A.B. Brown Coal Supply Agreement Amendment No. 2 CONFIDENTIAL PORTIONS OMITTED

Exhibit 10.3

 

 

CONFIDENTIAL PORTIONS OMITTED

 

LEGEND:

[**] REPRESENTS CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

This Amendment to the January 1, 2009 A.B. Brown Coal Supply Agreements between Vectren Fuels (VF), Inc. and Vectren Power Supply (VPS) evidences as follows:

 

WHEREAS, VPS has two contracts with VF to supply A.B. Brown, both of which were entered into effective January 1, 2009, and have a term ending December 31, 2014; and

 

WHEREAS, under the "Brown 1 Contract" VPS annually buys 1 million tons of coal from VF and under the "Brown 2 Contract" VPS annually buys 410,000 tons of coal from VF; and

 

WHEREAS, the Brown 1 Contract has entered its price re-negotiation period pursuant to section 4.4(the period having by prior agreement of the parties been deferred in 2010 to April 2011);

 

Now, therefore, the parties agree to amend both the Brown 1 and Brown 2 Contracts as follows:

 

1. With respect to the purchase of 410,000 tons of coal under the Brown 2 Contract in 2012, section 4.1 of the Contract is amended to provide that VPS will purchase 85% of the contract volume (348,000 tons) at an FOB Mine Price of [**].

 

2. With respect to the Brown 1 Contract, the following amendments have been made:

 

(a)  Under section 3.1 of the contract, in 2012 VPS shall purchase monthly incremental requirements in a quantity it shall determine and communicate to VF thirty (30) days in advance of the delivery month, with no commitment to procure any coal in 2012; in 2013 and 2014 VPS shall purchase 600,000 tons of coal from VPS; all other terms of section 3.1 including the 15% tonnage option shall remain effective;

 

(b)  Under section 4.1, the FOB Mine prices for 2012, 2013 and 2014 are [**].

 

(c)  Section 1.1 is amended to provide that the source of the coal shall be the Oaktown Mine, unless the parties mutually agree to an alternative source; and

 

(d)  Exhibit A is amended to provide for a monthly weighted average of chlorine of .10% and .06ug/g of mercury. To the extent coal is shipped in excess of this specification, VPS may reject such shipments.

 

3. No other terms of the Brown 1 and Brown 2 Contracts have been modified by this Amendment.

 

WHEREFORE, the parties have caused this Amendment to be effective as of October 31, 2011.