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.