Document:

Exhibit 10.45

 

BARGE TRANSPORTATION
AGREEMENT

 

This is a barge transportation agreement between LOUISVILLE GAS AND
ELECTRIC COMPANY (LG&E) effective January 1, 2002 and between KENTUCKY
UTILITIES COMPANY (KU) effective July 1, 2002, both Kentucky corporations,
whose addresses are 220 West Main Street, Louisville, Kentucky, 40202
(collectively “Buyer”) and CROUNSE CORPORATION, a Kentucky corporation, whose
address is 2626 Broadway, Paducah, Kentucky 42002-8109 (“Carrier”).

 

RECITALS

 

1.                                       LG&E owns and operates a generating plant
known as Mill Creek Station which is located on the Kentucky side of the Ohio
River at Mile point 626.4 (“Mill Creek”). The coal barge unloader currently at
Mill Creek is a clamshell type digger with an average dig rate of about one thousand
(1,000) tons per hour. The limestone barge unloader currently at Mill Creek is
an excavator equipped with a clamshell bucket with an average dig rate of about
four hundred (400) tons per hour.

 

2.                                            LG&E owns and operates a generating plant
known as Trimble County Station which is located on the Kentucky side of the
Ohio River at Mile point 571.4 (“Trimble County”). The coal barge unloader
currently at Trimble County is a bucket-ladder style digger with an average dig
rate of about three thousand and fifty (3,050) tons per hour. The limestone
barge unloader currently at Trimble County is a clamshell type digger with an
average dig rate of about four hundred and sixty-five (465) tons per hour.

 

3.                                       LG&E owns and operates a generating plant
known as Cane Run Station which is located on the Kentucky side of the Ohio
River at Mile point 617.0 (“Cane Run”). The

 

1

 

coal and limestone unloader will be an
excavator that digs the material out of the barge as the barge passes beneath
the excavator. The coal and limestone unloader is designed with an average dig
rate of about one thousand and six hundred (1,600) tons per hour.

 

4.                                       KU owns and operates a generating plant known
as Ghent Station which is located on the Kentucky side of the Ohio River at
Mile point 535.8 (“Ghent”). The coal and limestone unloader  is a bucket-ladder style digger with an
average dig rate of about one thousand and eight hundred (1,800) tons per hour.

 

5.                                       For purposes hereof, the term “Buyer” shall
refer to LG&E relative to the coal and limestone that is delivered to
LG&E, and shall refer to KU relative to the coal and limestone that is
delivered to KU.

 

6.                                       Jefferson County Riverport Authority is a
transloading facility located on the Kentucky side of the Ohio River at Mile
point 618.00 (“Riverport”). The barge unloader is a clamshell type digger with
an average dig rate of about four hundred (400) tons per hour.

 

AGREEMENTS

 

The parties hereto agree as
follows:

 

1.                                       General.  Carrier will transport coal and limestone by barge to Mill Creek, Cane
Run, Trimble County, Ghent, and Jefferson County Riverport. Buyer will
compensate Carrier therefor, under all the terms and conditions of this
Agreement.

 

2.                                       Term.  The term of this Agreement (the “Term”) shall commence January 1,
2002 for Louisville Gas and Electric Company and July 1, 2002 for Kentucky
Utilities Company and shall continue through December 31, 2007 subject to
the following. The rates and other terms and conditions set forth in this
Agreement are subject to review for any reason, at the request of either party,
for revisions to become effective on January 1, 2005. Either party may
request such a review by giving the other party written notice of such

 

2

 

request by October 1, 2004. The parties
shall then use their best efforts to negotiate in good faith an agreement on
new rates and/or other terms and conditions between October 1, 2004 and November 30,
2004. If the parties do not reach an agreement on new rates and/or other terms
and conditions by December 1, 2004, then this Agreement will terminate as
of December 31, 2004 without liability due to such termination for either
party.

 

3.                                       Cargo.  Carrier will transport under the terms of this
Agreement all solid fuel and limestone purchased by Buyer for delivery by barge
(the “Cargo”), except for (a) distress Cargo already in barges belonging to
other carriers, (b) Cargo purchased under spot contracts from suppliers having
contracts with other carriers, (c) Cargo purchased from loading points not
covered by Section 7 and (d) Cargo which is purchased FOB Destination,
except that the Cargo transported by another carrier during any calendar month
pursuant to exceptions (a) through (d) shall not exceed ten percent (10%) of
the total Cargo (in tons) purchased by Buyer for delivery by barge during such
calendar month. These restrictions shall not apply if Buyer requires more Cargo
transportation than Carrier can provide within the time frame Buyer requires for
loading, regardless of whether such non-performance is excused or unexcused,
and regardless or whether Buyer’s delivery requirements are of an urgent or
non-urgent nature. Buyer agrees to provide Carrier as much notice as
practicable and Carrier agrees to confirm whether or not barges are available promptly.
If barges belonging to another carrier are docked at the Buyer’s plant with
Carrier’s barges, then Buyer shall pay demurrage to Carrier at the greater of
(i) the same terms and conditions which would govern such other barge carrier’s
right to recover demurrage or (ii) the terms of Section 8 herein.
Notwithstanding any projections of Buyer’s barging requirements or any prior
barging requirements of Buyer, Buyer has no obligation to have any Cargo transported
under this Agreement at any time, but promises only that all Cargo actually
delivered by

 

3

 

barge to Buyer will be delivered under this
Agreement, subject to the exceptions set forth above.

 

4.                                      Delivery.

 

(a)                                  Carrier will receive Cargo at the loading
points listed in Section 7 hereof. Carrier will furnish empty barges at
the Loading Points in adequate numbers and at such times as to permit loading
of the Cargo in accordance with the Cargo suppliers’ reasonable operating
schedules and Buyer’s supply requirements. Buyer’s contracts with its Cargo
suppliers shall require them, at their own expense, to load the Cargo into the
barges with due diligence and dispatch and otherwise comply with the reasonable
requirements of Carrier’s barging operation. The Cargo suppliers shall have the
right to refuse to load any barges they consider unseaworthy or any barges
containing water or other foreign matter. In the case of limestone loading,
Buyer’s limestone supplier shall be responsible for cleaning barges to its
reasonable satisfaction. Carrier will deliver the loaded barges to Buyer’s
unloading dock or other point designated by Buyer at such times as to permit
the unloading of the Cargo in accordance with Buyer’s reasonable operating
schedules.

 

(b)                                 At Mill Creek, Ghent, Trimble County
limestone, and Jefferson County Riverport, Carrier shall properly and securely
moor the loaded barges at the unloading dock and notify the appropriate
person(s) that such mooring has been completed in accordance with the
provisions set forth in Appendix A, which is attached hereto. Buyer at its own
expense shall have the Cargo unloaded out of the barges with due diligence and
dispatch and otherwise comply with the reasonable requirements of Carrier’s barging
operation.

 

(c)                                  At Trimble County and Cane Run, the Carrier
shall notify the appropriate person(s) of incoming barges at least six (6)
hours prior to the arrival of each tow, in accordance with the provisions set
forth in Appendix A. Carrier shall provide the designated

 

4

 

plant personnel with periodic updates of the
expected day of all tow arrivals. Carrier’s coal tows shall be unloaded on a
stand-by basis, upon arrival, at Trimble County and Cane Run with Carrier being
responsible for all placement, shifting and decking services at the plant.
Buyer shall provide adequate shoreside personnel and equipment (including the
shuttle barge) for the operation of the unloading system. The coal barges
generally will be standby unloaded as follows: The Carrier shall provide a boat
and all deck-hands and tying services and shall shuttle the coal barges to and
away from the barge unloader; and shall leave with all empty coal barges.
Carrier’s services shall be provided in accordance with the provisions set
forth in Appendix A, which is attached hereto. After the barges are unloaded,
Buyer shall notify Carrier that such unloading has occurred and Carrier shall
remove the unloaded barges promptly. Buyer shall operate the unloader. When
circumstances make standby unloading impractical in Buyer’s discretion or in
the event Buyer claims that force majeure conditions prevent the unloading of a
tow, then the Buyer shall have the option of: (1) reconsigning the tow to
another of the Buyer’s plants, (2) having Carrier properly and securely moor
the coal barges at the unloading dock and notifying the appropriate person(s)
that such mooring has been completed and Buyer hiring a harbor boat to provide
fleet security for the loaded tow, or (3) requesting Carrier remain at the
plant with the tow and compensating Carrier at the applicable hourly rate of
$225 per hour, subject to the same adjustments set forth in subsection 7(b).

 

(d)                                 Except as otherwise expressly provided
herein, Carrier shall supply at its own expense all labor, supervision,
equipment and facilities, and shall pay all expenses and taxes whatsoever,
incurred in connection with its performance under this Agreement.

 

5.                                      Description of Barges. All barges used by the Carrier shall be in
good and seaworthy condition, shall have two (2) interior side slope sheets, at
least one (1) interior end

 

5

 

slope sheet, shall not be wider than
thirty-five (35) feet, and shall have a minimum capacity of fifteen hundred
(1,500) tons of coal.

 

6.                                      Compliance with Safety
Procedures and Laws.

 

(a) Carrier represents and warrants that it is in the business of river
barge transportation and that it possesses a high degree of professional
expertise in all facets of river barge transportation and promises that it will
exercise that degree of care of persons so skilled and that it will at all
times provide adequate skilled personnel, equipment, facilities, and capital to
transport Cargo safely in accordance with the terms of this Agreement.

 

(b) Without limiting the generality of the provisions of subsection (a)
above, the Carrier will at all times in its performance under this Agreement
comply with all applicable laws and regulations of any kind and all procedures
and provisions set forth in Appendix A attached hereto.

 

7.                                       Rates

 

(a)                                  Subject to the adjustments set forth in
subsections 6(b) and 6(c) hereof, Buyer shall pay to the Carrier the following
rates per ton:

 

6

 

CARGO – COAL

 

	
  LOADING POINT

  	
   

  	
  DESTINATION

  	
   

  
	
  River

  	
   

  	
  Mile Point

  	
   

  	
  Mill Creek

  	
   

  	
  Cane Run

  	
   

  	
  Trimble Co.

  	
   

  	
  Ghent

  	
   

  	
  Riverport

  	
   

  
	
  Monongahela

  	
   

  	
  85 - 102

  	
   

  	
  6.72

  	
   

  	
  6.82

  	
   

  	
  6.55

  	
   

  	
  6.30

  	
   

  	
  7.25

  	
   

  
	
  Monongahela

  	
   

  	
  61.2-84.9

  	
   

  	
  6.06

  	
   

  	
  6.16

  	
   

  	
  5.89

  	
   

  	
  5.64

  	
   

  	
  6.59

  	
   

  
	
  Monongahela

  	
   

  	
  23.8-61.1

  	
   

  	
  5.37

  	
   

  	
  5.47

  	
   

  	
  5.20

  	
   

  	
  4.95

  	
   

  	
  5.90

  	
   

  
	
  Monongahela

  	
   

  	
  Below 23.7

  	
   

  	
  4.68

  	
   

  	
  4.78

  	
   

  	
  4.51

  	
   

  	
  4.26

  	
   

  	
  5.21

  	
   

  
	
  Ohio

  	
   

  	
  0-84.2

  	
   

  	
  3.62

  	
   

  	
  3.72

  	
   

  	
  3.45

  	
   

  	
  3.20

  	
   

  	
  4.15

  	
   

  
	
  Ohio

  	
   

  	
  84.3 - 126.5

  	
   

  	
  3.22

  	
   

  	
  3.32

  	
   

  	
  3.05

  	
   

  	
  2.80

  	
   

  	
  3.75

  	
   

  
	
  Ohio

  	
   

  	
  126.6 —
  237.5

  	
   

  	
  3.04

  	
   

  	
  3.14

  	
   

  	
  2.87

  	
   

  	
  2.62

  	
   

  	
  3.57

  	
   

  
	
  Ohio

  	
   

  	
  237.6 -
  279.3

  	
   

  	
  2.67

  	
   

  	
  2.77

  	
   

  	
  2.50

  	
   

  	
  2.25

  	
   

  	
  3.20

  	
   

  
	
  Ohio

  	
   

  	
  279.4 -
  305.6

  	
   

  	
  2.12

  	
   

  	
  2.22

  	
   

  	
  1.95

  	
   

  	
  1.70

  	
   

  	
  2.65

  	
   

  
	
  Ohio

  	
   

  	
  305.7-317

  	
   

  	
  2.02

  	
   

  	
  2.12

  	
   

  	
  1.85

  	
   

  	
  1.60

  	
   

  	
  2.55

  	
   

  
	
  Ohio

  	
   

  	
  317.1-360

  	
   

  	
  1.97

  	
   

  	
  2.07

  	
   

  	
  1.80

  	
   

  	
  1.55

  	
   

  	
  2.50

  	
   

  
	
  Ohio

  	
   

  	
  TTI405.9

  	
   

  	
  1.71

  	
   

  	
  1.81

  	
   

  	
  1.54

  	
   

  	
  1.29

  	
   

  	
  2.24

  	
   

  
	
  Ohio

  	
   

  	
  470-531.5

  	
   

  	
  1.60

  	
   

  	
  1.70

  	
   

  	
  1.43

  	
   

  	
  1.18

  	
   

  	
  2.13

  	
   

  
	
  Ohio

  	
   

  	
  535.2-620

  	
   

  	
  1.05

  	
   

  	
  1.15

  	
   

  	
  1.25

  	
   

  	
  1.34

  	
   

  	
  1.58

  	
   

  
	
  Ohio

  	
   

  	
  620.1-720

  	
   

  	
  1.19

  	
   

  	
  1.29

  	
   

  	
  1.54

  	
   

  	
  1.63

  	
   

  	
  1.72

  	
   

  
	
  Ohio

  	
   

  	
  721 - 776.1

  	
   

  	
  1.54

  	
   

  	
  1.64

  	
   

  	
  1.89

  	
   

  	
  1.98

  	
   

  	
  2.07

  	
   

  
	
  Ohio

  	
   

  	
  Evansville
  784.1

  	
   

  	
  1.63

  	
   

  	
  1.80

  	
   

  	
  1.97

  	
   

  	
  2.06

  	
   

  	
  2.23

  	
   

  
	
  Ohio

  	
   

  	
  785 - 846

  	
   

  	
  1.98

  	
   

  	
  2.18

  	
   

  	
  2.33

  	
   

  	
  2.42

  	
   

  	
  2.61

  	
   

  

 

7

 

	
  River

  	
   

  	
  Mile Point

  	
   

  	
  Mill Creek

  	
   

  	
  Cane Run

  	
   

  	
  Trimble Co.

  	
   

  	
  Ghent

  	
   

  	
  Riverport

  	
   

  
	
  Ohio

  	
   

  	
  851.8

  	
   

  	
  2.13

  	
   

  	
  2.23

  	
   

  	
  2.48

  	
   

  	
  2.57

  	
   

  	
  2.66

  	
   

  
	
  Ohio

  	
   

  	
  853-918.5

  	
   

  	
  2.16

  	
   

  	
  2.35

  	
   

  	
  2.50

  	
   

  	
  2.58

  	
   

  	
  2.78

  	
   

  
	
  Ohio

  	
   

  	
  918.6-962

  	
   

  	
  2.30

  	
   

  	
  2.40

  	
   

  	
  2.65

  	
   

  	
  2.74

  	
   

  	
  2.83

  	
   

  
	
  Big Sandy

  	
   

  	
  All Origins

  	
   

  	
  2.17

  	
   

  	
  2.27

  	
   

  	
  2.00

  	
   

  	
  1.75

  	
   

  	
  2.70

  	
   

  
	
  Kanawha

  	
   

  	
  Above 82.8

  	
   

  	
  3.92

  	
   

  	
  4.02

  	
   

  	
  3.75

  	
   

  	
  3.50

  	
   

  	
  4.45

  	
   

  
	
  Kanawha

  	
   

  	
  67.7-82.7

  	
   

  	
  3.77

  	
   

  	
  3.87

  	
   

  	
  3.60

  	
   

  	
  3.35

  	
   

  	
  4.30

  	
   

  
	
  Kanawha

  	
   

  	
  Below 67.6

  	
   

  	
  3.64

  	
   

  	
  3.74

  	
   

  	
  3.47

  	
   

  	
  3.22

  	
   

  	
  4.17

  	
   

  
	
  Green

  	
   

  	
  Above 63.1

  	
   

  	
  2.52

  	
   

  	
  2.73

  	
   

  	
  2.86

  	
   

  	
  2.95

  	
   

  	
  3.16

  	
   

  
	
  Green

  	
   

  	
  0-63.0

  	
   

  	
  1.92

  	
   

  	
  2.10

  	
   

  	
  2.26

  	
   

  	
  2.35

  	
   

  	
  2.53

  	
   

  
	
  Tennessee

  	
   

  	
  0-25

  	
   

  	
  2.35

  	
   

  	
  2.45

  	
   

  	
  2.70

  	
   

  	
  2.79

  	
   

  	
  2.88

  	
   

  
	
  Upper Miss.

  	
   

  	
  98.5

  	
   

  	
  3.99

  	
   

  	
  4.09

  	
   

  	
  4.34

  	
   

  	
  4.43

  	
   

  	
  4.52

  	
   

  
	
  Upper Miss.

  	
   

  	
  125

  	
   

  	
  4.86

  	
   

  	
  4.96

  	
   

  	
  5.21

  	
   

  	
  5.30

  	
   

  	
  5.39

  	
   

  
	
  Upper Miss.

  	
   

  	
  161-185

  	
   

  	
  6.07

  	
   

  	
  6.17

  	
   

  	
  6.42

  	
   

  	
  6.51

  	
   

  	
  6.60

  	
   

  
	
  Lower Miss.

  	
   

  	
  Mobile Bay

  	
   

  	
  9.05

  	
   

  	
  9.15

  	
   

  	
  9.40

  	
   

  	
  9.49

  	
   

  	
  9.58

  	
   

  
	
  Lower Miss.

  	
   

  	
  55.3 - 57 *

  	
   

  	
  7.36

  	
   

  	
  7.46

  	
   

  	
  7.71

  	
   

  	
  7.80

  	
   

  	
  7.89

  	
   

  

 

*
If shipped from Davant (Electro-Coal) Mile 55.3, Lower Mississippi, then deduct
50.35 per ton.

 

CARGO –
LIMESTONE

 

	
   

  	
   

  	
  DESTINATION

  	
   

  
	
  LOAD POINTS

  	
   

  	
  Mill Creek

  	
   

  	
  Trimble Co.

  	
   

  	
  Ghent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cape Sandy (MP 674 Ohio River)

  	
   

  	
  $

  	
  0.78

  	
   

  	
  $

  	
  0.93

  	
   

  	
  $

  	
  0.95

  	
   

  
	
  New Amsterdam (MP 653 Ohio River)

  	
   

  	
  $

  	
  0.78

  	
   

  	
  $

  	
  093

  	
   

  	
  $

  	
  0.95

  	
   

  

 

8

 

DEMURRAGE

 

	
  Mill Creek, Jefferson
  County Riverport, Trimble Co., & Ghent             

  	
   

  	
  $150/demurrage debit

  	
   

  
	
  Trimble Co. Coal and Cane
  Run

  	
   

  	
  $225/demurrage debit

  	
   

  

 

Rates do not include switching and fleeting
charges at destinations (except Jefferson Riverport) or origins. Carrier shall
not be responsible for such charges. In the event the harbor service charges at
Jefferson Riverport are increased or decreased, the Carrier may increase or
decrease its rates accordingly. Rates from loading points not listed above will
be negotiated as required and shall be reasonably related to those set forth
above, taking into account differences in distance, operating conditions and
loading conditions. If Buyer and Carrier cannot agree on a rate from a
particular loading point, then Buyer shall have the right to hire another
carrier to transport Cargo from such loading point. Such tons transported by
another carrier shall not be subject to the limitations set forth in Section 3a
through 3d.

 

(b)                                 The rates set forth in subsection 7(a)
as adjusted per this section shall apply to Cargo loaded commencing January 1,
2002 for LG&E and commencing July 1, 2002 for KU. Rates will be
adjusted each quarter thereafter as follows:

 

(1) Twenty percent (20%) of
the base rate shall remain fixed for the Term of this Agreement.

 

(2) Fifty-five percent (55%)
of the base rate (hereinafter the “55% component”) shall change in proportion
to changes in the first published PPI Industrial Commodities Index Less Fuels
and Related Products and Power found in Table 8 of the Producer Price Indexes,
published monthly by the U.S. Department of Labor, Bureau of Labor Statistics
(hereinafter the “PPI”). The change in this component shall be calculated by
multiplying a fraction, the denominator of which shall be the average PPI for
April, May, and June, 2001 (the average base index first published for the
period is 143.6), and the

 

9

 

numerator of which shall be the average PPI
for the three-month period ending November 30, February 28, May 31,
or August 31 (hereinafter the “calculation period”) times the initial
fifty-five percent (55%) component. The effective date of the changes in this
component shall be January 1, April 1, July 1, or October 1
as the case may be, for the remainder of the Term of this Agreement, commencing
January 1, 2002 for LG&E and July 1, 2002 for KU.

 

(3) Twenty percent (20%) of
the base rate (hereinafter the “20% Component”) shall change in proportion to
changes in the average of (a) the posted price of #2 diesel fuel at
Catlettsburg, Kentucky and (b) the Ohio Valley Marine Service posted price at
the mouth of the Green River (together, the “Diesel Posted Prices”). The change
in the 20% Component shall be calculated by multiplying a fraction, the
denominator of which shall be the average Diesel Posted Prices on the first (1st)
day of each of the months of April, May, and June 2001(the average base
Diesel Posted Prices for the period is 86.7 cents per gallon), and the
numerator of which shall be the average Diesel Posted Prices on the first (1st)
day of each of the months for the three (3) month periods beginning September,
December, March and June (hereinafter the “Calculation Period”) times
the initial 20% Component. The effective date of the changes in this component
shall be the first day of the calendar quarter following the end of the
Calculation Period (January 1, April 1, July 1, or October 1,
as the case may be), for the remainder of the Term of this Agreement, beginning
January 1, 2002 for LG&E and beginning July 1, 2002 for KU.

 

(4) Five percent (5%) of the base rate (the “5% Component”)
represents federal taxes: the Inland Waterway Fuel Tax, Deficit Reduction Tax,
and Leaking Underground Storage Tank Tax (collectively, the “Taxes”). The
average base for the tax for the period is 24.4 cents per gallon, which amount
is comprised of Inland Waterway taxes in the amount of 20.0 cents per gallon,
Deficit Reduction taxes in the amount of 4.3

 

10

 

cents per gallon, and Leaking Underground
Storage Tank taxes in the amount of .10 cents per gallon). This 5% Component
will change to the extent of any future changes in the amount of Taxes, and
shall be adjusted effective on the first (1st) day of the calendar month
following the effective date of any change that occurs on or after January 1,
2002, (except when such change is effective on the first (1st) day of such
month, in which case the adjustment shall be made as of such date).

 

(c)                                  Changes in the PPI.  The current index of 1982 = 100 applies to
the PPI. Should this index be revised or a new one adopted, the parties shall
make an appropriate adjustment, either in accordance with published
instructions from the Bureau of Labor Statistics regarding such revision or, if
no such instructions are published, by a proportionate revision which will
fairly reflect such change in the index.

 

(d)                                 Rates will be adjusted for the cost of any
government-imposed tolls or other government charges (“Governmental Impositions”)
enacted after the effective date of this Agreement which are assessed on river
transportation and assessed against the Carrier for carrying Cargo under this
Agreement. Such rate adjustments will be effective as of the effective date of
such tolls or charges. Governmental Impositions shall not apply to: Taxes, as
defined in the preceding section, changes in taxes on fuel, which changes shall
be covered in sections 7(b)(3) and 7(b)(4) hereof, any noncompliance existing
as of the effective date of this Agreement, financing costs and taxes, income
tax or property taxes or related costs, any penalties, interest, fines, costs
of arbitration, mediation, litigation, or any other type of dispute resolution
through all stages of appeal, payment of judgments against Carrier or Carrier’s
affiliates, or on instruments or documents evidencing the same or on the
proceeds thereof, and wages, benefits and retirement. In order to constitute a
Governmental Imposition, it must be imposed against the barging industry either
on a regional, state or national basis. Carrier must notify Buyer in writing

 

11

 

of the obligation to comply
with such laws (if Carrier anticipates meeting the conditions that would
require Carrier to comply with such laws) within thirty (30) days of the time
Carrier becomes aware of such laws, setting forth the specific law or
regulation and the anticipated actual or actual financial impact on Carrier’s
delivery of Cargo hereunder, and the anticipated or actual effective date.
Additionally, the applicable base price hereunder shall be increased only if
the price adjustment is allocated evenly to all effected cargo transported by
Carrier, so that Buyer is allocated only its proportionate share of such
Governmental Imposition, and the base price shall be decreased for any savings
resulting from changes in such Governmental Imposition. The base price can not
be increased due to Governmental Impositions (a) on an annual basis, more than
five percent (5%) per ton of the rates effective January 1, 2002; and (b)
on a cumulative basis during the Term, more than fifteen percent (15%) per ton
of the rates effective January 1, 2002. If (a) the annual increase of
Governmental Impositions is more than five percent (5%) of the rates effective
on January 1, 2002, or (b) if the total amount of Governmental Impositions
is more than fifteen percent (15%) of the rates effective January 1, 2002,
on a cumulative basis during the Term of this Agreement, Carrier may terminate
this Agreement upon not less than sixty (60) days’ written notice to Buyer.
Alternatively, Buyer may agree, by forwarding written notice to Carrier within
sixty (60) days after receiving Carrier’s written notice of termination to
accept the cumulative Base Rate increase of more than fifteen percent (15%).
Carrier shall notify Buyer of any such changes within the time frames set forth
above and supply sufficient documentation for Buyer to verify any such change.
Either Buyer or Carrier may request a base price adjustment, which shall be
comprised of no more than the reasonable actual costs directly associated with
the effect of such change on the Cargo to be transported hereunder. Such
adjustment shall be made effective on the first day of the calendar month
following the effective date of any change,

 

12

 

(except when such change is
effective on the first day of the month, in which case the adjustment shall be
made as of such date).

 

(e)                                  The calculations for changes in the
components of the base rate are to be made to three (3) decimal places, with
the total being rounded to two (2) decimal places.

 

(f)                                    The term “ton” as used herein shall mean a
net ton of two thousand (2000) pounds avoirdupois weight.

 

8.                                      Demurrage.

 

(a)                                  Free Time At Mill Creek, Ghent, Jefferson
County Riverport, and Trimble County Limestone Destinations. Buyer shall be allowed four (4) “Free
Unloading Days” within which to unload each of the barges delivered to Buyer at
Mill Creek (coal and limestone), Ghent (coal and limestone), Jefferson
Riverport (coal and limestone) and Trimble County Limestone pursuant to this
Agreement. An “Unloading Day” shall commence at 7:00 a.m. and continue until
7:00 a.m. on the next day. The calculation of “Free Unloading Days” for each
barge, for purpose of the unloading demurrage accounts described in Sub-section c,
below, shall commence at the first (1st) 7:00 a.m. following the delivery of
such barge to Buyer and notification is given to Buyer that the first (1st)
barge is moored to the Buyer’s dock and ready to unload, and shall run
continuously thereafter for a period of ninety six (96) hours. “Actual
Unloading Days” for each barge, for purpose of said demurrage accounts, shall
commence concurrently with the commencement of the “Free Unloading Days” and
shall continue until the first (1St) 7:00 a.m. following the time
that Carrier’s dispatcher has been notified that the barge is actually unloaded
and ready for pick up (for a barge unloaded and said notification given before
the first (1st) 7:00 a.m. following delivery, the “Actual Unloading
Days” would be zero).

 

13

 

(b)                                 Free Time At Trimble County Coal and Cane Run
Destinations. Buyer shall be
allowed per barge tow, one (1) hour per barge plus one (1) additional hour as “Free
Unloading Hours” within which to unload the barge tow delivered to Buyer at
Trimble County Coal and Cane Run Stations. For example, if a barge tow of six
(6) barges is delivered, seven (7) free unloading hours shall be allowed Buyer
within which to unload the six (6) delivered barges (one (1) hour per barge
plus one (1) hour equals seven (7) hours). The calculation of “Free Unloading
Hours” for the purpose of the unloading demurrage accounts described in Sub-section (d)
below, shall commence when Buyer is notified that the first (1St)
barge is located under the unloader and is ready to unload, except that, if
Buyer for any reason, except for force majeure, is not prepared to unload such
barge or has another barge line’s barge under the unloader, then Free Unloading
Hours shall begin when Carrier notifies Buyer that it has arrived and is ready
to begin unloading. “Actual Unloading Hours” for each barge tow, for purpose of
said demurrage accounts, shall commence concurrently with the commencement of
the “Free Unloading Hours” and shall continue until Carrier is notified by
Buyer that the barge tow is actually unloaded and ready for removal. Fractions
of an hour shall be rounded up to the nearest one-half hour.

 

In the event a Crounse coal tow arrives at Trimble County within less
than twelve hours after the completion of the free unloading time for the
previous Crounse coal tow, the free time for the second coal tow shall not
commence until the twelfth hour following completion of the free time for the
first Crounse coal tow. For example, if a ten (10) barge Crounse coal tow
arrives at 0200 hours, the free time would expire at 1300 hours (eleven hours
later). If a second Crounse coal tow arrives at 1100 hours, the free time for
the second Crounse coal tow shall not commence until 0100 hours the next day
(twelve hours after the completion of the free unloading time for the first
Crounse coal tow). This exception shall

 

14

 

not apply to barges in either tow if such barges
were diverted from a plant other than Trimble County.

 

The plant shall maintain a log of start and stop times for the
unloading of each tow and shall communicate such times to Carrier’s towboat
pilothouse personnel, as requested, in order for both parties to mutually
reconcile free time calculations. Unloading shall be considered complete once
the bucket unloader has completed its unloading cycle (and been cleared from
the cargo box) for the last barge in that tow.

 

(c)                                  Demurrage Accounts For Mill Creek, Ghent,
Jefferson County Riverport, and Trimble County Limestone. Carrier shall maintain separate unloading
demurrage accounts for Mill Creek, Ghent, Jefferson County Riverport, and
Trimble County Limestone, in which one (1) credit shall be entered for each day
the Actual Unloading Days for a barge are less than four (4) days for that
barge, and in which one (1) debit shall be entered for each day the Actual
Unloading Days for a barge exceed four (4) days for that barge. Separate
demurrage accounts for coal and limestone shall be kept at Mill Creek, Ghent
and Trimble County.

 

At the end of each month during the Term of this Agreement, the
demurrage accounts shall be balanced and settled for that period (hereinafter
called “Accounting Period”) by canceling one (1) debit with one (1) credit in
each demurrage account and by the payment by Buyer to Carrier of one hundred
and fifty dollars ($150), subject to the same adjustments set forth in subsection 7(b),
for each such demurrage debit not so canceled. In the event the total credits
exceed the total debits in the account at the end of any Accounting Period,
such excess credits shall be canceled and shall not carry over to the next
Accounting Period. At Buyer’s request, but not more frequently than once per
month, Carrier shall send Buyer a summary of the current demurrage accounts.

 

15

 

(d)                                 Demurrage Accounts For Trimble County Coal
and Cane Run. Carrier shall
maintain unloading demurrage accounts for Trimble County coal and Cane Run, in
which Buyer will receive one (1) credit for each hour the “Actual Unloading
Hours” are less than the “Free Unloading Hours” and one (1) debit shall be
entered for each hour the Actual Unloading Hours exceed the Free Unloading
Hours.

 

At the end of each month during the Term of this Agreement, the
demurrage accounts shall be balanced and settled for that one month period
(hereinafter called “Accounting Period”) by canceling one (1) debit with one
(1) credit in each demurrage account and by the payment by Buyer to Carrier of
two hundred and twenty-five dollars ($225), subject to the same adjustments set
forth in subsection 7(b), for each such demurrage debit not so canceled.  In the event the total credits exceed the
total debits in the account at the end of any Accounting Period, such excess
credits shall be canceled and shall not carry over to the next Accounting Period.
At Buyer’s request, but not more frequently than once per month, Carrier shall
send Buyer a summary of the current demurrage accounts.

 

9.                                      Payment.

 

The method of determining
the weight of the Cargo for the purpose of calculating payment to the Carrier
hereunder shall be the same method used for the purpose of calculating payment
to the Cargo set forth in Buyer’s various coal supply and limestone agreements.
For all tons of Cargo unloaded pursuant to the provisions of Section 4,
between the first (1st) and fifteenth (15th) days of any calendar
month, Buyer shall make payment to Carrier for the transportation of such tons
of Cargo, between each loading point and each delivery point, by the
twenty-fifth (25th) of such month of transportation. If the twenty-fifth (25th)
is not a regular workday, payment shall be made on the next regular workday.
Within approximately fifteen (15) days after the end of each calendar month,
Buyer shall provide to

 

16

 

Carrier the number of tons of
Cargo transported between each loading point and each delivery point during
such calendar month under this Agreement. On the basis of this quantity
information, Carrier shall submit an invoice to Buyer for receipt by Buyer on
or before the twentieth (20th) of the month. Buyer shall make payment of such
invoice (less the payment made for the tons of Cargo transported between the
first (1st) of the month and the fifteenth (15th) of the month) by
the twenty-fifth (25th) of the month following delivery. If the twenty-fifth
(25th) is not a regular workday, payment shall be made on the next
regular workday. Two (2) invoices will be sent to Buyer. The invoice for
Louisville Gas and Electric will be sent to the following address:

 

Louisville Gas and Electric
Company P.O. Box 32010

Louisville, Kentucky 40232

Attn: Manager, LG&E/KU Fuels

 

The invoice for Kentucky
Utilities will be sent to the following address:

 

Kentucky Utilities Company

P.O. Box 32010

Louisville, Kentucky 40232

Attn: Manager, LG&E/KU Fuels

 

10.                               Indemnification.

 

The parties agree to defend,
indemnify and hold harmless each other from any claim, demand, suit, loss, cost
or expense or any damage which may be asserted, claimed or recovered against or
from one of them by reason of any damage to property, including property of
others, or injury, including death, sustained by any person or persons
whomsoever to the extent such damage, injury or death arises out of any act or
omission by the offending party, its officers, employees or parties engaged by
it, in its performance of this agreement. Neither party shall be liable to the
other party for consequential, punitive, or

 

17

 

exemplary damages.

 

11.                               Insurance. At all times, the Carrier will carry and
maintain at its own cost (a) protection and indemnity insurance, including
tower’s liability, collision liability, and wharfinger’s liability, in the
amount of at least five (5) million dollars per occurrence and (b) cargo
insurance which shall fully insure the Cargo at the then current cost of that
Cargo to Buyer, and (c) pollution insurance in the amount of at least five (5)
million dollars. Certificates of insurance satisfactory in form to Buyer and
signed by the Carrier’s insurer shall be supplied by the Carrier to Buyer
evidencing that the above insurance is in force and that not less than thirty
(30) calendar days written notice will be given to Buyer prior to any
cancellation or material reduction in coverage under the policies. The
Contractor shall cause its insurer to name Buyer as an additional named
insured, and waive all subrogation rights against Buyer for all losses or
claims arising from performance hereunder. Evidence of Buyer’s status as an
additional insured, a statement that such status shall not prejudice any rights
to which Buyer would have been entitled were Buyer not an additional insured,
and evidence of such waiver of subrogation satisfactory in form and substance
to Buyer shall be exhibited in the Certificate of Insurance mentioned above.
Carrier’s liability shall not be limited to its insurance coverage.

 

12.                               Termination. If either party hereto commits a material
breach of any of its obligations under this Agreement at any time, then the
other party has the right to give written notice describing such breach and
stating its intention to terminate the Agreement no sooner than 30 days after
the date of the notice (the “Notice Period”). If such material breach is
curable and the breaching party cures such material breach within the Notice
Period, then the Agreement shall not be terminated due to such material breach.
If such material breach is not curable or the breaching party fails to cure
such material breach within the

 

18

 

Notice Period, then this
Agreement shall terminate at the end of the Notice Period in addition to all
the other rights and remedies available to the aggrieved party under this
Agreement and at law and in equity.

 

13.                               Force Majeure. If either party hereto is delayed in or
prevented from performing any of its obligations under this Agreement due to
acts of God, war, riots, civil insurrection, acts of the public enemy, strikes,
lockouts, fires, floods, or earthquakes, equipment breakdowns, or other causes
beyond the reasonable control of the affected party, then the obligations of
both parties hereto shall be suspended to the extent made necessary by such
event provided that such party gives written notice to the other party as
promptly as practicable of the nature and probable duration of the force
majeure event. The party declaring force majeure shall exercise due diligence
to avoid and shorten the force majeure event and will keep the other party
advised as to the continuance of the force majeure event. Services not provided
during any force majeure period shall be made up within a reasonable time at
the option of Buyer. If a force majeure event affects a material portion of the
services hereunder for more than twenty (20) days, the party not claiming force
majeure may terminate the contract by forwarding written notice to the claiming
party. If the force majeure event claimed by Carrier is industry-wide, Buyer
may not terminate this Agreement unless Buyer can obtain alternate river
transportation services from another provider.

 

14.                               This section intentionally
left blank.

 

15.                               Independent Contractor. Nothing in this Agreement shall be deemed to
make the Carrier or any of the Carrier’s employers or agents the
representative, agent, or employee of Buyer. The Carrier shall be an
independent contractor and shall have responsibility for and control over the
details and means for performance under this Agreement. Anything in this
Agreement which may appear to give Buyer the right to direct the Carrier as to
the details of

 

19

 

its performance hereunder or to
exercise a measure of control over the Carrier means that the Carrier shall be
subject to the desires of Buyer only in the results achieved.

 

16.                               Equal Employment Opportunity.  To
the extent applicable, Carrier shall comply with all of the following
provisions which are incorporated herein by reference:  Equal Opportunity regulations set forth in 41
CRF §60-1.4(a) and (c) prohibiting discrimination against any employee or
applicant for employment because of race, color, religion, sex, or national
origin; Vietnam Era Veterans Readjustment Assistance Act regulations set forth
in 41 CFR § 60-250.4 relating to the employment and advancement of
disabled veterans and veterans of the Vietnam Era; Rehabilitation Act
regulations set forth in 41 CFR § 60-741.4 relating to the employment and
advancement of qualified disabled employees and applicants for employment; the
clause known as “Utilization of Small Business Concerns and Small Business
Concerns Owned and Controlled by Socially and Economically Disadvantaged
Individuals” set forth in 15 USC § 637(d)(3); and subcontracting plan
requirements set forth in 15 USC § 637(d).

 

17.                               Miscellaneous

 

(a)                                  This Agreement shall be governed by the
subject to the law of the Commonwealth of Kentucky (excluding its conflicts
laws).

 

(b)                                 All notices respecting this Agreement shall
be in writing and shall be addressed as follows:

 

	
   

  	
  If to
  LG&E:

  	
  Louisville
  Gas and Electric Company

  
	
   

  	
   

  	
  P.O. Box
  32010

  
	
   

  	
   

  	
  Louisville,
  Kentucky 40232

  
	
   

  	
   

  	
  Attn:
  Director Corporate Fuels and By Products

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to KU:

  	
  Kentucky
  Utilities

  
	
   

  	
   

  	
  P.O. Box
  32010

  
	
   

  	
   

  	
  Louisville,
  Kentucky 40232

  
	
   

  	
   

  	
  Attn:
  Director Corporate Fuels and By Products

  

 

20

 

	
   

  	
  If to
  Carrier:

  	
  Crounse
  Corporation

  
	
   

  	
   

  	
  2626
  Broadway

  
	
   

  	
   

  	
  Paducah,
  Kentucky 42001

  
	
   

  	
   

  	
  Attn:
  President

  

 

(c)                                  Attorneys’ Fees and Costs. If a dispute arises under this Agreement,
the prevailing party shall be entitled to recover attorney’s fees and other
costs from the nonprevailing party.

 

(d)                                 Entire Agreement. This Agreement contains the entire agreement
between the parties respecting the subject matter hereof and supersedes all
prior or contemporaneous oral or written statements, understandings, and
agreements.

 

(e)                                  Headings. The paragraph headings appearing in this Agreement are for convenience
only and shall not affect the meaning or interpretation of this Agreement.

 

provision of this agreement, or to take
advantage of any rights hereunder, shall not be construed as a waiver of such
provision or right.

 

(f)                                    Waiver. The failure of either party to insist on strict performance of any
provision of this agreement, or to take advantage of any rights hereunder,
stall not be construed as a waiver of such provision or right.

 

(g)                                 Remedies Cumulative. Remedies provided under this Agreement shall
be cumulative and in addition to other remedies provided under this Agreement
or by law or in equity.

 

(h)                                 Severability. If any provision of this Agreement is found
contrary to law or unenforceable by any court of law, the remaining provisions
shall be severable and enforceable in accordance with their terms, unless such
unlawful or unenforceable provision is material to the transactions
contemplated hereby, in which case the parties shall negotiate in good faith a
substitute provision.

 

(i)                                     Binding Effect. This Agreement shall bind and inure to the
benefit of the

 

21

 

parties and their successors and assigns.

 

(j)                                     Assignment.

 

(i)                                     Carrier shall not, without Buyer’s prior
written consent, which consent may be withheld in Buyer’s sole opinion, make
any assignment, subcontracting or transfer of this Agreement by operation of
law or otherwise, including without limitation any assignment or transfer as
security for any obligation, and shall not assign or transfer the performance
of or right or duty to perform any obligation of Carrier hereunder; provided,
however, that Carrier may assign the right to receive payments directly from
Buyer to a lender as part of any accounts receivable financing or other
revolving credit arrangement which Carrier may have now or at any time during
the Term of this Agreement, and provided further, that Buyer shall consider
consenting to an assignment to an affiliate of Carrier. Buyer shall not
unreasonably withhold its consent to an assignment to an affiliate of Carrier,
provided: (a) the affiliate’s balance sheet, financial statement, and business
experience and capability are comparable to Carrier’s, (b) the majority
ownership of the affiliate is comparable to Carrier’s, and (c) Carrier receives
Buyer’s prior written approval for the transfer.

 

(ii)                                  Buyer shall not, without Carrier’s prior
written consent, which consent shall not be unreasonably withheld, assign this
Agreement or any right for the performance of or right or duty to perform any
obligation of Buyer hereunder; except that, without such consent, Buyer may
assign this Agreement in connection with a transfer by Buyer of all or a
majority interest in the Buyer’s generating station that is the recipient of
the coal to be delivered hereunder, or as part of a merger or consolidation
involving Buyer.

 

(iii)                               In the event of an assignment or transfer
contrary to the provisions of this section, the non-assigning party may
terminate this Agreement immediately.

 

(k)                                  Amendments. Except as otherwise provided herein, this Agreement may not be
amended, supplemented or otherwise modified except by written instrument signed
by both parties hereto.

 

The parties hereto have
executed this Agreement effective as of the date first written above but
actually on the dates set forth below.

 

	
  LOUISVILLE GAS AND
  ELECTRIC COMPANY

  	
  CROUNSE CORPORATION

  	
   

  	
   

  

 

22

 

 

	
  KENTUCKY UTILITIES COMPANY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/   Victor
  A. Staffieri

  	
   

  	
   

  	
   

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  	
   

  	
   

  
	
  Date: 8/21/02

  	
   

  	
   

  	
   

  
						

 

Appendix A to Barging
Agreement

 

Some specific minimum safety procedures are set forth below.
This list in no way limits Carrier’s obligation to act safely at all times in
its performance under this Agreement and to bear sole responsibility therefor.
Additionally, while on Buyer’s property, Carrier will comply with Buyer’s
safety rules for contractors.

 

1.                                       Notice of Barge Transactions

 

At Mill Creek, Cane Run, Trimble County, and Ghent, the Carrier will
notify Buyer of any barge transaction as follows. The Carrier first will
attempt to notify Buyer’s guard service at the loading dock by way of the
marine radio located at the Guard House. If the Carrier is unable to contact
the guard service, the Carrier will notify the plant shift supervisor. If the
Carrier is unable to notify the plant shift supervisor, the Carrier will notify
the material handling supervisor. The Carrier shall not leave the barges until
one of the Buyer’s employees or agents set forth above has been notified.

 

2.                                       Location of Barges

 

At all times, the Carrier further will be prepared to, and upon request
by

 

23

 

Buyer will, immediately state the location of any
barge destined for Buyer and in the care and custody of Carrier from the time
that Buyer requests barge placement at a holding point to the time that Carrier
delivers the barges.

 

3.                                       Mooring

 

(a)                                  All barges that are moored at all
destinations and are to be left at the plant site shall be moored using both
the normal leaving lines supplied with each barge and a two inch (2”) fleeting
line that is attached to each cell.

 

(b)                                 Life preservers shall be worn by everyone
working on the barges.

 

(c)                                  For Trimble County and Cane Run, barges
generally will be standby unloaded as stated in Section 4 of this
Agreement. When circumstances dictate that barges will be moored at Trimble
County, the maximum number of barges to be moored in the coal area is thirty
(30) and in the limestone area is eighteen (18). Barges will be moored no more
than three (3) abreast during rising river, falling river, high water, or icy
conditions without a towboat in attendance.

 

(d)                                 For Mill Creek, the maximum number of barges
that can be moored without a harbor boat in attendance is thirty-two (32).
Barges shall not be moored wider than five (5) abreast under any conditions.

 

(e)                                  For Ghent, the maximum number of barges that
can be moored without a harbor boat in attendance is thirty-two (32).

 

4.                                       Riverport

 

For barges destined for the
Riverport, the Carrier will comply with all requirements and procedures
established by the Riverport pertaining to the Carrier’s performance hereunder.

 

24

 

5.                                       Breakaway and Loose Barnes

 

If at any time and for any reason any barge breaks away from the dock
or becomes loose, Carrier immediately will assist and cooperate in retrieving
or securing such barge upon becoming aware of the situation.

 

25Exhibit 10.46

 

Base Salaries for Named Executive Officers

 

In December 2004, the Compensation Group of LG&E Energy LLC
approved base salary increases for executive officers for 2005. The 2005
salaries for LG&E’s and KU’s named executive officers are as follows:

 

	
  Officer Name

  	
   

  	
  2005
  Base

  Salary

  	
   

  
	
  Hermann,
  Chris

  	
   

  	
  $

  	
  273,000

  	
   

  
	
  McCall, John
  R.

  	
   

  	
  $

  	
  425,400

  	
   

  
	
  Rives, S.
  Bradford

  	
   

  	
  $

  	
  345,280

  	
   

  
	
  Thompson ,
  Paul W.

  	
   

  	
  $

  	
  322,300

  	
   

  
	
  Staffieri,
  Victor A.

  	
   

  	
  $

  	
  700,163

  	
   

  

 

The salary increases were
effective December 20, 2004.

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