**Exhibit 99.4**

 

[*] = Certain confidential informationcontained in this document, marked by brackets, has been omitted and filedseparately with the Securities and Exchange Commission pursuant to Rule 24-b-2of the Securities Exchange Act of 1934, as amended.

 

**Base Contract for Sale and Purchase of Natural Gas**

 

This Base Contract is enteredinto as of the following date: September 23, 2004.  The parties to this Base Contract are thefollowing:

 
| Equitable  Production Company (“Equitable”) |   | and                          | MarkWest  Hydrocarbon, Inc. (“MarkWest”) |   |
|-------------------------------------------------------|--------|------------------------------|----------------------------------------------------|--------|
|                                                  |   |                         |                                               |
| Duns  Number:                                         |   | Duns  Number:                |                                               |
| Contract  Number:                                     |   | Contract  Number:            |                                               |
| U.S.  Federal Tax ID Number:                          |   | U.S.  Federal Tax ID Number: |                                               |
|                                                  |   |                         |                                               |
| *Notices*:                                            |   |                         |                                               |
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| Attn:                                                 |   | Attn:                        |                                               |
| Phone:                                                | Fax:   |                         | Phone:                                             | Fax:   |   |
|                                                  |   |                         |                                               |   |   |
| *Confirmations*:                                      |   |                         |                                               |
|                                                  |   |                         |                                               |
| Attn:                                                 |   | Attn:                        |                                               |
| Phone:                                                | Fax:   |                         | Phone:                                             | Fax:   |   |
|                                                  |   |                         |                                               |   |   |
| *Invoices and Payments*:                              |   |                         |                                               |
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| Attn:                                                 |   | Attn:                        |                                               |
|                                                  |   |                         |                                               |
| Phone:                                                | Fax:   |                         | Phone:                                             | Fax:   |   |
|                                                  |   |                         |                                               |
| *Wire Transfer or ACH Numbers (if applicable)*:       |   |                         |                                               |
| BANK:                                                 |   | BANK:                        |                                               |
| ABA:                                                  |   | ABA:                         |                                               |
| ACCT:                                                 |   | ACCT:                        |                                               |
| Other  Details:                                       |   | Other  Details:              |                                               |
|                                                       |        |                              |                                                    |        |  |  |

 

This Base Contract incorporates by reference for all purposes theGeneral Terms and Conditions for Sale and Purchase of Natural Gas published bythe North American Energy Standards Board. The parties hereby agree to the following provisions offered in saidGeneral Terms and Conditions.  In theevent the parties fail to check a box, the specified default provision shallapply.  Select only one box from eachsection:

 
| **Section 1.2**Transaction   Procedure                                                                | o  Oral  (default)  o   Written  **ý****  See Special Provisions**                                                                                                          | **Section 7.2**  Payment Date                                                                        | o  **15th **Day of Month following  Month of   delivery (default)  **ý****  25th **Day of Month following Month of   delivery 

**ý****  See Special  Provisions** |
|-------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Section 2.5**Confirm  Deadline                                                                      | o  2  Business Days after receipt (default)  o            Business  Days after receipt  **ý****  See Special Provisions** | **Section 7.2**  Method of   Payment                                                                 | ý  Wire  transfer (default)  o  Automated  Clearinghouse Credit (ACH)  o  Check                                                                                                   |
| **Section 2.6**  Confirming  Party                                                               | o  Seller  (default) 

o  Buyer

**ý**** ****See Special Provisions**                                                                                                            | **Section 7.7**  Netting                                                                             | ý  Netting  applies (default) 

o  Netting  does not apply                                                                                                                                  |
| **Section 3.2**  Performance   Obligation                                                        |  ̈  Cover  Standard (default)  Spot Price Standard 

**ý****  See Special  Provisions**                                                                                      | **Section 10.3.1**  Early Termination   Damages                                                      | ý  Early  Termination Damages Apply (default)  o  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                                                                                                                                                        | ý   Other Agreement Setoffs Apply (default)  o   Other Agreement Setoffs Do Not Apply |
| **Section 2.26**  Spot Price  Publication                                                   | o  Gas  Daily Midpoint (default)  **ý**  **See Special Provisions**                                                                                                                   | **Section 14.5**  Choice Of Law                                                                      | **West Virginia**                                                                                                                                                                                               |
| **Section 6**  Taxes                                                                             | ý  Buyer  Pays At and After Delivery Point (default) 

o  Seller  Pays Before and At Delivery Point                                                                                   | **Section 14.10**  Confidentiality                                                                   | ý  Confidentiality  applies (default)  o  Confidentiality  does not apply                                                                                                                   |
| **ý****  Special Provisions**Number of sheets attached:  o**  Addendum(s):** | ** **                                                                                                                                                                                                | ** **                                                                                                |

 
| Copyright ©  2002 North American Energy Standards Board, Inc. | NAESB Standard 6.3.1 |
|--------------------------------------------------------------------|----------------------|
| All Rights  Reserved                                               | April 19, 2002       |

 

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IN WITNESS WHEREOF, the parties hereto have executed this Base Contractin duplicate.

** **
| **EQUITABLE PRODUCTION COMPANY** |                              | **MARKWEST HYDROCARBON, INC.** |
|----------------------------------|-----------------------------------|--------------------------------|
| ** **                       | ** **                        | ** **                     | ** ** |
|                             |                              |                           |   |
| By                               | /s/  Equitable Production Company |                           | By | /s/  MarkWest Hydrocarbon, Inc. |
|                             |                              |                           |
| Name:                            |                              |                           | Name: |   |
|                             |                              |                           |   |   |
| Title:                           |                              |                           | Title: |   |
|                                  |                                   |                                |  |  |  |  |  |  |  |

 
| Copyright ©  2002 North American Energy Standards Board, Inc. | NAESB Standard X.X.X |
|--------------------------------------------------------------------|----------------------|
| All Rights  Reserved                                               | January 28, 2002     |

 

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**General Terms and Conditions**

**Base Contract for Sale and Purchase of Natural Gas**

 

SECTION 1.                                PURPOSEAND PROCEDURES

 

1.1.                              These General Terms and Conditions areintended to facilitate purchase and sale transactions of Gas on a Firm orInterruptible basis.  “Buyer” refers tothe party receiving Gas and “Seller” refers to the party delivering Gas.  The entire agreement between the partiesshall be the Contract as defined in Section 2.7.

 

**Theparties have selected either the “Oral Transaction Procedure” or the “WrittenTransaction Procedure” as indicated on the Base Contract.**

 

**OralTransaction Procedure:**

 

1.2.                              The parties will use the following TransactionConfirmation procedure.  Any Gas purchaseand sale transaction may be effectuated in an EDI transmission or telephoneconversation with the offer and acceptance constituting the agreement of theparties.  The parties shall be legallybound from the time they so agree to transaction terms and may each relythereon.  Any such transaction shall beconsidered a “writing” and to have been “signed”.  Notwithstanding the foregoing sentence, theparties agree that Confirming Party shall, and the other party may, confirm atelephonic transaction by sending the other party a Transaction Confirmation byfacsimile, EDI or mutually agreeable electronic means within three BusinessDays of a transaction covered by this Section 1.2 (Oral Transaction Procedure)provided that the failure to send a Transaction Confirmation shall notinvalidate the oral agreement of the parties. Confirming Party adopts its confirming letterhead, or the like, as itssignature on any Transaction Confirmation as the identification andauthentication of Confirming Party.  Ifthe Transaction Confirmation contains any provisions other than those relatingto the commercial terms of the transaction (i.e., price, quantity, performanceobligation, delivery point, period of delivery and/or transportationconditions), which modify or supplement the Base Contract or General Terms andConditions of this Contract (e.g., arbitration or additional representationsand warranties), such provisions shall not be deemed to be accepted pursuant toSection 1.3 but must be expressly agreed to by both parties; provided that theforegoing shall not invalidate any transaction agreed to by the parties.

 

**WrittenTransaction Procedure:**

 

1.2.                                                      The parties will use the following TransactionConfirmation procedure.  Should theparties come to an agreement regarding a Gas purchase and sale transaction fora particular Delivery Period, the Confirming Party shall, and the other partymay, record that agreement on a Transaction Confirmation and communicate suchTransaction Confirmation by facsimile, EDI or mutually agreeable electronicmeans, to the other party by the close of the Business Day following the dateof agreement.  The parties acknowledgethat their agreement will not be binding until the exchange of nonconflictingTransaction Confirmations or the passage of the Confirm Deadline withoutobjection from the receiving party, as provided in Section 1.3.

 

1.3.                              If a sending party’s Transaction Confirmationis materially different from the receiving party’s understanding of theagreement referred to in Section 1.2, such receiving party shall notify thesending party via facsimile, EDI or mutually agreeable electronic means by theConfirm Deadline, unless such receiving party has previously sent a TransactionConfirmation to the sending party.  Thefailure of the receiving party to so notify the sending party in writing by theConfirm Deadline constitutes the receiving party’s agreement to the terms ofthe transaction described in the sending party’s Transaction Confirmation.  If there are any material differences betweentimely sent Transaction Confirmations governing the same transaction, thenneither Transaction Confirmation shall be binding until or unless suchdifferences are resolved including the use of any evidence that clearlyresolves the differences in the Transaction Confirmations.  In the event of a conflict among the terms of(i) a binding Transaction Confirmationpursuant to Section 1.2, (ii) the oralagreement of the parties which may be evidenced by a recorded conversation,where the parties have selected the Oral Transaction Procedure of the BaseContract, (iii) the Base Contract, and (iv)these General Terms and Conditions, the terms of the documents shall govern inthe priority listed in this sentence.

 

1.4.                              The parties agree that each party mayelectronically record all telephone conversations with respect to this Contractbetween their respective employees, without any special or further notice tothe other party.  Each party shall obtainany necessary consent of its agents and employees to such recording.  Where the parties have selected the Oral TransactionProcedure in Section 1.2 of the Base Contract, the parties agree not to contestthe validity or enforceability of telephonic recordings entered into inaccordance with the requirements of this Base Contract.  However, nothing herein shall be construed asa waiver of any objection to the admissibility of such evidence.

 

SECTION 2.                                DEFINITIONS

 

The terms set forth below shall have themeaning ascribed to them below.  Otherterms are also defined elsewhere in the Contract and 

shall have the meanings ascribed to themherein.

 

2.1.                              “Alternative Damages” shall mean such damages,expressed in dollars or dollars per MMBtu, as the parties shall agree upon inthe Transaction Confirmation, in the event either Seller or Buyer fails toperform a Firm obligation to deliver Gas in the case of Seller or to receiveGas in the case of Buyer.

 

2.2.                              “Base Contract” shall mean a contract executedby the parties that incorporates these General Terms and Conditions byreference; that specifies the agreed selections of provisions contained herein;and that sets forth other information required herein and any SpecialProvisions and addendum(s) as identified on page one.

 

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2.3.                              “British thermal unit” or “Btu” shall mean theInternational BTU, which is also called the Btu (IT).

 

2.4.                              “Business Day” shall mean any day exceptSaturday, Sunday or Federal Reserve Bank holidays.

 

2.5.                              “Confirm Deadline” shall mean 5:00 p.m. in thereceiving party’s time zone on the second Business Day following the Day aTransaction Confirmation is received or, if applicable, on the Business Dayagreed to by the parties in the Base Contract; provided, if the TransactionConfirmation is time stamped after 5:00 p.m. in the receiving party’s timezone, it shall be deemed received at the opening of the next Business Day.

 

2.6.                              “Confirming Party” shall mean the partydesignated in the Base Contract to prepare and forward TransactionConfirmations to the other party.

 

2.7.                              “Contract” shall mean the legally-bindingrelationship established by (i) the Base Contract, (ii) any and all bindingTransaction Confirmations and (iii) where the parties have selected the OralTransaction Procedure in Section 1.2 of the Base Contract, any and alltransactions that the parties have entered into through an EDI transmission orby telephone, but that have not been confirmed in a binding Transaction Confirmation.

 

2.8.                              “Contract Price” shall mean the amountexpressed in U.S. Dollars per MMBtu to be paid by Buyer to Seller for thepurchase of Gas as agreed to by the parties in a transaction.

 

2.9.                              “Contract Quantity” shall mean the quantity ofGas to be delivered and taken as agreed to by the parties in a transaction.

 

2.10.                        “Cover Standard”, as referred to in Section3.2, shall mean that if there is an unexcused failure to take or deliver anyquantity of Gas pursuant to this Contract, then the performing party shall usecommercially reasonable efforts to (i) if Buyer is the performing party, obtainGas, (or an alternate fuel if elected by Buyer and replacement Gas is notavailable), or (ii) if Seller is the performing party, sell Gas, in eithercase, at a price reasonable for the delivery or production area, as applicable,consistent with:  the amount of noticeprovided by the nonperforming party; the immediacy of the Buyer’s Gasconsumption needs or Seller’s Gas sales requirements, as applicable; the quantitiesinvolved; and the anticipated length of failure by the nonperforming party.

 

2.11.                        “Credit Support Obligation(s)” shall mean anyobligation(s) to provide or establish credit support for, or on behalf of, aparty to this Contract such as an irrevocable standby letter of credit, amargin agreement, a prepayment, a security interest in an asset, a performancebond, guaranty, or other good and sufficient security of a continuing nature.

 

2.12.                        “Day” shall mean a period of 24 consecutivehours, coextensive with a “day” as defined by the Receiving Transporter in aparticular transaction.

 

2.13.                        “Delivery Period” shall be the period duringwhich deliveries are to be made as agreed to by the parties in a transaction.

 

2.14.                        “Delivery Point(s)” shall mean such point(s)as are agreed to by the parties in a transaction.

 

2.15.                        “EDI” shall mean an electronic datainterchange pursuant to an agreement entered into by the parties, specificallyrelating to the communication of Transaction Confirmations under this Contract.

 

2.16.                        “EFP” shall mean the purchase, sale orexchange of natural Gas as the “physical” side of an exchange for physicaltransaction involving gas futures contracts. EFP shall incorporate the meaning and remedies of “Firm”, provided thata party’s excuse for nonperformance of its obligations to deliver or receiveGas will be governed by the rules of the relevant futures exchange regulatedunder the Commodity Exchange Act.

 

2.17.                        “Firm” shall mean that either party mayinterrupt its performance without liability only to the extent that suchperformance is prevented for reasons of Force Majeure; provided, however, thatduring Force Majeure interruptions, the party invoking Force Majeure may beresponsible for any Imbalance Charges as set forth in Section 4.3 related toits interruption after the nomination is made to the Transporter and until thechange in deliveries and/or receipts is confirmed by the Transporter.

 

2.18.                        “Gas” shall mean any mixture of hydrocarbonsand noncombustible gases in a gaseous state consisting primarily of methane.

 

2.19.                        “Imbalance Charges” shall mean any fees,penalties, costs or charges (in cash or in kind) assessed by a Transporter forfailure to satisfy the Transporter’s balance and/or nomination requirements.

 

2.20.                        “Interruptible” shall mean that either partymay interrupt its performance at any time for any reason, whether or not causedby an event of Force Majeure, with no liability, except such interrupting partymay be responsible for any Imbalance Charges as set forth in Section 4.3related to its interruption after the nomination is made to the Transporter anduntil the change in deliveries and/or receipts is confirmed by Transporter.

 

2.21.                        “MMBtu” shall mean one million British thermalunits, which is equivalent to one dekatherm.

 

2.22.                        “Month” shall mean the period beginning on thefirst Day of the calendar month and ending immediately prior to thecommencement of the first Day of the next calendar month.

 

2.23.                        “Payment Date” shall mean a date, as indicatedon the Base Contract, on or before which payment is due Seller for Gas receivedby Buyer in the previous Month.

 

2.24.                        “Receiving Transporter” shall mean theTransporter receiving Gas at a Delivery Point, or absent such receivingTransporter, the Transporter delivering Gas at a Delivery Point.

 

2.25.                        “Scheduled Gas” shall mean the quantity of Gasconfirmed by Transporter(s) for movement, transportation or management.

 

2.26.                        “Spot Price “ as referred to in Section 3.2shall mean the price listed in the publication indicated on the Base Contract,under the listing applicable to the geographic location closest in proximity tothe Delivery Point(s) for the relevant Day; provided, if there is no single 

 

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price published for such location for such Day, butthere is published a range of prices, then the Spot Price shall be the averageof such high and low prices.  If no priceor range of prices is published for such Day, then the Spot Price shall be theaverage of the following: (i) the price (determined as stated above) for thefirst Day for which a price or range of prices is published that next precedesthe relevant Day; and (ii) the price (determined as stated above) for the firstDay for which a price or range of prices is published that next follows therelevant Day.

 

2.27.                        “Transaction Confirmation” shall mean adocument, similar to the form of Exhibit A, setting forth the terms of atransaction formed pursuant to Section 1 for a particular Delivery Period.

 

2.28.                        “Termination Option” shall mean the option ofeither party to terminate a transaction in the event that the other party failsto perform a Firm obligation to deliver Gas in the case of Seller or to receiveGas in the case of Buyer for a designated number of days during a period asspecified on the applicable Transaction Confirmation.

 

2.29.                        “Transporter(s)” shall mean all Gas gatheringor pipeline companies, or local distribution companies, acting in the capacityof a transporter, transporting Gas for Seller or Buyer upstream or downstream,respectively, of the Delivery Point pursuant to a particular transaction.

 

SECTION 3.                                PERFORMANCEOBLIGATION

 

3.1.                              Seller agrees to sell and deliver, and Buyeragrees to receive and purchase, the Contract Quantity for a particulartransaction in accordance with the terms of the Contract.  Sales and purchases will be on a Firm orInterruptible basis, as agreed to by the parties in a transaction.

 

**Theparties have selected either the “Cover Standard” or the “Spot Price Standard”as indicated on the Base Contract.**

 

**CoverStandard:**

 

3.2.                              The sole and exclusive remedy of the partiesin the event of a breach of a Firm obligation to deliver or receive Gas shallbe recovery of the following: (i) in the event of a breach by Seller on anyDay(s), payment by Seller to Buyer in an amount equal to the positivedifference, if any, between the purchase price paid by Buyer utilizing theCover Standard and the Contract Price, adjusted for commercially reasonabledifferences in transportation costs to or from the Delivery Point(s),multiplied by the difference between the Contract Quantity and the quantityactually delivered by Seller for such Day(s); or (ii) in the event of a breachby Buyer on any Day(s), payment by Buyer to Seller in the amount equal to thepositive difference, if any, between the Contract Price and the price receivedby Seller utilizing the Cover Standard for the resale of such Gas, adjusted forcommercially reasonable differences in transportation costs to or from the DeliveryPoint(s), multiplied by the difference between the Contract Quantity and thequantity actually taken by Buyer for such Day(s); or (iii) in the event thatBuyer has used commercially reasonable efforts to replace the Gas or Seller hasused commercially reasonable efforts to sell the Gas to a third party, and nosuch replacement or sale is available, then the sole and exclusive remedy ofthe performing party shall be any unfavorable difference between the ContractPrice and the Spot Price, adjusted for such transportation to the applicableDelivery Point, multiplied by the difference between the Contract Quantity andthe quantity actually delivered by Seller and received by Buyer for suchDay(s).  Imbalance Charges shall not berecovered under this Section 3.2, but Seller and/or Buyer shall be responsiblefor Imbalance Charges, if any, as provided in Section 4.3.  The amount of such unfavorable differenceshall be payable five Business Days after presentation of the performing party’sinvoice, which shall set forth the basis upon which such amount was calculated.

 

**Spot PriceStandard:**

 

3.2.                                                                              The sole and exclusive remedy of the partiesin the event of a breach of a Firm obligation to deliver or receive Gas shallbe recovery of the following: (i) in the event of a breach by Seller on anyDay(s), payment by Seller to Buyer in an amount equal to the difference betweenthe Contract Quantity and the actual quantity delivered by Seller and receivedby 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 theevent of a breach by Buyer on any Day(s), payment by Buyer to Seller in anamount equal to the difference between the Contract Quantity and the actualquantity delivered by Seller and received by Buyer for such Day(s), multipliedby the positive difference, if any, obtained by subtracting the applicable SpotPrice from the Contract Price.  ImbalanceCharges shall not be recovered under this Section 3.2, but Seller and/or Buyershall be responsible for Imbalance Charges, if any, as provided in Section4.3.  The amount of such unfavorabledifference shall be payable five Business Days after presentation of theperforming party’s invoice, which shall set forth the basis upon which suchamount was calculated.

 

3.3.                              Notwithstanding Section 3.2, the parties mayagree to Alternative Damages in a Transaction Confirmation executed in writingby both parties.

 

3.4.                              In addition to Sections 3.2 and 3.3, theparties may provide for a Termination Option in a Transaction Confirmationexecuted in writing by both parties.  TheTransaction Confirmation containing the Termination Option will designate thelength of nonperformance triggering the Termination Option and the proceduresfor exercise thereof, how damages for nonperformance will be compensated, andhow liquidation costs will be calculated.

 

SECTION 4.                                TRANSPORTATION,NOMINATIONS, AND IMBALANCES

 

4.1.                              Seller shall have the sole responsibility fortransporting the Gas to the Delivery Point(s). Buyer shall have the sole responsibility for transporting the Gas fromthe Delivery Point(s).

 

4.2.                              The parties shall coordinate their nominationactivities, giving sufficient time to meet the deadlines of the affectedTransporter(s).  Each party shall givethe other party timely prior Notice, sufficient to meet the requirements of allTransporter(s) involved in the transaction, 

 

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of the quantities of Gas to be delivered andpurchased each Day.  Should either partybecome aware that actual deliveries at the Delivery Point(s) are greater orlesser than the Scheduled Gas, such party shall promptly notify the otherparty.

 

4.3.                              The parties shall use commercially reasonableefforts to avoid imposition of any Imbalance Charges.  If Buyer or Seller receives an invoice from aTransporter that includes Imbalance Charges, the parties shall determine thevalidity as well as the cause of such Imbalance Charges.  If the Imbalance Charges were incurred as aresult of Buyer’s receipt of quantities of Gas greater than or less than theScheduled Gas, then Buyer shall pay for such Imbalance Charges or reimburseSeller for such Imbalance Charges paid by Seller.  If the Imbalance Charges were incurred as aresult of Seller’s delivery of quantities of Gas greater than or less than theScheduled Gas, then Seller shall pay for such Imbalance Charges or reimburseBuyer for such Imbalance Charges paid by Buyer.

 

SECTION 5.                                QUALITYAND MEASUREMENT

 

AllGas delivered by Seller shall meet the pressure, quality and heat contentrequirements of the Receiving Transporter. The unit of quantity measurement for purposes of this Contract shall beone MMBtu dry.  Measurement of Gasquantities hereunder shall be in accordance with the established procedures ofthe Receiving Transporter.

 

SECTION 6.                                TAXES

 

**The partieshave selected either “Buyer Pays At and After Delivery Point” or “Seller PaysBefore and At Delivery Point” as indicated on the Base Contract.**

 

**Buyer PaysAt and After Delivery Point:**

 

Seller shall pay or cause tobe paid all taxes, fees, levies, penalties, licenses or charges imposed by anygovernment authority (“Taxes”) on or with respect to the Gas prior to theDelivery Point(s).  Buyer shall pay orcause to be paid all Taxes on or with respect to the Gas at the DeliveryPoint(s) and all Taxes after the Delivery Point(s).  If a party is required to remit or pay Taxesthat are the other party’s responsibility hereunder, the party responsible forsuch Taxes shall promptly reimburse the other party for such Taxes.  Any party entitled to an exemption from anysuch Taxes or charges shall furnish the other party any necessary documentationthereof.

 

**SellerPays Before and At Delivery Point:**

 

Seller shall pay or cause tobe paid all taxes, fees, levies, penalties, licenses or charges imposed by anygovernment authority (“Taxes”) on or with respect to the Gas prior to theDelivery Point(s) and all Taxes at the Delivery Point(s).  Buyer shall pay or cause to be paid all Taxeson or with respect to the Gas after the Delivery Point(s).  If a party is required to remit or pay Taxesthat are the other party’s responsibility hereunder, the party responsible forsuch Taxes shall promptly reimburse the other party for such Taxes.  Any party entitled to an exemption from anysuch Taxes or charges shall furnish the other party any necessary documentationthereof.

 

SECTION 7.                                BILLING,PAYMENT, AND AUDIT

 

7.1.                              Seller shall invoice Buyer for Gas deliveredand received in the preceding Month and for any other applicable charges,providing supporting documentation acceptable in industry practice to supportthe amount charged.  If the actualquantity delivered is not known by the billing date, billing will be preparedbased on the quantity of Scheduled Gas. The invoiced quantity will then be adjusted to the actual quantity onthe following Month’s billing or as soon thereafter as actual deliveryinformation is available.

 

7.2.                              Buyer shall remit the amount due under Section7.1 in the manner specified in the Base Contract, in immediately availablefunds, on or before the later of the Payment Date or 10 Days after receipt ofthe 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 Buyerhereunder, payment to Buyer shall be made in accordance with this Section 7.2.

 

7.3.                              In the event payments become due pursuant toSections 3.2 or 3.3, the performing party may submit an invoice to the nonperformingparty for an accelerated payment setting forth the basis upon which theinvoiced amount was calculated.  Paymentfrom the nonperforming party will be due five Business Days after receipt ofinvoice.

 

7.4.                              If the invoiced party, in good faith, disputesthe amount of any such invoice or any part thereof, such invoiced party willpay such amount as it concedes to be correct; provided, however, if theinvoiced party disputes the amount due, it must provide supportingdocumentation acceptable in industry practice to support the amount paid ordisputed.  In the event the parties areunable to resolve such dispute, either party may pursue any remedy available atlaw or in equity to enforce its rights pursuant to this Section.

 

7.5.                              If the invoiced party fails to remit the fullamount payable when due, interest on the unpaid portion shall accrue from thedate due until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interestpublished under “Money Rates” by The Wall Street Journal, plus two percent perannum; or (ii) the maximum applicablelawful interest rate.

 

7.6.                              A party shall have the right, at its ownexpense, upon reasonable Notice and at reasonable times, to examine and auditand to obtain copies of the relevant portion of the books, records, andtelephone recordings of the other party only to the extent reasonably necessaryto verify the accuracy of any statement, charge, payment, or computation madeunder the Contract.  This right toexamine, audit, and to obtain copies shall not be available with respect toproprietary information not directly relevant to transactions under thisContract.  All invoices and billingsshall be conclusively presumed final and accurate and all associated claims forunder- or overpayments shall be deemed waived unless such invoices or billingsare objected to in writing, with adequate explanation and/or documentation,within two years after the Month of Gas delivery.  All retroactive adjustments under Section 7shall be paid in full by the party owing payment within 30 Days of Notice andsubstantiation of such inaccuracy.

 

7.7.                              Unless the parties have elected on the BaseContract not to make this Section 7.7 applicable to this Contract, the partiesshall net all undisputed amounts due and owing, and/or past due, arising underthe Contract such that the party owing the greater amount shall 

 

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make a single payment of the net amount to theother party in accordance with Section 7; provided that no payment required tobe made pursuant to the terms of any Credit Support Obligation or pursuant toSection 7.3 shall be subject to netting under this Section.  If the parties have executed a separatenetting agreement, the terms and conditions therein shall prevail to the extentinconsistent herewith.

 

SECTION 8.                                TITLE,WARRANTY, AND INDEMNITY

 

8.1.                              Unless otherwise specifically agreed, title tothe Gas shall pass from Seller to Buyer at the Delivery Point(s).  Seller shall have responsibility for andassume any liability with respect to the Gas prior to its delivery to Buyer atthe specified Delivery Point(s).  Buyershall have responsibility for and any liability with respect to said Gas afterits delivery to Buyer at the Delivery Point(s).

 

8.2.                              Seller warrants that it will have the right toconvey and will transfer good and merchantable title to all Gas sold hereunderand delivered by it to Buyer, free and clear of all liens, encumbrances, andclaims.  EXCEPT AS PROVIDED IN THISSECTION 8.2 AND IN SECTION 14.8, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULARPURPOSE, ARE DISCLAIMED.

 

8.3.                              Seller agrees to indemnify Buyer and save itharmless from all losses, liabilities or claims including reasonable attorneys’fees and costs of court (“Claims”), from any and all persons, arising from orout of claims of title, personal injury or property damage from said Gas orother charges thereon which attach before title passes to Buyer.  Buyer agrees to indemnify Seller and save itharmless from all Claims, from any and all persons, arising from or out ofclaims regarding payment, personal injury or property damage from said Gas orother charges thereon which attach after title passes to Buyer.

 

8.4.                              Notwithstanding the other provisions of thisSection 8, as between Seller and Buyer, Seller will be liable for all Claims tothe extent that such arise from the failure of Gas delivered by Seller to meetthe quality requirements of Section 5.

 

SECTION 9.                                NOTICES

 

9.1.                              All Transaction Confirmations, invoices,payments and other communications made pursuant to the Base Contract (“Notices”)shall be made to the addresses specified in writing by the respective partiesfrom time to time.

 

9.2.                              All Notices required hereunder may be sent byfacsimile or mutually acceptable electronic means, a nationally recognizedovernight courier service, first class mail or hand delivered.

 

9.3.                              Notice shall be given when received on aBusiness Day by the addressee.  In theabsence of proof of the actual receipt date, the following presumptions willapply.  Notices sent by facsimile shallbe deemed to have been received upon the sending party’s receipt of itsfacsimile machine’s confirmation of successful transmission.  If the day on which such facsimile isreceived is not a Business Day or is after five p.m. on a Business Day, thensuch facsimile shall be deemed to have been received on the next followingBusiness Day.  Notice by overnight mailor courier shall be deemed to have been received on the next Business Day afterit was sent or such earlier time as is confirmed by the receiving party.  Notice via first class mail shall beconsidered delivered five Business Days after mailing.

 

SECTION 10.                          FINANCIALRESPONSIBILITY

 

10.1.                        If either party (“X”) has reasonable groundsfor insecurity regarding the performance of any obligation under this Contract(whether or not then due) by the other party (“Y”) (including, withoutlimitation, the occurrence of a material change in the creditworthiness of Y),X may demand Adequate Assurance of Performance. “Adequate Assurance of Performance” shall mean sufficient security inthe form, amount and for the term reasonably acceptable to X, including, butnot limited to, a standby irrevocable letter of credit, a prepayment, asecurity interest in an asset or a performance bond or guaranty (including theissuer of any such security).

 

10.2.                        In the event (each an “Event of Default”)either party (the “Defaulting Party”) or its guarantor shall: (i) make an assignment or any generalarrangement for the benefit of creditors; (ii)file a petition or otherwise commence, authorize, or acquiesce in thecommencement of a proceeding or case under any bankruptcy or similar law forthe protection of creditors or have such petition filed or proceeding commencedagainst it; (iii) otherwise becomebankrupt or insolvent (however evidenced); (iv)be unable to pay its debts as they fall due; (v)have a receiver, provisional liquidator, conservator, custodian, trustee orother similar official appointed with respect to it or substantially all of itsassets; (vi) fail to perform anyobligation to the other party with respect to any Credit Support Obligationsrelating to the Contract; (vii) fail togive Adequate Assurance of Performance under Section 10.1 within 48 hours butat least one  Business Day of a writtenrequest by the other party; or (viii) nothave paid any amount due the other party hereunder on or before the secondBusiness Day following written Notice that such payment is due; then the otherparty (the “Non-Defaulting Party”) shall have the right, at its sole election,to immediately withhold and/or suspend deliveries or payments upon Noticeand/or to terminate and liquidate the transactions under the Contract, in themanner provided in Section 10.3, in addition to any and all other remediesavailable hereunder.

 

10.3.                        If an Event of Default has occurred and iscontinuing, the Non-Defaulting Party shall have the right, by Notice to theDefaulting Party, to designate a Day, no earlier than the Day such Notice isgiven and no later than 20 Days after such Notice is given, as an earlytermination date (the “Early Termination Date”) for the liquidation andtermination pursuant to Section 10.3.1 of all transactions under the Contract,each a “Terminated Transaction”.  On theEarly Termination Date, all transactions will terminate, other than thosetransactions, if any, that may not be liquidated and terminated underapplicable law or that are, in the reasonable opinion of the Non-DefaultingParty, commercially impracticable to liquidate and terminate (“ExcludedTransactions”), which Excluded Transactions must be liquidated and terminatedas soon thereafter as is reasonably practicable, and upon termination shall bea Terminated Transaction and be valued consistent with Section 10.3.1below.  With respect to each ExcludedTransaction, its actual termination date shall be the Early Termination Datefor purposes of Section 10.3.1.

 

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**The partieshave selected either “Early Termination Damages Apply” or “Early TerminationDamages Do Not Apply” as indicated on the Base Contract.**

 

**EarlyTermination Damages Apply:**

 

10.3.1.                    As of the Early Termination Date, theNon-Defaulting Party shall determine, in good faith and in a commerciallyreasonable manner, (i) the amount owed (whether or not then due) by each partywith respect to all Gas delivered and received between the parties underTerminated Transactions and Excluded Transactions on and before the EarlyTermination Date and all other applicable charges relating to such deliveriesand 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 paymentunder this Contract and (ii) the Market Value, as defined below, of eachTerminated Transaction.  TheNon-Defaulting Party shall (x) liquidate and accelerate each TerminatedTransaction at its Market Value, so that each amount equal to the differencebetween such Market Value and the Contract Value, as defined below, of suchTerminated Transaction(s) shall be due to the Buyer under the TerminatedTransaction(s) if such Market Value exceeds the Contract Value and to theSeller if the opposite is the case; and (y) where appropriate, discount eachamount then due under clause (x) above to present value in a commerciallyreasonable manner as of the Early Termination Date (to take account of theperiod between the date of liquidation and the date on which such amount wouldhave otherwise been due pursuant to the relevant Terminated Transactions).

 

For purposes of this Section 10.3.1, “Contract Value” means the amountof Gas remaining to be delivered or purchased under a transaction multiplied bythe Contract Price, and “Market Value” means the amount of Gas remaining to bedelivered or purchased under a transaction multiplied by the market price for asimilar transaction at the Delivery Point determined by the Non-DefaultingParty 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 Gasfutures contracts, quotations from leading dealers in energy swap contracts orphysical gas trading markets, similar sales or purchases and any other bonafide third-party offers, all adjusted for the length of the term anddifferences in transportation costs.  Aparty shall not be required to enter into a replacement transaction(s) in orderto determine the Market Value.  Anyextension(s) of the term of a transaction to which parties are not bound as ofthe Early 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 optionpursuant to which one party has the right to extend the term of a transactionshall be considered in determining Contract Values and Market Values.  The rate of interest used in calculating netpresent value shall be determined by the Non-Defaulting Party in a commerciallyreasonable manner.

 

**EarlyTermination Damages Do Not Apply:**

 

10.3.1.                    As of the Early Termination Date, theNon-Defaulting Party shall determine, in good faith and in a commerciallyreasonable manner, the amount owed (whether or not then due) by each party withrespect to all Gas delivered and received between the parties under TerminatedTransactions and Excluded Transactions on and before the Early Termination Dateand all other applicable charges relating to such deliveries and receipts(including without limitation any amounts owed under Section 3.2), for whichpayment has not yet been made by the party that owes such payment under thisContract.

 

**The partieshave selected either “Other Agreement Setoffs Apply” or “Other AgreementSetoffs Do Not Apply” as indicated on the Base Contract.**

 

**OtherAgreement Setoffs Apply:**

 

10.3.2.                    The Non-Defaulting Party shall net oraggregate, as appropriate, any and all amounts owing between the parties underSection 10.3.1, so that all such amounts are netted or aggregated to a singleliquidated amount payable by one party to the other (the “Net Settlement Amount”).  At its sole option and without prior Noticeto the Defaulting Party, the Non-Defaulting Party may setoff (i) any NetSettlement Amount owed to the Non-Defaulting Party against any margin or othercollateral held by it in connection with any Credit Support Obligation relatingto the Contract; or (ii) any Net Settlement Amount payable to the Defaulting Partyagainst any amount(s) payable by the Defaulting Party to the Non-DefaultingParty under any other agreement or arrangement between the parties.

 

**OtherAgreement Setoffs Do Not Apply:**

 

10.3.2.                    The Non-Defaulting Party shall net oraggregate, as appropriate, any and all amounts owing between the parties underSection 10.3.1, so that all such amounts are netted or aggregated to a singleliquidated amount payable by one party to the other (the “Net Settlement Amount”).  At its sole option and without prior Noticeto the Defaulting Party, the Non-Defaulting Party may setoff any Net SettlementAmount owed to the Non-Defaulting Party against any margin or other collateralheld by it in connection with any Credit Support Obligation relating to theContract.

 

10.3.3.                    If any obligation that is to be included inany 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 theNon-Defaulting Party accounting to the Defaulting Party when the obligation isascertained.  Any amount not then duewhich is included in any netting, aggregation or setoff pursuant to Section10.3.2 shall be discounted to net present value in a commercially reasonablemanner 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 ofthe Net Settlement Amount, and whether the Net Settlement Amount is due to ordue from the Non-Defaulting Party.  TheNotice shall include a written statement explaining in reasonable detail thecalculation of such amount, provided that failure to give such Notice shall notaffect the validity or enforceability of the liquidation or give rise to anyclaim by the Defaulting Party against the Non-Defaulting Party.  The Net Settlement Amount shall be paid bythe close of business on the second Business Day following such Notice, whichdate shall not be earlier than the Early Termination Date.  Interest on any unpaid portion of the NetSettlement Amount shall accrue from the date due until the date of payment at arate equal to the lower of (i) thethen-effective prime rate of interest published under “Money Rates” by The WallStreet Journal, plus two percent per annum; or (ii)the maximum applicable lawful interest rate.

 

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10.5.                        The parties agree that the transactionshereunder constitute a “forward contract” within the meaning of the UnitedStates Bankruptcy Code and that Buyer and Seller are each “forward contractmerchants” within the meaning of the United States Bankruptcy Code.

 

10.6.                        The Non-Defaulting Party’s remedies under thisSection 10 are the sole and exclusive remedies of the Non-Defaulting Party withrespect to the occurrence of any Early Termination Date.  Each party reserves to itself all otherrights, setoffs, counterclaims and other defenses that it is or may be entitledto arising from the Contract.

 

10.7.                        With respect to this Section 10, if theparties have executed a separate netting agreement with close-out nettingprovisions, the terms and conditions therein shall prevail to the extentinconsistent herewith.

 

SECTION 11.                          FORCEMAJEURE

 

11.1.                        Except with regard to a party’s obligation tomake payment(s) due under Section 7, Section 10.4, and Imbalance Charges underSection 4, neither party shall be liable to the other for failure to perform aFirm obligation, to the extent such failure was causedby Force Majeure.  The term “ForceMajeure” as employed herein means any cause not reasonably within the controlof the party claiming suspension, as further defined in Section 11.2.

 

11.2.                        Force Majeure shall include, but not belimited 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 linesof pipe; (ii) weather related events affecting an entire geographic region,such as low temperatures which cause freezing or failure of wells or lines ofpipe; (iii) interruption and/or curtailment of Firm transportation and/orstorage by Transporters; (iv) acts of others such as strikes, lockouts or otherindustrial 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 lawpromulgated by a governmental authority having jurisdiction.  Seller and Buyer shall make reasonableefforts to avoid the adverse impacts of a Force Majeure and to resolve theevent or occurrence once it has occurred in order to resume performance.

 

11.3.                        Neither party shall be entitled to the benefitof the provisions of Force Majeure to the extent performance is affected by anyor all of the following circumstances: (i) the curtailment of interruptible orsecondary Firm transportation unless primary, in-path, Firm transportation isalso curtailed; (ii) the party claiming excuse failed to remedy the conditionand to resume the performance of such covenants or obligations with reasonabledispatch; or (iii) economic hardship, to include, without limitation, Seller’sability to sell Gas at a higher or more advantageous price than the ContractPrice, Buyer’s ability to purchase Gas at a lower or more advantageous pricethan the Contract Price, or a regulatory agency disallowing, in whole or inpart, the pass through of costs resulting from this Agreement; (iv) the loss ofBuyer’s market(s) or Buyer’s inability to use or resell Gas purchasedhereunder, except, in either case, as provided in Section 11.2; or (v) the lossor failure of Seller’s gas supply or depletion of reserves, except, in eithercase, as provided in Section 11.2.  Theparty claiming Force Majeure shall not be excused from its responsibility forImbalance Charges.

 

11.4.                        Notwithstanding anything to the contraryherein, the parties agree that the settlement of strikes, lockouts or otherindustrial disturbances shall be within the sole discretion of the partyexperiencing such disturbance.

 

11.5.                        The party whose performance is prevented byForce 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 isrequired as soon as reasonably possible. Upon providing written Notice of Force Majeure to the other party, theaffected party will be relieved of its obligation, from the onset of the ForceMajeure event, to make or accept delivery of Gas, as applicable, to the extentand for the duration of Force Majeure, and neither party shall be deemed tohave failed in such obligations to the other during such occurrence or event.

 

11.6.                        Notwithstanding Sections 11.2 and 11.3, theparties may agree to alternative Force Majeure provisions in a TransactionConfirmation executed in writing by both parties.

 

SECTION 12.                          TERM

 

This Contract may be terminatedon 30 Day’s written Notice, but shall remain in effect until the expiration ofthe latest Delivery Period of any transaction(s).  The rights of either party pursuant toSection 7.6 and Section 10, the obligations to make payment hereunder, and theobligation of either party to indemnify the other, pursuant hereto shallsurvive the termination of the Base Contract or any transaction.

 

SECTION 13.                          LIMITATIONS

 

FOR BREACH OF ANY PROVISION FOR WHICH ANEXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY ORMEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY.  A PARTY’S LIABILITY HEREUNDER SHALL BELIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAWOR IN EQUITY ARE WAIVED.  IF NO REMEDY ORMEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, A PARTY’SLIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY.  SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLEAND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY AREWAIVED.  UNLESS EXPRESSLY HEREINPROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL,PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESSINTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITYPROVISION OR OTHERWISE.  IT IS THE INTENTOF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASUREOF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSESRELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCEBE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE.  TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAIDHEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULTOR IMPOSSIBLE 

 

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TO DETERMINE, OR OTHERWISE OBTAINING ANADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTEA REASONABLE APPROXIMATION OF THE HARM OR LOSS.

 

SECTION 14.                          MISCELLANEOUS

 

14.1.                        This Contract shall be binding upon and inureto the benefit of the successors, assigns, personal representatives, and heirsof the respective parties hereto, and the covenants, conditions, rights andobligations of this Contract shall run for the full term of this Contract.  No assignment of this Contract, in whole orin part, will be made without the prior written consent of the non-assigningparty (and shall not relieve the assigning party from liability hereunder),which consent will not be unreasonably withheld or delayed; provided, eitherparty may (i) transfer, sell, pledge, encumber, or assign this Contract or theaccounts, revenues, or proceeds hereof in connection with any financing orother financial arrangements, or (ii) transfer its interest to any parent or affiliateby assignment, merger or otherwise without the prior approval of the otherparty.  Upon any such assignment,transfer and assumption, the transferor shall remain principally liable for andshall not be relieved of or discharged from any obligations hereunder.

 

14.2.                        If any provision in this Contract isdetermined to be invalid, void or unenforceable by any court havingjurisdiction, such determination shall not invalidate, void, or makeunenforceable any other provision, agreement or covenant of this Contract.

 

14.3.                        No waiver of any breach of this Contract shallbe held to be a waiver of any other or subsequent breach.

 

14.4.                        This Contract sets forth all understandingsbetween the parties respecting each transaction subject hereto, and any priorcontracts, understandings and representations, whether oral or written,relating to such transactions are merged into and superseded by this Contractand any effective transaction(s).  ThisContract may be amended only by a writing executed by both parties.

 

14.5.                        The interpretation and performance of thisContract shall be governed by the laws of the jurisdiction as indicated on theBase Contract, excluding, however, any conflict of laws rule which would applythe law of another jurisdiction.

 

14.6.                        This Contract and all provisions herein willbe subject to all applicable and valid statutes, rules, orders and regulationsof any governmental authority having jurisdiction over the parties, theirfacilities, or Gas supply, this Contract or transaction or any provisionsthereof.

 

14.7.                        There is no third party beneficiary to thisContract.

 

14.8.                        Each party to this Contract represents andwarrants that it has full and complete authority to enter into and perform thisContract.  Each person who executes thisContract on behalf of either party represents and warrants that it has full andcomplete authority to do so and that such party will be bound thereby.

 

14.9.                        The headings and subheadings contained in thisContract are used solely for convenience and do not constitute a part of thisContract between the parties and shall not be used to construe or interpret theprovisions of this Contract.

 

14.10.                  Unless the parties have elected on the BaseContract not to make this Section 14.10 applicable to this Contract, neither partyshall disclose directly or indirectly without the prior written consent of theother party the terms of any transaction to a third party (other than theemployees, lenders, royalty owners, counsel, accountants and other agents ofthe party, or prospective purchasers of all or substantially all of a party’sassets or of any rights under this Contract, provided such persons shall haveagreed to keep such terms confidential) except (i) in order to comply with anyapplicable law, order, regulation, or exchange rule, (ii) to the extentnecessary for the enforcement of this Contract , (iii) to the extent necessaryto implement any transaction, or (iv) to the extent such information isdelivered to such third party for the sole purpose of calculating a publishedindex.  Each party shall notify the otherparty of any proceeding of which it is aware which may result in disclosure ofthe terms of any transaction (other than as permitted hereunder) and usereasonable efforts to prevent or limit the disclosure.  The existence of this Contract is not subjectto this confidentiality obligation. Subject to Section 13, the parties shall be entitled to all remediesavailable at law or in equity to enforce, or seek relief in connection withthis confidentiality obligation.  Theterms of any transaction hereunder shall be kept confidential by the partieshereto for one year from the expiration of the transaction.

 

In the event that disclosurisrequired by a governmental body or applicable law, the party subject to suchrequirement may disclose the material terms of this Contract to theextent so required, but shall promptly notify the other party, prior todisclosure, and shall cooperate (consistent with the disclosing party’s legalobligations) with the other party’s efforts to obtain protective orders orsimilar restraints with respect to such disclosure at the expense of the otherparty.

 

14.11                                                                     The parties may agree to dispute resolutionprocedures in Special Provisions attached to the Base Contract or in aTransaction Confirmation executed in writing by both parties.

 

 

**DISCLAIMER: **The purposes of this Contract are to facilitate trade, avoidmisunderstandings and make more definite the terms of contracts of purchase andsale of natural gas.  Further, NAESB doesnot mandate the use of this Contract by any party.  **NAESBDISCLAIMS AND EXCLUDES, AND ANY USER OF THIS CONTRACT ACKNOWLEDGES AND AGREESTO NAESB’S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS ORREPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THISCONTRACT OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES ORCONDITIONS OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS ORSUITABILITY FOR ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB KNOWS, HAS REASONTO 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, ORBY COURSE OF DEALING.  EACH USER OF THISCONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR ANYDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGESARISING OUT OF ANY USE OF THIS CONTRACT.**

 

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**SPECIAL PROVISIONS TOBASE CONTRACT FOR SALE AND PURCHASE OF NATURAL GAS**

 

**EQUITABLE PRODUCTIONCOMPANY,**herein referred to as (“Equitable”), and **MARKWESTHYDROCARBON, INC.,**herein referred to as (“MarkWest”), hereby agreeeffective the 1st day of October, 2004, to amend, modify and supplement theNAESB Standard 6.3.1 Base Contract for Sale and Purchase of Natural Gas (“BaseContract”) with the following special provisions contained herein (“SpecialProvisions”).  The Base Contract, asmodified by the Special Provisions, shall apply to the transaction between theparties for the purchase and sale of Gas (the “Transaction”).  All capitalized terms not otherwise definedherein shall have the meaning set forth in the Base Contract.

 

The terms and conditions set forth inthese Special Provisions are incorporated in and shall take precedence over anyconflicting or inconsistent provision in the Base Contract for Sale andPurchase of Natural Gas.

 

**SECTION 1.****                                                                               PURPOSEAND PROCEDURES**

 

Sections 1.2, 1.3 and 1.4 of the Base Contract shall be deleted intheir entirety and replaced with the following Sections 1.2 and 1.3:

 

1.2                                                                                 TheParties agree that this Contract is made expressly subject to, and incorporatesby this reference, the terms and provisions of that certain Netting, FinancialResponsibility and Security Agreement, of even date herewith, between Equitableand MarkWest, as attached hereto as Exhibit A (the “Netting Agreement”).

 

1.3                                                                                TheParties acknowledge that there will only be one Transaction under this BaseContract and the following shall constitute the exclusive TransactionConfirmation under this Contract:

 

**TRANSACTIONCONFIRMATION:**

 

A.                                 **Effective Date**.  Thedate on which the obligations and duties of the Parties shall commence, being the“Effective Date”, shall be October 1, 2004.

 

B.                                   **Delivery Period**.  From the Effective Datethrough December 31, 2009.

 

C.                                   **Delivery Point(s)**.  Equitable shall have the right todeliver the Gas to MarkWest at any location or interconnect on the transmissionsystem owned by Columbia Gas Transmission Corporation (“Columbia”), includingbut not limited to MarkWest’s Columbia Pool **[*]**and Columbia’s interconnect receipt points under MarkWest’s Columbia DeliveryContract **[*]** subject to the limitations in D.,below.

 

D.                                  **Performance Obligation andContract Quantity.**

 

1.                                        **Delivery and Receipt****Quantity**.**                                   **The Parties agree to deliver and receive thefollowing quantity of Gas during the term of this Agreement:

 

a.                                       Equitableshall deliver and MarkWest shall receive, subject to the provisions set forthbelow, Gas hereunder:

 

i.                                          upto a **[*]** daily quantity of **[*]**

 

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ii.                                       up to a **[*]** dailyquantity of **[*]** at each Columbia interconnectreceipt point as described in the “Operational Constraints by Allocation Entity”Report found on Columbia NAVIGATOR (Columbia’s EBB)

 

iii.                                    under (i) or (ii) above, the **[*]**daily quantity may be exceeded only upon prior written agreement between theParties.

 

b.                                      Thequantity of gas delivered by Equitable at the end of each Month (“EndingCumulative Delivered Quantity”) shall be equal to **[*]**.  Subject to other provisions hereof, includingbut not limited to the Force Majeure provisions, and further subject to theability and willingness of Columbia and MarkWest to accept Equitable’s gas thatmeets the quality specifications set forth in Section 5 of the Base Contractfor delivery, Equitable shall **[*]**.

 

c.                                       Equitableshall have the right to deliver Gas to MarkWest as set forth and limited underD.1.a., above, up to an aggregate, such that at the end of any Month the EndingCumulative Delivered Quantity does **[*]**.

 

d.                                      Tothe extent permitted by Columbia and as limited under D.1.a., above, MarkWestshall **[*]**.

 

e.                                        MarkWestrepresents to Equitable that MarkWest has and will use its commerciallyreasonable efforts to maintain the necessary rights with Columbia **[*]**.  Should suchright cease to exist during the term of this Agreement, then MarkWest shallpromptly notify Equitable thereof, and upon such notification this Agreementshall terminate.

 

f.                                         Uponany termination of this Agreement, if the amount of all quantities delivered byEquitable and received by MarkWest as set forth in Section D.1., minus the gassold by Equitable and purchased by MarkWest as set forth in Section D.2.,existing on the date of such termination (“Final Cumulative Delivered Quantity”)is then greater than zero, MarkWest shall, within 10 days of any termination ofthis Agreement, purchase from Equitable the Final Cumulative Delivered Quantitybased on the Contract Price, using the 15 days prior to the date of terminationas the applicable “Payment Period”.

 

g.                                       **[*]**.

 

2.                                        **Sale and Purchase Quantity.****                                   **The Parties agree to sell and purchase thefollowing quantity of Gas during the term of this Agreement:

 

a.                                       Notwithstandingthe quantity of Gas that Equitable has delivered and MarkWest has receivedunder Section D.1., above, Equitable shall sell and MarkWest shall purchase, ona “Firm Basis”, 9,000 dekatherms of Gas per Day (the “Daily Contract Quantity”)on average during each calendar month from gas that Equitable has delivered andMarkWest has received as set forth in Section D.1., above.  **[*]**.  The quantityof Gas sold by Equitable and purchased by MarkWest for any Month (“MonthlyContract Quantity”) shall be the Daily Contract Quantity multiplied by thenumber of Days in the Month.  The DailyContract Quantity shall be proportionately reduced at Equitable’s election ifand to the same extent MarkWest is unable or unwilling to process Gas fromEquitable under the Firm Gas Processing Agreement (Dwale), and the Firm GasProcessing Agreement (Non-Dwale) entered into between Equitable and MarkWest ofeven date herewith. Such reduction shall not apply to periods when MarkWest isunable to process Gas from Equitable due to events of force majeure orscheduled maintenance; provided, that the duration of any such force majeure orscheduled 

 

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maintenance period may not exceed **[*]** and may not exceed**[*]**.  If Columbia changes the gas qualityspecifications in its FERC tariff or similar documents, or if MarkWest andColumbia amend the operating agreement (pertaining to Plant residue gas qualityspecifications) in such a way that MarkWest may be allowed or is required torecover more or less liquids from the incoming gas stream at the Plants (asdefined in E.1.d.ii, below) than currently provided for, then the parties shallmeet and, within 30 days, determine a new Daily Contract Quantity to reflectthe changes in Plant recoveries.  The newDaily Contract Quantity will then be effective the first day of the nextmonth.  If the parties cannot agree,within that 30-day period, on a redetermined Daily Contract Quantity, thenuntil such agreement, the Daily Contract Quantity (“DCQ”) will be redeterminedfollowing the end of each calendar month as follows:

 

**[*]**

 

Where:

 

**[*]**

**[*]**

 

b.                                      Thequantity of gas **[*]** the Ending Cumulative Quantityof Gas on a thermally equivalent basis as set forth in Section D.1.b., above.

 

c.                                       MarkWestwill communicate its gas purchase requirements to Equitable, and will makecommercially reasonable efforts to afford Equitable the opportunity to sell gasthat MarkWest requires that is in excess of the commitment set forth in (a)above.

 

E.                                                                                       **Consideration and ContractPrice.**

 

1.                                                           As full consideration for the Gas soldhereunder, MarkWest shall pay Equitable an amount each Payment Date equal tothe Payment Period Quantity multiplied by the price (“Contract Price”)determined as follows, subject to verification by Equitable:

 

**[*]**

 

**SECTION 3.****  PERFORMANCE OBLIGATION**

 

Section 3 of theBase Contract shall be supplemented by the addition of following provisions:

 

3.2. a.                 Subject to the provisions of Section D. 2.,of the Transaction Confirmation above, Seller agrees to sell and deliver, andBuyer agrees to receive and purchase, the Daily Contract Quantity in accordancewith the terms of the Contract on a Firm basis.

 

3.2. b.                  For purposes of this Agreement, the parties agree that the “SpotPrice” shall be **[*]**.

 

3.2. c.                   In the event of a breach by MarkWest of its obligation toreceive gas delivered by Equitable under Section D. 1, of the TransactionConfirmation, other than due to events of force majeure or temporaryoperational constraints imposed by Columbia, MarkWest will pay Equitable forsuch gas not received an amount **[*]**.  Inthe event that such breach by MarkWest of its obligation to receive gasdelivered by Equitable, as required under this Agreement, other than due toevents of force majeure or temporary 

 

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operationalconstraints imposed by Columbia, occurs **[*]** or more than **[*]**, thenEquitable shall have the right but not the obligation to promptly notifyMarkWest thereof, and upon such notification this Agreement shallterminate.

 

In the eventMarkWest does not receive and purchase gas tendered for delivery and sale byEquitable under Section D.2 of the Transaction Confirmation as required underthis agreement, MarkWest will pay Equitable for such gas not purchased anamount equal **[*]**.  Upon making the payment required by this provision, MarkWestwill own that gas and the parties shall cooperate in good faith to arrange thedelivery to and receipt of that gas by MarkWest.  Should MarkWest fail to pay for any gas thathas been delivered by Equitable and received by MarkWest under Section D.1 andthat has been designated for sale by Equitable under D. 2., above, Equitable,in addition to all other remedies, shall have a claim for the Contract Pricedue for such gas.

 

3.2. d.                  In the event of a breach ofthe obligation of Equitable to **[*]** an Ending CumulativeDelivered Quantity of **[*]** as set forth in Section D.1.  ofthe Transaction Confirmation set forth above, then if:

 

(i)                                     **[*]**

(ii)                                  **[*]**

(iii)                               **[*]**, thenEquitable shall not be considered to have committed an event of breach of itsobligation to **[*]** an Ending CumulativeDelivered Quantity of **[*]**.

 

3.2 e.                        In the event of a breach ofthe obligation of Equitable to **[*]** an Ending CumulativeDelivered Quantity of **[*]** as set forth in Section D.1.  ofthe Transaction Confirmation set forth above, then if:

 

(i)                                     MarkWest had **[*]**, andas a result of such **[*]** considered MarkWest to not bein default of MarkWest’s obligation to **[*]**have an EndingCumulative Delivered Quantity **[*]** of **[*]**

(ii)                                  if **[*]**by Equitable to ensurethat the Ending Cumulative Delivered Quantity was **[*], and**

(iii)                               if Equitable does not **[*]** followingsuch breach by Equitable to cause the Ending Cumulative Delivery Quantity **[*]**, thenMarkWest shall **[*]** the Ending CumulativeDelivered Quantity to**[*]**.

 

3.2 f.                          In theevent of a breach of the obligation of Equitable to **[*]**as set forth in SectionD.1. ofthe Transaction Confirmation set forth above, and both of the conditions setforth in Section 3.2 d. (i) and 3.2 d. (ii) are not affirmative, then MarkWestshall **[*]**. Equitable will pay MarkWest an amount equal to **[*]**.  The Parties understand thatthe **[*]** as set forth above does not affect or modify the **[*]** asset forth in Sections D and E of the Transaction Confirmation.

 

 

**SECTION7.****BILLING, PAYMENT AND AUDIT**

 

Section 7.1 andSection 7.2 shall be modified in their entirety to read as follows:

 

7.1                                   Buyer shall prepare andsubmit to Seller, at the time of making Final Payment under Section 7.2, below,a statement setting forth the Ending Cumulative Delivered Quantity, ifapplicable, and the quantity of Gas during the Payment Period for which paymentis due, together with the applicable Contract Price for that Payment Period andfor any other applicable charges, providing supporting documentation acceptablein industry practice to support the amount due.

 

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7.2                                    Buyer shall remit an initialamount (“Initial Amount”) equal to **[*]** the Payment Period Quantityfor the Payment Period for which the payment is being made multiplied by **[*]**by the first Business Day of each Payment Period in the manner specified in theBase Contract, in immediately available funds. Buyer shall remit an additionalamount (“Final Amount”) due under Section 7.1 equal to the full amount due forthe applicable Payment Period, minus the Initial Amount paid to Seller for suchPayment Period, as set forth above, in the manner specified in the BaseContract, in immediately available funds, on or before the applicable PaymentDate; provided that if the Payment Date is not a Business Day, payment is dueon the next Business Day following that date. If the Initial Amount for any Payment Period exceeded the amountdetermined to be due for that Payment Period, the excess shall be applied tothe Initial Amount for the next Payment Period. As used herein, the “Payment Date”: (i) for the Payment Period of the first Day of a calendar month through the 15thDay of that calendar Month shall be the 20th Day of that Month, and(ii) for the Payment Period of the 16th Day of a calendar Monththrough the last Day of that calendar Month shall be the 5thcalendar Day of the next Month.  For theinitial Payment Period under this Contract, the Initial Amount shall be equalto **[*]**.

 

**SECTION9:  NOTICES**

 

Section 9.2 shall be modified to delete the words “or mutuallyacceptable electronic means.”

 

 

**EXHIBIT A**

 

**NETTING, FINANCIALRESPONSIBILITY AND SECURITY AGREEMENT BETWEEN EQUITABLE AND MARKWEST**

filed as exhibit 99.5 to this Form 10-Q.

 

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