EXHIBIT 10.9.1
[*]
Indicates that the confidential portion has been omitted from
this
filed exhibit and filed separately with the Securities and
Exchange
Commission
AMENDMENT ONE TO UNDERGROUND COAL SALES AGREEMENT
This AMENDMENT ONE TO UNDERGROUND COAL SALES AGREEMENT
("Amendment
One"), by and between SAN JUAN COAL
COMPANY, a Delaware corporation (referred to
herein as "SJCC") and PUBLIC SERVICE
COMPANY OF NEW MEXICO, a New Mexico
corporation, and TUCSON ELECTRIC POWER
COMPANY, an Arizona corporation
(collectively referred to herein as the
"Utilities") (with SJCC and Utilities
herein sometimes collectively referred to
as "Parties"), effective as of
December 15, 2003, amends that certain
Underground Coal Sales Agreement dated
August 31, 2001 (the "UGCSA") between SJCC
and the Utilities.
RECITALS
A. AU Mines, Inc. ("AU") has withdrawn as a partner of Cimarron
Coal
Company ("Cimarron") in exchange for an
undivided 31% interest in the assets of
Cimarron, and Cimarron has been reorganized
into a partnership in which AU has
no further interest.
B. SJCC has agreed to enter into with Cimarron the Installment
Sale
Agreement and Release, pursuant to which
SJCC will purchase all of the remaining
rights and interest of Cimarron in the La
Plata leases and the La Plata mine
created or reserved under the Cimarron
Assignment Agreement dated October 30,
1979, originally between Cimarron and
Western Coal Company and assigned to SJCC,
as amended and modified over time by
various agreements.
C. SJCC has agreed to enter into the AU Letter Agreement dated as
of
December 15, 2003 with AU amending the
Cimarron Assignment Agreement dated
October 30, 1979, as amended and
modified.
NOW THEREFORE, in consideration of the terms, covenants and
agreements
contained in this Amendment One and for
other good and valuable consideration,
the Utilities jointly and severally agree
with SJCC as follows:
AGREEMENT
1. The UGCSA is amended by deleting the text of Section 1.2 in
its
entirety and replacing it with
"[intentionally omitted]". The remaining sections
following 1.2 shall not be renumbered.
2. The UGCSA is amended by adding the following definitions to
Section
1.15:
SS) "Cimarron Coal Assignment" defined in Section 2.1.E.
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TT) "Installment Sale Agreement" defined in Section 2.1.E
UU) "Utility Payment Stream" defined in Section 8.5.C.
3. The UGCSA is amended by adding a new Section 2.1.E as
follows:
E) To perform all of the obligations contained in (i) the
Cimarron Coal Assignment dated October 30, 1979, originally
between Cimarron Coal Company and Western Coal Company and
assigned to SJCC, as amended and modified, including but not
limited to the letter amendment dated as of December 15, 2003
between AU Mines, Inc. and SJCC ("Cimarron Coal Assignment")
and (ii) the Installment Sale Agreement and Release between
Cimarron Coal Company and SJCC, dated as of December 15, 2003
("Installment Sale Agreement").
4. The UGCSA is amended by adding after the title line of Section
8.5,
"Other Costs", the new line:
Other Costs shall be the following:
5. The UGCSA is amended by replacing the existing text of Section
8.5.C
in its entirety with the following:
C)
Payment of the Utility Payment Stream
For purposes of this Section 8.5.C, the following definitions
apply:
"Y1" is the final Implicit Price Deflator Index of the Gross
Domestic Product ("IPD-GDP") (defined below) for the fourth
quarter of 2002, presently equal to 111.25
"Y2" is the final IPD-GDP for the fourth quarter of 1979,
presently equal to 53.90.
"Xl" is the most recently published quarterly IPD-GDP as of
the Calculation Date. The Calculation Date is the 5th day of
the month following the month for which each Utility Payment
Stream payment is being made (e.g., February 5 for the January
payment).
The factors X1/Y1 and X1/Y2 as applied below in this Section
8.5.C are utilized to recognize the effects of inflation and
deflation on certain relevant base amounts.
The IPD-GDP as utilized in this Section 8.5.C refers to the
Implicit Price Deflator of the Gross Domestic Product Index
("Index") published quarterly by the Bureau of Economic
Analysis of the U.S. Department of Commerce ("BEA").
Calculations for this Section 8.5.C shall be made based upon
the most recent Index published on the BEA website (if the BEA
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website no longer publishes the Index, then the Index as most
recently published in the Survey of Current Business shall be
utilized), at the applicable Calculation Date. Presently,
information concerning the Index is disseminated by the BEA by
means of the Survey of Current Business, (a magazine published
monthly by the U.S. Department of Commerce, Economic and
Statistics Administration, Bureau of Economic Analysis, and
printed by the Government Printing Office) in a Selected NIPA
Table designated as "Quantity and Price Indexes for Gross
Domestic Product" and, also, via BEA's website on the
Internet, as line 4 of Table 7.1 at:
www.bea.doc.gov/bea/dn/nipaweb/SelectTable.asp?Selected=N#S7.
At present, the Index is calculated and based on the reference year
of
1996 = 100. The Selected NIPA Tables are presented through
quarterly
estimates, updated monthly; the Parties agree that any update to
the
Index after the Calculation Date, caused by BEA adjusting its
estimates, shall not result in a recalculation of the amount of
a
Utility Payment Stream payment.
If, in the future, the BEA should change the reference year
utilized to
calculate the IPD-GDP then: Y1 shall be the IPD-GDP shown for
the
fourth quarter of 2002; and Y2 shall be the JPD-GDP shown for
the
fourth quarter of 1979, in conversion tables prepared by the BEA
in
respect to the new reference year and Xl for each succeeding
Utility
Payment Stream payment becoming due after the date of the change
of
reference years shall be determined by reference to the most
recently
published IPD-GDP, as of the Calculation Date, based on the new
reference year.
If the IPD-GDP should cease to be published by the BEA but
another
comparable index is published by another governmental agency then
such
index shall be utilized in the same manner as provided in this
Section
8.5.C in order to establish the amounts of the Utility Payment
Stream
becoming due for required future Utility Payment Stream payments.
If no
such index is published by governmental agencies, then such other
index
which may be available shall be utilized in a manner which will
fairly
and reasonably reflect the effects of inflation or deflation on
the
dollar amounts of the Utility Payment Stream payments.
The Utilities shall pay to SJCC the Utility Payment Stream
calculated
in two parts as follows ("Utility Payment
Stream"):
1) i)
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("Initial Payment") paid on January 22,
2004 to the account described in Section 8.7.C; and
ii) one hundred sixty nine (169) monthly payments
("Payment(s)") each in the amount calculated in this
Section 8.5.C(l) below, with the first Payment for
the month of December 2003 due on January 22, 2004,
and the final Payment for the month of December 2017
due on January 22, 2018. The terms Initial Payment
and Payment(s) as defined in this Section 8.5.C(1)
apply only in this Section 8.5.C(1).
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The amount of each Payment shall be calculated
utilizing [*] as the base amount to be subject to
inflation and deflation adjustment and calculated
mathematically by the following formula applied
separately for each Payment:
[*] x (X1/Y1) = amount of Payment
Utilities shall make the Payments specified in this
Section 8.5.C(1) to an SJCC
