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AGREEMENT NO.

For the Sale of Natural Gas

between

FX Energy Poland Sp. z o.o.

and

POLSKIE GÓRNICTWO NAFTOWE I GAZOWNICTWO S.A.

This Agreement (“Agreement”) was signed on 19.06.2009 in Warsaw between:

FX ENERGY POLAND Sp. z o.o. with its registered seat in Warsaw, at ul.
Chałubinskiego 8, 00-613 Warsaw, entered into the National Court Register by the
District Court in Warsaw under the KRS No. 0000052459, NIP 521-275-14-81, share
capital PLN 1 895 000 (one million eight hundred ninety five thousand),
hereinafter referred to as “FX”, the “Seller” or a “Party”, represented by:

1.       David N. Pierce – member of the Management Board; and

2.       Zbigniew Tatys - member of the Management Board………………………..,

and

Polskie Górnictwo Naftowe i Gazownictwo Spółka Akcyjna with its registered
office in Warsaw at ul. Kasprzaka 25, entered in the Companies Register of the
National Court Register by the District Court for the City of Warsaw, XIX
Commercial Division of the National Court Register, under number KRS 0000059492,
NIP number 525-000-80-28, REGON number 012216736-00027, hereinafter referred to
as the “Purchaser” or a “Party”, represented by:

1.       Artur Bieliński – Director of Gas Trading Department; and

2.       Bartosz Motyka-Radłowski – Director of Controlling Department.

§ 1

1.
In this Agreement, the below terms shall have the following meanings:

 
1/
Contract Day - a period starting at 10:00 p.m. of any given calendar day and
ending at 10:00 p.m. of the following calendar day;

 
2/
Sale Commencement Day - the Contract Day on which the sale of the Gas in
Delivery Point commences;

 
 

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3/
Sale Closure Day – the Contract Day on which the production from the Field is
ceased, or the Seller loses its title to the Gas;

 
4/
Gas – the 49% share in the ownership of a mix of hydrocarbons and non-flammable
gaseous components including methane and nitrogen as main components, belonging
to the Seller, which is not a gaseous fuel according to the Energy Law, and
which conforms to the parameters specified in Appendix No. 1, produced from the
Field on the basis of the Joint Operating Agreement, other than the part of the
mineral used in for the purposes of operation of the mining plant;

 
5/
Joint Operating Agreement – Joint operating agreement covering a part of the
Foresudetic Monocline, entered into on 12 May 2000 between the Buyer and the
Seller, on the basis of which the Seller will have the right of ownership of the
Gas, and any agreement related to the Field, which will replace it;

 
[NOTE: NUMBER 6 IS OMITTED IN THE POLISH VERSION]

 
7/
Contract Month - a period starting at 10:00 p.m. of the last day of the calendar
month directly preceding the given calendar month, and ending at 10:00 p.m. of
the last day of the given calendar month;

 
8/
Normal Cubic Meter (Nm3) - means the amount of gas required to fill a space of
one cubic metre with an absolute pressure of 101.325 kPa (one hundred and one
point three two five kilopascals) and at thermodynamic temperature of 273.15 K
(two hundred and seventy three point one five Kelvin); unless expressly stated
otherwise, all quantities of the Gas referred to herein shall be expressed in
Nm3;

 
9/
Sale Period - the period commencing on the Sale Commencement Day and ending on
the Sale Closure Day;

 
10/
Planned Maintenance Work - renovation, construction, maintenance and
modernization work:

 
(a)
conducted by the Purchaser in the Purchaser’s installations, which affects the
Purchaser’s ability to take the Gas at the Delivery Point;

 
(b)
conducted by the Seller in the Delivery System, which affects the Seller’s
ability to sell the Gas at the Delivery Point, including, without limitation,
any periodic tests conducted on the Field;

 
11/
Annual Statement– is defined in Appendix No. 1;

 
12/
Monthly Statement– is defined in Appendix No. 1;

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13/
Energy Law – an act dated 10 April 1997 – Energy law (unified text: Journal of
Laws of 2006 No. 89, item 625);

 
14/
Delivery Point - the point at which the connection pipe at the outlet of the
Metering System is linked to the Purchaser’s installation through the main
valve;

 
15/
Contract Year - a period starting at 10:00 p.m. on the last day of any calendar
year and ending at 10:00 p.m. of the last day of the following calendar year,
provided that:

 
(a)
the first Contract Year shall commence at 10:00 p.m. on the Sale Commencement
Day and shall continue until 10:00 p.m. on last day of the same calendar year;

 
(b)
if this Agreement terminates on any day other than December 31, the last
Contract Year shall end at 10:00 p.m. on the last day of effectiveness of the
Agreement;

 
16/
Quality Specification – a set of physical and chemical parameters of the Gas
specified in Appendix No. 1;

 
17/
Gas Station - a set of installations used, whether jointly or separately, to
reduce, process, control, measure and distribute the Gas;

 
18/
Delivery System - installations used for the purposes of producing, processing,
compressing, testing, measuring and selling the Gas at the Delivery Point;

 
19/
Tariff – the set of prices and fee rates, and conditions of their application,
prepared by the Seller and introduced as binding for customers specified
therein, according to the procedures set forth in the Energy Law; in particular
the Tariff shall set out the prices and fee rates for the consumers of the Lw
class low-methane gas;

 
20/
Metering System - gas meters and other metering devices, as well as the systems
connecting those devices, described in Appendix No. 1, used to measure the
quantity of the Gas sold at the Delivery Point, owned by the Seller;

 
21/
Field - means the gas field located in the “Roszków” mining area – the natural
gas accumulation in the Rotligend sandstone, located in the area of
Wielkopolskie province, Jarocin district, in Jarocin and Jaraczewo
municipalities;

2.
All units of measurement used herein are units of the SI system in accordance
with the Law on Measurements dated 11 May 2001 (consolidated text: Dz. U. of
2004, No. 243, item 2441).

 
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§ 2

1.
The Seller undertakes to transfer title to the Gas to the Seller during the Sale
Period and to surrender all the Gas to the Purchaser at the Delivery Point, and
the Purchaser undertakes to take all the Gas and pay for it at the Gas Price
specified in the Agreement.

2.
The Seller hereby represents that it has obtained all material authorizations,
including administrative permits, required for the execution and performance of
the Agreement.

3.
This Agreement is entered into subject to the condition precedent of the
Purchaser and the Seller entering into an agreement transferring to the Seller a
49% interest in the mining usufruct, based on which the Seller shall assume, as
co-holder of mining usufruct, all rights and obligations under the mining
usufruct agreement dated 29 February 2009 entered into between the State
Treasury – Minister of Environment and the Purchaser.

4.
This Agreement shall terminate upon depletion of the Field or if geological
conditions occur which shall render further exploitation impossible.

5.
The Sale Commencement Day shall occur no earlier than on the Contract Day on
which the Purchaser, acting as the operator under the Joint Operating Agreement,
commences extraction of Gas from the Field.

6.
The detailed rules for sale of the Gas to the Purchaser, including its technical
and quantity parameters, the rules for the Purchaser to place orders for the
Gas, the place of handover of the Gas, the rules for measuring the quality and
quantity of the Gas, the rules for preparing Monthly and Annual Statements, and
the rules for conducting the Planned Maintenance Work, as well as for
introducing stoppages and restrictions in the delivery of the Gas, are defined
in Appendix No. 1 hereto. Appendix 1 shall be signed no later than by the Sale
Commencement Day. If the Parties fail to agree upon the text of Appendix 1 by
the Sale Commencement Day, the text of Appendix 1 as proposed in good faith by
the Purchaser as the operator under the Joint Operating Agreement shall apply.

§ 3

1.
The Purchaser shall pay for the Gas amounts calculated as the product of the Gas
sold (expressed in cubic meters) and the Gas Price (PGU).

2.
As long and the Purchaser applies the Tariff, the Gas Price (PGU) shall
correspond to 0.95 (zero point ninety five) parts of the price for gaseous fuel
specified in the Tariff for the off-takers of low-methane gas (the “Lw”
sub-group) taking the largest amounts gaseous fuels from the transmission
network operated by Operator Gazociagow Przesylowych Gaz-System S.A., in
accordance with the following formula:
 
PGU = 0.95 *PT

4

 
 

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where:

PGU – the Gas Price payable for the Gas sold in the Contract Month.

PT – the price for gaseous fuel specified in the Tariff for the off-takers of
low-methane gas (the “Lw” sub-group) taking the largest amounts of gaseous fuel
from the transmission network operated by Operator Gazociagow Przesylowych
Gaz-System S.A., being in effect on the last day of the Contract Month
immediately preceding the Contract Month when the Gas is delivered;

3.
If the Tariff is changed, the Gas Price shall change as of the first day of the
Contract Month immediately following the month in which the change of the Tariff
becomes effective.

4.
If the Purchaser ceases to use the Tariff, the Parties shall enter into
negotiations aimed at determining the new Gas Price formula within 30 (thirty)
day following a notice to the Seller regarding that event.  If the Parties fail
to agree upon a new Gas Price formula within 4 (four) months from the
commencement of the said negotiations, each Party may terminate the Agreement
subject to no less than 6 (six) month notice, effective as of the end of a
Contract Year. For the avoidance of doubt, during the period between the day
when the Tariff ceases to apply and the day when the Parties agree on a new Gas
Price calculation formula, as well as during the termination notice period
referred to in the preceding sentence, the Gas Price applicable on the last day
of applicability of the Tariff shall apply.

5.
If the calorific value of the Gas sold is different from the calorific value
defined in the Tariff for the prices of the “Lw” sub-group low-methane gas, the
Gas Price shall be adjusted in accordance with the below formula:

 
PGU (c) = PGU (t) * MCV/TCV

 
where:

PGU (c) – the Gas Price payable for the Gas delivered in the Contract Month,
taking into account the actual calorific value of the Gas sold, as specified in
the Monthly Statement;

PGU (t) – the Gas Price calculated in accordance with section 2 above;

MCV – is the average monthly gross calorific value of the Gas sold in a given
Contract Month in accordance with the Monthly Statement, calculated in
accordance with Appendix No. 1, stated in MJ/Nm3;

TCV – is the gross calorific value specified in the Tariff for the prices of the
“Lw” sub-group low-methane gas sold in a given Contract Month, stated in MJ/Nm3.
 
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6.
Numbers used in the calculation of the Gas Price and the resulting PGU values
shall be rounded up or down to the fifth (5) decimal place inclusive.  Numbers
shall be rounded down if the digit subject to rounding is in the range between 0
and 4 inclusive, and shall be rounded up if the digit subject to rounding is in
the range between 5 and 9.

7.
The Gas Price and the other amounts stated herein are net of VAT, excise, and
any similar tax or public charges.

§ 4

1.
The amounts due for Gas sold shall be paid monthly, on the basis of Monthly
Statements.  Invoices shall be issued within seven (7) calendar days of the end
of each Contract Month, and sent to the Purchaser by fax, and the original
invoice shall be sent through persons or parties authorized to deliver mail on
the Contract Day on which it is issued.

2.
The amounts due for Gas sold shall be paid by wire transfer from the Purchaser’s
bank account to the bank account as specified in writing by the Seller, by the
30th calendar day following the end of the Contract Month in which the Gas has
been sold.

3.
The payment of amounts due under the Agreement shall be deemed to have been made
on the date of crediting the recipient’s bank account.

4.
Any default in payment obligations hereunder shall result in interest being
charged at the statutory rate established pursuant to Article 359 of the Polish
Civil Code, calculated for each day of the default.  If the statutory rate
ceases to be published, the applicable rate shall be agreed upon by the Parties
in an amendment hereto.  Any charged interest for default shall be payable
against an accounting note.

5.
The Parties shall notify each other in writing of any changes to the
descriptions or the numbers of their respective bank accounts, and such notice
shall specify both the former and the modified account details.  Such changes
shall not constitute amendments to this Agreement. A Party which defaults in
these obligations shall indemnify the other for all losses resulting from the
default.

§ 5

1.
Any complaints regarding invoices must be made in writing within ten (10)
business days of receipt.

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2.
If the complaint refers to a manifest error (e.g. a mathematical error), then
the Party receiving the invoice shall be authorized to calculate the correct
amount and pay such correct amount only within the time specified in § 4 section
2, provided that it gives the issuing Party, no later than on the date of
payment, a written notice explaining its calculation.  The latter Party shall
issue a correction invoice, without any delay after agreeing the correct amount
with the former.

3.
Complaints disputing an invoice for reasons other than those stated in section 2
above shall not release a Party from the duty to timely pay the amount stated in
the invoice constituting the basis for the complaint.

4.
The provisions of § 4 and § 5 shall apply, mutatis mutandis, to payments
against, and complaints concerning, accounting notes.

§ 6

 
Subject to § 2.4 above, the Agreement shall terminate:

 
1)
on the Sale Closure Day; or

 
2)
on the effective date of termination notice if the Agreement is terminated
pursuant to § 7.

§ 7

1.
Either Party’s failure to perform, or inappropriate performance of the material
provisions of this Agreement specified in section 2 below shall entitle the
other Party to terminate the Agreement subject to at least 30 (thirty) calendar
days’ notice effective as of the end of the Contract Year.

2.
Material provisions of the Agreement shall be considered non-performed or
performed inappropriately, if:

1)           a Party obliged fails to pay the other an amount due under the
Agreement and the default continues for at least thirty (30) days and is not
cured within an additional 14 (fourteen) day period following a written notice
calling for payment and specifying the amount due; or

2)           the Seller sells any Gas to a third party without the Purchaser’s
prior consent.

3.
The Party entitled to terminate the Agreement for the reasons specified in
section 2 above shall give the other Party a reasoned and properly documented
written notice specifying the reasons, and date of termination of the Agreement
pursuant to section 1 of this paragraph.

 
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4.
If the Agreement is terminated due to the reasons specified n section 2 point 1)
above, the Seller shall be entitled to claim from the Purchaser liquidated
damages equal to 6 (six) times the largest net monthly value of the Gas sold in
the last full Contract Year.

5.
If the Agreement is terminated due to the reasons specified n section 2 point 2)
above, the Purchaser shall be entitled to claim from the Seller liquidated
damages equal to 6 (six) times the largest net monthly value of the Gas sold in
the last full Contract Year, for each event referred to above.

6.
Each Party reserves the right to claim compensation for damages in excess of the
liquidated damages specified above.

§ 8

The Parties shall be liable for any failure to perform or inappropriate
performance of the Agreement pursuant to generally applicable terms.

§ 9

1.
The Parties shall attempt to resolve all disputes arising out of or in
connection with this Agreement by direct negotiations.  If the Parties do not
resolve the dispute within three (3) months of the delivery of either Party’s
invitation to negotiate with the other, the dispute shall be referred to the
competent state court.

2.
The existence of any dispute shall not excuse either Party’s performance of its
obligations hereunder.

§ 10

Any transfer to a third party of any rights and obligations arising hereunder
without the consent of the other Party shall be null and void, except for a
transfer of pecuniary claims.  If the Seller is required to transfer all its
rights hereunder by way of collateral assignment of rights to a bank with its
seat in an OECD country, or a financial institution with its seat in an OECD
country, licensed by a state authority of that country, the Seller shall make a
request therefor to the Purchaser, in which request the Seller shall properly
justify the necessity of such a transfer and shall state that such transfer of
rights under the Agreement shall be without prejudice to the Purchaser’s duties
and rights. The Purchaser shall notify the Seller within no more than 30
(thirty) calendar days of receipt of the request as to whether it agrees to or
refuses its consent to the transfer.

[NOTE: NUMBER 11 IS OMITTED IN THE POLISH VERSION]

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§ 12

1.
Except as otherwise specifically provided, all notices authorized or required by
this Agreement between the Parties, shall be in writing, in Polish, and
delivered in person or by registered mail or by courier service with confirmed
delivery, or by any electronic means of transmitting written communications
which provides written confirmation of completed transmission.  Any
communications relating to this Agreement shall be deemed delivered only when
received by the Party to whom such notice is directed, and the time for that
Party to deliver any notice in response to an originating notice shall run from
the date the originating notice is received.  All communications shall be
delivered to the following addresses of the respective Parties:

Purchaser:
Polskie Gornictwo Naftowe i Gazownictwo S.A.
 
ul. Marcina Kasprzaka 25
 
01-224 Warsaw, Poland
 
Phone:  +48 22 589 45 31
 
Fax:  +48 22 589 46 31
   
Seller:
FX Energy Poland Sp. z o.o.
 
ul. Chalubinskiego 8
 
00-613 Warsaw
 
Poland
 
Attention: Zbigniew Tatys
 
Phone +48 22 8300074
 
Fax +48 22 6306632

2.
The Parties undertake to inform each other forthwith of any changes referred to
in section 1 above or otherwise they will bear the costs relating to an
inappropriate performance of this undertaking.  Any changes concerning the
matters referred to in this clause shall not be regarded as amendments to this
Agreement.

§ 13

1.
Any amendment to the provisions of this Agreement must be in writing or shall
otherwise be null and void.

2.
The following appendices constitute an integral part of this Agreement:

 
1)
Appendix No. 1 – Technical conditions of Gas sale,

 
2)
Appendix No. 2. - current excerpts from the companies register regarding both
parties to the Agreement, along with Power of Attorney for the authorized
signatories.

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3.
This Agreement has been executed in two identical copies, one for each of the
Parties.

SELLER
PURCHASER
   
/s/
/s/

10

 
 

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