Agency Agreement

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The "Governmental Aprroval" sections work as we discussed: Under Article
10.2, initial effectiveness is contingent on receipt of an ICC Order
acceptable to each party (note-this is an ICC order "required" for the
agreement to take effect). The Agreement can terminate under 15.1(e) if a
"Judgment" (court order, regulatory order etc.) determines that, as a
result of Hub Transactions, Peoples is subject to comprehensive regulation
as a natural gas co. or loses its Hinshaw status. Under 15.2, the Agreement
terminates if it is found void or illegal, or at the option of either party
if found void or illegal in part with frustration of purpose. The intent
of our wording in these sections, and the related definitions, is to
eliminate the termination right (which was included in Peoples'intial
draft) for a regulatory action, such as an ICC order which adopts an
unfavorable ratemaking treatment for Hub revenues, but does not find the
agreement to be illegal or void. The thought was that, after Peoples
obtains an accpetable intial blessing from the ICC, the risk of some later
regulatory action short of a finding of illegality should rest with Peoples
during the Agreement's term.