Additional comments

Cle and I wanted to add a few comments to Boyd's email:

1. Section 1.6 (Cumulative Net Revenues). As noted, MEH should be
compensated in full (or be paid a reduced finders fee) for transactions it
brings to Peoples during the term that may be performed after the term.

2. Section 2.1. MEH may want to ask for a termination right on the
transfer of the Facilities. Also, transfers should be prohibited unless the
Agency Agreement is directly assumed on terms that are satisfactory to MEH.

3. Section 2.2.

They deleted the reference to our agency being an agency coupled with an
interest. An agency coupled with an interest exists when consideration has
been given or paid for the right to exercise the authority, or if the agent
is given an interest in the property with which the agent is dealing. A
principal may not be entitled to revoke an agency coupled with an interest.
I think we need to reach a meeting of the minds as to whether they will be
allowed to modify or terminate the agency other than pursuant to terms of the
agreement.

Their language states that Peoples' responsibilities as principal are limited
to those set forth in the agreement. We do not set those out, so we must do
so if this limitation is to survive. For example, we do not expressly
obligate Peoples to deliver Hub Services in accordance with the GT&C and
applicable law, to perform the contracts for Hub Transactions that it has
made, to maintain its facilities in good repair, etc. In particular, a
principal has the following duties, among others, to its agent: (i) the duty
to furnish an opportunity for work (e.g., to supply hub services for sale),
(iii) the duty not to interfere with the agent's work, (iv) the duty to
indemnify the agent where (a) the agent makes a payment authorized or made
necessary in executing the principal's affairs or a payment beneficial to the
principal or (b) the agent suffers a loss which, because of their relation,
it is fair that the principal should bear, and (vi) the duty to compensate
the agent for performing requested services that are beyond the scope of the
agency agreement. We will need to determine exactly what duties should be
expressly included in the agreement.

A gross negligence standard of liability is preferable to an ordinary
negligence standard.

As noted, it is inappropriate to make the agent strictly liable for complying
with the GT&C, since it may be vague, subject to conflicting interpretations,
and subject to change at Peoples' whims.

4. Section 2.10. If the concept survives, MEH should not be liable for
accounts receivable in dispute, particularly where Peoples may be directly at
fault for the nonpayment. MEH should not be accountable for payment defaults
by shippers who meet the credit standards that Peoples has historically
applied.

5. Section 3.2. Ideally, the receivables held by MEH should secure the
amounts owing to MEH. Further, MEH should be empowered to apply accounts
receivable toward the payment of taxes, Hub Shipper refunds, and reimbursible
expenses.

6. Section 5.1. As noted, no materiality qualifier should apply to
Judgments and Laws.

7. Section 10.1. As noted, I am uncertain how it can be determined which
expenses are "incremental to" MEH's obligations.

8. Section 14.1. Clearly, (b) is too broad. If the concept survives,
MEH should be liable for taking action which it knows or reasonably should
know exceed its authority.

9. Section 14.2. Section (i) needs to be restored, particularly in light
of comment 3 above regarding common law duties of a principal.

10. Section 18.3. Peoples' liability for MEH's routine and extraordinary
expenses should be negotiated between the parties.

11. Section 18.14. The new language should be dropped as too vague.

12. Section 18.16. This requires further explanation from Peoples.