AMENDMENT NUMBER ONE TO COAL SUPPLY AGREEMENTSupply Agreement |
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Exhibit
10.9.1
AMENDMENT NUMBER ONE TO
COAL SUPPLY AGREEMENT
This
Amendment Number One to COAL SUPPLY AGREEMENT, made and
entered into this 1
st day
of October 2007, is by and between
Williams Bulk Transfer Inc., with
offices in Williams, Iowa
("WBT") ;
and
Lincolnway Energy, LLC ,
with offices in Nevada, Iowa
("LWE") .
WITNESSETH:
WHEREAS,
WBT and LWE are parties to a Coal Supply Agreement dated July
14, 2005, and
WHEREAS,
WBT and LWE desire to amend that Coal Supply
Agreement,
THEREFORE,
in consideration of the covenants hereinafter contained, it is
mutually agreed by and between the parties that the Coal
Supply Agreement shall be amended on the day first signed
above as follows:
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1)
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SECTION 1. TERM shall
be deleted in its entirety and replaced with the
following:
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This
Agreement shall commence on the day first signed above and
expire as of January 1, 2013 ("Term").
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2)
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SECTION 2. QUANTITY shall
be deleted in its entirety and replaced with the
following:
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LWE
shall purchase one hundred percent (100%) of the Plant's coal
via this Agreement. WBT shall provide to LWE up to 220,000
Tons of Coal per year at a per Ton price equal to the sum of
the Coal Price and the Transportation Price for Coal (as
defined in Sections 5 and 8) plus any subsequent price
adjustments (defined in Sections 6 and 9) for the Term of this
Agreement.
WBT
shall make best efforts to maintain at all times a minimum of
a twenty (20) day supply inventory of Coal at its terminal
strictly for the benefit of LWE.
If
LWE fails to purchase a minimum of 80,000 Tons of Coal from
WBT in any calendar year ("Minimum Quantity Requirement"), LWE
shall pay WBT (i) $16.00 per Ton of Coal (adjusted as provided
in Section 6A) multiplied by the difference between the
Minimum Quantity Requirement and the actual Tons of Coal
purchased by LWE for the respective calendar year, less (ii)
any amounts that WBT recovers by mitigating its
damages.
*Portion
omitted pursuant to request for confidential treatment filed
separately with the Securities and Exchange
Commission.
E-26
For
purposes of this Agreement, "Ton" shall mean 2,000 pounds
avoirdupois.
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3)
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SECTION 5. TRANSPORTATION PRICE shall
be deleted in its entirety and replaced with the
following:
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"Transportation
Price" shall consist of the following components: (i) the cost of
transloading Coal at WBT; (ii) the cost of transporting Coal from
the Source to WBT via BNSF Railway ("BNSF") and CN Railroad ("CN");
and (iii) the cost of transporting the Coal from WBT to the Plant
in bottom-dump trailers via motor transportation. On March 1, 2007,
LWE's Transportation Price for Coal was $* per Ton, subject to the
Transportation Price Adjustments as set forth in Section 6
below.
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Effective
January 2, 2008, $* per Ton shall be added to LWE's then
current Transportation Price for Coal. On January 2, 2011, an
additional $* per Ton shall be added to LWE's then current
Transportation Price for Coal. In both cases the
Transportation Price adjustments set forth in Section 6 shall
then continue in full force and effect for the remainder of
the Term of this Agreement.
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4)
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SECTION 6. TRANSPORTATION PRICE ADJUSTMENTS shall
be deleted in its entirety and replaced with the
following:
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A.
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Beginning
April 1, 2007 and each, July1, October 1, January 1 and April 1
thereafter the Transportation Rate shall be adjusted quarterly,
upward or downward, by 100% of the quarterly percentage change in
the All Inclusive Index - Less Fuel (AII-LF); provided, however,
that in no case shall a Transportation Price adjusted below the
initial Transportation Price stated herein. For each adjustment,
the AII-LF for the current quarter will be divided by the AII-LF
for the previous quarter. Initially the Transportation Price herein
and subsequently the previous quarter's Transportation Price will
be multiplied by the resulting factor to produce the adjusted
transportation rates for the current quarter. Once the adjusted
transportation rates have been calculated, any fraction less than
one-half cent shall be dropped and any fraction equal to or greater
than one-half cent shall be increased to the next whole cent. This
adjustment shall also apply to short-fall amount of $16.00 stated
in Section 2 of this Agreement.
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*Portion
omitted pursuant to request for confidential treatment filed
separately with the Securities and Exchange
Commission.
E-27
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B.
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A
Fuel Surcharge shall apply to the Transportation Price if the
monthly average Retail On-Highway Diesel Fuel Price of the US is
equal to or greater than $* per gallon. The governing index shall
be the Energy Information Administration's average price in cents
per gallon for Retail On-Highway Diesel Fuel for the US Diesel
price, which information is available by calling the Energy
Information Administration's Diesel Fuel Motor & Gasoline
Hotline at (202) 568-6966 or the Administration's web page
at
www.eia.doe.gov .
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The
Transportation Price shall be subject to adjustment once each
month for fuel. The Fuel Surcharge for a given month will be
determined based on the first of the prior month using the
average weekly price of Retail On-Highway Diesel Fuel for the
second month prior. The following table shall determine the
Fuel Surcharge amount:
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$*
to
$*
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*
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%
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$*
to
$*
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*
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%
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*
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*
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*
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$*
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*
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%
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*Portion
omitted pursuant to request for confidential treatment filed
separately with the Securities and Exchange
Commission.
E-28
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$*
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*Portion
omitted pursuant to request for confidential treatment filed
separately with the Securities and Exchange
Commission.
E-29
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$*
to
$*
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*
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%
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*
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For
each $* per gallon increase (or fraction thereof) thereafter
an additional *% will be applied.
WBT
will not impose a negative fuel surcharge (or refund) if the
average price falls below $*
per
gallon.
The
surcharge amount shall be rounded to the nearest one hundredth
cent. For example, the average published price per gallon for
the month of March, 2006 was $2.478. Thus, the Fuel Surcharge
amount for May, 2006 would have been *% and the Transportation
Price would have been adjusted as follows:
$*
+
( $*
x
*%) = $* or $*
This
Fuel Surcharge is based on the percentage based coal fuel
surcharge program used by BNSF Railway as of March 15, 2007,
as seen in BNSF Rules Book 6100.
*Portion
omitted pursuant to request for confidential treatment filed
separately with the Securities and Exchange
Commission.
E-30
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C.
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LWE
and WBT acknowledge that WBT's performance under this Agreement
depends on WBT subcontractors for coal supply, rail and trucking
services. If, during the Term of this Agreement, the coal
suppliers, rail carriers or trucking companies used by WBT adjust
their base rates or ancillary charges (such as fuel surcharge
tables), or WBT experiences an event beyond the reasonable control
of WBT that changes WBT's costs of transportation and delivery
pursuant to this Agreement, WBT will provide LWE thirty (30) days
advance written notice of such changes, and within sixty (60) days
of that written notice the Parties may either negotiate a mutually
agreeable price adjustment under this Agreement or terminate this
Agreement; provided, however, that it is the intent of the Parties
that any and each such price adjustment will be handled on a direct
out-of-pocket cost, pass through basis.
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5)
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SECTION 8. COAL PRICE(S) shall
be amended by adding the following paragraph.
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The
"Coal Price(s)" per calendar year shall be as follows based on
a heat content of 8,750 BTU's per pound and subject to the
Coal Price Adjustments in Section 9:
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2008
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$
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*
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2009
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$
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*
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2010
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$
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*
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2011
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$
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*
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2012
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$
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*
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Environmental Force Majeure
. As
of the effective date of this Agreement, the Coal is or can
currently be utilized at LWE's Plant in material compliance with
all air pollution control and environmental laws, regulations, and
requi
