2003-2012 APPLICATION FOR PARTICIPATION IN A FORESTRY OFF SET POOL

AND SALES CONTRACT FOR EXCHANGE FORESTRY OFF SETS (XFOs)

I, Your Name hereby apply for participation in a forestry carbon pool managed by North Dakota Farmers Union (NDFU) for registration of Exchange Forestry Offsets (XFOs) with the Chicago Climate Exchange (CCX) for the years 2008-2012 on property that I own or control. I hereby agree that XXX.X acres shall be maintained as set forth in the Protocol for CCX Afforestation Projects.  I hereby agree that hold full legal ownership and title to the Greenhouse Gas mitigation rights registered as CCX Offsets that are associated with the facilities and activities included in this project.

I also hereby attest that the project is in the United States, and involves forestation and forest enrichment practices as described by CCX and was initiated on unforested or degraded forest land on or after January 1, 1990. I hereby agree that the forest project has as a primary purpose the long-term storage of atmospheric carbon in accordance with CCX terms and provisions- I further agree to provide documentary evidence of the legal protected status of the forested land parcels registered with CCX The quantity of XFOs to be issued to a CCX-registered forestry project shall be equivalent to the annual increase in sequestered carbon on eligible sites included in the project during the years 2008-2012 I agree to abide by the rules of the CCX as they pertain to XFOs and to the conditions for Pool participation as set forth in this agreement.

Purchaser agrees to buy and seller agrees to sell and deliver to purchaser free from liens and encumbrances at 1415 12th Avenue SE, Jamestown, North Dakota 58401, the rights to the Exchange Forestry Offsets (XFOs) created during the years 2003-2012 through the use of CCX approved practices. Please complete and attach the Exchange Forestry Offset Enrollment Worksheet and supporting documents as identified in the Terms and Conditions.

In particular, the seller warrants that the amount of carbon sequestered from which the XFOs arise is verified through Project Reports as described by the Chicago Climate Exchange, and agrees to abide by all of the rules of the Chicago Climate Exchange. The seller agrees to the terms of participation in the forestry carbon pool, recognizing that 20% of the accrued XFOs shall be held in reserve by the Purchaser until December 31, 2012. In the event that the project fails to meet these requirements, all XFOs from such land shall be null and void and any payments for XFOs delivered prior to January 1, 2013, shall be repaid subject to interest and penalties.

The transfer price of the XFOs covered by this contract shall be the sales price as determined by sale through the Chicago Climate Exchange less a 10% service fee retained by North Dakota/National Farmers Union. Contracts facilitated by an Associate Aggregator will be subject to an additional 10% service fee which will be paid to the Associate Aggregator. Exchange offset registration fees and offset verification costs are the responsibility of the offset project owner. Offset registration fees and offset pool verification fees will be deducted from pool proceeds prior to payment calculations. Sale of XFOs covered by this contract shall be at the sole discretion of the Purchaser, however all XFOs shall be priced no later than June 30, 2013. Payment for XFOs covered by this contract shall be made on an annual or semi-annual basis. The parties to this contract hereby agree that the title to the XFOs shall be automatically delivered to the Purchaser on the first day of January following the year of which forestry sequestration or destruction occurred. By signature hereto, Seller irrevocably conveys title to the XFOs stated above to NDFU as of the first day of January following the year which sequestration took place. Seller further warrants compliance with the terms and conditions contained in the Agreement for the period from January 1, 2003 through January 1, 2013.

CCX Offset Project Terms and Conditions: By registering a project with Chicago Climate Exchange CCX), each project owner agrees to and acknowledges the following Terms and Conditions in relation to the project and the Exchange Offsets issued by CCX:

1. The enrolled project meets all applicable eligibility rules of the Chicago Climate Exchange
2. CCX will issue to the CCX Registry account of the project owner or its designated aggregator a quantity of Exchange Offsets that conforms to the applicable CCX Rules. Project owners will be notified of acceptance/rejection of their XFOs into the CCX Registry account by the designated aggregator at or before the time of the first payment due the Seller hereunder.
3. Each sale of Exchange Offsets executed through CCX shall represent a complete transfer of all legal rights associated with the mitigation of greenhouse gases that relate to the quantity and time periods associated with the Exchange Offsets that are established through fulfillment of the Terms of this contract.
4. The project owner or its CCX-registered aggregator may sell or retain the Exchange Offsets earned under the provisions of this agreement.
5. The project owner shall retain full legal ownership of all greenhouse gas mitigation rights that may accrue: (a) on lands or via activities not included in the CCX-registered project; (b) in excess of the quantity of Exchange Offsets issued by CCX to CCX-registered projects; (c) before or after the years 2003 through 2010 for the CCX- registered project.
6. Neither CCX nor North Dakota Farmers Union makes any warranty as to the marketability or market value of CCX Exchange Offsets.
7. Each project owner, and, when applicable, its aggregator, is required to periodically submit a signed project report that confirms conformance with the terms herein. Representatives of CCX may conduct on-site inspection of registered projects and related documents. Each project owner agrees to provide access in such cases in a prompt and cooperative manner. All CCX offsets projects and project reports and verification reports are subject to inspection and audit by the provider of regulatory services designated by CCX and by other independent experts as may be engaged by CCX.
8. CCX may request additional information and/or access to registered projects for the purpose of advancing understanding of greenhouse gas mitigation projects. Project owners may decline such access without penalty. In no cases shall research findings cause a reduction in the quantity of Exchange Offsets to be issued to a registered project.
9. Failure to conform to the rules provided herein may result in termination of enrollment in CCX and prohibition from all further participation in CCX.

CCX Eligibility Requirements: All CCX-eligible carbon sequestration projects that produce less than 12,500 metric tons CO2 equivalent of Exchange Offsets per year must be registered through a CCX-registered aggregator. Projects that are represented in CCX by an Aggregator are referred to as 'pooled projects.' The 'pool' refers to the multiple projects represented by the Aggregator. Each Aggregator is assigned a CCX registry account which will hold all offsets issued to projects it represents. Aggregators shall also be Authorized Traders in the CCX Trading Platform for such offsets. Aggregators shall be responsible for receiving from individual projects the CCX-required project reports, and for submitting to CCX summary reports of projects they represent. The terms of the business and legal relationships between aggregators and project owners are left to the discretion of those parties.

Verifier: Is a technically expert entity that is approved by CCX to conduct verification of CCX Exchange Offset projects.

Offset Issuance: CCX-eligible greenhouse gas mitigation projects can be recorded in the CCX Registry and will be issued Exchange Offsets annually on the basis of mitigation tonnage realized through the year 2012. All Offset project mitigation effectiveness will be quantified on the basis of metric tons of CO2 equivalence. Each Exchange Offset will represent one hundred metric tons of carbon dioxide (CO2) and will be identified by annual vintage. CCX reserves the right to assess fees for the registration of Offset Projects in the CCX Registry.

Vintage: The vintage of an instrument is defined as the first year the designated instrument may be used for compliance with the CCX emission reduction schedule, or, as applicable, the CCX electricity purchase reduction schedule.

Trading Authority: North Dakota Farmers Union shall have sole authority to access the CCX Trading Platform and Registry account(s) holding the Offsets issued to projects it represents and to execute sales on the CCX electronic trading platform on behalf of project owners and distribute sales proceeds to project owners in accordance with the terms stated in this contract.

Forestation Projects in the U.S., Canada, Brazil and Mexico involving forestation (which includes aforestation or reforestation) and forest enrichment, via plantings and/or natural regeneration initiated on or after January 1, 1990, on land not forested, or on forest land that had been degraded or unforested on December 31, 1989, may earn XFOs. The quantity of XFOs to be issued to a CCX-registered forestry project shall be based on the annual increase in stored carbon (expressed in metric tons of carbon dioxide equivalence) on eligible sites included in the project during years the 2003 through 2010.

Non-compliance: In the case of noncompliance with the Terms and Conditions contained in this CCX Exchange Forestry Offsets contract, the owner of the noncompliant project shall return a quantity of CCX Exchange Offsets and/or Exchange Allowances that is equal to the total quantity of XFOs that have been issued to the project during the years 2003 through 2012 or present payment in an amount equal to the cost of acquiring such replacement offsets or allowance. The owner shall also pay to the aggregator, a penalty equal to twenty percent (20%) of the value of all offsets or allowances covered under this Agreement, as well as interest accruing on said amounts from the date of noncompliance, as well as all costs incurred by aggregator in enforcing this provision, inclusive of reasonable attorney fees. The owner of the noncompliant project may be prohibited from further participation in CCX.

Long-term commitments: The project owner must present to CCX evidence that the Carbon Stocks in forest parcels included in a Project will be subject to long-term maintenance in a manner deemed acceptable by the CCX Offsets committee. Projects in the U.S. and Canada can qualify if undertaken on privately owned land and placed in protective status via: (a) establishment of a long-term conservation easement providing that the Project land is to be maintained as forest for the duration of the easement; (b) transfer of ownership of land parcels to a land trust, qualifying non-governmental organization or governmental body, provided such transfer establishes legal protection that the project land is to be maintained as forest ; or. (c) other means that the CCX Offsets Committee and the CCX Forestry Committee may determine to be acceptable.

Small forestation projects are defined for the purposes of CCX forest project quantification rules as projects owned by entities for which the minimum annual gross accumulation of Carbon Stocks is expected to be less than 2,000 (two thousand) metric tons CO2 per year.
Medium forestation projects are defined for the purposes of CCX forest project quantification rules as projects owned by entities for which the minimum annual gross accumulation of Carbon Stocks is expected to be more than 200 but less than 12,500 metric tons CO2 equivalent per year.

Large forestation projects are defined for the purposes of CCX forest project quantification rules as projects owned by entities for which the minimum annual gross accumulation of Carbon Stocks is expected to be more than 200 but less than 12,500 metric tons CO2 equivalent per year.

CCX forest carbon baseline is the quantity of stored carbon in the CCX-included carbon pools (expressed in metric tons CO2 equivalent) in place on lands included in the CCX-registered project at the end of calendar year 2002.

Forest Carbon Reserve Pool: A quantity of Exchange Forestry Offsets equal to twenty percent (20%) of all XFOs generated by CCX-eligible forest carbon projects (as defined and quantified in conformance with CCX Rules) shall be held in a CCX Forest Carbon Reserve Pool. Such accounts shall be established for each medium and large project and for each aggregator of pooled projects. XFOs in the account shall remain the property of the project owner(s) (pool participants in the case of aggregated projects) and all XFOs that remain in the pool shall be released to the project owners in late 2012. In the event that a CCX-registered project experiences a net loss of stored carbon during 2003 through 2012, (e.g. due to events such as fire or tree removal), CCX shall promptly cancel XFOs held in the corresponding CCX Forest Carbon Reserve Pool in an amount equal to the net quantity of carbon (expressed in metric tons CO2 equivalent) released from the CCX-enrolled project. The maximum amount of carbon loss to be recognized by CCX shall be no more than the total quantity of XFOs issued to the project during its enrollment in CCX.

replacement instruments will be placed into the forest carbon reserve pool. Options available for the replacement of lost tons, and the associated replacement rates are as follows: (a) If previously issued XFOs are negated by net loss of stored carbon and are replaced with CCX-issued emission allowances or offsets, each previously issued offset must be replaced with one allowance or offset. (b) If previously issued offsets are negated by loss and are replaced with CCX XFOs to be generated by the affected project in later years (but as soon as practicable) as a result of carbon accumulation at the original project site, each cancelled XFO must be replaced with 1.2 later-vintage XFOs.

Carbon Quantification Methods

As applicable in the provisions below, direct measurement of forest carbon must be conducted by a CCX-approved Verifier that shall apply a CCX-recognized Forest Carbon Direct Quantification Method. The cost of verification of such direct measurements will be borne by the Project Owner. The elected quantification method shall be employed for all years during the 2003-2012 period.

Small Forestation Projects shall be subject to inspection by verification entities engaged by CCX.

All information contained in the Project Registration Filing for Medium-sized Forestation Projects must be verified by a CCX-approved Verifier.

Project Registration Filings for Small and Medium-sized Forestation Projects must document the quantity of trees involved in the Project, acreage included, description of planted tree species and the tree ages, sizes and planting density at the time of Project registration.

Carbon accumulation in Small and Medium-sized Forestation Projects in the U.S. and Canada may be quantified using the CCX-approved direct measurement methods or through use of the CCX Reforestation Carbon Accumulation Tables provided in Appendix Table A. The coefficients in Appendix Table A shall be applied for reforestation and aforestation undertaken in the U.S. and Canada for Projects involving plantings in excess of 250 stems per acre. Tree classifications in Appendix Table C and the coefficients in Appendix Table D and shall be applied for widely spaced tree planting Projects, including urban and suburban tree planting programs, undertaken in the U.S. and Canada.

For Large Forestation Projects the baseline Carbon Stocks and carbon accumulation must be quantified through direct measurement undertaken by a CCX-approved Verifier. Offset issuance is determined on the basis of net carbon accumulation, which shall reflect carbon lost from a Project site due to harvest, fire, pests or other events.

Owners of Projects that are quantified through direct measurement shall initially quantify the number of Offsets generated by the Project through use of the applicable Carbon Accumulation Coefficients provided in the Appendix (or other recognized and credible carbon accumulation reference values as may be recommended by CCX). Final Offset issuance quantities for 2003-201$-shall be based on direct measurement of carbon increments as determined by a measurement occurring during the third or fourth calendar quarter of 2003. CCX Projects that have been subject to direct measurement prior to 2003 may use those data to quantify annual increments in Carbon Stocks during the 2003 through 2012 period.

Quantification of Baselines and Carbon Accumulation for Small, Medium and Large CCX forestry projects