Document:

exv10w31

Exhibit 10.31

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 1

AMENDMENT NO. 1 TO COAL SUPPLY AGREEMENT

     THIS
AMENDMENT NO. 1 TO COAL SUPPLY AGREEMENT (“Amendment No. 1”) is entered into effective as
of July 1, 2008, by and between LOUISVILLE GAS AND ELECTRIC COMPANY (“LG&E”) and KENTUCKY UTILITIES
COMPANY (“KU”), each a Kentucky corporation, 220 West Main Street, Louisville, Kentucky 40202
(individually the “Buyer”, as applicable) and ARMSTRONG COAL COMPANY, INC., a Delaware Corporation,
407 Brown Road, Madisonville, Kentucky 42431 (“Seller”). In consideration of the agreements herein
contained, the parties hereto agree as follows:

	A.	 	AMENDMENTS
	 
	 	 	The Coal Supply Agreement heretofore entered into by the parties, dated effective January 1,
2008 and identified by the Contract Number set forth above is hereby amended as follows, (the
January 1, 2008 Coal Supply Agreement as amended by this Amendment No. 1 is hereafter referred to as
the “Agreement”):
	 
	B.	 	QUANTITY

	 	B.1 Section 3.1 Base Quantity is modified and reads as follows:

	 	 	 	Section 3.1 Base Quantity. The annual Base Quantity is revised to read as follows, all
other terms and conditions set forth in this Section 3.1 shall remain as stated in the Agreement:

	 	 	 	 	 
	YEAR	 	BASE QUANTITY (TONS)	 
	2008
	 	 	600,000	 
	2009
	 	 	2,300,000	 
	2010
	 	 	3,800,000 	*
	2011
	 	 	4,200,000 	**
	2012
	 	 	4,200,000 	**
	2013
	 	 	4,000,000 	**
	2014
	 	 	4,000,000 	**
	2015
	 	 	4,000,000 	**

1

 

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 1

	* -	 	Buyer shall have the right to nominate up to 1,500,000 tons of this amount to be
delivered by rail. Buyer shall make such nomination to Seller in writing by September 1, 2009.

	** -	 	Buyer shall have the right to nominate up to 2,500,000 tons of this amount per year
to be delivered by rail for calendar years 2011 through the term of the Agreement. Buyer shall make
such nomination in writing to Seller by September 1 of the preceding year.

	C.	 	PRICE

	 	C.l Section 8.1(a) Base Price is deleted and replaced with the following:
	 
	 	 	 	The base price (“Base Price”) of the coal to be sold hereunder will be firm and will be based on
Dollars/Ton and will be determined by the calendar year in which the coal is delivered to Buyer as
provided in Section 5 hereto and in accordance with the following schedule:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	QUANTITY	 	 	QUALITY 1	 	 	QUALITY 2	 
	YEAR	 	(Tons)	 	 	Barge	 	 	Rail	 	 	Barge	 	 	Rail	 
	2008
	 	 	600,000	 	 	$	27.31	 	 	$	27.31	 	 	$	28.30	 	 	$	28.30	 
	2009
	 	 	2,300,000	 	 	$	27.60	 	 	$	27.60	 	 	$	28.76	 	 	$	28.76	 
	2010
	 	 	First 200,000	 	 	$	27.60	 	 	$	27.60	 	 	$	28.76	 	 	$	28.76	 
	Remaining
	 	 	3,600,000	 	 	$	28.21	 	 	$	28.21	 	 	$	29.63	 	 	$	29.63	 
	2011
	 	 	First 400,000	 	 	$	28.21	 	 	$	28.21	 	 	$	29.63	 	 	$	29.63	 
	Remaining
	 	 	3,800,000	 	 	$	28.36	 	 	$	28.36	 	 	$	29.78	 	 	$	29.78	 
	2012
	 	 	First 200,000	 	 	$	28.36	 	 	$	28.36	 	 	$	29.78	 	 	$	29.78	 
	Remaining
	 	 	4,000,000	 	 	$	28.51	 	 	$	28.51	 	 	$	29.93	 	 	$	29.93	 
	2013
	 	 	4,000,000	 	 	$	28.66	 	 	$	28.66	 	 	$	30.08	 	 	$	30.08	 
	2014
	 	 	4,000,000	 	 	$	28.81	 	 	$	28.81	 	 	$	30.23	 	 	$	30.23	 
	2015
	 	 	4,000,000	 	 	$	28.96	 	 	$	28.96	 	 	$	30.38	 	 	$	30.38	 

	Not withstanding the foregoing, the base price for any Make-up Tons (as such term is defined
in §3.1 hereof) shall be the Base Price for the applicable Quantity in the calendar year in
which such Make-up Tons should have been delivered and not the Base Price for the applicable
Quantity in the Make-up Year (as such term is defined in §3.1 hereof).

2

 

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 1

	C.2	 	 Section 8.4 Diesel Fuel Adjustment is hereby deleted and replaced with the following
provision, however this deletion and replacement shall only be effective for the period July 1,
2008 through December 31, 2009. Thereafter this language shall be null and void and the original
Section 8.4 Diesel Fuel Adjustment shall be reinstated in its original form and shall be in
full force and effect from that point forward:
	 
	 	 	§8.4 Diesel Fuel and Explosives Price Adjustment. In addition to any other
adjustments provided herein, the Base Price shall also be adjusted for changes in the price
of Diesel Fuel and Explosives, such adjustment to be effective on the Adjustment Date (as
such term is hereinafter defined). The first Diesel Fuel and Explosives Price Adjustment
calculation shall be applied towards shipments unloaded beginning July 1, 2008.
	 
	 	 	The Diesel Fuel and Explosives Price Adjustment contemplated herein shall be determined
as follows: (1) Multiply $10.06 (herein called the “Base Diesel Fuel and Explosives
Component”) by the Adjustment Factor (as hereinafter defined; the resulting product is
hereinafter called the “Adjusted Diesel Fuel and Explosives Component”); (2) Subtract the
Base Diesel Fuel and Explosives Component from the Adjusted Diesel Fuel and Explosives
Component and the result shall be hereinafter called the “Diesel Fuel and Explosives — Base
Price Adjustment”. The Diesel Fuel and Explosives — Base Price Adjustment will be reset to
zero immediately prior to the calculation of the adjustment for the next Adjustment Date.
	 
	 	 	For purposes of this Section 8.4, the following terms shall have the meanings set forth
below:
	 
	 	 	“PPI” shall mean the published PPI-Commodities #2 Diesel Fuel Index #WPU057303 found in
the Producer Price Indexes, published monthly by the U.S. Department of Labor, Bureau of
Labor Statistics.
	 
	 	 	“Adjustment Factor” shall mean a fraction, the denominator of which shall be 232.5 (the
average base index PPI for May, June and July 2007) and the numerator of which shall be the
average PPI of the last three months published during a Calculation Period prior to an
Adjustment Date.
	 
	 	 	“Adjustment Date” shall mean the first day following a Calculation Period for which an
adjustment to the Base Price for changes in the price of Diesel Fuel and Explosives is
contemplated hereunder, namely, January 1, April 1, July 1 or October 1, as the case may be,
for each calendar year for which this Section 8.4 applies.
	 
	 	 	“Calculation Period” shall mean (i) for a January 1 Adjustment Date, the three (3)
months of September, October, and November of the preceding calendar year; (ii) for an April
1 Adjustment Date, the three (3) months of December of the preceding

3

 

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 1

	 	 	 	calendar year, and January and February; (iii) for a July 1 Adjustment Date, the
three (3) months of March, April, and May; and (iv) for an October 1 Adjustment Date,
the three (3) months of June, July, and August.
	 
	 	 	 	An example of the calculation of the Diesel Fuel and Explosives Base Price
Adjustment is included in Exhibit B attached hereto and made a part hereof.

	D.	 	EXHIBIT B

	 	D.1	 	 Exhibit B is deleted and replaced in its entirety as per the exhibit attached,
however this deletion and replacement shall only be effective for the period July 1, 2008
through December 31, 2009. Thereafter this language shall be null and void and the original
Exhibit B shall be reinstated in its original form and shall be in full force and
effect from that point forward:

	E.	 	STATUS OF AGREEMENT
	 
	 	 	As amended hereby, the Agreement is hereby ratified and confirmed and shall continue in full
force and effect.

	 	 	IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 on the day and year
below written, but effective as of the day and year first set forth above.

	 	 	 	 	 

	LOUISVILLE GAS AND ELECTRIC COMPANY	 	ARMSTRONG COAL COMPANY, INC.
	 
	 	 	 	 
	By:

	/s/ David S. Sinclair
	 	By:
	/s/ Martin D. Wilson
	 

	 
	 	 	 
	Title:

	VP Energy Marketing
	 	Title:
	 President
	Date:

	12-2-08
	 	Date:
	11/20/08
	 
	 	 	 	 
	KENTUCKY UTILITIES COMPANY	 	 
	 
	 	 	 	 
	By:

	/s/ David S. Sinclair	 	 	 
	 

	 	 	 	 
	Title:

	VP Energy Marketing	 	 	 
	Date:

	12-2-08	 	 	 

4

 

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 1

EXHIBIT B

Sample Diesel Fuel and Explosives Price Adjustment Calculation

Effective July 1, 2008

	 	 	 	 	 	 	 

	July 2008 Diesel Fuel and
Explosives Price Calculation
	 	 	 	 	 	 
	Base Diesel Fuel and
Explosives Component

	 	$	10.06	 	 	 
	(1) Calculate Adjusted Diesel
Fuel and Explosives
Component
	 	 	 	 	 	 
	 
	     (a) Calculate PPI Factor
	 	 	372.9	 	 	Average of base index PPI’s of the three months
during relevant Calculation Period for July
1, 2008 Adjustment Date Average of base index
PPI’s for May, June and July 2007
	Divided by:

	 	 	232.5	 	 	 
	 

	 	 	 	 	 	 
	PPI Factor

	 	 	1.604	 	 	 
	     (b) Calculate Adjustment Factor	 	 	 	 	 	 
	Base Diesel Fuel and
Explosives Component
	 	$	10.06	 	 	 
	Multiplied by:

	 	 	1.604	 	 	PPI Factor
	 

	 	 	 	 	 	 
	     Adjusted Diesel Fuel and
Explosives Component	 	$	16.136	 	 	 
	 
	(2) Calculate Diesel Fuel and
Explosives — Base Price
	 	 	 	 	 	 
	Adjustment

	 	$	16.136	 	 	Adj. Diesel Fuel and Explosives Component
	Less:

	 	$	10.06	 	 	Base Diesel Fuel and Explosives Component
	 

	 	 	 	 	 	 
	 

	 	$	6.08	 	 	Diesel Fuel and Explosives — Base Price Adjustment
	 
	(3) Calculate Adjusted Base
FOB Price Per Ton
	 	 	 	 	 	 
	 

	 	$	27.31	 	 	2008 Contract Base Price Per Ton
	Plus:

	 	$	6.08	 	 	Diesel Fuel and Explosives — Base Price Adjustment
	 

	 	 	 	 	 	 
	 

	 	$	33.39	 	 	Base Price Adjustment Effect. 7/1/08

	 	 	 	 	 	 	 	 	 

	Sample PPI Data:
	 	
	Figures used are hypothetical and for
illustration purposes only.
	 	
	PPI-Commodities - #2 Diesel Fuel #WPU057303
	 	
	 
	 	Mar 08	 	 	355.4	 
	 
	 	Apr 08	 	 	365.1	 
	 
	 	May 08	 	 	398.2	 
	 
	 	 	 	 	 	 	 
	 
	 	Average	 	 	372.9	 

5exv10w32

Exhibit
10.32

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 2

AMENDMENT NO. 2 TO COAL SUPPLY AGREEMENT

     THIS AMENDMENT NO. 2 TO
COAL SUPPLY AGREEMENT (“Amendment No. 2”) is entered into effective as
of December 22, 2009, by and between LOUISVILLE GAS AND ELECTRIC COMPANY (“LG&E”)
and KENTUCKY UTILITIES COMPANY (“KU”), each a Kentucky corporation, 220 West Main Street,
Louisville, Kentucky 40202 (individually the “Buyer”, as applicable) and ARMSTRONG COAL COMPANY,
INC., a Delaware Corporation, 407 Brown Road, Madisonville, Kentucky 42431 (“Seller”). In
consideration of the agreements herein contained, the parties hereto agree as follows:

	I.	 	AMENDMENTS
	 
	 	 	The Coal Supply Agreement heretofore entered into by the parties, effective as of January 1,
2008 and identified by the Contract Number set forth above, as amended by that certain Amendment
No. 1 to Coal Supply Agreement, dated effective July 1, 2008 (“Amendment No. 1”), is
hereby amended as follows (the January 1, 2008 Coal Supply Agreement as amended Amendment No. 1 and
by this Amendment No. 2, is hereafter referred to as the
“Agreement”):
	 
	A.	 	TERM

	 	A.1 	 	Section 2 Term is deleted in its entirety and replaced with the
following:
	 
	 	 	 	SECTION 2. TERM. The term of this Agreement shall commence on January 1, 2008
and shall continue through December 31, 2016, unless terminated earlier pursuant to any of the
terms set forth herein.

B. QUANTITY

	 	B.1	 	 Section 3.1 Base Quantity. The annual Base Quantity (i.e. all of
Section 3.1 except the last two paragraphs) is revised to read as follows, all other terms and
conditions set forth in the last two paragraphs of Section 3.1 (dealing with Make-up Tons) shall
remain as stated in the Agreement:
	 
	 	 	 	Section 3.1 Base Quantity. Subject to the terms and conditions set forth in this Agreement,
Seller shall sell and deliver, or cause to be delivered, and Buyer shall purchase and receive, or
cause to be received, the following annual base quantity of coal (“Base Quantity”):

1

 

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 2

	 	 	 	 	 
	YEAR	 	BASE QUANTITY (TONS)	 
	2008
	 	 	600,000	 
	2009
	 	 	2,200,000	 
	2010
	 	 	1,800,000	 
	2011
	 	 	2,100,000	 
	2012
	 	 	2,100,000	 
	2013
	 	 	2,100,000	 
	2014
	 	 	2,100,000	 
	2015
	 	 	2,100,000	 
	2016
	 	 	900,000	 

     Buyer shall have the right to nominate up to 75% of the Base Quantity for year 2010 and for each
year thereafter to be delivered by rail. Buyer shall make such nomination for each year to Seller
in writing by September 1 of the preceding year.

     For year 2010, all coal will be Quality 1 (as described in Section 6.1 of this Agreement).

     For years 2011-2016, Buyer will have the option to nominate up to 25% of the coal as Quality 2
(as described in Section 6.1 of this Agreement).

	C.	 	PRICE

	 	C.1 	 	Section 8.1(a) Base Price is modified and shall read as follows:
	 
	 	 	 	The base price (“Base Price”) of the coal to be sold hereunder will be firm and will be based on
Dollars/Ton and will be determined by the calendar year in which the coal is delivered to Buyer as
provided in Section 5 hereto and in accordance with the following schedule:

	 	 	 	 	 	 	 	 	 
	YEAR	 	QUALITY 1	 	 	QUALITY 2	 
	2008
	 	$	27.31	 	 	$	28.30	 
	2009
	 	$	27.60	 	 	$	28.76	 
	2010
	 	$	28.18	 	 	 	N/A	 
	2011
	 	$	28.19	 	 	$	29.61	 
	2012
	 	$	28.35	 	 	$	29.77	 
	2013
	 	$	28.35	 	 	$	29.77	 
	2014
	 	$	28.50	 	 	$	29.92	 
	2015
	 	$	28.50	 	 	$	29.92	 
	2016
	 	$	30.25	 	 	$	31.67	 

	Notwithstanding the foregoing, the base price for any Make-up Tons (as such term is defined
in Section 3.1 hereof) shall be the Base Price for the applicable quality in the calendar year in
which such Make-up Tons should have been delivered and not the

2

 

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No.2

	 	 	 	Base Price for the applicable quality in the Make-up Year (as such term is defined in Section 3.1
hereof).

	 	C.2 	 	Section 8.1 (b) Reopener is deleted in its entirety and is no longer applicable.

	D.	 	LIMITATION ON ENVIRONMENTAL FORCE MAJEURE

	 	 	 	D.l. Section 10.3 Limitation on Environmental Force Majeure is hereby added as a
new section, and shall read as follows:
	 
	 	 	 	§10.3 Limitation on Environmental Force Majeure. Notwithstanding anything to the contrary
set forth in §10.2 above, a delay or other failure in the issuing of one or more permits (that are
necessary on the date hereof pursuant to an existing environmental law, regulation, policy and/or
restriction to commence operations with respect to any Coal Property) shall not be the basis, in
whole or in part, of any claim by Seller under §10.2, whether such delay or failure relates to the
reinterpretation of existing environmental laws, regulations, policies and/or restrictions, to a
change in the interpretation, or to the enforcement thereof; provided however, this
§10.3 shall not apply with respect to delays or other failures in the issuing of one or
more necessary permits to the extent such permits are new permits required pursuant to an
environmental law, regulation, restriction or policy adopted after September 1, 2009 with respect
to the Coal Property or other Armstrong facilities then being utilized to provide coal hereunder.
In the event of the occurrence of a Section 10.2 Settlement Payment Termination Date
(as such term is defined in Section 1.1 of that certain Settlement Agreement and Release entered
into by the parties hereto as of even date herewith) and subsequently one or more of the permits
necessary for operation of the Equality Boot mine (or other source as contemplated in Section 1.1
of the Settlement and Release) is stayed, revoked or otherwise rendered ineffective by a
governmental entity having jurisdiction, nothing in this Section 10.3 shall act as a limitation on
any claim that Seller may have under Section 10.2 with respect to such stayed, revoked or
ineffective permits from and after the time of such stay, revocation or rendering ineffective.

	II.	 	STATUS OF AGREEMENT
	 
	 	 	As amended hereby, the Agreement is hereby ratified and confirmed and shall continue in full force
and effect.

3

 

ARMSTRONG COAL COMPANY, INC.

LG&E/KU Contract No. J07032

Amendment No. 2

     IN WITNESS WHEREOF, 
the parties hereto have executed this Amendment No. 2 on the day and year below
written, but effective as of the day and year first set forth above.

	 	 	 	 	 

	LOUISVILLE GAS AND ELECTRIC COMPANY	 	ARMSTRONG COAL COMPANY, INC.
	 
	 	 	 	 
	By:

	/s/ David S. Sinclair
	 	By:
	/s/ Martin Wilson
	 

	 
	 	 	 
	Name:

	David S. Sinclair
	 	Name:
	Martin Wilson
	Title:

	VP Energy Marketing
	 	Title:
	President
	Date:

	December 18, 2009
	 	Date:
	December 22, 2009
	 
	 	 	 	 
	KENTUCKY UTILITIES COMPANY	 	 
	 
	BY:

	/s/ David S. Sinclair	 	 	 
	 

	 	 	 	 
	Name:

	David S. Sinclair	 	 	 
	Title:

	VP Energy Marketing	 	 	 
	Date:

	December 18, 2009	 	 	 

4

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