exv10w17a






Exhibit 10.17A



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


COAL PURCHASE AND SALE AGREEMENT NO. 10-62-04-900




     THIS COAL PURCHASE AND SALE AGREEMENT No. 10-62-04-900 (“Agreement”) is entered into as of May
21, 2004 (the “Effective Date”), by and between American Electric Power Service Corporation, agent
for Columbus Southern Power Company (“Buyer”), and Oxford Mining Company, Inc. (“Seller”). Buyer
and Seller are also referred to herein individually as a “Party” and collectively as the “Parties.”



     The Parties hereby agree as follows:



DEFINITIONS



“Affiliates” means with respect to any entity, any other entity that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under common control with,
such entity. For this purpose, “control” means the direct or indirect ownership of 50% or more of
the outstanding capital stock or other equity interests having ordinary voting power.



“Agreement” shall have the meaning set forth in the preamble.



“Approved Production Source(s)” shall have the meaning set forth in Schedule 3.1-B.



“Bankruptcy Proceeding” means with respect to a Party or entity, such Party or entity (a) makes an
assignment or any general arrangement for the benefit of creditors, (b) files a petition, has a
petition filed against it or its assets, or otherwise commences, authorizes or acquiesces in the
commencement of a proceeding or cause of action under any bankruptcy or similar law for the
protection of creditors, (c) otherwise becomes bankrupt or insolvent (however evidenced), or (d) is
unable to pay its debts as they fall due.



“BTU” means the amount of energy required to raise the temperature of one (1) pound of pure water
one (1) degree Fahrenheit from 59.5° Fahrenheit to 60.5° Fahrenheit at a constant pressure of 14.73
pounds per square inch absolute.



“Business Day” means a day on which Federal Reserve member banks in New York City, New York are
open for business; and a Business Day shall open at 8:00 a.m. and close at 5:00 p.m. Eastern
Prevailing Time.



“Buyer” shall have the meaning set forth in the preamble.



“Claiming Party” shall have the meaning set forth in the definition of Force Majeure.



“Coal” means crushed, bituminous coal to be sold by Seller and purchased by Buyer, the quality of
which shall conform to the Quality Specifications set forth in Article III, and which does not
trigger Buyer’s rejection rights under Article II, or is otherwise acceptable by Buyer under this
Agreement. Such Coal shall (i) be substantially free from any extraneous materials (including, but
not limited to mining debris, Synfuel, bone, slate, iron, steel, petroleum coke, earth, rock,
pyrite, wood or blasting wire), (ii) be substantially consistent in quality throughout a Shipment,
(iii) meet the size required, and (iv) have no intermediate sizes (including fines) added or
removed.



“Commercially Reasonable Efforts” means the taking by a Party of such action as would be in
accordance with reasonable commercial practices as applied to the particular matter in question to
achieve the result as expeditiously as practicable; provided, however, that such action shall not
require that such Party incur unreasonable expense.









			
	 	 	 
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	 	1






 









 





“Contract Price” means the price in United States dollars per Ton to be paid by Buyer to Seller for
the purchase of Coal and any other proper charges pursuant to this Agreement and shall have the
meaning set forth in Article V.



“Contract Quantity” shall have the meaning set forth in Article II.



“Contract
[*]” shall mean the period commencing January 1, 2005
and ending [*], and
each period thereafter commencing [*] and ending the immediately
succeeding [*]
during the Term.



“Costs” means any brokerage fees, commissions and other transactional costs and expenses reasonably
incurred either by the Non-Defaulting Party as a result of terminating any hedges or other risk
management contracts and/or entering into new arrangements in order to replace the Contract
Quantity not delivered by Seller or not accepted by Buyer, as the case may be, and legal costs
incurred by the Non-Defaulting Party.



“Defaulting Party” shall have the meaning set forth in Article XVII.



“Delivery Period” shall have the meaning set forth in Article I.



“Designated Delivery Point” means FOB Plant or FOB Railcar at the coal loading facility described
on Schedule 3.1-B.



“Early Termination Date” shall have the meaning set forth in Article XVII.



“Eastern Prevailing Time” means Eastern Standard Time or Eastern Daylight Savings Time in effect in
New York, New York, as the case may be on the relevant date.



“Effective Date” shall have the meaning set forth in the preamble.



“Event of Default” shall have the meaning set forth in Article XVII hereof.



“First Extended Term” shall have the meaning set forth in Article I.



“FOB” shall have the meaning given to such term as provided in the Uniform Commercial Code of the
State of New York.



“Force Majeure” means an event or circumstance which prevents one Party (the “Claiming Party”) from
performing its obligations under this Agreement, which is not within the reasonable control of, or
the result of the negligence of, the Claiming Party, and which by the exercise of due diligence,
the Claiming Party is unable to overcome or avoid or cause to be avoided or is unable in good faith
to obtain a substitute acceptable to Buyer therefor. Force Majeure includes, but is not limited to,
an event or occurrence beyond the control of Buyer, such as without limitation, acts of God, war,
insurrection, riots, nuclear disaster, strikes, labor disputes, threats of violence, labor and
material shortages, fires, explosions, floods, river freeze-ups, breakdowns or damage to mines,
plants, equipment, or facilities (including a forced outage or an extension of a scheduled outage
of equipment or facilities to make repairs to avoid breakdowns thereof or damage thereto),
interruptions to or slowdowns in transportation, railcar shortages, barge shortages, embargoes,
orders, or acts of civil or military authority, laws, regulations, or administrative rulings, or
total or partial interruptions of Buyer’s operations which are due to any enforcement action or
other administrative or judicial action arising from an environmental law or regulation. Force
Majeure shall not be based on: (1) Buyer’s inability economically to use or resell the Coal
purchased hereunder; (2) adverse geological or mining conditions; (3) the Seller’s ability to sell
the Coal at a price greater than the Contract Price; or (4) Seller’s inability to economically
produce or obtain the Coal.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
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	 	2






 









 





“Free Loading Day” means a loading day for which Seller shall not be obligated to pay demurrage
charges. A loading day shall commence at 7:00 a.m. of a calendar day and end at 7:00 a.m. the next
calendar day. The first Free Loading Day shall commence at the later of the first 7:00 a.m.
immediately following the delivery of said barge to a Designated Delivery Point, or 7:00 a.m. on
the barge loading date specified in Seller’s request for placement of barges.



“Free Loading Period” means a period of two consecutive Free Loading Days. The Free Loading Period
for a barge delivered shall end forty-eight (48) consecutive hours after the period commenced.



“Gains” means, with respect to a Party, an amount equal to the present value of the economic
benefit, if any, (exclusive of Costs) to it resulting from the termination of its obligations with
respect to this Agreement, determined in a commercially reasonable manner.



“Half-Month” means, with respect to any calendar month, either (a) the period from and including
the first day of such month through and including the fifteenth day of such month or (b) the period
from and including the sixteenth day of such month through and including the last day of such
month.



“Half-Year Quantity Option” shall have the meaning set forth in Article II, Section 2.1.



“Imaged Agreement” shall have the meaning set forth in Article XXXI.



“Interest Rate” shall have the meaning set forth in Article IV.



“Letter of Credit” means an irrevocable, transferable, standby letter of credit, issued by a major
U.S. commercial bank or the U.S. branch office of a foreign bank, reasonably acceptable to the
beneficiary with, in either case, a senior unsecured credit rating of at least (a) “A-” by S&P and
“A3” by Moody’s, if such entity is rated by both S&P and Moody’s or (b) “A-” by S&P or “A3” by
Moody’s, if such entity is rated by either S&P or Moody’s but not both.



“Liabilities” shall have the meaning set forth in Article XIV.



“Losses” means, with respect to a Party, an amount equal to the present value of the economic loss,
if any, (exclusive of Costs) to it resulting from the termination of its obligations with respect
to this Agreement, determined in a commercially reasonable manner.



“Material Adverse Change” means a material change in the condition (financial or otherwise), net
worth, properties or operations or in economic conditions, which, when taken as a whole can
reasonably be anticipated to impair the ability of such Party to fulfill its obligations under this
Agreement, or there is reasonable grounds to believe that the creditworthiness of such Party has
become unsatisfactory or its ability to perform under this Agreement has been materially impaired.



“Monthly Quantity Option” shall have the meaning set forth in Article II, Section 2.1.



“Moody’s” means Moody’s Investors Service, Inc. or its successor.



“New Taxes” means any Taxes, fees, or assessments enacted and effective after the Effective Date of
this Agreement, including, without limitation, that portion of any Taxes or New Taxes that
constitutes an increase.



“Non-Defaulting Party” shall have the meaning set forth in Article XVII.



“Notice of Exercise” shall have the meaning set forth in Article II, Section 2.5.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
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	 	3






 









 





“Option” means Buyer’s right, but not the obligation, to purchase or purchase and resell Coal in
the amount of the option quantity as set forth in Article II, Section 2.1, and Buyer’s right to
extend the Term of this Agreement pursuant to Article I.



“Quality Specifications” means the quality characteristics on an “As-Received” basis, using ASTM
standards, specified on Schedule 3.1-A hereto.



“Performance Assurance” means collateral in the form of either cash or Letters of Credit or such
other security of the type and amount requested by the Party demanding Performance Assurance.



“Plant” means the Conesville Plant owned by Buyer and located near Conesville, Ohio, or the
Conesville Coal Preparation Plant (“CCPP”) located near Conesville, Ohio.



“Pledgor” shall have the meaning set forth in Article XVIII.



“Replacement Price” shall have the meaning set forth in Article XVI.



“S&P” means the Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
or its successor.



“Sales Price” shall have the meaning set forth in Article XVI.



“Second Extended Term” shall have the meaning set forth in Article I.



“Secured Party” shall have the meaning set forth in Article XVIII.



“Seller” shall have the meaning set forth in the preamble.



“Selling Price” shall have the meaning set forth in Article VII.



“Settlement Amount” shall have the meaning set forth in Article XX.



“Shipment” means, as applicable: (a) one unit trainload or at Buyer’s election a composite of two
or more unit trainloads; or (b) the aggregate of single railcars loaded on any one day (only where
single car rates apply), or (c) one barge or at Buyer’s election a composite of two or more barges,
or vessel load; or (d) the aggregate of the truckloads that are unloaded at the Designated Delivery
Point on any one day in accordance with the applicable Transportation Specifications.



“SO2” means sulfur dioxide and “SO2 per mmBtu” means sulfur dioxide per
million Btu.



“Suspension” shall have the meaning set forth in Article II, Section 2.6.



“Synfuel” means synthetic fuel qualified for tax credits under Section 29 of the Internal Revenue
Code of 1986, as amended.



“Taxes” means any or all ad valorem, property, business and occupation, occupation, severance,
generation, first use, conservation, Btu or energy, utility, gross receipts, privilege, sales, use,
consumption, excise, lease, transaction, and other taxes, governmental charges, licenses, fees,
permits and assessments, or increases therein, other than taxes based on net income or net worth.



“Term” shall have the meaning set forth in Article I.



“Third Party Impositions” shall have the meaning set forth in Article VI, Section 6.1.



“Ton” means 2,000 pounds avoirdupois weight.



“Transportation Specifications” means the timing and tonnage requirements for Shipment(s) set forth
in Article II.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	4






 









 





“Transporter” means the entity or entities transporting Coal on behalf of Seller to and at the
Designated Delivery Point or on behalf of Buyer or Buyer’s designee from the Designated Delivery
Point.



“Uniform Commercial Code” or “UCC” shall have the meaning set forth in Article XXIX.




ARTICLE I

Term and Delivery Period




     The term of this Agreement (the “Term”) shall commence on the Effective Date, and shall remain
in effect until [ * ], except as provided elsewhere in this Agreement.



     Provided this Agreement is still in effect, Buyer shall have the optional right, but not the
obligation, to extend the term of this Agreement for two [ * ] term extensions, the first of
which shall be referred to as the “First Extended Term” and shall begin [ * ] and end
[ * ]. Should Buyer elect the First Extended Term, then a second [ * ] term
extension shall become available and shall be referred to as the “Second Extended Term” and shall
begin on [ * ] and end of [ * ]. Each such election shall be referred to as
an “Option” for Coal produced from reserves of Coal dedicated to this Agreement in Schedule 3.1-B
hereof.



     Buyer shall give written notice of its desire to extend the term for such additional period on
or before July 1 of the preceding year. If such optional right of Buyer is exercised, all
provisions of this Agreement shall continue in full force and effect over the extended term
designated by Buyer.



     The delivery period of this Agreement (the “Delivery Period”) shall be from January 1, 2005,
through [ * ], except as provided elsewhere in this Agreement.



ARTICLE II

Obligations and Deliveries




     Section 2.1 Contract Quantity. During the Delivery Period, Seller agrees to
sell and deliver to the Buyer and Buyer agrees to purchase and accept from Seller, FOB truck or
railcar (as applicable) at the Designated Delivery Point, the quantity of Coal set forth herein.




	 	 	 	 	 
	 	 	Specification A	 	Specification B
	Contract [*]	 	Contract Quantity	 	Contract Quantity
	[*]
	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]
	[*] (First Extended Term, if elected)
	 	[*]	 	[*]

	[*] (Second Extended Term, if elected)
	 	[*]	 	[*]







     Such tonnage shall be delivered ratably during each month of each Contract [*].



     Buyer shall have the option to elect up to [*] of the Contract Quantity to be delivered as
Specification A or Specification B Coal with at least thirty (30) days prior notice to Seller.



     Upon at least eighteen months prior written notice, Buyer shall have the option, but not the
obligation, to elect to purchase from Seller [*] tons per [*] of Specification C Coal.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	5






 









 





Should Buyer elect to purchase Specification C Coal, Buyer shall purchase, and Seller shall
sell, such Coal in lieu of Specification A Coal for a period of [*] upon the terms and
conditions set forth in this Agreement. Such period may extend beyond the Term of this Agreement.




     At such time, if any, that Buyer elects to purchase Specification C Coal, Buyer shall also
have the option to elect to reduce purchases of Specification B Coal to [*] tons per [*].
The purchase of any revised quantities of Specification B Coal are to commence concurrently with
the purchase of Specification C Coal and continue throughout the remaining Term, as set forth in
Article I, of this Agreement, but not thereafter (no later than [*]). If Buyer’s
election shall become effective during a Contract [*], then the quantities of Specifications A, B,
and C Coal to be purchased and sold during such [*] shall be determined on a pro rata basis.



     Thus, for example, if Buyer were to elect in October [*] to purchase [*] tons of
Specification C Coal commencing April [*], and Buyer does not elect to extend the Term of this
Agreement, then for Contract [*] through [*], the Contract Quantities would be as follows:



***** EXAMPLE *****




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contract [*]	 	 	 	Specification A	 	Specification B	 	Specification C
	 	[*]	 	 	Specification A deliveries would
run through March [*], and
Specification C deliveries begin
April [*].
	 	 	[*]	 	 	 	[*]	 	 	 	[*]
	 
	 	[*]	 	 	 
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 	 	 	 	 
	 	 	 	 	 	 	[*]
	 	 	 	 	 
	 	[*]	 	 	 
	 	 	 	 	 	 	[*]	 	 	 	[*]
	 
	 	[*]	 	 	 
	 	 	 	 	 	 	 	 	 	 	[*]	 
	 	[*]	 	 	Specification C deliveries would
continue through March [*].
	 	 	 	 	 	 	 	 	 	 	[*]	 
	 	[*]	 	 	 
	 	 	 	 	 	 	 	 	 	 	[*]	 
	 	[*]	 	 	 
	 	 	 	 	 	 	 	 	 	 	[*]	 






***** END OF EXAMPLE *****




     During each Contract [*], Buyer shall have the right to increase the Contract Quantity for
Specification A and/or Specification B Coal by [*] tons per half-year (January through June or
July through December) (hereinafter the “Half-Year Quantity Option”) by notifying Seller of its
election to take such Half-Year Quantity Option at least ninety (90) days prior to the beginning of
the applicable half-year period.



     Additionally, Buyer shall have the right at any time, and from time to time, to increase its
monthly quantity obligation for Specification A and/or Specification B Coal by up to [*] tons
(hereinafter the “Monthly Quantity Option”) at any time up to thirty (30) days prior to the
beginning of the applicable delivery month. Such election shall remain in effect until such time as
Buyer again gives at least thirty (30) days prior notice of a subsequent election to reduce the
monthly quantity obligation to the minimum monthly quantity obligation.



     Each such election shall be referred to as an “Option” for Coal produced from reserves of Coal
dedicated to this Agreement in Schedule 3.1-B hereof.



     Section 2.2 Reconsignment and/or Resale Rights. From time to time, and at any
time, Buyer shall have the right, but not the obligation, to have all or any part of the Coal
hereunder reconsigned for delivery to any destination, and/or to make all or any part of the Coal
hereunder available for purchase by any person(s), whether or not affiliated with Buyer, through
Buyers assignment of this Agreement or Buyer’s purchase and subsequent resale to others of such
Coal.



     Should Buyer exercise its right to reconsign or resell Coal, Seller shall arrange for
transport to the destination designated by Buyer, in accordance with the Transportation



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	6






 









 





Specifications attached hereto as Schedule 2.4, or as otherwise provided by Buyer at the time
of exercising its rights under this Section 2.2.




     Should Buyer require Seller to deliver to other than the Designated Delivery Point, the
Contract Price under Article V of this Agreement shall be adjusted to account for the actual cost
difference incurred by Seller for transporting the Coal to such alternative location as compared to
Seller’s cost of transporting such Coal to the Designated Delivery Point (i.e., Contract Price to
be reduced by actual amount per ton savings, or increased by the amount of additional per ton
costs).



     Section 2.3 Scheduling. Buyer will advise Seller of its desired loading
dates, delivery schedule, and at Buyers option, its desire to have up to 100% of the deliveries
transported by truck to the Plant.


The Parties will work together in good faith to agree on a reasonable and mutually acceptable
delivery schedule within the Term and within each month during the Term.




     Section 2.4 Delivery. The Coal shall be delivered to Buyer FOB Plant or FOB
Railcar at the Designated Delivery Point in accordance with the Transportation Specifications
detailed in Schedule 2.4 (attached hereto and hereby made a part of this Agreement).



     Seller shall be responsible for any costs or charges imposed on or associated with the
delivery of the Contract Quantity up to the Designated Delivery Point. Buyer shall be responsible
for any costs or charges imposed on or associated with the Contract Quantity upon taking title to
the Coal at the Designated Delivery Point in accordance with Article XIV.



     If a Party is charged for any increased transportation charges, penalties, or other costs,
including demurrage, attributable to the other Party’s failure to timely load or unload the Coal in
accordance with the terms of this Agreement, including the timing and tonnage requirements of the
Transportation Specifications, and if such failure is not due to Force Majeure, such failing Party
shall reimburse the other for such charges.



     Each Party shall immediately contact the other Party in the event of a curtailment or
interruption in the delivery or receipt of Coal hereunder. Each Party shall contact the other Party
with as much advance notice as reasonably possible regarding any such impending curtailment or
interruption.



     Section 2.5 Option(s) Exercise.



     Unless otherwise expressly provided in this Agreement, in order to exercise an Option, the
Buyer will, no later than 4:00 p.m. Eastern Prevailing Time on the Exercise Date for an Option,
notify the Seller orally or in writing, which notice will be irrevocable (“Notice of Exercise”), of
the Buyer’s exercise of its right or rights granted pursuant to the relevant Option. Provided,
however, that if verbal notice is given, Buyer shall provide written confirmation of such verbal
notice to Seller as soon as practicable. The Buyer may exercise the right or rights granted
pursuant to the Option only by timely giving a Notice of Exercise to the Seller. If the Option is
not timely exercised, it will expire and neither the Buyer nor the Seller will have any further
rights or liabilities with respect to that Option. Once an Option has been timely and properly
exercised, the physical purchase and sale of the Coal related thereto shall be governed by the
terms of this Agreement.



     Section 2.6 Rejection and Suspension.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	7






 









 






     In addition to all other remedies at law or in equity, and in addition to the price
adjustments provided for in Article VII, Buyer shall have the following rights and remedies upon
Seller’s failure to conform with the requirements as set forth in Article III.



     (a) Buyer shall have the right to reject any Shipment hereunder if the Coal therein fails to
conform to any requirement set forth in Article III. Should Buyer exercise such right of rejection,
it shall notify Seller by telephone upon discovery of the nonconformance, such notification to be
promptly confirmed in writing.



     (b) Buyer shall have the right to suspend all further shipments of Coal hereunder if: (i)
there are three (3) non-conforming Shipments, whether rejected or not, in any three (3) month
period; (ii) two (2) out of four (4) consecutive Shipments are non-conforming Shipments; or (iii)
the Coal quality fails to meet the defined minimum or exceeds the defined maximum Contracted
Half-Month “Suspension” or rejection specifications applicable under Article III. Should Buyer
exercise such right to suspend further Shipments, Buyer shall notify Seller of its exercise of
right of suspension within 15 calendar days after the day or Halt-Month period in which such
failure occurs.



     (c) Upon receipt of Buyer’s notice of suspension, Seller shall immediately suspend further
Shipments and make every reasonable effort to correct the conditions giving rise to the Shipment(s)
of Coal failing to conform to such specifications or requirements. Seller shall inform Buyer in
writing on a weekly basis of such corrective actions taken by Seller.



     During such suspension, Seller shall permit Buyer’s full access to the production sources and
related facilities hereunder and to all engineering data related thereto. Buyer shall have the
right, but not the duty, to participate in any and all discussions relating to the matter and to
recommend procedures to correct said matter.



     Such suspension shall continue until Seller provides Buyer with assurances in writing that are
satisfactory to Buyer that the conditions causing Shipment of Coal not in accordance with this
Agreement have been corrected and that Seller can and shall deliver Coal meeting Article III
requirements and meeting the “Contracted Half-Month” specifications of Schedule 3.1-A (attached
hereto and hereby made a part of this Agreement).



     Upon receipt by Buyer of Seller’s satisfactory written assurances, as determined by Buyer in
its sole discretion, shipments shall be resumed at the rate specified in Article II.



     (d) In the event that: (i) Seller fails to provide Buyer with such assurances within 10 days
after the date of Buyer’s notice of suspension as described in this Section 2.6; or (ii) having
provided such assurances, Seller fails to correct such conditions and resume shipments in the
ensuing 30 days thereafter or (iii) after such resumption of shipments, Seller’s subsequent
deliveries at any time during the ensuing 90 days fall below the minimum or exceed the maximum
“Suspension” or rejection specifications applicable under Article III; then such event shall
constitute an Event of Default under Article XVII hereof.



     (e) Whether shipments suspended pursuant to this Article II hereof shall be made up, as well
as the scheduling of such make up, shall be at Buyer’s sole discretion. In the event Buyer
exercises its right to require such make up, delivery of make up tonnage shall be scheduled so that
such deliveries shall be shipped no later than 365 calendar days following resumption of shipments.



ARTICLE III

Quality Specifications




     Section 3.1 Quality Specifications. Seller shall cause all Coal delivered to Buyer,
pursuant to this Agreement, to comply with Quality Specifications set forth on Schedule 3.1-A.



     Buyer may terminate deliveries from an Approved Production Source if Buyer in its reasonable
judgment determines through operating experience that the Coal therefrom, even if



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	8






 









 





the Coal meets the requirements and specifications of Schedule 3.1-A, (i) causes
unsatisfactory performance at the consigned destination, or (ii) requires Buyer to modify
equipment, facilities, practices, or processes In such event, Buyer shall provide Seller with
written notice thereof, specifying the basis of such unsatisfactory performance or modification. If
more than three Approved Production Sources have been terminated and in Buyer’s reasonable judgment
the Coal continues to causes unsatisfactory performance at the consigned destination, or requires
Buyer to modify equipment, facilities, practices, or processes, then Buyer shall have the right to
terminate this Agreement.




ARTICLE IV

Billing and Payment; Financial Reports




     Buyer shall pay Seller by electronic transfer (recipient’s account per Seller’s advice) in
United States Funds for all Coal received, unloaded, taken into account, and accepted hereunder.



     Buyer shall submit to Seller the weight, analytical, and cost data on such Coal taken into
account during each Half-Month at each respective consigned destination within five (5) Business
Days after each such Half-Month period. Thereafter, Seller shall submit to Buyer, within two (2)
Business Days of receipt of such information, an invoice covering such Half-Month deliveries at
each respective consigned destination, which invoice shall include a reference to this Agreement’s
contract number 10-62-04-900.



     Buyer shall make payment by electronic transfer to Seller within 20 calendar days after the
Half-Month, provided Seller’s invoice is submitted in accordance with the preceding paragraph.
Seller shall provide Buyer all pertinent wire transfer instructions on each invoice.



     If applicable, Seller shall include on its invoice the statement “Seller certifies that
(insert number) of tons were mined in Virginia,” such statement to be separately signed by Seller.



     If Buyer in good faith reasonably disputes an invoice, it shall provide a written explanation
specifying in detail the basis for the dispute and pay any undisputed portion no later than the due
date. Upon resolution of any dispute involving an invoice, any additional amount owing shall be
paid with interest (the prime rate of interest for U.S. Dollars as published from time to time
under the section titled, “Money Rates” by The Wall Street Journal, [*] but not
to exceed the maximum applicable lawful interest rate [hereinafter “Interest Rate”]). If any Party
fails to pay amounts under this Agreement when due, unless such amount is the subject of a dispute
as provided above, or is excused by Force Majeure, in addition to the rights and remedies provided
in this Agreement, the aggrieved Party shall have the right to suspend performance under this
Agreement until such amounts plus interest have been paid, and/or exercise any remedy available at
law or in equity to enforce payment of such amount plus interest at the Interest Rate defined
herein.



     If requested by either Party, the other Party shall deliver to the requesting Party (i) within
120 days following the end of each fiscal year, a copy of the Party’s portion of the annual report
containing audited consolidated financial statements for such fiscal year for such Party and (ii)
within 60 days after the end of each of its first three (3) quarters of each fiscal year, a copy of
the quarterly report containing unaudited consolidated financial statements for such fiscal quarter
for the Party. In all cases, the statements shall be for the most recent accounting period and
shall be prepared in accordance with generally accepted accounting principals, provided however,
that should any such statements not be available on a timely basis due to a delay in preparation or
certification, such delay shall not be an Event of Default so long as the relevant entity
diligently pursues the preparation, certification, and delivery of the statements.


[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	9






 









 






     In the event a Party’s financial statements are filed with the Securities and Exchange
Commission and are available at www.sec.gov, then such Party has fulfilled its obligations
hereunder.



ARTICLE V

Contract Price




     The Contract Price shall be as follows:




	 	 	 	 	 	 	 	 	 
	 	 	FOB Plant
	Contract [*]	 	Specification A	 	Specification B
	[*]
	 	[*] per ton	 	[*] per ton
	[*]
	 	[*] per ton	 	[*] per ton

	[*]
	 	[*] per ton	 	[*] per ton

	[*]
	 	[*] per ton	 	[*] per ton
	[*] (First Extended Term, if elected)
	 	[*] per ton
	 	[*] per ton
	[*] (Second Extended Term, if elected)
	 	[*] per ton	 	[*] per ton






	 	 	 	 	 	 	 	 	 
	 	 	FOB Plant Rehobeth
	Contract [*]	 	Specification A	 	Specification B
	[*]
	 	[*] per ton	 	[*] per ton
	[*]
	 	[*] per ton	 	[*] per ton

	[*]
	 	[*] per ton
	 	[*] per ton
	[*]
	 	[*] per ton	 	[*] per ton
	[*] (First Extended Term, if elected)
	 	[*] per ton	 	[*] per ton
	[*] (Second Extended Term, if elected)
	 	[*] per ton	 	[*] per ton






	 	 	 	 	 	 	 	 	 
	 	 	FOB Rail Cadiz
	Contract [*]	 	Specification A	 	Specification B
	[*]
	 	[*] per ton	 	[*] per ton
	[*]
	 	[*] per ton	 	[*] per ton
	[*]
	 	[*] per ton	 	[*] per ton

	[*]
	 	[*] per ton	 	[*] per ton

	[*] (First Extended Term, if elected)
	 	[*] per ton	 	[*] per ton
	[*] (Second Extended Term, if elected)
	 	[*] per ton
	 	[*] per ton






     Should Buyer elect to receive Specification C Coal as provided for in Article II, Section 2.1,
the FOB Plant Contract Price for Specification C Coal shall be the then applicable FOB Plant
Specification B Contract Price in the Contract [*] in which said deliveries would begin, plus an
additional amount of [*] per ton. Such Specification C Contract Price per ton shall increase each
Contract [*] thereafter at the rate of [*] per ton.



     Any Monthly Quantity Option tons or Half-Year Quantity Option tons, for Specification A and/or
Specification B, elected as provided for under Article II, Section 2.1, shall be discounted by
[*] per ton from the Contract Price in effect for the applicable specification(s) during such
[*] for which such optional tons are elected.



     Except as provided herein under Articles V, VI, and VII, the Contract Price shall be firm and
not subject to any adjustment.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	10






 









 






ARTICLE VI

Taxes and Other Liabilities




     Section 6.1 Each Party shall use Commercially Reasonable Efforts to administer this
Agreement and implement the provisions in accordance with the intent to minimize Taxes, but neither
Party shall be obligated to incur additional expenses in doing so. Seller shall be solely
responsible for all assessments, fees, costs, expenses, and taxes (including without limitation,
New Taxes, but not income taxes) imposed by governmental authorities or other third parties (“Third
Party Impositions”) relating to the mining, beneficiation, production, sale, use, loading and
delivery of Coal to Buyer or in any way accrued or levied at or prior to the transfer of title to
the Coal to Buyer, and including, without limitation, all severance taxes, royalties, black lung
fees, reclamation fees and other costs, charges, and liabilities. Buyer shall be solely responsible
for Third Party Impositions relating to the Coal accrued or levied after the transfer of title to
the Coal to Buyer.



     If either Party is exempt from taxes, it shall provide a certificate of exemption or direct
pay permit, or other reasonable satisfactory evidence of such exemption.



     Section 6.2 Changes in Law. Seller hereby certifies that it is or will be in
compliance with the rules, practices, and standards issued by any governmental agency with respect
to legislation, regulations, rules or mandates which were in effect either by interim or final
rules as of the Effective Date of this Agreement.



     In the event of the enactment, modification, or revision of any Federal, State or local
legislation, regulations, rules or mandates issued pursuant thereto, including but not limited to
the Federal Mine Safety & Health Act of 1977 and the Surface Mining Control and Reclamation Act of
1977, after the Effective Date of this Agreement, which affect the bituminous coal industry with
respect to the coal reclamation, conservation, environmental protection, mine safety, mine working
conditions and practices, ventilation, health, employee retirement programs occupational hazards,
research and reclamation and conservation of mined areas, and which increases or decreases Seller’s
cost of producing Coal under this Agreement, an appropriate adjustment will be made to the current
Base Price to recognize such changed cost; provided, however, there shall be no changes made in the
Base Price for changed costs associated with labor related benefits or taxes, real or personal
property taxes, corporate net income or franchise taxes; and further provided that Buyer shall have
the right to terminate this Agreement should any such adjustments cause the Base Price to be
increased by more than [*] of its then current amount or should the total of all
such adjustments under this Section 6.2 cause the Base Price to be increased by more than [*] of its initial amount as of January 1, 2005.



     Seller shall notify Buyer in the event of such governmental action and shall submit detailed
documentation to allow determination of any such adjustment. If Seller and Buyer are unable to
agree within ninety (90) days of receipt by Buyer of Seller’s documentation as to the amount the
price per ton should be adjusted or as to whether the event is applicable, then the matter shall be
submitted to a firm of mining engineers and/or independent certified public accountants mutually
agreeable to the Parties for final determination, which shall be binding upon the Parties.



     If upon agreement or final determination, an adjustment in the cost per ton is found to be
appropriate, appropriate credit for such amount on all tons delivered on and after the effective
date of any such change resulting in such price adjustment, plus interest computed on the basis of
the prime rate in effect at Citibank, N.A. (or its successor), commencing sixty (60) days after the
effective date of such change, shall be made to the party to whom the benefit of such credit



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	11






 









 





is due; provided, however, that Seller shall not be entitled to any such credit for such
tonnage delivered prior to the date upon which Seller’s written request for such adjustment is
received by Buyer, nor for interest for a period of sixty (60) days subsequent to such date of
Buyer’s receipt.




     Section 6.3 Each Party shall indemnify, release, defend, and hold harmless the other
Party, its officers, directors, affiliates, agents, and employees, from and against any and all
Third Party Impositions with respect to the Coal that are the responsibility of such Party.



ARTICLE VII

Adjustments to the Contract Price




     Adjustments to the Contract Price for variances in quality shall be made in accordance with
the provisions of Schedule 7.2 (attached hereto and hereby made a part of this Agreement). The
Contract Price as adjusted by such provisions is referred to as the “Selling Price.”



ARTICLE VIII

Weighing, Sampling, and Analyses




     Weighing, sampling, and analyses shall be performed by Buyer in accordance with the provisions
of Schedule 8.1 (attached hereto and hereby made a part of this Agreement).



ARTICLE IX

Other Governmental Legislation, Regulations, and Orders




     Section 9.1 Seller and Buyer shall make good faith efforts to comply with the
provisions of all federal, state, and other governmental laws and any applicable orders and/or
regulations, or any amendments or supplements thereto, which have been, or may at any time be,
issued by a governmental agency.



     Section 9.2 (a) If any federal, state, or other governmental law, regulation, or order
(including but not limited to the Clean Air Act Amendments of 1990) is enforced or imposed upon
Buyer regarding the purchasing, burning, transporting, or the use of, the Coal specified in this
Agreement that would increase Buyer’s cost of burning or using such Coal on a dollar per ton basis
equivalent to more than [*] of the then current Contract Price, or the
reduction of the emission limitations below the current standard, or the sulfur or other chemical
content of the Coal to be burned at the Plant; or if, as a result of any federal, state, or other
governmental law, regulation, or order (including but not limited to the Clean Air Act Amendments
of 1990) relating to the sulfur or other chemical content of the Coal and/or the stack emission
limitations at a group of plants comprised of the Plant and any other generating plant(s) operated
by the American Electric Power Company, Inc., or any of its Affiliates, Buyer voluntarily or
involuntarily revises the specifications of the Coal to be burned at the Plant and/or voluntarily
or involuntarily reduces the stack emission limitations at the Plant, in order that the Plant or
such group of plants may be in compliance with said federal, state, or other governmental law,
regulation, or order; or if as a result of any of the foregoing, Buyer in its sole reasonable
judgment decides to discontinue the use of Coal at the Plant, then Buyer may terminate this
Agreement by written notice to Seller as of the date determined pursuant to Section 9.4. If Buyer
so requests, Seller may, but is not obligated to, agree to deliver Coal having such different
specifications and/or quantity requirements in accordance with the



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	12






 









 





remainder of the terms and conditions of this Agreement (specifically at the price provisions
set forth in Article V); provided, however, that those provisions dealing with quantity and/or
quality will be changed appropriately to accommodate such different specifications and/or
quantities. If, within 30 days of Seller’s receipt of Buyer’s notice to Seller pursuant to this
paragraph, Seller has not agreed to continue deliveries as provided above, Buyer may terminate this
Agreement by written notice to Seller. Should Buyer make such termination election, this Agreement
shall terminate as of the date determined pursuant to Section 9.4.




     (b) If any federal, state, or other governmental law, regulation, or order is enacted,
promulgated, or issued that alters, directly or indirectly, the rights of any electric utility,
exempt wholesale generator, independent power producer, or similar entity(ies) to sell electric
power to a location or locations served by the Plant or by any other plant(s) owned by Buyer and/or
any of its Affiliates, then Buyer may terminate this Agreement at any time thereafter by written
notice to Seller setting forth the date upon which Buyer’s election shall become effective;
provided, however, that said effective date shall in no event be earlier than 60 days after the
date of delivery of such notice.



     Section 9.3 In the event of the enactment of any new federal, state, or other
governmental law, or the promulgation of any regulation or order thereunder which prohibits (or
restricts so as effectively to prohibit) mining or processing, or shipping, as may be applicable,
of the Coal specified in this Agreement, Seller may elect to be relieved of its obligation upon the
effective date of implementation (compliance date) of such law, regulation, or order to deliver the
total quantity of Coal to be delivered under this Agreement to the extent of the amount of tonnage
represented by the percentage of production by Seller of such mining or processing, or shipping, as
may be applicable, of Coal so affected by such law, regulation, or order to the total amount of
Coal produced and processed to meet the quantity requirements of this Agreement.



     Section 9.4 (a) In the event Buyer elects to invoke Section 9.2 relative to the Clean
Air Act Amendments of 1990, Buyer shall notify Seller in writing setting forth the date upon which
Buyer’s election shall become effective; provided, however, that said effective date shall in no
event be earlier than 60 days after the date of delivery of such notice.



     (b) Except as provided for in Section 9.4(a), should either Buyer or Seller elect to invoke
Section 9.2 or 9.3, respectively, the Party so invoking shall notify the other Party in writing,
stating the grounds upon which such invocation is based. Said notice shall also state the date upon
which the notifying Party’s election shall become effective, which said date shall not be earlier
than 120 days prior to the effective date of the implementation (compliance date) of such law,
regulation, or order giving rise to the election; provided, however, that notwithstanding anything
to the contrary herein, said effective date shall in no event be earlier than 60 days after the
date of delivery of notice.



     Section 9.5 If Buyer elects to terminate this Agreement under the provisions of this
Article, then neither Party shall have, after the effective date of such termination, any further
obligation under this Agreement; provided, however, that such termination shall not affect any
rights or obligations of Buyer or Seller existing under this Agreement for Coal shipped or required
to be shipped prior to the effective date of said termination.



ARTICLE X

Representations




     On the Effective Date, each Party represents and warrants to the other Party that:




	 	(i)	 	it is duly organized, validly existing and in good standing under the laws of
jurisdiction of its formation;






[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	13






 









 







	 	(ii)	 	it has all regulatory authorizations necessary for it to legally perform its
obligations under this Agreement;
	 
	 	(iii)	 	the execution, delivery and performance of this Agreement are within its
powers, have been duly authorized by all necessary action and do not violate any of the
terms and conditions in its governing documents, any contracts to which it is a party
or any law, rule, regulation, order or the like applicable to it;
	 
	 	(iv)	 	this Agreement and each other document executed and delivered in accordance
with this Agreement constitutes its legally valid and binding obligation enforceable
against it in accordance with its terms, subject to any equitable defenses;
	 
	 	(v)	 	Buyer is acting as an agent for disclosed Parties, and Seller is acting for its
own account; each Party has made its own independent decision to enter into this
Agreement and as to whether this Agreement is appropriate or proper for it based upon
its own judgment, is not relying upon the advice or recommendations of the other Party
in so doing, and is capable of assessing the merits of and understanding, and
understands and accepts, the terms, conditions and risks of this Agreement;
	 
	 	(vi)	 	it is not bankrupt and there are no Bankruptcy Proceedings pending or being
contemplated by it or, to its knowledge, threatened against it which would result in it
being or becoming bankrupt;
	 
	 	(vii)	 	there is not pending or, to its knowledge, threatened against it or any of its
Affiliates any legal proceedings that could materially adversely affect its ability to
perform its obligations under this Agreement;
	 
	 	(viii)	 	no Event of Default with respect to it has occurred and is continuing and no such
event or circumstance would occur as a result of its entering into or performing its
obligations under this Agreement;
	 
	 	(ix)	 	it is a “forward contract merchant” and this Agreement is a “forward contract”
within the meaning of the United States Bankruptcy Code;
	 
	 	(x)	 	it has entered into this Agreement in connection with the conduct of its
business and it has the capacity or ability to make or take delivery of all Coal
referred to in this Agreement;
	 
	 	(xi)	 	with respect to this Agreement, it is an “eligible contract participant” as
defined in Section 1a(12) of the Commodity Exchange Act, as amended [7USC § 1a(12)];
	 
	 	(xii)	 	all applicable information that is furnished in writing by it or on behalf of
it to the other Party pursuant to this Agreement (as described on Schedule 10, attached
hereto and hereby made a part of this Agreement) is as of the date provided true,
accurate and complete in every material respect. For purposes of this representation,
financial information provided via posting on the Internet shall be deemed to be
written information provided to the other Party;
	 
	 	(xiii)	 	no event or circumstance exists at any Approved Production Source (as provided under
Schedule 3.1-B), that would constitute an event of Force Majeure under this Agreement.





     Each Party represents that the individuals signing this Agreement on behalf of each of them
has been duly authorized to do so. This Agreement will become a valid and binding contract only
upon its execution by such persons authorized to bind both Parties.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	14






 









 






ARTICLE XI

Audit




     Each Party (and its representatives) has the right, at its sole expense during normal working
hours and upon reasonable advance notice, to examine the records of the other Party, but only to
the extent reasonably necessary to verify the accuracy of any statement, charge or computation made
pursuant to this Agreement. If requested, a Party shall provide to the requesting Party statements
evidencing the quantities and qualities of Coal delivered or received at the Delivery Point. If any
such examination reveals any inaccuracy in any statement, the necessary adjustments in such
statements and the payments thereof will be promptly made and shall bear interest calculated at the
Interest Rate from the date the overpayment or underpayment was made until paid; provided, however,
that no adjustment for any statement or payment will be made unless objection to the accuracy
thereof was made in writing, in reference hereto, prior to the lapse of two (2) years from the
rendition thereof; and provided further, that for the purpose of such statement and payment
objections, this Article XI will survive any termination of this Agreement.



ARTICLE XII

Force Majeure




     To the extent either Party is prevented by Force Majeure from carrying out, in whole or part,
its obligations under this Agreement and such Party (the “Claiming Party”) gives notice and
details, orally and confirmed promptly in writing, of the Force Majeure to the other Party as soon
as practicable (but in no event later than 30 days after the occurrence thereof), then the Claiming
Party shall be excused from the performance of its obligations. The Claiming Party shall remedy the
Force Majeure with all reasonable dispatch. The non-Claiming Party shall not be required to perform
or resume performance of its obligations to the Claiming Party corresponding to the obligations of
the Claiming Party excused by Force Majeure. Failure to give such notice and furnish such
information within the time specified shall be deemed a waiver of all rights under this Article for
such period of time during which notice was not given. Buyer and Seller shall exercise reasonable
efforts to mitigate or eliminate the conditions which have caused the Force Majeure condition,
provided, however, nothing herein contained shall be construed as requiring Seller or Buyer to
accede to any demands of labor, or labor unions, or suppliers, or other parties which Seller or
Buyer considers unacceptable. No suspension or reduction by reasons of Force Majeure shall
invalidate the remainder of this Agreement but, on the removal of the cause, shipments shall resume
at the specified rate. The Claiming Party claiming Force Majeure shall furnish the non-Claiming
Party a monthly statement by the fifteenth (15th) day of the calendar month setting forth the
amount of tonnage not shipped or to be reduced because of Force Majeure causes asserted during the
second preceding calendar month.



     If an event of Force Majeure persists for (i) a continuous period of sixty days or (ii) an
aggregate of 75 days in any twelve-month rolling period, then, at any time thereafter during the
Force Majeure period, the Party not claiming Force Majeure shall have the option, upon at least
three (3) days’ prior written notice, to terminate this Agreement and the obligations of the
Parties thereunder.



     In the event of a Force Majeure, delivery of the affected quantity of Coal shall not be made
up except at Buyer’s sole discretion.



     If Seller claims Force Majeure under this Agreement and has obligations to provide Coal of a
similar type and quality as the Coal under other coal sales agreements, or if Buyer claims Force
Majeure and has obligations to purchase coal of a similar type and quality as the Coal


[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	15






 









 





under other coal sales agreements, then any reductions in Seller’s deliveries or Buyer’s
purchases (as applicable) shall be allocated by the Party claiming Force Majeure on a pro rata
basis among this Agreement and such other coal purchase or sales agreements involving coal of a
similar type and quality as the Coal, to the extent contractually permitted by such agreements.
Without limiting the generality of this Article, in the event of a Force Majeure event which causes
a partial or total curtailment of electrical generation from or electrical generating capacity at
the consigned destination or partial or total curtailment of transmission or distribution of
electricity therefrom, Buyer shall at its option, be relieved under this Article from its
obligation to accept up to the pro rata (based on such partial curtailment) quantity or entire
(based on such total curtailment) quantity of Seller’s coal scheduled for delivery for the period
during which such event or occurrence exists or existed.




ARTICLE XIII

Warranties




     In addition to all other warranties and representations made by Seller in this Agreement,
Seller represents and warrants that (i) Seller, its affiliates or subsidiaries, shall by the
Effective Date of this Agreement, own or control sufficient reserves of Coal as defined in Schedule
3.1-B to satisfy the quantity and quality provisions for this Agreement; (ii) Seller hereby
certifies that it is in good faith compliance with the rules, practices, and standards issued by
any and all governmental agency(ies) with respect to legislation, regulations, rules, or mandates
which were in effect either by interim or final rules, or passed, adopted, or promulgated but to go
into later effect, as of the time specified for the first delivery of Coal hereunder, including all
laws and regulations regarding the mining and sale of Coal (notices and orders issued under the
Federal Coal Mine Health and Safety Act and State and Federal Reclamation Acts excepted); and (iii)
Seller has filed or will have filed in a timely manner to have obtained by said time all licenses,
permits, certificates and other documents necessary for it to fulfill its obligations hereunder.
Seller shall furnish upon request from Buyer a statement indicating the amount of reserves that
remain to fulfill the quantity and quality requirements of this Agreement.



     Seller covenants that it will, and does hereby, dedicate to this Agreement such quantity of
said Coal reserves as is required for the full performance of Seller’s obligations hereunder and
that Seller will not sell nor contract to sell to others Coal from said reserves in such quantity
and quality as to jeopardize its ability to deliver the total quantity and quality of Coal called
for by this Agreement. Nothing in this Article XIII shall be construed as preventing Seller from
mining and selling Coal from said reserves to others provided the foregoing provisions with respect
to said reserves are complied with.



ARTICLE XIV

Title, Risk of Loss, and Indemnity




     Title for Coal conforming to this Agreement shall pass to Buyer as follows:




	 	a)	 	Title to and risk of loss of the Coal will pass to Buyer as the trucks are
unloaded at the Designated Delivery Point.
	 
	 	b)	 	Title to and risk of loss (except as provided in Schedule 2.4-B) of the Coal
will pass to Buyer as the loaded railcars are pulled from the Designated Delivery
Point.
	 
	 	c)	 	Title shall revert back to Seller immediately upon any rejection by Buyer as
provided elsewhere in this Agreement.





[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	16






 









 






     Seller warrants that it has title to the Coal and will deliver the Coal to Buyer free and
clear of all liens, claims, and encumbrances arising prior to the transfer of title to Buyer.
Seller and Buyer shall each indemnify, defend, and save harmless the other Party, its officers,
directors, affiliates, agents, and employees from and against any liabilities, expenses, losses,
claim, damages, penalties, causes of action, or suits arising out of or in connection with its
failure to comply with its obligations under this Agreement.



     Seller shall indemnify, save harmless, and defend Buyer and its affiliates, its officers,
directors, agents, and employees (all referred to in this sentence as “Buyer”) from and against any
liabilities, expenses, losses, claims, damages, penalties, causes of action, or suits, and all
other obligations whatsoever, including without limitation, all judgments rendered against and all
fines and penalties imposed upon Buyer (whether severally, or in combination with others) and any
reasonable attorneys’ fees and any other costs of litigation (all of which are hereinafter referred
to as “Liabilities”) arising out of injuries or death to any person(s), or damage to any property,
caused by or related to, in whole or in part the railcars (or barges, if applicable) furnished
hereunder (as applicable), between the time that such railcars (or barges, if applicable) are
delivered to Seller or Seller’s agent and the time that custody thereof is properly returned to
Buyer (or to Buyer’s agent carrier, if applicable), or if deliveries are by truck, arising out of
injuries or death to any person(s), or damage to any property, caused by or related to, in whole or
in part, to trucking of Coal, whether such Coal is trucked by Seller or Seller’s trucking
contractor(s). Any injury or death to person(s) or damage to property as hereinbefore described
shall be reported to Buyer by Seller immediately upon the occurrence thereof, and confirmed in
writing as soon as possible.



ARTICLE XV

Netting and Set Off




     If the Parties are required to pay any amount under this Agreement on the same day or in the
same month, then such amounts with respect to each Party may be aggregated and the Parties may
discharge their obligations to pay through netting, in which case the Party, if any, owing the
greater aggregate amount shall pay to the Party owed the difference between the amounts owed. Each
Party reserves to itself all rights, setoffs, counterclaims, combination of accounts, liens and
other remedies and defenses which such Party has or may be entitled to (whether by operation of law
or otherwise). The obligations to make payments under this Agreement or any other agreement between
the Parties may be offset against each other, set off or recouped therefrom.



ARTICLE XVI

Calculation of Damages




     Section 16.1 In addition to all other remedies available at law or, in equity, or
under this Agreement, unless excused by Force Majeure, by written agreement of Buyer and Seller, or
Buyer’s failure to perform, if Seller fails to deliver all or part of the Contract Quantity
pursuant to this Agreement (including any failure due to rejection or suspension of delivery
obligations), Seller upon demand shall pay Buyer, on the date payment would otherwise be due to
Seller, an amount for each ton of such deficiency equal to the positive difference, if any,
obtained by subtracting the Contract Price from the Replacement Price. “Replacement Price” means
the market price for such quantity at such Designated Delivery Point as determined by Buyer in a
commercially reasonable manner.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	17






 









 






     Unless excused by Force Majeure, by written agreement of Buyer and Seller, or Seller’s failure
to perform, if Buyer fails to accept all or part of the Contract Quantity pursuant to this
Agreement, Buyer upon demand shall pay Seller, on the date payment would otherwise be due, an
amount for each ton of such deficiency equal to the positive difference, if any, obtained by
subtracting the Sales Price from the Contract Price. “Sales Price” means the market price for such
quantity at such Designated Delivery Point as determined by Seller in a commercially reasonable
manner.



     Section 16.2 Payment of amounts, if any, determined under this Article shall be made
in accordance with Article IV; provided, that payment of any such amounts shall be made on the 15th
day of the month following such failure to deliver or accept Coal, as applicable. All such
determinations shall be made in a commercially reasonable manner. The Non-Defaulting Party shall
not be required to enter into any actual replacement transaction in order to determine the
Replacement Price or Sales Price, as appropriate, provided, however, that the Non-Defaulting Party
shall take all reasonable steps to mitigate its damages.



ARTICLE XVII

Events of Default, Remedies and Limitation of Liabilities




     Section 17.1 An event of default (“Event of Default”) with respect to a Party (the
“Defaulting Party”) shall mean any of the following:



     1) the failure of the Defaulting Party to pay when due any required payment and such failure
is not remedied within three Business Days, after receipt of written notice thereof, provided the
payment is not subject to a good faith dispute as described in Article IV;



     2) an event described under paragraph (d) of Article II, Section 2.6, Rejection and
Suspension, has occurred;



     3) any representation or warranty made by a Party herein shall prove to be untrue in any
material respect when made;



     4) the failure of the Defaulting Party to comply with its other respective covenants or
obligations under this Agreement and such failure continues uncured for five (5) Business Days
after receipt of written notice thereof;



     5) the Defaulting Party shall be subject to a Bankruptcy Proceeding;



     6) the Defaulting Party fails to establish, maintain, extend, or increase Performance
Assurance when required pursuant to this Agreement;



     7) the occurrence of a Material Adverse Change with respect to the Defaulting Party; provided
such Material Adverse Change shall not be considered an Event of Default if the Defaulting Party,
within forty-eight hours but at least one (1) Business Day after the date of notice, provides to
the Non-Defaulting Party for so long as the Material Adverse Change is continuing, Performance
Assurance with the Non-Defaulting Party in an amount equal to the sum of (in each case rounding
upwards for any fractional amount to the next $250,000):




	 	a)	 	the Settlement Amount that would be owed to the Non-Defaulting Party; plus
	 
	 	b)	 	if the Non-Defaulting Party is Seller, the amount equal to aggregate of the
amounts Seller is entitled to receive under this Agreement for Coal scheduled during
the 60 day period preceding the Material Adverse Change (the amount of said Performance
Assurance to be adjusted at the beginning of each subsequent quarter to reflect amounts
then owing).




[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	18






 









 






     Section 17.2 Upon the occurrence and during the continuance of an Event of Default,
the other Party (the “Non-Defaulting Party”) may, in its sole discretion:



     1) terminate, accelerate, and liquidate the Parties’ respective obligations under this
Agreement by establishing, and notifying the Defaulting Party of, an early termination date (which
shall be no earlier than the date of such notice nor later than 20 days after the date of such
notice) on which this Agreement shall terminate (“Early Termination Date”); and/or



     2) withhold any payments due to the Defaulting Party until such Event of Default is cured; or



     3) suspend performance of its obligations under this Agreement until such Event of Default is
cured.



     If notice of an Early Termination Date is given under this Article, the Early Termination Date
will occur on the designated date, whether or not the relevant Event(s) of Default is then
continuing.



     Section 17.3 Notwithstanding any provision to the contrary contained in this
Agreement, the Non-Defaulting Party shall not be required to pay the Defaulting Party any amount
under this Article XVII, until the Non-Defaulting Party receives confirmation satisfactory to it,
in its reasonable discretion (which may include an opinion of its counsel), that all other
obligations of any kind whatsoever of the Defaulting Party to make any payments to the
Non-Defaulting Party under this Agreement (or otherwise) have been fully and finally performed.



ARTICLE XVIII

Grant of Security Interest




     To secure its obligations under this Agreement and to the extent either or both Parties
deliver Performance Assurance hereunder, each Party (a “Pledgor”) hereby grants to the other Party
(the “Secured Party”) a present and continuing first priority secured interest in, and lien on (and
right of recoupment and setoff against), and assignment of, all cash collateral and cash equivalent
collateral and any and all proceeds resulting therefrom or the liquidation thereof, whether now or
hereafter held by, on behalf of, or for the benefit of, such Secured Party, and each Party agrees
to take such action as the other Party reasonably requires in order to perfect the Secured Party’s
first-priority security interest in, and lien on (and right of recoupment and/or setoff against),
such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.



ARTICLE XIX

Holding and Using of Performance Assurance




     Each Party will be entitled to hold Performance Assurance so long as the credit rating of the
senior unsecured debt obligation of the entity or its guarantor is rated at least BBB- by S&P’s and
Baa3 by Moody’s and further provided that an Event of Default has not occurred and is continuing
with respect to the Party. If a Party’s Event of Default has occurred and is continuing, then the
Defaulting Party, if it holds Performance Assurance, shall be required to immediately return all
Performance Assurance to the Non-Defaulting Party.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	19






 









 






ARTICLE XX

Early Termination Payment and Remedies




     If this Agreement terminates on an Early Termination Date, the Non-Defaulting Party shall
calculate, in a good faith commercially reasonable manner, the Settlement Amount as of the Early
Termination Date as soon as is reasonably practicable and shall promptly notify the Defaulting
Party of the amount thereof.



     “Settlement Amount” shall mean the present value of the single net aggregate amount for the
remaining term of the Agreement, including any exercised option period, of any Losses, Costs, and
Gains, expressed in United States Dollars, which the Non-Defaulting Party incurs as a result of the
early termination of this Agreement in accordance with Article XVII, including, but not limited to,
Losses or Gains based upon the then current replacement value of this Agreement, the amounts of any
unpaid invoices, and the amount for Coal delivered but not yet billed. In calculating the
Settlement Amount, the Non-Defaulting Party shall set off all amounts that are due to the
Defaulting Party against such Settlement Amount so that the Settlement Amount shall be netted to a
single liquidated amount. Any collateral being held by the Non-Defaulting Party shall be setoff
against the amount owed to the Non-Defaulting Party. If the Defaulting Party is holding collateral
posted by the Non-Defaulting Party, then the Non-Defaulting Party will have the right to set off
that amount against any payment to be made to the Defaulting Party.



     The Non-Defaulting Party shall provide the Defaulting Party with an explanation of how it
calculated the Settlement Amount, as well as supporting calculations and documentation reasonably
requested by the Defaulting Party. The Non-Defaulting Party shall use good faith commercially
reasonable efforts to mitigate any Costs or Losses it is entitled to hereunder. The Defaulting
Party shall have the right to audit (through a third party independent auditor mutually agreed to
by the Parties) the calculation of all of the Non-Defaulting Party’s Gains, Losses and Costs.



     If the present value of the Non-Defaulting Party’s aggregate Losses and Costs (net of any
amounts due to the Defaulting Party) exceed the present value of its aggregate Gains, all as
finally determined in accordance with the preceding provisions of this Article XX, the Defaulting
Party shall, within five (5) Business Days of such final determination, pay the Settlement Amount
to the Non-Defaulting Party, including interest thereon at the Interest Rate from the Early
Termination Date until paid in full. If the Defaulting Party disputes the Non-Defaulting Party’s
calculation of the Settlement Amount, the Defaulting Party will provide its calculations to the
Non-Defaulting Party within two (2) business Days of receipt of calculation from the Non-Defaulting
Party. The Defaulting Party shall nevertheless pay to the Non-Defaulting Party the undisputed
portion of the Settlement Amount and provide Performance Assurance for the remaining amount.



     Liability in Unexercised Options. In the event that the Agreement terminates on an
Early Termination Date prior to the Option(s) being exercised by Buyer, then if the Seller is the
Defaulting Party, the Buyer is entitled to the market price as of the date Early Termination Date
of an equivalent replacement Option(s) to be determined by Buyer in a commercially reasonable
manner.



ARTICLE XXI

Successors, Assigns, and Assignment




     This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their
respective successors and assigns; but, except for assignment to an Affiliate, this Agreement may
not be assigned by either Party without the prior written consent of the other,



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	20






 









 





except that either Party may without the written consent of the other assign to any financing
institution or institutions this Agreement or any monies due or to become due hereunder. No
assignment under this Article XXI shall in any way relieve the assignor from liability for full
performance under this Agreement. Any such assignee shall assume and agree to be bound by the terms
and conditions of this Agreement.




     Notwithstanding the provisions of the preceding paragraph to the contrary, Buyer shall have
the right to assign, in whole or in part, its rights and interests and delegate its obligations
under this Agreement to a producer of Synfuel, provided that the proposed assignee agrees in
writing to be bound by and to assume the terms and conditions of this Agreement and any and all
obligations of Buyer to Seller arising or accruing hereunder during the term of such assignment. If
the interest of Buyer in this Agreement shall be assumed, sold or transferred as hereinbefore
provided, Buyer shall be released and discharged from only those obligations to Seller arising or
accruing hereunder during the term of the assignment, and Buyer shall not be released and
discharged from and shall remain liable for any and all obligations to Seller arising or accruing
hereunder prior to or after the period of such assumption, unless such obligations are expressly
assumed in writing by the assignee. During the assigned term, Seller shall perform this Agreement
with the assuming party as if such person had been named as Buyer under this Agreement during the
assigned term, but any act, omission or breach of the assignee during the assigned term will not
affect the rights or obligations of the parties during the unassigned term. Should such assignment
occur, Seller also agrees upon the request of Buyer to enter into a new agreement with such Synfuel
producer on substantially the same terms and conditions as provided in this Contract with respect
to all or part of the Coal to be purchased hereunder.



     Written consent to one or more assignments shall not be construed as waiving the necessity of
obtaining written consent to other and/or additional assignments.



ARTICLE XXII

Government Contractor Compliance Certificate




     Unless exempted, the Parties shall comply with the equal employment opportunity clause in
Section 202 of Executive Order 11246 and all applicable rules, regulations, and relevant orders
pertaining to Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and Section
4212 of the Vietnam Era Readjustment Assistance Act of 1974, as amended. The Parties represent that
they do not, and shall not for the term of the Agreement, provide or maintain for its employees
facilities that are segregated on the basis of race, color, religion, sex or national origin. The
Parties represent that they will not assign its employees to perform any work related to the
Agreement at a location where facilities are segregated on the basis of race, color, religion, sex
or national origin. The Parties agree that they will not enter into any agreement to obtain goods
or services relating to the Agreement with any entity that provides, maintains or assigns its
employees to work at locations where facilities are segregated on the basis of race, color,
religion, sex or national origin. As used herein, “facility” means waiting rooms; work areas;
restaurants and other eating areas; time clocks; locker rooms and other storage or sleeping areas,
except as necessary to assure privacy between male and female employees; parking lots, drinking
fountains; recreation or entertainment areas; and transportation. If not otherwise exempted by
Title 48 and to the extent applicable, the Parties will comply with 48 CFR §52.219-8, Utilization
of Small, Small Disadvantaged, and Women-Owned Small Business Concerns, and 48 CFR §52.219-9,
Small, Small Disadvantaged, and Women-Owned Small Business Subcontracting Plan. If not otherwise
exempted by 41 CFR §60-1.5, the



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	21






 









 





Parties represent that they will file all reports or other required information specified in
41 CFR §60-1.7.




ARTICLE XXIII

Counterparts, Survival and Severability




     This Agreement may be executed in several counterparts, each of which is an original and all
of which constitute one and the same instrument. All audit rights shall survive the termination of
this Agreement in full for a period of two (2) years (except with respect to audit rights as to
third party impositions which shall survive for the applicable statute of limitations, including
any extensions thereof).



     Should any provision of this Agreement for any reason be declared invalid or unenforceable by
final and applicable order of any court or regulatory body having jurisdiction, such decision shall
not affect the validity of the remaining portions, and the remaining portions shall remain in
effect as if this Agreement had been executed without the invalid portion. In the event any
provision of this Agreement is declared invalid, the Parties shall promptly renegotiate to restore
this Agreement as near as possible to its original intent and effect.



ARTICLE XXIV

Expenses




     In addition to the other indemnification rights set forth in this Agreement, the Defaulting
Party will, on demand, defend, indemnify and hold harmless the Non-Defaulting Party for and against
all reasonable out-of-pocket expenses, including legal costs, incurred by the Non-Defaulting Party
by reason of the enforcement and protection of its rights under this Agreement including, but not
limited to, costs of collection.



ARTICLE XXV

Non-Waiver and Duty to Mitigate




     No waiver by any Party of any of its rights with respect to any other Party or with respect to
any matter or default arising in connection with this Agreement shall be construed as a waiver of
any subsequent right, matter or default whether of a like, kind, or different nature. Any waiver
shall be in writing signed by the waiving Party.



     Each Party agrees that it has a duty to mitigate damages.



     Except as otherwise set forth in this Agreement, nothing contained in this Agreement shall be
construed or constitute any Party as the employee, agent, partner, joint venturer or contractor of
any other Party.



     This Agreement is made and entered into for the sole protection and legal benefit of the
Parties, and their permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement.



ARTICLE XXVI

Notices




     Notices required under this Agreement may be exercised verbally, but shall be provided to the
other Party in writing as soon as practicable to the addresses shown herein. The Parties shall be
legally bound from the date the notification is exercised.



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	22






 









 






     Unless expressly provided otherwise, notices shall be in writing and delivered by hand or
electronic means or transmitted by facsimile or sent by postage prepaid, certified mail, return
receipt requested, or by overnight mail or courier. Notices hand delivered or delivered by
electronic means shall be deemed delivered by the close of the Business Day on which it was hand
delivered or delivered by electronic means (unless hand delivered after close of the Business Day
in which case it shall be deemed received by the close of the next Business Day). Notices provided
by facsimile shall be deemed to have been received upon the sending Party’s receipt of its
facsimile machine’s confirmation of a successful transmission. If the day on which such facsimile
is received is not a Business Day or is after five p.m. Eastern Prevailing Time on a Business Day,
then such facsimile shall be deemed to have been received on the following Business Day. Notices
provided by postage prepaid, certified mail, return receipt requested, or by overnight mail or
courier, shall be deemed delivered upon mailing. A Party may change its address by providing notice
thereof in accordance with this Article XXVI.


For Notices:

If to Seller:

ATTN CHARLES UNGUREAN

OXFORD MINING COMPANY INC

C/O EAGLE FUELS

330 OAK PARK, PO BOX 291

CADIZ OH 43907

PHONE: 740-942-8181            FAX: 740-942-4227



If to Buyer:

ATTN CONTRACT ADMINISTRATION

AMERICAN ELECTRIC POWER SERVICE CORPORATION

155 WEST NATIONWIDE BOULEVARD, COLUMBUS OH 43215

PHONE: 614-583-6114            FAX: 614-583-1606




     Seller shall reference this Agreement number on each invoice.



ARTICLE XXVII

Confidentiality




     Neither Party shall disclose, either directly or indirectly, the terms of this Agreement to a
third party without the written consent of the other Party (other than a Party’s and its
Affiliates’ employees, lenders, counsel, accountants or prospective permitted purchasers), except
in order to comply with any applicable law, order, regulation or exchange rule; provided, each
Party shall notify the other Party of any proceeding of which it is aware which may result in
disclosure and use reasonable efforts to prevent or limit the disclosure.



ARTICLE XXVIII

Entire Agreement, Amendments, and Interpretation




     This Agreement and the Schedules attached hereto and made a part hereof constitute the entire
agreement between the Parties relating to the subject matter contemplated by this Agreement and
supersedes any prior or contemporaneous agreements or representations



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	23






 









 





affecting the same subject matter. The Parties agree that parol or extrinsic evidence may not
be used to vary or contradict the express terms of this Agreement.




     No amendment modification or change to this Agreement be enforceable unless reduced to a
writing executed by the Party against whom such amendment, modification or change is sought to be
enforced and shall reference this Agreement.



     The Parties acknowledge that each Party and its counsel have reviewed and revised this
Agreement and that the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting Party shall not be used in interpretation of this Agreement.



     All headings for Articles and Sections herein are for convenience and reference purposes only.
Any capitalized terms used herein and not defined in the article or section in which it appears
shall have the meaning set forth herein under Definitions.



ARTICLE XXIX

Governing Law; Waiver of Jury Trial




     This Agreement shall be governed by and construed in accordance with the laws of the State of
Ohio. Each Party waives its respective right to any jury trial with respect to any litigation
arising under or in connection with this Agreement. Except as otherwise provided for herein, the
provisions of the Uniform Commercial Code (“UCC”) of the state the law of which shall govern this
Agreement shall be deemed to apply to this Agreement and any Coal supplied hereunder shall be
deemed to be “goods” for purposes of the UCC.



ARTICLE XXX

Venue




     Each Party hereby submits to the exclusive jurisdiction of state or federal courts located in
Franklin County, Ohio and all appellate courts therefrom and waives any objection which it may have
at any time to the laying of venue of any proceedings brought in such court, waives any claim that
such proceedings have been brought in an inconvenient forum, and further waives the right to
object, with respect to such proceedings, that such court does not have jurisdiction over such
Party.



ARTICLE XXXI

Imaged Agreement




     Any original executed Agreement or other related document may be photocopied and stored on
computer tapes and disks (“Imaged Agreement”). If an Imaged Agreement is introduced as evidence in
any judicial, arbitration, mediation or administrative proceedings, it shall be considered as
admissible evidence. Neither Party shall object to the admissibility of the Imaged Document on the
basis that such were not originated or maintained in documentary form under either the hearsay
rule, the best evidence rule, or other rule of evidence.



ARTICLE XXXII

Major Technological Improvements




     The Parties hereto recognize that major technological improvements in mining, hauling,
handling, or processing, may provide the future opportunity for reduced costs in supplying Coal
hereunder. Seller agrees that the application of latest technology in equipment and methods used in
the mining, hauling, handling, and processing of Coal to be supplied under this



[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 




			
	 	 	 
	5/3/04
	 	24






 









 





Agreement shall be considered and adopted if feasible. The Selling Price for all Coal
delivered from any source(s) where any such new technology is introduced shall be reduced by [*] of the difference between Seller’s normal production and processing costs per ton
without such new technology and such production and processing costs per ton subsequent to the
implementation of such new technology, after adjustment for depreciation of any related capital
expenditure(s), amortization of any costs relating to installation of such new technology, and a
rate of return on such expenditures and such costs at the then existing prime rate of Citibank,
N.A., prorated over the normal useful life of any such capital expenditure(s). The Selling Price
hereunder shall not be reduced pursuant to this Article XXXII, based on Seller’s use at such
source(s) of any technology, if such technology was generally available for commercial use in the
mining industry as of March 1, 2004.



IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be executed in its behalf by its
proper officer thereunder duly authorized, all as of the day and year first above written.




	 	 	 	 	 	 	 

	Seller: OXFORD MINING COMPANY, INC.	 	Buyer: AMERICAN ELECTRIC POWER

SERVICE CORPORATION, AS AGENT FOR

COLUMBUS SOUTHERN POWER COMPANY
	 
	 	 	 	 	 	 
	By:

	 	Charles C. Ungurean
	 	By:	 	 
	 
	Its:

	 	/s/ Charles C. Ungurean	 	Its:	 	/s/ [ILLEGIBLE]
	 

	 	 
	 	 	 	 





[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 



			
	 	 	 
	5/3/04
	 	25






 









 






SCHEDULE 2.4-A

TRANSPORTATION SPECIFICATIONS

TRUCK




     The Coal to be delivered hereunder (unless and until otherwise directed by Buyer as
hereinafter provided) shall be properly consigned by Seller to the Plant. Except as otherwise
provided by this Agreement, all Coal shall be delivered hereunder FOB Plant in trucks provided by,
or on behalf of, Seller. Seller shall accordingly deliver and dump such Coal at the Plant at such
time of day and at such plant location as Buyer may reasonably direct, at which time title and risk
of loss to Coal so delivered shall pass to Buyer (all references to “Seller” in these
Transportation Specifications, shall apply additionally to Seller’s trucking contractor[s], if any,
that deliver Coal on Seller’s behalf under this Agreement).



     Seller, at its expense, shall have coverage of the insurance specified below, which shall be
placed with insurance carrier(s) acceptable to Buyer, and shall maintain this insurance at all
times during performance of this Agreement



     (i) Coverage for the legal liability of Seller under the workers’ compensation and
occupational disease law of the state(s) in which the work is (are) performed. Seller shall be
contributor to the state workers’ compensation fund(s) and shall furnish a certificate to that
effect. If Seller is a legally permitted and qualified self-insurer in the state of Ohio, it may
furnish proof that it is such a self-insurer in lieu of submitting proof of insurance;



     (ii) Employer’s liability insurance in an amount not less than $2,000,000.00 for each
accident;



     (iii) Commercial general liability insurance with limits of not less than $2,000,000.00 for
each occurrence and aggregate;



     (iv) Commercial automobile liability insurance with a limit for bodily injury and property
damage of not less than $2,000,000.00 each accident;



     (v) Seller shall obtain waivers of subrogation on all their insurance, whether required by
this Agreement or in excess of the Agreement requirements. Such waivers shall be for the benefit of
Buyer.



     Buyer may prohibit Seller’s trucks from entering the premises of the consigned destination
hereunder until Buyer receives from Seller, from time to time upon reasonable demand by Buyer, two
copies each of acceptable certificates of the insurance coverages stated above. Buyer’s failure to
demand copies of such certificates shall not relieve Seller of the obligation to continually have
in force the insurance coverage stated above. Such certificates, which shall specifically reference
the contract number 10-62-04-900, shall state that the insurance carrier has issued the policies
providing for the insurance specified herein, that such policies are in force, and that the
insurance carrier will give Buyer thirty days prior written notice of any material change in, or
cancellation of, such policies. If such insurance policies are subject to any exceptions to the
terms specified herein, such exception shall be explained in full in such certificates. Buyer may,
at its discretion, require Seller to obtain insurance policies that are not subject to any
exceptions.



     Buyer may also prohibit any truck from entering the premises of the consigned destination
unless the driver of such truck receives and agrees to abide by Buyer’s written instructions (or
has evidence of such receipt and agreement obtained within the prior twelve-month period) as to
Buyer’s safety and other requirements for the operation of such trucks on such premises.




[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	26






 









 






SCHEDULE 2.4-B

TRANSPORTATION SPECIFICATIONS

RAIL




     The Coal herein contracted for rail delivery (unless and until otherwise directed by Buyer as
hereinafter provided) shall be properly consigned by Seller, rail freight collect, for rail
delivery to the Plant via Muskie Transloading, Inc.



     Seller shall load Coal that is to be delivered hereunder into railcars provided by Buyer, or
its agent, at the Designated Delivery Point(s) listed on Schedule 3.1-B of this Agreement. Requests
for any additional rail shipping origin(s) shall be proposed by Seller in writing and shall be
subject to Buyer’s written approval. Such approval shall be subject to Buyer’s reasonable
discretion.



     Except when in conflict with provisions of this Agreement, (in which case, such provisions
shall control), the loading at the shipping origin shall be accomplished according to the standard
tariff or contract agreements governing such operations between the Coal tipple operator and
carrier, including but not limited to free time and demurrage charges. Buyer shall not be
responsible for any charges assessed at the origin by carrier including, but not limited to,
detention charges.



     Seller shall not have the right to ship Coal to be delivered under this Agreement from any
rail shipping origin(s) other than the Designated Delivery Point(s) listed on Schedule 3.1-B unless
Seller shall first have obtained Buyer’s written approval of such additional shipping origin. Such
written approval shall be subject to Buyer’s sole discretion, and upon Seller’s agreement to pay
any increased transportation cost differential (based on carrier-provided cars) that would be
incurred by Buyer (any decreased transportation cost differential shall be to Buyer’s benefit) if
shipments were made from such proposed rail shipping origin as compared to Cadiz.



     Seller shall cause the loadings hereunder to be tendered in unit trainload lot shipments of
not less than 50 railcars each, shall be loaded to a minimum weight equal to ninety-eight percent
(98%) of the total of the marked load limit of all the cars in the unit train, and shall be loaded
in not more than four (4) hours from the Designated Delivery Point(s); provided, however, that
subject to the provisions hereinafter, Seller may tender trainload lot shipments of less than 50
railcars from an Designated Delivery Point(s) that is otherwise not capable of loading trainload
lot shipments of 50 railcars. Seller shall add the following notation on each bill of lading or
mine card documents: “Subject to Contract No. OHCR-C-3012” or such other contract number as
designated from time to time by Buyer.



     Seller shall cause deliveries to be loaded on any day of the week. Seller shall cause loadings
to commence at any hour of the day that scheduled railcars are made available for loading, and
loading time for each unit train shipped hereunder shall not exceed five (5) hours from the time
the unit train is placed for loading at the origin by the rail carrier. Seller shall provide to
Buyer, at least ten (10) days prior to the beginning of each month, a proposed shipping schedule.
Buyer shall review the schedule to verify if it can be accomplished with the railroad and that,
when combined with deliveries from all Designated Delivery Point(s) (if more than one), it does not
exceed the quantity obligation under this Agreement, and advise Seller of acceptance or
nonacceptance.




[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	27






 









 






     If at any time Seller ships Coal that results in Buyer being charged for improper consignment
or otherwise results in Buyer being charged a transportation charge for delivering such Coal
(including but not limited to any demurrage charge) which exceeds the minimum transportation charge
then in effect for shipments of not less than fifty (50) railcars loaded in not more than five (5)
hours and meeting all other railroad requirements necessary for the minimum transportation rate set
forth in the contract for shipping Coal from the Approved Rail Shipping Origin in carrier-provided
railcars, then any such improper consignment charge or excess transportation charge shall be
credited to Buyer.



     Should Seller not originate shipments in accordance with these Transportation Specifications,
Seller shall pay Buyer for any resulting charges incurred by Buyer which are assessed by the
railroad in excess of the charges that would have been incurred by Buyer had Seller strictly
complied herewith.



     Should Buyer reject any railcar load(s) of Coal in any shipment, Seller shall arrange for the
removal of such rejected railcar(s). All costs assessed by the railroad, including but not limited
to reconsignment charges, transportation charges, and demurrage charges, shall be to the account of
Seller. In addition, if the rejected railcar(s) of Coal are Buyer-provided railcar(s), then Seller
shall also pay the per diem and mileage charges as defined in the Car Hire Tables of the Official
Railway Equipment Register, as amended. Such per diem charges shall be effective as of the first
7:00 am. following Buyer’s rejection until the railcar(s) are unloaded at a destination specified
by Seller and then returned to a destination specified by Buyer (or by the railroad, if applicable)
for further utilization. Such mileage charges shall be based on the loaded and empty miles traveled
by the rejected railcar(s) from the point of rejection to such specified return destination.




[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	28







 











 




SCHEDULE 3.1-A

QUALITY SPECIFICATIONS




     The Coal required and delivered hereunder, upon unloading and receipt at the Plant (and at
each other respective consigned destination,) shall meet the following “Contracted Half-Month”
specifications. Further, for the purposes of this Article, the following “Suspension”
specifications shall be applicable to such Coal.



	 	 	 	 	 	 	 	 	 
	 	 	Weighted Average “As-Received” Basis
	 	 	Contracted	 	Half Month (A)*	 	Applicable Lot (B)*
	 	 	Half-Month	 	Suspension Limit	 	Suspension Limit (D)*
	SPECIFICATION A:
	 	 	 	 	 	 	 	 
	Calorific Value (Btu/lb.)

	 	 	[*]	 	 	[*]	 	[*]
	Moisture (%)

	 	 	[*]	 	 	[*]	 	[*]
	Ash (%)

	 	 	[*]	 	 	[*]	 	[*]
	Volatile Matter (%)

	 	 	[*]	 	 	[*]	 	[*]
	Hardgrove Grindability

	 	 	[*]	 	 	[*]	 	[*]
	Sulfur Dioxide (lbs. S02/MMBtu) (C)*

	 	 	[*]	 	 	[*]	 	[*]
	Ash Fusion Temp. (H=1/2w) °F Red. Atm

	 	 	[*]	 	 	[*]	 	[*]
	 
	 	 	 	 	 	 	 	 
	SPECIFICATION B:
	 	 	 	 	 	 	 	 
	Calorific Value (Btu/lb.)

	 	 	[*]	 	 	[*]	 	[*]
	Moisture (%)

	 	 	[*]	 	 	[*]	 	[*]
	Ash (%)

	 	 	[*]	 	 	[*]	 	[*]
	Volatile Matter (%)

	 	 	[*]	 	 	[*]	 	[*]
	Hardgrove Grindability

	 	 	[*]	 	 	[*]	 	[*]
	Sulfur Dioxide (lbs. S02/MMBtu) (C)*

	 	 	[*]	 	 	[*]	 	[*]
	Ash Fusion Temp. (H=1/2w) °F Red. Atm

	 	 	[*]	 	 	[*]	 	[*]
	 
	 	 	 	 	 	 	 	 
	SPECIFICATION C:
	 	 	 	 	 	 	 	 
	Calorific Value (Btu/lb.)

	 	 	[*]	 	 	[*]	 	[*]
	Moisture (%)

	 	 	[*]	 	 	[*]	 	[*]
	Ash (%)

	 	 	[*]	 	 	[*]	 	[*]
	Volatile Matter (%)

	 	 	[*]	 	 	[*]	 	[*]
	Hardgrove Grindability

	 	 	[*]	 	 	[*]	 	[*]
	Sulfur Dioxide (lbs. S02/MMBtu) (C)*

	 	 	[*]	 	 	[*]	 	[*]
	Ash Fusion Temp. (H=1/2w) °F Red. Atm

	 	 	[*]	 	 	[*]	 	[*]
	# Ash/MMBtu:

	 	 	[*]	 	 	[*]	 	[*]








 




			
	Definitions:
	 
	N/A: Not Applicable
	 
	(A) = 	 	the Half-Month weighted average analysis result (as determined under Article VIII of this
Agreement).
	 
	(B) = 	 	the analysis result of the sample (or composite of samples, if more than one) representing
each day’s unloading of Coal, or, at Buyers election, a composite of two or more such days
unloadings (a day’s unloading shall mean all Coal unloaded on a given day between the hours of
12:01 a.m. to 12:00 a.m.).
	 
	(C) = 	 	For the purpose of determining the pounds of sulfur dioxide per million Btu and pounds Ash
per million Btu, the figures shall be rounded to the nearest one hundredth. For example, [*]
pounds SO2 per million Btu shall mean [*] pounds SO2 per million Btu,
while [*] pounds SO2 per million Btu shall mean [*] pounds SO2 per million Btu
and shall be deemed, for example, not to have met a [*] pounds SO2 per million Btu
specification.
	 
	(D) = 	 	Buyer shall also have the right to reject any Coal that: 1) has a maximum topsize exceeding
[*] when delivered to the Plant or exceeds [*] capable of passing a [*] square wire cloth sieve; 2) has a maximum topsize exceeding [*] if delivered to
CCPP; 3) is not free flowing and free of extraneous material upon unloading; or 4) has
intermediate sizes (including fines) added or removed.
	 
	(E) = 	 	the “suspension” specification for grindability shall be no less than X, where X =
Contracted Btu times [*], divided by the actual weighted average “as-received” calorific value
of the coal for such lot.




[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 
	5/3/04
	 	29






 









 






SCHEDULE 3.1-8

APPROVED PRODUCTION SOURCE(S), APPROVED RESERVE(S) OF COAL,

AND DESIGNATED DELIVERY POINT(S)




     The Approved Production Source(s) to which reference is made to in this Agreement consist of
the following:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Coal	 	 	Ohio
	Mine	 	Reserves	 	 	Seam	 	 	County
	Boswell
	 	 	[*]	 	 	 	8,9	 	 	Belmont
	Egypt Valley East
	 	 	[*]	 	 	 	9	 	 	Belmont
	Martin
	 	 	[*]	 	 	 	8	 	 	Belmont/Harrison
	Sexton
	 	 	[*]	 	 	 	8,8A,9	 	 	Harrison
	Daron
	 	 	[*]	 	 	 	8,8A,9	 	 	Harrison
	New Lexington
	 	 	[*]	 	 	 	5,6	 	 	Perry
	 
	 	 	 	 	 	 	 	 	 	 	 
	Subtotal Strip 1
	 	 	[*]	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Plainfield II
	 	 	[*]	 	 	 	5,6	 	 	Guernsey/Coshocton
	Little Africa
	 	 	[*]	 	 	 	5,6	 	 	Coshocton
	Plainfield III
	 	 	[*]	 	 	 	5,6	 	 	Guernsey/Coshocton
	Otsego
	 	 	[*]	 	 	 	6	 	 	Guernsey/Muskingum
	Other Plainfield
	 	 	[*]
	 	 	 	5,6	 	 	Guernsey
	Stonecreek
	 	 	[*]	 	 	 	5,6,7	 	 	Tuscarawas
	Stillwater
	 	 	[*]	 	 	 	7	 	 	Tuscarawas
	Miley
	 	 	[*]	 	 	 	6	 	 	Coshocton
	 
	 	 	 	 	 	 	 	 	 	 	 
	Subtotal Strip 2
	 	 	[*]	 	 	 	 	 	 	 	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Coal	 	 	Ohio
	Mine	 	Reserves	 	 	Seam	 	 	County
	 	 	 	 	 	 	Seam	 	 	County
	Tusky #6
	 	 	[*]	 	 	 	6	 	 	Tuscarawas/Harrison
	Rush Twp #6
	 	 	[*]	 	 	 	6	 	 	Tuscarawas
	 
	 	 	 	 	 	 	 	 	 	 	 
	Subtotal Underground
	 	 	[*]	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Grand Totals
	 	 	[*]	 	 	6 Seams	 	7 Counties






The Designated Delivery Points are:




	 	 	 	 	 	 	 

	FOB Plant or	 	 	 	 
	 FOB Railcar	 	 	 	 
	 

	 	Cadiz Loadout
	 	OPSL No. CUOH-10045
	 	     
	 

	 	Rehobeth Loadout
	 	OPSL No. OSRR-1009
	 	 





[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	30






 









 






SCHEDULE 7.2

QUALITY ADJUSTMENTS




     In order for the Selling Price to accommodate variations in calorific value, sulfur dioxide
value, and ash value of the Coal delivered hereunder, there shall be an amount(s) added to or
subtracted from the Contract Prices as provided for in this Article. For purposes of this Schedule
7.2, the “Contract Price” shall mean the applicable Contract Price (based upon the Contract [*],
specification, and Designated Delivery Point) in accordance with Article V. These price adjustments
shall be in addition to any rights which Buyer may have as provided or referenced under Article II
of this Agreement.



     (a) If the weighted average calorific value of the Coal unloaded and taken into account
hereunder in a Half-Month is not equal to the Contract Half-Month Weighted Average Btu
Specification, then there shall be an amount added to the Contract Price (if the calculated number
is positive) or subtracted from the Contract Price (if such number is negative), as determined by
the following formula, to arrive at the adjusted price for such Coal:




Amount Per Ton of Increase or = (Actual Btu — Contracted Btu) x Contract Price




Decrease for Calorific Value                     Contracted Btu



provided, however, no premium will be paid for Calorific Value which exceeds the Contracted
Half-Month Weighted Average Btu/lb. by [*] Btu per pound.




     (b) If the weighted average Half-Month SO2 content tested is greater than the
SO2 Contracted Half-Month Weighted Average Specification, the Contract Price for Coal
will be reduced by an amount determined in accordance with the following formula



((Actual lbs. S02/mmbtu – SO2 Contracted S02/mmbtu) * Actual Btu/lb. * E)



[*]




E = the SO2 Monthly Price (or if not published, the average of the SO2
Daily Prices for the applicable calendar month of delivery) of allowances
expressed in dollars per ton of SO2 in the table entitled “AIR Daily
Emission Allowance Indices” published in AIR Daily, or its successor publication,
for such calendar month of delivery as first published following such month,
provided that if the SO2 Monthly Price is less than [*], then E shall
equal [*].



     (c) If the weighted average Half-Month SO2 content tested is less than the
SO2 Contracted Half-Month Weighted Average Specification, the Contract Price for Coal
will be increased by an amount determined in accordance with the following formula



((S02 Contracted lbs. S02/mmbtu — Actual S02/mmbtu) * Actual Btu/lb. * E) * [*]



[*]




E = the SO2 Monthly Price (or if not published, the average of the
SO2 Daily Prices for the applicable calendar month of delivery) of
allowances expressed in dollars per ton of SO2 in the table entitled “AIR
Daily Emission Allowance Indices” published in AIR Daily, or its successor
publication, for such calendar month of delivery as first published following such
month, provided that if the SO2 Monthly Price exceeds [*], then E
shall equal [*].



     Additionally, an amount of [*] per ton shall be deducted from the
Contract Price for each Applicable Lot of Coal having an SO2 value greater than the
Applicable Lot Suspension Limit.





[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	31






 









 






     (d) For each Applicable Lot of Coal tested to have an ash content greater than the Applicable
Lot Suspension Limit, the Contract Price for Coal in such Applicable Lot will be decreased by [*]
for each [*] ash increment, or portion thereof, by which the Applicable Lot’s ash content is
tested to be above the Applicable Lot Suspension Limit. (For example, if the Ash Applicable Lot
Suspension Limit is [*] and an Applicable Lot has a percent ash value of [*], then the
Contract Price decrease shall be [*] per ton.)



     (e) If the weighted average Actual Percent Recovery of Specification A Coal delivered to CCPP
hereunder in a Half Month is not equal to [*], then there shall be an amount added to or subtracted
from the Contract Price in accordance with the following formula:



(( Actual Percent Recovery — [*] ) / [*]) * Contract Price




provided that no premium or penalty will be paid if the difference between [*] and the Actual
Percent Recovery is less than the absolute value of [*].




     To determine the Actual Percent Recovery, Buyer shall conduct a float / sink test for each
Applicable Lot at a [*] specific gravity on a subsample (weighing a minimum of [*]) of the pertinent gross sample that has been reduced to a top size of [*]
(No. 4) or [*] (No. 8). The Actual Percent Recovery hereunder shall be calculated by dividing
the weight of the [*] specific gravity float fraction by the initial weight of the entire
subsample, and multiplying the quotient by [*].





[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	32






 









 






SCHEDULE 8.1

WEIGHING, SAMPLING AND ANALYSIS




WEIGHING




     Weights taken in accordance with this Schedule 8.1 shall be deemed accepted as correct (absent
manifest error) and shall govern all invoicing and payments hereunder.



     (a) Except as provided in (e) below, the weight of the Coal delivered by truck or railcar
hereunder shall be determined by Buyer at its expense on Buyer’s truck or conveyor belt scales at
Buyer’s unloading facility(ies). Such scales shall be calibrated once each month to maintain them
to within plus or minus one-half of one percent (±0.5%) accuracy. At Seller’s request, which Seller
may make from time to time, Buyer shall inform Seller of the results of such testing and
calibration. The testing and calibration of such scales shall be accomplished in accordance with
the guidelines outlined in the National Institute of Standards and Technology Handbook #44, or
other procedures which shall be mutually acceptable to Seller and Buyer.



     (b) Buyer shall give prompt notice by telephone or facsimile and confirm such notice in
writing to Seller if and when any scales are discovered to be in error beyond the limits
established above. If at any time the scales are determined to be in error beyond the limits
established in (a) supra, an adjustment of the payment to Seller shall be made based on the
assumption that the condition causing the scales to be in error beyond such limits shall have
existed with respect to all Coal unloaded on and after 30 calendar days prior to such discovery, or
the date of the previous scale calibration, whichever is later. Such adjustment shall be in an
amount equal to the difference in the weights as specified in the applicable invoices and the
weights that would have been obtained had the scales been accurate (without applying a ±0.5%
tolerance), multiplied by the price per ton as stated in said invoices.



     (c) Seller shall have the right, but not the duty, to have a representative present at any and
all times to observe the determination of weights; however, Buyer shall not be obligated to notify
Seller to be present. If Seller should at any time question the accuracy of the weights thus
determined, Seller shall so advise Buyer and confirm the same in writing, and Buyer shall arrange
to test the scales. If such test shows the scales to be in error, they shall be adjusted to the
required accuracy established above. If such test requested by Seller shows the scales to be within
the applicable limits established above for the respective scale, then Seller shall pay all costs
of such test, otherwise Buyer shall pay all such cost.



     (d) Any payments due by either Party to the other, as a result of adjustment and/or payment of
costs made pursuant to this Schedule 8.1, shall be paid in accordance with Article IV, Billing and
Payment.



     (e) During any period when Buyer’s scales are inoperable, determination of the quantities of
Coal delivered shall be made by a procedure to be established at such time by agreement of Buyer
and Seller.



SAMPLING AND ANALYSIS




     (a) Buyer shall provide a split of the composite sample for each day’s deliveries of Coal to
Seller.



     (b) All Coal delivered hereunder shall be sampled by Buyer using a mechanical sampling system
before it is commingled with other coal and approximately at the time it is weighed by Buyer on
Buyer’s scales. Buyer shall determine, by proper analyses made in its laboratory and at its
expense, the “As-Received” quality and characteristics of the Coal. Such analysis shall be provided
to Seller by Buyer within four (4) days following delivery of such Coal to Buyer. All sampling and
analyses hereunder shall be performed in accordance with methods approved by the American Society
for Testing and Materials (ASTM), or such other method as may be mutually acceptable. For purposes
of determining moisture hereunder, the two-stage






[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	33






 









 






procedures as defined in ASTM 3302 shall be used. Except as otherwise provided in this
Schedule, the results of the sampling and analyses by Buyer shall be accepted as the quality and
characteristics of the Coal unloaded hereunder at each respective consigned destination.




     (c) If Seller should from time to time question the correctness of either sampling or the
analyses made by Buyer, Seller may request that up to six consecutively days unloadings of Coal
hereunder be individually sampled by Buyer for analysis by a commercial testing laboratory,
mutually chosen, and using mutually acceptable procedures. The results of such commercial testing
laboratory’s analyses shall be accepted as the quality and characteristics of such Coal. If the
average of one or more of the Coal quality parameter values of the samples separately collected by
Buyer and analyzed by the commercial testing laboratory differ by more than the ASTM (or other
mutually agreeable methodology) reproducibility tolerance ranges for such respective Coal quality
parameter, when compared to the average values of splits of the same samples separately analyzed by
Buyer when both sets of sample splits have been taken from the same delivery of Coal, Buyer shall
pay such charges of such commercial testing laboratory, otherwise Seller shall pay such charges.



     (d) Unless Seller challenges, pursuant to Part (c) above, the accuracy of either the sampling
or analyses made by Buyer by written notice to Buyer by the 15th day of the Half-Month following
the Half-Month in which the Applicable Lot(s) of Coal represented by such sample(s) and/or analysis
(analyses) was (were) taken into account by Buyer, Seller shall be deemed to have waived all claims
with respect to such sampling and analyses.



     (e) Coal received, unloaded, and taken into account that is not sampled or is sampled but not
analyzed shall be taken into account as follows: If during any “half-month” at least fifty (50)
percent (by weight) of Coal delivered at a respective consigned destination during such period has
been sampled and analyzed, then the weighted average analytical results of such samples shall be
applicable to all Coal delivered to such consigned destination during such half-month period. If
more than fifty (50) percent (by weight) of Coal delivered at a consigned destination during any
such half-month period has not been sampled and analyzed, then the weighted average analytical
results of the portion of sampled and analyzed Coal shall apply to such portion, and the weighted
average analytical result of the last preceding half-month in which at least fifty (50) percent (by
weight) of the Coal delivered to such consigned destination was sampled and analyzed shall be
applicable to such portion of the Coal delivered which was not sampled and/or was not analyzed for
such half-month period.




[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	34






 









 






SCHEDULE 10

LIST OF DOCUMENTS




Schedule 10.1 — Oxford Mining Company Reserve Location Map





[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	35






 









 






SCHEDULE 10.1










[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	36






 









 






	 	 	 	 	 	 	 
	TABLE OF CONTENTS	 	Page No.
	 

	 	Preamble
	 	 	1	 
	 

	 	Definitions
	 	 	1-5	 
	ARTICLE I

	 	Term and Delivery Period
	 	 	5	 
	ARTICLE II

	 	Obligations and Deliveries
	 	 	5	 
	Section 2.1

	 	Contract Quantity

	 	 	5	 
	Section 2.2

	 	Reconsignment and/or Resale Rights

	 	 	6	 
	Section 2.3

	 	Scheduling

	 	 	7	 
	Section 2.4

	 	Delivery

	 	 	7	 
	Section 2.5

	 	Option(s) Exercise

	 	 	7	 
	Section 2.6

	 	Rejection and Suspension

	 	 	7	 
	ARTICLE III

	 	Quality Specifications
	 	 	8	 
	ARTICLE IV

	 	Billing and Payment; Financial Reports
	 	 	9	 
	ARTICLE V

	 	Contract Price
	 	 	10	 
	ARTICLE VI

	 	Taxes and Other Liabilities
	 	 	10	 
	ARTICLE VII

	 	Adjustments to the Contract Price (for Quality)
	 	 	12	 
	ARTICLE VIII

	 	Weighing, Sampling, and Analysis
	 	 	12	 
	ARTICLE IX

	 	Other Governmental Legislation, Regulations, and Orders
	 	 	12	 
	ARTICLE X

	 	Representations
	 	 	13	 
	ARTICLE XI

	 	Audit
	 	 	15	 
	ARTICLE XII

	 	Force Majeure
	 	 	15	 
	ARTICLE XIII

	 	Warranties
	 	 	16	 
	ARTICLE XIV

	 	Title, Risk of Loss, and Indemnity
	 	 	16	 
	ARTICLE XV

	 	Netting and Set Off
	 	 	17	 
	ARTICLE XVI

	 	Calculation of Damages
	 	 	17	 
	ARTICLE XVII

	 	Events of Default, Remedies and Limitation of Liabilities
	 	 	18	 
	ARTICLE XVIII

	 	Grant of Security Interest
	 	 	19	 
	ARTICLE XIX

	 	Holding and Using of Performance Assurance
	 	 	19	 
	ARTICLE XX

	 	Early Termination Payment and Remedies
	 	 	20	 
	ARTICLE XXI

	 	Successors, Assigns, and Assignment
	 	 	20	 
	ARTICLE XXII

	 	Government Contractor Compliance Certificate
	 	 	21	 
	ARTICLE XXIII

	 	Counterparts, Survival and Severability
	 	 	22	 
	ARTICLE XXIV

	 	Expenses
	 	 	22	 
	ARTICLE XXV

	 	Non-Waiver and Duty to Mitigate
	 	 	22	 
	ARTICLE XXVI

	 	Addresses for Notices
	 	 	22	 
	ARTICLE XXVII

	 	Confidentiality
	 	 	23	 
	ARTICLE XXVIII

	 	Entire Agreement, Amendments, and Interpretation
	 	 	23	 
	ARTICLE XXIX

	 	Governing Law; Waiver of Jury Trial
	 	 	24	 
	ARTICLE XXX

	 	Venue
	 	 	24	 
	ARTICLE XXXI

	 	Imaged Agreement
	 	 	24	 
	ARTICLE XXXII

	 	Major Technological Improvements
	 	 	24	 
	Schedule 2.4

	 	Transportation Specifications
	 	 	26-28	 
	Schedule 3.1-A

	 	Quality Specifications
	 	 	29	 
	Schedule 3.1-B

	 	Approved Prod Sources/Reserves/Des. Del. Point
	 	 	30	 
	Schedule 7.2

	 	Quality Adjustments
	 	 	31-32	 
	Schedule 8.1

	 	Weighing, Sampling, and Analysis
	 	 	33	 
	Schedule 10

	 	List of Documents Provided
	 	 	35	 







[*] Certain information in this document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions. 


			
	 	 	 
	5/3/04
	 	37