Contract

Exhibit 10.7 ———— BASE CONTRACT FOR SALE AND PURCHASE OF NATURAL GAS DATED NOVEMBER 13, 2002 BETWEEN UGI ENERGY SERVICES, INC. AND VIKING RESOURCES CORP. Exhibit 10(h) ORIGINAL FILE COPY Base Contract for Sale and Purchase of Natural Gas This XXX of the following date, November 13, 2002. The parties for basecontract are the following.

Viking Resources Corp. and UGI Energy Services, Inc. d/b/a GASMARK- ——————————————————– —————————————————————XXX 10500 1188 XXX Blvd., Suite 385, XXX- ——————————————————– —————————————————————Duns Number Duns Number 88-350-4581- ——————————————————– —————————————————————Contract Number: Contract Number:- ——————————————————– —————————————————————U.S. Federal Tax ID Number: U.S. Federal Tax ID Number: 23-2800541- ——————————————————– —————————————————————Notices:Viking Resources Corp. UGI Energy Services Inc. d/b/a GASMARK- ——————————————————– —————————————————————Attn: Michael Brecko Attn: Robert Meder- ——————————————————– —————————————————————Phone: (412) 262-2830 x126 Fax: (412) 262-3927 Phone: (610) 373 7999 Fax: (610) 374 4288- ——————————————————– —————————————————————Confirmations:Viking Resources Corp. UGI Energy Services Inc. d/b/a GASMARK- ——————————————————– —————————————————————Attn: Michael Brecko Attn: Robert Meder- ——————————————————– —————————————————————Phone: (412) 262-2830 x126 Fax: (412) 262-3927 Phone: (610) 373 7999 Fax: (610) 374 4288- ——————————————————– —————————————————————Invoices and PaymentsXXX XXXAttn: Attn: Joseph Hart- ——————————————————– —————————————————————Payments: Same Payments: Same- ——————————————————– —————————————————————Phone: Fax: Phone: (610) 373 7999 Fax: (610) 374 4288- ——————————————————– —————————————————————Wire Transfer or ACH Numbers (if applicable)BANK: Koybank, Cleveland Ohio BANK: PNC Bank NA-Philadelphia- ——————————————————– —————————————————————ABA: D4100103XXX ABA: D3100003ACCT: 428190700 ACCT: 8606074240- ——————————————————– —————————————————————Other details: Account is with Resource Energy Other Details:- ——————————————————– —————————————————————This Base Contract incoporates by reference for all purposes the General Terms and Conditions for Sale and Purchase of Natural Gaspublished by the North American Energy Services Board. XXX General Terms and Conditions in the event the parties fail to check XXXthe specified default provision shall apply XXX only one XXX from each section.
– ———————————————————————————————————————————–Section 1.2 |_| Oral (default) Section 7.2 25th Day of Month following Month of delivery (default)Transaction |_| Written Payment Date 10 Days following receipt ofProcedure |_| meter statements- ———————————————————————————————————————————–Section 3 Business Days XXX Section XXX |_| XXXXXX |_| _____ Business Days after Method of |_| Automated Clearinghouse receipt Credit (ACH)XXX Payment |_| Other- ———————————————————————————————————————————–Section 2.XXX |_| Seller (default) Section 7.7 |_| Nothing applies (default)Confirming |_| Buyer Nothing |_| Nothing does not applyParty |_| BOTH PARTIES- ———————————————————————————————————————————–Section 3.2 |_| Cover Standard (default) Section 10.3.1 |_| Early Termination Damages Apply (default)Performance |_| Spot Price Standard Early Termination Damages |_| Early Termination Damages DoObligation Not Apply ——————————————————————–Note: The following Spot Price Publication applies to both Section 10.3.2 |_| Other Agreement XXXX Applyof the immediately preceding. (default) Other Agreements XXX |_| Other Agreements XXX Do Not Apply ——————————————————————–Section 2.28 |_| Gas Daily Midpoint Section 14.5 (default)Spot Price |_| ___________________ Choice of Law PennsylvaniaPublication- ———————————————————————————————————————————–Section XXX |_| Buyer Pays At and After Section 14.10 |_| Confidentiality applies Delivery Point (default) (default) Confidentiality |_| Confidentiality does not applyTaxes |_| Seller Pays Before and At Delivery Point- ———————————————————————————————————————————–|_| Special Provisions Number of sheets attached: 2|_| Addendum(s): None- ———————————————————————————————————————————–IN WITNESS WHEREOF, the parties hereto have executed this Base Contract in duplicate.
Viking Resources Corp. UGI Energy Services Inc. d/b/a GASMARK- ——————————————————– —————————————————————Party Name Party NameBy: /s/ XXX Simmons By: /s/ Robert Meder- ——————————————————– —————————————————————Name: XXX Simmons Name: Robert MederTitle: Vice President Title: Vice President, Gas Supply & Risk Management- ———————————————————————————————————————————–Copyright(C)2002 North American Energy Standards Board, Inc. NAESB Standard 6.3.1All Rights Reserved April 19, 2002

GENERAL TERMS AND CONDITIONS BASE CONTRACT FOR SALE AND PURCHASE OF NATURAL GASSECTION 1. PURPOSE AND PROCEDURES1.1 These General Terms and Conditions are intended to facilitate purchase andsale transactions of Gas on a Firm or Interruptible basis. “Buyer” refers tothe party receiving Gas and “Seller” refers to the party delivering Gas. Theentire agreement between the parties shall be the Contract as defined inSection 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. AnyGas purchase and sale transaction may be effectuated in an EDI transmission ortelephone conversation with the offer and acceptance constituting theagreement of the parties. The parties shall be legally bound from the timethey so agree to transaction terms and may each rely thereon. Any suchtransaction shall be considered a “writing” and to have been “signed”.Notwithstanding the foregoing sentence, the parties agree that ConfirmingParty shall, and the other party may, confirm a telephonic transaction bysending the other party a Transaction Confirmation by facsimile, EDI ormutually agreeable electronic means within three Business Days of atransaction covered by this Section 1.2 (Oral Transaction Procedure) providedthat the failure to send a Transaction Confirmation shall not invalidate theoral agreement of the parties, Confirming Party adopts its confirmingletterhead, or the like, as its signature on any Transaction Confirmation asthe identification and authentication of Confirming Party. If the TransactionConfirmation contains any provisions other than those relating to thecommercial 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 pursuantto Section 1.3 but must be expressly agreed to by both parties; provided thatthe 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 saletransaction for a particular Delivery Period, the Confirming Party shall, andthe other party may, record that agreement on a Transaction Confirmation andcommunicate such Transaction Confirmation by facsimile, EDI or mutuallyagreeable electronic means, to the other party by the close of the BusinessDay following the date of agreement. The parties acknowledge that theiragreement will not be binding until the exchange of non-conflicting,Transaction Confirmations of 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 Confirmation is materially different fromthe receiving party’s understanding of the agreement referred to in Section1.2, such receiving party shall notify the sending party via facsimile, EDI ormutually agreeable electronic means, by the Confirm Deadline, unless suchreceiving party has previously sent a Transaction Confirmation to the sendingparty. The failure of the receiving party to so notify the sending party inwriting by the Confirm Deadline constitutes the receiving party’s agreement tothe terms of the transaction described in the sending party’s TransactionConfirmation. If there are any material differences between timely sentTransaction Confirmations governing the same transaction, then neitherTransaction Confirmation shall be binding until or unless such differences areresolved including the use of any evidence that XXX XXX the difference in theTransaction Confirmation. In the event of a conflict among the terms of (i) abinding Transaction Confirmation pursuant 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 andConditions, the terms of the documents shall govern in the priority listed inthis sentence.1.4 The parties agree that each party may electronically record all telephoneconversations with respect to this Contract between their respectiveemployees, without any special or further notice to the other party. Eachparty shall obtain any necessary consent of its agents and employees to suchrecording. Where the parties have selected the Oral Transaction Procedure inSection 1.2 of the Base Contract, the parties agree not to contest thevalidity or enforceability of telephonic recording entered into in accordancewith the requirements of this Base Contract. However, nothing herein shall beconstrued as a waiver of any objection to the admissibility of such evidence.SECTION 2. DEFINITIONSThe terms set forth below shall have the meaning ascribed to them below. Otherterms are also defined elsewhere in the Contract and shall have the meaningsascribed to them herein:2.1. “Alternative Damages” shall mean such damages, expressed in dollars ordollars per MMBtu, as the parties shall agree upon in the TransactionConfirmation, in the event either Seller or Buyer fails to perform a Firmobligation to deliver Gas in the case of Seller or to receive Gas in the caseof Buyer.2.2 “Base Contract” shall mean a contract executed by the parties thatincorporates these General Terms and Conditions by reference; that specifiesthe agreed selections of provisions contained herein; and that sets forthother 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 isalso called Btu (IT).- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 2 of 10 April 19, 20022.4. “Business Day” shall mean any day except Saturday, Sunday or FederalReserve Bank holidays.2.5. “Confirm Deadline” shall mean 5:00 p.m. in the receiving party’s time zoneon the second Business Day following the Day a Transaction Confirmation isreceived or, if applicable, on the Business Day agreed to by the parties inthe Base Contract provided, if the Transaction Confirmation is time stampedafter 5:00 p.m. in the receiving party’s time zone, it shall be deemedreceived at the opening of the next Business Day.2.6. “Confirming Party” shall mean the party designated in the Base Contract toprepare 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 inSection 1.2 of the Base Contract, any and all transactions that the partieshave entered into through an EDI transmission or by telephone, but that havenot been confirmed in a binding Transaction Confirmation.2.8. “Contract Price” shall mean the amount expressed in U.S. Dollars per MMBtuto be paid by Buyer to Seller for the purchase of Gas as agreed to by theparties in a transaction.2.9. “Contract Quantity” shall mean the quantity of Gas to be delivered andtaken as agreed to by the parties in a transaction.2.10. “Cover Standard”, as referred to in Section 3.2, shall mean that if thereis an unexcused failure to take or deliver any quantity of Gas pursuant to thisContract, then the performing party shall use commercially reasonable efforts to(i) if Buyer is the performing party, obtain Gas, (or an alternate fuel ifelected by Buyer and replacement Gas is not available), or (ii) if Seller is theperforming party, sell Gas. In either case, at a price reasonable for thedelivery or production area, as applicable, consistent with: the amount ofnotice provided by the nonperforming party; the immediacy of the Buyer’s Gasconsumption needs or Seller’s Gas sales requirements, as applicable thequantities involved; and the anticipated length of failure by the nonperformingparty.2.11. “Credit Support Obligation(s)” shall mean any obligation(s) to provide orestablish credit support for or on behalf of, a party to this Contract such asan irrevocable stand-by letter of credit, a margin agreement, a prepayment, asecurity interest in an asset, a performance bond, guaranty, or other bond andsufficient 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 bemade as agreed to by the parties in a transaction.2.14. “Delivery Points” shall mean such point(s) as are agreed to by the partiesin a transaction.2.15. “ED” shall mean an electronic data interchange pursuant to an agreemententered into by the parties, specifically relating to the communication ofTransaction 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 futurescontracts. EFP shall incorporate the meaning and remedies of “Firm”, providedthat a party’s excuse for nonperformance of its obligations to deliver orreceive Gas will be governed by the rules of the relevant futures exchangeregulated under the Commodity Exchange Act.2.17. “Firms” shall mean that either party may interrupt its performance withoutliability only to the extent that such performance is prevented for reasons of”Force Majeure” provided, however, that during Force Majeure interruptions theparty invoking Force Majeure may be responsible for any imbalance charges as setforth in Section 4.3 related to its interruption after the nomination is made tothe Transporter and until the change in deliveries and/or receipts is confirmedby the Transporter.2.18. “Gas” shall mean any mixture of hydrocarbons and noncombustible gases in agaseous state consisting primarily of methane.2.19. “Imbalance Charges” shall mean any fees, penalties, costs or charges (incash or in kind) assessed by a Transporter for failure to satisfy theTransporter’s balance and/or nomination requirements.2.20. “Interruptible” shall mean that either party may interrupt its performanceat 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 anyImbalance Charges as set forth in Section 4.3 related to its interruption afterthe nomination is made to the Transporter and until the change in deliveriesand/or receipts is confirmed by Transporter.2.21. “MMBtu” shall mean one million British thermal units, which is equivalentto one dekatherm.2.22. “Month” shall mean the period beginning on the first Day of the calendarmonth and ending immediately prior to the commencement of the first Day of thenext calendar month.2.23. “Payment Date” shall mean a date, as indicated on the Base Contract, on orbefore which payment is due Seller for Gas received by Buyer in the previousMonth.2.24. “Receiving Transporter” shall mean the Transporter receiving Gas at aDelivery Point, or absent such receiving Transporter, the Transporter deliveringGas 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 inthe publication indicated on the Base Contract, under the listing applicable tothe geographic location closest in proximity to the Delivery Point(s) for therelevant Day; provided, if there is no single price published for such locationfor such Day, but there is published a range of prices, then the Spot Priceshall be the average- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 3 of 10 April 19, 2002of such high and low prices. If no price or range of prices is published forsuch Day, then the Spot Price shall be the average of the following: (i) theprice (determined as stated above) for the first Day for which a price orrange of prices is published that next precedes the relevant Day; and (ii) theprice (determined as stated above) for the first Day for which a price orrange of prices is published that next follows the relevant Day.2.27. “Transaction Confirmation” shall mean a document, similar to the form ofExhibit A, setting forth the terms of a transaction formed pursuant to Section1 for a particular Delivery Period.2.28. “Termination Option” shall mean the option of either party to terminatea transaction in the event that the other party fails to perform a Firmobligation to deliver Gas in the case of Seller or to receive Gas in the caseof Buyer for a designated number of days during a period as specified on theapplicable Transaction Confirmation.2.29. “Transporter(s)” shall mean all Gas gathering or pipeline companies, orlocal distribution companies, acting in the capacity of a transporter,transporting Gas for Seller or Buyer upstream or downstream, respectively, ofthe Delivery Point pursuant to a particular transaction.SECTION 3. PERFORMANCE OBLIGATION3.1. Seller agrees to sell and deliver, and Buyer agrees to receive andpurchase, the Contract Quantity for a particular transaction in accordancewith the terms of the Contract. Sales and purchases will be on a Firm orInterruptible basis, as agreed to by the parties in a transaction.The parties have selected either the “Cover Standard” or the “Spot PriceStandard” as indicated on the Base Contract.- ——————————————————————————-Cover Standard:- ——————————————————————————-3.2. The sole and exclusive remedy of the parties in the event of a breach ofa Firm obligation to deliver or receive Gas shall be recovery of thefollowing: (i) in the event of a breach by Seller on any Day(s), payment bySeller to Buyer in an amount equal to the positive difference, if any, betweenthe purchase price paid by Buyer utilizing the Cover Standard and the ContractPrice, adjusted for commercially reasonable differences in transportationcosts to or from the Delivery Point(s), multiplied by the difference betweenthe Contract Quantity and the quantity actually delivered by Seller for suchDay(s); or (ii) in the event of a breach by Buyer on any Day(s), payment byBuyer to Seller in the amount equal to the positive difference, if any,between the Contract Price and the price received by Seller utilizing theCover Standard for the resale of such Gas, adjusted for commerciallyreasonable 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 Sellerhas used commercially reasonable efforts to sell the Gas to a third party, andno such replacement or sale is available, then the sole and exclusive remedyof the performing party shall be any unfavorable difference between theContract Price and the Spot Price, adjusted for such transportation to theapplicable Delivery Point multiplied by the difference between the ContractQuantity and the quantity actually delivered by Seller and received by Buyerfor such Day(s). Imbalance Charges shall not be recovered under this Section3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, ifany, as provided in Section 4.3. The amount of such unfavorable differenceshall be payable five Business Days after presentation of the performingparty’s invoice which shall set forth the basis upon which such amount wascalculated.- ——————————————————————————-Spot Price Standard:- ——————————————————————————-3.2. The sole and exclusive remedy of the parties in the event of a breach ofa Firm obligation to deliver or receive Gas shall be recovery of thefollowing: (i) in the event of a breach by Seller on any Day(s), payment bySeller to Buyer in an amount equal to the difference between the ContractQuantity and the actual quantity delivered by Seller and received by Buyer forsuch Day(s), multiplied by the positive difference, if any, obtained bysubtracting the Contract Price from the Sport Price; or (ii) in the event of abreach by Buyer on any Day(s), payment by Buyer to Seller in an amount equalto the difference between the Contract Quantity and the actual quantitydelivered by Seller and received by Buyer for such Day(s), multiplied by thepositive difference, if any, obtained by subtracting the applicable Spot Pricefrom the Contract Price. Imbalance Charges shall not be recovered under thisSection 3.2, but Seller and/or Buyer shall be responsible for ImbalanceCharges, if any, as provided in Section 4.3. 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 may agree to Alternative Damagesin 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 aTermination Option in a Transaction Confirmation executed in writing by bothparties. The Transaction Confirmation containing the Termination Option willdesignate the length of nonperformance triggering the Termination Option andthe procedures for exercise thereof, how damages for nonperformance will becompensated, and how liquidation costs will be calculated.SECTION 4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES4.1. Seller shall have the sole responsibility for transporting the Gas to theDelivery Point(s). Buyer shall have the sole responsibility for transportingthe Gas from the Delivery Point(s).4.2. The parties shall coordinate their nomination activities, givingsufficient time to meet the deadlines of the affected Transporter(s). Eachparty shall give the other party timely prior Notice, sufficient to meet therequirements of all Transporter(s) involved in the transaction, of thequantities of Gas to be delivered and purchased 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.- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 4 of 10 April 19, 20024.3. The parties shall use commercially reasonable efforts to avoid impositionof 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 ImbalanceCharges were incurred as a result of Buyer’s receipt of quantities of Gasgreater than or less than the Scheduled Gas, then Buyer shall pay for suchImbalance Charges or reimburse Seller for such Imbalance Charges paid bySeller. If the Imbalance Charges were incurred as a result of Seller’sdelivery of quantities of Gas greater than or less than the Scheduled Gas,then Seller shall pay for such Imbalance Charges or reimburse Buyer for suchImbalance Charges paid by Buyer.SECTION 5. QUALITY AND MEASUREMENTAll Gas delivered by Seller shall meet the pressure, quality and heat contentrequirements of the Receiving Transporter. The unit of quantity measurementfor purposes of this Contract shall be one MMBtu dry. Measurement of Gasquantities hereunder shall be in accordance with the established procedures ofthe Receiving Transporter.SECTION 6. TAXESThe 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 withrespect to the Gas prior to the Delivery Point(s). Buyer shall pay or cause tobe paid all Taxes on or with respect to the Gas at the Delivery Point(s) andall Taxes after the Delivery Point(s). If a party is required to remit or payTaxes that are the other party’s responsibility hereunder, the partyresponsible for such Taxes shall promptly reimburse the other party for suchTaxes. Any party entitled to an exemption from any such Taxes or charges shallfurnish 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 withrespect to the Gas prior to the Delivery Point(s) and all Taxes at theDelivery Point(s). Buyer shall pay or cause to be paid all Taxes on or withrespect to the Gas after the Delivery Point(s). If a party is required toremit or pay Taxes that are the other party’s responsibility hereunder, theparty responsible for such Taxes shall promptly reimburse the other party forsuch Taxes. Any party entitled to an exemption from any such Taxes or chargesshall furnish the other party any necessary documentation thereof.- ——————————————————————————-SECTION 7. BILLING, PAYMENT, AND AUDIT7.1. Seller shall invoice Buyer for Gas delivered and received in thepreceeding Month and for any other applicable charges, providing supportingdocumentation acceptable in industry practice to support the amount charged.If the actual quantity delivered is not known by the billing date, billingwill be prepared based on the quantity of Scheduled Gas. The invoiced quantitywill then be adjusted to the actual quantity on the following Month’s billingor as soon thereafter as actual delivery information is available.7.2. Buyer shall name the amount due under Section 7.1. in the mannerspecified in the Base Contract, in immediately available funds, on or beforethe later of the Payment Date or 10 Days after receipt of the invoice byBuyer, provided that if the Payment Date is not a Business Day, payment due onthe next Business Day following that date, in the event any payments are dueBuyer hereunder, payment to Buyer shall be made in accordance with the Section7.2.7.3. In the event payments become due pursuant to Sections 3.2 or 3.3, theperforming party may submit an invoice to the nonperforming party for anaccelerated payment setting forth the basis upon which the invoiced amount wascalculated. Payment from the nonperforming party will be due five BusinessDays after receipt of invoice.7.4. If the invoiced party, in good faith, disputes the amount of any suchinvoice or any part thereof, such invoiced party will pay such amount as itconcedes to be correct, provided, however, if the invoiced party disputes theamount due, it must provide supporting documentation acceptable in industrypractice to support the amount paid or disputed. In the event the parties areunable to resolve such dispute, either party may pursue any remedy availableat 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 dateof payment at a rate equal to the lower of (i) the then effective prime rateof interest published under “Money Rates” by The Wall Street Journal plus twopercent per annum; or (ii) the maximum applicable lawful interest rate.7.6. A party shall have the right, at its own expense, upon reasonable Noticeand at reasonable times, to examine and audit and to obtain copies of therelevant portion of the books, records, and telephone recordings of the otherparty only to the extent reasonably necessary to verify the accuracy of anystatement, charge, payment, or computation made under the Contract. This rightto examine, audit, and to obtain copies shall not be available with respect toproprietary information not directly relevant to transactions under thisContract. All invoices and billings shall be conclusively presumed final andaccurate and all associated claims for under- or overpayments shall be deemedwaived unless such invoices or billings are objected to in writing, withadequate explanation and/or documentation, within two years after the Month ofGas delivery. All retroactive adjustments under Section 7 shall be paid infull by the party owing payment within 30 Days of Notice and substantiation ofsuch inaccuracy.7.7. Unless the parties have elected on the Base Contract not to make thisSection 7.7 applicable to this Contract, the parties shall net all undisputedamounts due and owing, and/or past due, arising under the Contract such thatthe party owing the greater amount shall make a single payment of the netamount to the other party in accordance with Section 7; provided that nopayment required to be made pursuant to the terms of any Credit SupportObligation or pursuant to Section 7.3 shall be subject to netting under thisSection. If the parties have executed a separate netting agreement, the termsand conditions therein shall prevail to the extent inconsistent herewith.- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 5 of 10 April 19, 2002SECTION 8. TITLE, WARRANTY, AND INDEMNITY8.1. Unless otherwise specifically agreed, title to the Gas shall pass fromSeller to Buyer at the Delivery Point(s). Seller shall have responsibility forand assume an liability with respect to the Gas prior to its delivery to Buyerat the specified Delivery Points(s). Buyer shall have responsibility for andany liability with respect to said Gas after its delivery to Buyer at theDelivery Points(s).8.2. Seller warrants that it will have the right to convey and will transfergood and merchantable title to all Gas sold hereunder and delivered by it toBuyer, free and clear of all liens, encumbrances, and claims. EXCEPT AS PROVIDEDIN THIS SECTION 8.2 AND IN SECTION 14.8, ALL OTHER WARRANTIES, EXPRESS ORIMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANYPARTICULAR 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 thereonwhich attach before title passes to Buyer. Buyer agrees to indemnify Sellerand save it harmless from all Claims, from any and all persons, arising fromor out of claims regarding payment, personal injury or property damage fromsaid Gas or other charges thereon which attach after the passes to Buyer.8.4. Notwithstanding the other provisions of this Section 8, as between Sellerand Buyer, Seller will be liable for all Claims to the extent that such arisefrom the failure of Gas delivered by Seller to meet the quality requirement ofSection 5.SECTION 9. NOTICES9.1. At Transaction Confirmations, Invoices, payments and other communicationsmade pursuant to the Base Contract (“Notices”) shall be made to the addressesspecified in writing by the respective parties from time to time.9.2. All Notices required hereunder may be sent by facsimile or mutuallyacceptable electronic means, a nationally recognized overnight courierservice, first class mail or hand delivered.9.3. Notice shall be given when received on a Business Day by the addressee. Inthe absence of proof of the actual receipt date, the following presumptionswill apply. Notices sent by facsimile shall be deemed to have been receivedupon the sending party’s receipt or its facsimile machine’s confirmation ofsuccessful transmission. If the day on which such facsimile is received is nota Business Day or is after five p.m. on a Business Day, then such facsimileshall 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 onthe next Business Day after if was sent or such earlier time as is confirmedby the receiving party. Notice via first class mail shall be considereddelivered five Business Days after mailing.SECTION 10. FINANCIAL RESPONSIBILITY10.1. If either party (“X”) has reasonable grounds for insecurity regarding theperformance of any obligation under this Contract (whether or not then XXX) bythe other party (“Y”) (including, without limitation, the occurrence of amaterial change in the creditworthiness of Y), X may demand Adequate Assuranceof Performance “Adequate Assurance of Performance” shall mean sufficientsecurity in the form, amount and for the term reasonably acceptable to Xincluding, but not limited to, a standby irrevocable letter of credit, aprepayment, 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 “DefaultingParty”) or its guarantor shall (i) make an assignment or any general arrangementfor the benefit of creditors; (ii) XXX a petition or otherwise commence,authorize, or acquiesce in the commencement of a proceeding or case under anybankruptcy or similar law for the protection of creditors have such petitionfiled or preceding commenced against it; (iii) otherwise become bankrupt orinsolvent (however evidenced); (iv) be unable to pay its debts as they fall due;(v) have a receiver, provisional liquidator, observator, custodian, trustee orother similar official appointed with respect to it or substantially all of itsassets; (vi) fail to perform any obligation to the other party with respect toany Credit Support Obligations relating to the Contract; (vii) fail to giveAdequate Assurance of Performance under Section 10.3 within 48 hours but atleast one Business Day of a written request 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 Notice and/orto terminate and liquidate the transactions under the Contract, in the mannerprovided in Section 10.3, in addition to any and all other remedies availablehereunder.10.3. If an Event of Default has occurred and is continuing, the Non-DefaultingParty shall have the right, by notice to the Defaulting Party, to designate aDay, no earlier than the Day such Notice is given and not later than 20 Daysafter such Notice is given, as an early termination date (the “Early TerminationDate”) for the liquidation and termination pursuant to Section 10.3.1 of alltransactions under the Contract, each a “Terminated Transaction”. On the EarlyTermination Date, all transactions will terminate, other than thosetransactions, if any, that may not be liquidated and terminated under applicablelaw 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 seen thereafteras is reasonable practicable, and upon termination shall be a TerminatedTransaction and be valued consistent with Section 10.3.1 below. With respect toeach Excluded Transaction, its actual termination date shall be the EarlyTermination Date for the purposes of Section 10.3.1.- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 6 of 10 April 19, 2002THE PARTIES HAVE SELECTED EITHER “EARLY TERMINATION DAMAGES APPLY” OR “EARLYTERMINATION 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 shalldetermine, in good faith and in a commercially reasonable manner, (i) theamount owed (whether or not then due) by each party with respect to all Gasdelivered and received between the parties under Terminated Transactions andExcluded Transactions on and before the Early Termination Date and all otherapplicable charges relating to such deliveries and receipts (including withoutlimitation any amounts owed under Section 3.2), for which payment has not yetbeen made by the party that owes such payment under this Contract and (ii) theMarket Value, as defined below, of each Terminated Transaction. The Non-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 amount of Gasremaining to be delivered or purchased under a transaction multiplied by theContract Price, and “Market Value” means the amount of Gas remaining to bedelivered or purchased under a transaction multiplied by the market price fora similar transaction at the Delivery Point determined by the Non-DefaultingParty in a commercially reasonable manner. To ascertain the Market Value, theNon-Defaulting Party may consider, among other valuations, any or all of thesettlement prices of NYMEX Gas futures contracts, quotations from leadingdealers in energy swap contracts or physical gas trading markets, similarsales or purchases and any other bona fide third-party offers, all adjustedfor the length of the term and differences in transportation costs. A partyshall not be required to enter into a replacement transaction(s) in order todetermine the Market Value. Any extension(s) of the term of a transaction towhich parties are not bound as of the Early Termination Date (including butnot limited to “evergreen provisions”) shall not be considered in determiningContract Values and Market Values. For the avoidance of doubt, any optionpursuant to which one party has the right to o the terms of a transactionshall be considered in determining Contract Values and Market Values. The rateof interest used in calculating net present value shall be determined by theNon-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 shalldetermine, in good faith and in a commercially reasonable manner, the amountowed (whether or not then due) by each party with respect to all Gas deliveredand received between the parties under Terminated Transactions and ExcludedTransactions on and before the Early Termination Date and all other applicablecharges relating to such deliveries and receipts (including without limitationany amount owed under Section 3.2), for which payment has not yet been made bythe party that owes such payment under the Contract.- ——————————————————————————-THE PARTIES HAVE SELECTED EITHER “OTHER AGREEMENT SETOFFS APPLY” OR “OTHERAGREEMENT 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 thatall such amounts are netted or aggregated to a single liquidated amountpayable by one party to the other (the “Net Settlement Amount”). At its soleoption and without prior Notice to the Defaulting Party, the Non-DefaultingParty may setoff (i) any Net Settlement Amount owed to the Non-DefaultingParty against any margin or other collateral held by it in connection with anyCredit Support Obligation relating to the Contract; or (ii) any Net SettlementAmount payable to the Defaulting Party against any amount(s) payable by theDefaulting Party to the Non-Defaulting Party under any other agreement orarrangement between the parties.- ——————————————————————————-OTHERS 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 thatall such amounts are netted or aggregated to a single liquidated amountpayable by one party to the other (the “Net Settlement Amount”). At its soleoption and without prior Notice to the Defaulting Party, the Non-DefaultingParty may setoff any Net Settlement Amount owed to the Non-Defaulting Partyagainst any margin or other collateral held by it in connection with anyCredit 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, aggregateor setoff, as applicable, in respect of the estimate, subject to the Non-Defaulting Party accounting to the Defaulting Party when the obligation isascertained. Any amount not then due which is included in any netting,aggregation or setoff pursuant to Section 10.3.2 shall be discounted to netpresent value in a commercially reaonable manner determined by the Non-Defaulting Party.10.4. As soon as practicable after a liquidation, Notice shall be given by theNon-Defaulting Party to the Defaulting Party of the Net Settlement Amount, andwhether the Net Settlement Amount is due to or due from the Non-DefaultingParty. The Notice shall include a written statement explaining in reasonabledetail the calculation of such amount, provided that failure to give suchNotice shall not affect the validity or enforceability of the liquidation orgive rise to any claim by the Defaulting Party against the Non-DefaultingParty. The Net Settlement Amount shall be paid by the close of business on thesecond Business Day following such Notice, which date shall not be earlierthan the Early Termination Date. Interest on any unpaid portion of the NetSettlement Amount shall accrue from the date due until the- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 7 of 10 April 19, 2002date of payment at a rate equal to the lower of (i) the then-effective primerate of interest published under “Money Rates” by the The Wall Street Journal,plus two percent per annum, or (ii) the maximum applicable lawful interestrate.10.5. The parties agree that the transactions hereunder constitute a “forwardcontract” within the meaning of the United States Bankruptcy Code and thatBuyer and Seller are each “forward contract merchants” within the meaning ofthe United States Bankruptcy Code.10.6. The Non-Defaulting Party’s remedies under this Section 10 are the soleand exclusive remedies of the Non-Defaulting Party with respect to theoccurrence of any Early Termination Date. Each party reserves to itself allother rights, setoffs, counterclaims and other defenses that it is or may beentitled to arising from the Contract.10.7. With respect to this Section 10, if the parties have executed a separatenetting agreement with close-out netting provisions, the terms and conditionstherein shall prevail to the extent inconsistent herewith.SECTION 11. FORCE MAJEURE11.1. Except with regard to a party’s obligation to make payment(s) due underSection 7, Section 10.4, and imbalance Charges under Section 4, neither partyshall be liable to the other for failure to perform a Firm obligation, to theextent such failure was caused by Force Majeure. The term “Force Majeure” asemployed herein means any cause not reasonably within the control of the partyclaiming 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 inevacuation of the affected area, floods, washouts, explosions, breakage oraccident or necessity of repairs to machinery or equipment or lines of pipe,(ii) weather related events affecting an entire geographic region, such as lowtemperatures which cause freezing or failure of wells of lines of pipe; (iii)interruption and/or curtailment of Firm transportation and/or storage byTransporters; (iv) acts of others such as strikes, lockouts or otherindustrial disturbances, riots, sabotage, insurrections or wars; and (v)governmental actions such as necessary 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 Buyershall make reasonable efforts to avoid the adverse impacts of a Force Majeureand to resolve the event or occurrence once it has occurred in order to resumeperformance.11.3. Neither party shall be entitled to the benefit of the provisions ofForce Majeure to the extent, performance is affected by any or all of thefollowing occurrences: (i) the curtailment of interruptible or secondary Firmtransportation unless primarily in-path, Firm transportation is alsocurtailed; (ii) the party claiming excuse failed to remedy the condition andto 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 the Agreement, (iv) the loss ofBuyer’s market(s) or Buyer’s inability to use or resell Gas purchasedhereunder, except, in the either case, as provided in Section 11.2; (v) theloss or failure of Sellers gas supply or depletion of reserves, except ineither case, as provided in Section 11.2. The party claiming Force Majeureshall not be excused from its responsibility for Imbalance Charges.11.4. Notwithstanding anything to the contrary herein, the parties agree thatthe settlement of strikes, lockouts or other industrial disturbances shall bewithin the sole discretion of the party experiencing such disturbance.11.5. The party whose performance is prevented by Force Majeure must provideNotice to the other party. Initial Notice may be given only, however, writtenNotices with reasonably full particulars of the event or occurrence isrequired as soon as reasonably possible. Upon providing written Notice ofForce Majeure to the other party, the affected party will be relieved of itsobligation, from the onset of the Force Majeure event to make or acceptdelivery of Gas as applicable, to the extent and for the duration of ForceMajeure and neither party shall be deemed to have failed in such obligationsto the other during such occurrence or event.11.6. Notwithstanding Sections 11.2 and 11.3, the parties may agree toalternative Force Majeure provisions in a Transaction Confirmation executed inwriting by both parties.SECTION 12. TERMThe Contract may be terminated on 30 Days written Notice, but shall remain ineffect until the expiration of the latest Delivery Period of anytransaction(s). The rights of either party pursuant to Section 7.6 and Section10, the obligations to make payment hereunder, and the obligation of eitherparty to indemnify the other, pursuant hereto shall survive the termination ofthe Base Contract or any transaction.SECTION 13. LIMITATIONSFOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGESIS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE ANDEXCLUSIVE REMEDY. A PARTY’S LIABILITY HEREUNDER SHALL BE LIMITED AS SET FORTHIN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY AREWAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR INA TRANSACTION, A PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGESONLY. SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, ANDALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLYHEREIN PROVIDED, 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 INTENT OF THE PARTIES THAT THE LIMITATIONSHEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THECAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE.- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 8 of 10 April 19, 2002TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THEPARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE,OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGESCALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM ORLOSS.SECTION 14. MISCELLANEOUS14.1. This Contract shall be binding upon and inure to the benefit of thesuccessors, assigns, personal representatives, and heirs of the respectiveparties hereto, and the covenants, conditions, rights and obligations of thisContract shall run for the full term of this Contract. No assignment of thisContract, in whole or in part, will be made without the prior written consent ofthe non-assigning party (and shall not relieve the assigning party fromliability hereunder), which consent will not be unreasonably withheld ordelayed; provided, either party may (i) transfer, sell, pledge, encumber, orassign this Contract or the accounts, revenues, or proceeds hereof in connectionwith any financing or other financial arrangements, or (ii) transfer itsinterest to any parent or affiliate by assignment, merger or otherwise withoutthe prior approval of the other party. Upon any such assignment, transfer andassumption, the transferor shall remain principally liable for and shall not berelieved of or discharged from any obligations hereunder.14.2. If any provision in this Contract is determined to be invalid, void orunenforceable by any court having jurisdiction, such determination shall notinvalidate, void, or make unenforceable any other provision, agreement orcovenant of this Contract.14.3. No waiver of any breach of this Contract shall be held to be a waiver ofany other or subsequent breach.14.4. This Contract sets forth all understandings between the parties respectingeach transaction subject hereto, and any prior contracts, understandings andrepresentations, whether oral or written, relating to such transactions aremerged 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 bythe laws of the jurisdiction as indicated on the Base Contract, excluding,however, any conflict of laws rule which would apply the law of anotherjurisdiction.14.6. This Contract and all provisions herein will be subject to all applicableand valid statutes, rules, orders and regulations of any governmental authorityhaving jurisdiction over the parties, their facilities, or Gas supply, thisContract 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 andcomplete authority to enter into and perform this Contract. Each person whoexecutes this Contract on behalf of either party represents and warrants that ithas full and complete authority to do so and that such party will be boundthereby.14.9. The headings and subheadings contained in this Contract are used solelyfor convenience and do not constitute a part of this Contract between theparties and shall not be used to construe or interpret the provisions of thisContract.14.10. Unless the parties have elected on the Base Contract not to make thisSection 14.10 applicable to this Contract, neither party shall disclose directlyor indirectly without the prior written consent of the other party the terms ofany transaction to a third party (other than the employees, lenders, royaltyowners, counsel, accountants and other agents of the party, or prospectivepurchasers of all or substantially all of a party’s assets or of any rightsunder this Contract, provided such persons shall have agreed to keep such termsconfidential except (i) in order to comply with any applicable law, order,regulation, or exchange rule, (ii) to the extent necessary, for the enforcementof 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 thesole purpose of calculating a published index. 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 thisContract is not subject to this confidentiality obligation. Subject to Section13, the parties shall be entitled to all remedies available at law or in equityto enforce, or seek relief in connection with this confidentiality obligation.The terms of any transaction hereunder shall be kept confidential by the partieshereto for one year from the expiration of the transaction.In the event that disclosure is required by a governmental body or applicablelaw, the party subject to such requirement may disclose the material terms ofthis Contract to the extent so required, but shall promptly notify the otherparty, prior to disclosure, and shall cooperate (consistent with thedisclosing party’s legal obligations) with the other party’s efforts to obtainprotective orders or similar restraints with respect to such disclosure at theexpense of the other party.14.11 The parties may agree to dispute resolution procedures in SpecialProvisions attached to the Base Contract or in a Transaction Confirmationexecuted 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 purchaseand sale of natural gas. Further, NAESB does not mandate the use of thisContract by any party. NAESB DISCLAIMS AND EXCLUDES, AND ANY USER OF THISCONTRACT ACKNOWLEDGES AND AGREES TO NAESB’S DISCLAIMER OF, ANY AND ALLWARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL ORWRITTEN, WITH RESPECT TO THIS CONTRACT OR ANY PART THEREOF, INCLUDING ANY ANDALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE, NON-INFRINGEMENT,MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE (WHETHEROR NOT NAESB KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE INFACT AWARE OF ANY SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW, BY REASON OFCUSTOM OR USAGE IN THE TRADE, OR BY 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.- ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 9 of 10 April 19, 2002 EXHIBIT A TRANSACTION CONFIRMATION FOR IMMEDIATE DELIVERY

Viking Resources Corp Date: November 13, 2002 Transaction Confirmation #: ________________

This Transaction Confirmation is subject to the Base Contract between Sellerand Buyer dated November 13, 2002The terms of this Transaction Confirmation are binding unless disputed inwriting within 2 Business Days of receipt unless otherwise specified in theBase Contract.- ——————————————————————————-

SELLER: BUYER ——————————————————– ———————————————————————–Viking Resources Corp. UGI Energy Services, inc. d/p/a GASMARK ——————————————————– ———————————————————————–311 Rouser Corp. 1100 Berkshire Blvd., Suite 305 ——————————————————– ———————————————————————– Wyomissing PA 19810 ——————————————————– ———————————————————————–Moon Two, PA 15108 Attn: Robert Meder ——————————————————– ———————————————————————–Attn: Michael Brecko Phone: 610-373-7999 ——————————————————– ———————————————————————–Phone: 412-282-2830-126 Fax: 610-374-4288 ——————————————————– ———————————————————————–Fax: 412-282-3927 Base Contract No. ——————————————————– ———————————————————————–Base Contract No. Transporter: ——————————————————– ———————————————————————–Transporter: Transporter Contract Number: ——————————————————– ———————————————————————–Transporter Contract Number: ——————————————————–

– ——————————————————————————-Contract Price: $___________/MMBtu or NYMEX LDS plus $.30 oer Dth____________________________- ——————————————————————————-Delivery Period: Begin April 1, 2003 End: March 31, 2004- ——————————————————————————-Performance Obligation and Contract Quantity: (Select One)

Firm (Fixed Quantity): Firm (Variable Quantity): Interruptible:__________________ MMBtus/day 9,000 MMBtus/day Minimum Up to _____________ MMBtus/dayEFR 9,000 MMBtus/day Maximum subject to Section 4.2. at election of |_| Buyer or |_| Seller

– ——————————————————————————-Delivery Point(s): Texas Eastern Meter Number 73133 Station Name of Prah inMarket areas M2(If a o- ——————————————————————————-Special Conditions: Additional wells may be added upon mutual consent of theparties. All gas produced under this agreement shall be produced from wellslocated within the Commonwealth of Pennsylvania. Viking shall have triggerrights to lock its prices.- ——————————————————————————-

Seller: Viking Resources Corp. Buyer: UGI Energy Services Inc., d/b/s GASMARK ——————————————————– ————————————————————————By: By: ——————————————————– ————————————————————————Title: Vice President Title: Vice President, Gas Supply & Risk Management ——————————————————– ————————————————————————Date: 1/21/03 Date: 12/17/02 ——————————————————– ————————————————————————

– ——————————————————————————-Copyright(C)2002 North American Energy Standards Board, Inc.NAESB Standard 6.3.1All Rights Reserved Page 10 of 10 April 19, 2002 SPECIAL PROVISIONS To Base Contract for Sale and Purchase of Natural Gas Between UGI Energy Services, Inc. and Viking Resources Corp. Dated November 13, 2002THE FOLLOWING SENTENCE REPLACES SECTION 1.4 IN ITS ENTIRETY:The parties hereby consent to the electronic recording of their OralTransactions and related telephone discussions. Each party waives any furthernotice of such recording, and agrees to notify its officers and employees ofsuch recording and to obtain any necessary consent of such officers andemployees. Failure by the Confirming Party to send, or the other party toreturn, an executed Transaction Confirmation shall not invalidate any Gaspurchase and sale transaction (each a “Transaction” and collectively”Transactions”) agreed to by the parties in a recorded telephone conversation.In the absence of a written Transaction Confirmation, any such recording willbe deemed a “writing” by the parties for purposes of Section 2-201(1) of theUniform Commercial Code. A true and complete copy of a recording made byeither party will be provided to the other party upon request, if itreasonably appears that such recording may be utilized to resolve a disputebetween the parities. Such recording may be submitted by either party asevidence of the existence or terms of a Transaction, subject to any applicablestatute, rule or judicial precedent which limits the admissibility of parol orextrinsic evidence, and subject to any arguments which either party may makeregarding the interpretation or significance of such recording. In the eventof conflict between the terms and provisions of the written TransactionConfirmation and a recorded telephone conversation, the terms and provisionsof the written Transaction Confirmation shall control to the extent of anysuch conflict.THE FOLLOWING REPLACES PARAGRAPH (i) IN SECTION 2.7:(i) the Base Contract, including the Special Provisions and any Addendumsthereto,THE FOLLOWING REPLACES SECTION 2.20 IN ITS ENTIRETY:”Interruptible” shall mean that either party may interrupt its performance atany 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 anyImbalance Charges as set forth in Section 4.3, related to its interruptionafter the nomination is made to the Transporter and until the change indeliveries and/or receipts is confirmed by Transporter, or Section 4.4,related to the failure to provide timely notice of interruption.THE FOLLOWING PARAGRAPH IS ADDED AS SECTION 4.4:In the event that performance is interrupted, the interrupting party shallprovide no less than 24 hours notice of its intent to interrupt. In the eventthe interrupting party fails to provide timely notice of its intent tointerrupt its performance, the interrupting party shall be responsible fordamages calculated using the standards set forth in Section 3.2.THE FOLLOWING IS ADDED AS THE FIRST SENTENCE IN SECTION 8.2:Seller warrants that it is fully capable of assuming and willing to assume,financially and otherwise, all of the duties and obligations of this Contract.THE FOLLOWING REPLACES SECTION 8.3 IN ITS ENTIRETY:Seller agrees to indemnify Buyer its successors and assigns, officers,directors and employees, and save them harmless from all losses, liabilitiesfor claims, including but not limited to claims of title, personal injury,property damage, commercial damages and attorney’s fees and costs of court(“Claims”) arising from or out of or caused by Seller’s possession or controlof Gas sold hereunder. Buyer agrees to indemnify Seller its successors andassigns, officers, directors and employees, and save them harmless from alllosses, liabilities for claims, including but not limited to claims of title,personal injury, property damage, commercial damages and attorney’s fees andcost of court (“Claims”) arising from or out of or caused by, Buyer’spossession or control of Gas sold hereunder.THE FOLLOWING IS ADDED AT THE END OF SECTION 10.2:The Parties specifically agree that this Contract and all Transactionspursuant hereto are “Forward Contracts” as such term is defined in the UnitedStates Bankruptcy Code, 11 U.S.C., Section 101(25). If either Party becomessubject to Bankruptcy Code proceedings, it is understood and agreed that theother Party shall be entitled to exercise its right to liquidate this Contractas a “Forward Contract Merchant” under Section 556 of the U.S. BankruptcyCode.THE FOLLOWING IS ADDED AT THE END OF THE SECOND PARAGRAPH IN SECTION 10.3.1(EARLY TERMINATION DAMAGES APPLY):In addition to the other Early Termination Damages defined in this Section,the Non-Defaulting Party shall be entitled to recover the Costs resulting fromthe Event of Default. “Costs” shall mean brokerage fees, commissions and othersimilar transaction costs and expenses reasonably incurred by the Non-Defaulting Party either in terminating any arrangement by which it has hedgedits obligations pursuant to a terminated EFP or Firm transaction or inentering into new arrangements which replace a terminated EFP or Firmtransaction, and reasonable attorneys’ fees, if any, incurred in connectionwith enforcing its rights hereunder.

Accepted and Approved: Accepted and Approved:UGI Energy Services, Inc. Viking Resources Corp.d/b/a GASMARKBy: XXX By XXX- ———————————- ———————————-Title Title Vice President- ———————————- ———————————-Date 12/17/02 Date 1/21/03- ———————————- ———————————-