Document:

EX-10.20

 Exhibit 10.20 

ARMSTRONG COAL COMPANY, INC. 
 LG&E/KU Contract No. J07032 
 COAL SUPPLY AGREEMENT

 BETWEEN 
 ARMSTRONG COAL COMPANY, INC. 
 AND 

LOUISVILLE GAS & ELECTRIC COMPANY 
 and 
 KENTUCKY UTILTIES COMPANY 

Effective 

January 1, 2008 

 ARMSTRONG COAL COMPANY, INC. 

LG&E/KU Contract No. J07032 
  

 TABLE OF CONTENTS 

 

					
	 	  	PAGE	 
	 Recitals
	  	 	2	  
	 Section 1. General
	  	 	3	  
	 Section 2. Term
	  	 	3	  
	 Section 3. Quantity
	  	 	3	  
	 3.1 Base Quantity
	  	 	3	  
	 3.2 Delivery Schedule
	  	 	7	  
	 Section 4. Source
	  	 	7	  
	 4.1 Source
	  	 	7	  
	 4.2 Assurance of Operation and Quantity
	  	 	7	  
	 4.3 Non-Diversion of Coal
	  	 	8	  
	 4.4 Seller’s Preparation of Mining Plan
	  	 	8	  
	 4.5 Substitute Coal
	  	 	9	  
	 4.6 Relationship of the Parties
	  	 	10	  
	 Section 5. Delivery
	  	 	10	  
	 5.1 Barge Delivery
	  	 	10	  
	 5.2 Rail Delivery
	  	 	12	  
	 5.2.1 Freeze Conditioning
	  	 	13	  
	 Section 6. Quality
	  	 	14	  
	 6.1 Specifications
	  	 	14	  
	 6.2 Definition of “Shipment”
	  	 	16	  
	 6.3 Rejection
	  	 	17	  
	 6.4 Suspension and Termination
	  	 	18	  
	 Section 7. Weights, Sampling and Analysis
	  	 	19	  
	 7.1 Weights
	  	 	19	  
	 7.2 Sampling and Analysis
	  	 	19	  
	 Section 8. Price
	  	 	22	  
	 8.1 Base Price
	  	 	22	  
	 8.2 Quality Price Adjustment
	  	 	23	  
	 8.3 Payment Calculation
	  	 	26	  
	 8.4 Diesel Fuel Adjustment
	  	 	26	  
	 8.5 New Impositions
	  	 	28	  
	 Section 9. Invoices, Billing and Payment
	  	 	29	  
	 9.1 Invoicing Address
	  	 	29	  
	 9.2 Invoice Procedures for Coal Shipments
	  	 	29	  
	 9.3 Payment Procedures for Coal Shipments
	  	 	30	  
	 9.4 Withholding
	  	 	31	  
	 Section 10. Force Majeure
	  	 	32	  
	 10.1 General Force Majeure
	  	 	32	  
	 10.2 Environmental Law Force Majeure
	  	 	33	  
	 Section 11. Changes
	  	 	34	  

  
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LG&E/KU Contract No. J07032 
  

					
	 	  	PAGE	 
	 Section 12. Notices
	  	 	35	  
	 12.1 Form and Place of Notice
	  	 	35	  
	 12.2 Change of Person or Address
	  	 	36	  
	 12.3 Electronic Data Transmittal
	  	 	36	  
	 Section 13. Guarantee
	  	 	36	  
	 Section 14. Right to Resell
	  	 	37	  
	 Section 15. Indemnity and Insurance
	  	 	37	  
	 15.1 Indemnity
	  	 	37	  
	 15.2 Insurance
	  	 	37	  
	 Section 16. Termination for Default
	  	 	38	  
	 Section 17. Taxes, Duties and Fees
	  	 	39	  
	 Section 18. Documentation and Right of Audit
	  	 	39	  
	 Section 19. Equal Employment Opportunity
	  	 	39	  
	 Section 20. Coal Property Inspections
	  	 	40	  
	 Section 21. Miscellaneous
	  	 	41	  
	 21.1 Applicable Law
	  	 	41	  
	 21.2 Headings
	  	 	41	  
	 21.3 Waiver
	  	 	41	  
	 21.4 Remedies Cumulative
	  	 	41	  
	 21.5 Severability
	  	 	41	  
	 21.6 Binding Effect
	  	 	41	  
	 21.7 Assignment
	  	 	42	  
	 21.8 Entire Agreement
	  	 	42	  
	 21.9 Amendments
	  	 	42	  
	 21.10 Forward Contract
	  	 	43	  
	 21.11 Joint and Several Liability
	  	 	43	  
	 Signature Page
	  	 	43	  
	 Exhibit A Coal Properties
	  	 	44	  
	 Exhibit B Sample Coal Payment Calculations
	  	 	45	  
	 Exhibit C Sample Diesel Fuel Adjustment Calculation
	  	 	47	  

  
 ii 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 COAL SUPPLY AGREEMENT 

This is a coal supply agreement (the “Agreement”) dated as of January 1, 2008 between LOUISVILLE GAS AND ELECTRIC COMPANY
(“LG&E”) and KENTUCKY UTILITIES COMPANY (“KU”), each a Kentucky corporation, with a common address at 220 West Main Street, Louisville, Kentucky 40202 (LG&E and KU are each individually sometimes herein called a
“Buyer” as more particularly described below) and ARMSTRONG COAL COMPANY, INC. (“Seller”) a Delaware corporation with an address at 407 Brown Road, Madisonville, Kentucky 42431. 

The Seller acknowledges that, while there will be no effect on the Base Quantity set forth in Section 3 below, LG&E and KU will
allocate the quantity of coal to be purchased and received hereunder among themselves and that such allocation may change from time to time, at the sole discretion of LG&E and KU. Therefore, the term “Buyer” as used herein shall mean,
(a) with respect to any particular “shipment” (as such term is defined in Section 6.2 below) actually received by either LG&E or KU, the party who actually received such shipment; and (b) with respect to any time or
circumstance under this Agreement that the party or parties constituting “Buyer” is not determined pursuant to clause (a) immediately above (including, without limitation, matters involving exercise of rights or remedies by Buyer (or
enforcing obligations, duties and liability against Buyer by Seller) not involving shipments or prior to receipt of shipments), the party or parties (and in such percentage allocation, if applicable) as determined by LG&E and KU, in their sole
discretion. As provided in Section 21.11 below, Seller agrees that 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
the liability of each of LG&E and KU shall at all times be several and not joint, and that each party shall have obligations, duties and liability of a Buyer hereunder only to the extent (and
in the percentage, if applicable) each such party is determined to be a “Buyer” pursuant to this paragraph. Also, each party shall have rights and remedies of a Buyer hereunder only to the extent (and in the percentage, if applicable) each
of LG&E or KU is determined to be a “Buyer” pursuant to this paragraph. In the event the determination of Buyer pursuant to this paragraph is found contrary to law or unenforceable by any court of law, or cannot be reasonably made with
respect to any particular circumstance for any reason, the rights, remedies, obligations, duties and liabilities of Buyer shall be allocated to each of LG&E and KU, severally and not jointly, 50% to each party. 

In consideration of the agreements herein contained, the parties hereto agree as follows: 

RECITALS: 

WHEREAS, LG&E and KU are electric utility companies which desire to purchase steam coal; and 

WHEREAS, Buyer and Seller desire to enter into a coal supply agreement pursuant to which the Seller will supply coal to Buyer under the
terms as set forth herein. 
 NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 SECTION 1. GENERAL. 

(a) The above recitals are true and correct and comprise a part of this Agreement. 

(b) Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase and receive from Seller, steam coal subject to the terms
and conditions set forth herein. 
 (c) Each covenant, representation and warranty given by Seller herein is a material
inducement for Buyer to enter into this Agreement. 
 SECTION 2. TERM. The term of this Agreement shall commence
on January 1, 2008 and shall continue through December 31, 2015 subject to the provisions of §8.1, unless terminated pursuant to any of the terms set forth herein. 

SECTION 3. QUANTITY. 
 §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”): 
  

					
	 YEAR
	  	BASE QUANTITY (TONS)	 
	 2008
	  	 	600,000	  
	 2009
	  	 	2,500,000	  
	 2010
	  	 	4,000,000	* 
	 2011
	  	 	4,000,000	** 
	 2012
	  	 	4,000,000	** 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

					
	 YEAR
	  	BASE QUANTITY (TONS)	 
	 2013
	  	 	4,000,000	** 
	 2014
	  	 	4,000,000	** 
	 2015
	  	 	4,000,000	** 

 *—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. 

During calendar year 2008, Buyer shall have the right to nominate up to 90,000 tons of coal to be delivered during
calendar year 2008, as Quality 2 coal (as defined in §6.1). The remaining Base Quantity for calendar year 2008 shall be Quality 1 coal (as defined in §6.1). Buyer shall make such quality nomination by the fifth (5th) of the month preceding the month of delivery; provided,
however, the monthly nomination of Quality 2 coal (as defined in §6.1) shall not exceed fifty percent (50%) of the total coal nominated in a given month. 

During calendar year 2009, Buyer shall have the right to nominate up to 375,000 tons of coal to be delivered during
calendar year 2009 as Quality 2 coal (as defined in §6.1). The remaining Base Quantity for calendar year 2009 shall be Quality 1 coal (as defined in §6.1). Buyer shall make such quality nomination by the fifth (5th) of the month preceding the month of delivery; provided,
however, the monthly nomination of Quality 2 coal (as defined in §6.1) shall not exceed fifty percent (50%) of the total coal nominated in a given month. 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 During calendar years 2010 through the remaining term of the
Agreement, Buyer shall have the right to nominate up to 600,000 tons of coal per year, to be delivered during calendar years 2010 through the term of the Agreement, as Quality 2 coal (as defined in §6.1). The remaining annual Base Quantity for
each calendar year, 2010 through the term of the Agreement, shall be Quality 1 coal (as defined in §6.1). Buyer shall make such nomination by the fifth (5th) of the month preceding the month of delivery; provided, however, the monthly nomination of Quality 2 coal (as
defined in §6.1) shall not exceed fifty percent (50%) of the total coal nominated in a given month. 
 The Base
Quantity of coal scheduled to be delivered in a given calendar year as set forth in the table above (as such quantity may be adjusted as provided in this §3.1) shall be delivered during that calendar year. Not withstanding the foregoing, if
Seller or Buyer does not perform with respect to supplying or taking delivery of such Base Quantity scheduled for a particular year, for any reason, as a result of non-performing party’s actions or inactions to perform as required by this
Agreement (except to the extent such failure to deliver is due to force majeure as provided in Section 10 hereof), then performing party at its sole option, may elect to make up such undelivered quantities (“Make-up Tons”) by having
the non-performing party deliver or take delivery to the undelivered quantities in the calendar year (the “Make-up Year”) immediately following the calendar year in which such Make-up Tons should have been delivered. Prior to making such
election, performing party may request from non-performing party adequate assurances, satisfactory to performing party, that non-performing party is capable and will deliver or take delivery of, both the Base Quantity set forth for the Make-up Year
and the Make-up Tons in the Make-up Year. 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 In the event performing party makes the election, the quantity of
the Make-up Tons shall be added to and shall increase the Base Quantity set forth for the Make-up Year, and non-performing party shall deliver or take delivery of such new Base Quantity (including the Make-up Tons) during the Make-up Year pursuant
to a new mutually agreed delivery schedule incorporating the delivery of the additional Make-up Tons. In such event, for accounting and payment purposes, the first (1st) tons delivered in the Make-up Year shall be considered the Make-up Tons and deliveries will not be considered a
part of the original Base Quantity set forth for the Make-up Year unless and until non-performing party has delivered or taken delivery of all of the Make-up Tons which should have been delivered in the previous year. If the non-performing
party’s failure to deliver or take delivery of all of the Base Quantity during a particular year constitutes a breach of or other violation under this Agreement, nothing in this §3.1 shall act as a waiver by the performing party of such
breach or violation or shall act as a limitation on performing party’s remedies; provided however, that if performing party elects to make up the Make-up Tons, then such election and the receipt of the Make-up Tons in the Make-up Year shall be
performing party’s sole and exclusive remedy for non-performing party’s failure to deliver the Make-up Tons in that particular year; provided, further, that once performing party elects to deliver or accept Make-up Tons and there is a
failure to perform in providing or accepting the Make-up Tons, then the performing party shall not be limited to its choice of remedies as provided in this section, and can pursue or elect any other alternative remedy hereunder at law or in equity.

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 §3.2 Delivery Schedule. Shipments are to be made on a ratable basis as
adjusted during the year to reflect Buyer’s outages. Initial shipments shall begin on or about July 1, 2008. Time is of the essence with respect to the schedule so established. 

Except as otherwise provided herein, failure by Seller to deliver or Buyer to receive shipments in a timely fashion shall constitute a
material breach within the meaning of Section 16 of this Agreement, unless such failure to deliver or receive shipments is the result of the other party’s action or inaction. 
 SECTION 4. SOURCE.  
 §4.1 Source. The coal sold
hereunder, including coal purchased by Seller from third parties, shall be supplied from Seller’s mines as listed in Exhibit “A” attached hereto (the properties listed on Exhibit “A” are collectively referred to herein as
the “Coal Property”). 
 §4.2 Assurance of Operation and Reserves. Seller represents and warrants that the
Coal Property contains economically recoverable coal of a quality and in quantities which will be sufficient to satisfy all the requirements of this Agreement. Seller agrees and warrants that it will have at the Coal Property adequate machinery,
equipment and other facilities to produce, prepare and deliver coal in the quantity and of the quality required by this Agreement. Seller further agrees to operate and maintain such machinery, equipment and facilities in accordance with good mining
practices so as to efficiently and economically produce, prepare and deliver such coal. 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
Seller agrees that Buyer is not providing any capital for the purchase of such machinery, equipment and/or facilities and that Seller shall operate and maintain same at its sole expense,
including all required permits and licenses. Seller hereby dedicates to this Agreement sufficient reserves of coal meeting the quality specifications hereof and lying on or in the Coal Property so as to fulfill the quantity requirements hereof.

 §4.3 Non-Diversion of Coal. Seller agrees and warrants that it will not, without Buyer’s express prior
written consent, use or sell coal from the Coal Property in a way that will reduce the economically recoverable balance of coal in the Coal Property to an amount less than that required to be supplied to Buyer hereunder. 

§4.4 Seller’s Preparation of Mining Plan. Seller shall have prepared a complete mining plan for the Coal Property with
adequate supporting data to demonstrate Seller’s capability to have coal produced from the Coal Property which meets the quantity and quality specifications of this Agreement. Seller shall provide Buyer with two (2) copies of such mining
plan which shall contain maps and a narrative depicting areas and seams of coal to be mined and shall include (but not be limited to) the following information: (i) reserves from which the coal will be produced during the term hereof and the
mining sequence, by year (or such other time intervals as mutually agreed) during the term of this Agreement, from which coal will be mined; (ii) methods of mining such coal; (iii) methods of transporting and, in the event a preparation
plant is constructed at the Coal Property, methods of washing coal to insure compliance with the quantity and quality requirements of this Agreement including a description and flow sheet of the preparation plant; (iv) quality data plotted on
the maps depicting data points and isolines by ash, sulfur, and Btu; (v) quality control plans including sampling and analysis procedures to insure individual shipments meet quality specifications; and (vi) Seller’s aggregate
commitments to others to sell coal from the Coal Property during the term of this Agreement. Such complete mining plan shall be delivered to Buyer on or before May 31, 2008, if required. 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 Buyer’s receipt of the mining plan or other information or data furnished by Seller
shall not in any manner relieve Seller of any of Seller’s obligations or responsibilities under this Agreement; nor shall such review be construed as constituting an approval of Seller’s proposed mining plan as prudent mining practices,
such review by Buyer being limited solely to a determination, for Buyer’s purposes only, of Seller’s capability to supply coal on a long-term basis to fulfill Buyer’s requirements of a dependable coal supply. 

Seller shall annually provide Buyer with a mining plan update (“Update”) showing progress to date, conformity to original
mining plan, and then known changes in reserve data and planned changes in mining progression, plans or procedures. The update shall be submitted annually on or before October 1 of each year during the term of this Agreement. 

§4.5 Substitute Coal. Notwithstanding the above representations and warranties, in the event that Seller is unable to produce
or obtain coal from the Coal Property in the quantity and of the quality required by this Agreement, and such inability is not caused by a force majeure event as defined in Section 10, then Buyer will have the option of requiring that Seller
supply substitute coal from other facilities and mines under all the terms and conditions of this Agreement including, but not limited to, the price provisions of Section 8, the quality specifications of §6.1, and the provisions of
Section 5 concerning reimbursement to Buyer for increased transportation costs. Seller’s delivery of coal not produced from the Coal Property without having received the express written consent of Buyer shall constitute a material breach
of this Agreement. 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 §4.6 Relationship of the Parties. Seller agrees that it is not and will not
hold itself out as a partner, joint venture, employee, agent or representative of Buyer. Nothing herein contained shall be construed as creating a single enterprise, joint venture, agency, partnership, joint employer, owner-contractor, or
lessor-lessee relationship between Buyer and Seller. 
 Seller shall have sole and exclusive authority to direct and control its
respective activities and operations, and those of any subcontractors, undertaken in the performance of Seller’s obligations under this Agreement. Seller shall exercise full and complete control over its respective work force and labor
relations policies. Buyer shall have no authority or control over Seller’s operations or work force. 
 SECTION 5.
DELIVERY.  
 §5.1 Barge Delivery. The coal shall be delivered to Buyer F.O.B. barge at the Smallhous Dock
at mile point 76.6 on the Green River near Centertown, Kentucky (the “Barge Delivery Point”); provided however, if the Buyer or Buyer’s barging contractor is not permitted or able to take possession and control of the barge at such
dock (for example: if the dock is part of a closed harbor), then the coal is not considered delivered hereunder unless and until the barge is placed into a position that Buyer or Buyer’s barging contractor can take possession and control of the
barge and Buyer or Buyer’s barging contractor actually do take possession and control of such barge (in such case, the point where Buyer or Buyer’s barging contractor actually takes possession and control of the barge shall be considered
the Barge Delivery Point hereunder). Seller may deliver the coal at a. location different from the stated Barge Delivery Point, provided, however, that Seller shall reimburse Buyer for any resulting increases in the cost of transporting the coal to
Buyer’s generating station(s). Any resulting savings in such transportation costs shall be retained by Buyer. 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 Title to and risk of loss of coal sold will pass to Buyer and the coal will be
considered to be delivered when barges containing the coal are disengaged by Buyer’s barging contractor from the loading dock (except in the case where Buyer or Buyer’s barging contractor cannot take possession and control of the barge at
the dock, the coal will be considered to be delivered at the moment Buyer or Buyer’s Contractor actually takes possession and control of the barge). Buyer or its contractor shall furnish suitable barges in accordance with a delivery schedule
provided by Buyer to Seller. Seller shall load and trim the coal into barges to the proper draft and the proper distribution within the barges. Seller shall arrange and pay for all costs of transporting the coal from the mines to the Barge Delivery
Point (including, without limitation, all truck, rail, barge and transloading costs, and all fleeting, switching, harbor and other port charges). Buyer shall arrange for transporting the coal by barge from the Barge Delivery Point to its generating
station(s) and shall pay for the cost of such transportation. For delays caused by Seller in handling the scheduling of shipments with Buyer’s barging contractor, Seller shall be responsible for any demurrage or other penalties assessed by said
barging contractor (or assessed by Buyer) which accrue at the Barge Delivery Point, including the demurrage, penalties for loading less than the specified minimum tonnage per barge, or other penalties assessed for barges not loaded 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
in conformity with applicable requirements. Buyer shall be responsible to deliver barges in as clean and dry condition as practicable. Seller shall require of the loading dock operator that the
barges and towboats provided by Buyer or Buyer’s barging contractor be provided convenient and safe berth free of wharfage, dockage, fleeting, switching, and other harbor and port charges; that while the barges are in the care and custody of
the loading dock, all U.S. Coast Guard regulations and other applicable laws, ordinances, rulings, and regulations shall be complied with, including adequate mooring and display of warning lights; that any water in the cargo boxes of the barges be
pumped out by the loading dock operator prior to loading; that the loading operations be performed in a workmanlike manner and in accordance with the reasonable loading requirements of Buyer and Buyer’s barging contractor; and that the loading
dock operator carry landing owners or wharfinger’s insurance with basic coverage of not less than $300,000.00 and total of basic coverage and excess liability coverage of not less than $1,000,000.00, and provide evidence thereof to Buyer in the
form of a certificate of insurance from the insurance carrier or an acceptable certificate of self-insurance with requirement for thirty (30) days advance notification of Buyer in the event of termination of or material reduction in coverage
under the insurance. 
 §5.2 Rail Delivery. For rail deliveries of coal, Seller shall deliver the coal to Buyer
F.O.B. railcar at the rail loading facility at Midway Unit Train Facility rail loadout the (“Rail Delivery Point”), near McHenry, Kentucky on the Paducah and Louisville Railroad. Seller may deliver the coal at a location different from the
Rail Delivery Point, provided, however, that Seller shall reimburse Buyer for any resulting increases in the cost of transporting the coal to Buyer’s generating stations. Any resulting savings in such transportation costs shall be retained

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
by Buyer. The Base Price outlined in §8.1.a within shall be applicable to all coal loaded at the aforementioned Rail Delivery Point. Title to and risk of loss of coal sold will pass to Buyer
and the coal will be considered to be delivered when it is loaded into railcars at the Rail Delivery Point. Buyer or its contractor shall furnish suitable railcars in accordance with a delivery schedule provided by Buyer to Seller. Seller shall be
responsible for and pay the cost of repairs for any damages caused by Seller to railcars owned or leased by Buyer while such railcars are in Seller’s control or custody. Seller shall comply with the applicable provisions of Buyer’s rail
carrier’s contract or tariff. 
 §5.2.1 Freeze Conditioning. At Buyer’s request,
Seller shall treat (or have treated) any shipment of coal hereunder with a freeze conditioning agent approved by Buyer in order to maintain coal handling characteristics during shipment. If requested by Buyer, Seller shall also treat (or have
treated) any railcars specified by Buyer with a side release agent approved by Buyer. The price for such requested chemical treatment shall be an amount equal to Seller’s cost of materials applied and associated application costs on a per
gallon basis for each application of freeze conditioning agent or side release agent, as the case may be. Seller shall invoice Buyer for all such treatment which occurred in a calendar month by the fifteenth (15th) of the following month; and payment shall be electronically
transferred by the twenty-fifth (25th) of such
following month, except that, if the twenty-fifth
(25th) is not a regular work day, payment shall be
made on the next business day or within ten (10) days after receipt of Seller’s invoice, whichever is later. 

  
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 ARMSTRONG COAL COMPANY, INC 

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 SECTION 6. QUALITY.  

§6.1 Specifications. The coal delivered hereunder shall conform to the following specifications on an “as received”
basis: 
 QUALITY 1  
  

					
	 	  	Guaranteed Monthly	  	Rejection Limits
	 Specifications
	  	Weighted Average(1)	  	(per shipment)
	 BTU/LB.
	  	min. 11.000	  	<10.800
	 LBS/MMBTU:
	  		  	
	 MOISTURE
	  	max. 12.00	  	>13.50
	 ASH
	  	max. 12.00	  	> 13.50
	 SULFUR
	  	max. 3.0	  	>3.25
	 CHLORINE
	  	max. .10	  	> .13
	 FLUORINE
	  	max.	  	>
	 NITROGEN
	  	max. 3.0	  	> 3.5
	 ARSENIC (parts per million)
	  	max. 15.0	  	> 15.0
	 ASH/SULFUR RATIO
	  	min. 4.05	  	<3.8
	 SIZE(3“x0”):
	  		  	
	 Top size (inches)*
	  	max. 3X0	  	>3X0
	 Fines (% by wgt)
	  		  	
	 Passing 1/4” screen
	  	max. 45	  	>50
	 % BY WEIGHT:
	  		  	
	 VOLATILE
	  	min. 33	  	<30
	 FIXED CARBON
	  	min. 44	  	< 41
	 GRIND ABILITY (HGI)
	  	min. 55	  	< 50
	 ASH FUSION TEMPERATURE(°F)(ASTM D1857)
	  		  	
	 REDUCING ATMOSPHERE
	  		  	
	 Initial Deformation
	  	min. 2030	  	min. 2020
	 Softening (H=W)
	  	min. 2100	  	min. 2090
	 Softening (H=1/2W)
	  	min. 2200	  	min. 2150

  
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	 Fluid
	  	min. 2400	  	min. 2350
	 OXIDIZING ATMOSPHERE
	  		  	
	 Initial Deformation
	  	min. 2470	  	min. 2400
	 Softening (H=W)
	  	min. 2500	  	min. 2440
	 Softening (H=1/2W)
	  	min. 2510	  	min. 2460
	 Fluid
	  	min. 2550	  	min. 2500

 QUALITY 2 
  

					
	 	  	Guaranteed Monthly	  	Rejection Limits
	 Specifications
	  	Weighted Average(1)	  	(per shipment)
	 BTU/LB.
	  	min. 11.300	  	< 10.900
	 LBS/MMBTU:
	  		  	
	 MOISTURE
	  	max. 10.44	  	> 12.50
	 ASH
	  	max. 10.44	  	> 12.50
	 SULFUR
	  	max. 2.75	  	> 3.10
	 CHLORINE
	  	max. .10	  	> .13
	 FLUORINE
	  	max.	  	>
	 NITROGEN
	  	max. 3.0	  	> 3.5
	 ARSENIC (parts per million)
	  	max. 15.0	  	> 15.0
	 ASH/SULFUR RATIO
	  	min. 3.8	  	< 3.6
	 SIZE(3“x0”):
	  		  	
	 Top size (inches)*
	  	max. 3X0	  	>3X0
	 Fines (%by wgt)
	  		  	>50
	 Passing 1/4” screen
	  	max. 45	  	
	 % BY WEIGHT:
	  		  	
	 VOLATILE
	  	min. 33	  	<30
	 FIXED CARBON
	  	min. 44	  	< 41
	 GRINDABILITY (HGI)
	  	min. 55	  	<_50
	 ASH FUSION TEMPERATURE (°F) (ASTM D1857)
	  		  	
	REDUCING ATMOSPHERE	  		  	

  
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LG&E/KU Contract No. J07032 
  

					
	 Initial Deformation
	  	min. 2030	  	min. 2020
	 Softening (H=W)
	  	min. 2100	  	min. 2090
	 Softening (H=1/2W)
	  	min. 2200	  	min. 2150
	 Fluid
	  	min. 2400	  	min. 2350
	 OXIDIZING ATMOSPHERE
	  		  	
	 Initial Deformation
	  	min. 2470	  	min. 2400
	 Softening (H=W)
	  	min. 2500	  	min. 2440
	 Softening (H=1/2W)
	  	min. 2510	  	min. 2460
	 Fluid
	  	min. 2550	  	min. 2500

 (1) An actual Monthly Weighted Average will be calculated for each specification for each quality of
coal delivered to Buyer’s generating station(s). 
 * All the coal will be of such size that it will pass through a screen
having circular perforations three (3) inches in diameter, but shall not contain more than forty-five per cent (45 %) by weight of coal that will pass through a screen having circular perforations one-quarter (1/4) of an inch in diameter.

  

					
	 Note: As used herein
	  	>	  	means greater than:
		  	<	  	means less than.

 §6.2 Definition of “Shipment”. As used herein, a “shipment” shall mean
(a) with respect to barge deliveries, one (1) barge load or a barge lot load, or (b) with respect to rail deliveries, one (1) unit trainload of coal, as applicable, in accordance with Buyer’s sampling and analyzing
practices. 

  
 16 

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LG&E/KU Contract No. J07032 
  

 §6.3 Rejection. 

Buyer has the right, but not the obligation, to reject any shipment which fail(s) to conform to any or all of the Rejection Limits set
forth in §6.1 or contains extraneous materials. With respect to shipment(s) which fail to conform to any or all of the Rejection Limits set forth in §6.1, Buyer must reject such coal within seventy-two (72) hours of receipt of the
coal analysis provided for in §7.2 or such right to reject is waived. With respect to shipment(s) which contain extraneous materials, Buyer must reject coal within twenty-four (24) hours after receipt of the shipment(s) at Buyer’s
generating station(s). In the event Buyer rejects such non-conforming coal, title to and risk of loss of the coal shall be considered to have never passed to Buyer and Buyer shall return the coal to Seller or, at Seller’s request, divert such
coal to Seller’s designee, all at Seller’s cost and risk. Seller shall replace the rejected coal within five (5) working days from notice of rejection with coal conforming to all of the Rejection Limits set forth in §6.1. If
Seller fails to replace the rejected coal within such five (5) working day period or the replacement coal is rightfully rejected, Buyer may purchase coal from another source in order to replace the rejected coal. Seller shall reimburse Buyer
for (i) any amount by which the actual price plus transportation costs to Buyer of such coal purchased from another source exceed the price of such coal under this Agreement plus transportation costs to Buyer from the Delivery Point; and
(ii) any and all transportation, storage, handling, or other expenses that have been incurred by Buyer for rightfully rejected coal. This remedy is in addition to all of Buyer’s other remedies under this Agreement and under applicable law
and in equity for Seller’s breach. 
 If Buyer fails to reject a shipment of non-conforming coal which it had the right to
reject for failure to meet any or all of the Rejection Limits set forth in §6.1 or because such shipment contained extraneous materials, then such non-conforming coal shall be deemed accepted by Buyer; however, the quantity Seller is obligated
to sell to Buyer under the Agreement may or 

  
 17 

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LG&E/KU Contract No. J07032 
  

 
may not be reduced by the amount of each such non-conforming shipment at Buyer’s sole option and the shipment shall nevertheless be considered “rejectable” under §6.4.
Further, for shipments containing extraneous materials, which include, but are not limited to, slate, rock, wood, mining materials, metal, steel, etc., the estimated weight of such materials shall be deducted from the weight of that shipment.

 §6.4 Suspension and Termination. 
 If the coal sold hereunder fails to meet one (1) or more of the Guaranteed Monthly Weighted Averages set forth in §6.1 for any two (2) months in a six (6) month period, or if five
(5) barge shipments in a thirty (30) day period are rejectable by Buyer, or two (2) rail shipments are rejectable in any thirty (30) day period by Buyer, then Buyer may upon notice confirmed in writing and sent to Seller by
certified mail, suspend future shipments except shipments already loaded into barges, and/or railcars. Seller shall, within ten (10) days, provide Buyer with reasonable assurances that subsequent monthly deliveries of coal shall meet or exceed
the Guaranteed Monthly Weighted Averages set forth in §6.1 and that the source will exceed the rejection limits set forth in §6.1. If Seller fails to provide such assurances within said ten (10) day period, Buyer may terminate this
Agreement by giving written notice of such termination at the end of the ten (10) day period. A waiver of this right for any one (1) period by Buyer shall not constitute a waiver for subsequent periods. If Seller after providing such
assurances to Buyer’s reasonable satisfaction, shipments hereunder shall resume and any tonnage deficiencies resulting from suspension may be made up at Buyer’s sole option. If Buyer elects to not make up the shipments, the Base Quantity
shall be reduced to reflect the tonnage deficiency resulting from 

  
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LG&E/KU Contract No. J07032 
  

 
suspension. Buyer shall not unreasonably withhold its acceptance of Seller’s assurances, or delay the resumption of shipment. If Seller, after such assurances, fails to meet any of the
Guaranteed Monthly Weighted Averages for any one (1) month within the next six (6) months or if three (3) barge shipments or if one (1) rail shipment are rejectable within any thirty (30) day period during such six
(6) month period, then Buyer may terminate this Agreement and exercise all its other rights and remedies under applicable law and in equity for Seller’s breach. 
 SECTION 7. WEIGHTS, SAMPLING AND ANALYSIS.  
 §7.1
Weights. The weight of the coal delivered hereunder shall be determined on a per shipment basis by Buyer on the basis of scale weights at the generating station(s) unless another method is mutually agreed upon by the parties. Such scales
shall be duly reviewed by an appropriate testing agency and maintained in an accurate condition. Seller shall have the right, at Seller’s expense and upon reasonable notice, to have the scales checked for accuracy at any reasonable time or
frequency. If the scales are found to be over or under the tolerance range allowable for the scale based on industry accepted standards, either party shall pay to the other any amounts owed due to such inaccuracy for a period not to exceed thirty
(30) days before the time any inaccuracy of scales is determined. 
 §7.2 Sampling and Analysis. The Seller has
sole responsibility for quality control of the coal and shall forward its “as loaded” quality to the Buyer as soon as possible. The sampling and analysis of the coal delivered hereunder shall be performed by Buyer and the results thereof
shall be accepted and used for the quality and characteristics of the coal delivered under this 

  
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LG&E/KU Contract No. J07032 
  

 
Agreement. All analyses shall be made in Buyer’s laboratory at Buyer’s expense in accordance with ASTM standards where applicable, or using standards mutually acceptable, to both
parties. Samples for analyses shall be taken by any ASTM standards or standards mutually acceptable to both parties, and may be composited and shall be taken with a frequency and regularity sufficient to provide reasonably accurate representative
samples of the deliveries made hereunder. Seller represents that it is familiar with Buyer’s sampling and analysis practices, and finds them to be acceptable. Buyer shall notify Seller in writing of any significant changes in Buyer’s
sampling and analysis practices. Any such changes in Buyer’s sampling and analysis practices shall, except for ASTM or mutually agreeable changes in practices, provide for no less accuracy than the sampling and analysis practices existing at
the time of the execution of this Agreement, unless the Parties otherwise mutually agree. 
 Each sample
taken by Buyer shall be divided into four (4) parts and put into airtight containers, properly labeled and sealed. One (1) part shall be used for analysis by Buyer; one (1) part shall be used by Buyer as a check sample, if Buyer in
its sole judgment determines it is necessary; one (1) part shall be retained by Buyer (LG&E) until the twenty-fifth (25th) of the month following the month of unloading (the “LG&E Disposal Date”) or Buyer (KU) until
thirty (30) days after the sample is taken (the “KU Disposal Date”), the LG&E Disposal Date and the KU Disposal Date are collectively the “Disposal Date”), and shall be delivered to Seller for analysis if Seller so
requests before the Disposal Date; and one part (“Referee Sample”) shall be retained by Buyer until the Disposal Date. Seller shall be given copies of all analyses made by Buyer by the tenth (10th) business day of the month following the month of unloading.
Seller, on 

  
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LG&E/KU Contract No. J07032 
  

 
reasonable notice to Buyer shall have the right to have a representative present to observe the sampling and analyses performed by Buyer. Unless Seller requests a Referee Sample analysis before
the Disposal Date, Buyer’s analysis shall be used to determine the quality of the coal delivered hereunder. The Monthly Weighted Averages shall be determined by utilizing the individual shipment analyses. 

If any dispute arises before the Disposal Date, the Referee Sample retained by Buyer shall be submitted for analysis to an independent
commercial testing laboratory (“Independent Lab”) mutually chosen by Buyer and Seller. For each coal quality specification in question, a dispute shall be deemed not to exist and Buyer’s analysis shall prevail and the analysis of the
Independent Lab shall be disregarded if the analysis of the Independent Lab differs from the analysis of Buyer by an amount equal to or less than: 
  

	 	(i)	0.50% moisture 

  

	 	(ii)	0.50% ash on a dry basis 

  

	 	(iii)	100 Btu/lb. on a dry basis 

  

	 	(iv)	0.10% sulfur on a dry basis. 

For each coal quality specification in question, if the analysis of the Independent Lab differs from the analysis of Buyer by an amount
more than the amounts listed above, then the analysis of the Independent Lab shall prevail and Buyer’s analysis shall be disregarded. The cost of the analysis made by the Independent Lab shall be borne by Seller to the extent that Buyer’s
analysis prevails and by Buyer to the extent that the analysis of the Independent Lab prevails. 

  
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LG&E/KU Contract No. J07032 
  

 SECTION 8. PRICE.  

§8.1(a). Base Price. 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: 

 

																	
	 	  	QUALITY 1	 	  	QUALITY 2	 
	 YEAR
	  	Barge	 	  	Rail	 	  	Barge	 	  	Rail	 
	 2008
	  	$	27.31	  	  	 	n/a	  	  	$	28.30	  	  	 	n/a	  
	 2009
	  	$	27.60	  	  	$	27.60	  	  	$	28.76	  	  	$	28.76	  
	 2010
	  	$	28.21	  	  	$	28.21	  	  	$	29.63	  	  	$	29.63	  
	 2011
	  	$	28.36	  	  	$	28.36	  	  	$	29.78	  	  	$	29.78	  
	 2012
	  	$	28.51	  	  	$	28.51	  	  	$	29.93	  	  	$	29.93	  
	 2013
	  	$	28.66	  	  	$	28.66	  	  	$	30.08	  	  	$	30.08	  
	 2014
	  	$	28.81	  	  	$	28.81	  	  	$	30.23	  	  	$	30.23	  
	 2015
	  	$	28.98	  	  	$	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). 
 §8.1(b). Reopener. Either party may elect at its sole option to reopen this Agreement for negotiations
with respect to price and/or other terms and conditions with respect to tons to be delivered in 2013 and beyond. The party making the election must provide the non-electing party written notice by April 1, 2012 of its desire to reopen
negotiations for pricing and/or for other 

  
 22 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
terms and conditions for tons to be delivered in 2013 and beyond. If the parties do not reach an agreement on new pricing and/or on other terms and conditions for tons to be delivered in 2013 and
beyond, by August 1, 2012, then this Agreement (including any rights and obligations under this Agreement) will terminate as of December 31, 2012 without further obligation hereunder, except for those that occurred or accrued prior to
termination. This reopener provision shall not be interpreted as a Right of First Refusal or exclusive supply agreement. 

§8.2 Quality Price Adjustment. 
 (a) BTU True Up. The Base Price for coal delivered hereunder in any particular calendar month is based on the assumption that the actual “as received” monthly weighted average BTU/LB
(the “AMWA”) for coal delivered to Buyer during that particular calendar month is equal to the minimum Guaranteed Monthly Weighted Average BTU/LB set forth in §6.1 (“GMWA”). In the event the AMWA varies from the GMWA for any
particular calendar month, then the Base Price applicable to such delivered coal will be adjusted for that particular calendar month to account for such variation in BTU’s; such Base Price adjustment for BTU’s for that particular calendar
month to be determined as follows: 
 (i) Calculate the per ton Base Price BTU adjustment for any particular calendar month using the
following formula (where Price per Ton is the applicable Base Price set forth in §8.1 above): 
 AMWA - GMWA X Price per Ton = Per
Ton Adjustment 
 GMWA 

  
 23 

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LG&E/KU Contract No. J07032 
  

 (ii) Determine the Base Price adjustment for BTU’s for that month by multiplying the Per Ton
Adjustment (as calculated in (i) above) by the total number of tons of coal actually delivered to and unloaded by Buyer under this Agreement for that particular calendar month. 

Depending on whether the AMWA is greater or less than the GMWA in any particular calendar month, the Per Ton Adjustment (and thus the
Base Price adjustment for BTU’s) for that particular calendar month can be positive or negative. If the Base Price adjustment for BTU’s (as calculated above) for a particular calendar month is positive, then Buyer shall be obligated to pay
the amount of such adjustment to Seller. If the Base Price adjustment for BTU’s (as calculated above) for a particular calendar month is negative, then Seller shall be obligated to pay or credit the amount of such adjustment to Buyer. Buyer
shall be responsible for making the calculations and shall send a written statement to Seller of the amount of such adjustment each month. Such payments shall be due when the next payment for coal is due hereunder. 

For example, if the AMWA for a particular calendar month equals 11,375 BTU/LB, the GMWA equals 11,300 BTU/LB and the Price Per Ton equals
$28.30/ton, then the Per Ton Adjustment would be ((11,375 - 11,300) ÷ 11,300) x $28.30 = $.18783 per ton. If a total of 50,000 tons were delivered during that particular calendar month, then the Base Price adjustment for BTU’s would
equal $9,391.50 (50,000 x $.18783). Since it is positive, this amount would be due and owing to Seller by Buyer with respect to the deliveries for that particular calendar month. 

(b) The Base Price is based on coal meeting or exceeding the Guaranteed Monthly Weighted Average specifications for the Buyer’s
generating stations as set forth in §6.1. Quality price discounts shall be applied for each specification each month to reflect failures to meet the Guaranteed Monthly Weighted Averages set forth in §6.1, as determined pursuant to
§7.2, subject to the provisions set forth below. The discount values used are as follows: 

  
 24 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 DISCOUNT VALUES 

 

			
		  	$/MMBTU
	 BTU/LB.
	  	0.2604
		  	$/LB./MMBTU
	 SULFUR
	  	0.1232
	 ASH
	  	0.0083
	 MOISTURE
	  	0.0016

 (c) Notwithstanding the foregoing, for each specification each month with respect to the quality
price discounts in §8.2(b) above, there shall be no discount if the actual Monthly Weighted Average meets the applicable Discount Point set forth below. If the actual Monthly Weighted Average fails to meet such applicable Discount Point, then
the discount in §8.2(b) above shall apply and shall be calculated on the basis of the difference between the actual Monthly Weighted Average and the Guaranteed Monthly Weighted Average pursuant to the methodology shown in Exhibit B
attached hereto. 
 QUALITY 1  
  

					
	 	  	Guaranteed Monthly	  	 
	 	  	Weighted Average	  	Discount Point
	 BTU/LB
	  	min. 11,000	  	10,900
	 LB/MMBTU:
	  		  	
	 SULFUR
	  	max. 3.00	  	3.10
	 ASH
	  	max. 12.00	  	12.80
	 MOISTURE
	  	max. 12.00	  	12.75

  
 25 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 QUALITY 2  

 

					
	 	  	Guaranteed Monthly	  	 
	 	  	Weighted Average	  	Discount Point
	 BTU/LB
	  	min. 11,300	  	11,000
	 LB/MMBTU:
	  		  	
	 SULFUR
	  	max. 2.75	  	2.90
	 ASH
	  	max. 10.44	  	10.75
	 MOISTURE
	  	max. 10.44	  	11.75

 For example, if the actual Monthly Weighted Average, of sulfur of Quality 1 equals 3.15 lb/MMBTU, then
the applicable discount would be (3.15 lb. — 3.10 lb.) X $0.1232/lb/MMBTU = $0.00616/MMBTU. 
 §8.3 Payment
Calculation. Exhibit B attached hereto shows the methodology for calculating the coal payment and quality price discounts for the month Seller’s coal was unloaded by Buyer. If there are any such discounts, Buyer shall apply credit to
amounts owed Seller for the month the coal was unloaded. 
 §8.4 Diesel Fuel Adjustment. In addition to any other
adjustments provided herein, the Base Price shall also be adjusted for changes in the price of Diesel Fuel, such adjustment to be effective on the Adjustment Date (as such term is hereinafter defined). The first Diesel Fuel Price Adjustment
calculation shall be applied towards shipments unloaded beginning January 1, 2010. 

  
 26 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 The Diesel Fuel adjustment contemplated herein for any particular period shall be
determined as follows: (1) $7.00 per ton of the Base Price applicable to that particular period shall be deemed (for purposes of this section) to be the diesel fuel component of the Base Price (herein called the “Diesel Fuel
Component”) ; (2) Multiply the Diesel Fuel Component by the Adjustment Factor (as hereinafter defined; the resulting product is hereinafter called the “Diesel Fuel Component Adjustment”); before any adjustment to the price under
this Section shall occur with respect to a particular period, the applicable PPI Factor must be greater than 1.200 or less than 0.800; (3) If the PPI Factor is greater than 1.200 or less than 0.800, then the Base Price adjusted pursuant to this
section (herein called the “Adjusted Base FOB Price Per Ton”) for that particular period shall be equal to the sum of the Base Price and the Diesel Fuel Component Adjustment (note that if the PPI Factor is less than 0.800, the Diesel Fuel
Component Adjustment will be negative, resulting in an Adjusted Base FOB Price Per Ton which is less than the Base Price due by the amount of the Diesel Fuel Component Adjustment. An example calculation is shown in Exhibit C. 

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) for a
PPI Factor greater than 1.200, the difference between the PPI Factor and 1.200, (b) for a PPI Factor less than .800, the difference between PPI Factor and .800 (note: this calculation will result in a negative number), and (c) for a PPI
Factor between .800 and 1.200, inclusive, the Adjustment Factor shall be deemed to be zero. 

  
 27 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 “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 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 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. 
 “PPI Factor” shall mean a fraction, the denominator of which shall be the average of the base index PPI’s for May, June and July 2007, and the numerator of which shall be the average
of the base index PPI’s of the three months published during the relevant Calculation Period with respect to a particular Adjustment Date. 
 §8.5 New Impositions. The Base Price shall be subject to adjustment pursuant to this section only in the event that the requesting party can clearly demonstrate that new applicable Federal or
state statues, regulations, or other governmental impositions on the coal to be supplied hereunder, including but not limited to tax increases or decreases (other than taxes measured by income), occur after January 1, 2008, which cause
Seller’s cost for providing coal to Buyer under this Agreement to increase or decrease by more than twenty five cents ($.25) per ton. The affected party shall promptly notify the other party of any such changes and supply sufficient 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
documentation for the other party to verify any such change. Either Buyer or Seller may request a Base Price adjustment, which shall be comprised of no more than the reasonable costs directly
associated with the effect of such change on the coal to be supplied hereunder. If the non-requesting party agrees to the requested price adjustments, such adjustment shall be made effective on the first day of the calendar month following the
effective date of any change, (except when such change is effective on the first day of the month in which case the adjustment shall be made as of such date). If the non-requesting party rejects the request of the requesting party for a Base Price
adjustment, the requesting party, at its option, may terminate the contract without liability due to such termination for either party. 
 SECTION 9. INVOICES, BILLING AND PAYMENT. 
 §9.1 Invoicing
Address. Invoices will be sent to Buyer at the following address: 
 E.ON U.S. Services, Inc. 

220 West Main Street 
 Louisville, KY 40202 
 Attention: Manager Fuels Accounting and Administration

 §9.2 Invoice Procedures for Coal Shipments. Seller shall invoice Buyer at the Base Price,
plus or minus any adjustment as provided herein, for all coal unloaded in a calendar month by the tenth (10th) of the following month. 

  
 29 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 §9.3 Payment Procedures for Coal Shipments. 

For all coal delivered pursuant to Section 5 hereof, and unloaded at the Buyer’s generating station(s)
between the first (1st) through the fifteenth (15th) days of any calendar month, Buyer shall make preliminary payment for one-hundred percent (100%) of the amount owed for the coal (based on the assumption that the coal will meet all
guaranteed monthly quality parameters) by the twenty-fifth (25th) day of such month of delivery and unloading, except that, if the twenty-fifth (25th) is not a regular work day, payment shall be made on the next regular work day. All
preliminary payments shall be calculated based upon the then-current price on a dollar per ton basis as calculated on the guaranteed monthly weighted average BTU/lb and the then-current Base Price in dollars per ton. For all coal delivered, as
defined in Section 5 hereof, and unloaded at the Buyer’s generating station(s) between the sixteenth (16th) and through the last day of any calendar month, Buyer shall make a payment for one-hundred percent (100%) of the amount
owed for the coal by the fifteenth (15th) day of the month following the month of unloading, except that, if the fifteenth (15th) is not a regular work day, payment shall be made on the next regular work day. Also by the fifteenth
(15th) day of the month following the month of
unloading, with respect to all coal unloaded at Buyer’s generating station(s) during the month of unloading, a reconciliation of amounts paid and amounts owed during said month shall be made, including, making any adjustments for any applicable
discounts or other adjustments provided herein, except that, with respect to all amounts due or owing on the fifteenth
(15th) of the month following the month of unloading,
if the fifteenth (15th) is not a regular work day,
payment shall be made on the next regular work day. 
 For example, Buyer will make a preliminary payment by September 25
for coal unloaded from September 1 through 15. By September 15, a payment for coal unloaded from August 16 through August 31 will be made which will be adjusted to include a reconciliation with respect to 

  
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 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
all coal unloaded in August. The reconciliation shall be made as follows: Seller shall invoice Buyer on or before the tenth (10th) day of the month following the month of unloading at
Buyer’s generating station(s) during the previous month. The amount due for all coal (based on the Base Price minus any Quality Price Discounts) unloaded and accepted by Buyer during any calendar month shall be calculated and compared to the
sum of the preliminary payments made for coal delivered and unloaded and accepted during such month. The difference shall be paid by or paid to Seller, as applicable, by the fifteenth (15th) day of the month following the month of unloading or
five (5) days after receipt of an invoice whichever is later, except, that, if the fifteenth (15th) is not a regular work day, payment shall be made in the next regular work day. Buyer shall electronically transfer funds to Seller’s
Account: 
 Armstrong Energy, Inc. 
 US Bank, N.A. 
 Account # 152306681361 

Routing # 081-000-210 
 §9.4 Withholding. Buyer shall have the right to withhold from payment of any billing or billings (i) any sums which it is not able in good faith to verify or which it otherwise in good
faith disputes, (ii) any damages resulting from or likely to result from any breach of this Agreement by Seller, and (iii) any amounts owed to Buyer from Seller. Buyer shall notify Seller promptly in writing of any such issue, stating the
basis of its claim and the amount it intends to withhold. 

  
 31 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 Payment by Buyer, whether knowing or inadvertent, of any amount in dispute shall not be
deemed a waiver of any claims or rights by Buyer with respect to any disputed amounts or payments made. 
 SECTION 10.
FORCE MAJEURE. 
 §10.1 General Force Majeure. If either party hereto is delayed in or prevented from
performing any of its obligations or from utilizing the coal sold under this Agreement due to acts of God, war, riots, civil insurrection, acts of the public enemy, strikes, lockouts, fires, floods or earthquakes, which are beyond the reasonable
control and without the fault or negligence of the party affected thereby, then the obligations of both parties hereto shall be suspended to the extent made necessary by such event; provided that the affected party gives written notice to the other
party as early as practicable of the nature and probable duration of the force majeure event. The party declaring force majeure shall exercise due diligence to avoid and shorten the force majeure event and will keep the other party advised as to the
continuance of the force majeure event. During any period in which Seller’s ability to perform hereunder is affected by a force majeure event, Seller shall not deliver any coal to any other buyers to whom Seller’s ability to supply is
similarly affected by such force majeure event unless contractually committed to do so at the beginning of the force majeure event; and further shall deliver to Buyer under this Agreement at least a pro rata portion (on a per ton basis) of its total
contractual commitments to all its buyers to whom Seller’s ability to supply is similarly affected by such force majeure event in place at the beginning of the force majeure event. An event which affects the Seller’s ability to produce or
obtain coal from a mine other than the Coal Property will not be considered a force majeure event hereunder. 

  
 32 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 Tonnage deficiencies resulting from a force majeure event shall be made up at
Buyer’s sole option on a reasonable schedule; provided, however, Buyer shall be required to provide written notice to seller of its intent to require Seller to make up such deliveries within 90 days of the cessation of the force majeure
event. 
 §10.2 Environmental Law Force Majeure. The parties recognize that, during the continuance of this
Agreement, legislative or regulatory bodies or the courts may adopt or reinterpret environmental laws, regulations, policies and/or restrictions which will make it impossible or commercially impracticable for Buyer to utilize this or like kind and
quality coal which thereafter would be delivered hereunder or Seller to produce the coal which is required hereunder. 
 If as a
result of the adoption or reinterpretation of such laws, regulations, policies, or restrictions, or change in the interpretation or enforcement thereof, Buyer decides that it will be impossible or commercially impracticable (uneconomical) for
Buyer to utilize such coal, Buyer shall so notify Seller, and thereupon Buyer and Seller shall promptly consider whether corrective actions can be taken in the mining and preparation of the coal at Seller’s mine and/or in the handling and
utilization of the coal at Buyer’s generating station; and if in Buyer’s sole judgment such actions will not, without unreasonable expense to Buyer, make it possible and commercially practicable for Buyer to so utilize coal which
thereafter would be delivered hereunder without violating any applicable law, regulation, policy or order, Buyer shall have the right, upon the later of sixty (60) days notice to Seller or the effective date of such restriction, to terminate
this Agreement without further obligation hereunder on the part of either party. 

  
 33 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 If as a result of the adoption or reinterpretation of such laws, regulations, policies,
or restrictions, or change in the interpretation or enforcement thereof, Seller decides that it will be impossible or uneconomical for Seller to produce such coal, Seller shall so notify Buyer, and thereupon Seller and Buyer shall promptly consider
whether corrective actions can be taken in the mining and preparation of the coal at Seller’s mine and if in Seller’s sole judgment such actions will not, without unreasonable expense to Seller, make it possible and economical for Seller
to produce the coal which thereafter would be delivered hereunder without violating any applicable law, regulation, policy or order, Seller shall have the right, upon the later of sixty (60) days notice to Buyer or the effective date of such
restriction, to terminate this Agreement without further obligation hereunder on the part of either party. 
 SECTION 11.
CHANGES. Buyer may, by mutual agreement with Seller, at any time by written notice pursuant to Section 12 of this Agreement, make changes within the general scope of this Agreement in any one or more of the following: quality of coal
or coal specifications, quantity of coal, method or time of shipments, place of delivery (including transfer of title and risk of loss), method(s) of weighing, sampling or analysis and such other provision as may affect the suitability and amount of
coal for Buyer’s generating stations. 
 If any such changes makes necessary or appropriate an increase or decrease in the
then current price per ton of coal, or in any other provision of this Agreement, an equitable adjustment shall be made in: price, whether current or future or both, and/or in such other provisions of this Agreement as are affected directly or
indirectly by such change, and the Agreement shall thereupon be modified in writing accordingly. 

  
 34 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 Any claim by the Seller for adjustment under this Section 11 shall be asserted
within thirty (30) days after the date of Seller’s receipt of the written notice of change, it being understood, however that Seller shall not be obligated to proceed under this Agreement as changed until an equitable adjustment has been
agreed upon. The parties agree to negotiate promptly and in good faith to agree upon the nature and extent of any equitable adjustment. 
 SECTION 12. NOTICES. 
 §12.1 Form and Place of Notice.
Any official notice, request for approval or other document required to be given under this Agreement shall be in writing, unless otherwise provided herein, and shall be deemed to have been sufficiently given when delivered in person, transmitted by
facsimile or other electronic media, delivered to an established mail service for same day or overnight delivery, or dispatched in the United States mail, postage prepaid, for mailing by first class, certified, or registered mail, return receipt
requested, and addressed as follows: 
  

					
		 	 If to Buyer:
	  	Louisville Gas and Electric Company/Kentucky Utilities Company
		 		  	 220 West Main Street

Louisville, Kentucky 40202

		 		  	Attn.: Director Corporate Fuels and By Products
			
		 	 If to Seller:
	  	Armstrong Coal Company, Inc.
		 		  	407 Brown Road
		 		  	 Madisonville, Kentucky 42431

Attn: Mr. David R. Cobb

  
 35 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

					
		 	With Required Copies to:	  	
		 		  	 Martin Wilson, President

Armstrong Coal Company, Inc.
 7701 Forsyth
Boulevard-10th Floor

St. Louis, MO 63105
 314-721-8211
(FAX)

			
		 		  	And;
			
		 		  	 Mason L. Miller

Miller+Wells, PLLC
 300 East Main Street, Ste.
360
 Lexington, KY 40507
 859-281-0079
(FAX)

 §12.2 Change of Person or Address. Either party may change the person or address specified
above upon giving written notice to the other party of such change. 
 §12.3 Electronic Data Transmittal. Seller
hereby agrees, at Seller’s cost, to electronically transmit shipping notices and/or other data to Buyer in a format acceptable to and established by Buyer upon Buyer’s request. Buyer shall provide Seller with the appropriate format and
will inform Seller as to the electronic data requirements at the appropriate time. 
 SECTION 13. GUARANTEE.
Armstrong Land Company, LLC shall guarantee to Buyer the payment and performance of any and all obligations owed by Seller to Buyer pursuant to that certain Guaranty attached hereto. 

  
 36 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 SECTION 14. RIGHT TO RESELL. Buyer shall have the unqualified right to
resell all or any of the coal purchased under this Agreement. 
 SECTION 15. INDEMNITY AND INSURANCE.

 §15.1 Indemnity. Seller agrees to indemnify and save harmless Buyer, its officers, directors, employees and
representatives from any responsibility and liability for any and all claims, demands, losses, legal actions for personal injuries, property damage and pollution (including reasonable inside and outside attorney’s fees) (i) relating to the
trucks, barges or railcars provided by Buyer or Buyer’s contractor while such trucks, barges or railcars are in the care and custody of the loading dock or loading facility, (ii) due to any failure of Seller to comply with laws,
regulations or ordinances, or (iii) due to the acts or omissions of Seller in the performance of this Agreement. 

§15.2 Insurance. Seller agrees to carry insurance coverage with minimum limits as follows: 

(1) Commercial General Liability, including Completed Operations and Contractual Liability, $1,000,000 single limit liability.

 (2) Automobile General Liability, $1,000,000 single limit liability. 

(3) Employer’s Liability, $1,000,000 single limit liability. 

(4) In addition, Seller shall carry excess liability insurance covering the foregoing perils in the amount of $8,000,000 for any one
occurrence. 
 (5) Workers’ Compensation with statutory limits. 

  
 37 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 If any of the above policies are written on a claims made basis, then the retroactive
date of the policy or policies will be no later than the effective date of this Agreement. Certificates of Insurance satisfactory in form to the Buyer and signed by the Seller’s insurer shall be supplied by the Seller to the Buyer evidencing
that the above insurance is in force and that not less than thirty (30) calendar days written notice will be given to the Buyer prior to any cancellation or material reduction in coverage under the policies. The Seller shall cause its insurer
to waive all subrogation rights against the Buyer respecting all losses or claims arising from performance hereunder. Evidence of such waiver satisfactory in form and substance to the Buyer shall be exhibited in the Certificate of Insurance
mentioned above. Seller’s liability shall not be limited to its insurance coverage. 
 SECTION 16. TERMINATION FOR
DEFAULT. 
 Subject to §6.4, if either party hereto commits a material breach of any of its obligations under this
Agreement at any time, including, but not limited to, a breach of a representation and warranty set forth herein, then the other party has the right to give written notice describing such breach and stating its intention to terminate this Agreement
no sooner than thirty (30) days after the date of the notice (the “notice period”). If such material breach is curable and the breaching party cures such material breach within the notice period, then the Agreement shall not be
terminated due to such material breach. If such material breach is not curable or the breaching party fails to cure such material breach within the notice period, then this Agreement shall terminate at the end of the notice period in addition to all
the other rights and remedies available to the aggrieved party under this Agreement and at law and in equity. 

  
 38 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 SECTION 17. TAXES, DUTIES AND FEES. 

Seller shall pay when due, and the price set forth in Section 8 of this Agreement shall be inclusive of, all taxes, duties, fees and
other assessments of whatever nature imposed by governmental authorities with respect to the transactions contemplated under this Agreement. 
 SECTION 18. DOCUMENTATION AND RIGHT OF AUDIT.  
 Seller shall
maintain all records and accounts pertaining to payments, quantities, quality analyses, and source for all coal supplied under this Agreement for a period lasting through the term of this Agreement and for two (2) years thereafter. Buyer shall
have the right at no additional expense to Buyer to audit, copy and inspect such records and accounts at any reasonable time upon reasonable notice during the term of this Agreement and for two (2) years thereafter and Seller shall cooperate at
no additional cost to Buyer. 
 SECTION 19. EQUAL EMPLOYMENT OPPORTUNITY. To the extent applicable, Seller shall
comply with all of the following provisions which are incorporated herein by reference: Equal Opportunity regulations set forth in 41 CFR § 60-1.4(a) and (c) prohibiting discrimination against any employee or applicant for employment
because of race, color, religion, sex, or national origin; Vietnam Era Veterans Readjustment Assistance Act regulations 

  
 39 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 
set forth in 41 CFR § 50-250.4 relating to the employment and advancement of disabled veterans and veterans of the Vietnam Era; Rehabilitation Act regulations set forth in 41 CFR §
60-741.4 relating to the employment and advancement of qualified disabled employees and applicants for employment; the clause known as “Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and
Economically Disadvantaged Individuals” set forth in 15 USC § 637(d)(3); and subcontracting plan requirements set forth in 15 USC § 637(d). 
 SECTION 20. COAL PROPERTY INSPECTIONS. Buyer and its representatives, and others as may be required by applicable laws, ordinances and regulations shall have the right at all reasonable
times and at their own expense to inspect the Coal Property, including the loading facilities, scales, sampling system(s), wash plant facilities, and mining equipment for conformance with this Agreement. Seller shall cooperate with such inspections
at no additional cost to Buyer. Seller shall undertake reasonable care and precautions to prevent personal injuries to any representatives, agents or employees of Buyer (collectively, “Visitors”) who inspect the Coal Property. Any such
Visitors shall make every reasonable effort to comply with Seller’s regulations and rules regarding conduct on the work site, made known to Visitors prior to entry, as well as safety measures mandated by state or federal rules, regulations and
laws. Buyer understands that underground mines and related facilities are inherently high-risk environments. Buyer’s failure to inspect the Coal Property or to object to defects therein at the time Buyer inspects the same shall not relieve
Seller of any of its responsibilities nor be deemed to be a waiver of any of Buyer’s rights hereunder. 

  
 40 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 SECTION 21. MISCELLANEOUS. 

§21.1 Applicable Law. This Agreement shall be construed in accordance with the laws of the Commonwealth of Kentucky, and all
questions of performance of obligations hereunder shall be determined in accordance with such laws. 
 §21.2
Headings. The paragraph headings appearing in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. 
 §21.3 Waiver. The failure of either party to insist on strict performance of any provision of this Agreement, or to take advantage of any rights hereunder, shall not be construed as a waiver
of such provision or right. 
 §21.4 Remedies Cumulative. Remedies provided under this Agreement shall be cumulative
and in addition to other remedies provided under this Agreement or by law or in equity. 
 §21.5 Severability. If
any provision of this Agreement is found contrary to law or unenforceable by any court of law, the remaining provisions shall be severable and enforceable in accordance with their terms, unless such unlawful or unenforceable provision is material to
the transactions contemplated hereby, in which case the parties shall negotiate in good faith a substitute provision. 

§21.6 Binding Effect. This Agreement shall bind and inure to the benefit of the parties and their successors and assigns.

  
 41 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 §21.7 Assignment. 

A. Seller shall not, without Buyer’s prior written consent, which shall not be unreasonably withheld, make any assignment or
transfer of this Agreement, by operation of law or otherwise, including without limitation any assignment, encumbrance or transfer as security for any obligation, and shall not assign or transfer the performance of or right or duty to perform any
obligation of Seller hereunder; provided, however, that Seller may assign the right to receive payments for coal directly from Buyer to a lender as part of any accounts receivable financing or other revolving credit arrangement which Seller may have
now or at any time during the term of this Agreement. 
 B. Buyer shall not, without Seller’s prior written consent,
which may not be unreasonably withheld, assign this Agreement or any right or duty to perform any obligation of Buyer hereunder; except that, without such consent, Buyer may assign this Agreement in connection with a transfer by Buyer of all or a
part interest in the generating station comprising the Delivery Point, or as part of a merger or consolidation involving Buyer. 

C. In the event of an assignment or transfer contrary to the provisions of this section, the non-assigning party may terminate this
Agreement immediately. 
 §21.8 Entire Agreement. This Agreement contains the entire agreement between the parties
as to the subject matter hereof, and there are no representations, understandings or agreements, oral or written, which are not included herein. 
 §21.9 Amendments. Except as otherwise provided herein, this Agreement may not be amended, supplemented or otherwise modified except by written instrument signed by both parties hereto.

  
 42 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 §21.10 Forward Contracts. Buyer and Seller shall acknowledge that it is a
“forward contract merchant” and that all transactions pursuant to this Contract constitute “forward contracts” within the meaning of the United States Bankruptcy Code. 

§21.11 Joint and Several Liability. LG&E and KU shall be severally but not jointly liable for obligations of Buyer
hereunder, and shall be liable only for such obligations that pertain to a particular party constituting Buyer. 
 IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 
  

									
	 LOUISVILLE GAS AND ELECTRIC COMPANY
	 		 	ARMSTRONG COAL COMPANY, INC.
					
	 By:
	 	 /s/
	 		 	 By:
	 	 /s/ Martin D. Wilson

		 	Title: SVP-Energy Marketing	 		 		 	Title: President
		 	 Date: 12/20/07
	 		 		 	Date: 12/19/07
				
	KENTUCKY UTILITES COMPANY	 		 		 	
					
	 By:
	 	 /s/
	 		 		 	
		 	 Title: SVP-Energy Marketing
	 		 		 	
		 	 Date: 12/20/07
	 		 		 	

  
 43 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 EXHIBIT A TO COAL SUPPLY AGREEMENT 

“Coal Property” means the following seams and mines owned by Seller 

 

							
	 Mine Name
	  	 County
	  	 Type of Operation
	  	 Seams

	Big Run	  	Ohio	  	Underground	  	#9
	West Fork	  	Ohio	  	Surface	  	#9, #11, #12, #13
	Parkway	  	Muhlenberg	  	Underground	  	#9
	Equality Boot	  	Ohio	  	Surface	  	#11, #12, #13, #14
	Ken-Barton	  	Ohio	  	Surface	  	#9, #11, #12, #13
	East Fork	  	Ohio	  	Surface	  	#14
	Lewis Creek	  	Ohio	  	Surface/Underground	  	#9, #14
	Sunnyside	  	Muhlenberg	  	Surface	  	#11, #12, #14
	Jacobs Creek	  	Muhlenberg	  	Surface	  	#9, #11, #12, #13
	Vogue/Earles	  	Muhlenberg	  	Surface	  	#9, #11, #12, #14
	Game Preserve	  	Muhlenberg	  	Surface	  	#9

  
 44 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 Exhibit B 
 Page 1 of 2 
 EXHIBIT B 

SAMPLE COAL PAYMENT CALCULATIONS 
 For contracts supplied from multiple “origins”, each “origin will be calculated individually. 
  

							
	 Section I
	  	Base Data — Quality 1
	 1) Base or Adjusted Base FOB Price Per Ton:
	  	 	27.31	  	  	/ton
		  	  
	  
	 	  	
	 1a) Tons of coal delivered:
	  				  	tons
		  	  
	  
	 	  	
	 2) Guaranteed average heat content:
	  	 	11.000	  	  	BTU/LB.
		  	  
	  
	 	  	
	 2a) As received monthly avg. heat content:
	  				  	BTU/LB.
		  	  
	  
	 	  	
	 2b) Total BTU’s unloaded in the month:
	  				  	Millions of BTU’s
		  	  
	  
	 	  	
	 3) Guaranteed monthly avg. max. sulfur
	  	 	3.00	  	  	LBS./MMBTU
		  	  
	  
	 	  	
	 3a) As received monthly avg. sulfur
	  				  	LBS./MMBTU
		  	  
	  
	 	  	
	 4) Guaranteed monthly avg. ash
	  	 	12.00	  	  	LBS./MMBTU
		  	  
	  
	 	  	
	 4a) As received monthly avg. ash
	  				  	LBS./MMBTU
		  	  
	  
	 	  	
	 5) Guaranteed monthly avg. max. moisture
	  	 	12.00	  	  	LBS./MMBTU
		  	  
	  
	 	  	
	 5a) As received monthly avg. moisture
	  				  	LBS./MMBTU
		  	  
	  
	 	  	
	 6) BTU True Up: {[(line 2a — line 2)] ÷ line 2} x line 1
	  				  	Dollars/Ton
		  	  
	  
	 	  	
	 6a) BTU True Up Dollars (line 6 x line la)
	  				  	Dollars
		  	  
	  
	 	  	
			
	 Section II
	  	 	 	  	Discounts
	     Assign a (-) to all discounts (round to (5) decimal places)
	  				  	
	 7) BTU/LB.: If line 2a < 10,900 BTU/LB. then:

        {1 - {(line 2a) / (line 2)} * $0.2604/MMBTU

        {1- ( )/( )}* $0.2604 =
	  	$	                 	  	  	/MMBTU
	 7a) SULFUR: If line 3a is greater than 3.10 LBS/MMBTU

    [ (line 3a) — (line 3) ] * 0.1232/lb. Sulfur

    [( )-( )]*0.1232 =
	  	$	                 	  	  	/MMBTU
	 7b) ASH: If line 4a is greater than 12..80

    [ (line 4a) — (line 4) ] * 0.0083/MMBTU

    [( )-( )]*0.0083 =
	  	$	                 	  	  	/MMBTU
	 7c) MOISTURE: If line 5a is greater than 12.75 LBS/MMBTU

    [ (line 5a) — (line 5) ] * 0.0016/MMBTU

    [( )-( )]*0.0016 =
	  	$	                 	  	  	/MMBTU

  
 45 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 Exhibit B 
 Page 2 of 2 
  

							
	 Section III
	  	Total Price
Adjustments	 	  	 
	     Determine total Discounts as follows:
	  				  	
	 8) BTU/Lb Discount Dollars (line 7 x line 2b)
	  	$	                 	  	  	Dollars
	 9) Sulfur Discount Dollars (line 7a x line 2b)
	  	$	                 	  	  	Dollars
	 10) Ash Discount Dollars (line7b x line 2b)
	  	$	                 	  	  	Dollars
	 11) Moisture Discount Dollars (line 7c x line 2b)
	  	$	                 	  	  	Dollars
	 12) Total Discount Dollars: Sum of lines 8 thru 11: Total Coal Payment Calculation
	  	$	                 	  	  	Dollars
	 13) Total coal payment for month: [(line 1 x line la) + line 6a] — line 12
	  	$	                 	  	  	Dollars

  
 46 

 ARMSTRONG COAL COMPANY, INC 

LG&E/KU Contract No. J07032 
  

 EXHIBIT C  

Sample Diesel Fuel Price Adjustment Calculation 
 Effective January 1,2010 
  

									
	 January 2010 Diesel Fuel Price Calculation (Quality 1)
	  				  	
	 (1) Diesel Fuel Component
	  	$	7.00	  	  	Diesel Fuel Component
	 (2) Calculate Diesel Fuel Component Adjustment
	  				  	
	 (a) Calculate PPI Factor
	  	 	285.2	  	  	 Average of hypothetical base index
 PPIs of the three months during
 relevant Calculation Period for

January 1, 2010 Adjustment Date

	Divided by:	  	 	232.5	  	  	 Average of base index PPIs for
 May, June and July 2007

		  	  
	  
	 	  		  	
	PPI Factor	  	 	1.227	  	  	
	 (b) Calculate Adjustment Factor Since PPI Factor is greater than 1.200
	  	 	1.227	  	  	PPI Factor
	Less:	  	 	1.200	  	  	Upper Deadband
		  	  
	  
	 	  		  	
	Adjustment Factor	  	 	0.027	  	  	
	 (c) Calculate Diesel Fuel Component Adjustment
	  				  	
		  	$	7.00	  	  	Diesel Fuel Component
	Times:	  	 	.027	  	  	Adjustment Factor
		  	  
	  
	 	  		  	
		  	$	.19	  	  	Diesel Fuel Component Adjustment
	 (3) Calculate Adjusted Base FOB Price Per Ton
	  				  	
		  	$	28.21	  	  	Contract Base Price Per Ton
	Plus:	  	$	0.19	  	  	Diesel Fuel Component Adjustment
		  	  
	  
	 	  		  	
		  	$	28.40	  	  	Adjusted Base FOB Price Per 7
	 Sample PPI Data:
	  				  	
	 Figures are hypothetical — for illustration purposes only.

Sep/Oct/Nov 09 / PPI-Commodities — #2 Diesel Fuel #WPU057303
	  				  	
	Sep ‘09	  	 	283.0	  	  	
	Oct ‘09	  	 	285.2	  	  	
	Nov ‘09	  	 	287.4	  	  	
		  	  
	  
	 	  		  	
	Average	  	 	285.2	  	  	
	 May/June/Juy 2007/ PPI-Commodities — #2 Diesel Fuel #WPU057303
	  				  	
	May ‘07	  	 	226.5	  	  		  	
	June ‘07	  	 	227.6	  	  		  	
	July ‘07	  	 	243.5	  	  		  	
		  	  
	  
	 	  	
	Base Factor (Arithmetic average)	  	 	232.5	  	  		  	

  
 47 

 This Guaranty (the “Guaranty”) is made by Armstrong Land Company, LLC
(the “Guarantor”), a Delaware limited liability company, in favor of Louisville Gas and Electric Company and Kentucky Utilities Company (collectively the “Beneficiary”) in consideration of the Beneficiary entering into
agreement(s) with Armstrong Coal Company, Inc. (the “Counterparty”). 
  

	1.	Guaranty: Guarantor does hereby unconditionally and absolutely guarantee to Beneficiary the full and faithful (i) payment by Counterparty of any
amounts due to the Beneficiary under and pursuant to that certain Coal Supply Agreement dated on or about January 1, 2008 and any amendments thereto, (the “Agreement”) to be entered into from time to time by the Counterparty with
Beneficiary related to the purchase, sale and/or exchange of coal and (ii) performance of all obligations of Counterparty now existing or hereafter arising under the Agreement, including obligations that would exist under the Agreement but for
operation of any applicable provision of Title 11 (bankruptcy) of the United States Code or similar laws affecting creditor rights, or under applicable law or by agreement of Counterparty (the payment and performance obligations described in
clauses (i) and (ii) above are referred to herein collectively as the “Guaranteed Obligations”) Notwithstanding anything herein to the contrary, Guarantor shall have no performance obligation to sell, deliver, supply or transport
coal or any other commodity under the Agreement from any property other than the Coal Property. 

 This Guaranty shall
replace, supercede and render null and void any existing guaranties currently in force with respect to the Agreement.  
  

	2.	Guaranty Absolute: The Guarantor guarantees that the Guaranteed Obligations will be paid or performed strictly in accordance with the terms of the Agreement,
regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Beneficiary with respect thereto. The obligations of the Guarantor under this Guaranty are independent of, but
related to, the Counterparty’s obligations under the Agreement and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this Guaranty, irrespective of whether any action is brought against one or more of
the parties constituting Counterparty or whether one or more of the parties constituting Counterparty is joined in any such action or actions. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and the Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following: 

 (a) any lack of validity or enforceability of the Agreement or any agreement or instrument relating thereto; 
 (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations under the Agreement, any modification, extension or waiver of any of the
terms of the Agreement, or any other amendment or waiver of or any consent to departure from any term of the Agreement; 

(c) any taking, exchange, release or non-perfection or the taking or failure to take any other action with respect to any collateral,
or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations; 
 (d) any requirement that Beneficiary proceed against one or more of the parties constituting Counterparty, any other person or entity, any collateral or any manner of application of any collateral,
or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any of the Guaranteed Obligations; 

 (e) any change, restructuring or termination of the corporate structure or existence of
one or more of the parties constituting Counterparty or any of its Subsidiaries; 
 (f) any lack or failure of notice or any
failure of Beneficiary to disclose to one or more of the parties constituting Counterparty or the Guarantor any information relating to the financial condition, operations, properties or prospects of one or more of the parties constituting
Counterparty or the Guarantor, or relating to the Agreement, as the case may be, now or in the future known to Beneficiary (the Guarantor waiving any duty on the part of Beneficiary to disclose such information); or 

(g) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any
representation by Beneficiary that might otherwise constitute a defense available to, or a discharge of, one or more of the parties constituting Counterparty, the Guarantor or any other guarantor or surety. 

Notwithstanding any provision to the contrary contained herein, Guarantor’s liability hereunder shall be and is specifically limited
as expressly set forth in Section 1 above, and, except to the extent specifically provided in the Agreement, in no event shall Guarantor be subject hereunder to consequential, exemplary, equitable, loss of profits, punitive, tort, or any other
damages, costs, or attorney’s fees. 
 This Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by Beneficiary or any other Person upon the insolvency, bankruptcy or reorganization of one or more of the parties constituting Counterparty or
the Guarantor or otherwise, all as though such payments had not been made. The obligations of the Guarantor under this Guaranty shall at all times rank at least pari passu in right of payment with all other unsecured and unsubordinated
indebtedness (actual or contingent) of the Guarantor, except as may be required by law. This Guaranty shall continue to be effective if one or more of the parties constituting Counterparty merges or consolidates with or into another entity, loses
its separate legal identity or ceases to exist. 
 This Guaranty is a continuing guaranty of the payment (and not of collection)
and of the performance by each of the parties constituting Counterparty of its obligations under the Agreement. In no event shall Guarantor’s liability to Beneficiary exceed Counterparty’s liability under the Agreement, notwithstanding the
effect of the insolvency, bankruptcy or reorganization of Counterparty. The Guarantor agrees that its obligations under this Guaranty shall not be impaired, modified, changed, released or limited in any manner whatsoever by any impairment,
modification, change, release or limitation of the liability of one or more parties constituting Counterparty (or the estate in bankruptcy of one or more parties constituting Counterparty) resulting from the operation of any present or future
provision of the federal bankruptcy law or other similar statute. 
  

	3.	Waivers and Acknowledgments: The Guarantor hereby waives presentment, protest, acceleration, dishonor, promptness, diligence, filing of claims with a court in
the event of insolvency or bankruptcy of the one or more parties constituting Counterparty, notice of acceptance of this Guaranty and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that
Beneficiary protect, secure, perfect or insure any lien or any property subject thereto or exhaust any right or take any action against one or more of the parties constituting Counterparty or any other Person or entity, or any collateral. The
Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future. 

 No delay of Beneficiary in the exercise of, or failure to exercise, any rights hereunder
shall operate as a waiver of such rights, a waiver of any other rights or a release of Guarantor from any obligations hereunder nor shall any single or partial exercise by Beneficiary of any right, remedy or power hereunder preclude any other or
future exercise of any right, remedy or power. Each and every right, remedy and power hereby granted to Beneficiary or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by Beneficiary from
time to time. 
  

	4.	Expenses: Guarantor agrees to pay on demand any and all out-of-pocket costs, including reasonable legal fees and expenses, and other expenses incurred by
Beneficiary Counterparty in enforcing Guarantor’s obligations under this Guaranty. 

  

	5.	Subrogation: The Guarantor will not exercise any right that it may now or hereafter acquire against Counterparty that arise from the existence, payment,
performance or enforcement of the Guarantor’s Obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or
remedy of Beneficiary against Counterparty or any collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Counterparty,
directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the obligations of Counterparty under the Agreement and all other amounts
payable under this Guaranty shall have been performed or paid in full in cash (and not subject to disgorgement in bankruptcy or otherwise). If any amount shall-be paid to the Guarantor in violation of the preceding sentence at any time prior to the
later of the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, the Guarantor shall hold such amount as agent for the benefit of Beneficiary, which amount shall forthwith be paid to Beneficiary
to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Agreement, or to be held as collateral for any Guaranteed Obligations or
other amounts payable under this Guaranty thereafter arising. If (i) the Guarantor shall make payment to Beneficiary of all or any part of the Guaranteed Obligations and (ii) all of the Guaranteed Obligations and all other amounts payable
under this Guaranty shall be paid in full in cash, Beneficiary will, at the Guarantor’s request and expense, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty by Beneficiary, of
all of Beneficiary’s rights and benefits under the Agreement. In the event Guarantor performs part or all of Counterparty’s obligations, Guarantor shall be entitled to Counterparty’s rights and benefits under the Agreement and shall
be subrogated to Counterparty’s rights to Beneficiary with respect to such of Counterparty’s obligations so performed by Guarantor. 

  

	6.	Reservation of Defenses: Guarantor agrees that except as expressly set forth herein, it will remain bound upon this Guarantee notwithstanding any defenses which,
pursuant to the laws of suretyship, would otherwise relieve a guarantor of its obligations under a guaranty. Guarantor does reserve the right to assert defenses which Counterparty may have to payment of any Guaranteed Obligation other than defenses
arising from the bankruptcy or insolvency of Counterparty and other defenses expressly waived hereby. 

	7.	Notices: All demands, notices and other communications provided for hereunder shall, unless otherwise specifically provided herein, (a) be in writing
addressed to the party receiving the notice at the address set forth below or at such other address as may be designated by written notice, from time to time, to the other party, and (b) be effective upon receipt, when mailed by U.S. mail,
registered or certified, return receipt requested, postage prepaid, or personally delivered. Notices shall be sent to the following addresses: 

 If to Guarantor: 
 Armstrong Land Company, LLC 

Attn: Mr. Martin D. Wilson 
 7701 Forsyth Boulevard, 10th Floor 
 St. Louis, Missouri 63105 

Phone: 314-721-8202; Fax: 314-721-8211 
 With Copy To: 
 Mason L. Miller 

Miller + Wells, PLLC 
 300 East Main Street, Ste. 360 
 Lexington, Kentucky 40507 

Phone: 859-281-0077; Fax: 859-281-00749 
 If to Beneficiary: 
 Louisville Gas and Electric Company 

220 West Main Street 
 Louisville, Kentucky 40202 
 Attn: Director Corporate Fuels and By-Products

 Phone: 502-627-2774; Fax: 502-627-3243 
 Kentucky Utilities Company 
 220 West Main Street 

Louisville, Kentucky 40202 
 Attn: Director Corporate Fuels and By-Products 
 Phone: 502-627-2774; Fax:
502-627-3243 
  

	8.	Demand and Payment: Any demand by Beneficiary for performance or payment hereunder shall be in writing, signed by a duly authorized officer of Beneficiary and
delivered to the Guarantor pursuant to Section 7 hereof, and shall (a) reference this Guaranty, (b) specifically identify Beneficiary, the Guaranteed Obligations to be performed or paid and the amount of such Guaranteed Obligations
and (c) if applicable, set forth payment instructions. There are no other requirements of notice, presentment or demand. Guarantor shall perform or pay, or cause to be performed or paid, such Guaranteed Obligations within thirty
(30) business days of receipt of such demand. 

  

	9.	Representations and Warranties of Guarantor: Guarantor represents and warrants that: 

(a) it is a limited liability company duly organized and validly existing under the laws of the State of Delaware and has the power
and authority to execute, deliver and carry out the terms and provisions of the Guaranty; 
 (b) no authorization, approval,
consent or order of, or registration or filing with, any court or other governmental body having jurisdiction over Guarantor is required on the part of Guarantor for the execution and delivery of this Guaranty; and 

 (c) this Guaranty constitutes a valid and legally binding Agreement of Guarantor,
except as the enforceability of this Guaranty may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws effecting creditors’ rights generally and by general principles of equity.

  

	10.	Miscellaneous: 

Default. Guarantor represents and warrants that to its best information, knowledge and belief, no default(s) of the Agreement are
known to exist as of the date of this Guaranty. In the event Counterparty defaults in the performance of any Guaranteed Obligations under the Agreement, Beneficiary shall give written notice to Guarantor. Promptly thereafter, Guarantor shall perform
or cause to be performed such obligation of Counterparty as required by the Agreement. 
 Assignment. The Guarantor shall
not assign this Guaranty without the express written consent of the Beneficiary and any purported assignment absent such consent is void. The Beneficiary shall be entitled to assign its rights under this Agreement in its sole discretion. 

Severability. If any provision or portion of a provision of this Agreement is declared void and/or unenforceable, such provision or
portion shall be deemed severed from this Agreement which shall otherwise remain in full force and effect. 
 Amendments.
No amendment of this Guaranty shall be effective unless in writing and signed by Guarantor, Counterparty and Beneficiary. No waiver of any provision of this Guaranty nor consent to any departure by Guarantor therefrom shall in any event be effective
unless such waiver or consent shall be in writing and signed by Beneficiary. Any such waiver shall be effective only in the specific instance and for the specific purpose for which it was given. 

Successors and Assigns. This Guaranty shall be binding upon Guarantor, its successors and permitted assigns and inure to the
benefit of and be enforceable by Beneficiary, its successors and assigns. 
 Prior Agreements. The Guaranty embodies the
entire agreement and understanding between Guarantor and Beneficiary and supercedes all prior agreements and understandings relating to the subject matter hereof. 
 Headings. The headings in this Guaranty are for purposes of reference only, and shall not effect the meaning hereof. 
  

	11.	Limitation by Law: All rights, remedies and powers provided in this Guaranty may be exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Guaranty are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they will not render this
Guaranty invalid, unenforceable, in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law. 

  

	12.	Governing Law: This Guaranty shall in all respects be governed by and construed in accordance with the laws of the State of New York, without regard to
principles of conflicts of laws. 

 IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and
delivered by its duly authorized officer effective as of this 19 day of December, 2007 (“Effective Date”). 
  

			
	 Guarantor: ARMSTRONG LAND COMPANY, LLC

		
	By:	 	 /s/ Martin D. Wilson

		 	Name: Martin D. Wilson
		 	Title: PresidentEX-10.21

 Exhibit 10.21 

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	** 

 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 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. 

  
 3 

 ARMSTRONG COAL COMPANY, INC. 

LG&E/KU Contract No. J07032 
 Amendment No. 1 
  

 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	  

  
 5

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