Document:

exv10w5

 

Exhibit 10.5

ASSIGNMENT and PLEDGE AGREEMENT

(Large Volume Transportation Service Agreement)

     Amaizing Energy, LLC (“Assignor”), an Iowa limited liability company, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, hereby grants,
pledges, and assigns to CoBank, ACB (“Assignee”), all of Assignor’s right, title and interest in
and to:

That certain Large Volume Transportation Service Agreement (“Large Volume Transportation
Service Agreement”) between Assignor and Aquila, Inc. d/b/a Aquila Networks (“Aquila”)
dated as of the 6th day of December, 2004 pursuant to which the Aquila will
furnish transportation of Assignor’s natural gas to Assignor pursuant to the terms
contained in such Large Volume Transportation Service Agreement.

to secure payment and performance of all obligations of Assignor to Assignee under that certain
Master Loan Agreement, that certain Construction and Revolving Term Loan Supplement, that certain
Statused Revolving Credit Supplement, and that certain Non-Revolving Credit Supplement, all between
Assignor and Assignee, which by this reference are made a part hereof.

     It is the intention of Assignor that by this assignment Assignee shall acquire all of the
rights and obligations previously enjoyed by Assignor as owner under the Large Volume
Transportation Service Agreement.

     Assignor agrees to execute such other documents as may reasonably be requested by Assignee,
from time to time to evidence the above and foregoing assignment.

	 	 	 	 	 
	Dated: February 11, 2005 	Amaizing Energy, LLC

 	 
	 	By:  	/s/ Sam J. Cogdill
 	 
	 	 	Samuel Cogdill, Chairman 	 
	 	 	 	 
	 

 

By its execution hereof, Aquila, Inc. d/b/a Aquila Networks consents to and acknowledges the foregoing collateral
assignment of the described agreement.

	 	 	 	 	 	 	 	 	 
	 	 	Aquila, Inc. d/b/a
 Aquila Networks	 	 
	 
	 	 	 	 	 	 	 	 
	Dated February          , 2005

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	STATE OF IOWA                     )
	 	 	 	 	 	 	 	 
	                                                      )ss.
	 	 	 	 	 	 	 	 
	COUNTY OF CRAWFORD      )
	 	 	 	 	 	 	 	 

     On this 11th day of February, 2005, before me, the undersigned, a Notary
Public personally appeared Samual Cogdill, Chairman of Amaizing Energy,LLC on behalf of said
entity, who executed the foregoing instrument, and acknowledged that he executed the same as his
voluntary act and deed.

	 	 	 	 	 
	 	 	 	 	 
	 	SEAL     ANGEL R. JEPSEN

	 	 	                                        /s/ Angel Jepsen     
	 	Commission Number 727183

	 	 	                              Angel Jepson      Notary Public
	 	My Commission Expires

	 	 	In and for said State
	 	March 2, 2007

	 	 	My commission expires: March 2, 2007
	 	 	 	 	 

	 	 	 
	STATE OF                                  )

	 	 
	                                                      )ss.
	 	 
	COUNTY OF                               )
	 	 

     On this                      day of February, 2005, before me, the undersigned, a Notary Public, personally
appeared                                         , the
                                        
of Aquila, Inc. d/b/a Aquila Networks on behalf of said entity, who
executed the foregoing instrument, and acknowledged that s/he executed the same as his/her voluntary act and deed.

                                                             

                                                            Notary Public

In and for said State

My commission expires:exv10w6

 

Exhibit 10.6

ASSIGNMENT and PLEDGE AGREEMENT

(Through Put Service Agreement)

     Amaizing Energy, LLC (“Assignor”), an Iowa limited liability company, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, hereby grants,
pledges, and assigns to CoBank, ACB (“Assignee”), all of Assignor’s right, title and interest in
and to:

That certain Natural Gas Transportation Agremeent (“Through Put Service Agreement”) between
Assignor and Northern Natural Gas, pursuant to which the Northern Natural Gas will furnish
transportation of Assignor’s natural gas to Assignor pursuant to the terms contained in
such Through Put Service Agreement

to secure payment and performance of all obligations of Assignor to Assignee under that certain
Master Loan Agreement, that certain Construction and Revolving Term Loan Supplement, that certain
Statused Revolving Credit Supplement, and that certain Non-Revolving Credit Supplement, all between
Assignor and Assignee, which by this reference are made a part hereof.

     It is the intention of Assignor that by this assignment Assignee shall acquire all of the
rights and obligations previously enjoyed by Assignor as owner under the Through Put Service
Agreement.

     Assignor agrees to execute such other documents as may reasonably be requested by Assignee,
from time to time to evidence the above and foregoing assignment.

	 	 	 	 	 
	Dated: February  11, 2005 	Amaizing Energy, LLC

 	 
	 	By:  	/s/ Sam J. Cogdill
 	 
	 	 	Samuel Cogdill, Chairman 	 
	 	 	 	 

 

 

By its execution hereof, Northern Natural Gas consents to and acknowledges the foregoing collateral
assignment of the described agreement.

	 	 	 	 	 	 	 	 	 
	 	 	Northern Natural Gas	 	 
	 
	 	 	 	 	 	 	 	 
	Dated February          , 2005

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	STATE OF IOWA                     )
	 	 	 	 	 	 	 	 
	                                                      )ss.
	 	 	 	 	 	 	 	 
	COUNTY OF CRAWFORD      )
	 	 	 	 	 	 	 	 

     On this 11th day of February, 2005, before me, the undersigned, a Notary
Public personally appeared Samual Cogdill, Chairman of Amaizing Energy,LLC on behalf of said
entity, who executed the foregoing instrument, and acknowledged that he executed the same as his
voluntary act and deed.

	 	 	 	 	 
	 	 	 	 	 
	 	SEAL     ANGEL R. JEPSEN

	 	 	                                        /s/ Angel Jepsen     
	 	Commission Number 727183

	 	 	                              Angel Jepson      Notary Public
	 	My Commission Expires

	 	 	In and for said State
	 	March 2, 2007

	 	 	My commission expires: March 2, 2007
	 	 	 	 	 

	 	 	 
	STATE OF                                  )

	 	 
	                                                      )ss.
	 	 
	COUNTY OF                               )
	 	 

     On this                      day of February, 2005, before me, the undersigned, a Notary Public, personally
appeared                                         ,
the                                          of Northern Natural Gas on behalf of said entity, who executed the foregoing
instrument, and acknowledged that s/he executed the same as his/her voluntary act and deed.

                                                             

                                                            Notary Public

In and for said State

My commission expires:exv10w7

 

Exhibit 10.7

Base Contract for Sale and Purchase of Natural Gas

     This Base Contract is entered into as of the following date: 8-08-05. The parties to this Base Contract are the following:

	 	 	 	 	 
	Cornerstone Energy, Inc.
	 	and	 	Amaizing Energy, LLC
	11011 Q Street, Suite 106A, Omaha, NE 68137
	 	 	 	2404 W Hwy 30, Denison, Iowa 51442
	Duns Number: 114371912
	 	 	 	Duns Number: 120353755
	Contract Number:
	 	 	 	Contract Number:
	 
U.S. Federal Tax ID Number: 74-304-7168
	 	 	 	 
U.S. Federal Tax ID Number: 42-1522123
	 
	 	 	 	 
	Notices:
	 	 	 	 
	11011 Q Street, Suite 106A, Omaha, NE 68137
	 	 	 	2404 W Hwy 30, Denison, Iowa 51442
	Attn: Contract Administration
	 	 	 	Attn:
	Phone: 402-829-940 Fax: 402-829-3901
	 	 	 	 
Phone: 1-800-590-2827 Fax: 712-263-4134
	 
	 	 	 	 
	Confirmation:
	 	 	 	 
	11011 Q Street, Suite 106A, Omaha, NE 68137
	 	 	 	same as above
	Attn: Contract Administration
	 	 	 	 
Attn:
	Phone: 402-829-940 Fax: 402-829-3901
	 	 	 	 
Phone:
	 
	 	 	 	 

	 
	 	 	 	 
	Invoices and Payments:
	 	 	 	 
	Invoices: 11011 Q Street, Suite 106A, Omaha, NE 68137
	 	 	 	same as above
	Attn: Accounts Payable
	 	 	 	 

	Check Payments: P.O. Box 3807, Omaha, NE 68103
	 	 	 	 
Phone:
	 
	 	 	 	 

	 
	 	 	 	 
	Wire Transfer of ACH Numbers (if applicable):
	 	 	 	 
	BANK: Commercial Federal Bank
	 	 	 	BANK:
	ABA: 304072080
	 	 	 	 
ABA:
	ACCT: 93873670
	 	 	 	 
ACCT:
	Other Details: Customer Account # with Cornerstone
	 	 	 	 
Other Details:
	 
	 	 	 	 

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

	 	 	 	 	 	 	 	 	 	 	 
	Section 1.2
	 	n	 	Oral (default) – backed up by written	 	Section 7.2	 	n	 	25
th Day of Month following Month of
	Transaction
	 	 	 	Transaction Confirmation.	 	Payment Date	 	 	 	delivery (default)
	Procedure
	 	q	 	Written	 	 	 	q	 	_______ Day of Month following Month of delivery
	Section 2.5
	 	n	 	2 Business Days after receipt (default)	 	Section 7.2	 	n	 	Wire transfer (default)
	Confirm
	 	q	 	_______  Business Days after receipt	 	Method of	 	q	 	Automated Clearinghouse Credit (ACH)
	 
	 	 	 	 	 	Payment	 	q	 	Check
	Section 2.6
	 	q	 	Seller (default)	 	Section 7.7	 	n	 	Netting applies (default)
	Confirming
	 	q	 	Buyer	 	Netting	 	q	 	Netting does not apply
	Party
	 	n	 	Cornerstone Energy _______________	 	 	 	 	 	 
	Section 3.2
	 	n	 	Cover Standard (default)	 	Section 10.3.1	 	n	 	Early Termination Damages Apply (default)
	Performance Obligation	 	q	 	Spot Price Standard	 	Early. Termination	 	 	 	Early Termination. Damages Do Not Apply
	 
	 	 	 	 	 	Damages	 	 	 	 
	Note: The following Spot Price Publication applies to both
of the immediately preceding.	 	Section 10.3.2
Other Agreement	 	n
q	 	Other Agreement Setoffs Apply (default)
Other Agreement Setoffs Do Not Apply
	Section 2.26
	 	n	 	Gas Daily Midpoint (default)	 	Setoffs 	 	 	 	 
	Spot Price
	 	q	 	____________________________	 	Section 14.5	 	 	 	 
	 
	 	 	 	 	 	Choice Of Law	 	 	 	_____________Iowa________________________
	Section 6
	 	n	 	Buyer Pays At and After Delivery Point	 	Section 14.10	 	n	 	Confidentiality applies (default)
	Taxes
	 	 	 	(default)	 	Confidentiality	 	q	 	Confidentiality does not apply
	 
	 	q	 	Seller Pays Before and At Delivery Point	 	 	 	 	 	 
	n Special Provisions Number of sheets attached: two(2)
	 	 	 	 	 	 
	q Addendum(s): None
	 	 	 	 	 	 

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

	 	 	 	 	 	 	 
	CORNERSTONE ENERGY, INC.

Party Name	 	AMAIZING ENERGY, LLC

Party Name
	 
	 	 	 	 	 	 
	By
	 	 	 	By	 	/a/ Alan H. Jentz
	 
	 	 	 	 
	Name:
	 	 	 	Name:	 	 
	Title:
	 	 	 	Title:	 	General Manager

	 	 	 	 	 	 	 
	Copyright © 2002 North American Energy Standards Board, Inc.
	 	 	 	NAESB Standard 6.3.1
	All Rights Reserved
	 	Page 1 of 11	 	April 19, 2002

 

 

General Terms and Conditions

Base Contract for Sale and Purchase of Natural Gas

SECTION 1. PURPOSE AND PROCEDURES

1.1. These General Terms and Conditions are intended to facilitate purchase and sale transactions
of Gas on a Firm or Interruptible basis. “Buyer” refers to the party receiving Gas and “Seller”
refers to the party delivering Gas. The entire agreement between the parties shall be the Contract
as defined in Section 2.7.

The parties have selected either the “Oral Transaction Procedure” or the
“Written Transaction Procedure” as indicated on the Base Contract.

Oral Transaction Procedure:

1.2. The parties will use the following Transaction Confirmation procedure. Any
Gas purchase and sale transaction may be
effectuated in an EDI transmission or telephone conversation with the offer and
acceptance constituting the agreement of the parties. The parties shall be
legally bound from the time they so agree to transaction terms and may each
rely thereon. Any such transaction shall be considered a “writing” and to have
been “signed”. Notwithstanding the foregoing sentence, the parties agree that
Confirming Party shall, and the other party may confirm a telephonic
transaction by sending the other party a Transaction Confirmation by
facsimile, EDI or mutually agreeable electronic means within three Business
Days of a transaction covered by this Section 1.2 (Oral Transaction Procedure)
provided that the failure to send a Transaction Confirmation shall not
invalidate the oral agreement of the parties. Confirming Party adopts its
confirming letterhead, or the like, as its signature on any Transaction
Confirmation as the identification and authentication of Confirming Party. If
the Transaction Confirmation contains any provisions other than those relating
to the commercial terms of the transaction (i.e., price, quantity, performance
obligation, delivery point, period of delivery and/or transportation
conditions), which modify or supplement the Base Contract or General Terms and
Conditions of this Contract (e.g., arbitration or additional representations
and warranties), such provisions shall not be deemed to be accepted pursuant to
Section 1.3 but must be expressly agreed to by both parties; provided that the
foregoing shall not invalidate any transaction agreed to by the parties.

Written Transaction Procedure:

1.2. The parties will use the following Transaction Confirmation procedure.
Should the parties come to an agreement regarding a Gas purchase and sale
transaction for a particular Delivery Period, the Confirming Party shall, and
the other party may, record that agreement on a Transaction. Confirmation and
communicate such Transaction Confirmation by facsimile, EDI or mutually
agreeable electronic means, to the other party by the close of the Business Day
following the date of agreement. The parties acknowledge that their agreement
will not be binding until the exchange of nonconflicting Transaction
Confirmations or the passage of the Confirm Deadline without objection from the
receiving party, as provided in Section 1.3.

1.3. If a sending party’s Transaction Confirmation is materially different from the receiving
party’s understanding of the agreement referred to in Section 1.2, such receiving party shall
notify the sending party via facsimile, EDI or mutually agreeable electronic means by the Confirm
Deadline, unless such receiving party has previously sent a Transaction Confirmation to the sending
party. The failure of the receiving party to so notify the sending party in writing by the Confirm
Deadline constitutes the receiving party’s agreement to the terms of the transaction described in
the sending party’s Transaction Confirmation. If there are any material differences between timely
sent Transaction Confirmations governing the same transaction, then neither Transaction
Confirmation shall be binding until or unless such differences are resolved including the use of
any evidence that clearly resolves the differences in the Transaction Confirmations. In the event
of a conflict among the terms of (i) a binding Transaction Confirmation pursuant to Section 1.2,
(ii) the oral agreement of the parties which may be evidenced by a recorded conversation, where the
parties have selected the Oral Transaction Procedure of the Base Contract, (iii) the Base Contract,
and (iv) these General Terms and Conditions, the terms of the documents shall govern in the
priority listed in this sentence.

1.4. The parties agree that each party may electronically record all telephone conversations with
respect to this Contract between their respective employees, without any special or further notice
to the other party. Each party shall obtain any necessary consent of its agents and employees to
such recording. Where the parties have selected the Oral Transaction Procedure in Section 1.2 of
the Base Contract, the parties agree not to contest the validity or enforceability of telephonic
recordings entered into in accordance with the requirements of this Base Contract. However, nothing
herein shall be construed as a waiver of any objection to the admissibility of such evidence.

SECTION 2. DEFINITIONS

The terms set forth below shall have the meaning ascribed to them below. Other terms are also
defined elsewhere in the Contract and shall have the meanings ascribed to them herein.

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

	 	 	 	 	 	 	 
	Copyright © 2002 North American Energy Standards Board, Inc.
	 	 	 	NAESB Standard 6.3.1
	All Rights Reserved
	 	Page 2 of 11	 	April 19, 2002

 

 

to receive Gas in the case of Buyer.

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

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

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

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

2.6. “Confirming Party” shall mean the party designated in the Base Contract to prepare and forward
Transaction Confirmations to the other party.

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

2.8. “Contract Price” shall mean the amount expressed in U.S. Dollars per MMBtu to be paid by Buyer
to Seller for the purchase of

Gas as agreed to by the parties in a transaction.

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

2.10. “Cover Standard”, as referred to in Section 3.2, shall mean that if there is an unexcused
failure to take or deliver any quantity of Gas pursuant to this Contract, then the performing party
shall use commercially reasonable efforts to (i) if Buyer is the performing party, obtain Gas, (or
an alternate fuel if elected by Buyer and replacement Gas is not available), or (ii) if Seller is
the performing party, sell Gas, in either case, at a price reasonable for the delivery or
production area as applicable, consistent with the amount of notice provided by the nonperforming
party; the immediacy of the Buyer’s Gas consumption needs or Seller’s Gas sales requirements, as
applicable; the quantities involved; and the anticipated length of failure by the nonperforming
party.

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

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

2.13. “Delivery Period” shall be the period during which 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 data interchange pursuant to an agreement entered into by the parties, specifically relating to
the communication of Transaction Confirmations under this Contract.

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

2.17. “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; provided, however, that
during Force Majeure interruptions, the party invoking Force Majeure may be responsible for any
Imbalance Charges as set forth in Section 4.3 related to its interruption after the nomination is
made to the Transporter and until the change in deliveries and/or receipts is confirmed by the
Transporter.

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

	 	 	 	 	 	 	 
	Copyright © 2002 North American Energy Standards Board, Inc.
	 	 	 	NAESB Standard 6.3.1
	All Rights Reserved
	 	Page 3 of 11	 	April 19, 2002

 

 

2.19. “Imbalance Charges” shall mean any fees, penalties, costs or charges (in cash or in kind)
assessed by a Transporter for

failure to satisfy the Transporter’s balance and/or nomination requirements.

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

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

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

commencement of the first Day of the next calendar month.

2.23. “Payment Date” shall mean a date, as indicated on the Base Contract, on or before which
payment is due Seller for Gas

received by Buyer in the previous Month.

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

the Transporter delivering Gas at a Delivery Point.

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

2.26. “Spot Price “ as referred to in Section 3.2 shall mean the price listed in the publication
indicated on the Base Contract, under the listing applicable to the geographic location closest in
proximity to the Delivery Point(s) for the relevant Day; provided, if there is no single price
published for such location for such Day, but there is published a range of prices, then the Spot
Price shall be the average of such high and low prices. If no price or range of prices is published
for such Day, then the Spot Price shall be the average of the following: (i) the price (determined
as stated above) for the first Day for which a price or range of prices is published that next
precedes the relevant Day; and (ii) the price (determined as stated above) for the first Day for
which a price or range of prices is published that next follows the relevant Day.

2.27. “Transaction Confirmation” shall mean a document, similar to the form of Exhibit A, setting
forth the terms of a transaction

formed pursuant to Section 1 for a particular Delivery Period.

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

2.29. “Transporter(s)” shall mean all Gas gathering or pipeline companies, or local distribution
companies, acting in the capacity of a

transporter, transporting Gas for Seller or Buyer upstream or downstream, respectively, of the
Delivery Point pursuant to a particular transaction.

SECTION 3. PERFORMANCE OBLIGATION

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

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

Cover Standard:

3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or
receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by
Seller to Buyer in an amount equal to the positive difference, if any, between the purchase price paid by Buyer
utilizing the Cover Standard and the Contract Price, adjusted for commercially reasonable differences in
transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity
and the quantity actually delivered by Seller for such Day(s); or (ii) in the event of a breach by Buyer on any
Day(s), payment by Buyer to Seller in the amount equal to the positive difference, if any, between the Contract
Price and the price received by Seller utilizing the Cover Standard for the resale of such Gas, adjusted for
commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the
difference between the Contract Quantity and the quantity actually taken by Buyer for such Day(s); or (iii) in the
event that Buyer has used commercially reasonable efforts to replace the Gas or Seller has used commercially
reasonable efforts to sell the Gas to a third party, and no such replacement or sale is available, then the sole and
exclusive remedy of the performing party shall be any unfavorable difference between the Contract Price and the Spot
Price, adjusted for such transportation to the applicable Delivery Point, multiplied by the difference between the
Contract Quantity and the quantity actually delivered by Seller and received by Buyer for such Day(s). Imbalance
Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance
Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five
Business Days after presentation of the performing party’s invoice, which shall set forth the basis upon which such
amount was calculated.

	 	 	 	 	 	 	 
	Copyright © 2002 North American Energy Standards Board, Inc.
	 	 	 	NAESB Standard 6.3.1
	All Rights Reserved
	 	Page 4 of 11	 	April 19, 2002

 

 

Spot Price Standard:

3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or
receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by
Seller to Buyer in an amount equal to the difference between the Contract Quantity and the actual quantity delivered
by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by
subtracting the Contract Price from the Spot Price; or (ii) in the event of a breach by Buyer on any Day(s), payment
by Buyer to Seller in an amount equal to the difference between the Contract Quantity and the actual quantity
delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained
by subtracting the applicable Spot Price from the Contract Price. Imbalance Charges shall not be recovered under
this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section
4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the
performing party’s invoice, which shall set forth the basis upon which such amount was calculated.

3.3. Notwithstanding Section 3.2, the parties may agree to Alternative Damages in a Transaction
Confirmation executed in writing

by both parties.

3.4. In addition to Sections 3.2 and 3.3, the parties may provide for a Termination Option in a
Transaction Confirmation executed in writing by both parties. The Transaction Confirmation
containing the Termination Option will designate the length of nonperformance triggering the
Termination Option and the procedures for exercise thereof, how damages for nonperformance will be
compensated, and how liquidation costs will be calculated.

SECTION 4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES

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

4.2. The parties shall coordinate their nomination activities, giving sufficient time to meet the
deadlines of the affected Transporter(s). Each party shall give the other party timely prior
Notice, sufficient to meet the requirements of all Transporter(s) involved in the transaction, of
the quantities of Gas to be delivered and purchased each Day. Should either party become aware that
actual deliveries at the Delivery Point(s) are greater or lesser than the Scheduled Gas, such party
shall promptly notify the other party.

4.3. The parties shall use commercially reasonable efforts to avoid imposition of any Imbalance
Charges. If Buyer or Seller receives an invoice from a Transporter that includes Imbalance Charges,
the parties shall determine the validity as well as the cause of such Imbalance Charges. If the
Imbalance Charges were incurred as a result of 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.

SECTION 5. QUALITY AND MEASUREMENT

All Gas delivered by Seller shall meet the pressure, quality and heat content requirements of the
Receiving Transporter. The unit of quantity measurement for purposes of this Contract shall be one
MMBtu dry. Measurement of Gas quantities hereunder shall be in accordance with the established
procedures of the Receiving Transporter.

SECTION 6. TAXES

The parties have selected either “Buyer Pays At and After Delivery Point” or
“Seller Pays Before and At Delivery Point” as indicated on the Base Contract.

Buyer Pays At and After Delivery Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties,
licenses or charges imposed by any government authority (“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). 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.

Seller Pays Before and At Delivery Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties,
licenses or charges imposed by any government authority (“Taxes”) on or with
respect to the Gas prior to the Delivery Point(s) and all Taxes at the Delivery
Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to
the Gas after the Delivery Point(s). If a party is required to remit or pay
Taxes that are the other 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.

	 	 	 	 	 	 	 
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	All Rights Reserved
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SECTION 7. BILLING, PAYMENT, AND AUDIT

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

7.2. Buyer shall remit the amount due under Section 7.1 in the manner specified in the Base
Contract, in immediately available funds, on or before the later of the Payment Date or 10 Days
after receipt of the invoice by Buyer; provided that if the Payment Date is not a Business Day,
payment is due on the next Business Day following that date; In the event any payments are due
Buyer hereunder, payment to Buyer shall be made in accordance with this Section 7.2.

7.3. In the event payments become due pursuant to Sections 3.2 or 3.3, the performing party may
submit an invoice to the nonperforming party for an accelerated payment setting forth the basis
upon which the invoiced amount was calculated. Payment from the nonperforming party will be due
five Business Days after receipt of invoice.

7.4. If the invoiced party, in good faith, disputes the amount of any such invoice or any part
thereof, such invoiced party will pay such amount as it concedes to be correct; provided, however,
if the invoiced party disputes the amount due, it must provide supporting documentation acceptable
in industry practice to support the amount paid or disputed. In the event the parties are unable to
resolve such dispute, either party may pursue any remedy available at law or in equity to enforce
its rights pursuant to this Section.

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

7.6. A party shall have the right, at its own expense, upon reasonable Notice and at reasonable
times, to examine and audit and to obtain copies of the relevant portion of the books, records, and
telephone recordings of the other party only to the extent reasonably necessary to verify the
accuracy of any statement, charge, payment, or computation made under the Contract. This right to
examine, audit, and to obtain copies shall not be available with respect to proprietary information
not directly relevant to transactions under this Contract. All invoices and billings shall be
conclusively presumed final and accurate and all associated claims for under or overpayments shall
be deemed waived unless such invoices or billings are objected to in writing, with adequate
explanation and/or documentation, within two years after the Month of Gas delivery. All retroactive
adjustments under Section 7 shall be paid in full by the party owing payment within 30 Days of
Notice and substantiation of such inaccuracy.

7.7. Unless the parties have elected on the Base Contract not to make this Section 7.7 applicable
to this Contract, the parties shall net all undisputed amounts due and owing, and/or past due,
arising under the Contract such that the party owing the greater amount shall make a single payment
of the net amount to the other party in accordance with Section 7; provided that no payment
required to be made pursuant to the terms of any Credit Support Obligation or pursuant to Section
7.3 shall be subject to netting under this Section. If the parties have executed a separate netting
agreement, the terms and conditions therein shall prevail to the extent inconsistent herewith.

SECTION 8. TITLE, WARRANTY, AND INDEMNITY

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

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

8.3. Seller agrees to indemnify Buyer and save it harmless from all losses, liabilities or claims
including reasonable 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. 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.

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

	 	 	 	 	 	 	 
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	 	 	 	NAESB Standard 6.3.1
	All Rights Reserved
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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 parties from time to time.

9.2. 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.

9.3. Notice shall be given when received on a Business Day by the addressee. In the absence of
proof of the actual receipt date, the following presumptions will apply. Notices sent by facsimile
shall be deemed to have been received upon the sending 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 party. Notice via first class mail shall be considered delivered five
Business Days after mailing.

SECTION 10. FINANCIAL RESPONSIBILITY

10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any
obligation under this Contract (whether or not then due) by the other party (“Y”) (including,
without limitation, 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 in the form, amount and for the term reasonably acceptable to X, 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).

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 general arrangement for the benefit of creditors;
(ii) file a petition or otherwise commence, authorize, or acquiesce in the commencement of a
proceeding or case under any bankruptcy or similar law for the protection of creditors or have such
petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent
(however evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver,
provisional liquidator, conservator, custodian, trustee or other similar official appointed with
respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other
party with respect to any Credit Support Obligations relating to the Contract; (vii) fail to give
Adequate Assurance of Performance under Section 10.1 within 48 hours but at least one Business Day
of a written request by the other party; or (viii) not have paid any amount due the other party
hereunder on or before the second Business Day following written Notice that such payment is due;
then the other party (the “Non-Defaulting Party”) shall have the right, at its sole election, to
immediately withhold and/or suspend deliveries or payments upon Notice and/or to terminate and
liquidate the transactions under the Contract, in the manner provided in Section 10.3, in addition
to any and all other remedies available hereunder.

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

	 	 	 	 	 	 	 
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The parties have selected either “Early Termination Damages Apply” or “Early Termination Damages Do Not Apply” as indicated on the
Base Contract.

Early Termination Damages Apply:

     10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially
reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Gas delivered and
received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination
Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts
owed under Section 3.2), for which payment has not yet been made by the party that owes such payment under this Contract
and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate
and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such
Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under
the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the
case; and (y) where appropriate, discount each amount then due under clause (x) above to present value in a commercially
reasonable manner as of the Early Termination Date (to take account of the period between the date of liquidation and the
date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions).

For purposes of this Section 10.3.1, “Contract Value” means the amount of Gas remaining to be delivered or purchased under a
transaction multiplied by the Contract Price, and “Market Value” means the amount of Gas remaining to be delivered or purchased
under, a transaction multiplied by the market price for a similar transaction at the Delivery Point determined by the
Non-Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider,
among other valuations, any or all of the settlement prices of NYMEX Gas futures contracts, quotations from leading dealers in
energy swap contracts or physical gas trading markets, similar sales or purchases and any other bona fide third-party offers, all
adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a
replacement transaction(s) in order to determine the Market Value. Any extension(s) of the term of a transaction to which parties
are not bound as of the Early
Termination Date (including but not limited to “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 the Non-Defaulting Party in a commercially reasonable manner.

Early Termination Damages Do Not Apply:

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

The parties have selected either “Other Agreement Setoffs Apply” or “Other Agreement Setoffs Do Not Apply” as indicated on the
Base Contract.

Other Agreement Setoffs Apply:

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

Other Agreement Setoffs Do Not Apply:

     10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties
under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party
to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the
Non-Defaulting Party may setoff any Net Settlement Amount owed to the Non-Defaulting Party against any margin or other
collateral held by it in connection with any Credit
Support Obligation relating to the Contract.

10.3.3. If any obligation that is to be included in any netting, aggregation or setoff pursuant to
Section 10.3.2 is unascertained, the Non-Defaulting Party may in good faith estimate that
obligation and net, aggregate or setoff, as applicable, in respect of the estimate, subject to the
Non-Defaulting Party accounting to the Defaulting Party when the obligation is ascertained. Any
amount not then due which is included in any netting, aggregation or setoff pursuant to Section
10.3.2 shall be discounted to net present value in a commercially reasonable manner determined by
the Non-Defaulting Party.

10.4. As soon as practicable after a liquidation, Notice shall be given by the Non-Defaulting Party
to the Defaulting Party of the Net Settlement Amount, and whether the Net Settlement Amount is due
to or due from the Non-Defaulting Party. The Notice shall include a written statement explaining in
reasonable detail the calculation of such amount, provided that failure to give such Notice shall
not affect

	 	 	 	 	 	 	 
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the validity or enforceability of the liquidation or give rise to any claim by the Defaulting Party
against the Non-Defaulting Party. The Net Settlement Amount shall be paid by the close of business
on the second Business Day following such Notice, which date shall not be earlier than the Early
Termination Date. Interest on any unpaid portion of the Net Settlement Amount shall accrue from the
date due until the date of payment at a rate equal to the lower of (i) the then-effective prime
rate of interest published under “Money Rates” by The Wall Street Journal, plus two percent per
annum; or (ii) the maximum applicable lawful interest rate.

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

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

10.7. With respect to this Section 10, if the parties have executed a separate netting agreement
with close-out netting provisions,

the terms and conditions therein shall prevail to the extent inconsistent herewith.

SECTION 11. FORCE MAJEURE

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

11.2. Force Majeure shall include, but not be limited to, the following: (i) physical events such
as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as
hurricanes, which result in evacuation of the affected area floods, washouts, explosions, breakage
or accident or necessity of repairs to machinery or equipment or lines of pipe; (ii) weather
related events affecting an entire geographic region, such as low temperatures which cause freezing
or failure of wells or lines of pipe; (iii) interruption and/or curtailment of Firm transportation
and/or storage by Transporters; (iv) acts of others such as strikes, lockouts or other industrial
disturbances, riots, sabotage, insurrections or wars; and (v) governmental actions such as
necessity for compliance with any court order, law, statute, ordinance, regulation, or policy
having the effect of law promulgated by a governmental authority having jurisdiction. Seller and
Buyer shall make reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve
the event or occurrence once it has occurred in order to resume performance.

11.3. Neither party shall be entitled to the benefit of the provisions of Force Majeure to the
extent performance is affected by any or all of the following circumstances: (i) the curtailment of
interruptible or secondary Firm transportation unless primary, in-path, Firm transportation is also
curtailed; (ii) the party claiming excuse failed to remedy the condition and to resume the
performance of such covenants or obligations with reasonable dispatch; or (iii) economic hardship,
to include, without limitation, Seller’s ability to sell Gas at a higher or more advantageous price
than the Contract Price, Buyer’s ability to purchase Gas at a lower or more advantageous price than
the Contract Price, or a regulatory agency disallowing, in whole or in part, the pass through of
costs resulting from this Agreement; (iv) the loss of Buyer’s market(s) or Buyer’s inability to use
or resell Gas purchased hereunder, except, in either case, as provided in Section 11.2; or (v) the
loss or failure of Seller’s gas supply or depletion of reserves, except, in either case, as
provided in Section 11.2. The party claiming Force Majeure shall not be excused from its
responsibility for Imbalance Charges.

11.4. Notwithstanding anything to the contrary herein, the parties agree that the settlement of
strikes, lockouts or other industrial

disturbances shall be within the sole discretion of the party experiencing such disturbance.

11.5. The party whose performance is prevented by Force Majeure must provide Notice to the other
party. Initial Notice may be given orally; however, written Notice with reasonably full particulars
of the event or occurrence is required as soon as reasonably possible. Upon providing written
Notice of Force Majeure to the other party, the affected party will be relieved of its obligation,
from the onset of the Force Majeure event, to make or accept delivery of Gas, as applicable, to the
extent and for the duration of Force Majeure, and neither party shall be deemed to have failed in
such obligations to the other during such occurrence or event.

11.6. Notwithstanding Sections 11.2 and 11.3, the parties may agree to alternative Force Majeure
provisions in a Transaction

Confirmation executed in writing by both parties.

SECTION 12. TERM

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

	 	 	 	 	 	 	 
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	All Rights Reserved
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SECTION 13. LIMITATIONS

FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH
EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY. A 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.

SECTION 14. MISCELLANEOUS

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

14.2. If any provision in this Contract is determined to be invalid, void or unenforceable by any
court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any
other provision, agreement or covenant of this Contract.

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

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

14.5. The interpretation and performance of this Contract shall be governed by the laws of the
jurisdiction as indicated on the Base

Contract, excluding, however, any conflict of laws rule which would apply the law of another
jurisdiction.

14.6. This Contract and all provisions herein will be subject to all applicable and valid statutes,
rules, orders and regulations of any

governmental authority having jurisdiction over the parties, their facilities, or Gas supply, this
Contract or transaction or any provisions thereof.

14.7. There is no third party beneficiary to this Contract.

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

14.9. The headings and subheadings contained in this Contract are used solely for convenience and
do not constitute a part of this

Contract between the parties and shall not be used to construe or interpret the provisions of this
Contract.

14.10. Unless the parties have elected on the Base Contract not to make this Section 14.10
applicable to this Contract, neither party shall disclose directly or indirectly without the prior
written consent of the other party the terms of any transaction to a third party (other than the
employees, lenders, royalty owners, counsel, accountants and other agents of the party, or
prospective purchasers of all or substantially all of a party’s assets or of any rights under this
Contract, provided such persons shall have agreed to keep such terms confidential) except (i) in
order to comply with any applicable law, order, regulation, or exchange rule, (ii) to the extent
necessary for the enforcement of this Contract , (iii) to the extent necessary to implement any
transaction, or (iv) to the extent such information is delivered

	 	 	 	 	 	 	 
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to such third party for the sole purpose of calculating a published index. Each party shall notify
the other party of any proceeding of which it is aware which may result in disclosure of the terms
of any transaction (other than as permitted hereunder) and use reasonable efforts to prevent or
limit the disclosure. The existence of this Contract is not subject to this confidentiality
obligation. Subject to Section 13, the parties shall be entitled to all remedies available at law
or in equity to enforce, or seek relief in connection with this confidentiality obligation. The
terms of any transaction hereunder shall be kept confidential by the parties hereto for one year
from the expiration of the transaction.

In the event that disclosure is required by a governmental body or applicable law, the party
subject to such requirement may disclose the material terms of this Contract to the extent so
required, but shall promptly notify the other party, prior to disclosure, and shall cooperate
(consistent with the disclosing party’s legal obligations) with the other party’s efforts to obtain
protective orders or similar restraints with respect to such disclosure at the expense of the other
party.

14.11 The parties may agree to dispute resolution procedures in Special Provisions attached to the
Base Contract or in a Transaction Confirmation executed in writing by both parties.

DISCLAIMER: The purposes of this Contract are to facilitate trade, avoid misunderstandings and make
more definite the terms of contracts of purchase and sale of natural gas. Further, NAESB does not
mandate the use of this Contract by any party. NAESB DISCLAIMS AND EXCLUDES, AND ANY USER OF THIS
CONTRACT ACKNOWLEDGES AND AGREES TO NAESB’S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS OR
REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS CONTRACT OR ANY PART
THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB KNOWS,
HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE), WHETHER
ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING. EACH
USER OF THIS CONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR ANY DIRECT,
SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF THIS
CONTRACT.

	 	 	 	 	 	 	 
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EXHIBIT A

TRANSACTION CONFIRMATION

FOR IMMEDIATE DELIVERY

	 	 	 	 	 	 	 
	
     
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Letterhead/Logo
	 	 	 	 	 	 Date:                                                            ,   
                 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 Transaction Confirmation #:
	
     
	 	 	 	 	 	 

	 	 	 
	
This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated _________. The terms of this Transaction Confirmation are binding unless disputed in writing within 2 Business Days of receipt unless otherwise specified in the Base Contract.
	 
	 	 
	 SELLER:
	 	 BUYER:
	 
	 	Amaizing Energy, LLC
	 
	 	2404 W Hwy 30
	 
	 	Denison, Iowa 51442
	Attn:
	 	Attn:
	Phone:
	 	Phone: 1-800-590-2827
	Fax:
	 	Fax: 712-263-4134
	Base Contract No.
	 	Base Contract No.
	Transporter:
	 	Transporter:
	Transporter Contract Number:
	 	Transporter Contract Number:
	 
	 	 
	Contract Price: $____________/MMBtu or                                                 
                                                                              

	 
	 	 
	Delivery Period: Begin:________________,____________ End: __________________, ____________
	Performance Obligation and Contract Quantity: (Select One)
	 
	 	 
	Firm (Fixed Quantity):                                              
              
Firm (Variable Quantity):                                             Interruptible:
	                    , MMBtus/day                               
                                 ;  MMBtus/day Minimum                                 
   Up to       
MMBtus/day
	     o EFP                        
                          
                                                   MMBtus/day Maximum
	                                         
                     
                                     Subject to Section 4.2 at election of
	                                       
                   
                                         o Buyer of o Seller
	Delivery Point(s):                                     
           
                
                                                         
	(If a pooling point is used, list a specific geographic and pipeline location):
	 
	 	 
	Special Conditions:
	 	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	Seller:
	 	Buyer: Amaizinq Energy, LLC
	By:

	 	By:
	Title:
	 	Title:
	Date:

	 	Date:
	 

 

 

			
	Cornerstone Energy
	 	Transaction Confirmation

Page 1

This Transaction Confirmation confirms the agreement between Cornerstone Energy, Inc. (Seller) and Amaizing Energy,
LLC (Buyer) regarding the purchase and sale of natural gas as of Aug 8th, 2005. The Transaction Confirmation is
subject to the Terms and Conditions set forth herein and in the NAES Base Contract between the parties.

Acct
#:                                        þ New Acct                      Base Contract #:         
         Trans. Conf. #:

Contract Term                                                                      
Transaction Type                                                MDQ

Start: August 1, 2005                End: July 31, 2006          o Firm          o Secondary Firm          
o Interruptible

	 	 	 	 	 
	Delivery Point

	 	Delivery Information	 	 
	þ Into-the-Pipe

	 	Pipeline Name: Northern Natural Gas Co
	 	LDC: Aquila Networks
	o LDC City Gate

	 	Zone/Line Segment: Zone ABC
	 	LDC Acct#:
	o Direct Connect

	 	POI #:
	 	City/State: Denison, IA

Contract Volumes to the Delivery Point (MMBtu): (Specify Year) (Designate multiple sites and associated volumes on Page 3.)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MDQ	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year	 	Jan	 	Feb	 	Mar	 	Apr	 	Jun	 	 	 	 	 	Jul	 	Aug	 	Sept	 	Oct	 	Nov	 	Dec	 	Total
	2005
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	62,000	 	 	 	60,000	 	 	 	93,000	 	 	 	90,000	 	 	 	93,000	 	 	 	398,000	 
	2006
	 	 	93,000	 	 	 	84,000	 	 	 	93,000	 	 	 	90,000	 	 	 	93,000	 	 	 	90,000	 	 	 	93,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	636,000	 
	Total
	 	 	93,000	 	 	 	84,000	 	 	 	93,000	 	 	 	90,000	 	 	 	93,000	 	 	 	90,000	 	 	 	93,000	 	 	 	62,000	 	 	 	60,000	 	 	 	93,000	 	 	 	90,000	 	 	 	93,000	 	 	 	1,034,000	 

Billable Volume: þ Actual Consumption     o Nominations

Contract Price at the Delivery Point                                        Prices stated in: þ MMBtu o Other       
              

For the Monthly Contract Volumes stated above

 þ Index Price:          Based on index for deliveries to NNG Ventura as published in Inside FERC plus $                     plus fuel

Natural gas will be billed as it flows through the meter in the following order: (1) Fixed, Basis,
or NYMEX price; (2) Spot or Index Price. Cost components not included in the Contract Price, but incurred by Seller will be billed to Buyer
at the applicable market rate.

Fuel on Interstate Pipeline

o Is included in the Contract Price          þ Will be billed by Seller to Buyer

If Fuel is not included in the Contract Price, it will be billed based on:

þ The monthly index price for gas delivered to the Delivery Point specified herein

o The fixed price for gas delivered to the Delivery Point specified herein

Evergreen Pricing Provisions

Should Seller continue to deliver to Buyer beyond the term of this Ordering Exhibit, said
deliveries will be made thereafter for successive 30 day extensions, until terminated by either
party by giving written notice not less than thirty (30) days prior to the expiration of the
applicable one-year term extension. The default “Evergreen Price” will equal the Gas Daily Average
for deliveries to NNG Venture as published in Inside FERC plus applicable transportation, fuel, and
any other charges associated with the delivery of gas for the month in which the delivery occurred.
The default “Evergreen Volume” shall equal the previous calendar year’s monthly consumption in
MMBtu for the applicable month unless otherwise designated by Buyer.

Cash-Out     Monthly imbalances managed by: þ Cornerstone per the provisions below          o Utility per tariff

                                                                           
 o Cornerstone per the Balance Service Contract with Buyer

Monthly Imbalance Cash Out Provisions

The Index price for volumes below or in excess of the Monthly Contract Volumes will be billed based
upon the gas daily daily midpoint rate for the month of delivery plus all applicable
transportation, fuel, and other delivery charges associated with the delivery of gas to the
customer’s citygate.

 

 

			
	Cornerstone Energy
	 	Transaction Confirmation

Page 1

	 	 	 	 	 	 	 	 	 	 	 
	Nominations, Scheduling, and Daily Balancing	 	 	 	Storage
	Responsibility:

	 	Buyer
	 	Seller
	 	Not Applicable	 	 	 	 
	Nominations

	 	o
	 	þ
	 	o
	 	 	 	o Buyer assigns its pipeline storage account to Seller
	Scheduling

	 	o
	 	þ
	 	o
	 	 	 	o Buyer assigns its Utility storage account to Seller
	Daily Balance

	 	o
	 	þ
	 	o
	 	 	 	þ Not applicable

Special Provisions

Seller will provide daily balancing services for Buyer. The daily balancing service is intended
for typical daily variances for ongoing plant operation. This daily swing range will be plus or
minus 25% of the daily nomination in addition to the penalty free tolerance allowed by the LDC.
Daily variations beyond this tolerance will be balanced on a best efforts basis and would
potentially include buying/selling gas on an intraday basis at intraday prices. Daily cashout for
variances from baseload volumes within the provided tolerance range will e Gas Daily Daily Midpoint
plus $.025 (buy) or Gas Daily Daily Midpoint minus $.025 (sell). For SOL or critical days,
consumption must be less than or equal to the amount of gas delivered. Buyer will not incur LDC
tiered monthly imbalance cashouts.

Site(s) Covered by Transaction Confirmation (Invoices will include tax unless customer has
provided Cornerstone an exemption certificate for each site.)

	 	 	 	 	 	 	 	 	 
	Facility Name:

	 	Amaizing Energy, LLC
	 	 	 	Tax Exempt*:
	 	o Yes þ No
	Street Address:

	 	2404 W Hwy 30
	 	 	 	Inside City Limits:
	 	o Yes þ No
	City, State, Zip:

	 	Denison, IA 51442
	 	 	 	County: Crawford	 	 
	Utility Account #:

	 	                    
	 	 	 	Utility: Aquila Networks	 	 
	 
	 	 	 	 	 	 	 	 
	Buyer’s Address
	 	 	 	 	 	 	 	 
	Company Name:

	 	FC Stone
	 	 	 	Contact: Corny Boersma	 	 
	Street Address:

	 	10330 NW Prairie View Road
	 	 	 	Phone: 816-457-6277	 	 
	City, State, Zip:

	 	Kansas City, MO 64157
	 	 	 	Fax: 816-891-9190	 	 
	 
	 	 	 	 	 	 	 	 
	Billing Address (if different)	 	 	 	 	 	 
	Company Name:

	 	 	 	 	 	Attn:	 	 
	 

	 	 
	 	 	 	 	 	 
	Street Address:

	 	 	 	 	 	Phone:	 	 
	 

	 	 
	 	 	 	 	 	 
	City, State Zip:

	 	 	 	 	 	Fax:	 	 
	 

	 	 
	 	 	 	 	 	 

	 	 	 	 	 
	Buyer:

	 	Signature: /s/ Alan H. Jentz	 	 
	Amaizing Energy, LLC
	 	 	 	 
	 
	 	 	 	 
	 

	 	Title: General Manager
	 	Date: Aug 8, 2005
	 
	 	 	 	 
	Seller:

	 	Signature:	 	 
	 

	 	Title Vice President, Sales	 	 
	Cornerstone Energy, LLC

	 	 	 	Date:

IF ANY OF THE ABOVE TERMS ARE CONTRARY TO YOUR UNDERSTANDING OF OUR AGREEMENT, PLEASE NOTIFY US IN
WRITING SPECIFYING YOUR OBJECTIONS. FAILURE TO SO NOTIFY US WITHIN TWO (2) BUSINESS DAYS OF THE
DATE OF THIS TRANSACTION CONFIRMATION CONSTITUTES YOUR ACCEPTANCE OF THE TERMS SPECIFIED HEREIN.

 

 

SPECIAL PROVISIONS

Special Provisions to Base Contract for Sale and Purchase of Natural Gas (NAESB) dated
___, 2005 between Cornerstone Energy, Inc. (Seller) and Amaizing Energy, LLC (Buyer).

If the terms of these Special Provisions and the other terms of the Base Contract conflict, the
terms of these Special Provisions shall govern. Any definitions used in the Base Contract, unless
otherwise defined in these Special Provisions, shall have the same meaning in these Special
Provisions.

Any references herein to “General Teems and Conditions” shall mean the document attached to and
foaming part of the Base Contract entitled “General Terms and Conditions Base Contract for Sale and
Purchase of Natural Gas” and setting forth the General Teems and Conditions of the agreement
between the parties.

Any reference to a Section in these Special Provisions refers to the same Section of the General
Teims and Conditions to the Base Contract.

SECTION 4 — TRANSPORATION, NOMINATIONS, AND IMBALANCES

The following sentence is added to paragraph 4.1:

The Delivering Pipeline for the purposes of this Agreement is the Northern Natural Gas
Pipeline. All deliveries shall be as described in the Delivering Pipeline’s tariffs, which
terms and conditions are incorporated herein by reference. The Delivery Point for the
purposes of this Agreement is the point at which the six inch pipeline owned by Seller
connects to Denison, Iowa #1, POI 2828 located on Aquila Networks utility system located at
the facilities of Buyer.

SECTION 6 — TAXES

Delete the paragraph following the title “Buyer Pays At and After Delivery Point” and replace it
with the following:

To the extent permitted by law, Buyer will be responsible for and will pay all taxes and
assessments assessed against the natural gas and services being sold to Buyer after the
natural gas has been received at the final delivery point, (including any gas revenue tax
and Iowa natural gas replacement delivery tax). If Buyer is entitled to a tax exemption, it
is Buyer’s responsibility to provide Seller with evidence of such.

SECTION 10 — FINANCIAL RESPONSIBILITY

Paragraphs 10.1, 10.2 and 10.3 are deleted in their entirety and is replaced with the following:

10.1 To the extent reasonably requested, each party shall provide to the other party the
financial information necessary to perform a credit evaluation of the other party. If either
party (“X”) has reasonable grounds for insecurity regarding the performance of any
obligation under this Contract (whether or not then due) by the other party (“Y”)
(including, without limitation, 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 in the faun, amount and for the teen reasonably acceptable to
X, 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)

10.2 Each of the following events shall constitute an “Event of Default” under the Contract:
either party (the “Defaulting Party”) or its guarantor shall: (i) make an assignment or any
general arrangement for the benefit of creditors; (ii) file a petition or otherwise
commence, authorize, or acquiesce in the commencement of a proceeding or case under any
bankruptcy or similar law for the protection of creditors or have such petition filed or
proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however
evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver,
provisional liquidator, conservator, custodian, trustee or other similar official appointed
with respect to it or

 

 

substantially all of its assets; (vi) fail to perform any obligation to the other party with
respect to any Credit Support Obligations relating to the Contract; (vii) fail to give
Adequate Assurance of Performance under Section 10.1 within 48 hours but at least one
Business Day of a written request by the other party; or (viii) not have paid any amount due
the other party hereunder on or before the second Business Day following written Notice that
such payment is due. Upon an Event of Default as described above, the other party (the
“Non-Defaulting Party”) shall give the Defaulting Party written notice of said Event of
Default, and the Defaulting Party shall have 8 days from the date of the Notice in which to
cure said Event of Default (the “Cure Period”). Upon expiration of the Cure Period, if the
Defaulting Party has not cured the Event of Default, the Non-Defaulting Party shall have the
right, at its sole election, to withhold and/or suspend deliveries or payments and/or to
terminate and liquidate the transactions under the Contract, in the manner provided in
Section 10.3, in addition to any and all other remedies available hereunder.

Paragraph 10.3 is deleted in its entirety and is replaced with the following:

10.3 If an Event of Default has occurred, the Non-Defaulting Party shall have the right, by
its Notice to the Defaulting Party, to designate a Day, no earlier than 8 Days after such
Notice is given, as an early termination date (the “Early Termination Date”) for the
liquidation and termination pursuant to Section 10.3.1 of all transactions under the
Contract, each a “Terminated Transaction.” On the Early Termination Date, if the Defaulting
Party has not cured the Event of Default, all transactions will terminate, other than those
transactions, if any, that may not be liquidated and terminated under applicable law or that
are, in the reasonable opinion of the Non-Defaulting Party, commercially impracticable to
liquidate and terminate (“Excluded Transactions”), which Excluded Transactions must be
liquidated and terminated as soon thereafter as is reasonably practicable, and upon
termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1
below. With respect to each Excluded Transaction, its actual termination date shall be the
Early Termination Date for purposes of Section 10.3.1.

A Paragraph 14.1 is deleted in its entirety and is replaced with the following:

14.1 Unless the parties have elected on the Base Contract not to make this Section
14.10 applicable to this Contract, neither party shall disclose directly or indirectly
without the prior written consent of the other party the terms of any transaction to a third
party (other than the employees, lenders, royalty owners, counsel, accountants and other
agents of the party, or prospective purchasers of all or substantially all of a party’s
assets or of any rights under this Contract, provided such persons shall have agreed to keep
such terms confidential) except (i) in order to comply with any applicable law, order,
regulation, or exchange rule, (ii) to the extent necessary for the enforcement of this
Contract , (iii) to the extent necessary to implement any transaction, or (iv) to the extent
such information is delivered to such third party for the sole purpose of calculating a
published index. Each party shall notify the other party of any proceeding of which it is
aware which may result in disclosure of the terms of any transaction (other than as
permitted hereunder) and use reasonable efforts to prevent or limit the disclosure. The
existence of this Contract is not subject to this confidentiality obligation. Subject to
Section 13, the parties shall be entitled to all remedies available at law or in equity to
enforce, or seek relief in connection with this confidentiality obligation. The terms of any
transaction hereunder shall be kept confidential by the parties hereto for one year from the
expiration of the transaction.

In the event that disclosure is required by a governmental body or applicable law, the party
subject to such requirement may disclose the material terms of this Contract to the extent
so required, but shall promptly notify the other party, prior to disclosure, and shall
cooperate (consistent with the disclosing party’s legal obligations) with the other party’s
efforts to obtain protective orders or similar restraints with respect to such disclosure at
the expense of the other party. Notwithstanding the foregoing, notification to the
non-disclosing party shall not be required if disclosure of such material term is required
by a governmental body or applicable law due to either party becoming a publicly reporting
company.

dd as Section 14.12 of the Miscellaneous Section

14.12 Seller will provide index pricing and NYMEX basis pricing under normal payment terms
per the NAESB Base Contract. Seller will provide NYMEX locks for Buyer subject to a maximum
out of the

 

 

money (OOM) position of $500,000. The OOM position is defined as the difference between the
total aggregate NYMEX contract volume weighted average price and the total aggregate volume
weighted average price based upon the NYMEX market settlement on the most recent settlement.
This determination will be by Seller. Seller will include substantiation to Buyer of
required assurance amount (OOM amount in excess of $500,000). Buyer will provide assurances
in the form of a Letter of Credit agreement (LOC) to cover OOM amounts or a cash deposit to
cover the OOM position in excess of $500,000. Buyer will implement a reserve on behalf of
Buyer per the LOC, or provide a cash deposit via wire payment to Seller, either within 5
days of notification of Buyer by Seller of required assurance. If Buyer does not provide
assurance as requested, and in the absence of a reasonable dispute as the OOM amount, Seller
will be deemed to be in default and remedies described in NAESB Section 10 will apply. In
the event that the OOM amount drops back to within the $500,000 limitation for 10
consecutive market days, then the Seller will net the deposit amount back to the Buyer on
the next scheduled bill, or Buyer may cancel the LOC reserve, whichever applies. If NYMEX
contract locks are requested for periods that exceed 9 months, Seller at it’s sole
discretion has the right to impose volume limitations depending upon the level of gas market
prices. In any case, the OOM limitation applies to any outstanding NYMEX positions. Seller
also agrees to review the OOM limitation periodically upon review of current financial
updates provided by Buyer, and at Seller’s sole discretion would increase or decrease the
OOM limitation based upon findings of current financial creditworthiness.

PAGE 10 of 10 — EXHIBIT A — TRANSACTION CONFIRMATION FOR IMMEDIATE DELIVERY

This form shall be deleted in its entirety and replaced by Cornerstone Energy’s Transaction
Confirmation form. Any reference in the Base Contract to the “Transaction Confirmation” shall be
intended to refer to Cornerstone Energy’s Transaction Confirmation.

THE PARTIES DO HEREBY REPRESENT AND WARRANT THAT THE GENERAL TERMS AND CONDITIONS OF THE BASE
CONTRACT HAVE NOT BEEN MODIFIED, ALTERED, OR AMENDED IN ANY RESPECT EXCEPT FOR THESE SPECIAL
PROVISIONS WHICH ARE ATTACHED TO AND MADE A PART OF THE BASE CONTRACT.

	 	 	 	 	 	 	 	 	 
	CORNERSTONE ENERGY, INC.	 	 	 	AMAIZING ENERGY, LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 	/s. Alan H. Jentz
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:

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