EXHIBIT 10.04
Atmos Energy Marketing, LLC                                      BASE CONTRACT
11251 Northwest Freeway, Suite 400, Houston, TX 77092            FOR SALE AND
PURCHASE OF NATURAL GAS

Date:
 
Contract No.:
 
Seller:
Atmos Energy Marketing, LLC
Buyer:
Delta Natural Gas Company Inc.
 
381 Riverside Drive - Suite 120
 
3617 Lexington Road
 
Franklin, TN37064
 
Winchester, KY 40391-9797
Attn:
Zachry H. Littrell
Attn:
Brian Ramsey
Phone:
615-595-2878
Phone:
(859) 744-6171 Ext. 158
Fax:
615-794-0947
Fax:
(859) 744-3623
Email:
Zac.littrell@atmosenergy.com
Email:
bramsey@deltagas.com
Payment Address:             Bank of America
Invoice Address:
 
 
Dallas, TX 75284-7311
 
Delta Natural Gas Company Inc.
 
ABA #111 000 012
 
3617 Lexington Road
 
Atmos Energy Marketing, LLC
 
Winchester, KY 40391-9797
 
Acct. #375 1561125
 
 

Choice of Law:                                              State of Texas
Special Provisions:

The General Terms and Conditions attached hereto are incorporated in this Base
Contract and made a part hereof for all purposes. An reference to the Base
Contract shall include the General Terms and Conditions.
SELLER:                                                                                                               BUYER:
Atmos Energy Marketing,
LLC                                                                     Delta
Natural Gas Company Inc.
By:  /s/ Rob
Ellis                                                                                                            By:
 /s/George S. Billings
Name: Rob
Ellis                                                                                                       
     Name: George S. Billings
Title: Sr. Vice
President                                                                                          Title:
Mgr. – Gas Supply

GENERAL TERMS AND CONDITIONS (attached to and made a part of Base Contract)

1. PURPOSE AND PROCEDURES: This Base Contract is intended to facilitate
transactions for the purchase and sale of gas on a Firm or Interruptible, basis.
"Firm" 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. "Interruptible" shall mean that Seller may interrupt its
performance at any time for any reason, whether or not caused by an event of
Force Majeure, with no liability. "Transaction Confirmation" shall mean a
document, similar to the form of Exhibit A, setting forth the terms of a
transaction formed pursuant to this Paragraph 1 for a particular Delivery
Period. The parties will use the following Transaction Confirmation procedure.
Any gas purchase and sale transaction may be effectuated in a telephone
conversation. Either party may record any telephone conversation between the
parties for the purpose of documenting oral agreements for the purchase and sale
of gas. Any agreement  for the purchase and sale of gas t hat is reached in a
telephone conversation is legally binding if it is recorded by at least one
party and the recording ("Recording") evidences that the parties agreed upon the
Delivery Period, Delivery Points, Performance Obligation, Contract Price, and
Contract Quantity. In the event Contract Quantity is stated on a monthly basis,
then for purposes of Sections 2 and 3 where references are made to the amount of
gas delivered on a certain day, then the monthly Contract Quantity amount shall
be divided by the number of days in that month to determine a daily Contract
Quantity. A Recording is a "signed writing" and satisfies any applicable statute
of frauds as to both patties. Seller shall and Buyer may send a Transaction
Confirmation to confirm any agreement for the purchase and sale of Gas that is
reached in a telephone conversation regardless of whether or not it is recorded.
A party may send a Transaction Confirmation by telephonic facsimile
transmission, or other mutually agreeable electronic means. Any Transaction
Confirmation must be sent to the other party by the close of business on the
Business Day immediately following the date the agreement was reached. "Business
Day" shall mean any day except Saturday, Sunday or Federal Reserve Bank
holidays. Seller adopts its confirming letterhead, or the like, as its signature
on any Transaction Confirmation as the identification and authentication of
Seller. Any Transaction Confirmation that a party receives is legally binding as
to that patty and satisfies any applicable statute of frauds as to that part
unless the receiving party notifies the sending party by the Confirm Deadline of
any misstatement in the Transaction Confirmation of the terms of the
transaction. "Confirm Deadline" shall mean 5:00 p.m. Central Prevailing Time on
the second Business Day following the Day a Transaction Confirmation is received
and any Transaction Confirmation time stamped after 5:00 p.m. Central Prevailing
Time, shall be deemed received at the opening of the next Business Day. If there
are material differences between timely sent Transaction Confirmations governing
the same transaction or a party sends a timely notice disputing the Transaction
Confirmation governing a transaction, then none of the Transaction Confirmations
is legally binding or satisfies the statute of frauds as to either party
notwithstanding anything to the contrary. However, the fact that there is not a
binding Transaction Confirmation shall not prevent the enforcement of any
agreement for the purchase and sale of gas if there is a Recording. The entire
Page 1 of 4
 

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Agreement between the parties (the "Contract") consists of the provisions
contained in and listed in order of priority: (i) any Recording; (ii) any
binding Transaction Confirmation, (iii) this Base Contract. If there is any
conflict among items (i), (ii) and (iii) in the immediately preceding sentence
as to the Delivery Period. Delivery Points, Performance Obligation, Contract
Price or Contract Quantity, then said items shall govern in the priority listed
in the immediately preceding sentence. 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 patty. Each party shall obtain any necessary consent of its agents and
employees to such recording. The parties agree not to contest the validity or
enforceability of telephonic recordings entered into in accordance with the
requirements of this Base Contract. If the Transaction Confirmation contains
an;, 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
this Base Contract (e.g., arbitration or additional representations and
warranties), such provisions shall not be deemed to be accepted pursuant to this
paragraph I but must be expressly agreed to by both parties in writing; provided
that the foregoing shall not invalidate any transaction agreed to by the
parties.
2. PERFORMANCE OBLIGATION: 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 sole
and exclusive remedy of the Buyer in the event of a breach by Seller on any
day(s) of a Firm obligation to deliver gas shall be recovery of the following:
(i) payment by Seller to Buyer in an amount equal to the positive difference, if
any, between the purchase price paid by Buyer (using commercially reasonable
efforts to obtain gas or an alternate fuel if elected by Buyer and replacement
Gas is not available at a price reasonable for the delivery area, consistent
with: the amount of notice provided by Seller; the immediacy of the Buyer's gas
consumption needs; the quantities involved; and the anticipated length of
failure by Seller) 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); or (ii) in the event that Buyer has used
commercially reasonable efforts to replace the gas, and no such replacement is
available, then the sole and exclusive remedy of the Buyer shall be any
unfavorable difference between the Contract Price and the Henry Hub midpoint
price listed in Gas Daily multiplied by the difference between the Contract
Quantity and the quantity actually delivered by Seller for such Day(s).   The
sole and exclusive remedy of the Seller in the event of a breach by Buyer of a
Firm obligation to receive gas on any day(s) shall be limited to the 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 Henry Hub midpoint price listed in Gas Daily from the Contract
Price.
3. TRANSPORTATION, NOMINATIONS AND IMBALANCES: Seller shall have the sole
responsibility for transporting the gas to the Delivery Point. Buyer shall have
the sole responsibility for transporting the gas from the Delivery Point. The
parties shall coordinate their nomination activities, giving sufficient notice
to meet the deadlines of the affected transporter(s); "Transporter(s)" shall
mean all Gas gathering or pipeline companies, utilities 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
this Base Contract; of the gas to be delivered and purchased each Day. Should
either party become aware that actual deliveries at the Delivery Point are
greater or less than the quantity of gas confirmed by the transporter(s) for
movement, transportation or management (the "Scheduled Gas"), such party shall
promptly notify the other party. The parties shall use commercially reasonable
efforts to avoid imposition of any fees, penalties, cash‑outs, costs (including
but not limited to costs of purchased or borrowed gas) or other charges (in cash
or in kind) assessed by any transporter(s) for the failure to comply with or to
satisfy: (i) any nomination or usage requirements or (ii) daily and/or monthly
imbalance, or (iii) any directive by any transporter(s) to revise nominations or
scheduling ("Imbalance Charges"). Buyer shall promptly communicate to Seller any
notification or directive by any transporter(s) of potential or effective
Imbalance Charges. Any Imbalance Charges resulting from failure to timely
communicate and/or comply with such notification or directive shall be the
responsibility of the party whose failure caused the imbalance. If the Imbalance
Charges were incurred as a result of Buyer's 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 Seller's 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. Without limiting the generality of the foregoing provisions of
this paragraph 3, and for the avoidance of doubt, the parties acknowledge that
sharp changes in available pipeline capacity may occur with little or no notice
on one or more transporters that move, transport or manage gas purchased and
sold hereunder resulting from pipeline capacity allocations, operational flow
orders ("OFO"), pipeline interconnect problems, unscheduled maintenance or other
similar causes. In such event, the parties shall use reasonable efforts to avoid
the imposition of Imbalance Charges; however, Buyer shall reimburse Seller if
such Imbalance Charges are incurred by or imposed upon Seller notwithstanding
the Seller's exercise of reasonable efforts to avoid such charges by revising
nominations or by otherwise rescheduling the quantities to be delivered to or
for the account of Buyer hereunder. Seller shall leave the ability to utilize
alternate transportation; however, Seller shall not pass through resulting
incremental transportation charges or avoided transportation charges to Buyer.
4. 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 shall be in accordance with the established
procedures of the receiving transporter.
5. TAXES. Seller shall pay or cause to be paid all taxes, fees, levies,
penalties, licenses or charges, .imposed by any government authority ("Taxes")
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). Notwithstanding the
foregoing, Buyer agrees to reimburse Seller for any additional, or any increase
in, any sales, use, utility, utility receipts, gross receipts or similar tax
imposed in the future by any taxing or other governmental authority with respect
to the sale, use, or transportation of the gas sold pursuant to this Agreement.
If a party is required to remit or pay Taxes that are the other party's
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.
6. BILLINGS AND PAYMENTS: Seller shall invoice Buyer by mail or electronically
via fax or e‑mail on or before the fifteenth (15th) day of each month for actual
quantities delivered by Seller and received by Buyer in the prior month. If
actual quantities cannot be determined by the billing date, Seller shall
invoice, and Buyer shall pay, based on the quantity of Scheduled Gas. Buyer will
pay Seller's invoice, whether based on actual deliveries or Scheduled Gas, by
wire transfer within ten (10) days after receipt of Seller's invoice, or by the
twenty‑fifth (25th) day of the month immediately
following the month of delivery, whichever is later. Seller shall notify Buyer
of any necessary adjustments to volumes on the next succeeding invoice. If a
payment date falls on a day that is not a Business Day, payment will be made on
the next Business Day. If Buyer fails to pay amounts due Seller when same is
due, interest shall accrue at the lesser of (i) the prime rate of interest as
published from time to time by the Chase Manhattan Bank, New York plus two
percent (2%) from the date that such payment is due until the same is paid; or
(ii) the maximum applicable lawful interest rate. Buyer agrees to pay all
collection costs, including reasonable attorney's fees and court costs, incurred
by Seller in collecting such past due amounts. Seller, in addition to other
remedies available, may suspend performance until all past due amounts, late
payment charges, and collection costs are paid. Buyer and Seller agree to net
all undisputed amounts due and owing, and/or past due, arising under this
Contract such that the party owing the greater amount shall make a single
payment of the net amount to the other in accordance with this Section. Payments
required to be made pursuant to the terms of any adequate assurance or credit
support obligations shall not be subject to netting under this Contract.
 

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7. TITLE, WARRANTY, AND INDEMNITY: 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 Delivery Point(s). Buyer shall have
responsibility for and any liability with respect to said gas after its delivery
to Buyer at the Delivery Point(s). 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, ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF
FITNESS FOR ANY PARTICULAR PURPOSE, ARE DISCLAIMED. SELLER AGREES TO INDEMNIFY
BUYER AND SAVE IT HARMLESS FROM ALL LOSSES, LIABILITIES OR CLAIMS INCLUDING
REASONABLE ATTORNEYS' FEES AND COSTS OF COURT ("CLAIMS"), FROM ANY AND ALL
PERSONS, ARISING FROM OR OUT OF CLAIMS OF TITLE, PERSONAL INJURY OR PROPERTY
DAMAGE FROM SAID GAS OR OTHER CHARGES THEREON WHICH ATTACH BEFORE TITLE PASSES
TO BUYER (EXCEPT TO THE EXTENT SUCH INJURIES AND DAMAGE ARE CAUSED BY THE
NEGLIGENCE OF 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 OR PROPERTY DAMAGE FROM SAID GAS OR OTHER CHARGES
THEREON WHICH ATTACH AFTER TITLE PASSES TO BUYER (EXCEPT TO THE EXTENT SUCH
INJURIES AND DAMAGE ARE CAUSED BY THE NEGLIGENCE OF SELLER).
8. FINANCIAL RESPONSIBILITY: If Seller has reasonable grounds for insecurity
regarding the performance of any obligation under the Contract (whether or not
then due) by the Buyer (including, without limitation, the occurrence of a
material change in the creditworthiness of Buyer), Seller may demand Adequate
Assurance of Performance. "Adequate Assurance of Performance" shall mean
sufficient security in the form, amount and for the term reasonably acceptable
to Seller, including, but not limited to, a standby irrevocable letter of
credit, a prepayment, a security interest in an asset or a performance bond or
guaranty (including the issuer of any such security).
9. DEFAULT: If Buyer 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 give Adequate Assurances
of Performance as required herein within 2 Business Days of a written request by
Seller; or (vii) not have paid any amount due hereunder on or before the second
Business Day following written notice that such payment is due; then the Seller
shall have the right, at its sole election, to immediately withhold and/or
suspend deliveries or payments upon notice and/or to terminate this Contract, in
the manner provided in Section 10, in addition to any and all other remedies
available hereunder. Without limiting the applicability of any other provision
of the U.S. Bankruptcy Code as amended (the "Bankruptcy Code") (including
without limitation Sections 362, 546, 556, and 560 thereof and the applicable
definitions in Section 101 thereof), the parties acknowledge and agree that all
Transaction Confirmations and Recordings entered into hereunder will constitute
"forward contracts" or "swap agreements" as defined in Section 101 of the
Bankruptcy Code, that the rights of the parties under Section 9 of this
Agreement will constitute contractual rights to liquidate Transactions, that any
margin or collateral provided under any margin, collateral, security, or similar
agreement related hereto will constitute a "margin payment" as defined in
Section 101 of the Bankruptcy Code, and that the parties are entitled to the
rights under, and protections afforded by, Sections 362, 546, 556, and 560 of
the Bankruptcy Code.
10. EARLY TERMINATION DAMAGES: If this Contract is terminated by either party,
Seller shall determine, in good faith and in a commercially reasonable manner:
(i) the amount owed to Seller (whether or not then due) for which payment has
not yet been made, and (ii) the Market Value, as defined below, of all
transactions under the Contract. Seller shall liquidate and accelerate this
Contract and 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 shall be due to the Seller.  "Contract Value" means the amount of
gas remaining to be delivered or purchased under this Contract and any
transactions) multiplied by the Contract Price, and "Market Value" means the
amount of gas remaining to be delivered or purchased under this Contract and any
transactions) multiplied by the market price for a similar transaction at the
Delivery Point determined by Seller in a commercially reasonable manner. To
ascertain the Market Value, Seller 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.
Seller shall not be required to enter into a replacement agreement or
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 termination date
(including but not limited to "evergreen provisions") shall not be considered in
determining Contract Values and 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 Seller in a commercially reasonable manner. Seller shall give
Buyer written notice of the amount, including reasonable detail of calculations,
and Buyer shall pay the amount within 20 (twenty) days of receipt of such notice
11. FORCE MAJEURE: Except with regard to a party's obligation to make payment(s)
and Imbalance Charges due hereunder, 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 "Force Majeure" as employed herein means any cause
not reasonably within the control of the party claiming suspension, including
(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 (including in‑path and out‑of‑path
transportation) and/or storage by Transporters; (iv) acts of others such as
strikes, lockouts or other industrial disturbances, riots, sabotage,
insurrections or wars; 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. Neither party shall be entitled
to the benefit of the provisions of Force Majeure if the party claiming excuse
failed to remedy the condition and to resume the performance of such covenants
or obligations with reasonable dispatch. The party whose performance is
 

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prevented by Force Majeure must provide Notice to the other patty. 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.
12. TERM: This Contract may be terminated on 60 (sixty) days written notice, but
shall remain in effect until the expiration of the latest Delivery Period of any
transaction(s). Notwithstanding the foregoing, the rights of either party to
make adjustments pursuant to Sections 6 or 16 hereof, the obligation of either
party to indemnify the other, the netting rights of the parties, and the
obligation to make any and all payments hereunder shall survive termination of
this Contract or any transaction.
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 PARTY'S 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 PARTY'S 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.
14. APPLICABLE LAW, REGULATIONS, OR TARIFFS: This Contract is subject to all
existing and future legislation, governmental laws, orders, directives, rules,
regulations, and tariffs (including without limitation those applying to the
maximum price which may be charged for the sale of gas) issued by any regulatory
body or transporter(s) having jurisdiction hereunder. In the event any
regulatory body directly or indirectly asserts jurisdiction over the sale,
purchase, or transportation of gas hereunder, then either party shall have the
right to contest the validity of such law, order, rule, or regulation and
neither acquiescence therein or compliance therewith for any period of time, nor
any other provision contained herein, shall be construed as a waiver of such
right. Buyer agrees to reimburse Seller for any increase in tariffs) imposed in
the future by any regulatory authority or transporter(s) with respect to the
sale, use, or transportation of the natural gas sold pursuant to this Agreement.
15. ASSIGNMENT: No assignment of this Contract or of any right or obligation
hereunder shall be made without written consent of the other party, which
consent shall not be unreasonably withheld or delayed. Change of control or
ownership, merger or recapitalization of either party shall not be considered an
assignment.
16. ADJUSTMENT RIGHT: Either party shall have the right at all reasonable times
to examine the records of the other to the extent necessary to verify the
accuracy of any statement, charge or computation made under or pursuant to any
provision of this Contract. The parties agree to cooperate and to negotiate any
dispute with transporter(s) on errors in measurement or reporting. Either party
may request and will receive payment for any verifiable statement adjustment
within two (2) years of any statement.
17. NOTICES: All Transaction Confirmations, invoices, payments, notices of force
majeure and other communications ("Notices") shall be made to the addresses
specified in writing by the respective parties from time to time. All Notices
required hereunder may be sent by facsimile or mutually acceptable electronic
means, a nationally recognized overnight courier service, first class mail or
hand delivered. 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 party's receipt of its facsimile machine's
confirmation of successful transmission. If the day on which such facsimile is
received is 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 patty. Notice via first class mail shall be
considered delivered five (5) Business Days after mailing.
18. PRICING: Buyer has the option to lock‑in the price for specified quantities,
not to exceed the Contract Quantity, at a mutually agreeable price.
19. MISCELLANEOUS: 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. 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.  Each Party
acknowledges and agrees that, for purposes of this Agreement, the other Party is
not a "utility" as such term is used in Section 366 of the Bankruptcy Code, and
each Party agrees to waive and not to assert the applicability of the provisions
of Section 366 in any bankruptcy proceeding wherein such Party is a debtor. In
any such proceeding, each Party further agrees to waive the right to assert that
the other Party is a provider of last resort.
20. ENFORCEABILITY: Each Party represents and warrants that it has full and
complete authority to enter into and perform its obligations under this
Agreement and that this Agreement constitutes a legal, valid and binding
obligation of that Party; enforceable against it in accordance with its terms,
except as such enforceability may be affected by any bankruptcy law or the
application of principles of equity. Each person who executes this Agreement 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.

 

Page 4 of 4
 
 

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EXHIBIT A

Atmos Energy Marketing, LLC                   TRANSACTION CONFIRMATION
13430 Northwest Freeway, Suite 400, Houston, TX 77040        FOR IMMEDIATE
DELIVERY
 
Date:
 
Transaction Confirmation #:
Seller:
Atmos Energy Marketing, LLC
Buyer:
Delta Natural Gas Company Inc.
 
2000 Warrington Way, Suite 230
 
3617 Lexington Road
 
Louisville, KY  40222
 
 
 
Winchester, KY 40391-9797
Attn:
Trevor Atkins
Attn:
Brian Ramsey
Phone:
502-326-1381
Phone:
(859) 744-6171 Ext. 158
Fax:
502-326-1411
Fax:
(859) 744-3623
Email:
trevor.atkins@atmosenergy.com
Email:
bramsey@deltagas.com

 
Delivery
Period:                         Begin:                                            May
1, 2010     End:          April 30, 2011
Transporter:                                     TETCO
Service Level:                                Firm
Delivery Point:                               73131 and 73196
(If a pooling point is used, list a specific geographic location and pipeline
location)
 
 
Begin Flow Date
 
 
End Flow Date
Contract
Quantity MMBtus/Day
 
 
Contract Price (US$/MMBtu)
 
 
 
 
 
 
May 1, 2010
Aril 30, 2011
Up to 1,000
NYMEX Last Day Settle
TETCO ELA- M2
$0.38
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Special Conditions: 1) At the expiration of the Delivery Period, this
Transaction Confirmation shall automatically extend for twelve (12) successive
months unless terminated on sixty (60) days written notice by either party.

This Transaction Confirmation constitutes and confirms an agreement by the
parties to sell and purchase gas in accordance with the terms described herein
and is subject to the Base Contract for Sale and Purchase of Natural Gas between
Seller and Buyer.

Please confirm that the foregoing correctly sets forth the terms of our
agreement with respect to this transaction by signing in the space provided
below and returning a copy of the executed confirmation to us. Your failure to
execute and return this confirmation or to advise us of any errors by the time
specified in the Base Contract or in the NAESB, or, if not so specified, before
the gas begins to flow, shall constitute your acceptance of these terms.

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--------------------------------------------------------------------------------

AGREED TO AND ACCEPTED: SELLER                    AGREED TO AND ACCEPTED: BUYER
 
Atmos Energy Marketing, LLC                                Delta Natural Gas
Company, Inc.

By: /s/Rob Ellis                                              By: /s/Brian
Ramsey

By: /s/Brian Ramsey
           Printed Name:  Brian Ramsey
Printed Name:

Title:                                                      Title: VP –
Transmission & Gas Supply
 
 
SYMBOLS: Unless expressly provided otherwise all prices are per MMBtu of gas.
"GD" means Gas Daily ® Midpoint or Index, as applicable, for the applicable
delivery day for the specified location. "IF" means Inside F.E.R.C.s Gas Market
Report, Index, first publication for the month, for the delivery month for the
specified location. "NGW" means Natural Gas Week ®. "NGI" means Natural Gas
Intelligence. "NYMEX" means New York Mercantile Exchange. "KCBOT" means Kansas
City Board of Trade.

 

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