Document:

EX-10.2

 Exhibit 10.2 
 CONTRACT 
 FOR 

PURCHASE AND SALE OF COAL 
 BETWEEN 
 ARMSTRONG COAL COMPANY, INC. 

AND 

TENNESSEE VALLEY AUTHORITY 

 TABLE OF CONTENTS 

 

					
	SECTION DESCRIPTION	  	PAGE #	 
	 1. Contract Term
	  	 	4	  
	 2. Quantity
	  	 	5	  
	 3. Scheduling
	  	 	7	  
	 4. Variations, Delays, and Interruptions in Deliveries
	  	 	7	  
	 5. Source
	  	 	11	  
	 6. Price
	  	 	12	  
	 7. Sampling and Analysis
	  	 	12	  
	 8. Adjustment for Quality
	  	 	18	  
	 9. Quality and Specifications
	  	 	20	  
	 10. Contract Price Adjustments and Cost Requirements
	  	 	21	  
	 11. Remedies
	  	 	23	  
	 12. Notices
	  	 	25	  
	 13. Shipping Notices
	  	 	25	  
	 14. Transportation
	  	 	26	  
	 15. Payments, Invoices
	  	 	27	  
	 16. Weights
	  	 	28	  
	 17. Contract Administrator/Contracting Officer
	  	 	29	  
	 18. Disputes
	  	 	30	  
	 19. Clean Air Act and Other Environmental Requirements
	  	 	30	  
	 20. Unilateral Termination Right
	  	 	30	  
	 21. Credit Evaluation and Performance Assurance
	  	 	30	  
	 22. Verification of Data, Inspection or Records and Mine Sources
	  	 	32	  
	 23. Coal Mining Reclamation and Conservation Requirements
	  	 	32	  
	 24. Relationship of Parties—Producer’s Statement
	  	 	34	  
	 25. Non-Assignability; Subcontracts; Designation and Termination of Agent
	  	 	34	  
	 26. Waivers
	  	 	34	  
	 27. Officials Not to Benefit
	  	 	34	  
	 28. Small Business Policy
	  	 	35	  
	 29. Liquidated Damages for Subcontracting Plans
	  	 	35	  
	 30. Affirmative Action and Equal Opportunity
	  	 	35	  
	 31. Safety and Health
	  	 	36	  
	 32. Environmentally Acceptable Facilities; Clean Air and Water
	  	 	36	  
	 33. Certification for Contracts, Grants, Loans, and Cooperative Agreement
	  	 	36	  
	 34. Contract Components
	  	 	37	  
	 35. Exhibit I: Sample Calculations
	  	 	38	  
	 36. Appendix A: Coal Producers Statement and Specific Location Map
	  	 	39	  

  
 2 

 Contract
                                     

CONTRACT FOR PURCHASE AND SALE OF COAL 
 THIS AGREEMENT, is made and entered into this 10th day of September, 2008 by and between TENNESSEE VALLEY AUTHORITY, a corporation organized and existing under an Act of Congress (hereinafter called “TVA”), and Armstrong Coal Company,
Inc., a Delaware corporation with its principal place of business located at 7701 Forsyth Boulevard, 10th Floor, St. Louis, Missouri 63105 (hereinafter called “Contractor”). 

W I T N E S S E T H:  
 In consideration of the mutual covenants hereinafter stated, the parties hereto agree as follows: 

DEFINITIONS. 

“Contract Year” shall mean the nine-month period commencing April 1. 2009, and ending December 31, 2009, and
thereafter, each calendar year commencing January 1st
and ending December 31st for the Contract Term set
forth below. 
 “Delivery Commencement Date” shall be that date set forth in Section 1 hereof for commencement of deliveries.
Such date may be changed only by a written supplement to this contract, signed by both parties, that expressly refers to the term “Delivery Commencement Date;” provided, however, both parties agree that the Delivery Commencement Date shall
be postponed for any delay in the start-up of the Parkway Mine caused by either Contractor’s inability to receive required mining permits, or Contractor’s inability to begin production due to delays in the delivery of equipment or
machinery. In the event of such delay, the Delivery Commencement Date shall be established as the first day of the earliest ensuing month full production can begin at the Parkway Mine, and the first “Contract Year” shall, notwithstanding
any other provision of this contract to the contrary, be the nine month period commencing with the Delivery Commencement Date, as modified, and thereafter each subsequent twelve-month period for the Contract Term set-forth below, as modified, shall
also be a Contract Year. (For example, if full production did not begin until June 1, 2009 the first Contract year shall be deemed to be the 9-month period beginning June 1. 2009 and ending February 28, 2010; Contract Year #2
shall be March 1, 2010—February 28, 2011; Contract Year #3 would be March 1, 2011 — February 28, 2012, etc.) The actual date of commencement of deliveries shall not affect the Delivery Commencement Date. 

Notwithstanding any and all provisions to the contrary herein, it shall be a condition precedent to the parties’ obligations, duties and rights
hereunder, as well as to the enforceability of this Agreement, that Seller shall have obtained all permits utilized or necessary in connection with the mining and production of coal from the Parkway Mine, in a form no longer subject to appeal,
challenge or collateral attack, whether in administrative, judicial or other forum, by any party, by no later than January 1, 2010. Should such condition precedent not be met by the aforementioned date, this Agreement shall be deemed null and
void and unenforceable ab initio, and neither party shall have any liability to the other related to or arising from this Agreement. Buyer acknowledge and agrees that Seller shall use its best efforts to seek the aforementioned permits, and take and
all steps related thereto, that Seller deems advisable in its sole and absolute discretion. 
 “Contract Administrator” shall be that
TVA representative designated to administer the contract on behalf of TVA. 

  
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 “Destination” shall have the following meaning: For coal purchased F.O.B. destination at such
facility or facilities, each such facility shall be a “Destination.” The initial Destination is as follows: TVA’s Paradise Fossil Plant. 
 “Receiving Plant” shall mean TVA’s Paradise Fossil Plant. 
  

	1.0	CONTRACT TERM 

 The Delivery Commencement Date shall be April 1, 2009, unless postponed on account of any delay in the start-up of the Parkway Mine as described above, and deliveries shall continue for four and
three-quarter (43/4) years from said Delivery Commencement Date unless terminated
earlier by agreement or as otherwise provided herein. Provided, however, this contract may be reopened by either party (9) months prior to the 33th month anniversary of the Delivery Commencement Date for the purpose of renegotiating price only, and not for the
purpose of renegotiating any other terms and conditions. 
 Prior to April 1, 2011, either party may
notify the other in writing that it wishes to reopen for negotiation the Base Price for the 4th “Contract Year” (i.e. the price applicable to calendar year 2012 unless such 4th “Contract Year” has been postponed on account of delays in the start-up of the Parkway Mine—see
“Definitions” above of “Contract Year”). If the parties have not agreed on a new Base Price prior to July 1, 2011, the Contract shall terminate on December 31. 2011 (or at the expiration of the third Contract Year, if
such Contract Year ends later due to start-up delays at the Parkway Mine), provided however, in the event the parties cannot reach a mutual agreement as to a new Base Price, and written notice is given prior to July 15, 2011, TVA shall have the
unilateral right to extend the Contract for one year beyond the expiration date of the third Contract Year for the purchase and sale of 1.000,000 tons of coal at a price that is Five dollars ($5.00) above the then-current Base Price, or Contractor
shall have the unilateral right to extend the Contract for one year beyond the expiration date of the third Contract year for the purchase and sale of 1,000,000 tons of coal at a price that is Five dollars ($5.00) below the then-current Base Price.

 If no notice is given by either party prior to April 1, 2011 of their intent to reopen the 4th Contract Year price for
renegotiation, the then-current Base Price shall continue for such 4th Contract Year pursuant to Section 6.0 below. 
 In the event delays in start-up of the Parkway Mine have caused a postponement of the starting date of the 4th Contract Year (See “Definitions” above of “Contract Year”) such that the starting date of
such 4th Contract Year differs from the starting date of Calendar Year, 2012, the parties agree to adjust the notice periods of this Section 1.0 accordingly, by Contract supplement, to conform to the postponement of the starting date of the
4th Contract Year. 

If this reopener provision is exercised and a new Base Price is established for the 4th Contract Year, the Base Price effective for the 5th Contract Year shall be such new 4th Year Base Price increased by
3.0%. 

  
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	2.0	QUANTITY 

  

	2.1.1	Subject to TVA’s right to reduce or increase quantities to be delivered, as hereinafter provided, the quantity of coal to be sold and purchased hereunder during
each Contract Year shall be as follows: 

  

									
	 	  	 	 	  	Base Tonnage	 
	 *Contract Year #1
	  	 	2009	  	  	 	750,000	  
	 Contract Year #2
	  	 	2010	  	  	 	1,000,000	  
	 Contract Year #3
	  	 	2011	  	  	 	1,000,000	  
	 Contract Year #4
	  	 	2012	  	  	 	1 ,000,000	  
	 Contract Year #5
	  	 	2013	  	  	 	1 ,000,000	  

  

	*	Note: If the Delivery Commencement Date is delayed (See “Definitions” above of “Contract Year”). tonnages set forth above shall continue to
apply to the applicable Contract Year, as adjusted to account for such delays. 

 Note: Except as otherwise
provided below, all annual tonnages will be delivered in fifty-two (52) equal weekly deliveries or as directed by the Contract Administrator 
 TVA may, from time to time, with the consent of Contractor, decrease the scheduled quarterly deliveries by up to twenty percent (20%) of the quarterly schedule by giving at least sixty (60) days
written notice (“Nominated Quantity”). 
 If the “Nominated Quantity” is decreased pursuant to the above in
any quarter, Contractor at its option, on written notice provided within 90 days of the end of the quarter scheduled for such decrease, may notify TVA of its intent to reschedule deliveries for the amount of such decrease with delivery
rescheduled by mutual agreement at the then-current Base Price applicable to the time such delivery is rescheduled. The Base Price for any “make-up” tonnage rescheduled, at TVA’s request, after the expiration of the Contract Term
shall be the Base Price of the final Contract Year escalated by 3%. 
  

	2.1.2	TVA shall not be required to accept any quantity of coal shipped during a week that is in excess of the Nominated Quantity or scheduled quantity, but if TVA accepts
such excess quantity of coal, TVA shall, upon 15-day written notice to Contractor, require that such excess amount be deducted from the quantities to be shipped during the following or subsequent months/week(s) in the Contract Year nor shall
Contractor be obligated to deliver such make-up tonnage. 

 If at the expiration of the term of the contract less
than the maximum tonnage has been scheduled for delivery, the parties may by agreement extend the term of this contract for a period sufficient to permit the delivery of make-up tonnage. Neither party shall be obligated to agree to such an extension
with respect to such make-up tonnage. 
  

	2.1.3	This contract is not and shall not be construed as a contract for all of TVA’s coal requirements for any plant. TVA reserves the right to purchase coal from other
suppliers in any amount during the term of this contract. 

  

	2.2	Notwithstanding the provisions of Subsection 2.1.1, above, if generation of electricity at a Receiving Plant is curtailed or interrupted for a period of one week or
more as a result of the operating requirements of TVA’s integrated electric generating system, including considerations of economic dispatch of TVA’s generating units. TVA may. from time to time, suspend or reduce Contractor’s
deliveries under this contract by a percentage equal to the percentage reduction in electric output of the Receiving Plant resulting from such curtailment or interruption. If there is more than one Receiving Plant for this contract at the time of
such curtailment or interruption, the 

  
 5 

	 	suspension or reduction in deliveries shall apply only to such coal as, but for the curtailment or interruption, would have been received at the Receiving Plant
experiencing a curtailment or interruption. Such suspension or reduction in deliveries may continue as long as generation at such Receiving Plant is curtailed or interrupted; provided, however, if TVA continues any such reduction or suspension for
more than one hundred eighty (180) consecutive days, and the average weekly reduction or suspension during said one hundred eighty (180) day period was more than fifty percent (50%) of the average weekly quantity scheduled under this
contract for delivery during such period, Contractor may notify TVA in writing, after such one hundred eighty (180) day period, of Contractor’s intent to terminate this contract ninety (90) days from the date of TVA’s receipt of
such written notice, and this contract shall, upon the passing of such ninety-day (90-day) period, terminate without further cost or obligation to either party, unless TVA shall have directed the cancellation of the suspension or reduction within
forty-five (-45) days of TVA’s receipt of Contractor’s notice of termination. 

  

	2.3	If the coal purchased hereunder is shipped to a blending / trans-loading facility for incorporation into a Blended Product(s) that is constituted from (i) coal
purchased hereunder and/or coal of like quality to that purchased hereunder (such coal together with coal purchased hereunder “Contract Quality Coal”) and (ii) other coal or coals of dissimilar quality (when blended with Contract
Quality Coal, the “Blended Product(s)”), which Blended Product(s) is transported to more than one TVA Receiving Plant (“Multiple Receiving Plants”), then the provisions of Subsection 2.2 shall be applied as follows: In the event
one or more of the Multiple Receiving Plants experiences a curtailment or interruption in generation as described above, TVA shall determine the total reduction in weekly usage of Contract Quality Coal associated with the curtailment(s) or
interruption(s) (“Contract Quality Coal Reduction’’), and TVA may adjust downward weekly deliveries hereunder on the basis of the ratio of the Contract Quality Coal Reduction to the average total quantity of Contract Quality Coal TVA
has been receiving weekly for use in the Blended Product(s) based on receipts during the prior 30-day period. All provisions of Subsection 2.2 not inconsistent with this paragraph shall apply in the case of Blended Product(s) and Multiple Receiving
Plants. 

  

	2.4	Except where Contractor has terminated this contract as provided in Subsection 2.2., suspensions or reductions under Subsection 2.2 or Subsection 2.3 shall not affect
the enforceability of this contract and, on termination of the suspension or reduction, shipments shall resume pursuant to the terms and conditions of this contract. Contractor, at its option, on written notice provided within 90 days of the
resumption of deliveries herein, may notify TVA of its intent to reschedule deliveries suspended or reduced pursuant to Subsection 2.2 or Subsection 2.3 (also the “make-up tonnage”) with delivery rescheduled by mutual agreement at the
then-current Base Price applicable to the time such delivery is rescheduled. The Base Price for any “make-up” tonnage rescheduled, at TVA’s request, after the expiration of the Contract Term shall be the Base Price of the final
Contract Year escalated by 3.0%. 

  

	2.5	Except in the case of any failure to deliver that is excused under Subsection 4,2., TVA may exercise the remedies afforded it under Section 11, Remedies, or
as otherwise provided by law, in the event Contractor fails to deliver coal as provided in this Section 2, Quantity or Section 3. Scheduling; provided, however, in lieu of other remedies and notwithstanding any other
provision of this agreement to the contrary, TVA may elect to reschedule for delivery any such unexcused deficiencies provided TVA provides written notice to Contractor of its intent to do so within 90 days of the date such deficiency occurred
and such deficiency is rescheduled for delivery within twelve (12) months of such notice, or later as may be mutually agreed. Such rescheduled coal shall be delivered in accordance with the provisions of this contract and at the price in effect
at the time during which such deficiencies occurred. 

  
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	3.0	SCHEDULING 

  

	3.1	TVA shall provide Contractor with any changes to the quantities of coal to be delivered to TVA consistent with the requirements of Section 2, Quantity. TVA
maintains the right to coordinate all deliveries under this contract and others for the purposes of establishing a uniform delivery schedule for placement at Destination; provided however, such delivery schedule shall be mutually agreed upon by
Contractor, which agreement shall not be unreasonably withheld or delayed. 

  

	3.2	Contractor shall be responsible for making timely arrangements for the scheduling of transportation equipment necessary to comply with the delivery schedule established
by TVA. 

  

	3.3	Scheduled deliveries shall be by truck. 

  

	4.0	VARIATIONS, DELAYS AND INTERRUPTIONS IN DELIVERIES 

  

	4.1	Time of shipment is of major importance to TVA. Contractor shall immediately notify TVA’s Contract Administrator of any expected deviation from the shipment
schedule established in accordance with Section 2, Quantity, and Section 3, Scheduling, of this contract and of the cause and extent of the deviation, except in the case of variations in quantity from schedule of up to Five
percent (5%). 

  

	4.2	Subject to the conditions hereinafter stated, neither party shall be liable to the other for failure to deliver or accept delivery of coal as provided for in this
contract if such failure was due to supervening causes beyond its control and not due to its own negligence, and which cannot reasonably be overcome by the exercise of due diligence. Such causes shall include by way of illustration, but not
limitation: acts of God or of the public enemy; insurrection; riots; strikes; nuclear disaster; partial or total outages of coal-fired units; floods; accidents; major breakdown of equipment or facilities (including, but not limited to, emergency
outages of equipment or facilities to make repairs to avoid breakdowns thereof or damage thereto), such equipment and facilities to include, but not limited to, power generation, unloading, stock-out and preparation plant equipment; fires;
industry-wide carrier delays or shortages of carriers’ equipment; embargoes; orders or acts of civil or military authority; or industry-wide shortages of materials and supplies. Nor shall TVA be obligated to accept delivery of coal hereunder to
the extent that such causes wholly or partially prevent the unloading, stockpiling, preparing, or burning of coal at a Destination or Receiving Plant that is receiving coal at the time the cause occurs, in which case TVA shall have no obligation to
consign deliveries to another destination or plant; provided, however, that if there is more than one Destination or Receiving Plant for this contract at the time such cause occurs, TVA shall be excused from taking delivery of only such coal as
would have been received at the Destination or Receiving Plant experiencing such cause. Nor shall the refusal of either party to settle a strike on terms other than it considers satisfactory preclude the strike from being considered an excusable
cause. In the event of force majeure by Contractor, TVA shall have the right, but not the obligation, to require Contractor to make up any tonnage not delivered in accordance with this section. In the event of force majeure by TVA, Contractor shall
have the right, but not the obligation, to require TVA to make up any tonnage not delivered in accordance with this section. Any make-up tonnage under this provision shall be rescheduled by mutual agreement between the parties. Written notice of a
party’s intent to exercise its right to require the other party to make-up any tonnage not delivered in accordance with this section, in order to be effective, must be provided within 90 days of the resumption of deliveries. The Base Price
for make-up tonnage rescheduled herein shall be the then-current Base Price at the time such deliveries are rescheduled. The Base Price for any tonnage rescheduled under this provision, at TVA’s request, after the expiration of the Contract
Term shall be the Base Price of the final Contract Year, escalated by 3 percent. 

  
 7 

	4.3	Contractor’s delays due to delays of its subcontractors will not be excusable under this Section 4 unless the delay of the subcontractor was also due to
causes beyond the control and without the negligence of the Contractor or subcontractor, such as the causes listed above. Once Contractor has obtained all federal, state, and other regulatory agency coal mining permits in a form not subject to
appeal or challenge, certificates, and licenses and mining equipment necessary to begin mining at the Parkway Mine, the failure by Contractor to obtain and maintain such permits, certificates, and licenses and mining equipment shall not excuse
Contractor from any obligation under this contract. The provisions of Subsection shall not excuse a party unless such party failing to deliver or take coal shall give written notice to the other of such failure and furnish full information as to the
cause and probable extent thereof within ten (10) calendar days after the failure first occurs. In the case of the Contractor, said ten-day (10-day) period shall begin with the day following that on which tonnage first becomes deficient under
the established delivery schedule. In the case of TVA. this period shall begin on the day following that on which TVA first fails to take coal duly and properly delivered. Failure to give such notice and furnish such information within the time
specified shall be deemed a waiver of all rights under this Section 4 with respect to such coal or such tonnage scheduled for delivery prior to the date such notice and information are actually furnished. 

 

	4.4	In the event of partial failure to deliver, take, or unload coal which is excusable under this Section 4, the parties shall prorate deliveries or receipts of coal
in substantially the same proportion based upon contractual commitments, (e.g. a fifty percent (50%) reduction in receiving or production capacity would result in a fifty percent (50%) reduction in scheduled deliveries for each supplier or
consumer). However, the parties shall not be obligated to prorate a reduction in receipts or deliveries under coal supply contracts not affected by the failure because they have different modes of delivery or have substantially different quality
requirements, or because their scheduled delivery dates are not affected by the failure. During the periods TVA may experience such failures to take or unload coal; Contractor shall be permitted to sell such coal normally intended for TVA. In the
case of the period during which Contractor may experience such failures to deliver coal, TVA may purchase replacement coal. The disabling effects of such failures to deliver, take, or unload coal shall be corrected by the party experiencing such
failure as soon as and to the extent reasonably practicable. 

  

	4.5	If the coal purchased hereunder is shipped to a blending trans-loading facility for incorporation into a Blended Product(s) (as defined in Subsection 2.3 hereof), which
Blended Product(s) is transported to more than one TVA Receiving Plant (“Multiple Receiving Plants”), then the provisions of Subsection 4.2 shall be applied as follows: In the event one or more of the Multiple Receiving Plants experiences
a failure to take, unload or burn a Blended Product due to causes identified in Subsection 4.2, TVA shall determine the total Contract Quality Coal Reduction, (as defined in Subsection 2.3 hereof), and TVA may adjust downward weekly deliveries
hereunder on the basis of the ratio of the Contract Quality Coal Reduction to the average total quantity of Contract Quality Coal TVA has been receiving weekly for the Blended Product(s) based on receipts during the prior 30-day period. All
provisions of Subsection 4.2 not inconsistent with this Subsection 4.5 shall apply in the case of Blended Product(s) and Multiple Receiving Plants. This Subsection 4.5 shall not apply to excused failures to take coal due to events that affect
transportation, receipt, unloading, or handling of coal prior to blending. 

  

	4.6	TVA. by providing at least thirty (30) days’ prior written notice to Contractor, shall have the right to refuse any shipments otherwise scheduled for delivery
to a Destination or Receiving Plant during maintenance periods or scheduled or unscheduled outages, unless caused, in whole or in part, by TVA’s negligence, at such Destination or Receiving Plant. Either party shall have the right, but not the
obligation, to make up any tonnage not delivered in accordance with this Section. 

  
 8 

 Written notice of a party’s intent to exercise its right to require the other party to
make up such deliveries, in order to be effective, must be provided within 90 days of the commencement of such maintenance or outage period and such deliveries are rescheduled for delivery as may be mutually agreed. The Base Price for make-up
tonnage rescheduled herein shall be the then-current Base Price at the time such deliveries are rescheduled. The Base Price for any “make-up” tonnage rescheduled, at TVA’s request, after the expiration of the Contract Term shall be
the Base Price of the final Contract Year escalated by 3.0%. 
  

	4.7	Any written notice and information provided by Contractor to TVA under this Section 4 shall be submitted to TVA in writing and accompanied by and attached to a
Certificate of Force Majeure Information (“Certificate”), using the format set forth below, and executed by an authorized representative of Contractor. 

  
 9 

 CERTIFICATE OF FORCE MAJEURE INFORMATION 

TVA CONTRACT NO. (INSERT CONTRACT NUMBER) (THE “CONTRACT”) 
 1. [insert name], hereby certify that: 
 (a) I have prepared and submitted the attached Notice
of Force Majeure in good faith and based upon facts and circumstances known personally to me; 
 (b) to the best of my knowledge and
belief, the information contained in the attached Notice is, as of the date of this Certificate, accurate, complete, not misleading, and can be verified by supporting information currently in my possession or in the possession of other employees or
officers of [insert company name] (“Contractor”) and nothing has been omitted from the attached Notice the inclusion of which is necessary for the information contained in the attached Notice to be accurate, complete, and not
misleading; 
 (c) to the best of my knowledge and belief, the failure to deliver coal as provided in the Contract is due to supervening
causes beyond the control of Contractor, is not due to Contractor’s own negligence, and cannot be reasonably overcome by the exercise of due diligence by Contractor, and 
 (d) I am duly authorized to execute and submit this Certificate and attached Notice. 
 For
the purposes of this certification, the term “Force Majeure” refers to the conditions and causes set forth in Subsection 4.2 of the Contract, and the term “Notice” refers to the written notice described in Subsection 4.3 of the
Contract. 
  

	
	 Name

 

	 Title
  

	 Company

 

	 Date of Execution

  
 10 

	5.0	SOURCE 

  

	5.1	The source of coal delivered under this contract is of major importance to TVA. The provisions of this contract pertaining to coal quality and quantity requirements,
price adjustments, federal and state legislation, and other matters are directly related to the source of coal. As used in this Section 5, “Source Area” shall mean the total coal reserve areas outlined in the Specific Location Map(s)
identified in Appendix A; provided, that, within the Source Area, only the area(s) (for surfaced-mined coal) or mine opening(s) (for underground-mined coal) covered by the following mining permit(s) and proposed mine permit areas identified
herein is an “Authorized Source” of coal for delivery under this contract: [see appendix A]. The mine area(s) and/or opening(s) located within the Source Area shown on the Specific Location Map(s), but not covered by the mining permit(s)
listed above, may become an Authorized Source under the following procedures as mining progresses and the appropriate permit(s) and license(s) are obtained. Contractor shall notify TVA in writing at least sixty (60) days in advance of its
intention to deliver coal from any additional area(s) or mine opening(s) that is in the Source Area but which is not then authorized. TVA shall authorize such areas if the proposed source is owned or controlled by contractor or its affiliates and
if, in TVA’s reasonable judgment, the proposed source is capable of meeting the requirements of this contract. TVA reserves the right to require Contractor to furnish any information and/or any guarantees TVA deems necessary bearing on the
ability of any source or proposed source to meet the requirements of this contract and to make that information and / or any guarantees a part of this contract. 

 

	5.2	Contractor shall immediately notify TVA in writing of any material events affecting the size or location of the Authorized Source(s). All Authorized Sources under this
contract shall be in compliance with the Federal Mine Safety and Health Act of 1977, as amended, all state and federal reclamation laws, including the Surface Mining Control and Reclamation Act of 1977, as amended, and regulations issued under such
laws. If Contractor fails to comply with this requirement, whether or not coal from such Authorized Source is then being delivered hereunder, TVA may exercise its rights under Section 11, Remedies. 

 

	5.3	Contractor expressly assumes the risk that the “Source Area” and Authorized Source(s) as scheduled by Contractor (subject to approval by TVA as set forth
herein) will permit the production of coal in such quantities and of such quality as will meet the requirements of this contract. Coal shall not be delivered from any other source(s), or shipped from any other origin(s), or mined by any other
producer(s) unless authorized by TVA in writing prior to delivery. 

  

	5.4	Regardless of the cause of or reason for a request by Contractor to approve a new Authorized Source outside the Source Area, TVA shall be under no obligation to approve
the tendered source as an Authorized Source, and TVA may withhold its approval on any basis or bases that TVA may deem appropriate, including purely economic considerations. 

Notwithstanding the above, it is understood by the parties that Contractor is a new mining entity, and that its ability to ship the
quantities set forth in Section 2.1 1 above will require additional mines and permits from the “Source Area’’ and the approval of these additional mines as “Authorized Sources” by TVA. 

In the event TVA withholds approval of such additional mines or seams based on “purely economic considerations,” the quantities
set forth in Section 2.1.1 above shall be adjusted accordingly by the parties. 

  
 11 

	6.0	PRICE 

 TVA shall
pay Contractor the following prices for the Contract Years specified below (the “Base Price”) (All prices are on a truck-delivered basis to the Paradise Fossil Plant): 

 

													
	 *  Contract Year
	  	 	1	  	  	 	2009	  	  	$	55.00 f.o.b. PAF	  
	 Contract Year
	  	 	2	  	  	 	2010	  	  	$	56.51 f.o.b. PAF	  
	 Contract Year
	  	 	3	  	  	 	2011	  	  	$	58.07 f.o.b. PAF	  
	 Contract Year
	  	 	4	  	  	 	2012	  	  	$	59.66 f.o.b. PAF	  
	 Contract Year
	  	 	5	  	  	 	2013	  	  	$	61.30 f.o.b. PAF	  

  

	*	It the Delivery Commencement Date is postponed for any delay in the start-up of the Parkway Mine caused by either Contractor’s inability to receive required mining
permits or Contractor’s inability to begin production due to delays in the delivery of equipment or machinery, prices set forth above shall apply to the applicable Contract Year, as adjusted to account for such delays (See
Definitions” above of ‘‘Contract Year”). 

  

	7.0	SAMPLING AND ANALYSIS 

  

	 	7.01	Upon the commencement of deliveries under this Contract, the following applies: 

 

							
	 (Check one box only)

		  	þ	  	TVA Sampling/TVA Analysis	  	Section 7.1
				
		  	 ̈	  	Contractor Sampling/Contractor Analysis	  	Section 7.2
				
		  	 ̈	  	Contractor Sampling/TVA Analysis	  	Section 7.3
				
		  	 ̈	  		  	

  

	 	7.02	Regardless of which method of sampling and analysis is selected for initial deliveries, TVA, may elect from time to time, with 30 days’ advance written
notice, to switch to a different method of sampling and/or analysis, in which event the appropriate alternative clause of this Section 7 shall govern. 

 

	 	7.03	Contractor shall provide to TVA on a quarterly basis the following analysis and testing as specified by TVA. Sample composite size of not less than 10,000 tons (unless
otherwise approved by TVA): 

  

					
	 Size Consist
	  	Mineral Ash	  	Ash Fusions
	 HGI
	  	Trace Elements	  	

  

	7.1	TVA Sampling/TVA Analysis 

  

	7.1.1	The sampling location shall be the Receiving Plant unless TVA notifies Contractor in writing that samples will be taken at other locations, including blending
facilities. Contractor may be present at the taking of samples, but TVA shall have no obligation to notify Contractor to be present. TVA may engage the services of a third party to take its samples hereunder, rather than using its own employees.
Except as provided below, in order for TVA sampling and analysis to govern, the following criteria shall apply: 

  

	 	7.1.1.1	Sixty five percent (65%) of the shipments shall have been sampled and analyzed in accordance with the methods described in the latest published edition of the
Annual Book of ASTM Standards. Samples must have been collected utilizing mechanical systems 

  
 12 

 meeting ASTM D 2234 Type 1, Condition B, Collection of a Gross Sample of Coal, which have
been shown to be free of statistically significant bias. Systems will be subject to a critical inspection according to ASTM D4702 annually. Analysis procedures used should be as follows: 

 

			
	 Parameter
	  	Method
	 Residual Moisture
	  	ASTM D 5142
	 Air Dry Moisture
	  	ASTM D 3302 (Note)
	 Ash
	  	ASTM D 5142
	 Sulfur
	  	ASTM D 4239
	 Btu
	  	ASTM D 5865

 Note: Or General Industry Standards 
  

	 	7.1.1.2	The lot size for each sample shall be by barge load for barge coal, by trainload for rail coal, and by daily truck deliveries for truck coal. 

 

	 	7.1.1.3	The sampling system shall be located in an area such that the sample collected to represent the shipment is collected only from coal that is from said shipment.

  

	7.1.2	Analysis data (total moisture, ash, sulfur, and Btu) shall be promptly made available to Contractor through access to a computer system or, at TVA’s option, may be
provided by other means. Moisture, ash, and sulfur values shall be reported to the nearest hundredth (.01) of a percent. Heat content shall be reported to the nearest whole Btu/lb. SO2 content shall be calculated and reported to the nearest
hundredth (.01) of a pound. 

  

	7.1.3	All samples collected by TVA, or others at its direction, shall be properly air dried and prepared according to ASTM D2013 & D3302 or General Industry
Standards to produce a 60-mesh sample for analysis. The 60-mesh sample shall be divided into at least two parts and put in suitable airtight containers, the first container in each case to be used by TVA, or its designated commercial laboratory, to
determine the quality of coal sold hereunder for all contract purposes, except as specifically provided below. The second container in each case shall be held available to TVA for a period of sixty (60) days from actual sampling date of the
coal, properly sealed and labeled, to be analyzed if a dispute arises between TVA and Contractor. If Contractor wishes to dispute a sample or analysis, it shall notify TVA in writing within such sixty-day (60-day) period. If Contractor fails to
provide such notice of dispute within such sixty-day (60-day) period, Contractor shall be deemed to have waived any claim or defense based on errors or omissions in the sampling or analysis operations as to the affected samples.

  

	7.1.4	Upon receipt of a notice of a dispute over the results or method of such sampling or analysis, TVA shall review and inspect the sampling and analysis equipment and
procedures and the second sample part will be analyzed by a third-party commercial laboratory to check for reproducibility. The third-party laboratory will follow the same ASTM analysis procedures outlined in Subsection 7.1.1, and the
reproducibility limits in those same standards will be used to judge reproducibility. If the review of the sampling and/or analysis indicates the original sampling or analysis was improperly performed or the results of the second analysis are not
within ASTM reproducibility limits, the original analysis report shall be declared erroneous, and the results of the second analysis will be conclusive for both parties in regard to the analysis of the sample in question. Otherwise, the original
analysis report shall remain in full force and effect. 

  

	7.1.5	Contractor shall also sample and analyze, or obtain services of a third party to sample and analyze, all shipments of coal to TVA under this contract. These analyses
shall specify, at a minimum, the total moisture content, the ash content (as-received), the heat content Btu/lb (as-received), the sulfur content (as-received) and SO2 (as-received) and must be electronically transmitted to the

  
 13 

 Contract Administrator and other parties designated by the Contract Administrator in a
format acceptable to TVA. These analyses are required in order to provide information on the contents of coal received by TVA within 24 hours (including week ends and holidays) or prior to unloading, whichever is earliest. TVA reserves the right not
to unload coal at the Destination until after the appropriate analysis is received. Contractor shall be responsible for any demurrage charges incurred by TVA as the result of Contractor’s failure to transmit the analyses when and as required.
TVA may reject coal based on these analyses; however, nothing in this Subsection 7.1.5 shall affect in any way TVA’s rights to appropriate contractual actions and adjustments for quality based on samples collected and analyzed in accordance
with this Section 7. 
  

	7.1.6	In the event TVA does not sample at least sixty-five percent (65%) of the tonnage received in a calendar quarter, the Contractor’s samples shall be used for
the quality adjustment(s) for such quarter under Section 8, Adjustments for Quality, provided all Contractor samples for such quarter meet all criteria below: 

 

	 	7.1.6.1	Ninety-five percent (95%) of shipments shall have been sampled and analyzed in accordance with the methods described in the latest published edition of the Annual
Book of ASTM Standards, volume 05.05. Samples must have been collected utilizing mechanical systems meeting ASTM D 2234 Type 1, Condition B, Collection of a Gross Sample of Coal, which have been shown to be free of bias within the past year. The
bias testing procedure and precision used must be approved by TVA. Systems will be subject to a critical inspection according to ASTM D4702 prior to approval. Analysis procedures used should be as follows: 

 

					
	 Parameter
	  	Method	 
	 Residual Moisture
	  	 	ASTM D 5142	  
	 Air Dry Moisture
	  	 	ASTM D 3302	  
	 Ash
	  	 	ASTM D 5142	  
	 Sulfur
	  	 	ASTM D 4239	  
	 Btu
	  	 	ASTM D 5865	  

  

	 	7.1.6.2	Sample analysis (total moisture, ash, sulfur, and Btu) and other data required by TVA to match data with shipment shall be provided to TVA in a format approved by TVA.

  
 14 

	7.1.6.3	The lot size for each sample shall be by barge load for barge coal, by trainload for rail coal, and by daily truck deliveries for truck coal. 

 

	7.1.6.4	Analysis for each sample shall have been received by TVA by electronic data interchange within seven (7) days of collection of said sample.

  

	7.1.6.5	The sampling system shall be located in an area acceptable to TVA such that the sample collected for shipment is collected only from coal that is loaded for said
shipment. 

  

	7.1.7	In the event TVA’s sampling and analysis in any calendar quarter does not comply with the requirements of this Section 7.0 with respect to sampling and
analysis by TVA and in the event Contractor’s sampling and analysis in the same calendar quarter does not comply with the requirements of this Section 7.0 with respect to sampling and analysis by Contractor, then an average of
Contractor’s and TVA’s samples and analysis shall be used for said quarterly adjustment(s) for the tons represented by such samples. Contractor’s samples shall be used for the remaining tons for said quarterly adjustments(s) provided
such samples meet all of the above criteria. In the event there are some tons not sampled by TVA and not sampled by Contractor in accordance with the above criteria, the quality adjustments for those tons will be based on a prorated calculation of
the analysis of the TVA-sampled tons and the Contractor-sampled tons in such quarter that do meet the above criteria. 

  

	7.2	Contractor Sampling/Contractor Analysis 

 (Applicable if checked above or elected by TVA pursuant to this Section 7) 
  

	 	7.2.1	Contractor or third party collected samples shall be used for the quality adjustments) for each quarter under Section 8, Adjustments for Quality, provided all
samples for such quarter meet all criteria below: 

  

	 	7.2.1.1	One hundred percent (100%) of shipments shall have been sampled and analyzed in accordance with the methods described in the latest published edition of the Annual
Book of ASTM Standards. Samples must have been collected utilizing mechanical systems meeting ASTM D 2234 Type I, Condition B, Collection of a Gross Sample of Coal, which have been shown to be free of statistically significant bias within the past
year. The bias testing procedure and precision used must be approved by TVA. Systems will be subject to a critical inspection according to ASTM D4702 prior to approval. 

 

	 	7.2.1.2	TVA shall have the right to approve any laboratory that performs analyses hereunder, and the laboratory will be subject to inspection and/or audit prior to approval.
Analysis procedures used should be as follows unless otherwise approved in writing by TVA: 

  

			
	 Parameter
	  	Method
	 Residual Moisture
	  	ASTM D 5142
	 Air Dry Moisture
	  	ASTM D 3302
	 Ash
	  	ASTM D 5142
	 Sulfur
	  	ASTM D 4239
	 Btu
	  	ASTM D 5865

  
 15 

	 	7.2.1.3	Sample analysis (total moisture, ash, sulfur, and Btu) and other data required by TVA to match data with shipment shall be provided to TVA in a format approved by TVA.

  

	 	7.2.1.4	The lot size for each sample shall be by bargeload for barge coal, by trainload for rail coal, and by daily truck deliveries for truck coal. 

 

	 	7.2.1.5	Analysis for each sample shall have been received by TVA by electronic data interchange within seven (7) days of collection of said sample.

  

	 	7.2.1.6	The sampling system shall be located in an area acceptable to TVA such that the sample collected for shipment is collected only from coal that is loaded for said
shipment. 

  

	7.2.2	If TVA samples any of the tonnage received in a calendar quarter, and if Contractor’s samples for that same tonnage during the quarter do not meet all of the above
criteria, TVA’s samples shall be used for said quarterly adjustment(s) for the tons represented by such samples. TVA may engage the services of a third party to collect its samples hereunder, rather than using its own employees.
Contractor’s samples shall be used for the remaining tons for said quarterly adjustment(s), provided such samples meet all of the above criteria. In the event there are some tons not sampled by TVA and not sampled by Contractor in accordance
with the above criteria, the quality adjustment for those tons will be based on a prorated calculation of the analyses of the TVA-sampled tons and Contractor-sampled tons in such quarter that do meet the above criteria. 

 

	7.2.3	In the event Contractor’s mechanical sampling system is not operating due to mechanical, electrical, or operational failure. Contractor shall immediately notify
TVA and accept TVA’s (or TVA’s agent’s) samples at the Destination or Receiving Plant. 

  

	7.2.4	Contractor agrees to ensure that all sampling equipment is properly maintained and adjusted so that each sample taken is proportionate and representative of the coal
delivered. TVA or its designated representative may observe any sampling or sample preparation performed by Contractor. Contractor shall furnish the results of bias tests on the sampling system, and the results must be acceptable to TVA. The sample
system shall be bias tested (batch interval of all system components), and shown to be free of statistically significant bias, at least every twelve (12) months. 

 

	7.2.5	Contractor shall prepare the samples obtained as directed by TVA and shall divide such samples into at least three parts and place in suitable airtight containers.
Contractor will analyze the first part and electronically transmit the results to the Contract Administrator and all other parties designated by the Contract Administrator (TVA location or otherwise) within 24 hours (including weekends and holidays)
or prior to unloading at Destination, whichever is earliest. Except as provided below, Contractor’s analysis results obtained on this first part will be utilized by TVA to determine whether or not the coal covered by the sample will be unloaded
at the Destination. TVA reserves the right not to unload coal until after the appropriate analysis is received. Contractor shall be responsible for any demurrage charges incurred by TVA as a result of Contractor’s failure to transmit the
analyses when and as required. TVA may reject coal based on these analyses. Within twenty-four (24) hours of coal loading, Contractor shall have the second part identified by such sample number analyzed by either Contractor’s approved
laboratory or an approved third-party laboratory. The analysis results obtained from the second part shall supersede the first part sample results and will be utilized for all contract purposes, including determining the price adjustment required to
compensate for 

  
 16 

 the difference between the quality of the coal actually shipped and the contract Typical
Analysis. The third part (“referee sample”) will be retained by Contractor, for a minimum of sixty (60) days, to be analyzed by an independent laboratory (to be agreed upon by TVA and Contractor) in the event of a disagreement between
the parties regarding the results obtained on either of the other two parts. The results of the referee analysis will be conclusive for both parties in regard to the analysis of the sample in question. The cost of any such referee analysis shall be
borne by the party that requested it. 
  

	7.3	Contractor Sampling/TVA Analysis 

 (Applicable if checked above or elected by TVA pursuant to this Section 7) 
  

	7.3.1	Contractor or third party collected samples shall be used for the quality adjustment(s) for each quarter under Section 8, Adjustments for Quality, provided all
samples for such quarter meet all criteria below: 

  

	 	7.3.1.1	Ninety-five percent (95%) of shipments shall have been sampled and analyzed in accordance with the methods described in the latest published edition of the Annual
Book of ASTM Standards. Samples must have been collected utilizing mechanical systems meeting ASTM D 2234 Type 1, Condition B, Collection of a Gross Sample of Coal, which have been shown to be free of statistically significant bias within the past
year. The bias testing procedure and precision used must be approved by TVA. Systems will be subject to a critical inspection according to ASTM D4702 prior to approval. Analysis procedures used should be as follows unless otherwise approved in
writing by TVA: 

  

			
	 Parameter
	  	Method
	 Residual Moisture
	  	ASTM D 5142
	 Air Dry Moisture
	  	ASTM D 3302 (Note)
	 Ash
	  	ASTM D 5142
	 Sulfur
	  	ASTM D 4239
	 Btu
	  	ASTM D 5865

 (Note) — or General Industry Standards. 

 

	 	7.3.1.2	Sample analysis (total moisture, ash, sulfur, Btu and SO2) and other data required by TVA to match data with shipment shall be provided to TVA in a format approved by
TVA. 

  

	 	7.3.1.3	The lot size for each sample shall be by barge load for barge coal, by trainload for rail coal, and by daily truck deliveries for truck coal. 

 

	 	7.3.1.4	Analysis for each sample shall have been received by TVA by electronic data interchange within three (3) days of collection of said sample.

  

	 	7.3.1.5	The sampling system shall be located in an area acceptable to TVA such that the sample collected for shipment is collected only from coal that is loaded for said
shipment. 

  

	 	7.3.2	If TVA samples any of the tonnage received in a calendar quarter, and if Contractor’s samples for that same tonnage during the quarter do not meet all of the above
criteria, TVA’s samples shall be used for said quarterly adjustment(s) for the tons represented by such samples. TVA may engage the services of a third party to collect its samples hereunder, rather than using its own employees.
Contractor’s samples shall be used for 

  
 17 

 the remaining tons for said quarterly adjustment(s), provided such samples meet all of the
above criteria. In the event there are some tons not sampled by TVA and not sampled by Contractor in accordance with the above criteria, the quality adjustment for those tons will be based on a prorated calculation of the analyses of the TVA-sampled
tons and Contractor-sampled tons in such quarter that do meet the above criteria. 
  

	 	7.3.3	In the event Contractor’s mechanical sampling system is not operating due to mechanical, electrical, or operational failure, Contractor shall immediately notify
TVA and accept TVA’s (or TVA’s agent’s) samples at the Destination or Receiving Plant. 

  

	 	7.3.4	Contractor agrees to ensure that all sampling equipment is properly maintained and adjusted so that each sample taken is proportionate and representative of the coal
delivered. TVA or its designated representative may observe any sampling or sample preparation performed by Contractor. Contractor shall furnish the results of bias tests on the sampling system, and the results must be acceptable to TVA. The sample
system shall be bias tested (batch interval of all system components), and shown to be free of statistically significant bias, at least every twelve (12) months. 

 

	 	7.3.5	Contractor shall prepare the samples obtained as directed by TVA and shall divide such samples into at least three parts and place in suitable airtight containers.
Contractor will analyze the first part and electronically transmit the results to the Contract Administrator and all other parties designated by the Contract Administrator (TVA location or otherwise) within 24 hours (including weekends and holidays)
or prior to unloading at Destination, whichever is earliest. Except as provided below, Contractor’s analysis results obtained on this first part will be utilized by TVA to determine whether or not the coal covered by the sample will be unloaded
at the Destination. TVA reserves the right not to unload coal until after the appropriate analysis is received. Contractor shall be responsible for any demurrage charges incurred by TVA as a result of Contractor’s failure to transmit the
analyses when and as required. TVA may reject coal based on these analyses. Within twenty-four (24) hours of coal loading, Contractor shall send the second part identified by such sample number directly to TVA’s Central laboratory by
expedited delivery for analysis. The analysis results obtained from the second part shall supersede the first part sample results and will be utilized for all contract purposes, including determining the price adjustment required to compensate for
the difference between the quality of the coal actually shipped and the contract Typical Analysis. The third part (“referee sample”) will be retained by Contractor, for a minimum of sixty (60) days, to be analyzed by an independent
laboratory (to be agreed upon by TVA and Contractor) in the event of a disagreement between the parties regarding the results obtained on either of the other two parts. The results of the referee analysis will be conclusive for both parties in
regard to the analysis of the sample in question. The cost of any such referee analysis shall be borne by the party that requested it. 

  

	8.0	ADJUSTMENT FOR QUALITY 

  

	8.1	As used in this Section 8, a “Quarterly Average Value” shall mean the weighted average value of the appropriate quality component determined from all
samples of coal collected and analyzed in accordance with Section 7 during a calendar quarter, based on the tonnage represented by the samples collected and corresponding analysis. 

 

	8.2	BTU Adjustment — For the coal accepted in each calendar quarter, an adjustment, calculated to the nearest cent per ton and using the then current
Base Price, shall be applied to the contract price to account for variations in the Quarterly Average Value for as-received Btu/lb. compared to the 

  
 18 

 Typical Analysis for as-received Btu. This adjustment shall in no way be affected by
contract price adjustments under Section 10.2 “Law Changes”. (See Exhibit I for example of calculations.) 
  

	8.3	Ash Adjustment - For the coal accepted in each calendar quarter, an adjustment, calculated to the nearest tenth of a cent per ton at a rate of either
(1) $0.15 per ton (decrease) for each percentage point the Quarterly Average Value of ash (on an as received basis) exceeds the Typical Analysis for ash, or (2) $0.15 per ton (increase) for each percentage point the Quarterly
Average Value for ash (on an as-received basis) is less than the Typical Analysis for ash, shall be applied to the contract price. The calculation shall be prorated to cover any fractional percentage. (See Exhibit I for example of
calculations.) 

  

	8.4	Moisture Adjustment - For the coal accepted in each calendar quarter, an adjustment, calculated to the nearest tenth of a cent per ton at a rate of either
(1) $0.06 per ton (decrease) for each percentage point the Quarterly Average Value of moisture exceeds the Typical Analysis for Moisture, or (2) $0.06 per ton (increase) for each percentage point the Quarterly Average Value for
Moisture is less than the Typical Analysis for Moisture, shall be applied to the contract price. The calculation shall be prorated to cover any fractional percentage. (See Exhibit I for example of calculations.) 

 

	8.5	Sulfur Dioxide Adjustment - For coal accepted in each calendar quarter, an adjustment, calculated to the nearest tenth of a cent per ton at a rate of either
(1) $0.25 per ton (decrease) for each tenth (1/10) of a pound per million BTUs the Quarterly Average Value of sulfur dioxide exceeds the Typical Analysis for sulfur dioxide, or (2) $0.25 per ton (increase) for each tenth
(1/10) of a pound per million BTUs the Quarterly Average Value for sulfur dioxide is less than the Typical Analysis of sulfur dioxide, shall be applied to the contract price. The calculation shall be prorated to cover any fractional amount
tenth (1/10) of a pound. This adjustment shall in no way be affected by contract price adjustments under Section 10, Contract Price Adjustments and Cost Reimbursements hereof. (See Exhibit I for example of calculation).

  

	8.6	As soon as practicable after the end of each calendar quarter, TVA shall submit to Contractor a report showing the Quarterly Average Values and any per-ton adjustments
determined under this Section 8 of the contract. The number of tons of coal received by TVA during the calendar quarter shall be multiplied by said adjustments, and any resulting amount shall be paid promptly (or credited to the extent of any
offsetting debit) to the party to whom it is due. The assessment of adjustments in accordance with the foregoing does not in any way impair TVA’s rights under the contract or at law with respect to any failure by Contractor to meet the Typical
Analysis that gives rise to such adjustments. 

  
 19 

	9.0	QUALITY AND SPECIFICATIONS 

  

	9.1	All coal delivered under this contract shall conform to the following Typical Analysis on a quarterly average as determined by sampling and analyses performed in
accordance with Section 7, Sampling and Analysis: 

  

																			
	 	  	 	 	  	 	 	  	REJECTION/SUSPENSION	  	 	 	 	 	 
	 	  	TYPICAL ANALYSIS1	 	  	 	 	  	SPECIFICATIONS3	  	 	 	 	 	 
	 Lbs. of S02 per million Btu2
	  	 	5.0	  	  	 	lbs.	  	  	Not more than	  	 	5.0	(P) 	 	 	lbs.	  
	 Total Moisture
	  	 	11.0	  	  	 	%	  	  	Not more than	  	 	12.0	  	 	 	%	  
	 Sulfur (a/r max)
	  	 	2.90	  	  	 	%	  	  	Not more than	  	 	3.0	  	 	 	%	  
	 Ash (as received)
	  	 	10.0	  	  	 	%	  	  	Not more than	  	 	12.0	  	 	 	%	  
	 Btu/lb. (a/r)
	  	 	11,400	  	  				  	Not less than	  	 	11,000	  	 			
	 Ash fusion temperature
	  				  				  		  				 			
	 Reducing atmosphere
	  				  				  		  				 			
	 Initial
	  	 	1980	  	  	°	F	  	  		  				 			
	 Softening
	  	 	2075	  	  	°	F	  	  		  				 	°	F	  
	 Hemispherical
	  	 	2135	  	  	°	F	  	  		  				 	°	F	  
	 Fluid
	  				  	°	F	  	  		  				 	°	F	  
	 Volatile Matter (dry basis)
	  				  	 	%	  	  		  				 	 	%	  
	 Grindability (Hardgrove Index)
	  	 	54	  	  				  		  				 			
	 Chlorine (dry basis)
	  	 	.02	  	  	 	%	  	  		  				 	 	%	  

 NOTES: 
  

	1	The Typical Analysis shall be used for the quality adjustments under Section 8. 

 

	2	Sulfur Dioxide calculated at 97.5 percent. 

  

	3	Failure to comply with any of these specifications shall be a basis for rejections and suspensions or termination pursuant to Subsections 9.3. and 9.4.

  

	4	Paradise (P) 

  

	9.2	The coal as-received shall have a top size not greater than two (2) inches and not less than one and one-fourth (1-1/4) inches, with at least forty -five percent
(45%) of the product larger than one-fourth (1/4) inch, and with at least eighty-five percent (85%) of the product larger than 28 mesh. Such sizes shall be determined by using screens with square openings. Coal shall not exhibit a
temperature in excess of 120° F, and it shall be substantially free from mining impurities and scrap such as drill bits, pieces of scrap metal or plate, plastic, rubber, rope, cloth, wire, cable, bone, slate, earth, rock, pyrite, wood, or
water, that can be kept out or removed with the exercise of reasonable care during mining, preparation and loading. Belt magnets shall be employed by Contractor for metal removal when conveyor belt load outs are employed. Coal shall be loaded in a
manner that will ensure reasonably uniform consistency as to size and quality and shall not contain slurry pond material (washer tailings), gob pile material (mine refuse), petroleum-coke, oxidized coal, or blends of such materials, or create
excessive amounts of dust during the unloading and transferring to storage. 

  

	9.3	If any coal delivered fails to meet any of the Rejection/Suspension Specifications in Subsection on the basis of laboratory analysis or the requirements of Subsection
9.2. on the basis of visual inspection or laboratory analysis, TVA may reject the coal at the source, loading point, Destination, or Receiving Plant; provided, however, TVA must reject such coal within seventy-two (72) hours of receipt of the
aforementioned analysis or such right to reject is waived. TVA’s acceptance of any amount of coal which does not meet these requirements shall not constitute a waiver of any right which TVA may have under this contract or as provided by law on
account of 

  
 20 

 the delivery of such coal. In the event TVA rejects any coal in accordance with this
section, TVA will immediately notify Contractor of the rejection and of the cause of rejection. In the case of coal rejected after loading, unless the cause for rejection is corrected, Contractor shall promptly remove the coal from the
carrier’s equipment, from the transloading or blending facility, or from TVA premises, as the case may be, at Contractor’s expense. In addition to excess costs as provided in Section 11, Remedies, Contractor shall reimburse TVA for
any additional transportation costs, demurrage, equipment repair or replacement costs, or handling expenses incurred by TVA in connection with any such rejection. TVA shall not be under any obligation or liability to assist Contractor in any
corrective actions required to remedy the cause for rejection. If TVA 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/Suspension Specifications set forth in
Subsection 9.1 or because such shipment contained extraneous materials, then such non-conforming coal shall be deemed accepted by TVA. 
  

	9.4	If any coal delivered fails to meet any of the Rejection/Suspension Specifications stated in Subsection 9.1. or the requirements of Subsection 9.2., TVA shall have the
right to refuse to accept further deliveries from any or all mine sources under the contract until Contractor provides assurance satisfactory to TVA that Contractor will comply with the Rejection/Suspension Specifications and the Subsection 9.2.
requirements. Such assurance must be given in writing within seven (7) days after the beginning of such suspension. If Contractor fails to provide such satisfactory assurance within the time specified or provides such assurance but does not
correct the deficiencies that resulted in the Contractor’s failure to comply with any of the Rejection/Suspension Specifications or the requirements of Subsection 9.2. within seven (7) days after giving such assurance, TVA may then
terminate Contractor’s right to make further deliveries under this contract. However, if TVA has suspended Contractor’s right to make further deliveries under the above provision two (2) times during any twelve-month period, TVA shall
have the immediate right, at its option, upon the third such violation occurring within any twelve (12) month period following the second such violation, to terminate Contractor’s right to make further deliveries under this
contract. Contractor shall be responsible for all costs or damages incurred by TVA resulting from Contractor’s failure to comply with the contract requirements. Damages or excess reprocurement costs may be determined in accordance with
Section 11, Remedies. 

  

	10.0	CONTRACT PRICE ADJUSTMENTS AND COST REIMBURSEMENTS 

  

	10.1	Contract Price Adjustments. 

Effective the first day of the second Contract Year and the first day of each Contract Year thereafter, the Base Price (or then current
Base Price, as adjusted annually pursuant to this Section 10.1 only) shall be adjusted as set forth in Section 6.0 Price above. 
  

	10.2	Contract Cost Reimbursements, 

  

	10.2.1	Law Change Assessment Costs. In the event of the issuance, enactment, promulgation or amendment, after April 3, 2008, of a federal or state statute,
regulation, ordinance, rule or other mandate, or of a final judgment, order, or decree of a judicial or regulatory body or agency: 

 (i) relating specifically to coal mine safety, rescue, or emergency response (for example, and by way of illustration only, the Mine Improvement and New Emergency Response Act of 2006), or

 (ii) which assesses on a per-ton basis a tax, fee or other charge on coal (for example, and by way of illustration only,
the Federal Black Lung Excise Tax and severance tax on coal delivered hereunder), 

  
 21 

 but excluding all sales taxes, income taxes, franchise or privilege taxes, employment taxes,
ad valorem taxes (on real and personal property), other similar taxes, and royalties (“Law Change”), Contractor shall be entitled to a reimbursement of the actual additional costs incurred as a result of such Law Change. Contractor shall
notify TVA of such Law Change and supply from its records information satisfactory to TVA showing the direct effect, if any, of the Law Change upon the cost per ton of furnishing coal under this contract for which it seeks reimbursement. 

If Contractor seeks reimbursement under Subsection 10.2.1 (ii), the reimbursement shall, subject to Subsection 10.2.2, be equal to the
additional per-ton assessment referenced therein which results from a Law Change. If Contractor seeks reimbursement under subsection 10.2.1 (i), the per ton reimbursement shall, subject to Subsection 10.2.2, be equal to the total cost calculated on
a per-ton basis attributable to such a Law Change. provided however, the cost attributed to such Law Change shall be uniformly allocated over all coal tonnage produced by Contractor from the source affected by such Law Change (a “Law Change
Cost Reimbursement”). 
 If a Law Change increases Contractor’s cost of providing coal to TVA, a Law Change Cost
Reimbursement shall be paid by TVA to the extent, and only to the extent, of the increased cost that is attributable to such Law Change effective on the later of (a) the date TVA receives Contractor’s notice of the Law Change or
(b) the date Contractor’s cost of providing coal is increased by the Law Change. If a Law Change decreases Contractor’s cost of providing coal to TVA, a Law Change Cost Reimbursement shall be paid to TVA to the extent, and only to the
extent, of the decreased cost that is attributable to such Law Change effective on the date such Law Change could be utilized to reduce Contractor’s costs whether or not Contractor actually reduces such costs on such date. 

This Subsection 10.2.1 does not apply to any (i) promulgation, issuance, implementation, revision or amendment of rules and
regulations except to the extent, and only to the extent, such promulgation, issuance, implementation, revision, or amendment results from a Law Change, or (ii) implementation of statutes or rules or regulations that are enacted, issued or
promulgated after April 3, 2008. Any reimbursement under this Subsection 10.2.1 shall not include any portion of Contractor’s general and administrative expenses, or other corporate and overhead expense, and shall be subject to Subsection
10.2.2. 
 Notwithstanding any other provision of this agreement to the contrary, in the event of any price reopener or price
renegotiation by the parties with respect to coal sold under this agreement, TVA and Contractor agree that the date that both parties have executed a written supplement with respect to such new renegotiated per-ton price for coal, and not
April 3, 2008, shall be used as the operative date with respect to establishing any Law Change; it being understood that any such new renegotiated per-ton price will be deemed to fully incorporate the cost of any and all Law Changes occurring
on or before the date such new written supplement was executed by both parties. 
  

	10.2.2	If: (i) an individual or combination of Law Change Cost Reimbursement(s) requested by Contractor with respect to April 3, 2008 through the end of the first
Contract Year exceeds one dollar and seventy cents ($1.70) on a per ton basis; or (ii) an individual or combination of Law Change Cost Reimbursement(s) requested by Contractor in any single Contract Year thereafter exceeds one dollar and twenty
cents ($1.20) on a per ton basis, then TVA may, at its sole discretion and without further obligation or liability to either party hereunder or at law, terminate the contract upon sixty (60) days written notice given after such a reimbursement
is requested by Contractor, However, in lieu of termination, Contractor may elect to absorb the cost in excess of the aforementioned limits, in which case the contract shall remain in full force and effect. 

  
 22 

 Contractor’s election must be set forth in writing within thirty (30) days of
TVA’s notice of termination. Such election by Contractor shall be irrevocable and binding for the reimbursement sought to the extent it exceeds the aforementioned limits and shall be effective as of the effective date of the Law Change. TVA may
invoke the provisions of this Subsection 10.2,2 each and every time the cost of a Law Change exceeds the per-ton cost limits set forth above. 
  

	10.2.3	Subject to Section 10.3, Contractor shall submit to TVA quarterly invoices for all reimbursements sought under Subsection 10.2.1(ii), and all payments, including
tentative payments subject to review, for reimbursement(s) sought under Subsection 10.2. 1(ii) shall be made by TVA to Contractor within thirty (30) days of receipt of an invoice from Contractor for the same. Subject to Section 10.3,
Contractor shall submit to TVA invoices for all reimbursements sought under Subsection 10.2.1(i), and all payments, including tentative payments subject to review, for reimbursement(s) sought under Subsection 10.2.1(i) shall be made by TVA to
Contractor within twelve (12) months of receipt of an invoice from Contractor for the same. 

  

	10.3	The increase, decrease or reimbursement under each subsection of this Section 10 shall be calculated separately to the nearest one-tenth (1/10) cent per ton.
Any changes (including a recalculation of a previously granted tentative price adjustment or reimbursement) considered applicable by Contractor shall be reported to TVA by Contractor with appropriate data necessary to verify the change. Contractor
must furnish such supporting evidence as may be requested by TVA. A request for a price adjustment or reimbursement considered applicable by Contractor must be submitted to TVA with appropriate documentation within one hundred eighty (180) days
of the date Contractor incurs a resulting cost change. Failure to do so shall constitute a waiver of Contractor’s right to any upward adjustment or reimbursement. Any overpayment made under these provisions may be deducted from any amounts
otherwise due Contractor. 

  

	10.4	Contractor agrees that, in the event TVA reimburses Contractor under this Section 10 for a cost incurred by Contractor and it is later determined that Contractor
is entitled to recover such cost from a third party, at TVA’s request Contractor shall use its best efforts to recover such cost and upon such recovery shall reimburse TVA for amounts previously paid by TVA based on said cost. Reasonable costs
incurred by Contractor in pursuing such recovery at TVA’s request shall be reimbursed by TVA; provided that where Contractor and/or other purchasers from Contractor also receive a benefit from pursuing such recovery, the cost thereof shall be
equitably prorated. 

  

	11.0	REMEDIES 

  

	11.1	This Subsection 11.1 does not apply to a situation where another contract provision provides a different procedure, such as Subsection 9.4. If TVA in good faith
believes that Contractor has failed to comply with any term or condition of this contract, the Contract Administrator shall give Contractor oral notice, to be followed by written confirmation, of any such violation. 

 

	 	11.1.1	If Contractor fails to correct a curable material contract violation within seven (7) days of first notice, TVA shall have the right to suspend Contractor’s
right to make further deliveries until Contractor provides adequate assurance to TVA that Contractor will comply with all provisions of this contract, such assurance to be given in writing within seven (7) days after such suspension. If
Contractor fails to provide such adequate assurance within the time specified or timely provides such satisfactory assurance but Contractor does not correct the curable material contract violation(s) within seven (7) days after giving such
assurance, TVA shall have the right, but not the obligation, to terminate Contractor’s right to make further deliveries under this contract. 

  
 23 

	 	11.1.2	In the case of a contract violation by Contractor or Contractor’s Subcontractor that (i) is not curable (including, but not limited to, violations of
Section 5, Source, of this contract or Section 27 Officials Not to Benefit), or (ii) is a violation of any Federal or state law or regulation or county or municipal enactment, ordinance or code, including but not limited
to laws and regulations described in Subsection 14.6, upon providing notice as described above, TVA shall have the immediate right, but not the obligation, to terminate, or suspend for up to thirty (30) days, Contractor’s right to make
further deliveries under this contract. If TVA suspends Contractor’s right to make further deliveries, then, upon expiration of such suspension, TVA shall either direct Contractor to continue performance of this contract or terminate
Contractor’s right to make further deliveries. 

  

	11.2	Contractor shall be responsible for all costs or damages incurred by TVA resulting from Contractor’s failure to comply with the contract requirements, unless
otherwise excused. TVA may, at its option, purchase in the open market or by contract or otherwise procure coal at a commercially reasonable price to replace all or any part of (i) that which was rejected by TVA or which the Contractor has
failed to deliver, or (ii) that as to which its right to deliver was terminated or suspended. Except as provided in Section 4, Variations, Delays, and Interruptions in Deliveries, Contractor shall be liable to TVA for the excess
cost occasioned by such purchase(s) and any other loss or damage caused by Contractor’s breach of the contract, including, but without limitation to, liability incurred by TVA with respect to the transportation or other handling of the coal. In
the alternative, TVA may, at its election, determine the loss or damage sustained as a result of Contractor’s breach of contract by any other commercially reasonable methods or as provided by law. In addition to all other means of recovery, TVA
may deduct any such excess costs and damages from any amount otherwise due Contractor under this contract or otherwise. 

  

	11.3	TVA may, at its election, determine its excess costs resulting from any deficiency, rejection, suspension, or termination, unless otherwise excused, in the following
manner: (1) such part of the highest-delivered-cost coal (of comparable quality under one or more contracts) which TVA purchases at the next awarding of term or spot contracts for delivery to any fossil plant in the TVA system as would be
required to replace coal which was scheduled for delivery under this contract after the date the Contractor’s right to make deliveries under this contract was terminated shall be deemed to have been purchased as Replacement Coal for
Contractor’s account; and (2) for unexcused deficiencies occurring before termination or contract expiration, such part of the highest-delivered-cost coal (of comparable quality under one or more contracts) which TVA receives under term or
spot contracts in the week following each such deficiency, for delivery to any plant in the TVA system, as equals the quantity of Contractor’s deficiency shall be deemed to have been purchased as Replacement Coal for Contractor’s account.
Contractor shall be liable to TVA for the difference between the delivered cost of such Replacement Coal and the delivered cost of coal under this contract (not including quality adjustments under this contract). The delivered cost shall include
transportation and handling costs, as well as coal price, and shall take into account any differences between the quality of Replacement Coal and the quality specifications of this contract. 

 

	11.4	If TVA suspends or terminates Contractor’s right to make further deliveries hereunder or under any other provision of this contract and such suspension or
termination is finally determined in accordance with Section 18, Disputes, to have been improper, then Contractor May, without limitation and to the extent commercially practicable, resell the coal or the undelivered balance thereof, and
may recover the difference between the resale price (or zero if the coal cannot be resold) and the contract price, together with any incidental damages, including lost profits, but less expenses saved as a result of the same.

  

	11.5	In addition to the specific remedies provided for herein, in the event of a breach, the parties shall have all rights and remedies provided by law or equity.

  
 24 

	12.0	NOTICES  

 Unless
otherwise provided for in the contract, any contractual notice required to be given to either party shall be given by registered, certified, or first-class mail, electronic facsimile, or e-mail, to the intended party at the following address or at
such changed address as may from time to time be designated in a notice similarly delivered or mailed. Except as expressly provided herein, any notice shall be deemed to have been given when sent. Communications by electronic facsimile or e-mail
shall be confirmed by depositing, within twenty-four (24) hours after sending the electronic facsimile or e-mail, a copy of the same in the post office for transmission by registered, certified, or first-class mail in an envelope properly
addressed as follows: 
 In the case of Contractor to: 
 Martin Wilson, President 
 Armstrong Coal Company, Inc. 

7701 Forsyth Boulevard – l0th Floor 
 St. Louis, MO 63105 
 314-721-8211 (FAX) 

martinw@a-wllc.com  
 With copy to: 
 Tate Rich, President 

Delta Coals, LLC 
 95 White Bridge Road, #404 
 Nashville, TN 37205 

(615) 352-5668 (FAX) 
 trichdelta@comcast.net  
 Mason L. Miller 

Miller + Wells, PLLC 
 300 Lexington, KY 40507 
 (859) 281-0079 (FAX) 

mmiller@millerwells.com  
 In the case of TVA to: 
 Eddie Spicer 

Tennessee Valley Authority 
 1101 Market Street, MR 2A-C 
 Chattanooga, TN 37402 

(423) 751-3837 Fax 
 erspicer@tva.gov 
 Either party may, by written notice to the other, change
the representative or the address to which such notices and communications are to be sent. 
  

	13.0	SHIPPING NOTICES 

  

	13.1	For all coal shipped under this contract, Contractor shall forward to the Contract Administrator and all other parties (TVA location or otherwise) as designated by the
Contract Administrator a shipping notification as to coal shipped. This shipping notice must include the Purchase Order number, line item number, release number, traffic control numbers, railcar/barge/truck numbers, 

  
 25 

 origin, name of mine, size of coal, shipping date, and such other relevant information as
TVA may from time to time require. TVA shall have the right to require Contractor to transmit all of the above-referenced information via electronic data transfer direct to TVA’s computer system. Contractor is responsible for ensuring that its
computer system is compatible with TVA’s computer system. 
  

	13.2	Contractor must take whatever steps are necessary to ensure that shipping notices are received by the Contract Administrator and all other parties as designated by the
Contract Administrator prior to arrival of the coal at the Destination or within 24 hours of loading, including weekends and holidays, whichever is earliest. The Destination may not unload coal until a correct shipping notice is received, and
Contractor will be responsible to carrier or TVA for any demurrage charges resulting from delays due to late or improper notification. 

  

	13.3	In addition, on Monday of each week. Contractor must email a cumulative shipping notice to the Contract Administrator. This shipping notice will include such items as
Contract number, traffic control number, shipping date, conveyance ID, tonnage, quality and explanation for all variances from schedule. The format for this report will be provided by the Contract Administrator. 

 

	14.0	TRANSPORTATION 

  

	14.1	TVA reserves the right to specify reasonable limitations on the type and size of transportation equipment, the method of transportation (including trainload lots and
barge load lots where lots are necessary to provide the lowest transportation rate possible), and the exact routing to be used, whether or not transportation to the Destination is the responsibility of TVA. TVA may reject any shipment made in
disregard of such specifications. If the contract provides for a price or prices that include transportation in whole or in part to the Destination (f.o.b. destination contract), title to the coal and risk of loss and damage shall remain with
Contractor until delivery in acceptable condition by the carrier at Destination. 

  

	14.2	For all coal to be delivered hereunder, it shall be Contractor’s responsibility to load the coal and furnish loading devices which shall be suitable and fit for
the purpose contemplated in this contract. Contractor shall be governed by carrier’s instructions regarding the height and distribution of the load, weight of cargo, and other instructions which carrier deems necessary for safe transportation.
Contractor shall allow carrier’s inspection of loaded equipment to assure compliance with carrier’s loading instructions. 

  

	14.3	For all coal shipped, it shall be Contractor’s responsibility to visually inspect the transportation equipment prior to each loading and ascertain that the
equipment is empty and suitable for loading. Any equipment found mechanically unsound for loading or contaminated with material shall not be loaded. Contractor shall not load any railcars with open doors. When loading barges, Contractor shall leave
the four corners of the barges open to allow easier removal of coal and accumulated water. Contractor shall be responsible for all costs incurred by TVA, including the cost of any coal lost in transit, resulting from Contractor’s failure to
comply with these requirements. 

  

	14.4	For all coal purchased for delivery by rail, whether f.o.b. origin or f.o.b. Destination, Contractor shall be responsible for loading each car to the appropriate
capacity as required by the rail carrier. In addition, each trainload shipment tendered under this contract shall be loaded to the minimum trainload weight as required by the rail carrier. Contractor’s account will be charged with any charges
assessed to TVA because of Contractor’s failure to observe any minimum weight loading requirements. The gross weight of each car shall not exceed the maximum allowed by the carrier. If cars are found to be loaded in excess of such maximum, it
shall be Contractor’s responsibility to 

  
 26 

 correct the load at Contractor’s expense, including but not limited to,
Contractor’s payment to the carrier of switching charges, as well as any demurrage charges which may accrue while the car or cars await correction in load. 
  

	14.5	Contractor shall be responsible for any demurrage that accrues at any loading point as a result of Contractor or its subcontractors not being prepared to load the coal
as scheduled. The carrier shall invoice Contractor and Contractor shall pay said carrier for all origin demurrage charges which accrue at the loading point(s). Contractor agrees to comply with the terms and conditions of TVA’s applicable
transportation agreement(s) with respect to loading. 

  

	14.6	The explicit obligation of this contract is that it will be performed in accordance with all applicable Federal, state, county and municipal laws, regulations codes and
ordinances, including, but not limited to, those applicable to transportation of coal. Transportation of coal by Contractor or by any third party transporting coal on Contractor’s behalf to rail or barge loading facilities, or any other
transportation by truck, shall comply with applicable highway laws and regulations governing the weight of vehicles and all other highway laws promoting public safety, health and welfare, including all laws governing the operation of vehicles on any
road or highway. To ensure compliance with this provision and to promote safety and compliance with laws governing vehicle operation, TVA may, as provided in Subsection 11.1.2, terminate or suspend further deliveries under this contract on account
of violation of any motor vehicle laws or actions that, in TVA’s judgment, constitute unlawful or unsafe motor vehicle operations occurring in connection with any delivery of coal by truck. If any Contractor fails to comply with laws or
regulations governing the weight of vehicles, TVA shall have the same rights provided under Section 9, Quality and Specifications, for failure to meet the requirements thereof, including but not limited to the right to reject coal
delivered in overweight trucks. To ensure compliance with this provision and to help protect the roads and highways from overweight trucks, TVA may require that Contractor furnish a copy of the “certified” truck weight ticket. Regardless
of the actual weight of any truck coal received, the maximum gross weight that can be recorded for a single truck will be limited to the applicable maximum weight enforced by law. Any weight exceeding that maximum weight may be deducted from the
total weight of coal used for payment purposes. 

  

	14.7	All coal shipped hereunder shall be delivered by Contractor by truck to the Paradise Fossil Plant only. 

 

	15.0	PAYMENTS, INVOICES 

  

	15.1	Payments under this contract are subject to the provisions of the Prompt Payment Act (31 U.S.C. Sections 3901-3907). Payments as are provided for in the contract
or by law will be made by Electronic Fund Transfer (EFT). EFTs will be made not more than thirty (30) calendar days after the later of (1) receipt of a proper invoice(s) by TVA at: 

Accounts Payable Department 
 P.O. Box 15500 
 Knoxville, Tennessee 37901-5500 

Fax Number: (865) 632-6609 or (865) 632-4019 
 Email accountspayable@tva.gov  
 or (2) receipt and unloading of
the coal at the Destination. In preparing invoices, Contractor shall multiply the number of tons delivered by the Base Price applicable at the F.O.B. point of delivery plus or minus any adjustments that have been made effective under contract
provisions. Payments shall be made in United States funds and timely sent to Contractor via EFT transfer to the following account:  

  
 27 

			
	 Bank Name:
	  	US Bank N.A.
	 ABA Number:
	  	081000210
	 Bank Account Name:
	  	Armstrong Energy, Inc.
	 Bank Account Number:
	  	152306681361

  

	15.2	For purposes of this provision only, “proper invoice” shall mean a numbered and dated invoice containing the complete name of Contractor, agent’s name
(if any), Purchase Order number. Release number, Destination, total amount due, correct weights (as defined below), traffic control number, shipping date, name of mine at which the coal was produced, together with any documentation required to be
submitted therewith by any other provision of the contract. 

  

	15.3	For freeze conditioning invoices, or invoices for anything other than the tons delivered at the current price, the invoices should be mailed, faxed or emailed to the
Contract Administrator, using the notification information in Section 12. 

  

	16.0	WEIGHTS 

  

	16.1	Coal will be weighed or measured by TVA, Contractor, or independent laboratory technician (using scales or other appropriate method approved by TVA) at the location
where samples are collected for payment purposes. Except as specifically provided below, Contractor-provided weights will be used for contract purposes where this contract provides that Contractor samples are used for payment purposes, and
TVA’s weights will be used for contract purposes when this contract provides that TVA’s samples are used for payment purposes. When Contractor-provided weights are used, said weights will be reported to TVA by electronic facsimile or as
designated by the Contract Administrator for each shipment of coal hereunder. TVA shall have the right to have a representative present, at TVA’s sole risk and expense, at any and all times during TVA loadings to observe determination of
weights. Contractor shall notify TVA immediately upon the occurrence of inaccurate weighing or absence of actual weighing. Contractor shall confirm such notification in writing to TVA within seven (7) working days of the date of each such
occurrence. Such confirmation shall identify each affected coal shipment by Purchase Order number, line item number, shipping point, traffic control number, shipping date, and car/barge/truck number(s). Contractor’s account shall be adjusted
for any coal inaccurately weighed, or not weighed, such adjustment to be made at whatever time such occurrence(s) becomes known to TVA. 

  
 28 

	16.2	All scales and weighing devices used by Contractor to determine the governing weight of coal shall be certified by the appropriate regulatory authority or a railroad
and shall be material tested annually by an independent third party at the Contractor’s expense and the results of such tests provided to TVA within thirty (30) days of receipt of such test results of Contractor. Such scales and weighing
devices shall comply with the National Institute of Standards and Technology Handbook 44 and shall be installed, maintained, and operated according to manufacturers’ recommendations. 

 

	16.3	If Contractor-provided weights are to be used, and Contractor fails to provide proper weights, TVA weights will be the means by which the weight of coal sold,
delivered, and purchased hereunder shall be determined. Contractor shall reimburse TVA for any cost or expense charged to or incurred by TVA as a result of the absence of proper weights from Contractor, and TVA may elect to have TVA’s sampling
and analysis govern for quality adjustment purposes as to any coal not properly weighed by Contractor. While TVA may not undertake to weigh all coal received, it may at its option check weigh any coal received. In the event invoiced weights exceed
TVA weights by more than one and one-half percent (1.5%), a full material test will be run by both parties with each party responsible for its own cost. The weights that are determined most accurate shall govern. 

 

	16.4	Scale tests shall be performed more often than annually if reasonably requested by TVA. TVA shall be responsible for the cost of additional (more than annual) requested
tests unless the results thereof show that the scale failed to conform to certification standards, in which event the Contractor shall be responsible for such costs. 

 

	16.5	If Contractor’s or TVA’s weighing devices or methods are determined by said independent third party to be in error over 0.5%, an appropriate adjustment shall
be made to the affected weights and related invoices and payments reflecting the full extent of the error. Such adjustments shall be made retroactively to a date midway between the date on which the weighing devices were last tested and calibrated
and the date on which the inaccuracy in weighing methods or devices was first questioned and prospectively until the date on which the weighing methods and devices are corrected. 

 

	16.6	If scales at the applicable mine determine the weight for less than all of the railcars in a single trainload lot, then the average railcar weight for the last three
trainload lots to TVA, for trains that contained railcars all of the same capacity as the unweighed cars, shall be determined by dividing the trainload lots’ weight by the number of railcars in the trainload lots. The average railcar weight
shall be multiplied by the number of railcars in the unweighed or partially unweighed trainload lot to determine the trainload lot weight. 

  

	17.0	CONTRACT ADMINISTRATOR/CONTRACTING OFFICER 

 The Manager of Coal Acquisition and Supply has designated the Contract Administrator who administers this contract for TVA to act on behalf of TVA for all purposes in the administration of this contract,
such designation to continue until revoked or modified by the Manager of Coal Acquisition and Supply. The Contract Administrator shall serve as TVA’s “Contracting Officer” with respect to matters arising under terms of this contract
that provide for action by the Contracting Officer. 

  
 29 

	18.0	DISPUTES  

 The
Parties agree that any lawsuit between them that asserts a claim or claims arising out of or related to this contract (whether sounding in contract, tort, or otherwise) shall be filed and litigated to conclusion only in the United States District
Court for the Eastern District of Tennessee at Knoxville, and each Party hereby consents to the jurisdiction and venue of that court for all such lawsuits. The Parties further agree that in any such litigation (1) each will stipulate to have a
United States Magistrate Judge conduct any and all proceedings in the litigation in accordance with 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73, and (2) each will waive any right it may have to a trial by jury. 

 

	19.0	CLEAN AIR ACT AND OTHER ENVIRONMENTAL REQUIREMENTS 

 In the event of enactment, implementation, amendment, or enforcement of the Clean Air Act, as amended, or any other applicable federal, state, or local air pollution control or environmental law, rule, or
requirement which causes the continued use of the coal purchased under this contract to be inconsistent with (i) TVA’s air pollution control strategies, as they may be modified for meeting such air pollution control or environmental
requirements, or (ii) an administrative or judicial order, TVA may cancel this contract with no further obligation or liability hereunder or at law by giving Contractor ninety (90) days’ advance notice of such cancellation. In the
case of inconsistency with TVA’s air pollution control strategies, the parties will attempt to renegotiate the contract during such notice period to provide for delivery of coal that will be of a quality consistent with TVA’s new air
pollution control strategies. In the event the parties do not reach agreement on such a renegotiated contract within the 90-day notice period, the cancellation notice given by TVA shall remain in effect and the contract shall terminate at the end of
such period. In no event will TVA be obligated to divert deliveries from any affected Receiving Plant(s) to any alternate fossil plant or other destination. 
  

	20.0	UNILATERAL TERMINATION RIGHT—This Section left intentionally blank. 

 

	21.0	CREDIT EVALUATION AND PERFORMANCE ASSURANCE 

  

	21.1	Performance Assurance. Contractor has previously furnished performance assurance for the protection of TVA in the form of a cash deposit in the amount of One
Million Dollars ($1,000,000.00). 

 This deposit is for the security of TVA regarding the performance of all
obligations of the Contractor under this contract and all other contracts with TVA, and TVA may, subject to the provisions of Section 21, reasonably require the Contractor to adjust the amount of this deposit upward or downward. The deposit
will earn interest at TVA’s short-term interest rate. 
 Contractor acknowledges and agrees that any failure to establish,
maintain, or adjust said deposit shall constitute a default under this contract, subject to all applicable cure provisions. 

  
 30 

	21.2	Material or Adverse Change in Financial Condition. Contractor shall inform TVA, in writing, within ten (10) business days of any Material or Adverse Change
in its financial condition. For the purposes of this contract, a Material or Adverse Change may include, but is not limited to, any of the following: 

  

	 	1)	A bankruptcy filing, 

  

	 	2)	Insolvency, 

  

	 	3)	A report of a quarterly or annual loss or a decline in earnings of twenty percent (20%) or more compared to the prior period, 

 

	 	4)	A negative restatement of prior financial statements or a failure or refusal to provide quarterly or annual financial statements to TVA as required under Subsection
21.3 below, 

  

	 	5)	Default under other financing agreements with third-parties in excess of Ten Million Dollars ($10,000,000.00), 

 

	 	6)	Appointment of a receiver, trustee or examiner, or 

  

	 	7)	Entry of a judgment against Contractor in an amount that is greater than five percent (5%) of the Contractor’s net worth. 

If there is a Material or Adverse Change in Contractor’s financial condition. TVA may require Contractor to provide additional
reasonable Performance Assurance, as outlined herein, within ten (10) business days of Contractor’s receipt of a written request from TVA for such additional Performance Assurance, in an amount determined by TVA in a commercially
reasonable manner and in a form and from a financial institution or other guarantor reasonably acceptable to TVA. Such additional Performance Assurance may include, but is not limited to, increasing the amount of the deposit provided to TVA under
Subsection 21.1 above, or other performance assurance as described in Subsection 21.4. If the Contractor fails to deliver such additional Performance Assurance to TVA with ten (10) business days of receipt of TVA’s written request for such
additional Performance Assurance, then the Contractor may be deemed by TVA to be in default under the terms of this contract, subject to all applicable cure provisions. 
  

	21.3	Ongoing Credit Evaluation & Monitoring. TVA will monitor Contractor’s creditworthiness on an ongoing basis for changes in financial condition.
Contractor shall comply with the following provisions: 

  

	 	1)	Financial Statements: 

  

	 	a)	Within one hundred and twenty (120) calendar days following the end of each fiscal year, Contractor shall deliver a copy of Contractor’s annual report
containing audited consolidated financial statements for such fiscal year that include balance sheets, income statements, statements of cash flows and notes to the financial statements. 

 

	 	b)	Within sixty (60) calendar days following the end of each of the first three fiscal quarters of each fiscal year, Contractor shall deliver a copy of
Contractor’s quarterly report containing unaudited consolidated interim financial statements for such fiscal quarter. 

  

	 	c)	In all cases Contractor’s financial statements shall be prepared in accordance with generally accepted accounting principles used in the United States.

  

	 	d)	In the event any annual report or quarterly report cannot be delivered on a timely basis due to a delay in preparation or certification, such delay shall be excused to
the extent, and only to the extent, Contractor is diligently pursuing the preparation, certification, and delivery of such report and has informed TVA in writing as to the cause or causes of such delay and the anticipated duration of such delay

  

	 	2)	Within ten (10) business days of any change in majority ownership of Contractor, Contractor shall report such change and the details thereof to TVA.

  

	 	3)	Within ten (10) business days of the occurrence thereof Contractor shall disclose to TVA any material litigation with a demand in excess of Ten Million Dollars
($10,000,000.00). 

  
 31 

 TVA shall periodically review Contractor’s financial information to determine if, an
increase or decrease in the current level of Performance Assurance is required on behalf of Contractor. If the financial condition of the Contractor has changed to a point whereby TVA determines that further or additional Performance Assurance is
not required. TVA will release the security provided in Subsection 21.1; otherwise, the current Performance Assurance obligation will continue. 
  

	21.4	Types of Acceptable Performance Assurance. The types of acceptable Performance Assurance that TVA may require include but are not limited to:

  

	 	1.	Cash Deposit, 

  

	 	2.	An irrevocable standby letter of credit (including an increase or extension of an existing letter of credit) in a form and from a financial institution reasonably
acceptable to TVA, or 

  

	 	3.	Various combinations of the foregoing or other credit or performance assurance reasonably acceptable to TVA. 

 

	21.5	Remedies with Respect to Performance Assurance. In addition to any other remedies available under this contract or at law, TVA, upon or any time after the
occurrence or deemed occurrence of a default by Contractor (and provided such default is continuing), may exercise any and all of its rights with respect to all Performance Assurance, including but not limited to drawing on any outstanding letter of
credit issued for TVA’s benefit and liquidating all Performance Assurance then held by or for the benefit of TVA free from any claim or right of any nature whatsoever of Contractor, including, but not limited to, the cash deposit of One Million
Dollars ($1,000,000) previously furnished by Contractor by the protection of TVA. TVA shall apply the proceeds from such Performance Assurance to reduce Contractor’s obligations under this and all other contracts with TVA, and Contractor shall
remain liable for any amounts owing to TVA after the application of such proceeds. 

  

	22.0	VERIFICATION OF DATA, INSPECTION OF RECORDS AND MINE SOURCES 

 TVA, its employees, agents, or representatives, shall have the right, at its sole expense, after prior notice and at a reasonable time to inspect Contractor’s or, if applicable, its producer’s
records and mines and related facilities to verify the accuracy of the data supplied by Contractor to support its request for price adjustments or to establish Contractor’s actual cost change under section 10, Contract Price Adjustments and
Cost Reimbursements, and for purposes of determining Contractor’s compliance with the provisions of this contract. Information obtained by TVA, its employees, agents, or representatives, in examining Contractor’s or its producer’s
records or inspecting Contractor’s or its producer’s mines shall not be disclosed to third parties without the Contractor’s consent, unless disclosure is ordered by a court of competent jurisdiction, is made for purposes of any
litigation or proceeding (judicial, administrative, or investigatory) involving this contract, or is otherwise required by law. 
  

	23.0	COAL MINING RECLAMATION AND CONSERVATION REQUIREMENTS 

 The following TVA reclamation and conservation requirements are applicable to all contracts for the purchase of coal: 
  

	23.1	TVA Policy On Areas From Which Coal Will Be Procured: Coal Mining—Land and Water Resource Protection. TVA accepts no coal mined from locations in or near areas
officially designated by state or federal agencies, or identified by TVA, as wild or scenic river areas, wild, wilderness, natural, scenic, public recreation areas or under study pursuant to legislative authority for any such official designation,
except where special circumstances exist. No coal will be 

  
 32 

 accepted from locations in or near areas designated under legislative authority as
potential sites for the above uses unless, after coordination with the appropriate agencies, TVA determines that the coal can be mined without substantially adversely affecting the area’s potential for such use. In such cases and also in cases
involving offerings of coal from mines in or near other visually important areas such as major highways or population centers, special provisions designed to protect aesthetic values may be incorporated in the purchase contracts. No coal will be
accepted from areas in which, in TVA’s judgment, mining would adversely affect a public water supply and such adverse effect cannot be avoided by proper reclamation. 

 

	23.2	Contractor agrees that all sources of coal delivered shall be in full compliance with all state and federal reclamation laws, including the Surface Mining Control and
Reclamation Act of 1977 and all regulations issued thereunder. A violation of any such law or regulation shall constitute a breach of contract, entitling TVA to exercise its remedies as provided for in this contract or by law. TVA will not accept
coal mined from any source, stockpile, or otherwise during any period when the source is subject to a cessation order issued by the Office of Surface Mining and Reclamation (OSM) or any state reclamation enforcement agency for violation of
reclamation requirements. 

  

	23.3	TVA also reserves the right to either terminate this contract or suspend deliveries under the contract from any source whatsoever when any Authorized Source is subject
to a cessation order. 

  

	23.4	Coal which is not delivered due to such cessation order or suspension shall not be considered excusable, and TVA may purchase replacement coal for the Contractor’s
account. If, upon appeal by the Contractor under OSM’s or the appropriate state’s regulations, a cessation order is held to have been improperly issued, the Contractor shall not be liable for the cost of replacement coal, and any coal not
delivered due to the order or suspension may, at Contractor’s option, be canceled or rescheduled upon delivery terms reasonably acceptable to TVA. This constitutes Contractor’s exclusive remedy against TVA in the event of a wrongful
issuance of a cessation order by OSM or a state agency. 

  

	23.5	TVA reserves the right to require and Contractor agrees to perform over and above the requirements specified by law any special or additional reclamation work which TVA
deems necessary to ensure that the mining operation complies with TVA’s overall policy for protection and enhancement of the environment. Any such special or additional reclamation work shall be subject to the approval of the U.S. Office of
Surface Mining, or a related agency having jurisdiction over the matter. TVA agrees to compensate Contractor for the performance of such work in an amount to be mutually agreed upon before the commencement of work. No work performed by Contractor
shall be deemed special or additional reclamation work for the purposes hereof unless it is so designated in writing by the Contract Administrator. 

  

	23.6	TVA, its agents, and assigns shall have the right to enter upon any of the land affected by Contractor’s mining operation, at any time and without the necessity of
giving notice, for any purpose related to enforcing these reclamation and conservation requirements or to observe mining or reclamation completed or in progress. 

 

	23.7	TVA will not accept coal from sources mined under the 16-2/3 percent exemption allowed under P.L. 95-87, unless it can be documented that the source will be mined
and reclaimed to the performance standards established under P.L. 95-87, and furthermore, that the operation has the concurrence of the coal mining and regulatory (primacy) authority established by this law in the state from which the
coal is to be mined. 

  
 33 

	24.0	RELATIONSHIP OF PARTIES — PRODUCER’S STATEMENT 

 

	24.1	Regardless of whether the Contractor is the producer of the coal to be furnished or is the sales agent of one or more producer, the Contractor binds and obligates
itself for the full and faithful performance of the contract in its entirety. 

  

	24.2	If the Contractor is not the producer of the coal to be delivered hereunder, Contractor represents that it has contracted directly with the producer(s) who has
(have) executed the Coal Producer’s Statement(s) for the delivery of the coal to TVA. 

  

	25.0	NONASSIGNABILITY; SUBCONTRACTS; DESIGNATION AND TERMINATION OF AGENT 

 

	25.1.1	Neither this contract nor any interest herein or any payments hereunder shall be assigned without the prior written consent of TVA, which consent TVA may withhold in
its sole discretion. In the event TVA shall give such consent, the same shall not be construed as a waiver of this provision with regard to any subsequent assignment. 

 

	25.1.2	Notwithstanding the foregoing, any party may, without the need for consent from the other party (and without relieving itself from liability hereunder), transfer, sell,
pledge, encumber or assign this contract or the accounts, revenues or proceeds hereof or thereof in connection with any bank financing or security arrangements, provided, however, that no such assignment shall in any way relieve the assignor from
liability for full performance under this contract. Any such assignee shall assume and agree to be bound by the terms and conditions of this contract. Any consent to an assignment under this provision shall not be construed as a waiver of this
provision with regard to any subsequent assignment. 

  

	25.2	No designation of any agent by the Contractor to submit invoices, receive payments, or take any other action in connection with the performance or administration of
this contract shall be effective or recognized by TVA until the Contractor has given written notice of such designation and TVA has given Contractor specific written notice of its approval thereof. 

 

	25.3	If Contractor notifies TVA in writing of the termination of any agent that Contractor may have previously designated to administer this contract on its behalf, TVA may
thereafter rely on such notice of termination in all dealings with Contractor or a successor agent. 

  

	26.0	WAIVERS 

 No
waiver of any breach of this contract shall be held to be a waiver of any other breach. Unless a remedy is expressly designated as exclusive, all remedies afforded under the contract shall be in addition to every other remedy provided herein or by
law. 
  

	27.0	OFFICIALS NOT TO BENEFIT 

 No member of or delegate to Congress or Resident Commissioner, or any officers, employee, special Government employee, or agent of TVA shall be admitted to any share or part of this contract or to any
benefit that may arise therefrom unless it be made with a corporation for its general benefit; nor shall the Contractor offer or give, directly or indirectly, to any officer, employee, special Government employee, or agent of TVA any gift, gratuity,
favor, entertainment, 

  
 34 

 loan, or any other thing of monetary value, except as provided in 5 C.F.R. part 2635. Breach
of this provision shall constitute a material breach of this contract and TVA shall have the right to exercise all remedies provided in this contract, or at law. 
  

	28.0	SMALL BUSINESS POLICY 

 The requirements of 15 U.S.C § 637(d) are incorporated by reference. 
  

	29.0	LIQUIDATED DAMAGES FOR SUBCONTRACTING PLANS 

  

	29.1	Failure to make a good-faith effort to comply with the subcontracting plan, as used in this clause, means a willful or intentional failure to perform in accordance with
the requirements of the subcontracting plan approved under 15 U.S.C. 637(d) or willful or intentional action to frustrate the plan. 

  

	29.2	Performance shall be measured by applying the percentage goals to the total actual subcontracting dollars or, if a commercial plan is involved, to the pro rata share of
actual subcontracting dollars attributable to Government contracts covered by the commercial plan. If, at contract completion, or in the case of a commercial plan, at the close of the fiscal year for which the plan is applicable, the Contractor has
failed to meet its subcontracting goals and the Contracting Officer decides in accordance with Subsection 29.3 that the Contractor failed to make a good-faith effort to comply with its subcontracting plan, the Contractor shall pay TVA liquidated
damages in an amount equal to the actual dollar amount by which the Contractor failed to achieve each subcontract goal. 

  

	29.3	Before the Contracting Officer makes a final decision that the Contractor has failed to make such good-faith effort, the Contracting Officer shall give the Contractor
written notice specifying the failure and permitting the Contractor to demonstrate what good-faith efforts have been made. Failure to respond to the notice may be taken as an admission that no valid explanation exists. If, after consideration of all
the pertinent data, the Contracting Officer finds that the Contractor failed to make a good-faith effort to comply with the subcontracting plan, the Contracting Officer shall issue a final decision to that effect and require that the Contractor pay
the government liquidated damages as provided in Subsection 29.2. 

  

	29.4	With respect to commercial plans. i.e., company-wide or division-wide subcontracting plans, the Contracting Officer of the agency that originally approved the plan will
exercise the functions of the Contracting Officer under this clause on behalf of all agencies that awarded contracts covered by that commercial plan. 

  

	29.5	The Contractor shall have the right of appeal, under the section in this contract titled DISPUTES, from any final decision of the Contracting Officer.

  

	29.6	Liquidated damages shall be in addition to any other remedies that TVA may have. 

 

	30.0	AFFIRMATIVE ACTION AND EQUAL OPPORTUNITY 

 To the extent applicable, this contract incorporates by reference the “Equal Opportunity” for Special Disabled Veterans and Veterans of the Vietnam Era clause, 41 C.F.R. § 60-250.5; the
“Equal Opportunity for Workers with Disabilities” clause, 41 C.F.R. § 60-741.5; and the “Equal Opportunity” clause, 41 C.F.R. § 60-1.4. 

  
 35 

	31.0	SAFETY AND HEALTH 

 All sources supplying coal purchased under this contract shall be in full compliance with the Federal Mine Safety and Health Act of 1977 and regulations issued thereunder. Failure to comply shall
constitute a breach of contract, permitting TVA to exercise its remedies under this contract or as provided by law. 
  

	32.0	ENVIRONMENTALLY ACCEPTABLE FACILITIES; CLEAN AIR AND WATER 

 Contractor hereby stipulates and agrees as follows: 
 (1) Contractor certifies
that performance of this contract will not involve the use of any facility or facilities which have given rise to a conviction under Section 113(c) of the Clean Air Act (42 U.S.C. 7413(c)) or Section 309(c) of the Federal Water Pollution
Control Act (33 U.S. C. 1319(c). 
 (2) Contractor will comply with all the requirements of Section 114 of the Clean
Air Act and Section 308 of the Federal Water Pollution Control Act relating to inspection, monitoring, entry, reports, and information, as well as all other requirements specified in Section 114 and Section 308 of the Clean Air Act
and the Federal Water Pollution Control Act, respectively, and all regulations and guidelines issued thereunder in its performance of this contract. 
 (3) Contractor will notify TVA of any conviction under Section 113(c) of the Clean Air Act or Section 309(c) of the Federal Water Pollution Control Act involving a facility to be utilized
for this contract. 
  

	33.0	CERTIFICATION FOR CONTRACTS, GRANTS, LOANS AND COOPERATIVE AGREEMENTS 

Contractor’s representative, by signing this contract, certifies, to the best of his or her knowledge and belief, that: 

(1) No Federal appropriated funds have been paid or will be paid by or on behalf of Contractor to any person for influencing or
attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with the awarding of this contract or the extension, continuation, renewal,
amendment, or modification of this contract. 
 (2) If any funds other than Federal appropriated funds have been paid or
will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a member of congress, an officer or employee of Congress, or an employee of a member of Congress in connection with this Agreement,
Contractor shall complete and submit Standard Form-LLL, “Disclosure of Lobbying Activities,” in accordance with its instructions. 
 This certification is a material representation of fact upon which reliance was placed when this contract was made or entered into. Submission of this certification is a prerequisite for making or
entering into this contract imposed by 31 U.S.C. 1352. Any person who makes an expenditure prohibited under paragraph (1) of this clause or who fails to file or amend the disclosure form required to be filed or amended by paragraph (2) of
this clause shall be subject to civil penalties as provided for by 31 U.S.C. 1352. 

  
 36 

	34.0	CONTRACT COMPONENTS 

 Appendix A (Coal Producer’s Statement(s) and Specific Location Map(s)); Exhibit I (Example Calculation of Price Adjustment for Quality Variations); and the Subcontracting Plan are attached
hereto and made a part hereof. 
 IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed as of the aforesaid
date by their duly authorized representatives. 
  

							
	 WITNESS:
	 		 	CONTRACTOR Armstrong Coal Co.
				
	 /s/ Elizabeth J. Byrne
	 		 	By:	  	/s/ Martin D. Wilson
		 		 		  	Signature
				
		 		 	Title:	  	President
			
	 WITNESS:
	 		 	TENNESSEE VALLEY AUTHORITY
				
	 /s/
	 		 	By:	  	/s/ James M. Bach Sr.
		 		 		  	Signature
				
		 		 	Title:	  	Fuel Buyer

  
 37 

 EXHIBIT I 
 EXAMPLE CALCULATION OF PRICE ADJUSTMENT 
 FOR QUALITY VARIATIONS 

Assume: 
  

									
	 	  	Typical Analysis	 	 	Qtrly. Avg. Value	 
	 Btu/lb. (as-received)
	  	 	12,000	  	 	 	12,125	  
	 Ash (as-received)
	  	 	7.00	% 	 	 	9.00	% 
	 Total Moisture
	  	 	12.00	% 	 	 	12.25	% 
	 SO2 in Ibs./mmBtu at 97.5%
	  	 	1.70	  	 	 	1.62	  

 Total Tons Received equals 100,000 
 Price equals $20.00 
 Ash Adjustment Increase/Decrease is $0. 15 per percentage point

 Moisture adjustment increase/decrease is $0.06 per tenth of a percent 
 SO2 adjustment increase/decrease is $0.25 per tenth of a Ib. 
 Btu example for Section 8.2.

  

									
	 Btu Adjustment
	 	 	=	  	 	(Quarterly Average Value - Typical Analysis) X Price	  	
		 				 	Typical Analysis	  	

  

											
	 Btu Adjustment
	  	 	=	  	  	(12,125 - 12,000) X $20.00	  		  	
		  				  	12,000	  		  	
	 Btu Adjustment
	  	 	=	  	  	$0.21 per ton	  		  	

 Ash example for Section 8.3. 
 Ash Adjustment decrease = (Quarterly Average Value - Typical Analysis) X Adjustment 
 Ash
Adjustment decrease = (9.00 - 7.00) X $0.15 
 Ash Adjustment decrease = $0.30 per ton 
 Moisture example for Section 8.4. 
 Moisture Adjustment decrease = (Quarterly Average
Value - Typical Analysis) X Adjustment 
 Moisture Adjustment decrease = ((12.25 - 12.00)) X $0.06 

Moisture Adjustment decrease = $0.015 per ton. 

SO2 example for Section 8.5 (scrubbed plants). 
 SO2 Adjustment increase = (Typical Analysis - Quarterly Average Value) X Adjustment 
 SO2
Adjustment increase = (1.70 - 1.62) X 10) X $0.25 
 SO2 Adjustment increase = $0.20 per ton. 

Sulfur Dioxide example for Section 8.5 non-scrubbed plants) 
 Cantor Fitzgerald Market Price Index 
  

					
	 Month A Index Value
	  	$	181.00	  
	 Month B Index Value
	  	$	163.00	  
	 Month C Index Value
	  	$	192.00	  
		  	  
	  
	 
	 Average Index Value
	  	$	178.67	  

 (Typical Analysis SO2 - Quarterly Average Value SO2) X (Quarterly Average Value BTU) X (quarterly tonnage) X (average index value) / 1,000,000 = adjustment 

(0.80 – 0.95) X (13,000) X (250,000) X (179.00) / 1,000,000 = -$87,101.625 

  
 38 

 Appendix A 
 Authorized Source List: 
  

	1.	Parkway Underground — West Kentucky #9 — Permit #889-5014 

  

	2.	Sunnyside Surface — West Kentucky #11 & #12 — Permit Proposed 

 

	3.	Nelson Creek B Surface — West Kentucky #11 & #12 — Permit Proposed 

 

	4.	Paradise Underground — West Kentucky #9 — Permit Proposed 

  

	5.	Jacob’s Creek Surface — West Kentucky #9 — Permit Proposed 

  

	6.	Game Preserve Surface — West Kentucky #9 — Permit Proposed 

  

	7.	Hillside — West Kentucky #9 — Permit Proposed 

  
 39EX-10.3

 Exhibit 10.3 

TENNESSEE VALLEY AUTHORITY 
 COAL ACQUISITION & SUPPLY 
 1101 Market Street, MR 2A 

Chattanooga, Tennessee 37402-2801 
 CONTRACT SUPPLEMENT 
  

									
	TO:	  	Armstrong Coal Company Inc	  		  	Supplement No.	  	1
		  	7701 Forsyth Boulevard 10th Floor	  		  	Date	  	March 30, 2009
		  	St. Louis MO 63105	  		  	Group No.	  	635
		  		  		  	Contract No.	  	40685
		  		  		  	Plant	  	Various
		  		  		  	Name of Mine	  	Parkway

 Attention Mr. Martin Wilson 
 Per an agreement between Kenny Allen and TVA per phone discussion on 3/13/2009. 
 Armstrong Coal
Company Inc. shall provide sampling and weighing services for coal shipped by truck from the Parkway mine to TVA’s Paradise Fossil Plant. 

Section 7.01 shall be amended to designate “Contractor Sampling/contractor Analysis Section 7.2” for coal shipped by truck to
TVA’s Paradise Fossil Plant. 
 The coal price shall be increased by $0.20 per ton to cover the cost for the sampling and weighing
requirement required to provide these services. 
 TVA reserves the right to modify this agreement with respect to which party performs the
sampling and weighing of truck coal with a 30 days written notice by supplement to Armstrong Coal Company Inc. In the event TVA exercises this option the Contract price of coal shall be reduced by $0.20 per ton. 

The Base Price as prescribed in Section 6 of the Contract shall not be affected by this supplement. Quality adjustments shall be calculated on the
Base Price as defined in Section 6.0 Price of the Contract. 
 All other terms and conditions of the Contract remain unchanged. 

Please complete the acceptance below and return a signed copy of this contract supplement to this office. You should retain the other signed copy for your
files. 
 In the event Contractor fails to execute this Supplement in the acceptance space provided below or fails to return such executed
Supplement to TVA, shipment of coal to TVA following the date of Contractor’s receipt of this Supplement shall constitute an acceptance by Contractor of all the terms and conditions of this Supplement, unless within five (5) business days
of the date of receipt of this Supplement, Contractor notifies TVA, both orally and in writing that this Supplement is not accepted. 
 cc: Tate
Rich, President 
 Delta Coals, LLC 
 95
White Bridge Road #404 
 Nashville Tennessee 37205 

							
	Accepted	 	Armstrong Coal Co.	 		 	TENNESSEE VALLEY AUTHORITY
		 	Company	 		 	
				
	By	 	/s/ Martin D. Wilson	 		 	/s/ Eddie Spicer
		 	Signature	 		 	Eddie Spicer
		 		 		 	Fuel Contract Administrator
			
	President	 		 	/s/
	Title	 		 		 	Contract Support Specialist
			
	4/9/09	 		 	/s/
	Date	 		 		 	Manager of Coal Supply

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