Exhibit 10.54
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Base Contract for Sale and Purchase of Natural Gas This Base Contract is entered
into as of the following date: February 23, 2011 The parties to this Base
Contract are the following:

PARTY A JOHN D. OIL & GAS MARKETING, LLC PARTY NAMEPARTY B Gas Natural Service
Company, LLC 3511 Lost Nation Road Suite 213 Willoughby, Ohio 44094ADDRESS8500
Station Street Suite 100 Mentor, Ohio 44060 www.BUSINESS WEBSITEwww. JOHND.2011
– INTRASTATESales – Service Company 2CONTRACT NUMBERJOHND.2011 – INTRASTATESales
– Service Company 2 TBA IF APPLICABLED-U-N-S® NUMBERTBA IF APPLICABLE XUS
FEDERAL: 38 -3724735 ?OTHER: TAX ID NUMBERSXUS FEDERAL: TBA ?OTHER:
OhioJURISDICTION OF ORGANIZATIONOhio ?Corporation XLLC ?Limited
Partnership?Partnership ?LLP?Other: COMPANY TYPE?Corporation XLLC ?Limited
Partnership?Partnership ?LLP?Other: GUARANTOR (IF APPLICABLE)Gas Natural, Inc.
CONTACT INFORMATION John D. Oil & Gas Marketing, LLC ATTN:Mike Zappitello TEL:
440-669-2929 FAX 440-255-1985 EMAIL: mzappitello@cobrapipeline.com?
COMMERICALGas Natural Service Company, LLC ATTN:Jonathan A. Harrington TEL: FAX:
EMAIL: John D. Oil & Gas Marketing, LLC ATTN:as above TEL:FAX:
EMAIL:?SCHEDULINGGAS NATURAL SERVICE COMPANY, LLC ATTN:as above TEL:FAX: EMAIL:
John D. Oil & Gas Marketing, LLC ATTN: as above TEL:FAX: EMAIL:?CONTRACT AND
LEGAL NOTICES GAS NATURAL SERVICE COMPANY, LLC ATTN:as above TEL:FAX: EMAIL:
John D. Oil & Gas Marketing, LLC ATTN: as above TEL:FAX: EMAIL:?CREDIT GAS
NATURAL SERVICE COMPANY, LLC ATTN: as above TEL:FAX: EMAIL: John D. Oil & Gas
Marketing, LLC ATTN: as above TEL:FAX: EMAIL:?TRANSACTION CONFIRMATIONSGAS
NATURAL SERVICE COMPANY, LLC ATTN: as above TEL:FAX: EMAIL: ACCOUNTING
INFORMATION TBA ATTN: TEL:FAX: EMAIL:?INVOICES ?PAYMENTS ?SETTLEMENTSGas Natural
Service Company, LLC ATTN: TEL: FAX: 440 255-1985 EMAIL: BANK: ABA:ACCT: OTHER
DETAILS:WIRE TRANSFER NUMBERS (IF APPLICABLE)BANK: ABA:ACCT: OTHER DETAILS:
BANK: ABA:ACCT: OTHER DETAILS:ACH NUMBERS (IF APPLICABLE)BANK: ABA:ACCT: OTHER
DETAILS: ATTN: ADDRESS: CHECKS (IF APPLICABLE)ATTN: ADDRESS:

Copyright © 2006 North American Energy Standards Board, Inc.NAESB Standard 6.3.1
All Rights ReservedSeptember 5, 2006

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Contract for Sale and Purchase of Natural Gas (Continued) This Base Contract
incorporates by reference for all purposes the General Terms and Conditions for
Sale and Purchase of Natural Gas published by the North American Energy
Standards Board. The parties hereby agree to the following provisions offered in
said General Terms and Conditions. In the event the parties fail to check a box,
the specified default provision shall apply. Select the appropriate box(es) from
each section:

Section 1.2 Transaction Procedure XOral (default) OR Written Section 10.2
Additional Events of Default XNo Additional Events of Default (default)

Indebtedness Cross Default

Party A:

Party B:

Transactional Cross Default Specified Transactions:

Section 2.7 Confirm Deadline X2 Business Days after receipt (default) OR
Business Days after receipt

Section 2.8 Confirming Party XSeller (default) OR Buyer

Section 3.2 Performance Obligation XCover Standard (default) OR Spot Price
Standard Section 10.3.1 Early Termination Damages X Early Termination Damages
Apply (default)

OR

Early Termination Damages Do Not Apply

Note: The following Spot Price Publication applies to both of the immediately
preceding. Section 10.3.2 Other Agreement Setoffs XOther Agreement Setoffs Apply
(default)

Bilateral (default)

Triangular

OR

Other Agreement Setoffs Do Not Apply

Section 2.31 Spot Price Publication Gas Daily Midpoint (default) OR
X            Gas Daily Midpoint Columbia Appalachia

Section 6 Taxes XBuyer Pays At and After Delivery Point (default) OR Seller Pays
Before and At Delivery Point

Section 7.2 Payment Date

X25th Day of Month following Month of delivery (default) OR Day of Month
following Month of delivery Section 15.5 Choice Of Law Ohio

Section 7.2 Method of Payment Wire transfer (default) Automated Clearinghouse
Credit (ACH) X Check            Cash Account Transfer Section 15.10
Confidentiality XConfidentiality applies (default) OR Confidentiality does not
apply

Section 7.7 Netting XNetting applies (default) OR Netting does not apply •
Special Provisions Number of sheets attached:3 X Addendum(s):JOHND.2011 –
INTRASTATESales – Service Company #2.1 IN WITNESS WHEREOF, the parties hereto
have executed this Base Contract in duplicate. JOHN D. OIL & GAS MARKETING,
LLCPARTY NAMEGas Natural Service Company, LLC

—By: —/s/ Rebecca HowellSIGNATURE

—By: —/s/ Jonathan A. Harrington Rebecca HowellPRINTED NAMEJonathan A.
Harrington Controller & SecretaryTITLEController, Gas Natural, Inc.

Copyright © 2006 North American Energy Standards Board, Inc.NAESB Standard 6.3.1
All Rights ReservedPage 2 of 13September 5, 2006

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SECTION 1. PURPOSE AND PROCEDURES 1.1. These General Terms and Conditions are
intended to facilitate purchase and sale transactions of Gas on a Firm or
Interruptible basis. "Buyer" refers to the party receiving Gas and "Seller"
refers to the party delivering Gas. The entire agreement between the parties
shall be the Contract as defined in Section 2.9. The parties have selected
either the Oral Transaction Procedure or the Written Transaction Procedure as
indicated on the Base Contract. Oral Transaction Procedure: 1.2. The parties
will use the following Transaction Confirmation procedure. Any Gas purchase and
sale transaction may be effectuated in an EDI transmission or telephone
conversation with the offer and acceptance constituting the agreement of the
parties. The parties shall be legally bound from the time they so agree to
transaction terms and may each rely thereon. Any such transaction shall be
considered a writing and to have been signed. Notwithstanding the foregoing
sentence, the parties agree that Confirming Party shall, and the other party
may, confirm a telephonic transaction by sending the other party a Transaction
Confirmation by facsimile, EDI or mutually agreeable electronic means within
three Business Days of a transaction covered by this Section 1.2 (Oral
Transaction Procedure) provided that the failure to send a Transaction
Confirmation shall not invalidate the oral agreement of the parties. Confirming
Party adopts its confirming letterhead, or the like, as its signature on any
Transaction Confirmation as the identification and authentication of Confirming
Party. If the Transaction Confirmation contains any provisions other than those
relating to the commercial terms of the transaction (i.e., price, quantity,
performance obligation, delivery point, period of delivery and/or transportation
conditions), which modify or supplement the Base Contract or General Terms and
Conditions of this Contract (e.g., arbitration or additional representations and
warranties), such provisions shall not be deemed to be accepted pursuant to
Section 1.3 but must be expressly agreed to by both parties; provided that the
foregoing shall not invalidate any transaction agreed to by the parties. Written
Transaction Procedure: 1.2. The parties will use the following Transaction
Confirmation procedure. Should the parties come to an agreement regarding a Gas
purchase and sale transaction for a particular Delivery Period, the Confirming
Party shall, and the other party may, record that agreement on a Transaction
Confirmation and communicate such Transaction Confirmation by facsimile, EDI or
mutually agreeable electronic means, to the other party by the close of the
Business Day following the date of agreement. The parties acknowledge that their
agreement will not be binding until the exchange of nonconflicting Transaction
Confirmations or the passage of the Confirm Deadline without objection from the
receiving party, as provided in Section 1.3. 1.3. If a sending party's
Transaction Confirmation is materially different from the receiving party's
understanding of the agreement referred to in Section 1.2, such receiving party
shall notify the sending party via facsimile, EDI or mutually agreeable
electronic means by the Confirm Deadline, unless such receiving party has
previously sent a Transaction Confirmation to the sending party. The failure of
the receiving party to so notify the sending party in writing by the Confirm
Deadline constitutes the receiving party's agreement to the terms of the
transaction described in the sending party's Transaction Confirmation. If there
are any material differences between timely sent Transaction Confirmations
governing the same transaction, then neither Transaction Confirmation shall be
binding until or unless such differences are resolved including the use of any
evidence that clearly resolves the differences in the Transaction Confirmations.
In the event of a conflict among the terms of (i) a binding Transaction
Confirmation pursuant to Section 1.2, (ii) the oral agreement of the parties
which may be evidenced by a recorded conversation, where the parties have
selected the Oral Transaction Procedure of the Base Contract, (iii) the Base
Contract, and (iv) these General Terms and Conditions, the terms of the
documents shall govern in the priority listed in this sentence. 1.4. The parties
agree that each party may electronically record all telephone conversations with
respect to this Contract between their respective employees, without any special
or further notice to the other party. Each party shall obtain any necessary
consent of its agents and employees to such recording. Where the parties have
selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, the
parties agree not to contest the validity or enforceability of telephonic
recordings entered into in accordance with the requirements of this Base
Contract. SECTION 2. DEFINITIONS The terms set forth below shall have the
meaning ascribed to them below. Other terms are also defined elsewhere in the
Contract and shall have the meanings ascribed to them herein. 2.1. Additional
Event of Default shall mean Transactional Cross Default or Indebtedness Cross
Default, each as and if selected by the parties pursuant to the Base Contract.
2.2. Affiliate shall mean, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or
indirectly, the person or any entity directly or indirectly under common control
with the person. For this purpose, control of any entity or person means
ownership of at least 50 percent of the voting power of the entity or person.
Copyright 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1
All Rights Reserved Page 3 of 13 September 5, 2006

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2.3. IAlternative DamagesE shall mean such damages, expressed in dollars or
dollars per MMBtu, as the parties shall agree upon in the Transaction
Confirmation, in the event either Seller or Buyer fails to perform a Firm
obligation to deliver Gas in the case of Seller or to receive Gas in the case of
Buyer. 2.4. IBase ContractE shall mean a contract executed by the parties that
incorporates these General Terms and Conditions by reference; that specifies the
agreed selections of provisions contained herein; and that sets forth other
information required herein and any Special Provisions and addendum(s) as
identified on page one. 2.5. IBritish thermal unitE or IBtuE shall mean the
International BTU, which is also called the Btu (IT). 2.6. IBusiness Day(s)E
shall mean Monday through Friday, excluding Federal Banking Holidays for
transactions in the U.S. 2.7. IConfirm DeadlineE shall mean 5:00 p.m. in the
receiving partyIs time zone on the second Business Day following the Day a
Transaction Confirmation is received or, if applicable, on the Business Day
agreed to by the parties in the Base Contract; provided, if the Transaction
Confirmation is time stamped after 5:00 p.m. in the receiving partyIs time zone,
it shall be deemed received at the opening of the next Business Day. 2.8.
IConfirming PartyE shall mean the party designated in the Base Contract to
prepare and forward Transaction Confirmations to the other party. 2.9.
IContractE shall mean the legally-binding relationship established by (i) the
Base Contract, (ii) any and all binding Transaction Confirmations and (iii)
where the parties have selected the Oral Transaction Procedure in Section 1.2 of
the Base Contract, any and all transactions that the parties have entered into
through an EDI transmission or by telephone, but that have not been confirmed in
a binding Transaction Confirmation, all of which shall form a single integrated
agreement between the parties. 2.10. IContract PriceE shall mean the amount
expressed in U.S. Dollars per MMBtu to be paid by Buyer to Seller for the
purchase of Gas as agreed to by the parties in a transaction. 2.11. IContract
QuantityE shall mean the quantity of Gas to be delivered and taken as agreed to
by the parties in a transaction. 2.12. ICover StandardE, as referred to in
Section 3.2, shall mean that if there is an unexcused failure to take or deliver
any quantity of Gas pursuant to this Contract, then the performing party shall
use commercially reasonable efforts to (i) if Buyer is the performing party,
obtain Gas, (or an alternate fuel if elected by Buyer and replacement Gas is not
available), or (ii) if Seller is the performing party, sell Gas, in either case,
at a price reasonable for the delivery or production area, as applicable,
consistent with: the amount of notice provided by the nonperforming party; the
immediacy of the BuyerIs Gas consumption needs or SellerIs Gas sales
requirements, as applicable; the quantities involved; and the anticipated length
of failure by the nonperforming party. 2.13. ICredit Support Obligation(s)E
shall mean any obligation(s) to provide or establish credit support for, or on
behalf of, a party to this Contract such as cash, an irrevocable standby letter
of credit, a margin agreement, a prepayment, a security interest in an asset,
guaranty, or other good and sufficient security of a continuing nature. 2.14.
IDayE shall mean a period of 24 consecutive hours, coextensive with a IdayE as
defined by the Receiving Transporter in a particular transaction. 2.15.
IDelivery PeriodE shall be the period during which deliveries are to be made as
agreed to by the parties in a transaction. 2.16. IDelivery Point(s)E shall mean
such point(s) as are agreed to by the parties in a transaction. 2.17. IEDIE
shall mean an electronic data interchange pursuant to an agreement entered into
by the parties, specifically relating to the communication of Transaction
Confirmations under this Contract. 2.18. IEFPE shall mean the purchase, sale or
exchange of natural Gas as the IphysicalE side of an exchange for physical
transaction involving gas futures contracts. EFP shall incorporate the meaning
and remedies of IFirmE, provided that a partyIs excuse for nonperformance of its
obligations to deliver or receive Gas will be governed by the rules of the
relevant futures exchange regulated under the Commodity Exchange Act. 2.19.
IFirmE shall mean that either party may interrupt its performance without
liability only to the extent that such performance is prevented for reasons of
Force Majeure; provided, however, that during Force Majeure interruptions, the
party invoking Force Majeure may be responsible for any Imbalance Charges as set
forth in Section 4.3 related to its interruption after the nomination is made to
the Transporter and until the change in deliveries and/or receipts is confirmed
by the Transporter. 2.20. IGasE shall mean any mixture of hydrocarbons and
noncombustible gases in a gaseous state consisting primarily of methane. 2.21.
IGuarantorE shall mean any entity that has provided a guaranty of the
obligations of a party hereunder. 2.22. IImbalance ChargesE shall mean any fees,
penalties, costs or charges (in cash or in kind) assessed by a Transporter for
failure to satisfy the TransporterIs balance and/or nomination requirements.
2.23. IIndebtedness Cross DefaultE shall mean if selected on the Base Contract
by the parties with respect to a party, that it or its Guarantor, if any,
experiences a default, or similar condition or event however therein defined,
under one or more agreements or instruments, individually or collectively,
relating to indebtedness (such indebtedness to include any obligation whether
present or future, contingent or otherwise, as principal or surety or otherwise)
for the payment or repayment of borrowed money in an aggregate amount greater
than the threshold specified in the Base Contract with respect to such party or
its Guarantor, if any, which results in such indebtedness becoming immediately
due and payable. Copyright 2006 North American Energy Standards Board, Inc.
NAESB Standard 6.3.1 All Rights Reserved Page 4 of 13 September 5, 2006

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2.24. IInterruptibleE shall mean that either party may interrupt its performance
at any time for any reason, whether or not caused by an event of Force Majeure,
with no liability, except such interrupting party may be responsible for any
Imbalance Charges as set forth in Section 4.3 related to its interruption after
the nomination is made to the Transporter and until the change in deliveries
and/or receipts is confirmed by Transporter. 2.25. IMMBtuE shall mean one
million British thermal units, which is equivalent to one dekatherm. 2.26.
IMonthE shall mean the period beginning on the first Day of the calendar month
and ending immediately prior to the commencement of the first Day of the next
calendar month. 2.27. IPayment DateE shall mean a date, as indicated on the Base
Contract, on or before which payment is due Seller for Gas received by Buyer in
the previous Month. 2.28. IReceiving TransporterE shall mean the Transporter
receiving Gas at a Delivery Point, or absent such receiving Transporter, the
Transporter delivering Gas at a Delivery Point. 2.29. IScheduled GasE shall mean
the quantity of Gas confirmed by Transporter(s) for movement, transportation or
management. 2.30. ISpecified Transaction(s)E shall mean any other transaction or
agreement between the parties for the purchase, sale or exchange of physical
Gas, and any other transaction or agreement identified as a Specified
Transaction under the Base Contract. 2.31. ISpot Price I as referred to in
Section 3.2 shall mean the price listed in the publication indicated on the Base
Contract, under the listing applicable to the geographic location closest in
proximity to the Delivery Point(s) for the relevant Day; provided, if there is
no single price published for such location for such Day, but there is published
a range of prices, then the Spot Price shall be the average of such high and low
prices. If no price or range of prices is published for such Day, then the Spot
Price shall be the average of the following: (i) the price (determined as stated
above) for the first Day for which a price or range of prices is published that
next precedes the relevant Day; and (ii) the price (determined as stated above)
for the first Day for which a price or range of prices is published that next
follows the relevant Day. 2.32. ITransaction ConfirmationE shall mean a
document, similar to the form of Exhibit A, setting forth the terms of a
transaction formed pursuant to Section 1 for a particular Delivery Period. 2.33.
ITransactional Cross DefaultE shall mean if selected on the Base Contract by the
parties with respect to a party, that it shall be in default, however therein
defined, under any Specified Transaction. 2.34. ITermination OptionE shall mean
the option of either party to terminate a transaction in the event that the
other party fails to perform a Firm obligation to deliver Gas in the case of
Seller or to receive Gas in the case of Buyer for a designated number of days
during a period as specified on the applicable Transaction Confirmation. 2.35.
ITransporter(s)E shall mean all Gas gathering or pipeline companies, or local
distribution companies, acting in the capacity of a transporter, transporting
Gas for Seller or Buyer upstream or downstream, respectively, of the Delivery
Point pursuant to a particular transaction. SECTION 3. PERFORMANCE OBLIGATION
3.1. Seller agrees to sell and deliver, and Buyer agrees to receive and
purchase, the Contract Quantity for a particular transaction in accordance with
the terms of the Contract. Sales and purchases will be on a Firm or
Interruptible basis, as agreed to by the parties in a transaction. The parties
have selected either the ICover StandardE or the ISpot Price StandardE as
indicated on the Base Contract. Cover Standard: 3.2. The sole and exclusive
remedy of the parties in the event of a breach of a Firm obligation to deliver
or receive Gas shall be recovery of the following: (i) in the event of a breach
by Seller on any Day(s), payment by Seller to Buyer in an amount equal to the
positive difference, if any, between the purchase price paid by Buyer utilizing
the Cover Standard and the Contract Price, adjusted for commercially reasonable
differences in transportation costs to or from the Delivery Point(s), multiplied
by the difference between the Contract Quantity and the quantity actually
delivered by Seller for such Day(s) excluding any quantity for which no
replacement is available; or (ii) in the event of a breach by Buyer on any
Day(s), payment by Buyer to Seller in the amount equal to the positive
difference, if any, between the Contract Price and the price received by Seller
utilizing the Cover Standard for the resale of such Gas, adjusted for
commercially reasonable differences in transportation costs to or from the
Delivery Point(s), multiplied by the difference between the Contract Quantity
and the quantity actually taken by Buyer for such Day(s) excluding any quantity
for which no sale is available; and (iii) in the event that Buyer has used
commercially reasonable efforts to replace the Gas or Seller has used
commercially reasonable efforts to sell the Gas to a third party, and no such
replacement or sale is available for all or any portion of the Contract Quantity
of Gas, then in addition to (i) or (ii) above, as applicable, the sole and
exclusive remedy of the performing party with respect to the Gas not replaced or
sold shall be an amount equal to any unfavorable difference between the Contract
Price and the Spot Price, adjusted for such transportation to the applicable
Delivery Point, multiplied by the quantity of such Gas not replaced or sold.
Imbalance Charges shall not be recovered under this Section 3.2, but Seller
and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in
Section 4.3. The amount of such unfavorable difference shall be payable five
Business Days after presentation of the performing partys invoice, which shall
set forth the basis upon which such amount was calculated. Copyright 2006 North
American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved
Page 5 of 13 September 5, 2006

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Spot Price Standard: 3.2. The sole and exclusive remedy of the parties in the
event of a breach of a Firm obligation to deliver or receive Gas shall be
recovery of the following: (i) in the event of a breach by Seller on any Day(s),
payment by Seller to Buyer in an amount equal to the difference between the
Contract Quantity and the actual quantity delivered by Seller and received by
Buyer for such Day(s), multiplied by the positive difference, if any, obtained
by subtracting the Contract Price from the Spot Price; or (ii) in the event of a
breach by Buyer on any Day(s), payment by Buyer to Seller in an amount equal to
the difference between the Contract Quantity and the actual quantity delivered
by Seller and received by Buyer for such Day(s), multiplied by the positive
difference, if any, obtained by subtracting the applicable Spot Price from the
Contract Price. Imbalance Charges shall not be recovered under this Section 3.2,
but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as
provided in Section 4.3. The amount of such unfavorable difference shall be
payable five Business Days after presentation of the performing partyI invoice,
which shall set forth the basis upon which such amount was calculated. 3.3.
Notwithstanding Section 3.2, the parties may agree to Alternative Damages in a
Transaction Confirmation executed in writing by both parties. 3.4. In addition
to Sections 3.2 and 3.3, the parties may provide for a Termination Option in a
Transaction Confirmation executed in writing by both parties. The Transaction
Confirmation containing the Termination Option will designate the length of
nonperformance triggering the Termination Option and the procedures for exercise
thereof, how damages for nonperformance will be compensated, and how liquidation
costs will be calculated. SECTION 4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES
4.1. Seller shall have the sole responsibility for transporting the Gas to the
Delivery Point(s). Buyer shall have the sole responsibility for transporting the
Gas from the Delivery Point(s). 4.2. The parties shall coordinate their
nomination activities, giving sufficient time to meet the deadlines of the
affected Transporter(s). Each party shall give the other party timely prior
Notice, sufficient to meet the requirements of all Transporter(s) involved in
the transaction, of the quantities of Gas to be delivered and purchased each
Day. Should either party become aware that actual deliveries at the Delivery
Point(s) are greater or lesser than the Scheduled Gas, such party shall promptly
notify the other party. 4.3. The parties shall use commercially reasonable
efforts to avoid imposition of any Imbalance Charges. If Buyer or Seller
receives an invoice from a Transporter that includes Imbalance Charges, the
parties shall determine the validity as well as the cause of such Imbalance
Charges. If the Imbalance Charges were incurred as a result of BuyerIs receipt
of quantities of Gas greater than or less than the Scheduled Gas, then Buyer
shall pay for such Imbalance Charges or reimburse Seller for such Imbalance
Charges paid by Seller. If the Imbalance Charges were incurred as a result of
SellerIs delivery of quantities of Gas greater than or less than the Scheduled
Gas, then Seller shall pay for such Imbalance Charges or reimburse Buyer for
such Imbalance Charges paid by Buyer. SECTION 5. QUALITY AND MEASUREMENT All Gas
delivered by Seller shall meet the pressure, quality and heat content
requirements of the Receiving Transporter. The unit of quantity measurement for
purposes of this Contract shall be one MMBtu dry. Measurement of Gas quantities
hereunder shall be in accordance with the established procedures of the
Receiving Transporter. SECTION 6. TAXES The parties have selected either IBuyer
Pays At and After Delivery Point" or ISeller Pays Before and At Delivery PointE
as indicated on the Base Contract. Buyer Pays At and After Delivery Point:
Seller shall pay or cause to be paid all taxes, fees, levies, penalties,
licenses or charges imposed by any government authority (ITaxesE) on or with
respect to the Gas prior to the Delivery Point(s). Buyer shall pay or cause to
be paid all Taxes on or with respect to the Gas at the Delivery Point(s) and all
Taxes after the Delivery Point(s). If a party is required to remit or pay Taxes
that are the other partyIs responsibility hereunder, the party responsible for
such Taxes shall promptly reimburse the other party for such Taxes. Any party
entitled to an exemption from any such Taxes or charges shall furnish the other
party any necessary documentation thereof. Seller Pays Before and At Delivery
Point: Seller shall pay or cause to be paid all taxes, fees, levies, penalties,
licenses or charges imposed by any government authority (ITaxesE) on or with
respect to the Gas prior to the Delivery Point(s) and all Taxes at the Delivery
Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to
the Gas after the Delivery Point(s). If a party is required to remit or pay
Taxes that are the other partyIs responsibility hereunder, the party responsible
for such Taxes shall promptly reimburse the other party for such Taxes. Any
party entitled to an exemption from any such Taxes or charges shall furnish the
other party any necessary documentation thereof. SECTION 7. BILLING, PAYMENT,
AND AUDIT 7.1. Seller shall invoice Buyer for Gas delivered and received in the
preceding Month and for any other applicable charges, providing supporting
documentation acceptable in industry practice to support the amount charged. If
the actual quantity delivered is not known by the billing date, billing will be
prepared based on the quantity of Scheduled Gas. The invoiced quantity will then
be adjusted to the actual quantity on the following MonthIs billing or as soon
thereafter as actual delivery information is available. Copyright 2006 North
American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved
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7.2. Buyer shall remit the amount due under Section 7.1 in the manner specified
in the Base Contract, in immediately available funds, on or before the later of
the Payment Date or 10 Days after receipt of the invoice by Buyer; provided that
if the Payment Date is not a Business Day, payment is due on the next Business
Day following that date. In the event any payments are due Buyer hereunder,
payment to Buyer shall be made in accordance with this Section 7.2. 7.3. In the
event payments become due pursuant to Sections 3.2 or 3.3, the performing party
may submit an invoice to the nonperforming party for an accelerated payment
setting forth the basis upon which the invoiced amount was calculated. Payment
from the nonperforming party will be due five Business Days after receipt of
invoice. 7.4. If the invoiced party, in good faith, disputes the amount of any
such invoice or any part thereof, such invoiced party will pay such amount as it
concedes to be correct; provided, however, if the invoiced party disputes the
amount due, it must provide supporting documentation acceptable in industry
practice to support the amount paid or disputed without undue delay. In the
event the parties are unable to resolve such dispute, either party may pursue
any remedy available at law or in equity to enforce its rights pursuant to this
Section. 7.5. If the invoiced party fails to remit the full amount payable when
due, interest on the unpaid portion shall accrue from the date due until the
date of payment at a rate equal to the lower of (i) the then-effective prime
rate of interest published under IMoney RatesE by The Wall Street Journal, plus
two percent per annum; or (ii) the maximum applicable lawful interest rate. 7.6.
A party shall have the right, at its own expense, upon reasonable Notice and at
reasonable times, to examine and audit and to obtain copies of the relevant
portion of the books, records, and telephone recordings of the other party only
to the extent reasonably necessary to verify the accuracy of any statement,
charge, payment, or computation made under the Contract. This right to examine,
audit, and to obtain copies shall not be available with respect to proprietary
information not directly relevant to transactions under this Contract. All
invoices and billings shall be conclusively presumed final and accurate and all
associated claims for under- or overpayments shall be deemed waived unless such
invoices or billings are objected to in writing, with adequate explanation
and/or documentation, within two years after the Month of Gas delivery. All
retroactive adjustments under Section 7 shall be paid in full by the party owing
payment within 30 Days of Notice and substantiation of such inaccuracy. 7.7.
Unless the parties have elected on the Base Contract not to make this Section
7.7 applicable to this Contract, the parties shall net all undisputed amounts
due and owing, and/or past due, arising under the Contract such that the party
owing the greater amount shall make a single payment of the net amount to the
other party in accordance with Section 7; provided that no payment required to
be made pursuant to the terms of any Credit Support Obligation or pursuant to
Section 7.3 shall be subject to netting under this Section. If the parties have
executed a separate netting agreement, the terms and conditions therein shall
prevail to the extent inconsistent herewith. SECTION 8. TITLE, WARRANTY, AND
INDEMNITY 8.1. Unless otherwise specifically agreed, title to the Gas shall pass
from Seller to Buyer at the Delivery Point(s). Seller shall have responsibility
for and assume any liability with respect to the Gas prior to its delivery to
Buyer at the specified Delivery Point(s). Buyer shall have responsibility for
and assume any liability with respect to said Gas after its delivery to Buyer at
the Delivery Point(s). 8.2. Seller warrants that it will have the right to
convey and will transfer good and merchantable title to all Gas sold hereunder
and delivered by it to Buyer, free and clear of all liens, encumbrances, and
claims. EXCEPT AS PROVIDED IN THIS SECTION 8.2 AND IN SECTION 15.8, ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF
FITNESS FOR ANY PARTICULAR PURPOSE, ARE DISCLAIMED. 8.3. Seller agrees to
indemnify Buyer and save it harmless from all losses, liabilities or claims
including reasonable attorneysI fees and costs of court (IClaimsE), from any and
all persons, arising from or out of claims of title, personal injury (including
death) or property damage from said Gas or other charges thereon which attach
before title passes to Buyer. Buyer agrees to indemnify Seller and save it
harmless from all Claims, from any and all persons, arising from or out of
claims regarding payment, personal injury (including death) or property damage
from said Gas or other charges thereon which attach after title passes to Buyer.
8.4. The parties agree that the delivery of and the transfer of title to all Gas
under this Contract shall take place within the Customs Territory of the United
States (as defined in general note 2 of the Harmonized Tariff Schedule of the
United States 19 U.S.C. 1202, General Notes, page 3); provided, however, that in
the event Seller took title to the Gas outside the Customs Territory of the
United States, Seller represents and warrants that it is the importer of record
for all Gas entered and delivered into the United States, and shall be
responsible for entry and entry summary filings as well as the payment of
duties, taxes and fees, if any, and all applicable record keeping requirements.
8.5. Notwithstanding the other provisions of this Section 8, as between Seller
and Buyer, Seller will be liable for all Claims to the extent that such arise
from the failure of Gas delivered by Seller to meet the quality requirements of
Section 5. SECTION 9. NOTICES 9.1. All Transaction Confirmations, invoices,
payment instructions, and other communications made pursuant to the Base
Contract (INoticesE) shall be made to the addresses specified in writing by the
respective parties from time to time. 9.2. All Notices required hereunder shall
be in writing and may be sent by facsimile or mutually acceptable electronic
means, a nationally recognized overnight courier service, first class mail or
hand delivered. 9.3. Notice shall be given when received on a Business Day by
the addressee. In the absence of proof of the actual receipt date, the following
presumptions will apply. Notices sent by facsimile shall be deemed to have been
received upon the sending partyIs receipt of its facsimile machineIs
confirmation of successful transmission. If the day on which such facsimile is
received is Copyright 2006 North American Energy Standards Board, Inc. NAESB
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not a Business Day or is after five p.m. on a Business Day, then such facsimile
shall be deemed to have been received on the next following Business Day. Notice
by overnight mail or courier shall be deemed to have been received on the next
Business Day after it was sent or such earlier time as is confirmed by the
receiving party. Notice via first class mail shall be considered delivered five
Business Days after mailing. 9.4. The party receiving a commercially acceptable
Notice of change in payment instructions or other payment information shall not
be obligated to implement such change until ten Business Days after receipt of
such Notice. SECTION 10. FINANCIAL RESPONSIBILITY 10.1. If either party (IXE)
has reasonable grounds for insecurity regarding the performance of any
obligation under this Contract (whether or not then due) by the other party
(IYE) (including, without limitation, the occurrence of a material change in the
creditworthiness of Y or its Guarantor, if applicable), X may demand Adequate
Assurance of Performance. IAdequate Assurance of PerformanceE shall mean
sufficient security in the form, amount, for a term, and from an issuer, all as
reasonably acceptable to X, including, but not limited to cash, a standby
irrevocable letter of credit, a prepayment, a security interest in an asset or
guaranty. Y hereby grants to X a continuing first priority security interest in,
lien on, and right of setoff against all Adequate Assurance of Performance in
the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the
return by X to Y of such Adequate Assurance of Performance, the security
interest and lien granted hereunder on that Adequate Assurance of Performance
shall be released automatically and, to the extent possible, without any further
action by either party. 10.2. In the event (each an IEvent of DefaultE) either
party (the IDefaulting PartyE) or its Guarantor shall: (i) make an assignment or
any general arrangement for the benefit of creditors; (ii) file a petition or
otherwise commence, authorize, or acquiesce in the commencement of a proceeding
or case under any bankruptcy or similar law for the protection of creditors or
have such petition filed or proceeding commenced against it; (iii) otherwise
become bankrupt or insolvent (however evidenced); (iv) be unable to pay its
debts as they fall due; (v) have a receiver, provisional liquidator,
conservator, custodian, trustee or other similar official appointed with respect
to it or substantially all of its assets; (vi) fail to perform any obligation to
the other party with respect to any Credit Support Obligations relating to the
Contract; (vii) fail to give Adequate Assurance of Performance under Section
10.1 within 48 hours but at least one Business Day of a written request by the
other party; (viii) not have paid any amount due the other party hereunder on or
before the second Business Day following written Notice that such payment is
due; or ix) be the affected party with respect to any Additional Event of
Default; then the other party (the INon-Defaulting PartyE) shall have the right,
at its sole election, to immediately withhold and/or suspend deliveries or
payments upon Notice and/or to terminate and liquidate the transactions under
the Contract, in the manner provided in Section 10.3, in addition to any and all
other remedies available hereunder. 10.3. If an Event of Default has occurred
and is continuing, the Non-Defaulting Party shall have the right, by Notice to
the Defaulting Party, to designate a Day, no earlier than the Day such Notice is
given and no later than 20 Days after such Notice is given, as an early
termination date (the IEarly Termination DateE) for the liquidation and
termination pursuant to Section 10.3.1 of all transactions under the Contract,
each a ITerminated TransactionE. On the Early Termination Date, all transactions
will terminate, other than those transactions, if any, that may not be
liquidated and terminated under applicable law (IExcluded TransactionsE), which
Excluded Transactions must be liquidated and terminated as soon thereafter as is
legally permissible, and upon termination shall be a Terminated Transaction and
be valued consistent with Section 10.3.1 below. With respect to each Excluded
Transaction, its actual termination date shall be the Early Termination Date for
purposes of Section 10.3.1. The parties have selected either IEarly Termination
Damages ApplyE or IEarly Termination Damages Do Not ApplyE as indicated on the
Base Contract. Early Termination Damages Apply: 10.3.1. As of the Early
Termination Date, the Non-Defaulting Party shall determine, in good faith and in
a commercially reasonable manner, (i) the amount owed (whether or not then due)
by each party with respect to all Gas delivered and received between the parties
under Terminated Transactions and Excluded Transactions on and before the Early
Termination Date and all other applicable charges relating to such deliveries
and receipts (including without limitation any amounts owed under Section 3.2),
for which payment has not yet been made by the party that owes such payment
under this Contract and (ii) the Market Value, as defined below, of each
Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and
accelerate each Terminated Transaction at its Market Value, so that each amount
equal to the difference between such Market Value and the Contract Value, as
defined below, of such Terminated Transaction(s) shall be due to the Buyer under
the Terminated Transaction(s) if such Market Value exceeds the Contract Value
and to the Seller if the opposite is the case; and (y) where appropriate,
discount each amount then due under clause (x) above to present value in a
commercially reasonable manner as of the Early Termination Date (to take account
of the period between the date of liquidation and the date on which such amount
would have otherwise been due pursuant to the relevant Terminated Transactions).
For purposes of this Section 10.3.1, IContract ValueE means the amount of Gas
remaining to be delivered or purchased under a transaction multiplied by the
Contract Price, and IMarket ValueE means the amount of Gas remaining to be
delivered or purchased under a transaction multiplied by the market price for a
similar transaction at the Delivery Point determined by the Non-Defaulting Party
in a commercially reasonable manner. To ascertain the Market Value, the
Non-Defaulting Party may consider, among other valuations, any or all of the
settlement prices of NYMEX Gas futures contracts, quotations from leading
dealers in energy swap contracts or physical gas trading markets, similar sales
or purchases and any other bona fide third-party offers, all adjusted for the
length of the term and differences in transportation costs. A party shall not be
required to enter into a replacement transaction(s) in order to determine the
Market Value. Any extension(s) of the term of a transaction to which parties are
not bound as of the Early Termination Date (including but not limited to
Ievergreen provisionsE) shall not be considered in determining Contract Values
and Copyright 2006 North American Energy Standards Board, Inc. NAESB Standard
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Market Values. For the avoidance of doubt, any option pursuant to which one
party has the right to extend the term of a transaction shall be considered in
determining Contract Values and Market Values. The rate of interest used in
calculating net present value shall be determined by the Non-Defaulting Party in
a commercially reasonable manner. Early Termination Damages Do Not Apply:
10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall
determine, in good faith and in a commercially reasonable manner, the amount
owed (whether or not then due) by each party with respect to all Gas delivered
and received between the parties under Terminated Transactions and Excluded
Transactions on and before the Early Termination Date and all other applicable
charges relating to such deliveries and receipts (including without limitation
any amounts owed under Section 3.2), for which payment has not yet been made by
the party that owes such payment under this Contract. The parties have selected
either IOther Agreement Setoffs ApplyE or IOther Agreement Setoffs Do Not ApplyE
as indicated on the Base Contract. Other Agreement Setoffs Apply: Bilateral
Setoff Option: 10.3.2. The Non-Defaulting Party shall net or aggregate, as
appropriate, any and all amounts owing between the parties under Section 10.3.1,
so that all such amounts are netted or aggregated to a single liquidated amount
payable by one party to the other (the INet Settlement AmountE). At its sole
option and without prior Notice to the Defaulting Party, the Non-Defaulting
Party is hereby authorized to setoff any Net Settlement Amount against (i) any
margin or other collateral held by a party in connection with any Credit Support
Obligation relating to the Contract; and (ii) any amount(s) (including any
excess cash margin or excess cash collateral) owed or held by the party that is
entitled to the Net Settlement Amount under any other agreement or arrangement
between the parties. Triangular Setoff Option: 10.3.2. The Non-Defaulting Party
shall net or aggregate, as appropriate, any and all amounts owing between the
parties under Section 10.3.1, so that all such amounts are netted or aggregated
to a single liquidated amount payable by one party to the other (the INet
Settlement AmountE). At its sole option, and without prior Notice to the
Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff (i)
any Net Settlement Amount against any margin or other collateral held by a party
in connection with any Credit Support Obligation relating to the Contract; (ii)
any Net Settlement Amount against any amount(s) (including any excess cash
margin or excess cash collateral) owed by or to a party under any other
agreement or arrangement between the parties; (iii) any Net Settlement Amount
owed to the Non-Defaulting Party against any amount(s) (including any excess
cash margin or excess cash collateral) owed by the Non-Defaulting Party or its
Affiliates to the Defaulting Party under any other agreement or arrangement;
(iv) any Net Settlement Amount owed to the Defaulting Party against any
amount(s) (including any excess cash margin or excess cash collateral) owed by
the Defaulting Party to the Non-Defaulting Party or its Affiliates under any
other agreement or arrangement; and/or (v) any Net Settlement Amount owed to the
Defaulting Party against any amount(s) (including any excess cash margin or
excess cash collateral) owed by the Defaulting Party or its Affiliates to the
Non-Defaulting Party under any other agreement or arrangement. Other Agreement
Setoffs Do Not Apply: 10.3.2. The Non-Defaulting Party shall net or aggregate,
as appropriate, any and all amounts owing between the parties under Section
10.3.1, so that all such amounts are netted or aggregated to a single liquidated
amount payable by one party to the other (the INet Settlement AmountE). At its
sole option and without prior Notice to the Defaulting Party, the Non-Defaulting
Party may setoff any Net Settlement Amount against any margin or other
collateral held by a party in connection with any Credit Support Obligation
relating to the Contract. 10.3.3. If any obligation that is to be included in
any netting, aggregation or setoff pursuant to Section 10.3.2 is unascertained,
the Non-Defaulting Party may in good faith estimate that obligation and net,
aggregate or setoff, as applicable, in respect of the estimate, subject to the
Non-Defaulting Party accounting to the Defaulting Party when the obligation is
ascertained. Any amount not then due which is included in any netting,
aggregation or setoff pursuant to Section 10.3.2 shall be discounted to net
present value in a commercially reasonable manner determined by the
Non-Defaulting Party. 10.4. As soon as practicable after a liquidation, Notice
shall be given by the Non-Defaulting Party to the Defaulting Party of the Net
Settlement Amount, and whether the Net Settlement Amount is due to or due from
the Non-Defaulting Party. The Notice shall include a written statement
explaining in reasonable detail the calculation of the Net Settlement Amount,
provided that failure to give such Notice shall not affect the validity or
enforceability of the liquidation or give rise to any claim by the Defaulting
Party against the Non-Defaulting Party. The Net Settlement Amount as well as any
setoffs applied against such amount pursuant to Section 10.3.2, shall be paid by
the close of business on the second Business Day following such Notice, which
date shall not be earlier than the Early Termination Date. Interest on any
unpaid portion of the Net Settlement Amount as adjusted by setoffs, shall accrue
from the date due until the date of payment at a rate equal to the lower of (i)
the then-effective prime rate of interest published under IMoney RatesE by The
Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable
lawful interest rate. 10.5. The parties agree that the transactions hereunder
constitute a Iforward contractE within the meaning of the United States
Bankruptcy Code and that Buyer and Seller are each Iforward contract merchantsE
within the meaning of the United States Bankruptcy Code. 10.6. The
Non-Defaulting PartyIs remedies under this Section 10 are the sole and exclusive
remedies of the Non-Defaulting Party with respect to the occurrence of any Early
Termination Date. Each party reserves to itself all other rights, setoffs,
counterclaims and other defenses that it is or may be entitled to arising from
the Contract. Copyright 2006 North American Energy Standards Board, Inc. NAESB
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10.7. With respect to this Section 10, if the parties have executed a separate
netting agreement with close-out netting provisions, the terms and conditions
therein shall prevail to the extent inconsistent herewith. SECTION 11. FORCE
MAJEURE 11.1. Except with regard to a partyIs obligation to make payment(s) due
under Section 7, Section 10.4, and Imbalance Charges under Section 4, neither
party shall be liable to the other for failure to perform a Firm obligation, to
the extent such failure was caused by Force Majeure. The term IForce MajeureE as
employed herein means any cause not reasonably within the control of the party
claiming suspension, as further defined in Section 11.2. 11.2. Force Majeure
shall include, but not be limited to, the following: (i) physical events such as
acts of God, landslides, lightning, earthquakes, fires, storms or storm
warnings, such as hurricanes, which result in evacuation of the affected area,
floods, washouts, explosions, breakage or accident or necessity of repairs to
machinery or equipment or lines of pipe; (ii) weather related events affecting
an entire geographic region, such as low temperatures which cause freezing or
failure of wells or lines of pipe; (iii) interruption and/or curtailment of Firm
transportation and/or storage by Transporters; (iv) acts of others such as
strikes, lockouts or other industrial disturbances, riots, sabotage,
insurrections or wars, or acts of terror; and (v) governmental actions such as
necessity for compliance with any court order, law, statute, ordinance,
regulation, or policy having the effect of law promulgated by a governmental
authority having jurisdiction. Seller and Buyer shall make reasonable efforts to
avoid the adverse impacts of a Force Majeure and to resolve the event or
occurrence once it has occurred in order to resume performance. 11.3. Neither
party shall be entitled to the benefit of the provisions of Force Majeure to the
extent performance is affected by any or all of the following circumstances: (i)
the curtailment of interruptible or secondary Firm transportation unless
primary, in-path, Firm transportation is also curtailed; (ii) the party claiming
excuse failed to remedy the condition and to resume the performance of such
covenants or obligations with reasonable dispatch; or (iii) economic hardship,
to include, without limitation, SellerIs ability to sell Gas at a higher or more
advantageous price than the Contract Price, BuyerIs ability to purchase Gas at a
lower or more advantageous price than the Contract Price, or a regulatory agency
disallowing, in whole or in part, the pass through of costs resulting from this
Contract; (iv) the loss of BuyerIs market(s) or BuyerIs inability to use or
resell Gas purchased hereunder, except, in either case, as provided in Section
11.2; or (v) the loss or failure of SellerIs gas supply or depletion of
reserves, except, in either case, as provided in Section 11.2. The party
claiming Force Majeure shall not be excused from its responsibility for
Imbalance Charges. 11.4. Notwithstanding anything to the contrary herein, the
parties agree that the settlement of strikes, lockouts or other industrial
disturbances shall be within the sole discretion of the party experiencing such
disturbance. 11.5. The party whose performance is prevented by Force Majeure
must provide Notice to the other party. Initial Notice may be given orally;
however, written Notice with reasonably full particulars of the event or
occurrence is required as soon as reasonably possible. Upon providing written
Notice of Force Majeure to the other party, the affected party will be relieved
of its obligation, from the onset of the Force Majeure event, to make or accept
delivery of Gas, as applicable, to the extent and for the duration of Force
Majeure, and neither party shall be deemed to have failed in such obligations to
the other during such occurrence or event. 11.6. Notwithstanding Sections 11.2
and 11.3, the parties may agree to alternative Force Majeure provisions in a
Transaction Confirmation executed in writing by both parties. SECTION 12. TERM
This Contract may be terminated on 30 DayIs written Notice, but shall remain in
effect until the expiration of the latest Delivery Period of any transaction(s).
The rights of either party pursuant to Section 7.6, Section 10, Section 13, the
obligations to make payment hereunder, and the obligation of either party to
indemnify the other, pursuant hereto shall survive the termination of the Base
Contract or any transaction. SECTION 13. LIMITATIONS FOR BREACH OF ANY PROVISION
FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS
REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY. A PARTYIS
LIABILITY HEREUNDER SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL
OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR
MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, A PARTYIS
LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY. SUCH DIRECT ACTUAL
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR
DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED,
NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY
OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY
STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS
THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND
THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO,
INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID
HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT
OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS
INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE
APPROXIMATION OF THE HARM OR LOSS. Copyright 2006 North American Energy
Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 10 of 13
September 5, 2006

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SECTION 14. MARKET DISRUPTION If a Market Disruption Event has occurred then the
parties shall negotiate in good faith to agree on a replacement price for the
Floating Price (or on a method for determining a replacement price for the
Floating Price) for the affected Day, and if the parties have not so agreed on
or before the second Business Day following the affected Day then the
replacement price for the Floating Price shall be determined within the next two
following Business Days with each party obtaining, in good faith and from
non-affiliated market participants in the relevant market, two quotes for prices
of Gas for the affected Day of a similar quality and quantity in the
geographical location closest in proximity to the Delivery Point and averaging
the four quotes. If either party fails to provide two quotes then the average of
the other partys two quotes shall determine the replacement price for the
Floating Price. IFloating PriceE means the price or a factor of the price agreed
to in the transaction as being based upon a specified index. IMarket Disruption
EventE means, with respect to an index specified for a transaction, any of the
following events: (a) the failure of the index to announce or publish
information necessary for determining the Floating Price; (b) the failure of
trading to commence or the permanent discontinuation or material suspension of
trading on the exchange or market acting as the index; (c) the temporary or
permanent discontinuance or unavailability of the index; (d) the temporary or
permanent closing of any exchange acting as the index; or (e) both parties agree
that a material change in the formula for or the method of determining the
Floating Price has occurred. For the purposes of the calculation of a
replacement price for the Floating Price, all numbers shall be rounded to three
decimal places. If the fourth decimal number is five or greater, then the third
decimal number shall be increased by one and if the fourth decimal number is
less than five, then the third decimal number shall remain unchanged. SECTION
15. MISCELLANEOUS 15.1. This Contract shall be binding upon and inure to the
benefit of the successors, assigns, personal representatives, and heirs of the
respective parties hereto, and the covenants, conditions, rights and obligations
of this Contract shall run for the full term of this Contract. No assignment of
this Contract, in whole or in part, will be made without the prior written
consent of the non-assigning party (and shall not relieve the assigning party
from liability hereunder), which consent will not be unreasonably withheld or
delayed; provided, either party may (i) transfer, sell, pledge, encumber, or
assign this Contract or the accounts, revenues, or proceeds hereof in connection
with any financing or other financial arrangements, or (ii) transfer its
interest to any parent or Affiliate by assignment, merger or otherwise without
the prior approval of the other party. Upon any such assignment, transfer and
assumption, the transferor shall remain principally liable for and shall not be
relieved of or discharged from any obligations hereunder. 15.2. If any provision
in this Contract is determined to be invalid, void or unenforceable by any court
having jurisdiction, such determination shall not invalidate, void, or make
unenforceable any other provision, agreement or covenant of this Contract. 15.3.
No waiver of any breach of this Contract shall be held to be a waiver of any
other or subsequent breach. 15.4. This Contract sets forth all understandings
between the parties respecting each transaction subject hereto, and any prior
contracts, understandings and representations, whether oral or written, relating
to such transactions are merged into and superseded by this Contract and any
effective transaction(s). This Contract may be amended only by a writing
executed by both parties. 15.5. The interpretation and performance of this
Contract shall be governed by the laws of the jurisdiction as indicated on the
Base Contract, excluding, however, any conflict of laws rule which would apply
the law of another jurisdiction. 15.6. This Contract and all provisions herein
will be subject to all applicable and valid statutes, rules, orders and
regulations of any governmental authority having jurisdiction over the parties,
their facilities, or Gas supply, this Contract or transaction or any provisions
thereof. 15.7. There is no third party beneficiary to this Contract. 15.8. Each
party to this Contract represents and warrants that it has full and complete
authority to enter into and perform this Contract. Each person who executes this
Contract on behalf of either party represents and warrants that it has full and
complete authority to do so and that such party will be bound thereby. 15.9. The
headings and subheadings contained in this Contract are used solely for
convenience and do not constitute a part of this Contract between the parties
and shall not be used to construe or interpret the provisions of this Contract.
15.10. Unless the parties have elected on the Base Contract not to make this
Section 15.10 applicable to this Contract, neither party shall disclose directly
or indirectly without the prior written consent of the other party the terms of
any transaction to a third party (other than the employees, lenders, royalty
owners, counsel, accountants and other agents of the party, or prospective
purchasers of all or substantially all of a partyIs assets or of any rights
under this Contract, provided such persons shall have agreed to keep such terms
confidential) except (i) in order to comply with any applicable law, order,
regulation, or exchange rule, (ii) to the extent necessary for the enforcement
of this Contract , (iii) to the extent necessary to implement any transaction,
(iv) to the extent necessary to comply with a regulatory agencyIs reporting
requirements including but not limited to gas cost recovery proceedings; or (v)
to the extent such information is delivered to such third party for the sole
purpose of calculating a published index. Each party shall notify the other
party of any proceeding of which it is aware which may result in disclosure of
the terms of any transaction (other than as permitted hereunder) and use
reasonable efforts to prevent or limit the disclosure. The existence of this
Contract is not subject to this confidentiality obligation. Subject to Section
13, the parties shall be entitled to all remedies available at law or in equity
to enforce, or seek relief in connection with this confidentiality obligation.
The terms of any transaction hereunder shall be kept confidential by the parties
hereto for one year from the expiration of the transaction. In the event that
disclosure is required by a governmental body or applicable law, the party
subject to such requirement may disclose the material terms of this Contract to
the extent so required, but shall promptly notify the other party, prior to
disclosure, Copyright 2006 North American Energy Standards Board, Inc. NAESB
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and shall cooperate (consistent with the disclosing partyIs legal obligations)
with the other partyIs efforts to obtain protective orders or similar restraints
with respect to such disclosure at the expense of the other party. 15.11. The
parties may agree to dispute resolution procedures in Special Provisions
attached to the Base Contract or in a Transaction Confirmation executed in
writing by both parties 15.12. Any original executed Base Contract, Transaction
Confirmation or other related document may be digitally copied, photocopied, or
stored on computer tapes and disks (the IImaged AgreementE). The Imaged
Agreement, if introduced as evidence on paper, the Transaction Confirmation, if
introduced as evidence in automated facsimile form, the recording, if introduced
as evidence in its original form, and all computer records of the foregoing, if
introduced as evidence in printed format, in any judicial, arbitration,
mediation or administrative proceedings will be admissible as between the
parties to the same extent and under the same conditions as other business
records originated and maintained in documentary form. Neither Party shall
object to the admissibility of the recording, the Transaction Confirmation, or
the Imaged Agreement on the basis that such were not originated or maintained in
documentary form. However, nothing herein shall be construed as a waiver of any
other objection to the admissibility of such evidence. DISCLAIMER: The purposes
of this Contract are to facilitate trade, avoid misunderstandings and make more
definite the terms of contracts of purchase and sale of natural gas. Further,
NAESB does not mandate the use of this Contract by any party. NAESB DISCLAIMS
AND EXCLUDES, AND ANY USER OF THIS CONTRACT ACKNOWLEDGES AND AGREES TO NAESBIS
DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR
IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS CONTRACT OR ANY PART THEREOF,
INCLUDING ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE,
NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR ANY PARTICULAR
PURPOSE (WHETHER OR NOT NAESB KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS
OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW,
BY REASON OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING. EACH USER OF
THIS CONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR
ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES
ARISING OUT OF ANY USE OF THIS CONTRACT. Copyright 2006 North American Energy
Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 12 of 13
September 5, 2006

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TRANSACTION CONFIRMATION EXHIBIT A FOR IMMEDIATE DELIVERY Letterhead/Logo Date:
, Transaction Confirmation #: This Transaction Confirmation is subject to the
Base Contract between Seller and Buyer dated . The terms of this Transaction
Confirmation are binding unless disputed in writing within 2 Business Days of
receipt unless otherwise specified in the Base Contract. SELLER: Attn: Phone:
Fax: Base Contract No. Transporter: Transporter Contract Number: BUYER: Attn:
Phone: Fax: Base Contract No. Transporter: Transporter Contract Number: Contract
Price: $ /MMBtu or Delivery Period: Begin: , End: , Performance Obligation and
Contract Quantity: (Select One) Firm (Fixed Quantity): Firm (Variable Quantity):
Interruptible: MMBtus/day MMBtus/day Minimum Up to MMBtus/day E EFP MMBtus/day
Maximum subject to Section 4.2. at election of E Buyer or ? Seller Delivery
Point(s): (If a pooling point is used, list a specific geographic and pipeline
location): Special Conditions: Seller: By: Title: Date: Buyer: By: Title: Date: