Exhibit 10(b)

Execution Version

                 

 

 

Termination
Agreement

between

ProGas Limited

and

Northeast Energy Associates,
A Limited Partnership

dated January 14, 2005

 

 

 

 

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT (the "Agreement") is made this 14th day of January,
2005, (the "Effective Date") by and between PROGAS LIMITED, a Canada corporation
("ProGas"), and NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP, a
Massachusetts limited partnership ("NEA") (each a "Party", and collectively the
"Parties").

WITNESSETH:

WHEREAS, ProGas and NEA are parties to a contract pursuant to which ProGas sells
natural gas to NEA for consumption at NEA's 300 MW natural gas-fired electrical
and steam generation facility located in Bellingham, Massachusetts (the
"Facility");

WHEREAS, ProGas and NEA are parties to a Gas Purchase Contract, dated as of May
12, 1988, as amended by an Amending Agreement, dated as of April 17, 1989, and
by a Second Amending Agreement, dated as of June 23, 1989, and by an Amending
Agreement, dated as of November 1, 1991, and by an Amending Agreement and a
Letter Agreement, both dated as of July 30, 1993, (collectively, the "NEA Base
Contract"), as further amended by an Amending Agreement dated as of March 1,
2003 (the "Amending Agreement"), as further amended by a Partial Termination
Agreement dated January 6, 2004, as amended, (the "Partial Termination
Agreement") (the NEA Base Contract, as amended by the Amending Agreement and the
Partial Termination Agreement, the "Contract");

WHEREAS, the Contract governs the purchase by NEA and sale by ProGas of 12,507
MMBtus/day of natural gas;

WHEREAS, pursuant to the terms and conditions set forth herein, the Parties
desire to terminate their respective obligations under the Contract, including,
without limiting the foregoing, any obligation to buy and sell the Daily
Contract Quantity (as defined in the Contract and hereinafter referred to as the
"Daily Contract Quantity") equal to 12,507 MMBtus/day;

WHEREAS, the Parties agree that NEA will pay to ProGas or ProGas will pay to
NEA, as appropriate, a Termination Payment (as hereinafter defined) in
consideration for the termination of the Contract;

WHEREAS, pursuant to an agreement (the "Firm Service Agreement") with TCPL (as
hereinafter defined), ProGas has obtained firm gas transportation service from
TCPL for the natural gas to be supplied to NEA under the Contract, and will
incur costs in connection with such gas transportation arrangements in the event
that the Contract is terminated;

WHEREAS, pursuant to the ProGas/TransCanada NE Assignment Agreement dated on or
about July 30, 1993, by and between ProGas and TCPL (the "Assignment
Agreement"), ProGas collaterally assigned to TCPL certain payments due to ProGas
from NEA under the Contract as security for payment of amounts due to TCPL under
the Firm Service Agreement;

WHEREAS, pursuant to the Northeast Notice and Consent dated as of July 30, 1993,
by and among ProGas, TCPL and NEA, NEA consented to such collateral assignment
and other terms and conditions under the Assignment Agreement;

WHEREAS, pursuant to Section 6.3 of the Assignment Agreement, ProGas may not
amend, modify or terminate the Contract without the prior written consent of
TCPL;

WHEREAS, pursuant to the Bond Indentures (as hereinafter defined), NEA is
prohibited from amending, modifying or terminating the Contract unless certain
requirements described therein have been satisfied; and

WHEREAS, the Parties have agreed to a certain calculation methodology for
determining the amount of the Termination Payment, which will be based on
certain prevailing market conditions on the Termination Payment Calculation Date
(as hereinafter defined).

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows

1. DEFINITIONS; TERM; APPENDICES

In addition to terms defined in the recitals hereto, the following terms shall
have the meanings set forth below.

1.1 Defined Terms.

"Affected Producers" means the producers who have entered into long-term gas
purchase agreements with ProGas and who are entitled to cast ballots approving
or disapproving the pricing under the Replacement Resale Arrangement.

"Annual After Tax Discount Rate" means the agreed-upon proxy for ProGas' after
tax discount rate, equal to 6.98% and used for the calculation of the NYMEX
Reference Price and NYMEX Final Price

"Approvals" has the meaning set forth in Section 13(f).

"Base Termination Payment" has the meaning set forth in Section 3.2.

"Bond Indentures" means, collectively, the Trust Indenture dated as of November
15, 1994 among ESI Tractebel Funding Corp. (as successor to IEC Funding Corp.),
as Issuer, NEA, NJEA and State Street Bank and Trust Company, as Trustee, as
amended to date, and the Indenture dated as of February 19, 1998 by and among
ESI Tractebel Acquisition Corp., as Issuer, Northeast Energy, L.P. and State
Street Bank and Trust, as Trustee and Collateral Agent, as amended to date,
pursuant to which senior notes and subordinated bonds, respectively, were issued
to finance, in part, the Facility, together with any successor loan and security
documents resulting from a refinancing, defeasance or exchange of such senior
notes or subordinated bonds.

"Broker Quotes" means the written Mid-Market price quotations for monthly NYMEX
Henry Hub Gas Prices obtained from OTC Brokers.

"Business Day" means Monday through Friday, excluding any day on which banks in
either Calgary, Alberta (Canada) or New York, New York (U.S.A.) are closed for
business.

"Calculation Period" means the period from November 1, 2005, through October 31,
2013.

"Calendar Year Swap Spread" has the meaning set forth in Section 3.4(a)(ii).

"Closing Date" has the meaning set forth in Section 3.1(a).

"Closing Notice" has the meaning set forth in Section 3.1(a).

"Corporate Approvals" has the meaning set forth in Section 2.6(e).

"Deviation Percentage" has the meaning set forth in Section 3.4(b).

"Effective Date" has the meaning set forth in the Preamble hereto.

"Eligible Broker Quotes" has the meaning set forth in Section 3.4(a)(ii).

"Expiration Date" has the meaning set forth in Section 2.2.

"Indemnified Person" has the meaning set forth in Section 17(a).

"Mid-Market" means the average of the "bid" and "offer" prices for natural gas.
If bid and offer pricing is not simultaneously available, then for the purposes
of this Agreement, the Mid-Market shall mean the "settlement" price published or
quoted by NYMEX on the day that such pricing was sought, or the price most
reasonably equivalent thereto.

"NEA Payment Cap" has the meaning set forth in Section 3.2(a).

"NEA PPA Restructuring" has the meaning set forth in Section 2.4(c)

"NEA Termination Payment" means the amount to be paid by NEA to ProGas, to the
extent required pursuant to Section 3.2(a), in consideration for the termination
of the Contract on the Termination Date, the spreadsheet showing the final
calculations of which shall be attached hereto on the Closing Date as Appendix
C.

"NYMEX" means the New York Mercantile Exchange, Inc.

"NYMEX Final Price" means the average of the NYMEX Henry Hub Gas Prices for each
month in the Calculation Period calculated as of the Termination Payment
Calculation Date using the average of (1) the relevant prices for such date, (2)
the relevant prices for the Business Day immediately preceding such date, and
(3) the relevant prices for the date that is two (2) Business Days prior to such
date. An example of this calculation is shown on Appendix A.

"NYMEX Henry Hub Gas Prices" means the gas futures contract price for natural
gas delivered at Henry Hub in U.S. Dollars per MMBtu, for each month from
November 1, 2005 up to and including the year 2013 as determined in accordance
with Section 3.4.

"NYMEX Price Differential" means the NYMEX Final Price minus the NYMEX Reference
Price. The NYMEX Price Differential may be a negative number. An example of this
calculation is shown on Appendix A.

"NYMEX Reference Price" means the average of the NYMEX Henry Hub Gas Prices for
each month in the Calculation Period calculated as of October 7, 2004 and as
calculated and shown on Appendix A as US$ 5.329/MMBtu.

"OTC Brokers" means the brokers listed on Appendix D and any other brokers
agreed to in writing by the Parties for the purpose of providing Broker Quotes;
provided, that any broker that is currently a counterparty to ProGas or NEA or
who is in negotiations with ProGas or NEA to become a counterparty to ProGas or
NEA respectively under any contract or other business arrangement or who for any
other reason may not be a disinterested party for purposes of providing fair,
arms-length, unbiased quotations under this Agreement shall not be an OTC
Broker.

"Release" has the meaning set forth in Sections 2.5(f) and 2.6(h)

"Termination Date" has the meaning set forth in Section 2.1.

"Termination Payment" means either the NEA Termination Payment or the ProGas
Termination Payment.

"Termination Payment Calculation Date" has the meaning set forth in
Section 3.1(a).

"Producer Approval" means a Finding of Producer Support (as defined in the
Alberta Natural Gas Marketing Act) issued by the Alberta Petroleum Marketing
Commission pursuant to the Alberta Natural Gas Marketing Act which evidences the
consent of the Affected Producers to the pricing under the Replacement Resale
Arrangement.

"ProGas Termination Payment" means the amount to be paid by ProGas to NEA, to
the extent required pursuant to Section 3.2(b), in consideration for the
termination of the Contract on the Termination Date, the spreadsheet showing the
final calculations of which shall be attached hereto on the Closing Date as
Appendix C.

"ProGas Payment Cap" has the meaning set forth in Section 3.2(b).

"Published Values" means for any month the price for natural gas published by
NYMEX in respect of that month on its website
(www.nymex.com/jsp/markets/ng_fut_csf.jsp) in the table titled "Session Expanded
Table" under the column "Most Recent Settle" on the day in which the value is
sought, or if such website, table or column, as the case may be is discontinued
or no longer available, the correlative information available on such website or
on or through any successor or substantially equivalent information repository
agreed to by the Parties.

"Replacement Resale Arrangement" means the resale arrangement or arrangements
entered into or to be entered into by ProGas to resell gas volumes that would
otherwise have been sold or made available to NEA under the Contract.

"Required Ballots" has the meaning set forth in Section 2.3(b).

"Swap Spread-Derived Price" has the meaning set forth in Section 3.4(a)(ii).

"Swap Spread-Derived Price Calculation" has the meaning set forth in
Section 3.4(a)(ii).

"TCPL" means TransCanada PipeLines Limited, a Canada corporation and its
successors and assigns.

"TCPL Consent" means the final and irrevocable consent of TCPL to the
termination of the Contract required under the Assignment Agreement and obtained
by ProGas pursuant to the terms hereof on terms and conditions reasonably
acceptable to each of ProGas and NEA.

"Visible Market" means for any NYMEX Henry Hub Gas Price during any month, the
Published Values or the Broker Quotes meeting the criteria set forth in
Section 3.4(a)(ii).

1.2 Calculational Appendices.

(a) Appendices A and B to this Agreement set forth specific numerical values
used to calculate various components of the Termination Payment and sample
numerical values used to calculate a sample Termination Payment, which sample
values shall be replaced with actual values (as of the Termination Payment
Calculation Date) in order to calculate the actual Termination Payment, which
shall be set forth on Appendix C. The Parties acknowledge and agree that the
mathematical operations (addition, subtraction, multiplication and division)
performed on the numerical values contained or to be contained in Appendices A
through C in order to calculate the Termination Payment are embedded as
functions in a Microsoft Excel spreadsheet, a copy of which has been provided to
each Party's legal counsel.

(b) It is the intent of the Parties that the provisions of Articles 1 through 18
of this Agreement shall be construed consistently with Appendices A through C
and sample calculations contained therein, and that together such provisions and
appendices shall embody the agreement of the Parties with respect to the
calculation of the Termination Payment.

2. TERMINATION; TERMINATION DATE; CONDITIONS PRECEDENT.

2.1 Termination of the Contract

. Subject to the terms and conditions set forth below and provided that the
Closing Date occurs on or prior to the Expiration Date the Parties agree that
the Contract shall be terminated effective as of 9:59 a.m. (Eastern time) on
November 1, 2005 (the "Termination Date"), and each Party agrees to deliver to
the other a certificate acknowledging that the Release is effective as of the
Termination Date. The delivery of such certificates shall not be a condition to
the termination of the Contract or to the obligation of the Parties to make the
Termination Payment pursuant to Section 3.1(a), herein.

2.2 Termination of Agreement

. This Agreement shall be effective as of the Effective Date. If the Closing
Date does not occur on or prior to March 31, 2005 (or such later date as
extended pursuant to Section 3.1(a) or by mutual written agreement of the
Parties) (the "Expiration Date"), this Agreement shall terminate effective 12:01
a.m. Eastern time on the first Business Day following the Expiration Date,
unless this Agreement is terminated earlier pursuant to Section 2.3(c), 3.2(a)
or Section 3.2(b). In the event of any such termination of this Agreement, the
Contract shall continue unamended and unaffected by virtue of this Agreement;
provided, however, such termination shall not release either Party from any
claims by the other Party that it did not use commercially reasonable efforts in
connection with its obligations under Sections 2.3 or 2.4 as applicable.

2.3 ProGas Covenants Pending Closing

.

(a) Beginning on the Effective Date, ProGas shall use commercially reasonable
efforts to obtain at its sole cost and expense, as promptly as practicable:

(i) the TCPL Consent, and

(ii) the Producer Approval.

(b) ProGas shall promptly and with due diligence following the Effective Date
solicit in writing the consent of the Affected Producers to the pricing under
the Replacement Resale Arrangement, and shall, provided it receives the
requisite number of ballots with the requisite level of support, from such
Affected Producers (the "Required Ballots"), petition the Alberta Petroleum
Marketing Commission to issue, on an expedited basis, a Finding of Producer
Support (as defined in the Alberta Natural Gas Marketing Act). ProGas shall
provide NEA with periodic status reports as to its undertaking with respect to
the TCPL Consent, the Required Ballots and the Producer Approval, and shall
provide NEA with written notice within three (3) Business Days of receipt of
each of the TCPL Consent and the Producer Approval; provided, however if ProGas
notifies NEA in writing that ProGas has solicited the Affected Producers in
writing but has determined that it has not received the Required Ballots and
that Producer Approval cannot be obtained, then ProGas shall be released from
its obligations under this Section 2.3(b) and shall have no liability for
failure to obtain the Producer Approval. For the purposes of this Agreement,
"Producer Approval" shall include a Finding of Producer Support.

(c) If ProGas has not obtained the Producer Approval by the later of (i) January
31, 2005, or (ii) the Business Day following the date on which NEA provides
ProGas notice that the conditions precedent to the PPA Restructuring have been
met, ProGas shall so notify NEA in writing of such fact, together with its best
estimate of whether, and if applicable the date by which, it expects the
Producer Approval to be obtained, and NEA shall have the right to terminate this
Agreement within ten (10) days of such written notice by delivering a notice of
termination of this Agreement to ProGas; provided, however, if ProGas has
obtained the Required Ballots by January 31, 2005, and such Required Ballots are
sufficient in ProGas' reasonable judgment to require the Alberta Petroleum
Marketing Commission to issue a Finding of Producer Support, then ProGas shall
have the right, but not the obligation, to irrevocably waive the condition
precedent set forth in Section 2.5(d) by delivering to NEA written notice of
such waiver, in which case NEA shall not have the right to terminate the
Agreement pursuant to this Section 2.3(c). For the avoidance of doubt, if ProGas
waives the condition precedent set forth in Section 2.5(d) in accordance with
this section, and subsequent thereto, the Alberta Petroleum Marketing Commission
fails to issue, refuses to issue or rescinds the issuance of a Finding of
Producer Support, ProGas shall not be relieved from its obligation to consummate
the transactions contemplated herein and shall bear all risk and costs
associated therewith.

(d) If NEA terminates this Agreement by delivery of a termination notice in
accordance with Section 2.3(c), this Agreement shall terminate as of the date of
such notice and be of no further force and effect. In the event of such
termination, the Contract shall continue in full force and effect, unamended and
unaffected by virtue of this Agreement; provided, however, such termination
shall not release either Party from any claims by the other Party that it did
not use commercially reasonable efforts in connection with its obligations under
Sections 2.3 or 2.4 as applicable.

(e) ProGas covenants and agrees that once any of the TCPL Consent, the Required
Ballots or the Producer Approval is obtained, ProGas shall not take or consent
to the taking of any action to rescind, cancel or abrogate the effectiveness or
finality of the TCPL Consent, the Required Ballots or the Producer Approval.

2.4

NEA Covenants Pending Closing.

(a) Beginning on the Effective Date, NEA shall use commercially reasonable
efforts and due diligence to obtain, at NEA's sole cost and expense, as promptly
as practicable, (a) the Corporate Approvals and (b) the NEA PPA Restructuring.
NEA shall provide ProGas with periodic status reports as to NEA's undertaking
with respect thereto.

(b) NEA covenants and agrees that once the NEA PPA Restructuring and the
Corporate Approvals have been obtained in accordance with Section 2.4(a), NEA
shall not take any action to rescind, cancel or abrogate the effectiveness or
finality of the Corporate Approvals; provided, however, it is understood and
agreed that the finality of the NEA PPA Restructuring shall be contingent upon
receipt of the Corporate Approvals.

(c) Beginning on the Effective Date, NEA shall use commercially reasonable
efforts and due diligence to consummate, at NEA's sole cost and expense, as
promptly as practicable, the term restructuring of the four (4) power purchase
agreements between NEA and certain utility subsidiaries of NSTAR Electric & Gas
Corporation ("NSTAR") (the "NEA PPA Restructuring") on terms and conditions
acceptable to NEA; provided however, if NEA notifies ProGas in writing that NEA
has determined that the NEA PPA Restructuring cannot be consummated consistent
with such acceptable terms and conditions, then NEA shall be released from any
and all obligations under this Section 2.4(c) and shall have no liability
hereunder to ProGas for failure to pursue a NEA PPA Restructuring.

2.5 Conditions Precedent to Obligations of ProGas

. ProGas' obligation to effect the transactions set forth herein is subject to
the satisfaction at or before the Closing Date of the following conditions (any
of which ProGas may waive):

(a) Representations and Warranties. All of the representations and warranties of
NEA in Section 14 shall be true and correct in all respects as though made on
and as of the Closing Date (unless the incorrectness of such representations and
warranties does not have a material adverse effect on the rights of ProGas), and
NEA shall have delivered a certificate, duly executed by an authorized officer,
with respect to such representations and warranties. NEA shall have performed,
or caused to be performed, all of the agreements and covenants to be performed
by it under this Agreement as of the Closing Date, unless the non-performance of
such agreements and covenants does not have a material adverse effect on the
rights of ProGas hereunder.

(b) No Legal Restraint. Neither Party shall be subject to any order, decree,
injunction, or other legal restraint or prohibition of a court or agency of
competent jurisdiction which enjoins, prohibits or materially interferes with
the consummation of the closing on the Closing Date or the Reduction Amendment.

(c) TCPL Consent. The TCPL Consent shall have been obtained and remain in full
force and effect.

(d) Producer Approval. ProGas shall have obtained the Producer Approval.

(e) Release. NEA shall have executed and delivered to ProGas a written release
and waiver substantially in the form attached as Appendix E (the "Release").

2.6 Conditions Precedent to Obligations of NEA.

NEA's obligation to effect the transactions set forth herein is subject to the
satisfaction at or before the Closing Date of the following conditions (any of
which NEA may waive):

(a) Representations and Warranties. All of the representations and warranties of
ProGas in Section 13 shall be true and correct in all respects as though made on
and as of the Closing Date (unless the incorrectness of such representations and
warranties does not have a material adverse effect on the rights of NEA), and
ProGas shall have delivered a certificate, duly executed by an authorized
officer, with respect to such representations and warranties. ProGas shall have
performed, or caused to be performed, all of the agreements and covenants to be
performed by it under this Agreement as of the Closing Date, unless the
non-performance of such agreements and covenants does not have a material
adverse effect on the rights of NEA hereunder.

(b) No Legal Restraint. Neither Party shall be subject to any order, decree,
injunction, or other legal restraint or prohibition of a court or agency of
competent jurisdiction which enjoins, prohibits or materially interferes with
the consummation of the closing on the Closing Date or the Reduction Amendment.

(c) TCPL Consent. The TCPL Consent shall have been obtained and remain in full
force and effect.

(d) NEA PPA Restructuring. The closing for the NEA PPA Restructuring and the
transactions contemplated therein shall have occurred.

(e) NEA Corporate Approvals. All partnership and corporate approvals of (i) NEA
and its general partner and limited partners, (ii) FPL Group, Inc., FPL Energy
LLC and/or FPL Group Capital Inc. (as the case may be) and (iii) Tractebel Power
Inc., Tractebel North America Inc., Tractebel Electricity and Gas International
S.A., and Suez-Tractebel S.A. (as the case may be) that are required for the
consummation of the transactions contemplated herein or hereby, including
without limitation, the termination of the Contract, the payment of the NEA
Termination Payment and the consummation of an Indenture Compliance Arrangement,
shall have been obtained (collectively, the "Corporate Approvals").

(f) Producer Approval. The Producer Approval shall have been obtained (except to
the extent waived by ProGas pursuant to Section 2.3(c)).

(g) Release. ProGas shall have executed and delivered to NEA a written release
and waiver substantially in the form attached as Appendix E (the "Release").

3. CALCULATION OF TERMINATION PAYMENT; TERMINATION PAYMENT DATE.

3.1 Closing Date and Termination Payment Calculation Date.

(a) Within one (1) Business Day of the last of the following events to occur or
be waived by the Party entitled to the benefit of such condition precedent: (i)
NEA's determining, in its sole discretion, that the conditions precedent to the
PPA Restructuring have been met, (ii) NEA's obtaining the Corporate Approvals,
(iii) receipt by ProGas of the Producer Approval, and (iv) receipt of an
executed copy of the TCPL Consent, NEA shall deliver to ProGas a written notice
(the "Closing Notice") in accordance with Section 5 stating that the foregoing
conditions precedent (those listed in clauses (i) through (v)) have been
satisfied (or been waived by the Party entitled to the benefit of such condition
precedent). The calculation of the NYMEX Final Price and the calculation of the
Termination Payment by ProGas in accordance with Section 3.2 shall occur on the
Business Day after NEA delivers the Closing Notice (the "Termination Payment
Calculation Date"). The date upon which: (i) the conditions precedent set forth
in Sections 2.5 and 2.6 have been satisfied, and, (ii) a final Termination
Payment has been determined in accordance with Sections 3.2 and 3.4 and has been
agreed to by ProGas and NEA or as otherwise determined in accordance with
Section 3.2(a) or (b), shall be the closing date (or as otherwise mutually
agreed to by the Parties) (the "Closing Date"). On the Termination Date, the
Termination Payment shall be paid in accordance with Section 3.5 and the Parties
shall execute and deliver the Release certificate as contemplated in Section
2.1.

(b) The Parties acknowledge and agree that the Closing Date will occur prior to
the Termination Date and that nothing in this Agreement shall modify, relieve or
excuse ProGas' or NEA's respective obligations to deliver, receive and pay for,
the full Daily Contract Quantity of 12,507 MMBtus/day under the Contract through
9:59 a.m. (Eastern time) on the day following the Termination Date.

3.2 Calculation of Termination Payment.

The "Base Termination Payment" shall be equal to (1) negative nine million five
hundred thousand U.S. dollars (-US$9,500,000) plus (2) the product of negative
twenty-eight million two hundred thousand U.S. dollars (-US$28,200,000) times
the NYMEX Price Differential. An example of this calculation is shown on
Appendix B.

(a) NEA shall have no obligation to make an NEA Termination Payment to ProGas
and, as such, the NEA Payment Cap is zero U.S. dollars (US$0) (the "NEA Payment
Cap"); provided, however, if the Base Termination Payment is a positive number,
then NEA may elect to pay to ProGas the NEA Termination Payment, which shall be
an amount equal to the Base Termination Payment. If the Base Termination Payment
exceeds the NEA Payment Cap, then:

(1) ProGas shall notify NEA, concurrently with providing documentation of its
calculation of the amounts in Section 3.2(a) above, as to whether ProGas elects
to accept payment of the NEA Termination Payment in the amount of the NEA
Payment Cap, or

(2) If ProGas' notice provided for in Section 3.2(a)(1) states that ProGas
declines to accept the election described in Section 3.2(a)(1), then within one
(1) Business Day of receipt of such notice, NEA shall notify ProGas as to
whether NEA agrees to waive the NEA Payment Cap and pay to ProGas the NEA
Termination Payment in the amount of the Base Termination Payment.

If ProGas declines to accept its election under Section 3.2(a)(1) and NEA
declines to exercise its election under Section 3.2(a)(2), then the Parties
shall enter good-faith negotiations, for a period not to exceed two (2) Business
Days from the date NEA declines to exercise its waiver provided for in Section
3.2(a)2, during which time the Parties shall seek to arrive at a mutually
acceptable NEA Termination Payment. Notwithstanding the Parties' agreement to
negotiate in good faith, NEA shall not be obligated to make any NEA Termination
Payment exceeding the NEA Payment Cap unless NEA agrees to make such a payment
in its sole discretion. If the Parties' good faith negotiations do not result in
a mutually acceptable NEA Termination Payment within two (2) Business Days, then
this Agreement shall terminate unless the parties mutually agree to extend the
period for good faith negotiations.

(b) If the Base Termination Payment is a negative number, then ProGas shall pay
to NEA the ProGas Termination Payment, which shall be an amount equal to the
Base Termination Payment multiplied by negative one (-1), but in no event in
excess of twenty-five million U.S. Dollars (US$25,000,000)] (the "ProGas Payment
Cap"); provided, however, if the Base Termination Payment exceeds the ProGas
Payment Cap, then:

(1) ProGas shall notify NEA, concurrently with providing documentation of its
calculation of the amounts in Section 3.2(b) above, of whether ProGas agrees to
waive the ProGas Payment Cap and pay to NEA the ProGas Termination Payment in
the amount of the Base Termination Payment, or

(2) If ProGas' notice provided for in Section 3.2(b)(1) states that ProGas
declines to accept the election described in Section 3.2(b)(1), then within one
(1) Business Day of receipt of such notice, NEA shall notify ProGas as to
whether NEA elects to accept payment of the ProGas Termination Payment in the
amount of the ProGas Payment Cap.

If ProGas declines to exercise its election under Section 3.2(b)(1) and NEA
declines to accept its election under Section 3.2(b)(2), the Parties shall enter
good-faith negotiations, for a period not to exceed two (2) Business Days from
the date ProGas declines to exercise its waiver provided for in Section 3.2(b)2,
during which time the Parties shall seek to arrive at a mutually acceptable
ProGas Termination Payment. Notwithstanding the Parties' agreement to negotiate
in good faith, ProGas shall not be obligated to make any ProGas Termination
Payment exceeding the ProGas Payment Cap unless ProGas agrees to make such a
payment in its sole discretion. If the Parties' good faith negotiations do not
result in a mutually acceptable ProGas Termination Payment, within two (2)
Business Days, then this Agreement shall terminate unless the parties mutually
agree to extend period for good faith negotiations.

(c) If the Base Termination Payment is equal to zero, neither Party shall be
obligated to make payment of a Termination Payment, and the Parties shall
consummate the Closing as provided hereunder (subject to satisfaction of any
remaining conditions precedent).

3.3 [RESERVED]

3.4 Determination of NYMEX Henry Hub Gas Prices.

The monthly NYMEX Henry Hub Gas Prices used to calculate the NYMEX Reference
Price have been determined and are set forth in Appendix A. The NYMEX Henry Hub
Gas Prices used to determine the NYMEX Final Price shall be calculated as of the
Termination Payment Calculation Date and shall be determined consistent with the
methodology used to determine the NYMEX Reference Price as shown on Appendix A
and as described below:

(a) Use of Visible Market.

(1) For each month in the Calculation Period for which Published Values exist,
the NYMEX Henry Hub Gas Price shall be the Published Values for that month;

(2) For each month in the Calculation Period for which Published Values are not
available, the Parties shall negotiate in good faith to agree upon stipulated
values for the NYMEX Henry Hub Gas Price for such month. If the Parties cannot
so agree within two (2) hours, then ProGas shall obtain, as promptly as
commercially practicable and to the extent reasonably available, at least two
(2) Broker Quotes for each NYMEX Henry Hub Gas Price for those months during the
Calculation Period for which Published Values are not available and shall
provide to NEA copies of all data, quotes and other information provided by the
OTC Brokers in connection with such Broker Quotes. If Broker Quotes do not
specify monthly prices for any given month during the Calculation Period, but do
include Calendar Year Swap Spreads, then beginning with the first month for
which no Published Value is available, the NYMEX Henry Hub Gas Price for such
month shall be calculated as the sum of (i) the NYMEX Henry Hub Gas Price for
the same month during the previous year plus (ii) the Calendar Year Swap Spread
(such amount, the "Swap Spread-Derived Price" and such calculation, the "Swap
Spread-Derived Price Calculation"). "Calendar Year Swap Spread" means the value
quoted by an OTC Broker as a differential to the price of the Henry Hub natural
gas futures contract for a given month and year. This calculation shall be
repeated for any "stub" year (i.e., any year for which fewer than 12 months of
monthly prices are available) until such year has a stipulated NYMEX Henry Hub
Gas Price for each month during such year. The Swap Spread-Derived Price
Calculation shall continue to be used, to the extent available, for subsequent
monthly prices by adding the correlative year's Calendar Year Swap Spread for
any given month to price for the same month during the prior year. For example,
if the last month for which a Published Value is available is May 2009, then the
June 2009 NYMEX Henry Hub Gas Price shall equal the June 2008 value plus the
Calendar Year Swap Spread for June 2009. If Calendar Year Swap Spreads are not
available for a given year and if any later Broker Quote provides the NYMEX
Henry Hub Gas Price on a calendar year basis, then the monthly NYMEX Henry Hub
Gas Price during each month of such calendar year for the annual Broker Quote
shall be deemed to be the calendar year NYMEX Henry Hub Gas Price contained in
the Broker Quote. All Broker Quotes obtained pursuant to this section shall be
averaged, and Broker Quotes for any given NYMEX Henry Hub Gas Price (or Swap
Spread-Derived Price) that are no greater than 105%, and no less than 95%, of
the average of the Broker Quotes obtained for such NYMEX Henry Hub Gas Price (or
Swap Spread-Derived Price) shall be "Eligible Broker Quotes" and all other
Broker Quotes shall be disregarded for the purposes of this section. The
arithmetic average of the Eligible Broker Quotes obtained for each NYMEX Henry
Hub Gas Price for each month (or year or Swap Spread-Derived Price) shall be the
NYMEX Henry Hub Gas Price for such month (or year or Swap Spread-Derived Price)
for purposes of calculating the NYMEX Final Price.

(b) Absence of a Visible Market for Certain NYMEX Henry Hub Gas Prices. If
neither Published Values nor Eligible Broker Quotes are available to determine
the NYMEX Henry Hub Gas Price for any month in the Calculation Period, ProGas
shall calculate the arithmetic average percentage change in the Visible Market
for each of the NYMEX Henry Hub Gas Prices for all of the months during the
Calculation Period for which Visible Market values for NYMEX Henry Hub Gas
Prices are available (the "Deviation Percentage"). The Deviation Percentage
shall be computed as (i) the simple sum of the Visible Market values for NYMEX
Henry Hub Gas Prices for each NYMEX Henry Hub Gas Price for each month divided
by (ii) the simple sum of the analogous NYMEX Henry Hub Gas Prices for the
correlative months used to calculate the NYMEX Reference Price. If the Deviation
Percentage is:

(1) Less than one percent (1%) , then the NYMEX Henry Hub Gas Prices for which
there is no Visible Market for purposes of calculating the NYMEX Final Price
will be the correlative NYMEX Henry Hub Gas Price used to calculate the NYMEX
Reference Price as set forth in Appendix A.

(2) Equal to or greater than one percent (1%), then, if for purposes of
calculating the NYMEX Final Price the correlative NYMEX Henry Hub Gas Price used
to calculate the NYMEX Reference Price as set forth in Appendix A are used for
the NYMEX Henry Hub Gas Prices for which there is no Visible Market and as a
consequence of that methodology for calculating the NYMEX Final Price the
calculation of the Termination Payment results in:

(i) the ProGas Termination Payment (if applicable) being less than or equal to
$24,000,000 and greater than or equal to $1,000,000; then the Closing shall
occur, and the Termination Payment so calculated will be adjusted after the
Closing Date but before the Termination Date as follows:

The Parties will select by mutual agreement a third-party consultant who has
commercial expertise in gas price forecasting, long-term gas forward contract
pricing and valuation, or other relevant expertise, and such third-party
consultant shall, as promptly as practicable, provide monthly NYMEX Henry Hub
Gas Prices for the dates used in the calculation of the NYMEX Final Price which,
absent manifest error, will be used for the calculation of the NYMEX Final Price
and the Termination Payment. If the Termination Payment calculated using the
NYMEX Final Price developed by the third-party consultant results in:

(x) the ProGas Termination Payment (if applicable) being less than or equal to
Progas Payment Cap and the NEA Termination Payment (if applicable) being less
than or equal to the NEA Payment Cap, then the Closing shall occur, and the
Termination Payment so calculated shall be the Termination Payment due and the
Parties will equally share the cost of engaging the third-party consultant;

(y) the ProGas Termination Payment (if applicable) being greater than the Progas
Payment Cap then Termination Payment due shall equal the Progas Payment Cap and
Progas shall pay the costs of engaging the third-party consultant.

(z) The NEA Termination Payment (if applicable) being greater than the NEA
Payment Cap, then the Termination Payment due shall equal the NEA Payment Cap,
and NEA shall pay the costs of engaging the third-party consultant.

(ii) the ProGas Termination Payment (if applicable) being greater than
$24,000,000 or less than $1,000,000 then this Agreement shall terminate within
two (2) Business Days, unless the parties mutually agree to a Termination
Payment or to otherwise extend the term hereof.

(c) Retention of NYMEX Henry Hub Gas Prices Data. Each of the Parties agree to
save all data, quotes and other information (including without limitation the
NYMEX Final Price) developed or obtained pursuant to this Section 3.4 until the
Closing Date or the termination of this Agreement.

3.5 Payment of Termination Payment.

(a) On the Termination Date, subject to the satisfaction or waiver of the
conditions set forth in Section 2.5 or Section 2.6 hereof (as applicable), NEA
shall pay to ProGas or ProGas shall pay to NEA (as applicable) the Termination
Payment in immediately available funds, payable by wire transfer as follows:

(i) Payment to ProGas:

Pay Through:

Account Number 6550826336
Bank of America N.T. and S. A.
ABA 026009593

For transfer to:

Toronto Dominion Bank, Transit 80609
FCT ProGas Limited.

Favor:

806090805 7316583
ProGas Limited
BP Center
11th Floor
240 4th Avenue S.W.
Calgary, Alberta T2P2H8

or to such other banking institution designated in writing by ProGas at least
two (2) Business Days prior to the Closing Date. Any such funds that are
transmitted by wire transfer shall be timely wired so as to be received and
confirmed on or before the close of business on the Closing Date of the
receiving banking institution designated by ProGas in accordance with the
previous sentence.

(ii) Payment to NEA:

BBK: US Bank (ABA #091000022)
BNF: US Bank Trust N.A.
A/C: 173103321092
OBI: Corporate Trust
REF#: 102560-001 for the account of NEA/NJEA
Attn: TFM/CDR

or to such other banking institution designated in writing by NEA at least two
(2) Business Days prior to the Closing Date. Such funds shall be timely wired so
as to be received and confirmed on or before the close of business on the
Closing Date of the receiving banking institution designated by NEA in
accordance with the previous sentence.

4. RESERVED.

5. NOTICES.

Any notice from one Party to the other shall be given in writing and shall be
deemed to be given (a) as of the date transmitted by facsimile and received in
full prior to the close of normal business hours of the recipient, (b) the day
after the date sent by overnight courier or other means of next day personal
delivery, or (c) the date of delivery by hand. For the purposes of this Section
5, such notices shall be mailed to the following respective addresses or the
following respective facsimile numbers or to such others as may be hereafter
designated by either Party:

If to NEA:

Northeast Energy Associates, A Limited Partnership
c/o Northeast Energy, LP
FPL Energy, LLC
700 Universe Blvd.
P.O. Box 14000
Juno Beach, FL 33408
Attention: Nathan E. Hanson, Business Manager
Phone: 561-304-5121
Facsimile: 561-304-5161

If to ProGas:

ProGas Limited
1100, 240 4th Avenue S.W.
Calgary, Alberta
Canada T2P 2H8
Attention: Shonda Day, Director Marketing
Telephone: (403) 233-1310
Facsimile: (403) 233-5655

6. INTEGRATION AND FURTHER ASSURANCES.

Provided the Closing Date occurs, this Agreement and any amendments hereto prior
to the Expiration Date and all releases, acknowledgments, documents and
agreements collateral hereto contain the entire agreement and understanding
between the Parties, their agents, employees and affiliates as to the subject
matter contained herein and therein and supersede all prior agreements and
understandings relating to the subject matter hereof. At any time and from time
to time, upon the reasonable request of a Party, the other Party shall promptly
execute and deliver any and all further instruments and documents and take such
further action as the requesting Party may request in order to fully perform and
carry out the terms of this Agreement.

7. NON-WAIVER.

No failure by either Party or any of its agents to exercise, no course of
dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, and, in addition, no provision of
this Agreement shall be considered waived by either Party except when such
waiver is given in writing. The failure of either Party to insist in any one or
more instances upon strict performance of any of the provisions of this
Agreement or to take advantage of any of its rights hereunder shall not be
construed as a waiver of any such provisions or the relinquishment of any such
rights for the future, but the same shall continue and remain in full force and
effect.

8. ASSIGNMENT OR TRANSFER OF INTEREST.

This Agreement shall be binding upon and inure to the benefit of the respective
heirs, administrators, representatives, executors, successors and permitted
assigns of the Parties hereto; provided, however, that neither Party may assign,
sell, transfer or in any other way convey its or his rights, duties or
obligations under this Agreement, either in whole or in part, without the prior
written consent of the other Party (which consent shall not be unreasonably
withheld or delayed).

9. NO THIRD PARTY BENEFICIARIES.

The Parties do not intend to create rights in, or grant remedies to, any third
party as a beneficiary of this Agreement or of any duty, covenant, obligation or
understanding established under this Agreement.

10. EFFECT OF SECTION HEADINGS.

Section headings appearing in this Agreement are inserted for convenience only,
and shall not be construed as interpretations of text.

11. GOVERNING LAW.

This Agreement shall be interpreted, governed and construed under the laws of
the Province of Alberta, Canada (without giving effect to its conflict of laws
provisions which could apply the law of another jurisdiction). All disputes
arising between the Parties concerning the construction or enforcement of this
Agreement that the Parties are unable to settle between themselves shall be
submitted to a trial by judge. The Parties hereby waive any rights to a trial by
jury. All proceedings shall be held in Alberta. The Parties hereby consent to
jurisdiction in Alberta and agree that Alberta is a convenient venue for any
proceedings between the Parties.

12. SEVERABILITY

If any term or provision of this Agreement or the interpretation or application
of any term or provision to any prior circumstance is held to be unenforceable,
illegal or invalid by a court or agency of competent jurisdiction, the remainder
of this Agreement and the interpretation or application of all other terms or
provisions other than those which are unenforceable, illegal or invalid shall
not be affected thereby, and each term and provision shall be valid and be
enforced to the fullest extent permitted by law.

13. REPRESENTATIONS AND WARRANTIES OF ProGas.

ProGas makes no representations and warranties except as expressly stated
herein. ProGas represents and warrants to NEA as of the date hereof as follows

(a) ProGas is a corporation duly organized, validly existing and in good
standing under the laws of Canada and is duly qualified to transact business and
is in good standing in each jurisdiction where failure to so qualify would have
a material adverse effect on the performance by ProGas of its obligations under
this Agreement. ProGas has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of, and the performance by
ProGas of its obligations under this Agreement have been duly and validly
authorized by all necessary corporate action of ProGas. This Agreement has been
duly and validly executed and delivered by ProGas and constitutes its valid
legal and binding obligation, enforceable against ProGas in accordance with its
terms (except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws from time to
time in effect that affect creditors' rights generally and subject to the
qualification that general equitable principles may limit the enforcement of
certain remedies).

(b) The execution and delivery of this Agreement by ProGas, the fulfillment of
and the compliance by ProGas with this Agreement, and the consummation by ProGas
of the transactions described herein, do not and will not (i) violate or
conflict with any provisions of ProGas' Articles of Incorporation, Bylaws, or
any other governing documents, (ii) violate, conflict with or result in the
breach or termination of any agreement or instrument to which ProGas is a party
or is bound by and which could have an adverse effect on the consummation or
performance or consummation and performance by ProGas of the transactions
contemplated by this Agreement, provided that the TCPL Consent is obtained and
remains in full force and effect, or (iii) violate or conflict with any law,
rule, ordinance, regulation, judgment, order, injunction, decree or award that
applies to or binds ProGas or any of its assets.

(c) (i) ProGas has good, valid and marketable title to the Contract and
(ii) except pursuant to the Assignment Agreement, ProGas has not assigned or
otherwise transferred to any third party any of its rights, duties, liabilities
or obligations under this Agreement or the Contract.

(d) There is no action, suit, claim, arbitration, proceeding, investigation or
litigation pending against ProGas or, to the best of ProGas' knowledge,
threatened against or involving ProGas, its property, the Contract, or this
Agreement or any of the transactions contemplated herein or therein, at law or
in equity, before or by any court, arbitrator or governmental authority, which
could have an adverse effect on the consummation and/or performance by ProGas of
the transactions contemplated by this Agreement, including without limitation
the Reduction Amendment. No governmental agency or authority has at any time
given notice of intention to commence or, to the best of ProGas' knowledge,
commenced any investigation relating to the legal right of ProGas to perform its
obligations under this Agreement, which could have an adverse effect on the
consummation and/or performance by ProGas of the transactions contemplated by
this Agreement, including without limitation the Reduction Amendment.

(e) Prior to the date hereof, the Contract has not been amended other than as
set forth in the Recitals hereto and is in full force and effect, and
constitutes a valid and binding obligation of, and is legally enforceable in
accordance with its terms against ProGas. ProGas has complied in all material
respect with the Contract and is not in default thereunder, and there has not
occurred any event which (whether with or without notice, lapse of time or both)
would constitute such a default under the Contract by ProGas.

(f) Except for the TCPL Consent, NEB Approval and the Producer Approval, which
ProGas will endeavor to obtain as provided in Section 2.3, ProGas has obtained
all permits, licenses, approvals, consents and exemptions (collectively,
"Approvals") required for ProGas to perform its obligations under this Agreement
and to adjust the Daily Contract Quantity, required by applicable laws,
statutes, rules and regulations in effect as of the date hereof, and (i) each
such Approval was duly obtained, validly issued, and is in full force and effect
and all applicable appeal periods with respect thereto have expired or the right
to appeal by all parties entitled to appeal has been irrevocably waived, (ii)
ProGas has complied with all material conditions stated in such Approvals which
are required to have been complied with as of the date hereof and (iii) ProGas
is not in default of any provision of such Approvals and no basis exists for
invalidating, revoking or terminating any such Approval.

(g) No finder, broker or agent has been employed, appointed or authorized to act
on ProGas' behalf in connection with the transactions contemplated by this
Agreement.

14. REPRESENTATIONS AND WARRANTIES OF NEA.

NEA makes no representations and warranties except as expressly stated herein.
NEA represents and warrants to ProGas as of the date hereof as follows:

(a) NEA is a limited partnership validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, and is duly qualified to transact
business and is in good standing in each jurisdiction where failure to so
qualify would have a material adverse effect on the performance by NEA of its
obligations under this Agreement. NEA has all requisite limited partnership
power and authority to execute, deliver, and perform under, this Agreement and,
subject to receipt of the Corporate Approvals, to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by NEA and constitutes its valid and binding obligation,
enforceable against NEA in accordance with its terms (except to the extent that
enforcement may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect that affect
creditors' rights generally and subject to the qualification that general
equitable principles may limit the enforcement of certain remedies).

(b) The execution and delivery of this Agreement by NEA, the fulfillment of and
the compliance by NEA with the respective terms and provisions of this Agreement
and, subject to receipt of the Corporate Approvals, the consummation by NEA of
the transactions described herein do not and will not (i) violate or conflict
with any provisions of NEA's limited partnership agreement or other governing
documents, (ii) provided that each of the TCPL Consent and an Indenture
Compliance Arrangement is obtained and remains in full force and effect,
violate, conflict with or result in the breach or termination of any agreement
or instrument to which NEA is a party or is bound by and which could have an
adverse effect on the consummation or performance, or consummation and
performance, by NEA of the transactions contemplated by this Agreement, or
(iii) violate or conflict with any law, rule, ordinance, regulation, judgment,
order, injunction, decree or award that applies to or binds NEA or any of its
assets.

(c) (i) NEA has good, valid and marketable title to the Contract and (ii) except
as contemplated in the Contract, or the Bond Indentures, NEA has not assigned or
otherwise transferred to any third party any of its rights, duties, liabilities
or obligations under this Agreement or the Contract.

(d) There is no action, suit, claim, arbitration, proceeding, investigation or
litigation pending against NEA or, to the best of NEA's knowledge, threatened
against or involving NEA, its property, the Contract, or this Agreement or any
of the transactions contemplated herein or therein, at law or in equity, before
or by any court, arbitrator or governmental authority, which could have an
adverse effect on the consummation and/or performance by NEA of the transactions
contemplated by this Agreement. No governmental agency or authority has at any
time given notice of intention to commence or, to the best of NEA's knowledge,
commenced any investigation relating to the legal right of NEA to perform its
obligations under this Agreement, which could have an adverse effect on the
consummation and/or performance by NEA of the transactions contemplated by this
Agreement, including without limitation the Reduction Amendment.

(e) Prior to the date hereof the Contract has not been amended other than as set
forth in the recitals hereto and is in full force and effect, and constitutes a
valid and binding obligation of, and is legally enforceable in accordance with
its terms against NEA. NEA has complied in all material respects with the
Contract and is not in default thereunder, and there has not occurred any event
which (whether with or without notice, lapse of time or both) would constitute
such a default under the Contract by NEA.

(f) No finder, broker or agent has been employed, appointed or authorized to act
on NEA's behalf in connection with the transactions contemplated by this
Agreement.

(g) Except for an Indenture Compliance Arrangement and the Corporate Approvals
which NEA will endeavor to obtain as provided in Section 2.4, NEA has obtained
all Approvals required for NEA to perform its obligations under this Agreement,
and to terminate the Contract, as required by applicable laws, statutes, rules
and regulations in effect as of the date hereof, and (i) each such Approval was
duly obtained, validly issued, and is in full force and effect and all
applicable appeal periods with respect thereto have expired or the right to
appeal by all Parties entitled to appeal has been irrevocably waived, (ii) NEA
has complied with all material conditions stated in such Approvals which are
required to have been complied with as of the date hereof and (iii) NEA is not
in default of any provision of such Approvals and no basis exists for
invalidating, revoking or terminating any such Approval.

15. COUNTERPART EXECUTION.

This Agreement may be executed in counterpart, no one copy of which need be
executed by both NEA and ProGas. A valid and binding contract shall arise if and
when counterpart execution pages are executed and delivered by NEA and ProGas.

16. CONTRACT VALIDITY

Neither Party shall initiate or assert in any regulatory, judicial, arbitral or
administrative proceeding that (a) it has been damaged due to the Reduction
Amendment or (b) it acted imprudently in its agreement to terminate the
Contract.

17. INDEMNITY.

(a) Each Party shall be liable to and shall defend, indemnify and hold harmless
the other Party and its and their respective directors, officers, members,
partners, shareholders, employees, managers, agents, trustees, beneficiaries,
representatives, lenders, affiliates, successors and permitted assigns (each an
"Indemnified Person") for, from and against any and all claims, liabilities,
obligations, actions, demands, judgments, losses, costs, expenses (including
reasonable legal fees on a solicitor and own client basis incurred in connection
therewith), suits, proceedings and damages (but expressly excluding
consequential, indirect, exemplary, special, incidental, economic or punitive
losses, damages or claims including, without limitation, losses of profit)
asserted against or suffered or incurred by any Indemnified Person in connection
with breach of this Agreement by the indemnifying Party; provided, however, that
in the event any claim results from the joint or concurrent negligence or
willful misconduct of, or breaches of this Agreement by, both Parties, each
Party shall be liable under this indemnification provision in proportion to its
relative degree of fault.

(b) In the event that a Party is obligated to indemnify and hold harmless any
Indemnified Person pursuant to this Section 17, the amount owing to the
Indemnified Person shall be the amount of such Indemnified Person's actual,
reasonable, documented out-of-pocket costs, net of any insurance or other
recovery actually received by the Indemnified Person.

18. AMENDMENT.

This Agreement may be amended, modified or supplemented only by written
agreement signed by both Parties.

 

IN WITNESS WHEREOF, the undersigned have consented and caused this Agreement to
be executed as of the date first indicated above.

 

NORTHEAST ENERGY ASSOCIATES,
A LIMITED PARTNERSHIP

 

By:

Northeast Energy, LP
Its General Partner

 

By:

ESI Northeast Energy GP, Inc.
Its Administrative General Partner

 

By:

NATHAN E. HANSON

   

Name: Nathan E. Hanson
Title: Director

       

PROGAS LIMITED

 

By:

N. L. LUNDE

   

Lee Lunde
President

 

By:

SHONDA DAY

   

Shonda Day
Director of Marketing

 

 

Appendix A to Termination Agreement Dated January 14, 2005

Page 1 of 2

NYMEX Reference Price (October 7, 2004)

 

NYMEX Final Price (Day 1) (Example)

394.232

Divided By

73.977

Equals

$5.329

 

405.997

Divided By

73.977

Equals

$5.488

Month
Beginning

NYMEX
Published
Values

Broker
Quotes
Cal
Spread

NYMEX
Gas
Prices

Discount
Rate

PV of
Price

 

Month
Beginning

NYMEX
Published
Values

Broker
Quotes
Cal
Spread

NYMEX
Gas
Prices

Discount
Rate

PV of
Price

       

6.98% (p.a.)
0.56% (m.)

             

Nov-05

$7.035

 

$7.035

0.9944

$7.00

 

Nov-05

$6.618

 

$6.618

0.9944

$6.58

Dec-05

$7.295

 

$7.295

0.9888

$7.21

 

Dec-05

$6.943

 

$6.943

0.9888

$6.87

Jan-06

$7.455

 

$7.455

0.9833

$7.33

 

Jan-06

$7.173

 

$7.173

0.9833

$7.05

Feb-06

$7.405

 

$7.405

0.9778

$7.24

 

Feb-06

$7.148

 

$7.148

0.9778

$6.99

Mar-06

$7.210

 

$7.210

0.9723

$7.01

 

Mar-06

$6.958

 

$6.958

0.9723

$6.77

Apr-06

$6.190

 

$6.190

0.9668

$5.98

 

Apr-06

$5.973

 

$5.973

0.9668

$5.77

May-06

$6.005

 

$6.005

0.9614

$5.77

 

May-06

$5.853

 

$5.853

0.9614

$5.63

Jun-06

$6.015

 

$6.015

0.9560

$5.75

 

Jun-06

$5.873

 

$5.873

0.9560

$5.61

Jul-06

$6.025

 

$6.025

0.9507

$5.73

 

Jul-06

$5.898

 

$5.898

0.9507

$5.61

Aug-06

$6.055

 

$6.055

0.9453

$5.72

 

Aug-06

$5.923

 

$5.923

0.9453

$5.60

Sep-06

$6.015

 

$6.015

0.9400

$5.65

 

Sep-06

$5.918

 

$5.918

0.9400

$5.56

Oct-06

$6.045

 

$6.045

0.9348

$5.65

 

Oct-06

$5.948

 

$5.948

0.9348

$5.56

Nov-06

$6.305

 

$6.305

0.9295

$5.86

 

Nov-06

$6.253

 

$6.253

0.9295

$5.81

Dec-06

$6.549

 

$6.549

0.9243

$6.05

 

Dec-06

$6.548

 

$6.548

0.9243

$6.05

Jan-07

$6.695

 

$6.695

0.9191

$6.15

 

Jan-07

$6.778

 

$6.778

0.9191

$6.23

Feb-07

$6.648

 

$6.648

0.9140

$6.08

 

Feb-07

$6.755

 

$6.755

0.9140

$6.17

Mar-07

$6.473

 

$6.473

0.9088

$5.88

 

Mar-07

$6.565

 

$6.565

0.9088

$5.97

Apr-07

$5.643

 

$5.643

0.9037

$5.10

 

Apr-07

$5.705

 

$5.705

0.9037

$5.16

May-07

$5.468

 

$5.468

0.8987

$4.91

 

May-07

$5.580

 

$5.580

0.8987

$5.01

Jun-07

$5.483

 

$5.483

0.8936

$4.90

 

Jun-07

$5.610

 

$5.610

0.8936

$5.01

Jul-07

$5.503

 

$5.503

0.8886

$4.89

 

Jul-07

$5.630

 

$5.630

0.8886

$5.00

Aug-07

$5.523

 

$5.523

0.8836

$4.88

 

Aug-07

$5.650

 

$5.650

0.8836

$4.99

Sep-07

$5.488

 

$5.488

0.8787

$4.82

 

Sep-07

$5.620

 

$5.620

0.8787

$4.94

Oct-07

$5.518

 

$5.518

0.8738

$4.82

 

Oct-07

$5.625

 

$5.625

0.8738

$4.91

Nov-07

$5.753

 

$5.753

0.8689

$5.00

 

Nov-07

$5.925

 

$5.925

0.8689

$5.15

Dec-07

$5.983

 

$5.983

0.8640

$5.17

 

Dec-07

$6.215

 

$6.215

0.8640

$5.37

Jan-08

$6.145

 

$6.145

0.8592

$5.28

 

Jan-08

$6.455

 

$6.455

0.8592

$5.55

Feb-08

$6.105

 

$6.105

0.8543

$5.22

 

Feb-08

$6.428

 

$6.428

0.8543

$5.49

Mar-08

$5.960

 

$5.960

0.8495

$5.06

 

Mar-08

$6.213

 

$6.213

0.8495

$5.28

Apr-08

$5.260

 

$5.260

0.8448

$4.44

 

Apr-08

$5.373

 

$5.373

0.8448

$4.54

May-08

$5.090

 

$5.090

0.8400

$4.28

 

May-08

$5.243

 

$5.243

0.8400

$4.40

Jun-08

$5.100

 

$5.100

0.8353

$4.26

 

Jun-08

$5.268

 

$5.268

0.8353

$4.40

Jul-08

$5.115

 

$5.115

0.8306

$4.25

 

Jul-08

$5.298

 

$5.298

0.8306

$4.40

Aug-08

$5.130

 

$5.130

0.8260

$4.24

 

Aug-08

$5.323

 

$5.323

0.8260

$4.40

Sep-08

$5.110

 

$5.110

0.8214

$4.20

 

Sep-08

$5.298

 

$5.298

0.8214

$4.35

Oct-08

$5.135

 

$5.135

0.8168

$4.19

 

Oct-08

$5.308

 

$5.308

0.8168

$4.34

Nov-08

$5.350

 

$5.350

0.8122

$4.35

 

Nov-08

$5.583

 

$5.583

0.8122

$4.53

Dec-08

$5.565

 

$5.565

0.8076

$4.49

 

Dec-08

$5.858

 

$5.858

0.8076

$4.73

Jan-09

$5.680

 

$5.680

0.8031

$4.56

 

Jan-09

$6.098

 

$6.098

0.8031

$4.90

Feb-09

$5.640

 

$5.640

0.7986

$4.50

 

Feb-09

$6.088

 

$6.088

0.7986

$4.86

Mar-09

$5.485

 

$5.485

0.7941

$4.36

 

Mar-09

$5.903

 

$5.903

0.7941

$4.69

Apr-09

$4.915

 

$4.915

0.7897

$3.88

 

Apr-09

$5.083

 

$5.083

0.7897

$4.01

May-09

$4.815

 

$4.815

0.7852

$3.78

 

May-09

$4.963

 

$4.963

0.7852

$3.90

Jun-09

$4.825

 

$4.825

0.7808

$3.77

 

Jun-09

$4.988

 

$4.988

0.7808

$3.89

Jul-09

$4.835

 

$4.835

0.7765

$3.75

 

Jul-09

$5.018

 

$5.018

0.7765

$3.90

Aug-09

$4.845

 

$4.845

0.7721

$3.74

 

Aug-09

$5.048

 

$5.048

0.7721

$3.90

Sep-09

$4.845

 

$4.845

0.7678

$3.72

 

Sep-09

$5.028

 

$5.028

0.7678

$3.86

Oct-09

$4.855

 

$4.855

0.7635

$3.71

 

Oct-09

$5.058

 

$5.058

0.7635

$3.86

Nov-09

$5.025

 

$5.025

0.7592

$3.81

 

Nov-09

$5.343

 

$5.343

0.7592

$4.06

Dec-09

$5.200

 

$5.200

0.7549

$3.93

 

Dec-09

$5.618

 

$5.618

0.7549

$4.24

Jan-10

$5.295

 

$5.295

0.7507

$3.97

 

Jan-10

$5.848

 

$5.848

0.7507

$4.39

Feb-10

$5.255

 

$5.255

0.7465

$3.92

 

Feb-10

$5.838

 

$5.838

0.7465

$4.36

Mar-10

$5.144

 

$5.144

0.7423

$3.82

 

Mar-10

$5.668

 

$5.668

0.7423

$4.21

Apr-10

$4.669

 

$4.669

0.7381

$3.45

 

Apr-10

$4.890

 

$4.890

0.7381

$3.61

May-10

$4.629

 

$4.629

0.7340

$3.40

 

May-10

$4.790

 

$4.790

0.7340

$3.52

Jun-10

$4.629

 

$4.629

0.7299

$3.38

 

Jun-10

$4.815

 

$4.815

0.7299

$3.51

Jul-10

$4.628

 

$4.628

0.7258

$3.36

 

Jul-10

$4.840

 

$4.840

0.7258

$3.51

Aug-10

$4.626

 

$4.626

0.7217

$3.34

 

Aug-10

$4.865

 

$4.865

0.7217

$3.51

Sep-10

$4.626

 

$4.626

0.7177

$3.32

 

Sep-10

$4.880

 

$4.880

0.7177

$3.50

Oct-10

$4.626

 

$4.626

0.7137

$3.30

 

Oct-10

$4.895

 

$4.895

0.7137

$3.49

Nov-10

$4.805

 

$4.805

0.7097

$3.41

 

Nov-10

$5.105

 

$5.105

0.7097

$3.62

Dec-10

$4.980

 

$4.980

0.7057

$3.51

 

Dec-10

$5.315

 

$5.315

0.7057

$3.75

Jan-11

$5.145

 

$5.145

0.7017

$3.61

 

Jan-11

$5.668

 

$5.668

0.7017

$3.98

Feb-11

$5.105

 

$5.105

0.6978

$3.56

 

Feb-11

$5.658

 

$5.658

0.6978

$3.95

Mar-11

$4.994

 

$4.994

0.6939

$3.47

 

Mar-11

$5.488

 

$5.488

0.6939

$3.81

Apr-11

$4.519

 

$4.519

0.6900

$3.12

 

Apr-11

$4.710

 

$4.710

0.6900

$3.25

May-11

$4.479

 

$4.479

0.6861

$3.07

 

May-11

$4.610

 

$4.610

0.6861

$3.16

Jun-11

$4.479

 

$4.479

0.6823

$3.06

 

Jun-11

$4.635

 

$4.635

0.6823

$3.16

Jul-11

$4.478

 

$4.478

0.6784

$3.04

 

Jul-11

$4.660

 

$4.660

0.6784

$3.16

Aug-11

$4.476

 

$4.476

0.6746

$3.02

 

Aug-11

$4.685

 

$4.685

0.6746

$3.16

Sep-11

$4.476

 

$4.476

0.6709

$3.00

 

Sep-11

$4.700

 

$4.700

0.6709

$3.15

Oct-11

$4.476

 

$4.476

0.6671

$2.99

 

Oct-11

$4.715

 

$4.715

0.6671

$3.15

Nov-11

$4.655

 

$4.655

0.6633

$3.09

 

Nov-11

$4.925

 

$4.925

0.6633

$3.27

Dec-11

$4.830

 

$4.830

0.6596

$3.19

 

Dec-11

$5.135

 

$5.135

0.6596

$3.39

Jan-12

$5.026

 

$5.025

0.6559

$3.30

 

Jan-12

$5.508

 

$5.508

0.6559

$3.61

Feb-12

$4.985

 

$4.985

0.6523

$3.25

 

Feb-12

$5.498

 

$5.498

0.6523

$3.59

Mar-12

$4.874

 

$4.874

0.6486

$3.16

 

Mar-12

$5.328

 

$5.328

0.6486

$3.46

Apr-12

$4.399

 

$4.399

0.6450

$2.84

 

Apr-12

$4.550

 

$4.550

0.6450

$2.93

May-12

$4.359

 

$4.359

0.6413

$2.80

 

May-12

$4.450

 

$4.450

0.6413

$2.85

Jun-12

$4.359

 

$4.359

0.6377

$2.78

 

Jun-12

$4.475

 

$4.475

0.6377

$2.85

Jul-12

$4.358

 

$4.358

0.6342

$2.76

 

Jul-12

$4.500

 

$4.500

0.6342

$2.85

Aug-12

$4.356

 

$4.356

0.6306

$2.75

 

Aug-12

$4.525

 

$4.525

0.6306

$2.85

Sep-12

$4.356

 

$4.356

0.6271

$2.73

 

Sep-12

$4.540

 

$4.540

0.6271

$2.85

Oct-12

$4.356

 

$4.356

0.6236

$2.72

 

Oct-12

$4.555

 

$4.555

0.6236

$2.84

Nov-12

$4.535

 

$4.535

0.6201

$2.81

 

Nov-12

$4.765

 

$4.765

0.6201

$2.95

Dec-12

$4.710

 

$4.710

0.6166

$2.90

 

Dec-12

$4.975

 

$4.975

0.6166

$3.07

Jan-13

$4.945

 

$4.945

0.6131

$3.03

 

Jan-13

$5.368

 

$5.368

0.6131

$3.29

Feb-13

$4.905

 

$4.905

0.6097

$2.99

 

Feb-13

$5.358

 

$5.358

0.6097

$3.27

Mar-13

$4.794

 

$4.794

0.6063

$2.91

 

Mar-13

$5.188

 

$5.188

0.6063

$3.15

Apr-13

$4.319

 

$4.319

0.6029

$2.60

 

Apr-13

$4.410

 

$4.410

0.6029

$2.66

May-13

$4.279

 

$4.279

0.5995

$2.57

 

May-13

$4.310

 

$4.310

0.5995

$2.58

Jun-13

$4.279

 

$4.279

0.5961

$2.55

 

Jun-13

$4.335

 

$4.335

0.5961

$2.58

Jul-13

$4.278

 

$4.278

0.5928

$2.54

 

Jul-13

$4.360

 

$4.360

0.5928

$2.58

Aug-13

$4.276

 

$4.276

0.5895

$2.52

 

Aug-13

$4.385

 

$4.385

0.5895

$2.58

Sep-13

$4.276

 

$4.276

0.5862

$2.51

 

Sep-13

$4.400

 

$4.400

0.5862

$2.58

Oct-13

$4.276

 

$4.276

0.5829

$2.49

 

Oct-13

$4.415

 

$4.415

0.5829

$2.57

       

73.98

$394.23

         

0.5829

$406.00

 

Initialed as to correctness

MLL

   

 

 

Appendix A to Termination Agreement Dated January 14, 2005

Page 2 of 2

NYMEX Final Price (Day 2) (Example)

 

NYMEX Final Price (Day 3) (Example)

405.997

Divided By

73.977

Equals

$5.488

 

405.997

Divided By

73.977

Equals

$5.488

Month
Beginning

NYMEX
Published
Values

Broker
Quotes
Cal
Spread

NYMEX
Gas
Prices

Discount
Rate

PV of
Price

 

Month
Beginning

NYMEX
Published
Values

Broker
Quotes
Cal
Spread

NYMEX
Gas
Prices

Discount
Rate

PV of
Price

       

6.98% (p.a.)
0.56% (m.)

             

Nov-05

$6.618

 

$6.618

0.9944

$6.58

 

Nov-05

$6.618

 

$6.618

0.9944

$6.58

Dec-05

$6.943

 

$6.943

0.9888

$6.87

 

Dec-05

$6.943

 

$6.943

0.9888

$6.87

Jan-06

$7.173

 

$7.173

0.9833

$7.05

 

Jan-06

$7.173

 

$7.173

0.9833

$7.05

Feb-06

$7.148

 

$7.148

0.9778

$6.99

 

Feb-06

$7.148

 

$7.148

0.9778

$6.99

Mar-06

$6.958

 

$6.958

0.9723

$6.77

 

Mar-06

$6.958

 

$6.958

0.9723

$6.77

Apr-06

$5.973

 

$5.973

0.9668

$5.77

 

Apr-06

$5.973

 

$5.973

0.9668

$5.77

May-06

$5.853

 

$5.853

0.9614

$5.63

 

May-06

$5.853

 

$5.853

0.9614

$5.63

Jun-06

$5.873

 

$5.873

0.9560

$5.61

 

Jun-06

$5.873

 

$5.873

0.9560

$5.61

Jul-06

$5.898

 

$5.898

0.9507

$5.61

 

Jul-06

$5.898

 

$5.898

0.9507

$5.61

Aug-06

$5.923

 

$5.923

0.9453

$5.60

 

Aug-06

$5.923

 

$5.923

0.9453

$5.60

Sep-06

$5.918

 

$5.918

0.9400

$5.56

 

Sep-06

$5.918

 

$5.918

0.9400

$5.56

Oct-06

$5.948

 

$5.948

0.9348

$5.56

 

Oct-06

$5.948

 

$5.948

0.9348

$5.56

Nov-06

$6.253

 

$6.253

0.9295

$5.81

 

Nov-06

$6.253

 

$6.253

0.9295

$5.81

Dec-06

$6.548

 

$6.548

0.9243

$6.05

 

Dec-06

$6.548

 

$6.548

0.9243

$6.05

Jan-07

$6.778

 

$6.778

0.9191

$6.23

 

Jan-07

$6.778

 

$6.778

0.9191

$6.23

Feb-07

$6.755

 

$6.755

0.9140

$6.17

 

Feb-07

$6.755

 

$6.755

0.9140

$6.17

Mar-07

$6.565

 

$6.565

0.9088

$5.97

 

Mar-07

$6.565

 

$6.565

0.9088

$5.97

Apr-07

$5.705

 

$5.705

0.9037

$5.16

 

Apr-07

$5.705

 

$5.705

0.9037

$5.16

May-07

$5.580

 

$5.580

0.8987

$5.01

 

May-07

$5.580

 

$5.580

0.8987

$5.01

Jun-07

$5.610

 

$5.610

0.8936

$5.01

 

Jun-07

$5.610

 

$5.610

0.8936

$5.01

Jul-07

$5.630

 

$5.630

0.8886

$5.00

 

Jul-07

$5.630

 

$5.630

0.8886

$5.00

Aug-07

$5.650

 

$5.650

0.8836

$4.99

 

Aug-07

$5.650

 

$5.650

0.8836

$4.99

Sep-07

$5.620

 

$5.620

0.8787

$4.94

 

Sep-07

$5.620

 

$5.620

0.8787

$4.94

Oct-07

$5.625

 

$5.625

0.8738

$4.91

 

Oct-07

$5.625

 

$5.625

0.8738

$4.91

Nov-07

$5.925

 

$5.925

0.8689

$5.15

 

Nov-07

$5.925

 

$5.925

0.8689

$5.15

Dec-07

$6.215

 

$6.215

0.8640

$5.37

 

Dec-07

$6.215

 

$6.215

0.8640

$5.37

Jan-08

$6.455

 

$6.455

0.8592

$5.55

 

Jan-08

$6.455

 

$6.455

0.8592

$5.55

Feb-08

$6.428

 

$6.428

0.8543

$5.49

 

Feb-08

$6.428

 

$6.428

0.8543

$5.49

Mar-08

$6.213

 

$6.213

0.8495

$5.28

 

Mar-08

$6.213

 

$6.213

0.8495

$5.28

Apr-08

$5.373

 

$5.373

0.8448

$4.54

 

Apr-08

$5.373

 

$5.373

0.8448

$4.54

May-08

$5.243

 

$5.243

0.8400

$4.40

 

May-08

$5.243

 

$5.243

0.8400

$4.40

Jun-08

$5.268

 

$5.268

0.8353

$4.40

 

Jun-08

$5.268

 

$5.268

0.8353

$4.40

Jul-08

$5.298

 

$5.298

0.8306

$4.40

 

Jul-08

$5.298

 

$5.298

0.8306

$4.40

Aug-08

$5.323

 

$5.323

0.8260

$4.40

 

Aug-08

$5.323

 

$5.323

0.8260

$4.40

Sep-08

$5.298

 

$5.298

0.8214

$4.35

 

Sep-08

$5.298

 

$5.298

0.8214

$4.35

Oct-08

$5.308

 

$5.308

0.8168

$4.34

 

Oct-08

$5.308

 

$5.308

0.8168

$4.34

Nov-08

$5.583

 

$5.583

0.8122

$4.53

 

Nov-08

$5.583

 

$5.583

0.8122

$4.53

Dec-08

$5.858

 

$5.858

0.8076

$4.73

 

Dec-08

$5.858

 

$5.858

0.8076

$4.73

Jan-09

$6.098

 

$6.098

0.8031

$4.90

 

Jan-09

$6.098

 

$6.098

0.8031

$4.90

Feb-09

$6.088

 

$6.088

0.7986

$4.86

 

Feb-09

$6.088

 

$6.088

0.7986

$4.86

Mar-09

$5.903

 

$5.903

0.7941

$4.69

 

Mar-09

$5.903

 

$5.903

0.7941

$4.69

Apr-09

$5.083

 

$5.083

0.7897

$4.01

 

Apr-09

$5.083

 

$5.083

0.7897

$4.01

May-09

$4.963

 

$4.963

0.7852

$3.90

 

May-09

$4.963

 

$4.963

0.7852

$3.90

Jun-09

$4.988

 

$4.988

0.7808

$3.89

 

Jun-09

$4.988

 

$4.988

0.7808

$3.89

Jul-09

$5.018

 

$5.018

0.7765

$3.90

 

Jul-09

$5.018

 

$5.018

0.7765

$3.90

Aug-09

$5.048

 

$5.048

0.7721

$3.90

 

Aug-09

$5.048

 

$5.048

0.7721

$3.90

Sep-09

$5.028

 

$5.028

0.7678

$3.86

 

Sep-09

$5.028

 

$5.028

0.7678

$3.86

Oct-09

$5.058

 

$5.058

0.7635

$3.86

 

Oct-09

$5.058

 

$5.058

0.7635

$3.86

Nov-09

$5.343

 

$5.343

0.7592

$4.06

 

Nov-09

$5.343

 

$5.343

0.7592

$4.06

Dec-09

$5.618

 

$5.618

0.7549

$4.24

 

Dec-09

$5.618

 

$5.618

0.7549

$4.24

Jan-10

$5.848

 

$5.848

0.7507

$4.39

 

Jan-10

$5.848

 

$5.848

0.7507

$4.39

Feb-10

$5.838

 

$5.838

0.7465

$4.36

 

Feb-10

$5.838

 

$5.838

0.7465

$4.36

Mar-10

$5.668

 

$5.668

0.7423

$4.21

 

Mar-10

$5.668

 

$5.668

0.7423

$4.21

Apr-10

$4.890

 

$4.890

0.7381

$3.61

 

Apr-10

$4.890

 

$4.890

0.7381

$3.61

May-10

$4.790

 

$4.790

0.7340

$3.52

 

May-10

$4.790

 

$4.790

0.7340

$3.52

Jun-10

$4.815

 

$4.815

0.7299

$3.51

 

Jun-10

$4.815

 

$4.815

0.7299

$3.51

Jul-10

$4.840

 

$4.840

0.7258

$3.51

 

Jul-10

$4.840

 

$4.840

0.7258

$3.51

Aug-10

$4.865

 

$4.865

0.7217

$3.51

 

Aug-10

$4.865

 

$4.865

0.7217

$3.51

Sep-10

$4.880

 

$4.880

0.7177

$3.50

 

Sep-10

$4.880

 

$4.880

0.7177

$3.50

Oct-10

$4.895

 

$4.895

0.7137

$3.49

 

Oct-10

$4.895

 

$4.895

0.7137

$3.49

Nov-10

$5.105

 

$5.105

0.7097

$3.62

 

Nov-10

$5.105

 

$5.105

0.7097

$3.62

Dec-10

$5.315

 

$5.315

0.7057

$3.75

 

Dec-10

$5.315

 

$5.315

0.7057

$3.75

Jan-11

$5.668

 

$5.668

0.7017

$3.98

 

Jan-11

$5.668

 

$5.668

0.7017

$3.98

Feb-11

$5.658

 

$5.658

0.6978

$3.95

 

Feb-11

$5.658

 

$5.658

0.6978

$3.95

Mar-11

$5.488

 

$5.488

0.6939

$3.81

 

Mar-11

$5.488

 

$5.488

0.6939

$3.81

Apr-11

$4.710

 

$4.710

0.6900

$3.25

 

Apr-11

$4.710

 

$4.710

0.6900

$3.25

May-11

$4.610

 

$4.610

0.6861

$3.16

 

May-11

$4.610

 

$4.610

0.6861

$3.16

Jun-11

$4.635

 

$4.635

0.6823

$3.16

 

Jun-11

$4.635

 

$4.635

0.6823

$3.16

Jul-11

$4.660

 

$4.660

0.6784

$3.16

 

Jul-11

$4.660

 

$4.660

0.6784

$3.16

Aug-11

$4.685

 

$4.685

0.6746

$3.16

 

Aug-11

$4.685

 

$4.685

0.6746

$3.16

Sep-11

$4.700

 

$4.700

0.6709

$3.15

 

Sep-11

$4.700

 

$4.700

0.6709

$3.15

Oct-11

$4.715

 

$4.715

0.6671

$3.15

 

Oct-11

$4.715

 

$4.715

0.6671

$3.15

Nov-11

$4.925

 

$4.925

0.6633

$3.27

 

Nov-11

$4.925

 

$4.925

0.6633

$3.27

Dec-11

$5.135

 

$5.135

0.6596

$3.39

 

Dec-11

$5.135

 

$5.135

0.6596

$3.39

Jan-12

$5.508

 

$5.508

0.6559

$3.61

 

Jan-12

$5.508

 

$5.508

0.6559

$3.61

Feb-12

$5.498

 

$5.498

0.6523

$3.59

 

Feb-12

$5.498

 

$5.498

0.6523

$3.59

Mar-12

$5.328

 

$5.328

0.6486

$3.46

 

Mar-12

$5.328

 

$5.328

0.6486

$3.46

Apr-12

$4.550

 

$4.550

0.6450

$2.93

 

Apr-12

$4.550

 

$4.550

0.6450

$2.93

May-12

$4.450

 

$4.450

0.6413

$2.85

 

May-12

$4.450

 

$4.450

0.6413

$2.85

Jun-12

$4.475

 

$4.475

0.6377

$2.85

 

Jun-12

$4.475

 

$4.475

0.6377

$2.85

Jul-12

$4.500

 

$4.500

0.6342

$2.85

 

Jul-12

$4.500

 

$4.500

0.6342

$2.85

Aug-12

$4.525

 

$4.525

0.6306

$2.85

 

Aug-12

$4.525

 

$4.525

0.6306

$2.85

Sep-12

$4.540

 

$4.540

0.6271

$2.85

 

Sep-12

$4.540

 

$4.540

0.6271

$2.85

Oct-12

$4.555

 

$4.555

0.6236

$2.84

 

Oct-12

$4.555

 

$4.555

0.6236

$2.84

Nov-12

$4.765

 

$4.765

0.6201

$2.95

 

Nov-12

$4.765

 

$4.765

0.6201

$2.95

Dec-12

$4.975

 

$4.975

0.6166

$3.07

 

Dec-12

$4.975

 

$4.975

0.6166

$3.07

Jan-13

$5.368

 

$5.368

0.6131

$3.29

 

Jan-13

$5.368

 

$5.368

0.6131

$3.29

Feb-13

$5.358

 

$5.358

0.6097

$3.27

 

Feb-13

$5.358

 

$5.358

0.6097

$3.27

Mar-13

$5.188

 

$5.188

0.6063

$3.15

 

Mar-13

$5.188

 

$5.188

0.6063

$3.15

Apr-13

$4.410

 

$4.410

0.6029

$2.66

 

Apr-13

$4.410

 

$4.410

0.6029

$2.66

May-13

$4.310

 

$4.310

0.5995

$2.58

 

May-13

$4.310

 

$4.310

0.5995

$2.58

Jun-13

$4.335

 

$4.335

0.5961

$2.58

 

Jun-13

$4.335

 

$4.335

0.5961

$2.58

Jul-13

$4.360

 

$4.360

0.5928

$2.58

 

Jul-13

$4.360

 

$4.360

0.5928

$2.58

Aug-13

$4.385

 

$4.385

0.5895

$2.58

 

Aug-13

$4.385

 

$4.385

0.5895

$2.58

Sep-13

$4.400

 

$4.400

0.5862

$2.58

 

Sep-13

$4.400

 

$4.400

0.5862

$2.58

Oct-13

$4.415

 

$4.415

0.5829

$2.57

 

Oct-13

$4.415

 

$4.415

0.5829

$2.57

       

73.98

$406.00

         

0.5829

$406.00

 

Initialed as to correctness

MLL

   

 

Appendix B to Termination Agreement
Dated January 14, 2005

NYMEX Reference Price

                 

       

$

5.329

       

                                   

NYMEX Final Price

                 

       

$

5.488

       

                                   

NYMEX Price Differential

                 

       

$

0.1590

       

                                   

Base Partial Termination Payment

                 

     

$

(9,500,000)

Plus the Product of

     

                 

     

$

(28,200,000)

Times

0.1590

     

                 

     

Equals

$

(13,984,844)

       

                 

 

 

 

Initialed as to correctness

MLL

   

 

 

Appendix C to Termination Agreement
Dated January 14, 2005

NYMEX Reference Price

                 

       

$

5.329

       

                                   

NYMEX Final Price

                 

       

$

         

                                   

NYMEX Price Differential

                 

       

$

         

                                   

Base Partial Termination Payment

                 

     

$

(9,500,000)

Plus the Product of

     

                 

     

$

(28,200,000)

Times

       

                 

     

Equals

$

(9,500,000)

       

                 

 

 

 

Initialed as to correctness

MLL

   

 

 

APPENDIX D

APPROVED OTC BROKERS

1.

Mancapital LLC

2.

Spectron Energy Inc.

3.

Edf Mann

4.

APB Energy, Inc.

5.

TFS

6.

Amerex

7.

Choice Energy

8.

GFI Energy