CERTAIN
INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL
AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY
DISCLOSED. THE OMITTED PORTIONS OF THIS DOCUMENT ARE INDICATED BY [***].


 


	
      

  	
   

  
	
   

  	
  New
  Coal Supply

  Agreement

  3⁄4

  Stanwell Corporation Limited

  Coronado Curragh Pty Ltd

  3⁄4

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  






 


	
  Level 22 Waterfront Place 1 Eagle Street

  Brisbane Qld 4000 Australia DX 102 Brisbane

  T +61 7 3119 6000 F +61 7 3119 1000

  minterellison.com     

  	
  

  
















      










      





	
  Table
  of Contents 

  
	
  Details

  	
  3

  
	
  Recitals

  	
  3

  
	
  1

  	
  Interpretation

  	
  5

  
	
  2

  	
  Agreement
  to Buy and Sell/Total Contract Tonnage

  	
  9

  
	
  3

  	
  Source
  of Coal/Substitute Coal

  	
  10

  
	
  4

  	
  Annual
  Contract Tonnage, Rates of Delivery and Notification of Requirement

  	
  15

  
	
  5

  	
  Coal
  Option

  	
  17

  
	
  6

  	
  Delivery
  Facilities/Title/Risk

  	
  18

  
	
  7

  	
  Quality
  of Coal

  	
  19

  
	
  8

  	
  Quantity
  and Quality Determination

  	
  20

  
	
  9

  	
  Price
  of Coal

  	
  22

  
	
  10

  	
  Variation
  for Quality

  	
  23

  
	
  11

  	
  Payment

  	
  23

  
	
  12

  	
  Interruption
  to Supply

  	
  27

  
	
  13

  	
  Interruption
  to Taking of Deliveries

  	
  31

  
	
  14

  	
  Sales
  by Coronado to other Purchasers

  	
  35

  
	
  15

  	
  Marketable
  Reserves

  	
  35

  
	
  16

  	
  Request
  by Stanwell for Postponement of Deliveries

  	
  35

  
	
  17

  	
  Dispute
  Resolution

  	
  36

  
	
  18

  	
  Assignment
  and Change of Control

  	
  38

  
	
  19

  	
  Representations,
  Warranties and Undertakings

  	
  40

  
	
  20

  	
  Confidentiality

  	
  41

  
	
  21

  	
  Notices
  and Communications

  	
  42

  
	
  22

  	
  Miscellaneous

  	
  42

  
	
  23

  	
  Costs

  	
  44

  
	
  24

  	
  Counterparts

  	
  44

  
	
  25

  	
  Triggering
  Events/Termination

  	
  44

  
	
  Schedule 1
  – SRA Value Schedule

  	
  48

  
	
  Schedule 2
  – Quality Assurance

  	
  62

  
	
  Schedule 3
  – Rail Performance Levels

  	
  63

  
	 	 	
   

  
	
   

  	
   

  	
   

  










 Page | 2 










      




Details


	
  Date

  	
  12 July 2019

  






Parties


	
  Name

  	
  Stanwell
  Corporation Limited

  
	
  ABN

  	
  37 078
  848 674

  
	
  Short form name

  	
  Stanwell

  
	
  Notice details

  	
  Level 2,
  180 Ann Street, Brisbane QLD 4000 

  Attention:
  Company Secretary 

  
	
   

  	
  Email:
  karen.buckley@stanwell.com 

  
	
   

  	
  Copy to: General Counsel

  
	
   

  	
  Email:
  philip.ware@stanwell.com

  
	
   

  	
   

  
	
  Name

  	
  Coronado Curragh Pty Ltd

  
	
  ABN

  	
  90 009 362 565

  
	
  Short form name

  	
  Coronado 

  
	
  Notice
  details

  	
  Level 31,
  345 Queen Street, Brisbane QLD 4000

  Attention:
  Garold Spindler, Chief Executive Officer 

  
	
   

  	
  Email:
  gspindler@coronadocoal.com     

  






 


Recitals 


	
  A          The securing of a stable
  supply of Coal for the Supply Term is of fundamental importance to Stanwell.
  The securing of a stable demand for its coal production is of fundamental
  importance to Coronado.  Accordingly, Coronado has agreed to sell and deliver
  and Stanwell has agreed to accept and purchase Coal in accordance with the
  terms and conditions of this Agreement, which has been executed as a deed.

  
	
  B          Under the terms of the ACSA and the
  "Reserved Area Deed of Consent" executed by the parties on 6
  November 2009, the Reserved Area within the Curragh North Mining Lease (as
  those terms are defined in the ACSA) was reserved for Stanwell and Coronado
  was not entitled to mine the Reserved Area.

  
	
  C           Under the "Amended and Restated
  Reversion Deed" executed by the parties on 6 November 2009, Stanwell was
  entitled to acquire the Curragh North Mining Lease and certain related assets
  from Coronado, and Coronado was required to transfer the Curragh North Mining
  Lease and certain related assets to Stanwell, for nominal consideration, and
  Stanwell also held the right to access or acquire certain other coal
  production related assets and infrastructure.

  






 



 

 





 Page | 3 










      




 


	
  D          The
  parties agreed in the Deed (and subject to the terms of the Deed):

  (i)          that Stanwell permits Coronado to mine
  the Reserved Area;

  (ii)         that Stanwell will not exercise any of its
  rights, or assert any interests, in or in relation to the Curragh North
  Mining Lease;

  (iii)        to terminate the "Reversion
  Deed" and the "Reserved Area Deed of Consent";

  (iv)        that Coronado will supply coal to
  Stanwell under this Agreement from the expiry or termination of the ACSA; and

  (v)         the Derived Amount and the Cash in Lieu  payable by Coronado to Stanwell under this
  Agreement are payable as consideration for the termination of the Reversion
  Deed and deletion of clause 2.9 of the ACSA. 

  







 

 





 Page | 4 










      




It is
agreed  as
follows.


1.    Interpretation


1.1    Definitions  


In this Agreement:


"Act" means the Mineral Resources Act
1989 (Qld). 


"ACSA"  means the Amended
Coal Supply Agreement dated 6 November 2009 between Stanwell and Coronado,
as amended by: 


(a)    the ACSA
Deed of Amendment entered into between Stanwell and Coronado on or about
21 November 2016;


(b)    the Deed;
and 


(c)    the
letter from Coronado to Stanwell dated 20 September 2018.


"ACSA Final Delivery Date"  means the date that is the
"Final Delivery Date" under the ACSA.


"Advance Payment"
has the meaning given in Clause 16.


"Annual Contract Tonnage"
means for each Year during the Supply Term, the quantity of Coal in Tonnes
Equivalent nominated by Stanwell in accordance with Clause 4.1(a)(i).


"Authorised Representative"
means, in respect of each Party, the authorised representative notified by that
Party to the other Party from time to time.


"Business Day" means
a day other than Saturday, Sunday or public holiday in Brisbane, Queensland.


"Cash in Lieu" has
the meaning given in the SRA Value Schedule. 


"Cash Value of the SRA"
has the meaning given in the SRA Value Schedule. 


"Change of Control"
means, in relation to Coronado, a change in the persons (including a fund, a
trust or a corporation as defined in the Corporations Act) who are individually
or together able to Control Coronado.


"Coal" means coal
from the Tenements or Substitute Coal that meets the requirements of
Clause 7.


"Commencement Date"
means 14 August 2018.


"Contract Price per GJ"
has the meaning given in the SRA Value Schedule. 


"Contract Price per Tonne
Equivalent" has the meaning given in the SRA Value Schedule. 


"Control"
has the meaning given in section 50AA of the Corporations Act, and in addition:



(a)    in the
case of a corporation, includes the power (whether it is legally enforceable or
not) to control, whether directly or indirectly, the composition of the board
of directors of that corporation, the voting rights of the majority of the
voting shares of the corporation or the management of the affairs of the
corporation; and


(b)    in the
case of a trust, includes the power (whether it is legally enforceable or not)
to control, whether directly or indirectly, the appointment or removal of the
trustee of the trust, the composition of the board of directors of the trustee,
the voting rights of the majority of the securities of the trust or the
management of the affairs of the trust or the business operated by the trust,


and Controlled  has a
corresponding meaning, where a reference to the Corporations Act in this
definition is to that Act as in force at 14 August 2018.


"Coronado Holdings" means:



 

 






 Page | 5 










      




(a)    until
the Permitted Reorganisation, Coronado Group LLC; and


(b)    on and
from the Permitted Reorganisation, Coronado Global Resources Inc. (formerly
Coronado Group Holdco LLC).  


"Coronado's Carrier"
means such person who from time to time contracts with Coronado for the
transport of Substitute Coal.


"Corporations Act"
means the Corporations Act 2001 (Cth).


"Curragh Mine"
means Coronado's coal mine and coal mining facilities located within the
Tenements and Coronado's processing facilities located within or in the
vicinity of those Tenements.


"Deed" means the
Curragh Mine – New Coal Supply Deed between Coronado and Stanwell dated 14
August 2018.


"Derived Amount"
has the meaning given in the SRA Value Schedule.


"Final
Delivery Date" means the earlier of:


(a)    the last
day of the Month for which the Outstanding Value of the SRA is first determined
as equalling zero; and


(b)    31
December 2038.


"Government Body"
means any government, governmental or semi-government or judicial entity, any
body politic, any ministry, inspectorate, official, public or statutory person
or other statutory or administrative entity, domestic or foreign, federal,
state or local.


"GST" means any
tax, levy, charge or impost implemented under the GST Act or an Act of the
Parliament of the Commonwealth of Australia substantially in the form of, or
which has a similar effect to, the GST Act.


"GST Act" means the
Act entitled A New Tax System (Goods and Services Tax) Act 1999 (Cth)
or any Act passed in substitution for or replacement of that Act and
expressions and words defined in that Act and used in this Agreement have the
meanings defined in that Act.


"Holding Company"
has the meaning given that term in section 9 of the Corporations Act.


"Invoice Price" has the meaning given in
Clause 9(b).


"JORC Code" means
the Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves from time to time.


"Loading Plant"
means the loading plant located at the mine at which a delivery of coal is to
be made.


"Marketable Reserves Statement" means:


(a)    unless
paragraph (b) applies, a statement given in accordance with the JORC Code
showing, amongst other things, the Mineral Resources and Ore Reserves (as those
terms are defined in the JORC Code) of coal within the Tenements; and


(b)    if a
Holding Company of Coronado is not listed on a recognised stock exchange, an
annual reserves statement for the Tenements prepared by suitably qualified
experts equivalent to a JORC Code reserves statement.


“Medium Term Arrangement"
means:


(a)    any contractual
arrangement for the sale and purchase of coal by Coronado with a third party,
or by Stanwell with a third party, as applicable, having a term of not less
than three Months and not more than one Year; and


(b)    any such
arrangement for a term of not more than one Year which contains an option for
Stanwell or Coronado to extend that term, provided that such option is not
exercised after the relevant interruption to supply or to taking of deliveries,
as applicable, ceases without the prior consent of Stanwell (where Coronado is
the party to the agreement) or of Coronado (where Stanwell is the party to the
agreement).



 

 






 Page | 6 










      




"Mining
Lease"  means a mining lease granted under the Act.


"Month" means a calendar month.


"Monthly Tonnages"
has the meaning given in Clauses 4.2(a) and 4.2(b).


"Monthly Tonnage (SRA Value
Schedule)" has the meaning given in the SRA Value Schedule. 


"Netback Amount"
for each Month during the Supply Term, has the meaning given in Clause 11.2.


"Netback Price" has
the meaning given in the SRA Value Schedule. 


"Nominal Net Weight"
for a train means 97.5% of the aggregate of the weight of coal capable of being
carried in the wagons in that train, for each particular class of wagon as most
recently advised by Stanwell's Carrier.


"Nominated Contract Price
per GJ" has the meaning given in the SRA Value Schedule. 


"Outstanding Value of the
SRA" has the meaning given in the SRA Value Schedule. 


"Party" means
Coronado or Stanwell.


"Permitted Reorganisation"
means the transfer by Coronado Group LLC of all of its assets (other than its
interests in Coronado Global Resources Inc. (formerly Coronado Group Holdco
LLC)) to Coronado Global Resources Inc. (formerly Coronado Group Holdco LLC).


"Power Station"
means:


(a)    the
Stanwell Power Station; or


(b)    any other
power station:


(i)    owned by
Stanwell which Stanwell may nominate to receive and use Coal; and


(ii)    where
the Coal has been test burned by Stanwell and determined by Stanwell to be
suitable for use,


depending in each case upon where
the Coal is intended to be used.


"Project Documents"
means this Agreement, the Deed and the ACSA. 


"Quarter" means any
period of 3 consecutive Months beginning on January 1, April 1, July 1 and
October 1 of any Year.


"Quarterly Tonnages"
has the meaning given in Clause 4.1(a).


"Rail Energy Payment"
has the meaning given in Clause 11.5.


"Related Body Corporate"
has the meaning given to that term in section 50 of the Corporations Act .


“Shareholding Minister” has
the meaning given to that term in the Government Owned Corporations Act 1993
(Qld). 


"SRA
Value Schedule"  means the model calculations schedule at
Schedule 1 to this Agreement which sets out the information and formulae
required to determine:


(a)    certain
amounts to be paid under this Agreement; and 


(b)    the Final
Delivery Date.


"Standard Coal Quality"
means all of the Gross Calorific Value, Ash and Total Moisture specifications
as set out in Clause 7.1(a).


"Stanwell Power Station"
means the existing coal fired power station operated by Stanwell near Gracemere
in the State of Queensland.


"Stanwell's Carrier"
means such person who from time to time contracts with Stanwell for the
transport of Coal.



 

 






 Page | 7 










      




"Substitute
Coal" has the meaning given in Clause 3.2.


"Supply
Commencement Date" means
the earlier of:


(a)    the day
after the ACSA Final Delivery Date;


(b)    if the
ACSA is terminated prior to the ACSA Final Delivery Date, the day after the
date that the ACSA is terminated; and


(c)    1 January
2029. 


"Supply Term" means
the period from the Supply Commencement Date until the Final Delivery Date. 


"Tenements" means
Mining Lease Numbers 1878, 1990, 80010, 80011, 80012, 80086, 80110, 80112,
80123, 80171, 700006, 700007, 700008 and 700009 and Mineral Development Licence
Numbers 162, 328 and 329 and any renewals, extensions and amendments thereof
and any tenements issued to Coronado in place thereof or over any part of the
area covered by the foregoing tenements.


"Termination Payment"
has the meaning given in the SRA Value Schedule. 


"Tonne" means a
metric ton of 1,000 kg.  For the purpose of conversion, a metric ton equals
0.984206 long tons and a long ton equals 1.016047 metric tons.


"Tonne Equivalent"
means a quantity of Coal with an as received Gross Calorific Value of 25.6
gigajoules, determined by the sampling and analysis techniques provided in this
Agreement.


"Tonnes Delivered" for each Month during the Supply Term, has the meaning given in Clause 11.2. 


"Trade Certified" means that the
Weighbridge is licensed under the National Measurement Act 1960 (Cth).


"Value of the SRA"
has the meaning given in the SRA Value Schedule. 


"Weekly Tonnages"
has the meaning given in Clauses 4.3(a) to 4.3(c) inclusive.


"Weighbridge" means
the weighbridge at or near the Loading Plant or other weighbridge agreed in
writing by the Parties, with each Party acting reasonably.


"Year"
means a calendar year commencing on January 1 and ending on December 31.


1.2    Interpretation



In this Agreement:


(a)    All
payments required to be made under this Agreement shall be made in Australian
Dollars and Cents.


(b)    References
to "A$" or "$" shall be a reference to Australian dollars
and references to "US$" shall be a reference to United States
dollars.


(c)    Each
provision shall be deemed to be separate and severable from each other
provision.  If any provision is determined to be invalid or unenforceable, such
determination and the consequential severance (if any) shall not invalidate the
rest of this Agreement which shall remain in full force and effect as if such
provision had not been made a part thereof unless the effect of the severance
of any such provision would be to frustrate this Agreement in which case the
legal principles of frustration of contract shall apply.   


(d)    Reference
to a Party includes that Party's successors and permitted assigns and
references to Coronado or Stanwell shall include their successors and permitted
assigns.


(e)    Reference
to Australian or British Standards shall unless otherwise agreed by the Parties
be reference to such Standards as at the date hereof.



 

 






 Page | 8 










      




(f)    Save
as expressly provided in this Agreement, reference to any statute shall include
reference to any modification thereof or any statutory provision substituted
therefore and any regulation, rule, by-law, Order in Council or Proclamation
made thereunder or pursuant thereto.


(g)    Percentages
shall where the context permits, in relation to physical characteristics of
coal, refer to percentages by mass.


(h)    A
reference to a person includes a corporation of any type, and any other legal
structure, as well as a natural person.


(i)    Where a
word or phrase is given a particular meaning, other parts of speech or
grammatical forms of that word or phrase have corresponding meanings.


(j)    A
reference to a law, document, deed or agreement, including this Agreement,
includes a reference to that law, document, deed or agreement as amended,
novated, supplemented, varied or replaced from time to time.


(k)    The
terms "include" and "including" shall be deemed to be
followed by the words "without limitation".


(l)    If a
Party is required to use "its best endeavours" under this Agreement,
that Party is entitled to take into consideration commercial considerations
(including time and cost) and whether the obligation can be achieved and any
such obligation shall be so interpreted.


(m)    A
reference to the "date of this Agreement" is a reference to the date
this document was executed by the Parties.


2.    Agreement to Buy and Sell/Total
Contract Tonnage


2.1    New CSA


This Agreement is the "full form New CSA"
described in clause 3.2(a) of the Deed.  This Agreement supersedes and replaces
the Binding Terms Sheet (as defined in the Deed). 


2.2    Agreement


Commencing on the Supply Commencement Date, Coronado shall
sell and deliver to Stanwell, and Stanwell shall purchase and accept from
Coronado, Coal in the quantities and on the terms and conditions provided in
this Agreement.


2.3    Term


(a)    This
Agreement will have effect from the Commencement Date, and unless this
Agreement is terminated earlier in accordance with its terms this Agreement
ends on the date occurring after the Final Delivery Date when each Party has
complied with its obligations and satisfied all of its liabilities under this
Agreement.


(b)    From four
Years prior to the expected Final Delivery Date, either Party may request the
other Party to discuss the possibility of extending this Agreement to cover
additional tonnages of Coal.  In such case the Parties will discuss such
possibility but, subject to Clause 2.3(c)(ii) neither Party shall be
obliged to agree to any such extension.


(c)    If
as at 31 December 2038, the Outstanding Value of the SRA is greater than zero,
then:


(i)    Coronado
shall pay to Stanwell the Cash Value of the SRA as at 31 December 2038 by no
later than 31 January 2039; and


(ii)    if
requested by Stanwell, Coronado will use its best endeavours to supply Coal, at
a price to be agreed between Coronado and Stanwell.



 

 






 Page | 9 










      




2.4    Non-exclusive
Supply Agreement


Without derogating from the obligations of Coronado and
Stanwell under this Agreement, Coronado acknowledges and agrees that:


(a)    it is not
the exclusive supplier of coal to Stanwell;


(b)    Stanwell
is not obliged to purchase all of its coal requirements from Coronado; and 


(c)    Stanwell
may seek and obtain supplies of coal from third party suppliers of coal.


3.    Source
of Coal/Substitute Coal


3.1    Source of Coal


(a)    Coal
supplied under this Agreement shall be from the Tenements, except as provided
in Clause 3.1(b).


(b)    Coronado
shall have the right to deliver Substitute Coal, and Stanwell shall accept
delivery of that Substitute Coal, subject to Clauses 3.3 to 3.8, inclusive. 
Stanwell's sole obligations to accept delivery of that Substitute Coal are set
out in this Clause 3.


(c)    Except as
otherwise expressly provided in this Agreement, the provisions of this
Agreement shall apply to that Substitute Coal as if it were coal produced from
the Tenements.


3.2    Substitute
Coal


(a)    "Substitute Coal"
means coal produced from sources other than the Tenements and either:


(i)    if the
coal is for use at the Power Station: 


(A)    the coal
meets the provisions of Clause 7 and has been previously utilised at the Power
Station; or


(B)    if the
coal has not been previously utilised at the Power Station, then coal that
Stanwell has test burned and determined is suitable for use at the Power
Station in accordance with Clause 3.2(c); or


(ii)    if the
coal is not for use at the Power Station, then coal that meets the provisions
of Clause 7.


(b)    Coronado
may at any time request Stanwell to provide a list of coal that has been
previously utilised at the Power Station, including its source and quality and
Stanwell shall provide that information within 7 days of receiving that
request.


(c)    Where
coal which has not been previously utilised at the Power Station is intended
for use at the Power Station, Coronado may request Stanwell to test burn the
coal and Stanwell shall do so and shall inform Coronado of its determination,
with reasons within 60 days of receiving that request.  Stanwell shall act
reasonably and in good faith in the test burn and in determining the
suitability of such coal.  Such trial coal shall be purchased and transported
on the same basis as Coal is purchased and transported under this Agreement.


3.3    Transportation
of Substitute Coal


Clauses 3.4 to 3.8, inclusive,
shall apply in relation to the transport of Substitute Coal that is not
delivered at the Curragh Mine Loading Plant.


3.4    Transportation
and Rail Rates of Substitute Coal from Designated Mines


(a)    "Designated
Mine(s)" means any mine other than the Curragh Mine for which Stanwell
at the relevant time has rail freight arrangements in place for transport of
coal from that mine to:



 

 






 Page | 10 










      




(i)    the
Power Station; and


(ii)    such
other destination as Stanwell advises Coronado that Coal delivered under this
Agreement is to be transported.  


(b)    Within 7
days of receiving a request from Coronado, Stanwell shall inform Coronado of
all Designated Mines.


(c)    Stanwell
shall use its best endeavours to achieve rail freight rates for the transport
of coal from Designated Mines to the Power Station, or if applicable, to such
other destination as Stanwell advises Coronado that Coal delivered under this
Agreement is to be transported, that are at least equivalent to or better than
market rates at the time and are based on utilisation equivalent to Stanwell's
planned total coal consumption for the Year concerned.


(d)    For
any proposed delivery of Substitute Coal from a Designated Mine, Coronado may
request Stanwell to inform it:  


(i)    whether
Stanwell is able to arrange the transport of the Substitute Coal; 


(ii)    of
the destination of the Substitute Coal;


(iii)    provided
Stanwell is able to arrange the transport of the Substitute Coal, of any
Difference or Stanwell Election Difference, as the case may be (as defined in
Clause 3.6(a)) that would apply to that delivery; and


(iv)    if
Coronado were to arrange the transportation of that Substitute Coal, of any
Capacity Charges (as defined in Clause 3.6(a)) that would apply.  


(e)    Stanwell
shall provide the information requested in Clause 3.4(d) (or Stanwell's best
estimate thereof, based on reasonable grounds) within 5 days of the request. 
Coronado may then elect to:


(i)    have
Stanwell arrange transportation of the Substitute Coal, provided Stanwell has
informed Coronado that it is able to do so, and in that event Stanwell shall
arrange the transportation;


(ii)    provided
Coronado has made the request at least 7 days before the proposed delivery,
arrange the transportation of the Substitute Coal; or


(iii)    cancel
the proposed delivery of Substitute Coal.


(f)    If: 


(i)    Coronado
has made an election in accordance with Clauses 3.4(e)(i) or 3.4(e)(ii) in
respect of the transportation of Substitute Coal; and  


(ii)    Stanwell
makes an election in accordance with Clause 4.5 which would apply to any
quantity of Coal that would be Substitute Coal to which the election made in
accordance with Clauses 3.4(e)(i) or 3.4(e)(ii) would apply (Designated Mine
Export Substitute Coal),   


then:


(iii)    the
election under Clauses 3.4(e)(i) or 3.4(e)(ii) will not apply in respect of the
Designated Mine Export Substitute Coal; 


(iv)    Stanwell
must provide the information required under Clause 3.4(d) in respect of the
Designated Mine Export Substitute Coal within 5 days of the election under
Clause 4.5; and


(v)    Coronado
may then make the election under Clause 3.4(e) in respect of the Designated
Mine Export Substitute Coal.


3.5    Transportation
and Rail Rates of Substitute Coal from other Mines  


(a)    "Other
Mine(s)" means any mine that is not the Curragh Mine or a Designated
Mine.



 

 






 Page | 11 










      




(b)    For
any proposed delivery of Substitute Coal from any Other Mine:


(i)    Coronado
shall give Stanwell at least 14 days' notice of that proposed delivery from a
nominated Other Mine and request Stanwell to obtain a quotation for a rail
freight rate for the transportation of Substitute Coal from that Other Mine.


(ii)    Stanwell
shall use its best endeavours to achieve rail freight rates for the transport
of coal from that Other Mine to the Power Station, or if applicable, to such
other destination as Stanwell advises Coronado that Coal delivered under this
Agreement is to be transported, that are at least equivalent to or better than
market rates at the time and are based on utilisation equivalent to Stanwell's
planned total coal consumption for the Year concerned.


(iii)    Within
7 days of receiving that notice and request, Stanwell shall inform Coronado of:


(A)    whether
Stanwell is able to arrange transport of the Substitute Coal;


(B)    any such quotation; 


(C)    the
destination of the Substitute Coal;


(D)    any
Difference or Stanwell Election Difference, as the case may be (as defined in
Clause 3.6(a)) that would apply to that delivery; and 


(E)    if
Coronado were to arrange the transportation of that Substitute Coal, any
Capacity Charges (as defined in Clause 3.6(a)) (or Stanwell's best estimate
thereof, based on reasonable grounds) that would apply.


(iv)    Coronado
may then elect to:


(A)    have
Stanwell arrange transportation of the Substitute Coal, provided Stanwell has
informed Coronado that it is able to do so, and in that event Stanwell shall
arrange the transportation;


(B)    arrange
the transportation of the Substitute Coal; or


(C)    cancel
the proposed delivery of Substitute Coal.


(v)    If: 


(A)    Coronado
has made an election in accordance with Clauses 3.5(b)(iv)(A) or 3.5(b)(iv)(B)
in respect of the transportation of Substitute Coal; and 


(B)    Stanwell
makes an election in accordance with Clause 4.5 which would apply to any
quantity of Coal that would be Substitute Coal to which the election made in
accordance with Clauses 3.5(b)(iv)(A) or 3.5(b)(iv)(B) would apply (Other
Mine Export Substitute Coal),   


then:


(C)    the
election under Clauses 3.5(b)(iv)(A) or 3.5(b)(iv)(B) will not apply in respect
of the Other Mine Export Substitute Coal;


(D)    Stanwell
must provide the information required under Clause 3.5(b)(iii) in respect of
the Other Mine Export Substitute Coal within 5 days of the election under
Clause 4.5; and


(E)    Coronado
may then make the election under Clause 3.5(b)(iv) in respect of the Other Mine
Export Substitute Coal. 


3.6    Payment
for Transportation


(a)    In
this Clause 3.6:


(i)    "Transport
Cost" means the amount, in $/Tonne, equal to the applicable rate for
the transport of coal from the relevant Designated Mine or Other Mine, as 



 

 





 Page | 12 










      




the case may be, to the
relevant destination taking into account all rail performance Freight
Incentives and Corridor Improvement Incentives available from Stanwell's
Carrier or Coronado's Carrier, as the case may be.


(ii)    "Train
Weight" means the weight, in Tonnes, of Substitute Coal contained in
each rail consignment for delivery to the unloading facility at the Power
Station, or such other destination as Stanwell advises Coronado that Coal
delivered under this Agreement is to be transported, determined in accordance
with Clause 8;


(iii)    "CC
Cost" means the cost (Transport Cost times Train Weight), in total
$'s, of delivery of a rail consignment to the unloading facility at the Power
Station that Stanwell incurs or would incur had the Substitute Coal been
supplied from the Curragh Mine Loading Plant at the same time;


(iv)    "SC
Cost" means the cost (Transport Cost times Train Weight), in total
$'s, of delivery of a rail consignment of Substitute Coal to the unloading
facility at the Power Station (including, if the Substitute Coal is delivered
to any other location than the Power Station, the cost (Transport Cost times
Train Weight), in total $'s, which would have been payable for a delivery of a
rail consignment of Substitute Coal to the unloading facility at the Power
Station if it were so delivered); 


(v)    "Stanwell
Election SC Cost" means, for the transport of Substitute Coal to a
destination other than the Power Station, the cost (Transport Cost times Train
Weight), in total $'s, of delivery of the rail consignment of Substitute Coal
to the unloading facility at such other destination;


(vi)    "Difference"
means:


SC Cost less CC Cost


Provided that the Difference shall
not exceed the amount advised by Stanwell under Clauses 3.4 or 3.5, as the case
may be.


If positive the Difference is
defined as "Overs” 


If negative the Difference is
defined as "Unders"  


(vii)    "Stanwell
Election Difference" means:


Stanwell Election SC Cost less SC
Cost


Provided that the Stanwell Election
Difference shall not exceed the amount advised by Stanwell under Clauses 3.4 or
3.5, as the case may be.


If positive the Stanwell Election
Difference is defined as "Stanwell Election Overs” 


If negative the Stanwell Election
Difference is defined as "Stanwell Election Unders" 


(viii)    "Capacity
Charges" means any penalty rail rate or cost that Stanwell is required
to pay under a rail freight agreement(s) with Stanwell's rail provider(s),
which agreement(s) relate(s) in whole or in part to the transport of Coal from
the Curragh Mine Loading Plant imposed because of Coronado electing to supply
Substitute Coal, taking into account the effect of the transport of other
suppliers' coal under that rail freight agreement(s).


(ix)    "Freight
Incentives" means rail performance incentives that are available and
which actually apply to Stanwell's Carrier or Coronado's Carrier, as the case
may be, rail rate at the relevant time.


(x)    "Corridor
Improvement Incentives" means rail corridor incentives available to
rail users at the relevant time.



 

 






 Page | 13 










      




(b)    For
each rail consignment of Substitute Coal delivered under this Clause 3, the
Parties will calculate the Difference and the Stanwell Election Difference (if
applicable). 


(c)    If
Substitute Coal is transported and Stanwell arranges that transportation of
Substitute Coal and:


(i)    Unders is declared:


(A)    Stanwell
will pay the SC Cost or Stanwell Election SC Cost (as the case may be) to the
rail provider;


(B)    Stanwell
will pay the Unders to Coronado; and


(C)    the
Parties shall record the Unders for consideration under Clause 3.6(h).


(ii)    Overs is declared:


(A)    Stanwell
will pay the SC Cost or Stanwell Election SC Cost (as the case may be) to the
rail provider;


(B)    Coronado
will pay the Overs to Stanwell; and


(C)    the
Parties shall record the Overs for consideration under Clause 3.6(h).


(d)    If
Substitute Coal is transported and Coronado arranges that transportation of
Substitute Coal and:


(i)    Unders is declared:


(A)    Coronado
will pay the SC Cost or Stanwell Election SC Cost (as the case may be) to the
rail provider;


(B)    Stanwell
will pay the CC Cost to Coronado; and


(C)    the
Parties shall record the Unders for consideration under Clause 3.6(h).


(ii)    Overs is declared:


(A)    Coronado
will pay the SC Cost or Stanwell Election SC Cost (as the case may be) to the
rail provider;


(B)    Stanwell
will pay the CC Cost to Coronado; and


(C)    the
Parties shall record the Overs for consideration under Clause 3.6(h).


(e)    If
the Substitute Coal is transported to any destination other than the Power
Station and: 


(i)    Stanwell
Election Overs is declared:


(A)    if
Coronado arranges the transportation of Substitute Coal, Stanwell will pay the
Stanwell Election Overs to Coronado; and


(B)    the
Parties shall record the Stanwell Election Overs for consideration under Clause
3.6(h).


(ii)    Stanwell
Election Unders is declared:


(A)    if
Stanwell arranges the transportation of Substitute Coal, Stanwell will pay the
Stanwell Election Unders to Coronado; and


(B)    the
Parties shall record the Stanwell Election Unders for consideration under
Clause 3.6(h).


(f)    The
financial transactions under Clause 3.6(c), (d), and (e) (as applicable) shall
be conducted for each rail consignment of Substitute Coal, unless otherwise
agreed.



 

 






 Page | 14 










      




(g)    After the end of each Year, and
as soon as the information becomes available, Stanwell will provide an invoice
(with such supporting information as Coronado may reasonably require) to
Coronado in respect of the Capacity Charges (if any) with such payment to be
made within 14 days of receipt of such invoice.


(h)    Within
30 days of the giving of the invoice referred to in Clause 3.6(g) for any Year,
the Parties will determine, in respect of that Year:


(i)    The total
Overs and any Stanwell Election Overs for all rail consignments;


(ii)    The
total Unders and any Stanwell Election Unders for all rail consignments; and


(iii)    (Total
Overs plus Stanwell Election Overs plus Capacity Charge less Total Unders less
Stanwell Election Unders) ("Excess"). 


(i)    If
the Excess is negative Coronado shall pay to Stanwell a sum equal to 50% of the
Excess, with such payment to be made within 14 days of receipt of such invoice
from Stanwell.  


(j)    The Party
entitled to payment under this Clause 3.6 will provide an invoice for payment
by the other Party with such payment to be made as provided in Clause 11.9(a)
(with Clause 11.9(a) applying mutatis mutandis to payments by Coronado). 


(k)    The
Parties will provide sufficient information (when available) to enable each
other to raise invoices and to record the necessary information for purposes of
this Clause 3.6 and for internal recording purposes.


3.7    Notification of Delivery of
Substituted Coal


Coronado recognises that Stanwell needs to be informed in
advance of delivering Substitute Coal, including the forward delivery
schedule.  Coronado shall give at least 7 days' notice of any delivery of such
coal but Stanwell shall use its best endeavours to accept such coal on shorter
notice where it will suffer no material adverse effect in doing so.


3.8    Limit
of Amount of Substitute Coal


Notwithstanding any other
Clause, Coronado shall not have the right to deliver any Substitute Coal which
if delivered would cause the Substitute Coal to be delivered in any Year to
exceed 50% of the Annual Contract Tonnage for that Year.  


4.    Annual
Contract Tonnage, Rates of Delivery and Notification of Requirement


4.1    Annual
nominations


(a)    Not
later than the 30 June occurring prior to the commencement of each Year during
the Supply Term, Stanwell shall, by notice to Coronado:


(i)    nominate:


(A)    the
Annual Contract Tonnage for that Year which must be between [***] Tonnes
Equivalent and [***] Tonnes Equivalent (and pro rata for a part Year), and if
no such nomination is made for any Year, Stanwell shall be deemed to have
nominated 2 million Tonnes Equivalent;


(B)    in
respect of any Month during that Year, a quantity of the Annual Contract
Tonnage in Tonnes Equivalent (up to one twelfth of the Annual Contract Tonnage
for any Month), for which Stanwell elects to receive Cash in Lieu; and


(C)    the Nominated Contract Price per
GJ for each Month in that Year, which must be:



 

 






 Page | 15 










      




(I)    no
less than the Contract Price per GJ for that Month in that Year as set out in
the SRA Value Schedule multiplied by [***]; and


(II)    no more
than the Contract Price per GJ for that Month in that Year as set out in the
SRA Value Schedule multiplied by [***],


and if no such nomination is made
for any Year, Stanwell shall be deemed to have nominated the Contract Price per
GJ for each Month in that Year as set out in the SRA Value Schedule,


provided that the nomination must
not cause the Outstanding Value of the SRA to be less than zero;


(ii)    confirm
any additional Tonnes that have been postponed in accordance with Clause
12.4(c), Clause 13.4(c) or Clause 16 and that Coronado is obliged to deliver in
that Year pursuant to this Agreement;  


(iii)    propose
the Quarterly Tonnage for each Quarter of such Year; and


(iv)    indicate,
on a non-binding basis, the nominations of the Annual Contract Tonnage for each
Year, and Nominated Contract Price per GJ for each Month, of the Supply Term
after the Year for which the nominations in Clause 4.1(a)(i)(A) and
4.1(a)(i)(C) are made, in accordance with the SRA Value Schedule.


(b)    If
Stanwell fails to give a notice under Clause 4.1(a)(iii), or if Coronado
disagrees with the Quarterly Tonnages as proposed by Stanwell, then the
Quarterly Tonnages for each Quarter of the Year shall be one quarter of the
Annual Contract Tonnage.


(c)    If:


(i)    Stanwell
does not make a nomination by the 30 June that occurs immediately prior to the
commencement of the first Year of the Supply Term; and 


(ii)    either:


(A)    the
Supply Term commences; or


(B)    in the
reasonable opinion of Stanwell, the Supply Term is likely to commence before
Stanwell will be able to make a nomination, 


Stanwell shall promptly make a nomination in accordance
with Clause 4.1(a) for the period in respect of the first (and if applicable,
the second) Year in the Supply Term.


(d)    If there
is an interruption to the supply of Coal in the period between the date of
Stanwell’s nomination and 31 December of that Year, Stanwell may prior to 31
December revise its nomination of the Annual Contract Tonnage, by an amount
equal to the missed deliveries, provided that the revised nomination does not
exceed a total maximum of [***] million Tonnes Equivalent.  That revised
nomination of the Annual Contract Tonnage will be Stanwell’s nomination for the
purposes of Clause 4.1(a).  


(e)    For the
purposes of calculating the Cash Value of the SRA, where the Agreement will
terminate due to Coronado's default, Stanwell may (but is not obliged to) give
a revised nomination under this Clause 4.1, including the non-binding
nominations for each Year of the Supply Term under Clause 4.1(a)(iv).


(f)    If
the Supply Commencement Date occurs before the ACSA Final Delivery Date, in
respect of each Month from the Supply Commencement Date until the Month in
which the ACSA Final Delivery Date occurs, Stanwell must nominate one twelfth
of the Annual Contract Tonnage (pro rata for any part Month) as Cash in Lieu.


(g)    Notwithstanding
Clauses 4.1(a) through 4.1(f), either Coronado or Stanwell may at any time
propose any Annual Contract Tonnage and Quarterly Tonnage for the next Year. 
The other Party shall consider any such proposal but shall be under no
obligation to 



 

 





 Page | 16 










      




accept the same.  If the
Parties agree upon a different Annual Contract Tonnage and Quarterly Tonnage
that shall become the Annual Contract Tonnage and Quarterly Tonnage for the
periods concerned.


4.2    Monthly Deliveries


(a)    Coronado
shall give notice of its intended Monthly Tonnage for each Month during a
Quarter no later than 30 days before the commencement of that Quarter.  If
Stanwell disagrees with the Monthly Tonnages notified by Coronado, the Parties
will discuss the same in good faith with a view to agreeing upon Monthly
Tonnages that meet the requirements of both Coronado and Stanwell.


(b)    Failing
agreement, the Monthly Tonnages for the Quarter shall be approximately one
third of the Quarterly Tonnage.


4.3    Weekly
Deliveries


(a)    Coronado
shall give notice of its intended Weekly Tonnage for each week of each Month no
later than 7 days before the commencement of that Month.  If Stanwell disagrees
with the Weekly Tonnages notified by Coronado, the Parties will discuss the
same in good faith with a view to agreeing upon Weekly Tonnages that meet the
requirements of both Coronado and Stanwell.


(b)    Failing
agreement, the Weekly Tonnages for the Month shall provide for deliveries each
week of approximately one quarter of the Monthly Tonnage.


(c)    If
both Parties agree, any Weekly Tonnages may be changed to take into account
Coronado's planned exports of coal from the Tenements and Stanwell's other
planned purchases of coal for the Power Station.


4.4    Obligation to Deliver and Accept
Deliveries


Coronado shall deliver, and Stanwell shall take delivery
of, Coal at rates which meet the requirements of Clauses 4.1 to 4.3,
inclusive.  Coronado is not obliged to deliver any Coal in respect of which
Stanwell has elected to take Cash in Lieu.


4.5    Export election


Stanwell may elect not more than once in respect of any
Quarter, by giving notice to Coronado prior to the commencement of the Quarter,
to receive any quantity of Coal that Stanwell does not require at the Stanwell
Power Station and deal with it as it sees fit, including to export the Coal or
otherwise deal with the Coal (and if it does so, Stanwell may request Coronado,
to act as its agent to deal with the Coal at Stanwell’s cost, and Coronado may
accept or reject that request in its absolute discretion). Coronado must
deliver and Stanwell must take such Coal in accordance with the terms of this
Agreement.


4.6    Specific Deliveries


Coronado shall make day to day arrangements regarding the
scheduling of trains directly with Stanwell's Carrier or Coronado's Carrier and
with designated personnel at the Power Station. 


5.    Coal Option


(a)    The
Parties must use their best endeavours to negotiate an agreement for an option
to purchase additional Coal (Coal Option) on terms substantially similar
to those set out in the letter from Garold
Spindler to Richard Van Breda dated 26 June 2019 (the Coal Option Letter)
by 30 September 2019 (Negotiation Deadline).  


(b)    If the
Parties have not executed and delivered the Coal Option by the Negotiation
Deadline;


(i)    the
Parties will be deemed to be in a dispute about the terms of the Coal Option (Coal
Option Dispute); 



 

 






 Page | 17 










      




(ii)    the
terms of Schedule 2 of the Deed will apply to the Coal Option Dispute on the
basis that, for the purposes of applying Schedule 2 of the Deed to the Coal
Option Dispute:


(A)    the
"New CSA" as defined in the Deed is read as the Coal Option;


(B)    a
"CSA Dispute" as defined in the Deed is read as the Coal Option
Dispute; 


(C)    the
"Guiding Principles" as defined in Schedule 2 of the Deed will be
read as being those parts of the Coal Option Letter relating to the agreement
of an option to purchase additional Coal; 


(D)    copies of
this Agreement and the Coal Option Letter must be provided to the
"Expert" (as defined in the Deed) for the purposes of clause 5.5 of
Schedule 2 of the Deed; 


(E)    clause
5.6(a)(ii) is deleted; and


(F)    such
other amendments as necessary are made to give effect to the terms of Schedule
2 of the Deed in respect of the Coal Option Dispute. 


6.    Delivery
Facilities/Title/Risk


(a)    Except where
Coronado is to arrange transport of Substitute Coal, Coal shall be delivered by
Coronado onto rail wagons at the Loading Plant, at Coronado's cost.


(b)    Subject
to reasonable maintenance requirements that have, where possible, been
previously notified by Coronado to Stanwell, Coronado shall deliver Coal at the
Curragh Mine Loading Plant at a rate of at least [***] Tonnes per hour and have
the Loading Plant available twenty-four (24) hours per day, seven (7) days a
week.


(c)    Where
Stanwell is to arrange the transportation of Substitute Coal, Coronado shall
deliver such Substitute Coal at a rate which forms the basis of the rail rates
agreed with Stanwell’s Carrier.  


(d)    Coronado
shall maintain adequate stockpiles of Coal to ensure continuity of deliveries
taking into account such contingencies as might reasonably be foreseeable to a
prudent mine operator.


(e)    Where
Stanwell is to arrange the transportation of Substitute Coal, Stanwell shall
ensure that sufficient rollingstock is available at the Loading Plant at no
cost to Coronado to allow Coronado to carry out its obligations hereunder.


(f)    Where
Stanwell is to arrange transport, delivery and acceptance of Coal shall be
deemed to have been made and taken, and risk and title shall pass to Stanwell,
when Coal from the Loading Plant is discharged onto rail wagons.


(g)    Where
Coronado is to arrange transport of Substitute Coal, delivery and acceptance of
that Coal shall be deemed to have been made and taken, and risk and title shall
pass to Stanwell, when the Coal is discharged from Coronado's Carrier's rail
wagons at the unloading facilities at the Power Station or such other
destination as Stanwell advises the Substitute Coal be delivered to in
accordance with Stanwell's rights under this Agreement.


(h)    Coronado will use its best
endeavours to comply with Schedule 2 and Schedule 3.


(i)    From time
to time, either Party may request renegotiation of the provisions of
Schedule 3 of this Agreement to reflect the provisions of its then
contract for rail haulage which includes the loading of Coal at the Curragh
Mine Loading Plant.  In such event the Parties will meet in good faith to
endeavour to agree upon revised terms which meet their respective needs.  If no
agreement is reached by the Parties to amend this Agreement, this Agreement
shall continue unchanged.



 

 






 Page | 18 










      




7.    Quality of Coal


7.1    Standard Coal Quality


(a)    The
Standard Coal Quality, which shall form the basis of price and price variations
for varying Coal quality, shall be:


	
   

  	
  Gross Calorific Value (as sampled):

  	
   

  	
  [***]GJ/t

  
	
   

  	
  Ash (at [***]% Total Moisture):

  	
   

  	
  [***]%

  
	
   

  	
  Total Moisture (as sampled):

  	
   

  	
  [***]%

  






 (b)    Coronado
will use its best endeavours to ensure that Coal supplied will generally meet
Standard Coal Quality.


(c)    If
Coal supplied by Coronado is of lesser quality than the Standard Coal Quality
over a period of two consecutive Months, Stanwell may request advice from
Coronado on the action, if any, Coronado proposes to take in an endeavour to
deliver Coal of Standard Coal Quality.


7.2    Limiting Specifications


(a)    If in
the reasonable opinion of Stanwell after consultation between the Parties
following a request under Clause 7.1(c) on the basis of previous deliveries and
any inspection under Clause 7.3(b), the quality of Coal delivered or likely to
be delivered hereunder at any time and from time to time does not meet any of
the following limiting Coal specifications (for the purpose of this Clause 7,
the "Limiting Specifications"):   


	
   

  	
   

  	
   

  
	
  Gross Calorific Value (as received)

  	
  [***]GJ/t

  	
  min

  
	
  Ash (at [***]% total moisture)

  	
  [***]%

  	
  max

  
	
  Total Moisture (as received)

  	
  [***]%

  	
  max

  
	
  Sulphur (at [***]% total moisture)

  	
  [***]%

  	
  max

  
	
  Slagging Index

  (0.8 x deformation temperature + 0.2 x hemisphere temperature
  (in reducing atmosphere))

  	
  [***]°

  	
  min

  
	
  Volatile Matter (as received)

  	
  [***]%

  	
  min

  






then Stanwell may by notice suspend
delivery of Coal hereunder from the time of giving such notice until Coronado
can demonstrate that the Coal ready for delivery is likely to meet all of the
Limiting Specifications (provided that for Coal used or intended to be used in
the Power Station, Stanwell may only give such notice if in Stanwell's
reasonable opinion the failure of such Coal to meet these Limiting
Specifications materially affects, or is likely to materially affect, the
normal operation of the Power Station).


(b)    Stanwell
shall furnish to Coronado, as soon as practicable after the giving of any
notice of suspension hereunder, a statement setting out the reasons for
Stanwell's decision to suspend deliveries, together with any relevant evidence
and a portion of the sample or samples tested where applicable.  Such a
suspension shall constitute an interruption to supply in terms of
Clause 12.


(c)    For
rejection purposes coal quality will be determined on a mine stockpile basis
and not on a train by train basis.


(d)    Coronado
shall use its best endeavours to ensure that Coal will meet the Limiting
Specifications.



 

 






 Page | 19 










      




(e)    If
Coronado is not able to demonstrate that the Coal ready for delivery is likely
to meet all of the Limiting Specifications as required in Clause 7.2(a) within
a reasonable period of time, then Clause 12 shall apply.


7.3    Quality Generally


(a)    Coronado
shall keep Stanwell informed on matters which may affect the quality of Coal.


(b)    Stanwell
may at any reasonable time, after the giving of a reasonable notice, inspect
Coronado's facilities and operations including Coronado's drilling and quality
control operations.


(c)    If
Coronado on an ongoing basis cannot meet the Slagging Index Limiting
Specification of [***]°C minimum, and Coronado so requests, Stanwell will meet
with Coronado to discuss whether it will be possible for Stanwell to accept
coal which does not meet that Limiting Specification over a particular period
of time and if so on what basis, but Stanwell shall not be obliged to agree to
accept such coal.  However Stanwell will act reasonably and in good faith in
considering such request.


(d)    Coronado
will use its best endeavours to ensure that based on representative sampling
from Coal quantities in excess of [***]Tonnes:


(i)    no more
than [***]% and if possible, no more than [***]% of Coal delivered hereunder
will pass through a [***] millimetre square mesh screen; and


(ii)    all coal
delivered hereunder will pass through a [***] millimetre square mesh screen.


(e)    Coronado
shall, so far as reasonably practicable, co-operate with Stanwell to minimise
any operational problems which may be experienced by Stanwell associated with:


(i)    the
handling of the Coal;


(ii)    extraneous
materials in the Coal at the time of delivery ("Extraneous Materials");
or


(iii)    other
undesirable properties of Coal at the time of delivery.  


(f)    Stanwell
may reject any delivery of Coal containing Extraneous Materials which are
likely, in Stanwell's reasonable opinion, to make the Coal unusable by
Stanwell.


8.    Quantity
and Quality Determination


8.1    Weight


The weight of Coal for payment purposes shall be
ascertained by the Trade Certified Weighbridge, or in the event of the Trade
Certified Weighbridge being unavailable or the Weighbridge not being Trade
Certified then:


(a)    subject
to any agreement that is made as contemplated in Clause 8.1(b), the weight of
Coal for payment purposes shall be the Nominal Net Weight; and


(b)    if
the Trade Certified Weighbridge is unavailable for more than 28 consecutive
days, or if the Weighbridge is not Trade Certified for more than 28 consecutive
days, the Parties will meet in good faith to discuss and seek to agree a
replacement method of determining the weight of Coal for payment purposes until
the Trade Certified Weighbridge is again available or the Weighbridge is Trade
Certified (as applicable).  Until any such agreement is reached, Clause 8.1(a)
will continue to apply.  Clause 17 will not apply to any failure of the Parties
to agree as contemplated in this Clause 8.1(b) except to the extent that if the
Parties fail to reach agreement where the Trade Certified Weighbridge is
unavailable for more than 365 consecutive days, or if the Weighbridge is not
Trade Certified for more than 365 consecutive days, either Party may refer the
matter for resolution to an Expert under Clause 17(h).



 

 






 Page | 20 










      




8.2    Sampling


(a)    All
sampling, sample preparation and analysis of Coal to determine the quality of
Coal delivered for the purpose of this Agreement shall be undertaken in
accordance with Australian Standards AS4264 and AS1038 unless otherwise
indicated or otherwise agreed from time to time.


(b)    The
automatic sampler which exists adjacent to the rail loadout bins situated at
the Loading Plant will be used to obtain samples representative of Coal
delivered by Coronado to rail wagons.  Analyses of the sample shall be carried
out at Stanwell's cost by Stanwell by an NATA registered laboratory agreed by
the Parties.  Coronado shall operate the automatic sampler ("Mine
Sampler") which exists adjacent to the rail loadout bins situated at
the Curragh Mine, and shall request the supplier of Substitute Coal to operate
the sampler adjacent to its rail loadout bins, to obtain samples representative
of Coal delivered by Coronado to rail wagons.  The Mine Sampler shall conform
to Australian Standard requirements.  Coronado shall provide the agreed NATA
registered laboratory with the sample representative of Coal delivered to rail
wagons.  Analysis of the sample shall be carried out by that agreed laboratory.


(c)    Coronado
must use its best endeavours to ensure that the Mine Sampler operates as
contemplated in this Clause 8 in respect of each train carrying Coal.  If the
Mine Sampler does not operate as contemplated in this Clause 8 in respect of a
train carrying Coal, a representative of Coronado must notify Stanwell or a
nominee appointed by Stanwell for the purpose of this Clause of that event
immediately by telephone and as soon thereafter as practicable by email. 


(d)    If the
Mine Sampler does not operate as contemplated in this Clause 8 in respect of a
train carrying Coal, then:


(i)    Stanwell
is entitled to, but shall not be obliged to, collect or arrange for its
representative to collect a sample of Coal when Coal is discharged from the
rail wagons at the Power Station unloading conveyor, and that sample shall be
taken to be a sample for every purpose under this Agreement as though taken by
the Mine Sampler under this Clause 8; or


(ii)    if
Stanwell or its representative does not collect a sample when Coal is
discharged from the rail wagons at the Power Station unloading conveyor, then
the quality of Coal that is delivered by the train from which a sample was not
taken shall be deemed to be equivalent to the average Gross Calorific Value (as
received), Ash (at standard total moisture) and Total Moisture (as received)
determined in respect of all other deliveries of Coal made under this Agreement
during the Month in question.


(e)    Not fewer
than three analysis sub-samples shall be prepared from each sample of Coal
taken in accordance with this Clause 8.  Stanwell shall retain one analysis
sub-sample for analysis and shall make one analysis sub-sample available to
Coronado if requested by Coronado (provided such request is made within five
(5) Business Days of notification by Stanwell of the results of the analysis of
such sample).  Stanwell shall seal and retain one analysis sub-sample for twelve
weeks for umpire analysis if required.


(f)    As
soon as practicable after taking the Coal sample Stanwell or Stanwell's
authorised representative shall determine the Total Moisture of the sample and
shall determine on an as-received basis Gross Calorific Value, Ash and Moisture
of the analysis sub-sample.  Analyses shall be determined in accordance with
the Standards listed in Clause 8.2(a) hereof.  The following Coal properties
representing the quality of Coal delivered shall be calculated from such
analyses:


Gross Calorific Value (as sampled)


Ash (at [***]% Total Moisture)


Total Moisture (as sampled)



 

 






 Page | 21 










      




Stanwell shall notify Coronado
of the quality of Coal for each sample determined accordingly, within seven (7)
days after sampling.


(g)    Coal
properties notified in accordance with Clause 8.2(f) for samples taken during
each Month shall be weight averaged on the basis of mass of individual Coal
consignments for that Month to obtain the Monthly average Coal properties to
determine the Monthly averaged Gross Calorific Value, Ash and Total Moisture
for determination of Coal quality price adjustment pursuant to Clause 10.


(h)    Ash and
Total Moisture shall be expressed to the nearest 0.10 percent (0.10%) in
individual analyses and averages thereof.  Should the calculated average fall
exactly midway between two such percentages, then the nearest even one-tenth of
a percent shall be accepted.  Gross Calorific Value shall be expressed to the
nearest 0.01 gigajoule per Tonne for individual analyses and averages thereof.


(i)    In the
event of a disagreement with the determination of any Coal properties apart
from Total Moisture, Coronado shall notify Stanwell within two weeks of
Stanwell's notification of such determination.  In that event, the third
portion of the appropriate sub-sample shall be delivered to a mutually agreed
independent laboratory for umpire analysis.  If the umpire analysis differs
from Stanwell's analysis by more than the limit of reproducibility between
laboratories, the umpire analysis shall be substituted for Stanwell's
determination for all purposes.  The costs incurred in carrying out any umpire
analysis shall be borne by Coronado unless the umpire analysis is adopted in
which latter case Stanwell shall bear the costs of the umpire analysis.


(j)    There
shall be no umpire analysis of Total Moisture, but Coronado shall be entitled
to satisfy itself that the Total Moisture is determined in accordance with this
Agreement, by nominating a representative to be present at Total Moisture
determination at Stanwell's or its authorised representative's laboratory. 
However if either Coronado or Stanwell is concerned that the sample may have been
contaminated with additional moisture then the Parties will in good faith meet
to discuss what Total Moisture should be used.


(k)    Stanwell
and Coronado shall be entitled without notice, subject to complying with all
laws and with all rules and requirements of the other Party to ensure safety
and good environmental practices, to inspect or check the weighing, sampling
and analysis facilities of the other Party or its authorised representative and
to have access for witnessing the weighing, sampling and analysis of Coal.  Coronado
shall ensure that its arrangements with suppliers of Substitute Coal permit
Stanwell to exercise similar rights in respect of those suppliers.


(l)    Prior to
each week during the Supply Term, Coronado shall provide to Stanwell
non-binding, indicative forecasts of Gross Calorific Value, Ash and Total
Moisture for Coal expected to be delivered in that week.


9.    Price
of Coal


(a)    The
Contract Price per Tonne Equivalent for each Month is to be determined in
accordance with the SRA Value Schedule.


(b)    The
"Invoice Price" for Coal delivered in any Month is the
Contract Price per Tonne Equivalent for the Month adjusted to reflect the
quality of the Coal delivered in that Month in accordance with Clause 10.


(c)    The
Contract Price per Tonne Equivalent for each Month will only vary in accordance
with the SRA Value Schedule and is inclusive of all costs.  The Contract Price
per Tonne Equivalent so determined shall apply throughout the Supply Term
irrespective of any change in Coronado's actual costs, the Curragh Mine's
viability or market prices.


(d)    Stanwell
will pay a royalty amount for each Month determined in accordance with
Clause 11.4.



 

 






 Page | 22 










      




10.    Variation for Quality


(a)    The
Invoice Price shall be the Contract Price per Tonne Equivalent adjusted for
variations in quality from the Standard Coal Quality Specification as set out
in this Clause 10.  Such quality shall be determined in accordance with
the provisions of Clause 8.


Adjustments will be made for variations from:


	
   

  	
  Gross
  Calorific Value (as sampled)

  	
   

  	
  [***]GJ/t

  
	
   

  	
  Ash (at
  [***]% Total Moisture)

  	
   

  	
  [***]%

  
	
   

  	
  Total
  Moisture (as sampled)

  	
   

  	
  [***]%

  






(b)    The
Invoice Price for any Month shall be calculated from the Contract Price per
Tonne Equivalent in accordance with the following formula:


IP        =         CP((GCV/[***])-(0.01(AC-[***]))-(0.015(AC1-[***]))-(0.01(MC-[***]))-
(0.03(MC1-[***])))


	
  Where:

  	
   

  	
   

  
	
  IP

  	
  =

  	
  Invoice Price

  
	
  CP

  	
  =

  	
  Contract Price per Tonne Equivalent for
  that Month

  
	
  GCV

  	
  =

  	
  Weight averaged gross calorific value of
  Coal delivered in that Month determined in accordance with Clause 8

  
	
  AC

  	
  =

  	
  Weight averaged ash content of coal
  delivered in that Month determined in accordance with Clause 8 or [***]%
  whichever is the greater.

  
	
  AC1

  	
  =

  	
  AC or [***]% whichever is the greater

  
	
  MC

  	
  =

  	
  Weight averaged moisture content of coal
  delivered in that Month determined in accordance with Clause 8 or [***]%
  whichever is greater

  
	
  MC1

  	
  =

  	
  MC or [***]% whichever is the greater

  






11.    Payment  


11.1    Monthly
payment


In respect of each Month during the Supply Term, Stanwell
must pay to Coronado, or Coronado must pay to Stanwell, as the case may be:


(a)    the
amount payable for the Coal delivered in the Month as determined in accordance
with Clause 11.2;  


(b)    the
amount payable for the Derived Amount for the Month as determined in accordance
with Clause 11.3;


(c)    if
Stanwell has made an election for the payment of Cash in Lieu in respect of the
Month, the amount of the Cash in Lieu for the Month in accordance with Clause
11.3;


(d)    the
royalty amount payable in respect of the Coal delivered in the Month as
determined in accordance with Clause 11.4;


(e)    any Rail
Energy Payment pursuant to Clause 11.5;


(f)    any
amount payable in respect of GST pursuant to Clause 11.6; 


(g)    any
Transport Cost payable pursuant to Clause 3.6; and



 

 






 Page | 23 










      




(h)    any
amount payable in respect of any interruptions to supply that are not Causes
Outside the Control of Coronado pursuant to Clause 12.


Payment for the amounts payable under Clause 11.1(a)
and (b) will be satisfied in each Month by Stanwell paying the Netback Amount
less the Derived Amount to Coronado, which is an amount equivalent to the
amount determined as the Invoice Price x Tonnes Delivered. 


11.2    Payment
for Coal


In respect of each Month during the Supply Term, Stanwell
shall pay to Coronado the Netback Amount for the aggregate quantities of Coal
delivered in that Month. The "Netback Amount" for the Month is
to be determined as: 


Netback Amount = [Netback Price x Monthly Tonnage (SRA
Value Schedule)] + [(Invoice Price x Tonnes Delivered) – (Contract Price per
Tonne Equivalent x Monthly Tonnage (SRA Value Schedule))] 


where "Tonnes Delivered" is the sum of the
quantities delivered in that Month as ascertained in accordance with Clause 8.


11.3    Derived
Amount and Cash in Lieu


In respect of each Month during the Supply Term, Coronado
shall pay to Stanwell:


(a)    the
Derived Amount for the Month; and


(b)    the Cash
in Lieu for the Month.


The Derived Amount and the Cash in
Lieu are to be determined for each Month in accordance with the SRA Value
Schedule.


11.4    Royalty
amount


In respect of each Month during
the Supply Term, Stanwell shall pay a
royalty amount for the aggregate quantities of Coal delivered in the Month
during the Supply Term calculated in accordance with the following expression:


Royalty Payable        =        [(Invoice
Price x (7/93 +1) x 0.07) x Tonnes Delivered]


11.5    Rail
Energy Payment


Stanwell shall pay to Coronado (or Coronado shall pay to
Stanwell if the amount is negative) each Month, on an interim basis, an Interim
Rail Energy Payment on Coal delivered for each Month calculated as follows:


	
   

  	
   

  
	
  Interim Monthly Rail Energy Payment

  	
  =         CC Interim Monthly Rate x 0.5[(GCV/[***]) – 1]
  x Tonnes Delivered

  






At the end of each Year, and as soon as the information
becomes available, Stanwell shall recalculate each Interim Monthly Rail Energy
Payment for each Month of that Year as if each payment had been calculated and
paid using the CC Final Monthly Rate and not the CC Interim Monthly Rate
("Final Monthly Rail Energy Payment").  Stanwell shall provide
an invoice (with such supporting documentation as Coronado may reasonably
require) to Coronado setting out the total of the Interim Monthly Rail Energy
Payments paid by each of Coronado and Stanwell for that Year; the total of the
Final Monthly Rail Energy Payments; and the amounts payable by each Party had
the Monthly payments been made for that Year based on the applicable Final
Monthly Rail Energy Payment. Any payment by Coronado or Stanwell shall be made
within 14 days of the invoice being received as contemplated in Clause
11.9(c).  


In this Clause 11.5:



 

 






 Page | 24 










      




"CC Interim Monthly
Rate" means the amount, in $/Tonne, equal to Stanwell's Carrier's rail
rate applying at the time, taking into account Stanwell's best estimate of all
available rail performance Freight Incentives and Corridor Improvement
Incentives, for the transport of Coal from the Curragh Mine Loading Plant to
the unloading facilities at the Power Station.


"CC Final Monthly Rate" means the amount,
in $/Tonne, equal to Stanwell's Carrier's rail rate applying at the time, taking
into account all rail performance Freight Incentives and Corridor Improvement
Incentives actually received, for the transport of Coal from the Curragh Mine
Loading Plant to the unloading facilities at the Power Station.


"Freight Incentives" means rail
performance incentives that are available and which actually apply to
Stanwell's Carrier's rail rate at the relevant time.


"Corridor Improvement Incentives" means
rail corridor incentives available to rail users at the relevant time.


"GCV" has the meaning given to that term
in Clause 10(b).


"Tonnes Delivered"
means, for the relevant period, the sum of the quantities delivered during that
period as ascertained in accordance with Clause 8.


11.6    GST


For the purposes of this Agreement,


(a)    It is agreed:


(i)    all
amounts expressed or determined to be payable by any Party to another under
this Agreement are calculated and will be determined exclusive of GST;
and


(ii)    any part
of a supply that is treated as a separate supply for GST purposes (including
attributing GST payable to tax periods) will be treated as a separate supply
for the purposes of this Clause 11.6.


(b)    If
any payment required to be made by one Party to another under this Agreement is
a payment for a taxable supply for the purposes of the GST Act, the amount
payable is the amount derived by multiplying the original amount payable by the
formula [1 + (the decimal expression of the GST rate imposed under the GST
Act)].


(c)    If any
Party is required to reimburse another for an amount paid or payable for a
taxable supply by a third party for which that Party is entitled to claim an
input tax credit, the amount required to be reimbursed will be reduced by the amount of the credit.


(d)    The
obligation to pay any additional amount under this Clause 11.6 is subject to
the Party receiving the payment providing to the other Party in accordance with
the requirements of the GST Act a tax invoice for each payment.  


(e)    Payment of the GST
shall be made at the same time as the first payment for the relevant taxable
supply is required to be made provided the Party receiving the payment has
issued a tax invoice or adjustment note (as required) to the other Party.


(f)    If a payment is calculated
by reference to or as a specified percentage of another amount or revenue
stream, that payment will be calculated by reference to or as a specified
percentage of the amount or revenue stream exclusive of GST.


(g)    If the amount of GST paid or
payable by any Party in respect of a taxable supply made under this Agreement
differs from the amount of GST paid by that Party by reason of the Australian
Commissioner of Taxation lawfully adjusting the amount of GST payable, then the
amount of GST paid shall be adjusted accordingly, by a further payment by one
Party to the other as the case requires.


(h)    To
the extent that consideration for any supply by, under or in connection with
this Agreement includes non-monetary consideration:



 

 






 Page | 25 










      




(i)    the
Parties agree to act in good faith in determining the GST-inclusive market
value of the non-monetary consideration provided for the supply;


(ii)    the tax
invoice for the supply must state the GST-inclusive market value of the
non-monetary consideration provided for the supply; 


(iii)    subject
to the
Parties exchanging tax invoices during the same Month, the Parties will allow
for the Parties’ respective payments of GST under this Agreement to be offset;
and


(iv)    to
the extent the respective payments of GST under Clause 11.6(h)(iii) are not
equal, the difference must be paid as a monetary payment, in addition to and at
the same time that the GST-exclusive consideration for the supply is payable or
to be provided under this Agreement.


(i)    If an
adjustment of GST is required as a result of an adjustment event in respect of
a supply made pursuant to this Agreement, then:


(i)    a
corresponding adjustment of GST payable under this Agreement must be made
between the Parties within 21 days after the end of the tax period in which the
adjustment is attributable; and


(ii)    if
obliged to do so under the GST Act, the supplier must issue an adjustment note
within 21 days after the end of the tax period in which the adjustment is
attributable. 


(j)    In relation to the taxable supply of Stanwell's termination
of the Reversion Deed and deletion of clause 2.9 of the ACSA for which the
Derived Amount and Cash in Lieu are consideration, Clauses 11.6(e) and
11.6(h)(iv) are modified so that the payment of the amount on account of GST in
accordance with Clause 11.6(b) must be made by Coronado to Stanwell by the last
available lodgement date of Stanwell’s ‘Business Activity Statement’ for the
Month in which the tax invoice was issued.  For the purposes of facilitating
Coronado's compliance with this Clause, Stanwell notifies Coronado that it has
monthly tax periods.  GST payments made by Coronado to Stanwell after the
required date will incur an interest charge (payable by Coronado to Stanwell)
equal to the one month Australian Bank Bill Swap Rate displayed on page BBSW of
the Thomson Reuters screen (or any replacement page which displays that rate),
plus [***]% p.a.


(k)    If the
Australian Taxation Office determines that Coronado made a taxable supply in
relation to Coronado’s supply referred to in Clause 11.6(j) for which
Stanwell's termination of the Reversion Deed and deletion of clause 2.9 of the
ACSA is consideration, Clauses 11.6(e) and 11.6(h)(iv) are modified so that the
payment of the amount on account of GST in accordance with Clause 11.6(b) must
be made by Stanwell to Coronado by the last available lodgement date of
Coronado’s ‘Business Activity Statement’ for the Month in which the tax invoice
was issued.  For the purposes of facilitating Stanwell's compliance with this
Clause, Coronado notifies Stanwell that it has monthly tax periods.  GST
payments made by Stanwell to Coronado after the required date will incur an
interest charge (payable by Stanwell to Coronado) equal to the one month
Australian Bank Bill Swap Rate displayed on page BBSW of the Thomson Reuters
screen (or any replacement page which displays that rate), plus [***]% p.a.


11.7    Invoicing


(a)    Coronado
shall submit to Stanwell as soon as practicable after the end of each Month an
invoice for all amounts payable by the Parties pursuant to this Clause 11 in
respect of that Month, except for the supply referred to in Clause 11.7(b)(ii)
below.  Each invoice shall be accompanied by a statement showing in detail the
calculations used to determine all amounts payable.  


(b)    The
Parties acknowledge that, subject to any subsequent agreement to issue
recipient created tax invoices, in accordance with Clause 11.6(d) of this
Agreement:



 

 






 Page | 26 










      




(i)    Coronado
will issue tax invoices to Stanwell for its taxable supplies under and in
connection with this Agreement (including for the taxable supply of Coal); and


(ii)    Stanwell
will issue tax invoices to Coronado for the taxable supply for which the
Derived Amount and Cash in Lieu are consideration.   


11.8    Set-Off


Except in respect of the netting of the Netback Amount and
Derived Amount in accordance with Clause 11.1 and any set-off permitted in
accordance with Clause 25.9(b), neither Party shall be entitled to set-off
against any amounts payable by it to the other Party pursuant to this
Agreement, any amounts payable by the other Party to it pursuant to this
Agreement or otherwise.


11.9    Payment/Adjustments


(a)    If
an amount is payable by Stanwell to Coronado, Stanwell shall pay such invoices
to a bank account nominated by Coronado by the 15th day of the Month in which the invoice
is submitted or within seven (7) days of receipt of the invoice, whichever is
the later date.


(b)    If an
amount is payable by Coronado to Stanwell, Coronado shall pay such invoices to
a bank account nominated by Stanwell by the 15th day of the Month in which the
invoice is submitted or within seven (7) days of receipt of the invoice,
whichever is the later date.


(c)    Where
appropriate, an adjustment will be made between the Parties for any charge
which has been levied on an interim basis within 14 days of the final amount
being determined.


(d)    If after
reasonable consultation with Coronado, Stanwell is of the reasonable opinion
the amount of any invoice rendered pursuant to this Clause 11 exceeds the
amount actually owing by Stanwell, Stanwell may withhold payment of 50% of the
difference, and pay:


(i)    the other
50% of the difference; plus


(ii)    the
amount of GST payable by Coronado on the full amount of the invoice; plus


(iii)    all
other undisputed amounts in accordance with Clause 11.9(a).


In the event of such withholding, Stanwell shall by the due
date of payment notify Coronado of the reasons for its opinion in reasonable
detail.  Withholding as aforesaid shall be deemed to be a dispute which shall
be resolved in accordance with Clause 17.  Stanwell shall pay the amount
withheld to the extent the dispute mechanism determines it is payable within 7
days of that determination.


12.    Interruption
to Supply


12.1    Stable Supply as Fundamental
Condition


(a)    Coronado
expressly acknowledges that, without derogating from the provisions of this
Agreement providing for termination and suspension, it is a fundamental
expectation of Stanwell that this Agreement will provide Stanwell with a stable
supply of Coal (complying with the quality characteristics provided in this
Agreement) for use in the Power Station and that it was on the basis of
Coronado's representations of its ability to provide such stable supply as
specified herein that Stanwell agreed to enter this Agreement with Coronado.


(b)    Irrespective
of the allocation of risk for failure to supply the Coal under this Agreement,
Coronado shall endeavour to avoid and minimise any interruptions to supply.



 

 






 Page | 27 










      




(c)    Coronado will not enter into a contract
under which Coronado is obliged to supply Coal to a customer in priority to supplying Coal
to Stanwell.


(d)    Clauses
12.2 to 12.7, inclusive shall apply in the event deliveries of Coal are not
tendered in full by Coronado hereunder on the due date or such non-tendering is
threatened as provided hereunder, irrespective of the cause, except where the
cause is the breach by Stanwell of its obligations hereunder or the non-taking
by Stanwell of such Coal.


12.2    Coronado
to Give Notices and Reports


(a)    Coronado
shall give notice ("Interruption Notice") to Stanwell promptly
upon the occurrence of any event which interrupts or is reasonably likely to interrupt the supply
of Coal by Coronado in accordance with this Agreement.


(b)    As
soon as practicable thereafter, Coronado shall give a report to Stanwell
covering the following matters to the best of Coronado's knowledge at the time of giving
the report:


(i)    the nature of the interruption
or threatened interruption;


(ii)    the circumstances and cause of
the same;


(iii)    whether
Coronado considers the event to be outside the control of Coronado;


(iv)    the likely duration of the
interruption;


(v)    Coronado's
revised delivery plan for Coal at the time of giving the report; and


(vi)    details
of the efforts that have been made and are planned by Coronado to avoid or
minimise the interruption and the effects thereof on Coronado's performance
under this Agreement.


(c)    So long
as the interruption continues or continues to threaten, Coronado shall furnish
Stanwell with further reports covering the matters listed in Clause 12.2(b):


(i)    whenever there is any material
change in the circumstances as set out in the last report; and


(ii)    in any
event no less than Monthly.


(d)    Coronado shall notify
Stanwell immediately when the interruption of supply of Coal ends.


12.3    Counter-Measures
by Stanwell


(a)    Stanwell
shall be entitled to take reasonable action to avoid or mitigate the effects of
the interruption or threatened interruption of supply of Coal, without prejudicing
such rights as Stanwell may have under this Agreement with respect to such
interruption.  In particular but without limitation, Stanwell shall be entitled
to take the following actions if the interruption to supply continues, or in
the reasonable opinion of Stanwell after consulting with Coronado is likely to
continue, for more than:


(i)    thirty
(30) days, then Stanwell may, at its discretion in accordance with
Clause 12.4(a):


(A)    subject
to Clause 12.4(c) postpone the affected deliveries, until any subsequent Year
or Years of the Supply Term; or


(B)    without
penalty to Stanwell cancel the relevant deliveries and purchase other coal;


(ii)    ninety
(90) days, then Stanwell may, at its discretion in accordance with
Clause 12.4(a), enter Medium Term Arrangements for the purchase of other
coal to cover the tonnage of coal which is in Stanwell's reasonable view,
likely to be affected by the interruption in which case Stanwell, in addition
to its rights under Clause 12.3(a)(i) above, may at its discretion cancel the
shipments 



 

 





 Page | 28 










      




covered by the Medium Term
Arrangements or postpone, subject to Clause 12.4(c), the same to any subsequent
Year or Years; and


(iii)    fifteen
(15) Months, and actually result in Stanwell receiving less than [***]% of the
Coal it is entitled to receive under this Agreement during those fifteen (15)
Months, then Stanwell may, in addition to its rights described in Clauses
12.3(a)(i) and (ii) above, upon notice to Coronado terminate this Agreement
provided such notice is given within seven (7) days of the end of that fifteen
(15) Month period.  Any notice given pursuant to this clause shall state the
effective date of such termination.


(b)    In the
event Coronado becomes able to recommence performance in accordance with this
Agreement during the period of any suspension under Clause 12.3(a)(ii),
Coronado shall give Stanwell not less than ninety (90) days' notice thereof in
which event, upon termination of its Medium Term Arrangements, Coronado shall
recommence making and Stanwell shall recommence taking Coal deliveries under
this Agreement.


(c)    Before
taking any reasonable action under Clause 12.3(a), Stanwell shall inform
Coronado of its proposed action.  Coronado may, within 5 days, make
representations to Stanwell as to the appropriateness of the proposed action, taking into account among other
things, the likelihood of the interruption occurring and its likely duration.  In
determining what reasonable action to take under Clause 12.3(a), Stanwell shall
take those representations into account.


12.4    Stanwell’s Elections


(a)    Stanwell
may make the elections provided in Clause 12.3(a) by giving notice to Coronado
at any time prior to the recommencement of Coronado's performance after
interruption or suspension of this Agreement.


(b)    If
Stanwell elects to cancel deliveries in accordance with Clause 12.3 the
cancelled deliveries of Coal will not be treated as delivered for the purposes
of the SRA Value Schedule and any cancellation will not prejudice Stanwell's
entitlement to achieve the Outstanding Value of the SRA under this Agreement.


(c)    If Stanwell elects to treat the
affected deliveries as postponed, then the same shall be postponed until such
subsequent Years as may be nominated by Stanwell in the notice of election
given under Clause 12.4(a) provided that unless Coronado agrees, the postponed
deliveries to be delivered in any Year shall not exceed [***] percent ([***]%)
of the Annual Contract Tonnage nominated by Stanwell in accordance with Clause
4.1(a)(i) for that Year.   


(d)    If
Stanwell elects to enter into Medium Term Arrangements and Coronado gives
Stanwell notice of resumption of deliveries Stanwell shall use its best endeavours to
terminate the Medium Term Arrangements (without being required to breach the
same) such that it is able to take the deliveries when nominated by Coronado.


(e)    If the
interruption to making deliveries is only partial or if Coronado is able to
recommence partial deliveries only and such partial deliveries are in
Stanwell's reasonable view likely to result in Stanwell receiving less than
[***]% of the total Coal it is entitled to receive under this Agreement over
the succeeding 90 days, Stanwell shall have the option of not accepting any
deliveries, in which case the provisions of this Clause 12 shall apply as if no
deliveries were possible, or of accepting such deliveries as can be made, in
which case this Clause shall apply to the portion of deliveries that cannot be
made.


12.5    Causes
Outside the Control of Coronado


(a)    For
the purposes of Clauses 12.7(b) and 12.7(c), an interruption to supply of Coal
shall be considered to be a "Cause Outside the Control of Coronado"
only if the following conditions are met:



 

 






 Page | 29 










      




(i)    the
cause of the interruption was not reasonably foreseeable and was beyond
Coronado's reasonable control;


(ii)    the
interruption could not have been avoided or overcome by a prudent coal mine operator
exercising due diligence;


(iii)    Coronado
has substantially given the notices and reports required under Clause 12.2;


(iv)    any
relevant requirements of Clause 12.5(b) are satisfied;


(v)    if the
Coal is Substitute Coal, the requirements of Clause 12.6 are satisfied; and


(vi)    Coronado
allocates its available coal to Stanwell on a basis which is no less favourable
than to Coronado's other customers.


(b)    The
following provisions shall apply with respect to the particular causes
enumerated:


(i)    Interruptions
due to breakdowns of machinery will only be considered to be beyond Coronado's
reasonable control if Coronado has followed proper maintenance procedures and
has in place proper "breakdown" procedures which anticipate normally
foreseeable breakdowns and minimise the consequences.


(ii)    Interruptions
due to failure of supply of goods and services, including shipping and other
transportation, electric power and water, will only be considered to be beyond
Coronado's reasonable control if Coronado has exercised due prudence in the
choice of the supplier and has entered proper contractual arrangements.


(iii)    Interruptions
due to shortage of reserves, geology, mining conditions, reduction in export
demand or increases in costs, however unexpected, will not be considered to be
beyond Coronado's reasonable control.


(c)    Where
Coronado is entitled to recover damages from a third party supplier of goods or
services, it shall use its best endeavours to do so (to the extent that a
prudent operator and investor would do so) and the cause concerned (to the
extent it otherwise qualifies under this Clause 12.5) will only be considered
to be a Cause Outside the Control of Coronado to the extent such damages
recovered by Coronado are insufficient to pay to Stanwell the amounts payable
under Clause 12.7(c).


(d)    Without
limitation the following are examples of events that could lead to
interruption to the supply of Coal beyond Coronado's control if the
requirements of Clauses 12.5(a) and 12.5(b) are met:


(i)    natural calamities, acts of
public enemies, acts of terrorists, insurrections, fires, wars, explosions,
floods;


(ii)    serious breakdowns of railroad
or port facilities;


(iii)    breakdowns of mining plant and
equipment and other machinery;


(iv)    embargoes,
orders or acts of a competent court or governmental or other statutory
authority;


(v)    strike, lockouts, illegal
stoppages, or labour or union organised reduction of production; and


(vi)    failure
of supply of goods and services, including Coronado's Carrier failing to make
sufficient rollingstock available at the Loading Plant at a mine to transport
Substitute Coal.



 

 






 Page | 30 










      




12.6    Causes
Outside the Control of Coronado in case of Substitute Coal  


Where
the interruption to supply affects Coal which is Substitute Coal, the
interruption to supply shall not be considered to result from a Cause Outside
the Control of Coronado unless the requirements of Clause 12.5(a) are satisfied
(a "Qualifying Cause") and either:


(a)    coal supplies in the area in
Queensland north of latitude 24 degrees south are generally interrupted by the
same cause; or


(b)    the
Substitute Coal has been or is to be delivered to the Curragh Mine for delivery
to Stanwell through the Curragh Mine Loading Plant and either:


(i)    the
Qualifying Cause prevents the Substitute Coal from being delivered to the
Curragh Mine Loading Plant; or


(ii)    the
Qualifying Cause occurs after such delivery. 


12.7    Consequences
of Interruption


(a)    Both
Coronado and Stanwell shall endeavour to mitigate costs and damages flowing
from any interruption to the supply of Coal.


(b)    If
the cause of the interruption to supply is a Cause Outside the Control of
Coronado, then Coronado shall be relieved of its obligation to make such deliveries at such time to
the extent the making is prevented by such cause, without derogating from
Coronado's other obligations hereunder.


(c)    Subject to Clause 22.6, if
the cause of the interruption to supply is not a Cause Outside the Control of
Coronado, then in addition to such other rights as Stanwell may have under this
Agreement, Stanwell shall be entitled to indemnification from Coronado for all
of Stanwell's costs and damages resulting from the interruption, including
additional costs in obtaining make up coal and the Derived Amount that would
have been attributable to such coal had it been delivered by Coronado. 
Stanwell will use reasonable endeavours to mitigate all such costs and damages.


(d)    If
Clause 12.7(c) applies, and Stanwell obtains make up coal and Coronado
indemnifies Stanwell in accordance with Clause 12.7(c) for all of
Stanwell's costs and damages resulting from the interruption, the Tonnes Equivalent of such
make up coal will be treated as having been delivered for the purposes of the
Monthly Tonnage (SRA Value Schedule).


13.    Interruption to Taking of
Deliveries


13.1    Stable Demand as Fundamental
Condition


(a)    Stanwell
expressly acknowledges that, without derogating from the provisions of this
Agreement providing for termination and suspension, it is a fundamental
expectation of Coronado that this Agreement will provide Coronado with a stable
demand for Annual Contract Tonnage and that it was on the basis of Stanwell's representations
of its ability to provide such stable demand as specified herein that Coronado
agreed to enter this Agreement with Stanwell.  


(b)    Irrespective
of the allocation of risk for failure to take Coal under this Agreement,
Stanwell shall endeavour to avoid and minimise any interruptions to the taking of
deliveries of Coal.


(c)    Clauses
13.2 to 13.6 inclusive, shall apply in the event Stanwell does not take
delivery in full of any Coal for which Stanwell has validly nominated in accordance with this
Agreement hereunder on the due date, or such non-taking of delivery is
threatened as provided hereunder, irrespective of the cause, except where the
cause is the breach by Coronado of its obligations under this Agreement.



 

 






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13.2    Stanwell
to Give Notices and Reports  


(a)    Stanwell
shall give notice ("Interruption Notice") to Coronado promptly
upon the occurrence of any event which interrupts or is reasonably likely to
interrupt the taking of Coal by Stanwell in accordance with this Agreement.


(b)    As
soon as practicable thereafter, Stanwell shall give a report to Coronado
covering the following matters to the best of Stanwell's knowledge at the time
of giving the report:


(i)    the nature of the interruption
or threatened interruption;


(ii)    the circumstances and cause of
same;


(iii)    whether
Stanwell considers the event to be outside the control of Stanwell;


(iv)    the likely duration of the
interruption;


(v)    Stanwell's
revised plan for taking of deliveries of Coal at the time of giving the report;
and


(vi)    details
of the efforts that have been made and are planned by Stanwell to avoid or
minimise the interruption and the effects thereof on Stanwell's performance
under this Agreement.


(c)    So long
as the interruption continues or continues to threaten, Stanwell shall furnish
Coronado with further reports covering the matters listed in Clause 13.2(b):


(i)    whenever there is any material
change in the circumstances as set out in the last report; and


(ii)    in any
event no less than Monthly.


(d)    Stanwell shall notify
Coronado immediately when the interruption ends.


13.3    Counter-Measures
by Coronado


(a)    Coronado
shall be entitled to take reasonable action to avoid or mitigate the effects of
the interruption or threatened interruption on Coronado, without prejudicing
such rights as Coronado may have under this Agreement with respect to such
interruption.  In particular but without limitation, Coronado shall be entitled
to take the following actions if the interruption continues, or in the
reasonable opinion of Coronado after consulting with Stanwell is likely to
continue, for more than:


(i)    thirty
(30) days, then Coronado may, at its discretion in accordance with
Clause 13.4(a):


(A)    subject to Clause 13.4(c)
postpone the affected deliveries, until any subsequent Year or Years of the
Supply Term; or


(B)    without penalty to Coronado,
cancel the same and sell the affected deliveries elsewhere;


(ii)    ninety
(90) days, Coronado may, at its discretion in accordance with
Clause 13.4(a), enter Medium Term Arrangements for the sale of the
affected deliveries which in Coronado's reasonable view are likely to be
affected by the interruption to third parties, in which case Coronado (in
addition to its rights under Clause 13.3(a)(i) above), may, at its discretion
cancel the shipments covered by the Medium Term Arrangements or postpone,
subject to Clause 13.4(c), the same to any subsequent Year or Years;


(iii)    fifteen
(15) Months and actually result in Stanwell taking less than [***]% of the Coal
it is entitled to receive under this Agreement during those fifteen (15)
Months, then Coronado may (in addition to its rights under Clauses 13.3(b) and
13.3(c)), upon notice to Stanwell terminate this Agreement provided such notice
is given within seven (7) days of the end of that fifteen (15) Month 



 

 





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period.  Any notice given
pursuant to this clause shall state the effective date of such termination.


(b)    In
the event Stanwell becomes able to recommence performance in accordance with
this Agreement during the period of any suspension under Clause 13.3(a)(ii),
Stanwell shall give Coronado not less than ninety (90) days' notice thereof in
which event, upon termination of its Medium Term Arrangements, Coronado
shall recommence making and Stanwell shall recommence taking Coal deliveries
under this Agreement.


(c)    Before
taking any reasonable action under Clause 13.3(a), Coronado shall inform
Stanwell of its proposed action.  Stanwell may, within 5 days, make
representations to Coronado as to the appropriateness of the proposed action,
taking into account among other things, the likelihood of the interruption
occurring and its likely duration.  In determining what reasonable action to
take under Clause 13.3(a), Coronado shall take those representations into
account.


13.4    Coronado's Elections


(a)    Coronado
may make the elections provided in Clause 13.3(a) by giving notice to Stanwell
at any time prior to the recommencement of Stanwell's performance after suspension
of this Agreement.


(b)    If
Coronado elects to cancel deliveries in accordance with Clause 13.3 the
cancelled deliveries of Coal will not be treated as delivered for the purposes
of the SRA Value Schedule and any cancellation will not prejudice Stanwell's
entitlement to achieve the Outstanding Value of the SRA under this Agreement.


(c)    If
Coronado elects to treat the affected deliveries as postponed, then the same
shall be postponed until such subsequent Years as may be nominated by Coronado
in the notice of election given under Clause 13.4(a); provided that unless Stanwell
agrees, the postponed deliveries to be delivered in any Year shall not exceed
[***] percent ([***]%) of the Annual Contract Tonnage nominated by Stanwell in
accordance with Clause 4.1(a)(i) for that Year.  


(d)    If
Coronado elects to enter into Medium Term Arrangements and Stanwell gives
Coronado notice of resumption of taking of deliveries Coronado shall use its
best endeavours to terminate the Medium Term Arrangements (without being required to
breach the same) such that it is able to make the deliveries when nominated by
Stanwell.


(e)    If the
interruption to taking of deliveries is only partial, or if Stanwell is able to
recommence taking partial deliveries only and such partial taking is likely in
Coronado's reasonable view to result in Stanwell taking less than [***]% of
the total Coal it is required to take under this Agreement over the succeeding
90 days, Coronado shall have the option of not tendering any deliveries, in
which case the provisions of this Clause 13 shall apply as if it were not
possible for Stanwell to take any deliveries, or of tendering such deliveries
as can be taken, in which case this Clause 13 shall apply to the portion of
deliveries that cannot be taken.


13.5    Causes
Outside the Control of Stanwell


(a)    For
the purposes of Clauses 13.6(b) and 13.6(c), an interruption to the taking of
deliveries shall be considered to be a "Cause Outside the Control of
Stanwell" if Stanwell is prevented from taking, transporting, or using
the Coal in the manner contemplated by this Agreement, but only if the
following conditions are met:


(i)    the cause
of the interruption was not reasonably foreseeable and was beyond Stanwell's
reasonable control;


(ii)    the
interruption could not have been avoided or overcome by a prudent power station
operator exercising due diligence;


(iii)    Stanwell
has substantially given the notices and reports required under
Clause 13.2;



 

 






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(iv)    any
relevant requirements of Clause 13.5(b) are satisfied; and


(v)    Stanwell
takes such Coal as it is able to take on a basis which is no less favourable to
Coronado than to Stanwell's other suppliers.


(b)    The
following provisions shall apply with respect to the particular causes
enumerated:


(i)    Interruptions
due to breakdowns of machinery will only be considered to be beyond Stanwell's
reasonable control if Stanwell has followed proper maintenance procedures and
has in place proper "breakdown" procedures which anticipate normally
foreseeable breakdowns and minimise the consequences.


(ii)    Interruptions
due to failure of supply of goods and services, including shipping and other
transportation (and in the case of Stanwell, Stanwell's Carrier), electric
power and water, will only be considered to be beyond Stanwell's reasonable
control if Stanwell has exercised due prudence in the choice of the supplier
and has entered proper contractual arrangements.


(iii)    Interruptions
due to increases in costs, environmental restrictions, or any reduction in
demand for electricity, however unexpected, will not be considered to be beyond
Stanwell's reasonable control.


(iv)    Interruptions
due to embargoes, orders or acts of a Government Body of the State of
Queensland, however unexpected, will not be considered to be beyond Stanwell's
reasonable control where those embargoes, orders or acts:


(A)    are
intended to apply, or have the effect of applying, only to Stanwell and/or the
Stanwell Power Station; or


(B)    are
intended to have a greater proportional application to the Stanwell Power
Station than other coal fired power stations in the State of Queensland,


provided that this Clause 13.5(b)(iv) shall not apply to
Stanwell if the shares in Stanwell cease to be owned by a Government Body,
unless the commission of the relevant embargo, order or act is a condition,
express or implied, of the transaction by which the new owner became owner of
those shares.


(c)    Where
Stanwell is entitled to recover damages from a third party supplier of goods or
services, it shall use its best endeavours to do so (to the extent that a
prudent power station operator would do so) and the cause concerned (to the extent
it otherwise qualifies under this Clause 13.5) will only be considered to be a
Cause Outside the Control of Stanwell to the extent such damages recovered by
Stanwell are insufficient to pay to Coronado the amounts payable under Clause
13.6(c).


(d)    Without
limitation, the following are examples of events that could lead to
interruption beyond Stanwell's control if the requirements of Clauses 13.5(a) and 13.5(b)
are met:


(i)    natural calamities, acts of
public enemies, acts of terrorists, insurrections, fires, wars, explosions,
floods;


(ii)    serious breakdowns of railroad
or port facilities;


(iii)    breakdowns of the boilers and
other machinery;


(iv)    embargoes,
orders or acts of a competent court or governmental or other statutory
authority;


(v)    strike, lockout, illegal
stoppages, or labour or union organised reduction of production; and


(vi)    failure
of supply of goods and services including Stanwell's Carrier failing to make
sufficient rollingstock available at the train loading facilities at the
Curragh Mine to allow Stanwell to carry out its obligations hereunder.



 

 






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13.6    Consequences
of Interruption


(a)    Both
Coronado and Stanwell shall endeavour to mitigate costs and damages flowing
from any interruption to the taking of deliveries of Coal.


(b)    If
the cause of the interruption to the taking of deliveries of Coal is a Cause
Outside the Control of Stanwell, then Stanwell shall be relieved of its obligation to take
such deliveries at such time (and to make payments in consequence of not taking
the same) to the extent the taking is prevented by such cause, without
derogating from Stanwell's other obligations hereunder.


(c)    Subject
to Clause 22.6, if the cause of the interruption to the taking of deliveries is
not a Cause Outside the Control of Stanwell and Stanwell has not made an Advance Payment
with respect to such deliveries as provided in Clause 16, then in addition
to such other rights as Coronado may have under this Agreement, Coronado shall
be entitled to recover from Stanwell indemnification for all of Coronado's
costs and damages resulting from the interruption, including costs in
stockpiling of coal and any reduced price (in comparison to the Netback Price)
it may receive from selling coal to other customers. Coronado will use
reasonable endeavours to mitigate all such costs and damages.


14.    Sales by Coronado to other
Purchasers


Subject only to complying with its obligations to Stanwell
under this Agreement, Coronado may, at its sole discretion, sell coal produced
from the Tenements to any other purchaser of that coal.


15.    Marketable
Reserves  


15.1    Annual Report on Marketable
Reserves


Coronado shall prepare and provide to Stanwell by 30
September of each Year during the Supply Term (or if earlier, within 10
Business Days of it being filed with a recognised stock exchange), the most
current Marketable Reserves Statement.


16.    Request
by Stanwell for Postponement of Deliveries


Stanwell may request of Coronado
that it does not take deliveries of Coal that it would otherwise be required to
take by electing to make an Advance Payment to Coronado equal to 100% of the
Contract Price per Tonne Equivalent of the affected delivery, provided that:


(a)    Stanwell gives reasonable
prior notice to Coronado of its intent to make this election;


(b)    Coronado
at its sole discretion and without legal obligation, decides to accommodate the
election with or without conditions and gives Stanwell notice to that effect,
including setting out any conditions and costs Stanwell will be required to
bear;


(c)    Stanwell
first agrees to comply with any conditions and be liable for any costs as
outlined in Coronado's notice, and if the Coal is stockpiled it is done so at
Stanwell's risk; and


(d)    in the event Stanwell does so
elect, Stanwell shall be entitled to request make up deliveries of the affected
deliveries in any subsequent Year (provided that unless Coronado agrees such
make up deliveries shall not exceed 10% of the Annual Contract Tonnage for any
Year).


An "Advance Payment" is a payment
described in this Clause 16.  For the purposes only of the SRA Value
Schedule and without limiting Coronado's delivery obligations, if Stanwell
makes an Advance Payment in respect of any Coal, that Coal will be deemed to
have been delivered at the time of payment by Stanwell.



 

 






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17.    Dispute Resolution


(a)    If
at any time any question, dispute or difference arises between Stanwell and
Coronado in relation to, or arising out of, this Agreement, then the Authorised Representative
from each of Stanwell and Coronado shall meet with the view to resolving that
question, dispute or difference.


(b)    If
the dispute is not resolved within fourteen (14) days of the meeting referred
to in Clause 17(a), then the Chief Executive Officer (or person of
equivalent rank) of Stanwell shall meet with the Chief Executive Officer (or
person of equivalent rank) of Coronado with a view to resolving the dispute.


(c)    If
the dispute is not resolved within fourteen (14) days of the meeting referred
to in Clause 17(b) then the dispute shall be referred to mediation, to be conducted in
accordance with Clause 17(g).


(d)    If the
dispute is not resolved within thirty (30) days of the commencement of the
mediation referred to in Clause 17(c) then either Party may commence proceedings in a
court of competent jurisdiction in Queensland.


(e)    Notwithstanding the existence of
a dispute the Parties shall continue to perform the Agreement.


(f)    Nothing herein shall
prejudice the right of a Party to seek urgent injunctive or declaratory relief
in respect of the dispute or any other matter arising under this Agreement.


(g)    The
following
paragraphs apply to any mediation between the Parties pursuant to Clause 17(c):


(i)    If the
Parties do not agree within seven (7) days from the date upon which Clause
17(c) applies as to the identity of the mediator, or the mediator agreed by the
Parties determines that he or she is unable or unwilling to act, a mediator
shall be appointed by the Resolution Institute in accordance with its mediation
rules.  Within seven (7) days of such agreement or nomination the Parties must
jointly appoint the agreed or nominated mediator and if either refuses to make
the appointment the other is hereby irrevocably authorised to appoint the
mediator on behalf of both Parties.


(ii)    Within
seven (7) days after his or her appointment the mediator shall meet with the
Parties to agree upon the procedure to be adopted in resolving the dispute or
difference and failing agreement between them within ten (10) days from such
appointment the procedure shall be as determined by the mediator having regard
to the other provisions hereof.


(iii)    The mediator:


(A)    may
inform himself or herself in relation to any matter in dispute in such manner
as he or she thinks fit;


(B)    shall be
entitled to engage or consult with any adviser, legal or technical, as he or
she may see fit; and


(C)    shall
otherwise have the power to facilitate the resolution of the dispute in such a
manner and subject to such rules as the mediator in his or her absolute
discretion determines as suitable for the nature of the dispute.


(iv)    The
mediator shall seek to resolve the dispute by acting as a mediator or
conciliator between the Parties and for that purpose may require the Parties to
confer with him or her at any time in relation to the whole or any part of or
in respect of any aspect of the dispute.


(v)    Unless
agreed by the Parties neither Party shall be represented by a legal
practitioner.



 

 






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(vi)    The
Parties shall pay the costs of the mediator and any consultants engaged by the
mediator equally.


(vii)    Neither
anything said orally or in writing, nor any documents or information provided
by either Party to the other or to the mediator and produced for the purposes
of the mediation in the course of or in connection with the mediation shall be
admissible in any legal proceedings between the Parties; and shall be regarded
as privileged, provided that this shall not apply to documents already in
existence and otherwise admissible; and unless agreed by the Parties the person
acting as mediator may not be called as a witness by either Party in any
proceedings.


(h)    Notwithstanding the foregoing
provisions of this Clause 17, in the event that the question, dispute or
difference relates to Clauses 7, 8 (except for the umpire analysis provided
therein), 11.6 and 11.9(c) ("Reference Clause(s)"), then:


(i)    Either
Party may give notice to the other requesting a meeting to resolve the same and
if the matter is not resolved within 14 days of such notice either Party may
give notice specifying the nature of the question dispute or difference and
calling for the point at issue to be referred to an "Expert". 


(ii)    In such
event the Parties shall seek to agree upon an Expert to determine the matter.


(iii)    Failing
such agreement within one Month of the notice referred to in Clause 17(h)(i),
and unless the Reference Clause states to the contrary, the Chair of the
Resolution Institute shall be requested to nominate the Expert.


(iv)    The
Parties must give the Expert all of the information and assistance which the
Expert may reasonably require.


(v)    The
Expert must:


(A)    promptly
fix a reasonable time and place for receiving submissions or information from
the Parties or from any persons as he may think fit;


(B)    accept
oral or written submissions from the Parties in relation to the dispute;


(C)    not be bound by the rules of
evidence; 


(D)    prior to
making a binding decision, publish a draft decision giving reasons within 28 days
of his appointment and thereafter the Parties may within 35 days of his
appointment make written submissions to the Expert and the Expert may amend his
draft decision prior to making his final decision; and


(E)    state his final decision giving
reasons in writing within 40 days of his appointment.


(vi)    The
Expert will be required to undertake to keep confidential all matters coming to
his knowledge by reason of his appointment and performance of his duties.


(vii)    The
Expert will have the following powers:


(A)    to inform
himself independently as to all matters relevant to the dispute;


(B)    to
receive oral or written submissions from the Parties; and


(C)    to consult with any other
professionally qualified persons as he in his absolute discretion thinks fit in
relation to resolving the dispute.


(viii)    The
Expert shall not be deemed to be an arbitrator but an expert and the law
relating to arbitration, including the Commercial Arbitration Act 2013
(Qld),



 

 





 Page | 37 










      




 shall not apply to the Expert
or the determination or the procedures by which the Expert may reach a
determination.


(ix)    The
determination of the Expert shall be final and binding on each Party.


(x)    Except as
otherwise provided in the Reference Clause, the costs of the Expert and any
consultants or advisors engaged by the Expert shall be borne equally by the
Parties.  The Parties shall each bear their own legal and other costs.


(xi)    All
proceedings and submissions and responses shall be kept confidential between
the Parties, their respective legal and other advisors who are under a duty of
confidentiality, and the Expert.  Such information may only be divulged to any
other third party with the prior consent of the Parties or as may be required
by law, in order to enforce the determination of the Expert or as may be
required in connection with any litigation.


(i)    A Party
shall consider in good faith any request by the other Party to have any
question, dispute or difference referred to an Expert under Clause 17(h), but without any
obligation to do so.


18.    Assignment
and Change of Control  


18.1    Assignment by Coronado


Coronado may not assign all or any part of its rights or
obligations under this Agreement unless:


(a)    Stanwell has given its prior
consent; and


(b)    its rights, in the same
percentage, to the Tenements and to each Project Document are assigned to the
same assignee at the same time, except in relation to a deemed assignment under
Clause 18.4.


18.2    Assignment of rights to the
Tenements


(a)    Coronado may not assign
its rights to the Tenements, except together with an assignment, in the same
percentage, of its rights and obligations under this Agreement.


(b)    Notwithstanding
Clause 18.2(a), Coronado may encumber its rights to the Tenements so long as
the encumbrancee undertakes in a form reasonably satisfactory to Stanwell only to
dispose of such rights together with an assignment of rights and obligations
under this Agreement in accordance with Clause 18.1.


18.3    Assignment by Stanwell


Stanwell may not assign all or any part of its rights or
obligations under this Agreement unless:


(a)    Coronado has given its prior consent; and


(b)    each Project Document is
assigned to the same assignee at the same time.


18.4    Change
of Control


A Change of Control of Coronado will be deemed to be an
assignment of this Agreement for the purpose of this Clause 18 and the person
that acquires Control will be deemed to be the "proposed assignee",
provided that this Clause 18.4 will not apply if the Change of Control of
Coronado occurs as a result of the purchase of shares or other securities in
Coronado Holdings which are of a class that are listed on the Australian
Securities Exchange or another recognised stock exchange.



 

 






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18.5    Requests
for consent


(a)    The Party
requesting any consent under this Clause 18 ("Party Concerned")
may request consent for a proposed assignee as soon as it believes a person is
likely to be an assignee ("Request").  


(b)    The
Party whose consent is required under this Clause 18 ("Consenting Party")
must, within 30 days (or 45 days if Clause 18.5(d) applies) of receiving a
Request, by notice to the Party Concerned, either:


(i)    subject
only to Clause 18.6(b), 18.6(e) and 18.6(g), give unqualified consent; or


(ii)    refuse
consent, in which case it must set out the reasons for such refusal.


(c)    If the Consenting Party fails for
any reason to give the notice within such period, unqualified consent will be
deemed to have been given.


(d)    If
neither the proposed assignee nor any of its Holding Companies:


(i)    has a
substantial investment in Australia, or


(ii)    is
listed on a stock exchange either in Australia or overseas,


then the 30 day period referred to in Clause 18.6(b) will
be extended to 45 days.


(e)    To
maximise the time the Consenting Party has to consider the suitability of a
proposed assignee, the Party Concerned may notify the Consenting Party of a
shortlist of proposed assignees as soon as the Party Concerned is satisfied
that a list, acceptable to it, is available.  However, a notice requesting a
consent for the purpose of this Clause 18.5 for a particular assignee will not
be deemed to have been given until the Party Concerned by notice informs the
Consenting Party that in its opinion a person named in the shortlist is likely
to be an assignee.


18.6    Financial
Ability


(a)    In
this Clause 18.6 "Financial Ability" means:


(i)    in
relation to a Party its financial ability to perform its obligations as a party
to this Agreement; and


(ii)    where
Clause 18.4 applies, a Party's financial ability to perform its obligations as
a party to this Agreement taking into account its Financial Ability and whether
that is materially adversely affected by a change of ownership to the proposed
assignee.


(b)    Where
a Party's
consent is required under this Clause 18, such consent must be given unless:


(i)    the
Consenting Party, acting reasonably, determines that the proposed assignee does
not have the Financial Ability; or


(ii)    where
Clause 18.4 applies, Stanwell, acting reasonably, determines that the party
would not continue to have the Financial Ability.


(c)    If,
acting reasonably, the Consenting Party determines that the proposed assignee
does not have the Financial Ability, and so informs, with reasons, the Party
Concerned as contemplated in Clause 18.5(b)(ii), the Party Concerned may then
request the Consenting Party to consider whether by taking into account the
ownership of the proposed assignee and the financial substance of its Holding
Company ("Matters") the proposed assignee thereby has the
Financial Ability.


(d)    The
Consenting Party must consider the request made under Clause 18.6(c) within 5
days of receiving it.  If, acting reasonably it determines that by taking into
account either or both Matters, the proposed assignee thereby has the Financial
Ability, the Consenting Party must inform the Party Concerned to that effect
and give its consent to the proposed assignment.  In doing so, the Consenting
Party may give qualified 



 

 





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consent requiring reasonable
contractual protections, such as a Holding Company guarantee.


(e)    When
making a request under Clause 18.5 in respect of a particular proposed
assignee, the Party Concerned may request that if the Consenting Party, acting
reasonably, should determine that the proposed assignee does not have the
Financial Ability, then the Consenting Party also have regard to the Matters
for that
proposed assignee.   


(f)    In that
event the Consenting Party, acting reasonably, may give qualified consent
requiring reasonable contractual protections, such as a Holding Company
guarantee.  Any such consent is to be given within the 30 or 45 day period as
contemplated under Clause 18.5.  In doing so the Consenting Party must also
give reasons for initially determining that the proposed assignee does not have
the Financial Ability.


(g)    Notwithstanding
any other provision of Clause 18 a consent for a particular potential assignee
will be deemed to include a consent for any Related Body Corporate of it that
becomes the actual assignee so long as the Related Body Corporate is determined
by the Consenting Party in accordance with this Clause 18.6 to:


(i)    meet the
criteria set out in this Clause; or if not 


(ii)    meet
the criteria set out in this Clause by the Consenting Party, acting reasonably,
taking into account the Matters, if the Party Concerned has requested that the
Matters be considered,


and if Clause 18.6(g)(ii) applies, the Consenting Party may
give qualified consent requiring reasonable contractual protections, such as a
Holding Company guarantee.


18.7    Deemed
notice


The Parties agree that any notice referred to in this
Clause 18 will be deemed to have been given and received if:


(a)    similar
notice has been given pursuant to the equivalent provision to this Clause 18 in
another Project Document; and


(b)    that notice refers to this
Agreement.


19.    Representations, Warranties and
Undertakings


19.1    By Coronado


Coronado represents, warrants and undertakes to Stanwell
that as at the date of this Agreement:


(a)    Coronado is the sole legal
and beneficial owner of, and is entitled to all coal produced from, the
Tenements; and


(b)    Coronado
has corporate power, has obtained all necessary approvals, licenses and
authorities, and has taken all necessary steps to enable it to enter this Agreement
and perform its obligations hereunder.


19.2    By Stanwell


Stanwell represents, warrants and undertakes to Coronado
that as at the date of this Agreement it has the corporate power, has obtained
all necessary approvals, licenses and authorities and has taken all necessary
steps to enable it to enter this Agreement and perform its obligations
hereunder.



 

 






 Page | 40 










      




20.    Confidentiality


(a)    Subject
to Clause 20(b), the provisions of this Agreement and all information acquired
by a Party from the other Party in respect of the operation of this Agreement
and each Project Document shall be confidential and shall not unless otherwise agreed by all the Parties
be disclosed to any third party except to:


(i)    a Related
Body Corporate;


(ii)    the
State, as required by any relevant laws or regulations and the Shareholding Ministers
in the case of Stanwell;


(iii)    a
contractor employed by a Party where disclosure of such data or information is
necessary to such contractor's work provided that such contractor executes an
agreement of confidential treatment thereof for the benefit of the other Party;


(iv)    a bona
fide prospective purchaser of part or all of a Party's interest in this
Agreement or any of the Tenements or of the Curragh Mine or the Power Stations
(including a person with whom a Party is conducting bona fide negotiations
directed towards a merger, public listing or consolidation) provided that it
first executes an agreement of confidential treatment thereof for the benefit
of the other Party;


(v)    a bank or
other lending agency to the extent necessary for a Party arranging for funding
of its obligations hereunder; or


(vi)    its professional advisers.


(b)    Clause
20(a) shall not apply to information that:


(i)    becomes
generally available to the public other than as a result of a disclosure by the
Party seeking to rely on this Clause 20(b) ("Relevant Party'') in
violation of this Agreement;


(ii)    was
available to the Relevant Party on a non-confidential basis prior to its
disclosure to that Party by the other Party or its representatives, or


(iii)    becomes
available to the Relevant Party on a non-confidential basis from a source other
than the other Party or its representatives when such source is entitled, to
the best of the Relevant Party's knowledge, to make such disclosure.


(c)    In
this Clause 20 information required by Clause 20(a) and 20(b) to be
confidential shall be referred to as "Confidential Information". 


(d)    Nothing
herein contained shall be construed to preclude a Party from making any public announcement or other
disclosure reasonably necessary to comply with any statutory or regulatory
obligation including, but without limiting the generality of the foregoing, any
disclosure obligation applicable under the Corporations Act or the requirements
of any stock exchange on which the shares of such Party or a Related Body
Corporate are or are proposed to be listed.


(e)    A Party
requiring or wishing to make public any material referred to in Clause 20(d)
that includes Confidential Information shall notify the other Party of the proposed
announcement as far in advance as is reasonably possible.


(f)    The
obligations under this Clause shall continue to bind a Party for a period of 3
Years after the termination of the last of this Agreement and each Project Document.



 

 






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21.    Notices and Communications


21.1    Notice


In this Clause 21,
"Notice" means a notice, demand, consent, approval or
communication given by a party pursuant to or in connection with this
Agreement.


21.2    Service


A Notice must be:


(a)    in
writing, in English;


(b)    signed:


(i)    in
the case of Stanwell, by its Authorised
Representative, a director or a company secretary; and


(ii)    in the
case of Coronado, by its
Authorised Representative, a director or a company secretary; and


either:


(iii)    hand delivered or sent by prepaid post; or


(iv)    sent by email,


in each case, to the recipient's address for
notices specified in the details at the start of this Agreement, as varied by
any Notice given by the recipient to the sender.


21.3    Notice by email


A Notice by email is taken to be in writing and signed by
the named sender.


21.4    Effective on receipt


A Notice given in accordance with this Clause 21 takes
effect when taken to be received (or at a later time specified in it), and is
taken to be received:


(a)    if hand delivered, on delivery;


(b)    if sent
by prepaid post within Australia, on the fifth Business Day after the date of
posting; and


(c)    if sent
by email, on dispatch of the email unless the sender's server indicates a
malfunction or error in transmission or the recipient immediately notifies the
sender of an incomplete transmission,


but if the delivery or receipt is not on a Business Day or
is after 5.00pm on a Business Day, the Notice is taken to be received at 9.00am
on the next Business Day.


21.5    Service of Process


The Parties agree any process in any proceedings in
Australia issued by any Party, including any originating process, may be served
on any other Party by sending a photocopy of the signed and sealed copy of the
initiating process document by certified or registered mail, with postage
prepaid, to such other Party at that Party's address pursuant to this
Clause 21.


22.    Miscellaneous


22.1    Waivers and Remedies


(a)    Except
where inconsistent with the context hereof the failure of any Party to insist
in any instance upon strict performance of any of the provisions of this
Agreement or to take advantage of any of its rights hereunder shall not be
construed as a waiver of any 



 

 





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such provisions or the
relinquishment of any such rights, but the same shall continue and remain in
full force and effect.


(b)    In particular
and without limiting the generality of the foregoing, the acceptance by
Stanwell of Coal which does not comply with the Standard Coal Quality or the
Limiting Specifications in Clause 7.2(a) shall not be deemed to be a waiver by
Stanwell of any of its rights under this Agreement in relation to such Coal or
of its right to refuse to accept future deliveries which do not meet such
requirements.


(c)    Any amendment to this
Agreement shall be in writing and signed by the Parties.


22.2    Entire Agreement


This Agreement shall constitute the entire agreement
between the Parties in relation to its subject matter and no other
representations, warranties, covenants, terms or conditions, whether express or
implied and whether oral or in writing, in relation to the subject matter of
this Agreement shall be of any force or effect unless contained in this
Agreement.  This Agreement supersedes all prior negotiations, contracts,
arrangements, understandings and agreements including the Binding Terms Sheet
(as defined in the Deed) with respect to its subject matter, including any
discussions between Coronado and Stanwell and any Related Body Corporate or
representative of any of them 


22.3    Interpretation and Governing
Law


The law of the State of Queensland, Australia, shall apply
to and be the proper law of this Agreement.  Any action or proceedings taken or
which may be taken under or in connection with this Agreement shall be taken,
instituted or determined, as the case requires, in the Courts of Queensland.


22.4    Amendment


Any amendment to this Agreement shall be in writing and
signed by the Parties.  


22.5    Mutual
Collaboration


Stanwell and Coronado recognise
that circumstances may arise which could not have been reasonably foreseen at
the time this Agreement is entered into.  The Parties agree that they will use
their best endeavours to resolve any problems due to any such unforeseeable
circumstances including continuation of any interruption to supply and to
taking of deliveries in the spirit of mutual understanding and collaboration. 
Failure to resolve any problems as contemplated in this Clause 22.5 will
not be a matter to which Clause 17 applies.


22.6    Limitations
to Losses and Damages


(a)    If
any act or omission of Coronado or Stanwell, under the provisions of this
Agreement:


(i)    gives
rise to any liability on the part of that Party for damages the amount of which
is not liquidated by any provision of this Agreement (including damages for
negligence, where that negligence constitutes, or contributes to, a breach of
contract by it); or  


(ii)    gives
rise to any liability on the part of that Party under any indemnity given by it
under this Agreement,


then such liability shall be limited to the direct,
proximate and foreseeable loss attributable to such act or omission, after
taking into account any obligation of the Party claiming in respect of the
liability to mitigate its loss and any contributory conduct, and neither the
Party claiming in respect of the liability nor any other person claiming
through or under that Party shall be entitled to damages or indemnification for
any Excluded Loss attributable to such act or omission.


For the avoidance of doubt, the damages referred to in
Clauses 12.7(d) and 13.6 are, once determined, "liquidated" for
purposes of this Clause 22.6(a)(i).



 

 






 Page | 43 










      




(b)    In
Clause 22.6(a) "Excluded Loss" means:


(i)    in the
case of loss or damage or liability to a non-Party resulting from a breach of
contract - indirect, remote or unforeseeable loss, including economic loss,
loss of use, loss of contracts, loss of revenue, loss of profit, loss or denial
of opportunity, loss of access to markets, loss of goodwill, loss of business
reputation, loss of production, increased overhead costs, or wasted overheads
or any other similar loss occasioned by that breach, whether or not in the
reasonable contemplation of the Parties at the time of execution of this
Agreement as being a probable result of the relevant breach;


(ii)    in the case of loss or damage
arising from any tort (including negligence) - indirect, remote or
unforeseeable loss and, in the case of pure economic loss, loss not flowing
directly from the commission of the tort; and


(iii)    in the case of loss or damage
arising from any breach of statutory duty, regulation or by-law - indirect,
remote or unforeseeable loss and, in the case of pure economic loss, loss not
flowing directly from the breach of the statutory duty, regulation or by-law,
save where such loss or damage cannot be excluded or limited by operation of
mandatory provisions of law.


22.7    Further Assurances


Each Party shall execute and deliver all further documents
and instruments, and provide such further assistance that may be necessary or
desirable to carry out the provisions of this Agreement or to effectuate the
purposes or intent of this Agreement.


23.    Costs


(a)    Except as
provided
in Clause 23(b), whether or not any of the transactions contemplated by this
Agreement are consummated, each Party shall pay its own fees and expenses of
and incidental to the negotiation, preparation and execution of this Agreement,
and to the transactions contemplated by this Agreement, including the fees and
disbursements of its lawyers and accountants.


(b)    Coronado
shall:


(i)    bear and
pay for all stamp duty on, or incidental to the execution of, this Agreement
and on or incidental to all transactions contemplated by this Agreement
excluding stamp duty on transactions or agreements between Stanwell and third
parties or between Stanwell and its Related Bodies Corporate;


(ii)    lodge
this Agreement for stamping as required by the relevant statute; and


(iii)    indemnify
Stanwell against its liability for all such stamp duty and against any
liability resulting from the failure of Coronado to lodge any document for
stamping as required under any applicable legislation.


24.    Counterparts


This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.


25.    Triggering
Events/Termination


25.1    Definitions 


In this Clause 25:



 

 






 Page | 44 










      




(a)    "Event
of Default" means a Financial Default or a Non-Financial Default, as the context
requires.


(b)    "Financial
Default" means any of the following:


(i)    any
failure by a Party to pay any sum due and payable to the other Party under this
Agreement or under a Project Document by the earlier of the following days:


(A)    the 15th day after the unpaid
sum becomes due and payable; and


(B)    the 5th
day after the Party receives notice from the other Party that the sum has not
been paid by the date it became due and payable (for the avoidance of doubt the
other Party is not obliged to give such notice);


(ii)    a Party
takes or has taken against it any action or proceeding whether voluntary or
compulsory which has the object or effect of:


(A)    winding
up that Party, which action or proceeding has not been dismissed or withdrawn
within 14 days; or


(B)    a Party's
liquidation or provisional liquidation;


(iii)    a
Party enters a compromise or other arrangement with its creditors or a receiver
or receiver and manager is appointed over any of its assets;


(iv)    at any
time after the date that Stanwell has been provided with Acceptable Security in
accordance with clause 4.1 of the Deed, Coronado fails to comply with any
subsequent or continuing obligation to Stanwell under that clause; and


(v)    at any
time before the date that Stanwell has been provided with Acceptable Security
in accordance with clause 4.1 of the Deed, Coronado is in breach of clause 4.2
of the Deed,


except that Clause 25.1(b)(iii) shall not apply to a
reconstruction or amalgamation of a Party while that Party is solvent.


(c)    "Non-Financial
Default" means a default, other than a Financial Default, by a Party in performing
this Agreement, but excludes an Excluded Event.


(d)    "Excluded
Event" means where there is an interruption or threatened interruption
to the taking of Coal by Stanwell from Coronado and Clause 13.3(a) applies. 


25.2    Default Notice


If an Event of Default occurs, the
non-defaulting Party may give the defaulting Party a notice ("Default
Notice") describing in reasonable detail the Event of Default that has
occurred and the following:


(a)    a
statement that the notice is a Default Notice issued under this Clause;


(b)    a
statement that there has been a Financial Default or a Non-Financial Default (as
the case may be);


(c)    a
statement of the relevant matters of fact in sufficient detail so as to permit
the clear identification of the matters constituting the default and the
non-defaulting Party's requirement for rectification; and


(d)    signatures
in accordance with Clause 21.


25.3    Cure
Period


Upon receipt of a Default
Notice, the defaulting Party will have:


(a)    in the
case of a Financial Default, 10 days to cure that default; and


(b)    in
the case of a Non-Financial Default, 60 days to cure that default, unless the
Parties have agreed in good faith on a longer period (not to exceed 180 days),
in which case 



 

 





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the period to cure that default
shall be such longer period, provided that the cure period will end immediately
if the defaulting Party ceases to be diligently pursuing a cure of the default.


25.4    Non-curable
default


If under Clause 25.3(b), the defaulting Party's default is
not reasonably capable of remedy, the defaulting Party must immediately notify
the other Party and take all reasonable steps satisfactory to the other Party
to mitigate the consequences of the default, but without prejudice to the
non-defaulting Party's rights under Clause 25.5.


25.5    Remedies


If a default is not cured within the
applicable cure period described in Clause 25.3, the non-defaulting Party may,
subject to:


(a)    giving 30
days' notice to the defaulting Party stating its intention to do so if the
default is not cured (and the default is not cured within that notice period)
provided that only 15 days' notice shall be required for a Financial Default
under Clause 25.1(b) (and provided that any notice given pursuant to this
Clause shall state the effective date of such termination); and


(b)    if the
Event of Default is a Non-Financial Default, that default having a material
adverse effect on the rights of the non-defaulting Party under this Agreement, 


terminate this Agreement without prejudice to any of its
other rights in this Agreement, any right to sue the defaulting Party for
damages for that default or the exercise of all other available legal or
equitable remedies, including suing for specific performance, injunctive relief
or such other orders as it deems appropriate.


25.6    Termination - General


The expiration or termination of this Agreement shall:


(a)    not
affect the provisions expressed or implied to operate or have effect on or
after such expiration or termination; and


(b)    be
without prejudice to any right of action already accrued to a Party in respect
of any breach of this Agreement by the other Party.  


25.7    Requirement
to provide Acceptable Security  


(a)    Stanwell
may terminate this Agreement with immediate effect if:


(i)    by 30
June 2019 Coronado has not granted, procured for or provided Stanwell with all
Acceptable Security as defined in and required by clause 4.1 of the Deed and
Coronado has not demonstrated to the reasonable satisfaction of Stanwell that:


(A)    Coronado
is using its best endeavours to grant, procure for and provide Stanwell with
all such Acceptable Security within a reasonable period after 30 June 2019; and



(B)    there are
reasonable grounds for Stanwell to believe that there are reasonable prospects
of the Acceptable Security being provided within that reasonable period;


(ii)    in any
case, all Acceptable Security required by clause 4.1 of the Deed has not been
granted, procured for or provided to Stanwell by 30 September 2019; or


(iii)    at the
time all Acceptable Security required by clause 4.1 of the Deed is granted to,
procured for or provided to Stanwell, Coronado is not able to demonstrate to
Stanwell’s satisfaction that the requirement in clause 4.1(f) of the Deed is
satisfied.



 

 






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(b)    Stanwell's
termination of this Agreement under Clause 25.7(a) is a termination for
Coronado's default for the purposes of determining the Termination Payment
calculated in accordance with the SRA Value Schedule to be paid by Coronado to
Stanwell under Clause 25.9 and is without prejudice to:


(i)    any of
its other rights in this Agreement; 


(ii)    any
right to sue Coronado for damages; or 


(iii)    the exercise of all other
available legal and equitable remedies, including suing for specific
performance, injunctive relief or such other orders as it deems appropriate.


25.8    Termination by Stanwell


If the ACSA is terminated by Stanwell following an 'Event
of Default' (as defined in the ACSA) arising in respect of Coronado, Stanwell
may immediately terminate this Agreement without prejudice to:


(a)    any of its other rights in this
Agreement;


(b)    any right to sue Coronado for
damages; or


(c)    the exercise of all other
available legal and equitable remedies, including suing for specific
performance, injunctive relief or such other orders as it deems appropriate.


25.9    Termination
payment


(a)    If this
Agreement is terminated for any reason (including under this Clause 25),
Coronado must pay to Stanwell the Termination Payment calculated in accordance with the
SRA Value Schedule within 10 Business Days of the date of termination.  


(b)    If
this Agreement is terminated otherwise than due to    Coronado's default,
Coronado may set-off against the Termination Payment any net amount payable by
Stanwell to Coronado under Clause 11 of this Agreement (having deducted any amounts
payable by Coronado to Stanwell under this Agreement).



 

 






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Schedule 1– SRA Value Schedule  


1.    Introduction


1.1    This
Agreement includes a number of items which change from time to time in
accordance with the Model Calculations contained in this Schedule 1.  The
purpose of these Model Calculations is to accommodate the flexibility in this
Agreement (including as to the Supply Commencement Date, Contract Price per GJ,
Monthly Tonnage and Cash in Lieu) while ensuring that in all circumstances
Stanwell receives the Value of the SRA. The Value of the SRA is acquitted by
the payment by Coronado of Monthly Cash Flows (adjusted by the Discount Factor)
as determined by the Model Calculations, and if the Outstanding Value of the
SRA is greater than zero as at the 31 December 2038, by payment by Coronado of
the Termination Payment.  


1.2    From time
to time as required for the purposes of this Agreement prior to the Supply
Commencement Date, and then at the end of each Month during the Supply Term,
the Model Calculations will be made in accordance with their terms.  The Model
Calculations use Fixed Inputs, Variable Elements and the output of other Model
Calculations.  


1.3    The
Model Calculations determine (amongst other things) certain payments to be made
under this Agreement, including that, in relation to each Month during the
Supply Term:


(a)    Stanwell
shall pay to Coronado the Netback Amount for the aggregate quantities of Coal
delivered in that Month.  The Netback Amount for the Month is to be determined
as: 


Netback Amount = [Netback Price x Monthly Tonnage (SRA
Value Schedule)] + [(Invoice Price x Tonnes Delivered) – (Contract Price per
Tonne Equivalent x Monthly Tonnage (SRA Value Schedule)]


(b)    Coronado
shall pay to Stanwell the Derived Amount and the Cash in Lieu for the Month.


1.4    The
Parties have agreed the form of an Excel spreadsheet which contains the Model
Calculations as attached to the email sent from Tim Peirce, Coronado to Natalie
Gordon, Stanwell on 14 August 2018 at approximately 11.15 am, and which is
attached to this Schedule 1.  The Excel spreadsheet also includes rows which
are to be used for the administration of this Agreement by the Parties, but
which are not, and do not affect, Fixed Inputs, Variable Elements or Model
Calculations for the purposes of this Schedule 1. 


1.5    To
the extent of any inconsistency, the documents will be interpreted in the
following order of precedence:


(a)    this
Agreement, including this Schedule 1; 


(b)    the
Excel spreadsheet; and


(c)    the
worked examples attached.


1.6    Each
Party acknowledges that the Model Calculations do not and will not take account
of either Party's tax position.


1.7    In this
Schedule 1, a reference to a Clause is a reference to a Clause in the main body
of this Agreement.


2.    Fixed
Inputs


The following
items are the Fixed Inputs (which remain unchanged throughout the term
of this Agreement):



 

 





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  Fixed Input

  	
  Value of Fixed Input

  
	
  Discount Rate

  	
  13% per annum.

  
	
  Valuation Date

  	
  13 August 2018.

  
	
  Netback Price

  	
  in respect of each Month on and from the Valuation Date,
  the price in A$ set out for that Month for the Netback Price in Attachment 1
  to this Schedule 1.  

  
	
  Contract Energy

  	
  means 25.6 GJ/Tonne (as received).

  
	
  New CSA Days

  	
  means, for a Month, the number of days from (and
  excluding) the Valuation Date until (and including) the last day of the
  relevant Month.

  
	
  Escalation Factor

  	
  means, for a Month:  (1 + 0.02) ^
  (New CSA Days / 365)

  
	
  Discount Factor

  	
  in respect
  of each Month from the Valuation Date, is to be determined as:

   

  =1/[((1+ Discount Rate)^(1/365))^(New CSA Days)]

  
	
  Value of the SRA

  	
  A$210,000,000.

  






 


3.    Variable
Elements


The following items are the Variable Elements: 


	
  Variable Element

  	
  Determination of Variable Element

  
	
  Supply Commencement Date

  	
  has the
  meaning given in Clause 1.1. 

  For the purposes only of the Model Calculations, unless and until the
  Supply Commencement Date occurs, a nominal Supply Commencement Date of 1
  March 2027 will be used for the Model Calculations (except if this Agreement
  is terminated prior to the Supply Commencement Date occurring and Stanwell
  has given a nomination in accordance with Clause 4.1(a), in which case the
  Supply Commencement Date indicated in that nomination will be used).

  
	
  Base Contract Price per GJ

  	
  means:

  ·     if the Supply Commencement
  Date is prior to 1 January 2026, A$[***] per GJ; 

  ·     otherwise, the price per GJ
  set out in the table headed 'Base Contract Price per GJ' in Attachment 1 to
  this Schedule 1 for the Month in which the Supply Commencement Date occurs, 

  provided that unless and until the Supply Commencement
  Date occurs, A$[***] will be used for Base Contract Price per GJ under this
  Schedule 1.  

  The Base Contract Price per GJ is fixed on the Supply Commencement
  Date.

  
	
  Contract Price per GJ

  	
  means, for each Month during the Supply Term, the Base
  Contract Price per GJ multiplied by the Escalation Factor for that Month. 

  
	
  Nominated Contract Price per GJ

  	
  means, for each Month during the Supply Term, the amount
  nominated as the Nominated Contract Price per GJ by Stanwell in accordance
  with Clause 4.1(a)(i)(C).

  
	
  Cash in Lieu Tonnage

  	
  means, for each Month during the Supply Term, the
  quantity of the Annual Contract Tonnage (in Tonnes Equivalent) for which
  Stanwell elects to receive Cash in Lieu in accordance with Clause
  4.1(a)(i)(B).

  






 



 

 





 Page | 49 










      





	
  Monthly Tonnage (SRA Value
  Schedule)

  	
  means:

  ·     for
  a Month prior to the effective date of the relevant Model Calculation, the
  actual quantity of Coal in Tonnes Equivalent delivered in that Month by
  Coronado to Stanwell;  

  ·     for
  any other Month in respect of which Stanwell has given a nomination in
  accordance with Clause 4.1, the Annual Contract Tonnage nominated by Stanwell
  for that Year, divided by 12; and

  ·     for any other Month during
  the Supply Term, 2,000,000 divided by 12, in Tonnes Equivalent.

  






 


4.    Model
Calculations


The following Model Calculations
will be calculated for each Month during the Supply Term using the Fixed
Inputs, Variable Elements and other Model Calculations (as is relevant).  The
Discounted Monthly Cash Flows and the Outstanding Value of the SRA will also be
calculated for each Month on and from the Valuation Date.


 


	
  Model Calculation

  	
  Formula

  
	
  Contract Price per Tonne
  Equivalent

  	
  means, for each Month during the Supply Term, the
  Nominated Contract Price per GJ for that Month multiplied by the Contract
  Energy.

  
	
  Derived Amount per Tonne

  	
  means, for each Month during the Supply Term, the Netback
  Price less the Contract Price per Tonne Equivalent for that Month. 

  
	
  Derived Amount

  	
  means, for each Month during the Supply Term, the Derived
  Amount per Tonne multiplied by the Monthly Tonnage (SRA Value Schedule) for
  that Month.

  
	
  Cash in Lieu

  	
  means, for each Month during the Supply Term, the Derived
  Amount per Tonne multiplied by the Cash in Lieu Tonnage for that Month.  

  
	
  Monthly Cash Flows

  	
  means, for each Month during the Supply Term, the Derived
  Amount plus the Cash in Lieu for that Month.

  
	
  Discounted Monthly Cash Flows

  	
  means, for each Month during the
  Supply Term the amount determined as:

   

  = Monthly Cash Flows x Discount Factor

   

  
	
  Cumulative Discounted Cash Flows

  	
  means, for each Month on and from the Valuation Date, the
  sum of each of the Discounted Monthly Cash Flows for every Month occurring
  during the Supply Term up to and including that Month (and being, prior to
  the Supply Commencement Date, zero). 

  
	
  Outstanding Value of the SRA

  	
  means, for each Month on and from the Valuation Date, the
  amount determined as: 

   

  =Value of the SRA – Cumulative Discounted Cash Flows

   

  






 



 

 





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5.    Termination
Payments


If this Agreement is terminated or if as at 31 December
2038, the Outstanding Value of the SRA is greater than zero, Coronado must pay
to Stanwell a termination payment (Termination Payment) calculated in
accordance with this Schedule 1 and:


·       
 if the termination is due to Coronado's
default, the Termination Payment will be: 


 


·       
 the Cash Value of the SRA; plus 


·       
 the Top-Up Amount; and 


 


·       
      if the termination is for any
other reason or if as at 31 December 2038, the Outstanding Value of the SRA is
greater than zero, the Termination Payment will be the Cash Value of the SRA.  


 


Calculation of the Cash Value of the SRA


 


The Cash Value of the SRA is calculated as:


 


"="    Outstanding Value of the SRA m / Discount
Factor m


with each such value being calculated as at the end of the
Month in which the date of termination occurs. 


 


Calculation of Top-Up Amount


 


The Top-Up Amount is determined by:


 


·       
 taking the remaining Supply Term as at
the date of termination based on the last nomination (including the non-binding
nomination for each Year in the Supply Term after the Year for which the
nomination is made) under Clause 4.1;


 


·       
 calculating a revised Netback Price
(the Revised Netback Price) for each Month of the remaining Supply Term in
accordance with the table set out below and determining any Top-Up Amount
payable by Coronado;  


 


	
  Input

  	
  Value of Fixed Input

  
	
  Forecast Price 

  	
  means, for each Month of the remaining Supply Term from
  and including the date of termination, the price for [***] kcal/kg NAR
  thermal coal on a Free on Board basis at Newcastle Port in nominal US$ per
  tonne that is included for that Month in the Wood MacKenzie Long Term Thermal
  Market Outlook last published prior to the date of termination. 

  
	
  FX Rate

  	
  means, for each Month of the remaining Supply Term from
  and including the date of termination, the rate for converting US dollars
  into one Australian dollar that is included for that Month in the long term
  exchange rate forecast published by Wood MacKenzie last published prior to
  the date of termination. 

  
	
  A$ Forecast Price

  	
  means, for a Month, the Forecast Price divided by the FX
  Rate.

  
	
  Reference Energy

  	
  means the energy applicable to the Forecast Price, as
  measured in GJ per Tonne (as received), being for the Forecast Price
  described above, [***] GJ per Tonne (as received).

  
	
  Port Costs

  	
  in respect of each Month of the remaining Supply Term from and including the date of termination, the price in A$ set out for that Month for Port Costs
  in Attachment 1 to this Schedule 1.  

  






 



 

 





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  Rail Costs

  	
  in respect of each Month of the remaining Supply Term from and
  including the date of termination, the price is A$ set out for that Month for
  Rail Costs in Attachment 1 to this Schedule 1.

  
	
  Export Royalty 

  	
  means, in respect of each Month of the remaining Supply
  Term from and including the date of
  termination:

   

  if the A$ Forecast Price less Port Costs is less than or
  equal to A$100/Tonne:

   

  =((A$ Forecast Price less Port Costs) x 7%)

   

  if A$ Forecast Price less Port Costs is greater than
  A$100/Tonne and less than or equal to A$150/Tonne:

   

  =A$7 + ((A$ Forecast Price less Port Costs less A$100) x
  12.5%)

   

  if the A$ Forecast Price less Port Costs is greater than
  A$150/Tonne:

   

  =A$13.25 + ((A$ Forecast Price less Port Costs less $150)
  x 15%)

   

  
	
  Revised Netback Price

  	
  is calculated for each Month of the remaining Supply Term from and including the date of termination as:

   

  =(A$ Forecast Price) x (Contract Energy / Reference
  Energy) – Port Costs – Rail Costs – Export Royalty

   

  
	
  Discount Factor (Termination)

  	
  in respect of each Month of the remaining Supply Term from and including the date of termination, is to be
  determined as:

  =1/[((1+ Discount Rate)^(1/365))^(Days from the date of termination to
  the end of the relevant Month)]

  
	
  Top-Up Amount  (Month)

  	
  in respect of each Month of the remaining Supply Term from and including the date of termination:

  ·       
   if the Revised Netback Price is less than or equal to the Netback Price for the Month, the Top-Up Amount (Month)
  for the Month is zero; and

  ·       
   if the Revised Netback Price is
  greater than the Netback Price for the Month, the Top-Up Amount (Month) for
  the Month is determined as: 

  = [(Revised Netback Price – Netback Price) x Monthly Tonnage (SRA Value
  Schedule) x Discount Factor (Termination)].

  
	
  Top-Up Amount

  	
  the sum of each Top-Up Amount (Month).

  






 


 


The Forecast Price and the FX Rate are the Forecast
Indices.  If at any time on and from the Valuation Date, a Forecast Index is no
longer published or the basis of calculation of the Forecast Index materially
changes, the Forecast Index will be replaced with a replacement index that best
represents the characteristics of the relevant Forecast Index as at the
Valuation Date.  In order to determine whether a Forecast Index is no longer
published or the 



 

 





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basis of calculation of the
Forecast Index materially changes and, if so, the replacement index:


 


·       
 Either Party may notify the other if it
considers that a Forecast Index is no longer published or the basis of
calculation of the Forecast Index has materially changed.  If the Parties do
not agree on whether a Forecast Index is no longer published or the basis of
calculation of the Forecast Index has materially changed within 30 days of such
notice, Clause 17(h) will apply.  


·       
 If the Parties agree or it is
determined that a Forecast Index is no longer published or the basis of
calculation of the Forecast Index has materially changed, the Parties will seek
to agree upon a replacement Forecast Index.  If the Parties have not agreed on
a replacement within 30 days of the agreement or determination, Stanwell will
nominate a relevant replacement Forecast Index to Coronado.


·       
 If Coronado does not agree with the
replacement Forecast Index provided by Stanwell, Clause 17(h) will apply.  


·       
 If a replacement Forecast Index is
determined in circumstances where Coronado is in default or this Agreement has
been terminated due to Coronado's default and the Forecast Index that is
finally agreed or determined is the replacement Forecast Index nominated by
Stanwell, then Coronado must bear the cost of the Expert and any consultant or
advisors engaged by the Expert and Stanwell's legal and other costs related to
the determination.


 


If a Forecast Index does not, as at the date of
termination, publish any of the input for the Forecast Index beyond a date such
that it does not include all remaining Months of the Supply Term as required to
determine the Revised Netback Price, the Forecast Index for the Months in which
no input is published will be determined as:


 


·       
 in relation to the Forecast Price, the
forecast published for the date which is furthest in the future from the date
of termination (Last Published Date) multiplied by the Forecast Escalation Rate
where:


 


·       
 the Forecast Escalation Rate means, for
a Month:  (1 + 0.02) ^ (Forecast Days / 365); and


 


·       
 Forecast Days means, for a Month, the
number of days from (and excluding) the Last Published Date u     ntil (and
including) the last day of the relevant Month; and


 


·       
 in relation to the FX Rate, the FX Rate
published for the date which is furthest in the future from the date of
termination.


 


6.    Maintenance
of agreed Value of the SRA and model 


For the purposes of administration, Coronado must prepare
the Model Calculations in accordance with this Schedule 1 each Month and make
it available to Stanwell in the same format as the agreed Excel spreadsheet (or
as otherwise agreed).



 

 





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Attachment
1 to Schedule 1


[***]


 


 


 







 






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Attachment 2 to Schedule 1 – Model Calculations worked
examples 


[***]


 


 


 


Page | 58



 

 





      










      




Schedule 2 – Quality Assurance


[***]


 


 


 


Page | 62



 

 





      










      




Schedule 3 – Rail Performance Levels 


[***] 


 


 


 


Page | 63



 

 





      










      




EXECUTED
as a deed


 


	
  Signed by Richard
  Van Breda for Stanwell Corporation Limited ACN 078 848 674 under
  power of attorney in the presence of

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Natalie Gordon                              9 July
  2019

  	
   

  	
  /s/ Richard Van Breda

  
	
  Signature of witness

  	
   

  	
  Richard
  Van Breda

  
	
  Natalie Gordon

  	
   

  	
   

  
	
  Name of witness (print)

  	
   

  	
   

  






 


 


	
  Executed by Coronado
  Curragh Pty Ltd ABN 90 009 362 565 in accordance with Section 127 of
  the Corporations Act 2001 (Cth) 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Ayten Saridas

  	
   

  	
  /s/ Ben
  Pentelow

  
	
  Signature of
  director

  	
   

  	
  Signature of director/company secretary

  (Please delete as applicable)

  
	
  Ayten
  Saridas

  	
   

  	
  Ben
  Pentelow

  
	
  Name of director
  (print)

  	
   

  	
  Name of director/company
  secretary (print)

  






 


 


 


 


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