I responding to your comments as follows:

Sect. 1.9.  The second to last sentence in the definition of Cumulative Net 
Revenues duplicates part (but not all) of the first sentence of Section 7.2 
with regard to what is included in Cumulative Net Revenue. . . . Perhaps the 
make-up of Cumulative Net Revenue should be covered in just one place or, as 
an alternative, the definition 1.9 could cross-reference 7.2.

You're absolutely right.  The "and, for purposes of Section 7.1, Section 7.2" 
reference is a bust.  I've recast the sentence as "The calculation of 
Cumulative Net Revenues is made expressly subject to Sections 2.10 and 7.2."

I don't believe the language of Sect. 7.2 regarding the make-up of Cumulative 
Net Revenue is intended to be only "for purposes of Section 7.1" as the 
wording of 7.2 suggests.

I included that to avoid any unintended consequences in the event we later 
use "Cumulative Net Revenue" in other contexts for which it wouldn't be 
appropriate to include such refund-revenues; but if you believe it's 
confusing, I'll delete the clause.

Sect. 3.3. I would delete part (i) if the last sentence. It would be illegal 
and contrary to this Agreement for MEH (or Peoples) to charge a rate above 
the maximum, so it seems inappropriate to suggest that MEH can collect a fee 
for doing this.

Per our discussion, I agree that it seems inappropriate to contemplate 
knowing violations of federal law.  I'll soften it so it will have a better 
chance of not raising regulatory hackles.

Perhaps we should just make Peoples responsible for all refunds. Let me know 
what you think.

That would be easier, but it seems fair that we should be responsible for 
risks we knowingly or recklessly assume.

Also, 6 lines from the end of 7.2, I think the reference to 7.2 (ii) is a 
typo. I believe it's just 7.2.

It's now changed.

Sect. 18.3. Do we want to include any work related to the Governmental 
Approval as "ordinary course"?

My inclination is to not include it, so as to avoid arguments with Peoples 
over what's extraordinary and what's ordinary in this context.

As always, I thank you for your help.  DT

David A. Tucker
Bracewell & Patterson, L.L.P.
Pennzoil Place, South Tower
711 Louisiana
Houston, Texas 77002
Phone:  (713) 221-1414
Fax:  (713) 221-1212
Email:   dtucker@bracepatt.com