Attached files
Exhibit 10.1
Amendment to Coal Supply
Agreements
This Amendment to the January 1, 2009,
F. B. Culley and A. B. Brown Coal Supply Agreements between Vectren Fuels, Inc.
(“Seller”) and Vectren Power Supply, Inc. (“Buyer”) (the “Supply Agreements”),
has been entered into effective the 21 day of December, 2009, and evidences as
follows:
WHEREAS,
Buyer has requested that Seller provide terms for the deferral of certain
contract deliveries scheduled to be made under the Supply Agreements in 2009 and
2010 in order to alleviate Buyer’s coal inventory management issues;
and
WHEREAS,
Seller and Buyer have negotiated terms for such a deferral;
NOW,
THEREFORE, the parties agree to amend Sections 3.1 and 4.1 of the Supply
Agreements as follows:
|
|
1.
|
Under
Section 3.1 of each of the Supply Agreement, Buyer agreed to accept
delivery from Seller of at least 85% of specified coal quantities in 2009
and 2010 at its Culley and Brown
plants.
|
|
|
2.
|
Pursuant
to this Amendment, Section 3.1 of the Supply Agreements is modified to
reflect that Seller has agreed to defer 88,000 tons of coal deliveries in
2009 and 522,000 tons of coal deliveries in 2010, over and above Buyer’s
option to reduce deliveries by 15% of the specified quantities in those
years.
|
|
|
|
|
3.
|
Buyer
shall control the amount and timing of such deferrals, as well as the
identity of the plant (Culley and Brown) that will be deferring the
delivery under the Supply Agreements, so long as the aggregate deferral
amount does not exceed the tonnage set forth in paragraph 2
above.
|
|
|
4.
|
With
respect to the 2009 and 2010 deferrals, such tonnage shall be subsequently
supplied to Buyer in 2011 or 2012, based upon Buyer’s
instructions. Buyer will direct the delivery of such deferred
tons to either Culley or Brown. All deferred tons must be
purchased from Seller no later then December 31, 2012. Delivery
of deferred tons in 2011 or 2012 does not count as part of the specified
quantities to be purchased under the Supply Agreements in those contract
years.
|
|
|
5.
|
With
respect to the deferred tons, Section 4.1 of the Supply Agreements is
modified so that tons deferred in 2009 shall be delivered in 2011 or 2012,
regardless of plant delivery location, at an FOB mine price of $57.50/ton.
Similarly, tons deferred in 2010 shall be delivered in 2011 or 2012 at an
FOB mine price of $59.00/ton.
|
|
|
6.
|
In
exchange for discounting the 2011 and 2012 Supply Agreement prices for the
deferred coal. , Buyer agrees that to the extent it determines it requires
incremental coal in 2012, 2013, or 2014, it will provide Seller a Right of
First Refusal (“ROFR”) allowing Seller to match competing offers to sell
coal of similar quality to Buyer. This ROFR shall be applicable
for up to 50% of incremental coal Buyer seeks to procure in those
years.
|
|
|
7.
|
All
deliveries of deferred tons shall comply with all Supply Agreement terms,
and the Supply Agreements are not modified except as provided
herein.
|
IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed by their
duly authorized representatives as of the effective date set forth
above.
Vectren
Fuels, Inc.
By /s/ Randy
Back
____________
Randy Beck
Vectren Power Supply
By /s/ Ronald
Jochum
____________
Ronald Jochum