Information)
-5-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Overview
- --------
The Board of Directors of Indianapolis Power & Light Company (IPL) on
February 28, 1995, declared a quarterly dividend on common stock of
$20,419,652. The dividend was paid by IPL to IPALCO Enterprises, Inc. in
April, 1995.
Internally generated cash provided by IPL's operations and the
issuance of long-term debt were used primarily for construction
expenditures and the repayment of short-term and long-term debt during the
first three months of 1995.
On February 9, 1995, IPL issued First Mortgage Bonds in the principal
amount of $40 million to replace comparable bonds that were at a higher
rate.
Future Rate Relief
- ------------------
IPL has asked the Indiana Utility Regulatory Commission (IURC) to
approve increases in its electric rates. IPL is requesting approval of an
overall rate increase of about 13.9 percent to generate additional annual
revenues of $87.7 million. Under IPL's proposal, the percent of increase
will vary for different customer classes. Hearings scheduled by the IURC
on IPL's request were held from February 7 through February 22, 1995.
The Office of Utility Consumer Counselor (OUCC) filed its case-in-
chief in the proceeding with the IURC on April 21, 1995, recommending that
IPL's existing electric rates be decreased $33.7 million. IPL believes
that the OUCC's recommendation is based on errors of fact, miscalculations
and misapplications of principles, and, accordingly, believes that its
recommendation is not likely to be accepted. Other intervenors, including
a group of industrial customers, the Citizens Action Coalition, the City of
Indianapolis and the Department of Defense, also filed their case-in-chief
on April 21, 1995. IPL is scheduled to file rebuttal testimony in this
proceeding on May 26, 1995. Public hearings on the OUCC's and other
intervenors' case-in-chief and IPL's rebuttal testimony are scheduled to
commence in July of 1995.
IPL last received an order from the IURC authorizing an increase in
electric basic rates and charges in August, 1986.
New Indiana Regulation
- ----------------------
On April 26, 1995, changes to existing Indiana Utility Regulatory laws
were enacted which increase the period to be used in Indiana's quarterly
earnings test from one year to five years and allow the IURC to consider
alternate forms of regulation. The quarterly earnings test is applicable
to all Indiana electric and gas utilities. The extension of the test
period will allow utilities, which can be significantly affected by weather
conditions, to average high and low periods when computing the quarterly
earnings test.
-6-
RESULTS OF OPERATIONS
Comparison of Quarters Ended March 31, 1995 and March 31, 1994
--------------------------------------------------------------
Income applicable to common stock decreased $4.0 million during the
first quarter of 1995 from the comparable 1994 period. The following
discussion highlights the factors contributing to this result.
Operations
- ----------
The decrease in electric operating revenues of $4.6 million was
primarily a result of the milder weather during this quarter compared to
the same period one year ago. Contributing to the decreased revenues was a
decrease in retail electric kilowatt-hour (KWH) sales of $4.0 million and a
decrease in sales for resale of $1.5 million, due to decreased energy sales
to neighboring utilities. These decreases were partially offset by
increases in fuel cost adjustment recoveries of $.6 million and
miscellaneous revenues of $.3 million. The following table is a summary of
KWH sales to each customer class:
Retail KWH Sales By Customer Class
In Millions of KWHs
Three Months Ended March 31,
1995 1994 % Change
------- ------- --------
Residential 1,175.9 1,283.6 (8.4)%
Commercial 585.0 639.6 (8.5)
Industrial 1,534.2 1,504.0 2.0
Other 20.5 21.2 (3.3)
------- -------
Total Retail 3,315.6 3,448.4 (3.9)
======= =======
Power purchased decreased $1.3 million primarily due to decreased firm
peaking-energy payments and decreased non-displacement purchases for 1995.
Purchased steam decreased $.2 million due to a decrease in prices and
therms purchased from an independent resource recovery system located
within the City of Indianapolis.
Depreciation expense increased $1.2 million primarily due to an
increase in the utility plant balance.
Income taxes - net decreased $2.3 million primarily due to the
decrease in pretax utility operating income.
As a result of the foregoing, utility operating income decreased 7.8%
over last year, to $38.3 million.
Other Income and Deductions
- ---------------------------
Allowance for equity funds used during construction increased $.2
million due to an increased construction base.
Interest Charges
- ----------------
Allowance for borrowed funds used during construction increased $.2
million due to an increased construction base.
-7-
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
- --------------------------
On August 18, 1993, the Indiana Utility Regulatory Commission ("IURC")
entered an order in Cause No. 39437, approving the Environmental Compliance
Plan of Indianapolis Power & Light Company ("IPL") to comply with the Clean
Air Act Amendments of 1990. The estimated cost of IPL's Environmental
Compliance Plan is approximately $250 million before including allowance
for funds used during construction. A primary part of IPL's Plan,
scrubbing IPL's Petersburg 1 and 2 coal-fired plants by 1996 to enable IPL
to continue to burn high sulfur coal, was opposed by the Office of Utility
Consumer Counselor ("OUCC"), the Citizens Action Coalition ("CAC"), and the
Industrial Intervenors Group ("IIG"). OUCC, CAC and IIG have appealed the
IURC's order to the Indiana Court of Appeals. The Attorney General on
behalf of the State of Indiana has filed an Amicus Brief in support of IPL.
The matter is fully briefed and is awaiting decision by the Court of
Appeals.
On April 8, 1994, IPL filed a petition with the IURC, Cause No. 39938,
for authority to increase its rates and charges for electric service, to
continue the capitalization of allowance for funds used during construction
and to defer depreciation expense on IPL's Stout Combustion Turbine Unit
No. 5, to add to the fair value of IPL's utility property environmental
compliance capital projects and qualified pollution control property under
construction and for revised depreciation rates. IPL prefiled its evidence
on October 11, 1994, and hearings on IPL's case-in-chief were held from
February 7 through February 22, 1995. A procedural schedule has been
established with the last hearings scheduled to occur in August of 1995. A
hearing for the public pursuant to Indiana Statute will be held between
April 21, 1995 and July 10, 1995 on a date later determined by the IURC.
On March 16, 1993, Smith Cogeneration of Indiana, Inc., and its
affiliated ("Smith") filed a petition with the IURC requesting that IPL be
ordered to enter into a power sales agreement to purchase power from
Smith's proposed 240 megawatt plant. On September 24, 1993, IPL filed a
motion for summary adjudication of Smith's petition. Thereafter, on
September 7, 1994, the IURC entered an Order dismissing Smith's petition.
No action has been taken in this matter since the entry of the Order and
IPL believes this matter is concluded.
In June, 1993, IPL received a Notice of Violation from the
Indianapolis Air Pollution Control Section ("IAPCS") regarding fugitive
dust emissions at its Perry K Generating Station. IPL met with IAPCS to
discuss four alleged violations over a span of 15 months. Each violation
was subject to a fine of up to $2,500. IPL agreed to a settlement in the
amount of $3,500 for all alleged violations, and the settlement was
finalized on August 31, 1994, and this matter is concluded.
-8-
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
a) Exhibits. Copies of documents listed below which are identified
with an asterisk (*) are incorporated herein by reference and
made a part hereof.
3.1* Articles of Incorporation of Indianapolis Power & Light Company, as
amended. (Form 10-Q for quarter ended 3-31-91.)
3.2* Bylaws of Indianapolis Power & Light Company dated January 25, 1994.
(Form 10-Q for quarter ended 3-31-94.)
4.1* Mortgage and Deed of Trust, dates as of May 1, 1940, between
Indianapolis Power & Light Company and American National Bank and
Trust Company of Chicago, Trustee, as supplemented and modified by 33
Supplemental Indentures.
Exhibits D in File No. 2-4396; B-1 in File No. 2-6210; 7-C File
No. 2-7944; 7-D in File No. 2-72944; 7-E in File No. 2-8106; 7-F in
File No. 2-8749; 7-G in File No. 2-8749; 4-Q in File No. 2-10052; 2-I
in File No. 2-12488; 2-J in File No. 2-13903; 2-K in File No. 2-22553;
2-L in File No. 2-24581; 2-M in File No. 2-26156; 4-D in File No. 2-
26884; 2-D in File No. 2-38332; Exhibit A to Form 8-K for October
1970; Exhibit 2-F in File No. 2-47162; 2-F in File No. 2-50260; 2-G in
File No. 2-50260; 2-F in File No. 2-53541; 2E in File No. 2-55154; 2E
in File No. 2-60819; 2F in File No. 2-60819; 2-G in File No. 2-60819;
Exhibit A to Form 10-Q for the quarter ended 9-30-78 File No. 1-3132;
13-4 in File No. 2-73213; Exhibit 4 in File No. 2-93092. Twenty-
eighth, Twenty-ninth and Thirtieth Supplemental Indentures. (Form 10-
K dated for the year ended December 31, 1985.)
4.2* Thirty-First Supplemental Indenture dated as of October 1, 1986.
(Form 10-K for year ended 12-31-86.)
4.3* Thirty-Second Supplemental Indenture dated as of June 1, 1989. (Form
10-K for year ended 12-31-89.)
4.4* Thirty-Third Supplemental Indenture dated as of August 1, 1989. (Form
10-K for year ended 12-31-89.)
4.5* Thirty-Fourth Supplemental Indenture dated as of October 15, 1991.
(Form 10-K for year ended 12-31-91.)
4.6* Thirty-Fifth Supplemental Indenture dated as of August 1, 1992. (Form
10-K for year ended 12-31-92.)
4.7* Thirty-Sixth Supplemental Indenture dated as of April 1, 1993. (Form
10-Q for year quarter ended 9-30-93.)
4.8* Thirty-Seventh Supplemental Indenture dated as of October 1, 1993.
(Form 10-Q for quarter ended 9-30-93.)
4.9* Thirty-Eighth Supplemental Indenture dated as of October 1, 1993.
(Form 10-Q for quarter ended 9-30-93.)
4.10* Thirty-Ninth Supplemental Indenture dated as of February 1, 1994.
(Form 8-K, dated 1-25-94.)
4.11* Fortieth Supplemental Indenture dated as of February 1, 1994.
(Form 8-K, dated 1-25-94.)
-9-
Item 6. Exhibits and Reports on Form 8-K - continued
- -----------------------------------------------------
4.12* Forty-First Supplemental Indenture dated as of January 15, 1995.
(Exhibit 4.12 to the Form 10-K dated 12-31-94.)
10.1 Coal Supply Agreement dated September 27, 1994, between Indianapolis
Power & Light Company and Black Diamond Coal Company, Inc.
(Confidential portions of this Contract have been omitted and filed
separately with the SEC pursuant to 17 CFR 240.24b-2.)
10.2 Coal Supply Agreement dated December 7, 1994, between Indianapolis
Power & Light Company and Triad Mining of Indiana, Inc. and Marine Coal
Sales Company. (Confidential portions of this Contract have been
omitted and filed separately with the SEC pursuant to 17 CFR 240.24b-2.)
27.1 Financial Data Schedule
b) Reports on Form 8-K.
A report on Form 8-K was filed on January 31, 1995, and
amended on February 15, 1995, reporting Item 5, other events,
with respect to IPL's earnings and earnings of its parent, IPALCO
Enterprises, Inc. for the year ended December 31, 1994. The Form
8-K included the 1994 audited financial reports of Indianapolis
Power & Light Company.
-10-
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
INDIANAPOLIS POWER & LIGHT COMPANY
----------------------------------
(Registrant)
Date: May 15, 1995 /s/ John R. Brehm
------------ -------------------------------------
John R. Brehm
Senior Vice President
Finance and Information Services
Date: May 15, 1995 /s/ Stephen J. Plunkett
------------ -------------------------------------
Stephen J. Plunkett
Controller
-11-
EXHIBIT 10.1
COAL SUPPLY AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
BLACK DIAMOND COAL COMPANY, INC.
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. TERM. . . . . . . . . . . . . . . . 4
SECTION 2. QUANTITY. . . . . . . . . . . . . . 5
SECTION 3. SOURCE; POINT OF DELIVERY;
DESTINATION . . . . . . . . . . . 5
SECTION 4. QUALITY . . . . . . . . . . . . . . 6
SECTION 5. BASE PRICE FOR COAL . . . . . . . . 8
SECTION 6. ADJUSTMENTS TO BASE PRICE . . . . . 8
SECTION 7. CALORIFIC PRICE ADJUSTMENTS . . . .13
SECTION 8. WEIGHTS . . . . . . . . . . . . . .14
SECTION 9. SAMPLING AND ANALYSIS . . . . . . .16
SECTION 10. BILLING AND PAYMENT . . . . . . . .18
SECTION 11. RECORDS . . . . . . . . . . . . . .18
SECTION 12. FORCE MAJEURE . . . . . . . . . . .19
SECTION 13. COMPLIANCE WITH ANTIPOLLUTION LAWS &
REGULATIONS, ETC . . . . . . . . . . .21
SECTION 14. NOTICES . . . . . . . . . . . . . .22
SECTION 15. WAIVERS AND REMEDIES. . . . . . . .23
SECTION 16. SUCCESSORS AND ASSIGNS. . . . . . .24
SECTION 17. HEADINGS NOT TO AFFECT CONSTRUCTION24
SECTION 18. WRITTEN INSTRUMENT CONTAINS ENTIRE
AGREEMENT . . . . . . . . . . . .25
SECTION 19. EXECUTION OF COUNTERPARTS . . . . .25
SECTION 20. CONSTRUCTION OF AGREEMENT . . . . .25
SECTION 21. REPRESENTATIONS . . . . . . . . . .26
SECTION 22. DEDICATION OF RESERVES AND GUARANTEE
OF PERFORMANCE . . . . . . . . .26
<PAGE>
COAL SUPPLY AGREEMENT
THIS AGREEMENT, made and entered into as of the 27th day of
September, 1994, by and between Black Diamond Coal Company, Inc., an
Indiana corporation, with an office at Sullivan, Indiana (hereinafter
referred to as "Seller"), and Indianapolis Power & Light Company, an
Indiana corporation, with offices at Indianapolis, Indiana (herein
sometimes referred to as "Buyer").
WITNESSETH:
WHEREAS, Buyer is a public utility rendering electric utility
service over certain areas within the State of Indiana; and
WHEREAS, Buyer desires to secure, to the extent of the quantities
and for the period hereinafter stated, a supply of bituminous coal of the
quality hereinafter set forth for use at its H. T. Pritchard and C.C.
Perry K Generating Stations or such other generating stations as
designated solely by Buyer from time to time, which supply of bituminous
coal would assure compliance with applicable sulfur dioxide emission
limitations for such generating stations imposed by authorities having
jurisdiction therein, a copy of which proposed regulations is attached as
"Exhibit A"; and
WHEREAS, Seller represents that it is experienced in the commercial
production of bituminous coal and that it owns, leases, controls or has
mining rights to proven and recoverable coal reserves as described in the
attached "Exhibit B" with the qualities and characteristics set forth
herein; and,
WHEREAS, Buyer desires to purchase coal and Seller desires to
supply coal pursuant to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereinafter set forth, it is
hereby agreed by and between the parties hereto as follows:
SECTION 1. TERM.
The initial term of this Agreement shall be for a period of twelve
(12) years commencing on September ___, 1994, and ending on December 31,
2006, unless such period is extended by the written mutual agreement of
the parties. Upon written notification at least one year prior to the
expiration of the initial term, Buyer shall have the right to extend the
term for an additional period of five (5) years.
SECTION 2. QUANTITY.
The quantity of coal to be sold and purchased under this Agreement
shall be 480,000 tons per Contract Year, as herein defined, (such
quantity is hereafter referred to as the "Base Quantity") with deliveries
to commence no later than December 31, 1994. As used herein, the term
"ton" shall mean a short tone of 2,000 pounds avoirdupois weight. Except
during the initial year and final year, the term "Contract Year" shall
mean a period beginning on January 1 and ending on the succeeding
December 31. Deliveries shall be prorated during the initial year and
the final year. In addition, buyer shall have the right, upon prior
written notice to Seller on or before, October 1 of any contract year, to
increase or decrease the Base Quantity for the next Contract Year by an
amount not more than or not less than fifteen percent (15%) of the Base
Quantity.
SECTION 3. SOURCE; POINT OF DELIVERY; DESTINATION.
The source of the coal shall be the Black Diamond Mine of Seller
located in Greene County, Indiana. The coal shall be delivered by Seller
to Buyer f.o.b. trucks (to be arranged by Buyer) loaded at the Black
Diamond Mine, or, at Buyer 's direction, Seller will deliver coal f.o.b.
train (rail cars to be supplied by Buyer or the railroad if so arranged
by Buyer) at Seller's siding on the Indiana Rail Road as shown on Exhibit
"B", which has the capability to load a minimum of fifty-five 100-ton
railroad cars. Buyer shall have the right to direct Seller to change the
transportation mode
at any time during the term of this Agreement. The term "Shipment" shall
be defined as a unit train rail delivery or, if trucks are used for
transporting the coal, "Shipment" shall be defined as the sum of one
day's truck deliveries. Title to the coal shall pass from Seller at said
point of delivery and risk of loss shall follow title, provided however,
Buyer shall not be responsible for costs incurred as a result of Seller's
failure to comply with loading specifications of the carrier(s). Point
of delivery for purposes of Sections 5 and 6 of this Agreement shall be
F.O.B. railcar or truck as the case may be. Point of delivery for
Purposes of Sections 4, 7 and 9 of this Agreement shall be F.O.B. Buyer's
Generating Station(s).
Coal deliveries hereunder shall be made in substantially equal
monthly quantities subject to vacation and holiday schedules of the Black
Diamond Mine, the Buyer and the shipper; and in accordance with Buyer's
shipping instructions.
SECTION 4. QUALITY.
The coal to be delivered hereunder shall be:
(a) crushed run-of-mine Indiana #4, 2" x 28" mesh coal washed
using magnetite in Seller's heavy media preparation plant as shown on the
attached flow chart marked as "Exhibit C"; and
(b) of quality equal to or better than the following
characteristics on a monthly weighted average "as received" basis, as
determined pursuant to Section 9 hereof:
Washed
Moisture (maximum) 15%
Ash (maximum) 7.5%
Pounds of sulfur dioxide per million
British Thermal Units (maximum) 2.05
Calorific Value (BTU's per pound minimum) 11,500
Grindability (Hardgrove Index, average) 58
Grindability (Hardgrove Index, Minimum) 53
Ash Softening Temperature
(Reducing H = W) minimum 2,500 Degrees F
(c) Should the "as received" quality of the coal fail to meet any
one or more of the characteristics described in Section 4(b) on a monthly
weighted average "as received" basis, or should the coal in any one (l)
rail car or any four (4) truckloads fail to meet any one or more of the
following quality limitations on a "dry" basis:
Dry
Ash (maximum) 9.52%
Sulfur (maximum) 1.35%
Pounds of sulphur dioxide per mmBTU 2.05
Calorific Value (BTU's per pound minimum) 13,452
then Buyer, at its option, may immediately suspend future deliveries of
all coal until Seller gives assurances acceptable to Buyer that it has
corrected such deviations. Should such assurances not be given within
thirty (30) days following such suspension, Buyer may: terminate this
Agreement with out further obligation to Seller; or pursue other legal
remedies; or invoke any or all contractual remedies; or all of the
foregoing.
(d) Seller warrants that the coal shall be free of any extraneous
materials, such as slate, shale, fire clay, rock, stone, dirt, mud or any
other impurities or quality characteristics that render the coal
unsuitable for use at Buyer's Generating Station(s). Should any
Shipment(s) of coal containing such extraneous material be delivered to
any of Buyer's Generating Stations then Buyer may immediately reject such
Shipment(s) and title to such Shipment(s) shall revert to Supplier. If
Buyer rejects such Shipment(s) then Seller will be responsible for all
costs associated with the rejected coal Shipment(s).
(e) For purposes of this Agreement pounds of sulfur dioxide per
million BTU shall be calculated according to the following:
Pounds of SO2 per mmBTU =
(% Sulfur x 20,000)/(As-received BTU/Pound)
Percent sulfur and As-received BTU per pound shall be determined in
accordance with Section 9.
SECTION 5. BASE PRICE FOR COAL.
The "Base Price" of the coal shall be Twenty-Three and 88/100
Dollars ($23.88) per ton f.o.b. trucks at the Black Diamond Mine or
f.o.b. train at Seller's on the Indiana Rail Road. As used herein, the
term "Base Price" shall mean the price of the coal as adjusted in
accordance with Section 6 of this Agreement.
SECTION 6. ADJUSTMENTS TO BASE PRICE.
(a) The Base Price includes the Federal Black Lung Excise Tax
(presently $0.92 per ton for deep mined coal), the reclamation fee
assessed pursuant to the Surface Mining Control and Reclamation Act of
1977 (presently $0.15 per ton for deep mined coal) and all federal, state
or local taxes (excluding taxes based on income), fees or other
governmental charges that are presently in effect. Any adjustments made
under Section 6(b) shall not be subject to any further adjustment
pursuant to Section 6(c) hereof.
(b) After January 1, 1995, in the event federal, state or local
legislative, regulatory or court action results in significant and
documentable changes in the cost of mining and producing coal at the
Black Diamond Mine, Seller may present to Buyer a written request for a
Base Price revision for those readily identifiable cost changes. Buyer
shall efficiently act upon such a request and respond as soon as
practicable within ninety (90) days after such written request is
received. Buyer's action and response shall be to either (i) agree with
Seller's request, (ii) mutually agree with Seller on a revision to the
Base Price other than as requested by Seller, or (iii) if no agreement
can be reached as to an adjustment to Base Price and if Seller chooses
not to withdraw its request, terminate this Agreement upon sixty (60)
days written notice to Seller with no further liability to either party,
except that Buyer shall be obligated to pay for the coal delivered prior
to such termination, for which payment has not yet been made , at the
Base Price then in effect.
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(d) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(e) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(f) Each time the Base Price is adjusted in accordance with
Section 6 hereof, and at any other time upon thirty days notice from
Buyer, Seller shall furnish to Buyer a detailed statement showing the
calculations of the new Base Price and the basis for the adjustment made
thereto.
SECTION 7. CALORIFIC PRICE ADJUSTMENT.
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
It is recognized by the parties that the calorific value of the coal may
vary. Therefore, an adjustment shall be calculated each month in order
to compensate for variations of more than 200 BTU's per pound during that
month. This calculation shall be made by Buyer as follows:
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) The adjustment on a per ton basis so calculated shall be added to
or subtracted from (as the case may be) the Base Price for
Shipments received during the month to which such weighted average
BTU/lb. applies. This calorific price adjustment provision shall
not be construed to be the sole remedy available to Buyer, but
shall be in addition to and cumulative to any other remedies.
(b) These provisions of Section 7 shall apply notwithstanding the
provisions stated in Section 6(c)(2) and Section 6(d) above.
SECTION 8. WEIGHTS.
(a) The weight of coal shipped by rail shall be determined by Buyer
using belt scales at Buyer's Generating Station(s). The weight of coal
shipped by truck to Buyer's Station(s) equipped with truck scales shall
be determined by Buyer using such truck scales. The weight of coal
shipped by truck to Buyer's Station(s) not presently equipped with truck
scales shall be determined by Buyer using truck scales, if installed.
The weights thus determined shall be accepted as the quantity of the coal
for which invoices are to be rendered and payments made in accordance
with Section 10 hereof.
(b) Buyer shall arrange for its scales to be properly inspected and
approved on a semi-annual basis by either the Indiana State Bureau of
Weights and Measures, a mutually acceptable representative agency, or the
scale manufacturer in accordance with the applicable standards
established by such appropriate weighing and inspection bureau, and
subject to verification by Seller and the carrier(s) involved in delivery
to Buyer's Generating Station(s).
Seller shall have the right to have a representative present at any and
all times to observe the weighing of the coal. If Seller should at any
time question the accuracy of the weights thus determined, Seller shall
so advise Buyer and Buyer shall arrange for tests to be conducted by
either the Indiana State Bureau of Weights and Measures, a mutually
acceptable representative agency, or the scale manufacturer in accordance
with the applicable standards established by such appropriate weighing
and inspection bureau. If such tests reveal Buyer's scales to be in
error, they shall promptly be adjusted to an accurate condition. If any
such tests reveal an error in weight in excess of one-quarter of one
percent (0.25%) the weights of the coal measured on such scale during the
period commencing with the date on which the accuracy was questioned and
ending on the date such scales are correctly calibrated, shall be
adjusted by the amount of the as-found calibration error. Invoices shall
be adjusted to reflect such change in weight.
(c) In the event Buyer's weighing facilities for truck deliveries are
not operational or installed, weights will be determined on truck scales
at Black Diamond Mine by Seller, in accordance with the testing and other
provisions of this Section 8 and such weights shall be accepted as the
quantity of the coal for which invoices are to be rendered and payments
made in accordance with Section 10 hereof.
In the event Buyer's weighing facilities for rail deliveries are not
operational, the weight per rail car will be established by using the
average lading weight per rail car of the ten (10) most recent Shipments
which were weighed prior to such inoperability, or if ten (10) Shipments
have not moved prior to such inoperability, the average lading weight of
rail cars in the ten (10) Shipments following reinstatement of
operability of Buyer's scales will be used as the weight per rail car.
SECTION 9. SAMPLING AND ANALYSIS.
Each day that coal is delivered hereunder, Buyer shall take or cause to
be taken, representative samples of such coal and cause to be determined
by proper analyses the quality and characteristics of the coal for each
Shipment. Sampling shall consist of representative samples, manually
gathered, from at least 20% of the railcars in each Shipment, or, in the
event of truck delivery, 20% of the trucks in each Shipment. Where
mechanical sampling systems are available, such sampling systems shall be
used in accordance with standards developed by the American Society for
Testing and Materials (herein referred to as "ASTM"), unless the Buyer
and Seller shall agree on alternate standards. Analyses shall be
performed in general accordance with ASTM procedures. Buyer shall
furnish semi-monthly to Seller a report showing the quality and
characteristics of the coal made on a per shipment basis. Seller shall
have the right to have a representative present at any and all times to
observe the sampling. Results of the sampling and analyses by Buyer
shall be accepted as the quality and characteristics of the coal
delivered hereunder; provided however, that if Seller should at any time
question the correctness of either the sampling or the analyses made by
Buyer, Seller shall have the right, at its expense, to have the coal
sampled at destination and analyzed by a commercial testing laboratory,
mutually chosen, and using standards developed by ASTM, Bureau of Mines
or mutually acceptable procedures. The results of such sampling and
analyses shall be accepted as the quality and characteristics of the coal
for those Shipments. If the Buyer's sample is from less than 20% of the
Shipment, the results of Seller's sample and analysis shall be accepted
as the quality and characteristics of the Shipment.
SECTION 10. BILLING AND PAYMENT.
On or about the tenth (10th) day of each month, Seller shall render
invoices to Buyer covering the coal shipped during the first ten (10)
days of said month. Buyer shall, within ten (10) days after receipt of
such invoices, pay to Seller by cash or check, in United States funds,
the net amount of the invoice. On or about the twentieth (20th) day of
each month, Seller shall render invoices to Buyer covering the coal
shipped during the second ten (10) days of said month. Buyer shall,
within ten (10) days after receipt of such invoices, pay to Seller by
cash or check, in United States funds, the net amount of the invoices.
On or before the third (3rd) working day of each calendar month, or as
soon thereafter as practical, Seller shall render to Buyer invoices
covering the coal shipped during the period from the twenty-first (21st)
day to the last day of the preceding month and shall give effect to all
pertinent adjustments for the second preceding calendar month. Buyer
shall pay to Seller by cash or check, in United States funds, the net
amount of such invoices within ten (10) days after receipt of the
invoices.
SECTION 11. RECORDS.
Seller shall keep accurate and satisfactory records and books of
account showing all costs, payments, price adjustments, credits, debits
and all other data required for purposes of this Agreement.
Buyer shall have the right at all times and at any time, upon
reasonable and written notice, to examine or to cause a nationally
recognized accounting firm or mining engineering firm to examine the
reserves, mine, and records of Seller as they pertain to this Agreement.
The cost of such examination shall be borne by Buyer.
SECTION 12. FORCE MAJEURE.
(a) The term "force majeure" as used herein shall mean any and all
causes beyond the control and without the fault or negligence of the
party failing to perform, including but not limited to acts of God, acts
of the public enemy, insurrections, riots, labor disputes, boycotts,
labor and material shortages, fires, explosions, floods, breakdowns of or
damage to equipment or facilities, interruptions to transportation,
embargoes, acts of military authorities, or other causes of a similar
nature which wholly or partly prevent the mining, delivering and/or
loading of the coal by Seller, or the receiving, unloading, accepting
and/or utilizing of the coal by Buyer.
(b) If, because of a verifiable condition of force majeure, either
party hereto is unable to carry out any of its obligations under this
Agreement (other than the obligation of a party to pay money in
connection with the performance of this Agreement) and if such party
shall promptly give to the other party written notice of such force
majeure, then the obligation of the party giving such notice shall be
suspended to the extent made necessary by such force majeure and during
its continuance; provided however, that the party giving such notice
shall use its best efforts to eliminate such force majeure insofar as
possible with a minimum of delay. Any deficiencies in deliveries of the
coal caused by force majeure shall not be made up except by mutual
consent. In the event the force majeure clause is invoked by either
party to this Agreement, deliveries or purchases, as the case may be,
shall be prorated among Seller's contract purchasers or Buyer's contract
suppliers based upon existing shipping schedules and projections for the
pertinent destinations specified in the force majeure notice, during the
period such force majeure is in effect.
(c) During a period in which a condition of total force majeure is
invoked by Buyer, Seller, in the absence of mutual consent to make up
such deficient deliveries, may sell to others the coal otherwise
designated for Buyer. Conversely, during a period in which a condition
of total force majeure is invoked by Seller, Buyer, in the absence of
mutual consent to make up such deficient deliveries, may buy from others
the coal otherwise to have been purchased from Seller.
(d) Notwithstanding the foregoing provisions of this Section 12, it is
expressly understood that any prohibition to take deliveries of, or to
utilize coal, which is imposed upon Buyer by means of laws, regulations
or orders of a court or administrative body, whether or not such event is
beyond the control of Buyer, shall not for the purposes hereof negate the
provisions of Section 13 hereof.
<PAGE>
SECTION 13. COMPLIANCE WITH ANTIPOLLUTION LAWS AND
REGULATIONS, ETC.
The parties hereto recognize that, during the term of this Agreement,
legislative or regulatory bodies or the courts having competent
jurisdiction over the subject matter hereof may enact laws and
regulations, or issue orders or enforcement policies such as, but not
limited to, those relating to air pollution, the effect of which will
make it impossible or impractical for Buyer to utilize the coal without
substantially changing or altering its utilization equipment. Such laws,
regulations, enforcement policies, or orders may pertain to but would not
necessarily be limited to, the sulfur content of the coal. If such laws,
regulations, enforcement policies or orders are imposed, Buyer shall
provide written notice to Seller of such laws, regulations, enforcement
policies and orders as soon as reasonably practicable. If Buyer, in its
sole reasonable opinion, is unable to utilize the coal with its then
present equipment at its H. T. Pritchard or Perry K Generating Stations
and desires to replace the coal with other coal of suitable quality
specifications, then Buyer shall give Seller notice of termination of
this Agreement effective in one hundred twenty (120) days and Seller
shall have the exclusive right to submit a proposal for such replacement
coal within thirty (30) days after receipt of such notice. If Seller's
proposal for supplying such replacement coal to Buyer is not timely
submitted or if the parties are unable to reach a new agreement
concerning such replacement coal, including quality and price, within
sixty (60) days after submittal of such proposal by Seller, the exclusive
right to negotiate shall expire immediately and this Agreement shall
terminate on the date specified in Buyer's termination notice. Upon such
termination, neither party hereto shall have any further liability to the
other party hereunder except to pay for the coal delivered prior to such
termination for which payment has not yet been made.
SECTION 14. NOTICES.
(a) Any notice, request, consent, demand, report or statement given to
or made upon either party hereto by the other party hereto under any of
the provisions of this Agreement shall be in writing, unless it is
otherwise specifically provided herein, and shall be treated as duly
delivered when the same is either (i) personally delivered to the officer
listed below of Buyer or personally delivered to the officer listed below
of Seller, or (ii) deposited in the United States mail, postage prepaid
and properly addressed as follows:
If notice is to Buyer, addressed as follows:
Indianapolis Power & Light Company
P. O. Box 1595
Indianapolis, Indiana 46206-1595
Attention: Vice President - Fuel Supply
with a copy to:
Indianapolis Power & Light Company
P. O. Box 1595
Indianapolis, Indiana 46206-1595
Attention: Vice President, Secretary and General Counsel
If notice is to Seller, addressed as follows:
Black Diamond Coal Company, Inc.
516 Wulfenberger
Sullivan, Indiana 47882
Attention: Mr. Richard H. Whitehead, President
(b) Any notice, request or demand pertaining to matters of an
operating nature may be delivered by mail, messenger, telephone,
telegraph or verbally to such agent of the party hereto being notified as
may be appropriate; and, if given by telephone, telegraph or verbally,
shall be confirmed in writing as soon as practicable thereafter, if the
party to whom the notice is given so requests in any particular instance.
SECTION 15. WAIVERS AND REMEDIES.
(a) The failure of either party hereto to insist in any one or more
instances upon strict performance of any provision of this Agreement by
the other party hereto, or to take advantage of any of its rights
hereunder, shall not be construed as a waiver by it of any such provision
or the relinquishment by it of any such rights in respect of any
subsequent nonperformance of such provision; but the same shall continue
and remain in full force and effect.
(b) Each remedy specifically provided for under this Agreement shall
be taken and construed as cumulative and in addition to every other
remedy provided for herein or by law.
(c) No default (including but not limited to failure to meet or exceed
all quality specifications in Section 4 hereof) by either party hereto in
the performance of any of its covenants or obligations hereunder, which
except for this provision would be the legal basis for the right or
rescission or termination of this Agreement by the other party hereto,
shall give or result in such a right unless and until such defaulting
party shall fail to correct or take all such actions as are necessary to
correct such default thereafter within thirty (30) days after written
notice of claim of such default is given to such defaulting party by the
other party hereto.
SECTION 16. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns; provided
however, that this Agreement may not be assigned nor may either party
transfer a controlling interest in the ownership of such party, without
the written consent of the other party, except as a pledge, assignment or
other security arrangement to secure indebtedness incurred for the
purpose of or in connection with performance under this Agreement.
SECTION 17. HEADINGS NOT TO AFFECT CONSTRUCTION.
The headings to the respective sections and paragraphs of this
Agreement are inserted for convenience of reference and are neither to be
taken to be any part of the provisions hereof nor to control or affect
the meaning, construction or effect of the same.
SECTION 18. WRITTEN INSTRUMENT CONTAINS ENTIRE AGREEMENT.
This written instrument contains the entire agreement between the
parties hereto in respect of the subject matter, and there are no other
understandings or agreements between said parties, or either of them in
respect thereof.
SECTION 19. EXECUTION OF COUNTERPARTS.
This instrument may be executed in any number of counterparts, and all
such counterparts shall constitute but one and the same instrument.
SECTION 20. CONSTRUCTION OF AGREEMENT.
This instrument shall be governed by and construed in accordance with
the laws of the State of Indiana.
SECTION 21. REPRESENTATIONS.
Buyer and Seller each represent to the other that the person signing
this Agreement on behalf of said party has the full right, power and
authority to enter into this Agreement, to bind the corporation by the
terms of this Agreement and that all necessary corporate action has been
taken in connection therewith.
SECTION 22. DEDICATION OF RESERVES AND GUARANTEE OF PERFORMANCE
(a) To secure full and faithful performance by Seller under this
Agreement, Seller hereby dedicates to Buyer all of the coal reserves that
are presently owned, leased or controlled by Seller and all coal reserves
that Seller hereafter may acquire, lease or control in Greene County,
Indiana, commonly known as Seller's Black Diamond Mine and more
specifically identified and shown on Exhibits B and B1. The dedication
of the coal reserves shall be subordinate to the interest of United
Leasing,Inc., Seller's lender, and shall be made in the form of a written
recordable instrument. The dedication shall commit Seller to mine,
produce and deliver the coal to Buyer in accordance with the provisions
of this Agreement. During the term of this Agreement, Seller agrees to
keep the dedicated coal reserves free and clear of any and all liens,
mortgages and encumbrances, except for the interests of United Leasing,
Inc. and current easements, property rights and restrictions of record of
any property owner. Except as stated above, Seller shall refrain from
encumbering the dedicated coal reserves as a pledge, assignment or other
security arrangement to secure any indebtedness.
(b) In order to meet the delivery commencement date in Section 2,
Seller agrees to secure financing no later than September 27, 1994 and to
concurrently commence mining activities at the Black Diamond Mine that
are necessary and required to operate the Mine and commence deliveries of
coal no later than December 31, 1994. In the event that Seller defaults
in the performance of its obligations at anytime during the term of this
Agreement, Buyer shall have the right to designate, in conjunction with
Seller's lender, a qualified substitute contract miner to assume the
obligations of the Seller and to perform in accordance with this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective corporate officers or
representatives, all as of the date first above written.
INDIANAPOLIS POWER & LIGHT COMPANY
By: /s/ Ramon L. Humke
Ramon L. Humke
President & Chief Operating Officer
Attest:
By: /s/ Marcus E. Woods
Marcus E. Woods
Secretary & General Counsel
BLACK DIAMOND COAL COMPANY, INC.
By: /s/ Richard H. Whitehead
Richard H. Whitehead, President
Attest:
By:_____________________________________
Title:
<PAGE>
EXHIBIT A
326 IAC 7-4-11 Morgan County sulfur dioxide emission
limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 11. Indianapolis Power and Light (IPL) Pritchard Generating
Station shall comply with the sulfur dioxide emission limitations in
pounds per million Btu and other requirements as follows:
Emission
Facility Description Limitations
(1) Units 1 and 2 0.37 each
(2) Units 3, 4, 5, and 6 on and before
September 30, 1990 6.0 each
Unit 3 after September 30, 1990 0.37
Units 4, 5, and 6 after September 30,
1990 3.04 each
(3) As an exception to the emission limitations specified in
subdivision (2), after September 30, 1990, at any time in which IPL burns
coal on Unit 3, sulfur dioxide emissions from Units 3, 4, 5, and 6 shall
be limited to two and fifty-seven hundredths (2.57) pounds per million
Btu each.
(4) Prior to October 31, 1989, IPL shall modify the two (2) stacks
servings Units 3, 4, 5, and 6 to increase the height of each stack to at
least two hundred and eighty-one (281) feet above grade.
(5) Prior to February 28, 1989, IPL shall submit completed
engineering plans and drawings of flue gas conditioning systems for Units
4 and 5 to the department. Prior to May 31, 1990, IPL shall complete
installation of flue gas conditioning systems for Units 4 and 5.
(6) After September 30, 1990, on a day for which Unit 3 does not burn
any coal, the limitations in subdivision (2) are in effect, and
compliance shall be determined as specified in 326 IAC 7-2-1(c).
(7) After September 30, 1990, on a day for which unit 3 burns any
coal, the limitations in subdivision (3) are in effect. As an exception
to the requirements of 326 IAC 7-2-1(c)(1) on a day for which Unit 3
burns any coal, if the thirty (30) day rolling weighted average for any
unit is above two and fifty-seven hundredths (2.57) pounds per million
Btu, then 326 IAC 7-2-1(c)(1) does not apply, and the daily average
emission rate for that unit for that day shall not exceed two and fifty-
seven hundredths (2.57) pounds per million Btu.
(8) After September 30, 1990, for the purposes of determining
compliance under 326 IAC 7-2-1(b), stack tests performed on Units 3, 4,
5, and 6 shall demonstrate compliance with the most stringent set of
limits in effect at any time during the day prior to or during the test
based on the Unit 3 operating status and fuel type as indicated by the
log maintained pursuant to subdivision (9).
(9) After September 30, 1990, IPL shall maintain and make available
to the department upon request a log of the operating status and fuel
type used for Unit 3. In addition, in the quarterly report required by
326 IAC 7-2-1(a), IPL shall submit to the department a daily summary
indicating fuel type for Unit 3, and, for days on which Unit 3 burned any
coal and any thirty (30) day rolling weighted average was greater than
two and fifty-seven hundredths (2.57) pounds per million Btu, IPL shall
submit to the department the daily average sulfur content, heat content,
and sulfur dioxide emission rate for Units 3, 4, 5, and 6.
(Air Pollution Control Board, 326 IAC 7-4-11;
filed Aug 28, 1990, 4:50 p.m.: 14 IR 76)
326 IAC 7-4-2 Marion County sulfur dioxide emission
limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 2. The following sources and facilities located in Marion County
shall comply with the sulfur dioxide emission limitations in pounds per
million Btu (lbs./MMBtu) and pounds per hour (lbs./hr.), unless otherwise
specified, and other requirement:
(Material not relevant deleted)
(29) Indianapolis Power and Light Perry K shall comply with the sulfur
dioxide emission limitations in pounds per million Btu and other
requirements as follows:
Emission
Boiler Number Limitations
(A) 17 and 18 0.3
(B) 11, 12, 13, 14, 15, and 16 2.1
(C) As an alternative to the emission limitations in clause (B),
sulfur dioxide emissions from Boilers 11, 12, 13, 14, 15, and 16 may
comply with any one (1) of the sets of emission limitations in pounds per
million Btu as follows:
Emission
Boiler Number Limitations
(i) 13, 14, 15, and 16 0.0
11 and 12 4.4
(ii) 11, 12, 15, and 16 0.0
13 and 14 4.4
(iii) 11, 12, 13, and 14 0.0
15 and 16 4.4
(iv) 11, 12, 15, and 16 3.0
13 and 14 0.3
(v) 11 and 12 0.3
13, 14, 15, and 16 3.0
(D) The department or the Indianapolis Air Pollution Control Division
shall be notified prior to the reliance by Indianapolis Power and Light
on any one (1) of the sets of alternative emission limitations specified
in clause (C).
(E) A log of hourly operating status for each boiler shall be
maintained and made available to the department upon request. A daily
summary indicating which boilers were in service during the day shall be
submitted to the department quarterly. In addition, records of the daily
average sulfur content, heat content, and sulfur dioxide emission rate
for each day in which an alternative set of emission limitations
specified in clause (C) is used shall be submitted to the department
quarterly.
(F) For the purposes of 326 IAC 7-2-1(c)(1), during thirty (30) day
periods in which Indianapolis Power and Light relies on more than one (1)
set of emission limitations specified in clauses (B) through (C), a
separate thirty (30) day rolling weighted average for each set of
limitations shall be determined. Each thirty (30) day rolling weighted
average shall be based on data from the previous thirty (30) operational
days within the last ninety (90) days for that set of limitations. If
Indianapolis Power and Light does not operate thirty (30) days under any
one (1) set of limitations within the last ninety (90) days, the rolling
weighted average shall be based on all operational days within the last
ninety (90) days for that set of limitations.
(G) Boilers 11 through 16 shall be limited to six and zero-tenths
(6.0) pounds per million Btu each until Boilers 11 through 16 achieve
compliance with the sulfur dioxide emission limitations specified in
clauses (B) through (C). Compliance with the emission limitations
specified in clauses (B) through (C) shall be achieved according to the
following schedule:
(i) Complete engineering analysis of modifications by April 2, 1988.
(ii) Complete testing and design of modifications and place orders for
necessary equipment by May 2, 1989.
(iii) Complete installation of necessary equipment and achieve
compliance with emission limitations specified in clauses (B) through
(C) by June 2, 1990.
<PAGE>
EXHIBIT B
[Narrative Description of Map: Exhibit B to this Contract is a map
detailing the location of the Black Diamond Mine, indicating the mineral
rights owners, and showing the location of the Indiana Rail Road]
<PAGE>
EXHIBIT B1
BLACK DIAMOND COAL COMPANY, INC.
RESERVE DEDICATION
<PAGE>
ATTACHMENT TO
COAL SUPPLY AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY AND
BLACK DIAMOND COAL COMPANY, INC.
DEDICATION OF COAL RESERVES
This dedication made this 3rd day of November, 1994, by and between
Black Diamond Coal Company, Inc., an Indiana corporation doing business
in the State of Indiana (hereinafter Black Diamond) and Indianapolis
Power & Light Company, an Indiana corporation (hereinafter IPL).
WITNESSETH
That Black Diamond and IPL have by separate agreement dated September
27, 1994, entered into an Coal Supply Agreement for the sale and purchase
of coal from the Black Diamond Mine in Green County, Indiana; and
That by the terms of said contract, Black Diamond has agreed to make
the Black Diamond Mine captive to IPL by dedicating to IPL all the coal
reserves from said mine as hereinafter described; and
That the parties desire to record this dedication of coal reserves in
order to service notice of such encumbrance and to make such dedication a
matter of public record so that the dedication becomes a covenant running
with the land.
NOW THEREFORE, Black Diamond hereby dedicates of record to IPL all the
coal reserves owned, leased or controlled by Black Diamond and all coal
reserves hereafter acquired, leased or controlled by Black Diamond at the
Black Diamond Mine in Green County, Indiana subject to the pre-existing
interests of any other parties therein. These coal reserves are more
fully described in the above mentioned Agreement, and are more
particularly described in the metes and bounds perimeter description
attached hereto and made a part hereof.
IN WITNESS WHEREOF, Black Diamond has caused this instrument to be
executed by its duly authorized officers.
BLACK DIAMOND COAL COMPANY, INC.
By: /s/ Richard H. Whitehead, Pres.
STATE OF INDIANA)
: SS.:
COUNTY OF MARION)
Before me, a notary public, personally appeared Richard H. Whitehead of
Black Diamond Coal Company, Inc., who acknowledged the execution of the
foregoing instrument to be his free and voluntary act and deed and the
free, voluntary and duly authorized act and deed of said corporation on
this 3rd day of November, 1994.
/s/ Teresa M. Wall
Notary Public
My Commission Expires: 5-29-95
My County of Residence: Marion
This instrument prepared by David B. Barnard, Attorney at Law
Indianapolis Power & Light Company
25 Monument Circle
Indianapolis, Indiana 46206
<PAGE>
Metes and Bounds Description of the Coal Reserves
in the Coal Supply Agreement between
Indianapolis Power & Light Company
and
Black Diamond Coal Company, Inc.
Effective November 3, 1994
A tract of land being all of Sections 7, 8, 9, 16, 17, 18, 19, 20, 21,
28, 29, 30, 31, 32, and 33, Township 8 North, Range 7 West, of the Second
Principal Meridian, in Wright Township, Greene County, Indiana, and all
Sections 4, 5, and 6, Township 7 North, Range 7 West, of the Second
Principal Meridian, in Stockton Township, Greene County, Indiana, the
perimeter of which tract is more particularly described as follows:
Beginning at the Northwest Corner of Section 7, Township 8 North, Range
7 West; thence easterly, on and along the North lines of Sections 7, 8,
and 9, Township and Range aforesaid, a distance of 16,000 feet, more or
less, to the Northeast corner of said Section 9; thence southerly, on and
along the East lines of Sections 9, 16, 21, 28, and 33, Township and
Range aforesaid, a distance of 26,440 feet, more or less, to the
Southeast corner of said Section 33; thence westerly, on and along the
South line of said Section 33, a distance of 40 feet, more or less, to
the Northeast corner of Section 4, Township 7 North, Range 7 West; thence
southerly, on and along the East line of said Section 4, a distance of
5900 feet, more or less, to the Southeast corner of said Section 4;
thence westerly, along the South lines of Sections 4, 5 and 6, Township
and Range aforesaid, a distance of 15,840 feet, more or less, to the
Southwest corner of said Section 6; thence northerly, along the West line
of said Section 6, a distance of 6300 feet, more or less, to the
Northwest corner of said Section 6 and the Southwest corner of Section
31, Township 8 North, Range 7 West; thence continuing northerly, along
the West lines of Sections 31, 30, 19, 18, and 7, Township and Range
aforesaid, a distance of 26,470 feet, more or less, to the Northwest
corner of said Section 7, and the Point of Beginning.
<PAGE>
EXHIBIT C
[Narrative Description of Exhibit C: Exhibit C to this Contract is a
flowchart showing the process the coal to be delivered under the Contract
must complete.]
EXHIBIT 10.2
COAL SUPPLY AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
TRIAD MINING OF INDIANA, INC.
AND
MARINE COAL SALES COMPANY
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. TERM . . . . . . . . . . . . . . . . . . 3
2. QUANTITY. . . . . . . . . . . . . . . . . 3
3. SOURCE OF COAL AND DELIVERIES . . . . . . . . 4
4. QUALITY . . . . . . . . . . . . . . . . . 5
5. BASE PRICE FOR COAL . . . . . . . . . . . . 7
6. ADJUSTMENTS TO BASE PRICE . . . . . . . . . . 8
7. CALORIFIC COST ADJUSTMENTS. . . . . . . . . . 14
8. WEIGHTS . . . . . . . . . . . . . . . . . 15
9. SAMPLING AND ANALYSIS. . . . . . . . . . . . 16
10. BILLING AND PAYMENT . . . . . . . . . . . . 17
11. RECORDS AND AUDITS. . . . . . . . . . . . . 17
12. FORCE MAJEURE. . . . . . . . . . . . . . . 18
13. COMPLIANCE WITH ANTI-POLLUTION LAWS AND
REGULATIONS, ETC. . . . . . . . . . . . . . 18
14. NOTICES . . . . . . . . . . . . . . . . . 19
15. WAIVERS AND REMEDIES . . . . . . . . . . . . 20
16. ARBITRATION. . . . . . . . . . . . . . . . 21
17. SUCCESSORS AND ASSIGNS . . . . . . . . . . . 21
18. HEADINGS NOT TO AFFECT CONSTRUCTION . . . . . . 21
19. WRITTEN INSTRUMENT. . . . . . . . . . . . . 21
20. LIMITATION OF LIABILITY OF MARINE. . . . . . . 22
21. EXECUTION OF COUNTERPARTS . . . . . . . . . . 22
22. CONSTRUCTION OF AGREEMENT . . . . . . . . . . 22
EXHIBIT A . . RESERVE LOCATION
EXHIBIT B . . CURRENT PUBLISHED EMISSION STANDARD
EXHIBIT C . . MARKETING AND SALES SERVICE AGREEMENT
EXHIBIT D . . COAL PREPARATION PLANT FLOW DIAGRAM
<PAGE>
COAL SUPPLY AGREEMENT
THIS AGREEMENT, made and entered into as of this 7th day of December,
1994 by and among Triad Mining of Indiana, Inc. ("Seller"), an Indiana
corporation, with offices at Owensboro, Kentucky, Marine Coal Sales Company
("Marine"), a Delaware corporation, with offices at Carmel, Indiana, and
Indianapolis Power & Light Company ("Buyer"), with offices at Indianapolis,
Indiana.
RECITALS
WHEREAS, Buyer is a public utility rendering electric utility and
steam service over certain areas within the State of Indiana; and
WHEREAS, Buyer intends to purchase, in accordance with the terms and
conditions stated herein, a supply of bituminous coal for use at various
stations as needed and determined by Buyer ("Stations"). The coal shall be
of the qualities and characteristics set forth in this Agreement to assure
compliance with the applicable sulfur dioxide emission limitations imposed
by governmental authorities having jurisdiction thereover.
WHEREAS, Seller owns, leases, or controls (as such term is commonly
used in the coal industry), bituminous coal reserves in Greene County,
Indiana as identified in Exhibit "A" attached. Seller intends to supply to
Buyer coal in accordance with the terms and conditions of this Agreement
which shall assure compliance with the applicable sulfur dioxide emission
limitations imposed by governmental authorities having jurisdiction
thereover. A copy of the current regulations is attached as Exhibit "B";
and
WHEREAS, Seller has entered into a Marketing and Sales Service
Agreement ("Sales Service Agreement") with Marine, a copy of which is
attached hereto, for informational purposes, as Exhibit "C". A copy of any
amendment thereto will be furnished promptly to Buyer by Seller, and will
be incorporated into Exhibit "C".
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereinafter set forth, it is hereby
agreed by and between the parties hereto as follows:
<PAGE>
SECTION 1. TERM.
(a) The term of this Agreement shall commence as of the first date written
above and shall continue in effect through December 31, 2000.
(b) Buyer has sole option to extend the term of this Agreement for any
period up to five (5) years subject to reserve tonnage verification
and price negotiation. Buyer shall notify Seller of the exercise of
such option on or before August 25, 1999. Should Buyer and Seller not
mutually agree upon price by December 31, 1999, Seller shall not sell
coal, to another buyer, at a price lower than quoted by Seller to
Buyer. Such restriction on Seller shall be effective until December
31, 2001.
SECTION 2. QUANTITY.
(a) The quantity of coal to be sold and purchased under this Agreement
shall be 300,000 tons per Contract Year of Coal having a sulphur
dioxide content not to exceed 2.0 pounds per million British Thermal
Units (MMBTU), as described in Section 4(a) and 4(b), and an
additional 250,000 tons per Contract Year of coal having a sulphur
dioxide content not to exceed 2.4 pounds per MMBTU, as described in
Section 4(a) and 4(b), for a total of 550,000 tons per contract year.
"Ton" shall be defined as a short ton of 2,000 pounds avoirdupois
weight. "Contract Year" shall be defined as a period beginning on
January 1 and ending on the succeeding December 31. If the first year
is a partial Contract Year, the quantities will be prorated coincident
with the number of days available for shipment from the date of
commencement of shipments through the end of the calendar year.
(b) On or before November 1 of each Contract Year, Buyer shall retain the
right, upon written notice to Seller, to increase or decrease either,
or both, of the two different quantities in Section 2(a) above for the
next Cotnract Year by an amount not greater than 10%.
(c) Buyer shall have the right of first refusal regarding Spot Sales from
all reserves in the State of Indiana owned or controlled by Seller
presently or in the future. "Spot Sales" shall be defined as tonnage
sold under a contract term of one year or less, or tonnage sold under
a contract term of one year or less and subsequently extended by one
year increments. To exercise this right, Buyer must respond to Seller
by accepting or rejecting a bona fide offer within twenty-four (24)
hours after receipt of notice from Seller regarding another proposed
sale. Notice to Buyer shall include all terms and conditions of the
sale such as, but not limited tok, source, quality, quantity by month
and term, F.O.B. mine and delivered prices, means of delivery, F.O.B.
point, and premium or penalty provisions. Such notice shall
constitute an offer to sell to Buyer under the terms thereby defined.
If Buyer refuses such offer, then Seller may sell that coal, to said
buyer only, under terms and conditions of that agreement shall remain
identical to the notice presented to Buyer throughout the life of that
agreement. So long as Seller complies in good faith with these
provisions, the provisions of Subsection 6(q) shall not apply.
SECTION 3. SOURCE OF COAL AND DELIVERIES.
(a) The source of coal shall be the reserves of Seller located in Greene
County, Indiana, identified on Exhibit A and nearby reserves which may
be acquired by Seller. Exhibit A will be updated as Seller acquires
additional reserves for this Agreement. Seller covenants that it will
not sell or contract to sell coal from said reserves in such manner
or quantity as to jeopardize its ability to perform under the terms
of this Agreement. Seller further covenants that coal from sources
not previously approved by Buyer in writing will not be included in
shipments to Buyer.
(b) Coal subject to this Agreement shall be delivered by Seller to Buyer
FOB trucks (to be arranged by Buyer) loaded at Seller's mine, or at
Buyer's option, FOB railcars (to be arranged by Buyer) at Seller's
rail siding (the location of which is set forth in Exhibit A).
Seller's rail siding(s) shall have the capacity to hold and load a
minimum of fifty-five 100-ton capacity railroad cars in accordance
with existing tariff or applicable rail contract or both. "Shipment"
shall be defined as a single train rail delivery or, if trucks are
used for transporting the coal, "Shipment" shall be defined as the sum
of one day's truck deliveries from any one of Seller's loading points
to any one of Buyer's Stations. Risk of loss shall follow title to
the coal. Title shall pass when coal is delivered to trucks or
railcards by Seller. Point of delivery for purposes of Sections 5 and
6 of this Agreement shall be FOB railcar or truck as the case may be.
Point of delivery for Purposes of Sections 4, 7 and 9 of this
Agreement shall be FOB Buyer's Station(s).
(c) Coal deliveries subject to this Agreement shall be made in
substantially equal monthly quantities subject to the vacation and
holiday schedules of Seller, Buyer and shippers and in accordance with
Buyer's shipping instructions.
(d) The primary destination of coal deliveries shall be Buyer's H.T.
Pritchard Station and C.C. Perry K Station. Buyer shall have the
right, but not the obligation, to direct shipments to any other of its
Stations.
SECTION 4. QUALITY.
The procedures outlined in Section 9 shall be used to determine the quality
of the coal received.
(a) All coal shipped pursuant to this Agreement shall consist of three
seams from the reserves identified in Exhibit A. The seams are
identified as the Lower Block, Upper Block and Shady Lane Seams. Coal
from the Lower Block and Upper Block shall be fully washed, crushed,
run-of-mine. Coal from the Shady Lane Seam shall be crushed,
run-of-mine and washed as necessary to obtain the 2.0 pounds of
sulphur dioxide per MMBTU product. All three seams will be crushed
to a size of 3" x 0", (with Buyer retaining the right to require a
size of 2" x 0" at its sole discretion; and Seller shall comply within
30 days of receipt of Buyer's notice), containing a maximum of 3%
minus 100 mesh fines. The products shall be of quality equal to or
better than the following characteristics on a Monthly Weighted
Average "As-Received" basis:
(1) 2.0 Pounds Of Sulphur Dioxide Product.
Moisture (maximum) 16.0%
Ash (maximum) 7.5%
Sulfur Dioxide(maximum) 2.0 lbs. SO2/MMBTU
Chlorine (maximum) 0.1%
Calorific Value (BTU per lb.) 11,450 minimum
Grindability (Hardgrove Index) 50 minimum
Slagging Factor (maximum) 1.0
Fouling Factor (maximum) .15
Ash Softening Temperature 2,250 degrees
Fahrenheit (Reducing H=W) minimum
(2). 2.4 Pounds Of Sulphur Dioxide Product
Moisture (maximum) 15.0%
Ash (maximum) 7.5%
Sulfur Dioxide (maximum) 2.4 lbs. SO2/MMBTU
Chlorine (maximum) 0.1%
Calorific Value (BTU per lb.) 11,450 minimum
Grindability (Hardgrove Index) 50 minimum
Slagging Factor (maximum) 1.0
Fouling Factor (maximum) .15
Ash Softening Temperature 2,250 degrees
Fahrenheit (Reducing H=W) minimum
If the quality of coal delivered by Seller fails to meet any one or
more of the standards set forth in this Subsection, Buyer shall be
entitled to exercise the remedies of Subsection 4(c).
(b) Coal delivered by Seller pursuant to this Agreement under
Subsection 4(b) shall additionally be subject to the following
quality specifications on an individual Shipment basis:
(1) 2.0 Pounds Of Sulphur Dioxide Product.
Moisture (maximum) 16.0%
Ash (maximum) 8.5%
Sulfur Dioxide (maximum) 2.05 lbs.
SO2/MMBTU
Chlorine (maximum) 0.1%
Calorific Value (BTU per lb.) 11,200 minimum
Grindability (Hardgrove Index) 48 minimum
Slagging Factor (maximum) 1.0
Fouling Factor (maximum) .15
Ash Softening Temperature 2,250 degrees
Fahrenheit (Reducing H=W) minimum
(2). 2.4 Pounds Of Sulphur Dioxide Product
Moisture (maximum) 16.0%
Ash (maximum) 8.5%
Sulfur Dioxide(maximum) 2.45 lbs. SO2/MMBTU
Chlorine (maximum) 0.1%
Calorific Value (BTU per lb.) 11,200 minimum
Grindability (Hardgrove Index) 48 minimum
Slagging Factor (maximum) 1.0
Fouling Factor (maximum) .15
Ash Softening Temperature 2,250 degrees
Fahrenheit (Reducing H=W) minimum
"Shipment" shall be as defined in Subsection 3(b), unless redefined
pursuant to Subsection 9(d). If the quality of coal delivered by
Seller fails to meet any one or more of the standards set forth in
this Subsection, Buyer shall be entitled to exercise the remedies
of Subsection 4(c).
(c) If coal delivered by Seller fails to meet any one or more of the
quality specifications included in any one of Subsections 4(a) or
4(b), then Buyer, at its option, may immediately suspend future
deliveries of any and all coal subject to this Agreement until
Seller gives assurances acceptable to Buyer that it has corrected
such deviations. If 1) such assurances are not given within thirty
(30) days following such suspension, and 2) Seller uses its best
efforts to meet the quality specifications and is unable to do so,
then Buyer's remedies shall be limited to terminating this
Agreement without further obligation to Seller except Buyer shall
be entitled to recover any and all excess costs of purchasing
Replacement Coal as provided in I.C.26-1-2- 712. "Replacement
Coal" is defined as coal purchased by Buyer during the remaining
term of this Agreement under terms and conditions not substantially
different from those contained in this Agreement, and price must be
negotiated in good faith.
(d) In order to assure environmental compliance, Seller shall collect
representative samples, analyze the samples, and advise Buyer of
Seller's determination of the sulphur content expressed in pounds
of sulphur dioxide per million Btu's or percent sulphur, whichever
is applicable, of each Shipment prior to loading into trucks or
railcars.
(e) Seller warrants that coal delivered to Buyer shall not contain
extraneous materials that would render the coal, in Buyer's sole
opinion, unsuitable for use at Buyer's Station(s). Extraneous
materials include, but are not limited to, slate, shale, fireclay,
rock, stone, dirt, mud, wood and rags. Should any Shipment(s) of
coal containing such extraneous material be delivered to any of
Buyer's Stations then Buyer may immediately reject such Shipment(s)
and title to such Shipment(s) shall revert to Supplier.
(f) THE QUALITY SPECIFICATIONS SET FORTH IN THIS SECTION 4 SHALL BE IN
LIEU OF ANY OTHER WARRANTY OF QUALITY, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(g) For purposes of this Agreement pounds of sulfur dioxide per million
BTU shall be calculated according to the following:
Pounds of SO2 per MMBTU =
(%S X 20,000)/(As-received BTU/pound)
Percent sulfur and As-received BTU per pound shall be determined in
accordance with Section 9.
SECTION 5. BASE PRICE FOR COAL.
The Base Price per net ton for coal shall be $23.00 for the 2.0 pound SO2
per MMBTU and 2.4 pound SO2 per MMBTU products. The Base Price shall be
adjusted according to the provisions of Section 6, and as adjusted shall
also be the Adjusted Base Price.
SECTION 6. ADJUSTMENTS TO BASE PRICE.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(4) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(b) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(d) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(e) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(f) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(4) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(g) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(h) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(i) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(j) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(k) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(l) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(m) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(n) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(i) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(ii) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(iii) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(iv) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(o) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(p) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(q) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(r) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 7. CALORIFIC COST ADJUSTMENT.
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(b) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
DECEMBER 7, 1994 BETWEEN INDIANAPOLIS
POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 8. WEIGHTS.
(a) The weight of coal shipped shall be determined on scales maintained
by Seller. The weights thus determined shall be accepted as the
quantity of coal for which invoices are to be rendered and payments
made in accordance with Section 10. Seller shall arrange for such
scales to be properly inspected and approved at least twice each
year by either the railroad, a mutually acceptable representative
agency, or the scale manufacturer in accordance with the applicable
standards established by the carrier or the appropriate weighing
and inspection bureau, and subject to verification by Buyer and all
carriers involved in the delivery to Buyer's Station(s). Seller
shall notify Buyer in advance of all scale inspections, and Buyer
shall have the right to have a representative present.
(b) Buyer shall have the right to have a representative present at any
and all times to observe the weighing of the coal. If Buyer should
at any time question the accuracy of the scales, Buyer shall so
advise Seller, who shall arrange for the scales to be tested,
subject to Buyer's rights detailed in Subsection 8(a). Such tests
shall be conducted by the railroad, the Indiana State Bureau of
Weights and Measures, a mutually acceptable representative agency
or the scale manufacturer. Tests shall be performed in accordance
with the applicable standards established by the carrier or the
appropriate weighing and inspection bureau. If such tests show
Seller's scales to be in error, said scales shall be adjusted to an
accurate condition. If any such inspection or test reveals an
error in weight in excess of one-half percent (1/2%), then weights
of the coal measured on that scale during the period commencing
with the date on which the accuracy was questioned to the date that
scale is correctly calibrated shall be adjusted in proportion to
the calibration error. Invoices submitted during this period shall
be adjusted in accordance with said adjustment to weights. No
adjustments shall be made to invoices submitted prior to the time
the accuracy of the scales was questioned.
(c) Buyer retains the option to weigh coal deliveries on Buyer's scales
at any time and for any reason from time to time. If Buyer chooses
to exercise this option, then Buyer will notify Seller in writing
and the rights and responsibilities of Seller per Subsections 8(a)
and 8(b) shall be assumed by Buyer, and the rights and
responsibilities of Buyer thereunder shall be assumed by Seller.
SECTION 9. SAMPLING AND ANALYSIS.
(a) Each day that coal is delivered hereunder, Buyer shall take or
cause to be taken representative samples of such coal. Buyer shall
further cause to be determined by proper analysis the quality and
characteristics of the coal. Sampling shall consist of
representative samples, manually gathered, from at least 20% of the
railcars or trucks in each Shipment or by mechanical sampling
systems where available. Analysis of each Shipment shall be
performed in general accordance with ASTM procedures. Buyer shall
furnish semi-monthly to Marine and Triad a report showing the
quality of the coal on a Shipment basis. Seller shall have the
right to have a representative present at any and all times to
observe the sampling and analysis. Results of sampling and
analysis by Buyer shall determine the quality of each Shipment.
(b) If Seller should at any time question either Buyer's sampling
methods or the results of any of Buyer's analyses, Seller shall
have the right, at its expense, to have the coal sampled at
destination and analyzed by a commercial testing laboratory, which
will be chosen mutually by the Parties. Tests shall be performed
using standards developed by ASTM, Bureau of Mines, or other
mutually acceptable procedures. The results of such sampling and
analysis shall be accepted as the quality of the coal for each
Shipment so sampled.
(c) If Buyer's sample is from less than 20% of a Shipment, the results
of Seller's sample and analysis shall determine the quality and
characteristics of such Shipment.
(d) Buyer has the right to require sampling and analysis on a more
frequent basis and as necessary in order to assure compliance with
applicable environmental standards. In such event, the term
"Shipment" in Subsection 3(b) shall be redefined by Buyer to the
extent required to assure such compliance.
SECTION 10. BILLING AND PAYMENT.
(a) As provided in the Sales Service Agreement, Marine shall be
responsible for the rendering of invoices to Buyer. After the 15th
day of each month, Marine shall render an invoice to Buyer covering
the coal shipped during the first fifteen (15) days of that month.
After the last day of each month, Marine shall render an invoice to
Buyer covering the coal shipped during the sixteenth day through
the last day of that month. Buyer shall, within ten (10) business
days after receipt of each invoice, pay to Seller's account at
National City Bank of Louisville, by cash or check, in United
States funds, the net amount of that invoice. Each invoice shall
be for the Adjusted Base Price approved by Buyer, in effect at the
time of shipment.
(b) As soon as practical after all pertinent data has been received
relating to quality, Buyer shall issue to Marine a debit or credit
memo giving effect to all adjustments for the month's shipments
relative to quality as detailed in Section 7. If additional
amounts are due from Buyer, Buyer shall pay to Seller's account at
National City Bank of Louisville, by cash or check, in United
States funds, the net amount of each invoice within ten (10)
business days after receipt. If credits are due, Buyer shall
deduct the amount of any credit memo from the next payment due.
(c) Payment shall be deemed to have been made on the date that any
check is deposited in the United States Mail.
SECTION 11. RECORDS AND AUDITS.
(a) Seller and Marine shall keep accurate and satisfactory records and
books of account showing all financial and technical data required
for purposes of administering this Agreement.
(b) Each time the Base Price is adjusted in accordance with any
provision of Section 6, Marine shall furnish to Buyer a detailed
statement showing the calculations of the Adjusted Base Price and
the basis for the proposed adjustment.
(c) Buyer shall have the right at all times and at any time, upon
reasonable and written notice, to examine or to cause a nationally
recognized accounting firm or mining engineering firm to examine
the reserves, mine, and records of Seller and Marine as they
pertain to this Agreement. The cost of such examination shall be
borne by Buyer.
SECTION 12. FORCE MAJEURE.
(a) The term "force majeure" shall mean any and all causes beyond the
control and without the fault or negligence of the Party failing to
perform. Such causes shall include but not be limited to acts of
God, acts of the public enemy, insurrections, riots, labor
disputes, boycotts, labor and material shortages, fires,
explosions, floods, breakdowns of or damage to equipment or
facilities, interruptions to transportation, embargoes, acts of
military authorities, or other causes of a similar nature whether
or not foreseen or foreseeable which wholly or partly prevent the
mining, loading and/or delivery of the coal by Seller; or the
receiving, unloading, accepting, and/or utilizing of the coal by
Buyer. Settlement of labor disputes shall be deemed beyond the
control and without the fault or negligence of the Party
experiencing such event. Documentation verifying a condition of
force majeure shall be made available by the Party invoking the
provisions of this Section.
(b) If, because of a verifiable condition of force majeure, either
Party is unable to carry out any of its obligations under this
Agreement (except for obligation of either Party to pay money in
connection with the performance of this Agreement), that Party
shall promptly give written notice to the other Party. The
obligation of the Party giving notice shall be suspended to the
extent made necessary by said force majeure during its continuance.
However, the Party giving notice shall use commercially reasonable
efforts to eliminate the force majeure with a minimum of delay.
Any deficiencies in deliveries of the coal caused by a condition of
force majeure shall not be made up except by mutual consent.
(c) During a period in which Buyer invokes a condition of force
majeure, Seller, in the absence of mutual agreement to make up
deficient deliveries, may sell to others the coal otherwise
designated for Buyer. Likewise, during a period in which Seller
invokes a condition of force majeure, Buyer, in the absence of
mutual agreement to make up deficient deliveries, may buy from
others the coal otherwise to have been purchased from Seller.
SECTION 13. COMPLIANCE WITH ANTI-POLLUTION LAWS AND
REGULATIONS, ETC.
(a) The Parties to this Agreement recognize that, during the term of
this Agreement, legislative bodies, regulatory agencies or courts
having competent jurisdiction over the subject matter of this
Agreement may enact laws or regulations, or issue orders such as,
but not limited to, those relating to air pollution, the effect of
which will make it impossible or impractical for Buyer to utilize
the coal subject to this Agreement at H.T. Pritchard Station for
the 2.4 pounds of sulphur dioxide per mmBTU product, or C.C. Perry
K Station for the 2.0 pounds of sulphur dioxide per mmBTU product
without changing or altering its present equipment. Such laws,
regulations or orders may pertain to, but would not necessarily be
limited to, the sulfur content of the coal. If any such laws,
regulations or orders are imposed, Buyer shall provide written
notice to Seller of same as soon as practicable.
(b) If Buyer in its sole reasonable opinion, is unable to utilize the
coal with its present equipment at H.T. Pritchard Station for the
2.4 pounds of sulphur dioxide per MMBTU product, or C.C. Perry K
Station for the 2.0 pounds of sulphur dioxide per MMBTU product,
then Buyer shall give Seller notice of termination of this
Agreement which will be effective one hundred twenty (120) days
from receipt of notice. Buyer shall not be obligated to take any
of the products at any of its other Stations. Seller shall have
the exclusive right to notify Buyer that it desires to submit a
proposal for replacement coal within thirty (30) days after receipt
of notice. If Seller's proposal for supplying replacement coal to
Buyer is not submitted within sixty (60) days, the exclusive right
to negotiate shall expire immediately and this Agreement shall
terminate on the date specified in Buyer's notice of termination.
If the Parties are unable to reach a new agreement concerning
replacement fuel within sixty (60) days after submittal of a bona
fide proposal by Seller, this exclusive right shall likewise
expire. Upon termination under this Section, neither Party to this
Agreement shall have any further liability to the other except to
pay for coal delivered prior to termination and for which payment
has not yet been tendered.
SECTION 14. NOTICES.
(a) Any notice, request, consent, demand, report or statement given to
or made upon either Party to this Agreement by the other under any
of the provisions of this Agreement shall be in writing, unless it
is otherwise specifically provided in this Agreement, and shall be
treated as duly delivered when either (i) personally delivered to
the designated agent of the Party being notified (listed as
follows), (ii) sent by express courier mail service, or (iii)
deposited in the United States Mail, postage prepaid and properly
addressed, or (iv) sent by telecopier.
(b) Mail to Buyer's designated agent shall be addressed to:
Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595
Indianapolis, IN 46206-1595
Attn: Vice President - Fuel Supply
with a copy to:
Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595
Indianapolis, IN 46206-1595
Attn: Senior Vice President
Secretary & General Counsel
Mail to Seller's designated agent shall be addressed to:
Marine Coal Sales Company
645 West Carmel Drive
Suite 190
Carmel, IN 46032
Attn: President
with copies to:
Triad Mining of Indiana, Inc.
401 Frederica Street
Building A, Suite 101
Owensboro, KY 42302
Attn: President
SECTION 15. WAIVERS AND REMEDIES.
(a) In any one or more instances, the failure of either Party to this
Agreement to insist upon strict performance of any provision of
this Agreement by the other, or to take advantage of any right or
rights provided by this Agreement, shall not be construed as a
waiver of any provision or the relinquishment of any right or
rights respecting any subsequent nonperformance of any provision.
The Agreement shall therefore continue and remain in full force and
effect.
(b) Each remedy specifically provided under this Agreement is
non-exclusive and shall be taken and construed as cumulative and in
addition to any other remedy provided herein or by law.
(c) No default (including but not limited to failure to meet or exceed
all quality specifications in Section 4 hereof) by either Party to
this Agreement in the performance of any covenants or obligations
under this Agreement, which except for this subsection would be the
legal basis for a right of rescission or termination of this
Agreement by the other party, shall give or result in such a right
unless and until the defaulting Party shall fail to correct or
commence actions necessary to correct such default within thirty
(30) days after written notice of claim of default is given to
defaulting Party by the Party claiming default.
SECTION 16. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement, or
the alleged breach thereof (whether or not arbitra-tion has been
specifically mentioned in any section of this Agree-ment), shall be settled
by arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Associa-tion and judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
Each Party shall choose one arbitrator and the third arbitrator shall be
chosen pursuant to the Rules of the American Arbitration Associa-tion. Each
Party agrees to pay the award of the arbitration within sixty (60) days of
receipt of the arbitrators' decision. It is the intent of the Parties that
arbitration be used to resolve disputes under this Agreement as quickly as
possible and, therefore, the arbitrators shall be requested to render a
decision within ninety (90) days of the date the dispute is referred to
arbitration. Each Party shall bear the cost of the arbitrator selected by
that Party and the Parties shall share equally the cost of the third
arbitra-tor. Discovery rules pursuant to the Federal Rules of Civil Proce-
dure shall be applicable to any arbitration under this Agreement.
SECTION 17. SUCCESSORS AND ASSIGNS.
This Agreement may not be assigned by either Seller or Buyer without the
written consent of the other Party, except as a pledge, assignment to secure
indebtedness, or other security arrangement to secure indebtedness incurred
for the purpose of or in connection with performance under this Agreement.
SECTION 18. HEADINGS NOT TO AFFECT CONSTRUCTION.
The headings to the respective sections and paragraphs of this Agreement are
inserted for convenience of reference and are neither to be taken to be any
part of the provisions hereof nor to control or affect the meaning,
construction or effect of the same.
SECTION 19. WRITTEN INSTRUMENT.
This written instrument contains the entire agreement between the Parties
and there are no other understandings or agreements, oral or written,
between said Parties. Any amendments to this Agreement shall be made in
writing and signed by both Parties. Purported amendments not in writing and
signed shall be null and void.
SECTION 20. LIMITATION OF LIABILITY OF MARINE.
Marine is a Party to this Agreement for the marketing, negotiating, and
administrative purposes stated herein and in the Sales Service Agreement
attached hereto as Exhibit "C". In no event shall Marine be held liable for
the performance or non-performance of any obligations relating to the
delivery or failure in the delivery of coal in the quantity required to be
supplied hereunder at any time during the term hereof.
SECTION 21. EXECUTION OF COUNTERPARTS.
This instrument may be executed in any number of counterparts, and all such
counterparts shall constitute but one and the same instrument.
SECTION 22. CONSTRUCTION OF AGREEMENT.
This instrument shall be governed by and construed in accordance with the
laws of the State of Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective corporate officers or
representatives, all as of the date December 7, 1994.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Ramon L. Humke
Ramon L. Humke
President and Chief Operating Officer
ATTEST:
/s/ Donald W. Knight
TRIAD MINING OF INDIANA, INC.
By /s/ Timothy Aull
Timothy Aull, President
ATTEST:
/s/ Richard E. Miller
MARINE COAL SALES COMPANY
By /s/ Larry F. Kaelin
Larry F. Kaelin, President
ATTEST:
/s/ Richard E. Miller
<PAGE>
EXHIBIT A
[Narrative Description of Map: Exhibit A to this Contract is a map
detailing the location of the coal reserves in Greene County, Indiana]
<PAGE>
EXHIBIT B
326 IAC 7-4-11 Morgan County sulfur dioxide emission limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 11. Indianapolis Power and Light (IPL) Pritchard Generating
Station shall comply with the sulfur dioxide emission limitations in pounds
per million Btu and other requirements as follows:
Emission
Facility Description Limitations
(1) Units 1 and 2 0.37 each
(2) Units 3, 4, 5, and 6 on and before
September 30, 1990 6.0 each
Unit 3 after September 30, 1990 0.37
Units 4, 5, and 6 after September 30,
1990 3.04 each
(3) As an exception to the emission limitations specified in subdivision
(2), after September 30, 1990, at any time in which IPL burns coal on Unit
3, sulfur dioxide emissions from Units 3, 4, 5, and 6 shall be limited to
two and fifty-seven hundredths (2.57) pounds per million Btu each.
(4) Prior to October 31, 1989, IPL shall modify the two (2) stacks
servings Units 3, 4, 5, and 6 to increase the height of each stack to at
least two hundred and eighty-one (281) feet above grade.
(5) Prior to February 28, 1989, IPL shall submit completed engineering
plans and drawings of flue gas conditioning systems for Units 4 and 5 to the
department. Prior to May 31, 1990, IPL shall complete installation of flue
gas conditioning systems for Units 4 and 5.
(6) After September 30, 1990, on a day for which Unit 3 does not burn
any coal, the limitations in subdivision (2) are in effect, and compliance
shall be determined as specified in 326 IAC 7-2-1(c).
(7) After September 30, 1990, on a day for which unit 3 burns any coal,
the limitations in subdivision (3) are in effect. As an exception to the
requirements of 326 IAC 7-2-1(c)(1) on a day for which Unit 3 burns any
coal, if the thirty (30) day rolling weighted average for any unit is above
two and fifty-seven hundredths (2.57) pounds per million Btu, then 326 IAC
7-2-1(c)(1) does not apply, and the daily average emission rate for that
unit for that day shall not exceed two and fifty-seven hundredths (2.57)
pounds per million Btu.
(8) After September 30, 1990, for the purposes of determining compliance
under 326 IAC 7-2-1(b), stack tests performed on Units 3, 4, 5, and 6 shall
demonstrate compliance with the most stringent set of limits in effect at
any time during the day prior to or during the test based on the Unit 3
operating status and fuel type as indicated by the log maintained pursuant
to subdivision (9).
<PAGE>
(9) After September 30, 1990, IPL shall maintain and make available to
the department upon request a log of the operating status and fuel type used
for Unit 3. In addition, in the quarterly report required by 326 IAC 7-2-
1(a), IPL shall submit to the department a daily summary indicating fuel
type for Unit 3, and, for days on which Unit 3 burned any coal and any
thirty (30) day rolling weighted average was greater than two and fifty-
seven hundredths (2.57) pounds per million Btu, IPL shall submit to the
department the daily average sulfur content, heat content, and sulfur
dioxide emission rate for Units 3, 4, 5, and 6.
(Air Pollution Control Board, 326 IAC 7-4-11;
filed Aug 28, 1990, 4:50 p.m.: 14 IR 76)
326 IAC 7-4-2 Marion County sulfur dioxide emission limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 2. The following sources and facilities located in Marion
County shall comply with the sulfur dioxide emission limitations in pounds
per million Btu (lbs./MMBtu) and pounds per hour (lbs./hr.), unless
otherwise specified, and other requirement:
(Material not relevant deleted)
(29) Indianapolis Power and Light Perry K shall comply with the sulfur
dioxide emission limitations in pounds per million Btu and other
requirements as follows:
Emission
Boiler Number Limitations
(A) 17 and 18 0.3
(B) 11, 12, 13, 14, 15, and 16 2.1
(C) As an alternative to the emission limitations in clause (B), sulfur
dioxide emissions from Boilers 11, 12, 13, 14, 15, and 16 may comply with
any one (1) of the sets of emission limitations in pounds per million Btu
as follows:
Emission
Boiler Number Limitations
(i) 13, 14, 15, and 16 0.0
11 and 12 4.4
(ii) 11, 12, 15, and 16 0.0
13 and 14 4.4
(iii) 11, 12, 13, and 14 0.0
15 and 16 4.4
(iv) 11, 12, 15, and 16 3.0
13 and 14 0.3
(v) 11 and 12 0.3
13, 14, 15, and 16 3.0
(D) The department or the Indianapolis Air Pollution Control Division
shall be notified prior to the reliance by Indianapolis Power and Light on
any one (1) of the sets of alternative emission limitations specified in
clause (C).
(E) A log of hourly operating status for each boiler shall be maintained
and made available to the department upon request. A daily summary
indicating which boilers were in service during the day shall be submitted
to the department quarterly. In addition, records of the daily average
sulfur content, heat content, and sulfur dioxide emission rate for each day
in which an alternative set of emission limitations specified in clause (C)
is used shall be submitted to the department quarterly.
(F) For the purposes of 326 IAC 7-2-1(c)(1), during thirty (30) day
periods in which Indianapolis Power and Light relies on more than one (1)
set of emission limitations specified in clauses (B) through (C), a separate
thirty (30) day rolling weighted average for each set of limitations shall
be determined. Each thirty (30) day rolling weighted average shall be based
on data from the previous thirty (30) operational days within the last
ninety (90) days for that set of limitations. If Indianapolis Power and
Light does not operate thirty (30) days under any one (1) set of limitations
within the last ninety (90) days, the rolling weighted average shall be
based on all operational days within the last ninety (90) days for that set
of limitations.
(G) Boilers 11 through 16 shall be limited to six and zero-tenths (6.0)
pounds per million Btu each until Boilers 11 through 16 achieve compliance
with the sulfur dioxide emission limitations specified in clauses (B)
through (C). Compliance with the emission limitations specified in clauses
(B) through (C) shall be achieved according to the following schedule:
(i) Complete engineering analysis of modifications by April 2,
1988.
(ii) Complete testing and design of modifications and place orders
for necessary equipment by May 2, 1989.
(iii) Complete installation of necessary equipment and achieve
compliance with emission limitations specified in clauses (B)
through (C) by June 2, 1990.
<PAGE>
Exhibit C
MARKETING AND SALES SERVICE AGREEMENT
THIS AGREEMENT entered into as of this 8th day of November, 1990 is
between MARINE COAL SALES COMPANY ("Marine"), an Indiana partnership, and
TRIAD MINING OF INDIANA, INC. ("Triad"), an Indiana corporation.
WHEREAS, Marine and Triad had entered into a Coal Mining and
Marketing Agreement dated as of November 8, 1990 which provides for the
execution of this Marketing and Sales Service Agreement between the same
parties; and
WHEREAS, the Coal Mining and Marketing Agreement obligates Triad to
construct and operate a coal mine near Switz City, Indiana utilizing coal
reserves from Ayrshire Land Company (the "Switz City Mine").
NOW, THEREFORE, in consideration of the covenants and promises set
forth herein, the parties agree as follows:
1. Term. The term of this Agreement shall commence upon the
execution hereof and shall continue until the later of the following:
(a) The permanent cessation of the production of coal from
the Switz City Mine; or
(b) The expiration of the initial term of the coal supply
agreement with Indianapolis Power & Light Company described in
Paragraph 7 of the Coal Mining and Marketing Agreement and further
described in Paragraph 9 of this Agreement.
2. Services to be Provided by Marine. With respect to coal to
be produced and sold from the mines described in Paragraph 1 above
(hereinafter called the "Subject Mines"), Marine shall provide such of the
following services as may be requested by Triad:
(a) Provide market research to determine markets for the
coal to be produced.
(b) Identify potential markets for such coal.
(c) Make presentations to potential customers for such coal.
(d) Conduct negotiations with customers; close and document
sales to customers; investigate creditworthiness.
(e) Obtain estimates and orders for coal from customers.
(f) Coordinate transportation arrangements with carriers.
(g) Send required shipping notices to customers.
(h) Handle customer complaints about quantity or quality.
(i) Prepare and send invoices and statements to customers.
(j) Calculate all price adjustments - both escalation and
quality adjustments; negotiate agreement on price revisions, if
required.
(k) Collect amounts due by customers.*
(l) Remit to Triad and, if applicable, to the carrier,
amounts due them.*
(m) Remit to appropriate governmental agency any applicable
sales, use or other taxes imposed on the sale of the coal.*
(n) Handle Force Majeure notices for Triad - issuance and
receipt.
(o) Assist Triad in obtaining replacement or substitute coal
if required.
* Not applicable to Coal Supply Agreement between
Indianapolis Power & Light Company ("IP&L") and Triad because of
provisions of Paragraph 7 of Coal Mining and Marketing Agreement
referenced above.
3. Compensation to Marine. In consideration of the services to
be provided by Marine hereunder and in further consideration of the
assignment of interests made by Marine to Triad pursuant to the Coal Mining
and Marketing Agreement, it is agreed that Marine shall receive the
following compensation for coal produced from the Subject Mines:
(a) A fee of 2.2% of gross realization on all coal sold to
"IP&L" pursuant to the Coal Supply Agreement described in Paragraph
2(c) of the Coal Mining and Marketing Agreement (the "IP&L Coal
Supply Agreement") during the initial term thereof.
(b) A fee of 2.2% of gross realization on all coal sold to
AMAX Coal Sales Company pursuant to the Option to Purchase Coal
Agreement described in Paragraph 2(b) of the Coal Mining and
Marketing Agreement during the five year term thereof.
(c) A fee of 2.2% of gross realization in the form of a
reduction in the price paid to Triad for coal purchased by Marine
from Triad pursuant to the provisions of Paragraph 5 of the Coal
Mining and Marketing Agreement, plus 50% of the average monthly
gross realization in excess of the price then in effect under the
IP&L Coal Supply Agreement.
(d) A fee of 2.2% of gross realization plus 20% of gross
realization in excess of the price then in effect under the IP&L
Coal Supply Agreement for all quantities of coal sold in excess of
400,000 tons per year.
(e) A fee of 2.2% of gross realization plus 20% of gross
realization in excess of the price then in effect under the IP&L
Coal Supply Agreement for all quantities of coal sold commencing
after the expiration of the periods involved with the arrangements
described in subparagraphs (b) and (c) of this Paragraph 3.
The term "gross realization" shall mean the gross proceeds received for coal
sold to a customer f.o.b. mine without deduction of the fee payable to
Marine but exclusive of any sales, use or other taxes based upon the sale
or use of the coal.
4. Coal Supply Agreements. In the case of coal sold to customers
falling into the categories set forth in subsections (d) and (e) of Section
3 above, Marine will consult with Triad on terms for sales of coal to such
customers. All such sales shall be made on terms acceptable to Triad in its
sole and absolute discretion.
5. Indemnification.
(a) Triad agrees to indemnify and save Marine harmless from
and against any and all liabilities, losses, claims, demands,
expenses or damages which are caused by any of the following: (i)
any willful or negligent act or omission of Triad in the operation
of the Subject Mines; (ii) any failure by Triad to comply with the
terms and conditions of this Agreement or the Coal Mining and
Marketing Agreement; (iii) any failure to comply with applicable
laws and regulations relating hereto. Triad agrees that it will
defend the interests of Marine in any claim or lawsuit covered by
this indemnification provision, including, but not limited to,
payment of all attorney fees, court costs, costs of settlements and
satisfaction of any judgments entered.
(b) Marine agrees to indemnify and save Triad harmless from
and against any and all liabilities, losses, claims, demands,
expenses or damages which are caused by any of the following: (i)
any willful or negligent act or omission of Marine in the sale of
coal produced from the Subject Mines; (ii) any failure by Marine to
comply with the terms and conditions of this Agreement or the Coal
Mining and Marketing Agreement; (iii) any failure to comply with
applicable laws and regulations relating hereto. Marine agrees
that it will defend the interests of Triad in any claim or lawsuit
covered by this indemnification provision, including, but not
limited to, payment of all attorney fees, court costs, costs of
settlements and satisfaction of any judgments entered.
6. Default of Triad.
(a) Events of Default. The following shall constitute
events of default by Triad hereunder:
(i) Failure to perform any material obligation
imposed on Triad set forth in the Coal Mining and Marketing
Agreement, in this Agreement, or in the Agreements described
in Paragraph 2 of the Coal Mining and Marketing Agreement.
(ii) The bankruptcy or insolvency of Triad or its
cessation of business as a going concern.
(b) Remedies for Default. Subject to the notice of default
and the cure period provisions of Paragraph 9 hereof, Marine shall
have the following remedies for an event of default committed by
Triad:
(i) To recover damages under applicable legal
theories.
(ii) To obtain equitable relief under applicable legal
theories.
7. Default of Marine.
(a) Events of Default. The following shall constitute
events of default by Marine hereunder:
(i) Failure to perform any material obligation
imposed on Marine set forth in the Coal Mining and Marketing
Agreement or in this Agreement.
(ii) Failure to remit when due any funds received
from customers which are due to Triad or any third party.
(iii) The bankruptcy or insolvency of Marine or its
cessation of business as a going concern.
(b) Remedies for Default. Subject to notice of default and
the cure period provisions of Paragraph 9 hereof, Triad shall have
the following remedies for an event of default committed by Marine:
(i) To recover damages under applicable legal
theories.
(ii) To obtain equitable relief under applicable legal
theories.
8. Notices and Cure Provisions.
(a) Either party shall be entitled to exercise the remedies
for default available to it as set forth in Paragraph 7 and 8
hereof if the party alleged to be in default (the "Defaulting
Party") by the other party (the "Non-Defaulting Party") fails to
cure any such default within a period of thirty (30) days (the
"Cure Period") (except that the Cure Period for Paragraph 7(a)(ii)
shall be ten (10) days) after written notice of claim of such
default has been sent by the Non-Defaulting Party to the Defaulting
Party unless such default cannot reasonably be cured within the
Cure Period and the Defaulting Party can demonstrate that steps
have been taken to cure such default within a reasonable period of
time and the Defaulting Party proceeds with due diligence to cure
the default within a reasonable period of time.
9. Additional Agreement with IP&L. If the parties are successful
in negotiating an additional coal supply agreement with IP&L to be supplied
from the Petersburg Mine as described in Paragraph 8 of the Coal Mining and
Marketing Agreement, it is understood that Triad shall own and operate the
Petersburg Mine and that Marine shall be the exclusive sales agent for the
coal produced and sold from such Mine to IP&L for the initial terms of the
coal supply agreement with IP&L. The parties shall negotiate a Marketing
and Sales Service Agreement for the coal sold to IP&L from the Petersburg
Mine upon reasonable terms taking into account the sales price of the coal
and the costs of mining, preparing and delivering the coal to IP&L. If the
parties mutually agree, such Marketing and Sales Service Agreement may cover
other coal produced at the Petersburg Mine.
10. Assignment. This Agreement is personal to the parties hereto
and to the principals of such parties, and neither party shall transfer or
assign this Agreement to any third party without the prior written consent
of the other party.
11. Notices. All notices hereunder shall be in writing and shall
be given either by personal delivery or by the U.S. mails, courier service,
telex, telecopier, or any similar means, properly addressed to the Parties
as follows:
If notice is to Marine, addressed as follows:
Richard E. Miller, President
Marine Coal Sales Company
645 W. Carmel Drive - Suite 190
Carmel, Indiana 46032
If notice is to Triad, addressed as follows:
Joe M. Aull, President
Triad Mining of Indiana, Inc.
5000 Back Square Drive
Owensboro, Kentucky 42301
Either party may, by written notice to the other, change the person or
address to which notice (including copies thereof to other persons) are to
be sent.
12. Waivers. The failure of a party hereto to insist upon any one
or more instances of strict performance of any provision hereof or to take
advantage of any rights hereunder shall not be construed as a waiver of any
such provision or the relinquishment of any such rights. To be effective
any waiver must be in writing and must set forth clearly the right being
waived.
13. Arbitration. Except for the provisions hereof relating to
Events of Default and remedies therefor which shall not be subject to
arbitration, all other controversies or claims arising out of or relating
to this Agreement which are not resolved by negotiations between the parties
hereto shall be settled by arbitration in accordance with Commercial
Arbitration Rules of the American Arbitration Association, and judgment may
be entered on the award in any court having jurisdiction. Either party may
determine, in its sole discretion, that negotiations or continued
negotiations, would be unavailing.
14. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Indiana.
15. Headings. The headings in this Agreement are for convenience
only, and shall not be considered a part of, or used in the interpretation
of, this Agreement.
16. Construction. No understanding or agreements not expressly
stated herein shall be binding on the parties in the construction or
fulfillment hereof unless such understandings, or agreements are reduced to
writing and signed by the respective parties.
17. Amendments. No waiver, alteration or modification of any of
the provisions, or termination, of this Agreement shall be effective unless
in writing and fully executed by the party to be bound thereby.
18. Entire Agreement. This Agreement contains the entire
Agreement between the parties with respect to the subject matter hereof.
All previous and collateral agreements, representations, warranties,
promises and conditions of sale are superseded by this Agreement. Any
representation, promise or condition not incorporated in this Agreement
shall not be binding on either party.
19. Execution of Counterparts. This Agreement may be executed in
any number of counterparts, and all such counterparts shall constitute but
one and the same Agreement.
20. Severability. All agreements and covenants herein contained
are severable, and in the event any of them shall be held to be invalid by
any court having jurisdiction, all remaining agreements and covenants shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized respective corporate officers or
representatives, all as of the date first above written.
MARINE COAL SALES COMPANY,
a Partnership
ATTEST: By Marine Coal Sales, Inc.,
General Partner
/s/ Judy K. Van Abeele By: /s/Richard E. Miller
Secretary President
TRIAD MINING OF INDIANA, INC.
ATTEST:
/s/ Michael W. Howard By: /s/ Joseph M. Aull
<PAGE>
CONSENT TO SUBSTITUTION OF PARTIES
WHEREAS, the undersigned entered into a certain Coal Marketing and
Sales Service Agreement dated November 8, 1990, (the "Agreement") with
Marine Coal Sales Company, an Indiana partnership ("MCSC-1"); and
WHEREAS, Marine Coal Sales Company, a Delaware corporation ("MCSC-
2") has acquired all rights, title and interest of MCSC-1 and has assumed
the obligation to perform all executory agreements to which MCSC-1 is a
party; and
WHEREAS, MCSC-1 was dissolved as of January 12, 1994;
NOW, THEREFORE, the undersigned hereby consents to the substitution
of MCSC-2 for MCSC-1 as a party to the Agreement as of January 12, 1994.
IN WITNESS WHEREOF, the undersigned has caused this Consent to
Substitution of Parties to be executed to be effective as of January 12,
1994.
TRIAD MINING OF INDIANA, INC.
By: /s/ Timothy R. Aull
Title: /s/ President
<PAGE>
EXHIBIT D
[Narrative Description of Exhibit D: Exhibit D to this Contract is a
flowchart showing the process the coal to be delivered under the Contract
must complete.]
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000050217
<NAME> INDIANAPOLIS POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,737,528
<OTHER-PROPERTY-AND-INVEST> 4,123
<TOTAL-CURRENT-ASSETS> 150,214
<TOTAL-DEFERRED-CHARGES> 129,946
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,021,811
<COMMON> 324,537
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 406,260
<TOTAL-COMMON-STOCKHOLDERS-EQ> 732,160
0
51,898
<LONG-TERM-DEBT-NET> 654,128
<SHORT-TERM-NOTES> 30,701
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 350
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 552,574
<TOT-CAPITALIZATION-AND-LIAB> 2,021,811
<GROSS-OPERATING-REVENUE> 175,518
<INCOME-TAX-EXPENSE> 15,588
<OTHER-OPERATING-EXPENSES> 121,652
<TOTAL-OPERATING-EXPENSES> 137,240
<OPERATING-INCOME-LOSS> 38,278
<OTHER-INCOME-NET> 857
<INCOME-BEFORE-INTEREST-EXPEN> 39,135
<TOTAL-INTEREST-EXPENSE> 11,523
<NET-INCOME> 27,612
795
<EARNINGS-AVAILABLE-FOR-COMM> 26,817
<COMMON-STOCK-DIVIDENDS> 20,420
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 70,486
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
