JOINT APPLICATION OF NATIONAL FUEL AND LEIDY HUB
File No.
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
FORM U-1

National Fuel Gas Company                    Leidy Hub, Inc.
30 Rockefeller Plaza                         10 Lafayette Square
New York, NY 10112                           Buffalo, NY 14203	

(Name of company filing this statement
and address of principal executive offices)

NATIONAL FUEL GAS COMPANY
(Name of top registered holding company)

Walter E. DeForest, President      Richard M. DiValerio, Secretary
Leidy Hub, Inc.                    National Fuel Gas Company
10 Lafayette Square                10 Lafayette Square
Buffalo, NY  14203                 Buffalo, NY 14203	

(Names and addresses of agents for service)
It is respectfully requested that the Commission send copies of
all notices, orders and communications to:
James R. Peterson, Esq.
Suite 1500
10 Lafayette Square
Buffalo, NY 14203
OUTLINE
Item 1. Description of Proposed Transactions.
A. SUMMARY OF PROPOSED TRANSACTIONS
B. FORMATION AND OPERATION OF ENERCHANGE
(1) Developing and Operating the Electronic Trading System.
(2) Operating Existing Market Hubs.
(3) Doing Transactions on the Electronic Trading System.
(4) Developing and Operating Other Hubs.
(5) Engaging in Market-Making Activity
(6) Other and Incidental Activities.
C. PRE-PURCHASE AGREEMENT
D. PURCHASE AGREEMENT
E. LIMITED LIABILITY COMPANY AGREEMENT OF ENERCHANGE, L.L.C.
F. PARENT GUARANTEES
G. ANALYSIS
(1) Satisfaction of Requirements of Section 10(b) and 10(c)
(2) Applicability of the Gas Related Activities Act
(3) Enerchange's Rule 16 Exemption
H. FINANCING
Item 2. Fees, Commissions and Expenses.
Item 3. Applicable Statutory Provisions.
Item 4. Regulatory Approval.
Item 5. Procedure.
Item 6. Exhibits and Financial Statements.
Item 7. Information as to Environmental Effects.
SIGNATURES
National Fuel Gas Company ("National"), is a public utility holding company registered under the Public Utility Holding Company Act of 1935, as amended ("Act"). National's wholly-owned subsidiary, Leidy Hub, Inc. ("LHI") has joined this application/declaration.
Item 1. Description of Proposed Transactions.
A. SUMMARY OF PROPOSED TRANSACTIONS
National and LHI are proposing the following transactions (the "Proposed Transactions"), all of which are described below in more detail:
(i) LHI would enter into a Purchase Agreement (the "Purchase Agreement", copy attached as Exhibit A-7) with Hub Services, Inc. ("Hub Services"). LHI would thereby acquire a 14.5% Limited Liability Company Interest in (and thereby become a "Member" of) Enerchange, L.L.C., a Delaware member-managed limited liability company ("Enerchange"). Enerchange would provide various energy-related services to the public.
(ii) LHI, as a Member of Enerchange, would make capital contributions to Enerchange from time to time as required by Enerchange's Executive Committee pursuant to the Limited Liability Company Agreement of Enerchange, L.L.C. (the "LLC Agreement", attached hereto as Exhibit A-8); LHI's capital contributions to Enerchange are exempt from the requirement for a declaration pursuant to Rule 45(b)(4) [17 CFR Section 250.45(b)(4)].
(iii) LHI, as a Member of Enerchange, might make loans to Enerchange if another Member failed to make any required capital contribution; LHI's loan amount would be based on the ratio of its 14.5% interest to the interests of the other nondefaulting Members.
(iv) LHI, as a Member of Enerchange, might have the opportunity and/or the obligation to purchase additional interests in Enerchange from other Members;
(v) Enerchange would become a Member of, and make capital contributions and loans to, another Delaware member- managed limited liability company to be known as QuickTrade, L.L.C. ("Quicktrade"). Enerchange's participation in this transaction would be exempt from the requirement for a declaration because Enerchange satisfies the requirements of Rule 16 [17 CFR
Section 250.16].
(vi) National would guarantee certain future trade obligations of LHI, Enerchange and QuickTrade, and LHI would guarantee certain future trade obligations of Enerchange and QuickTrade.
The Proposed Transactions, to the extent they happen, would result from LHI's entering into the Purchase Agreement. This application/declaration is filed (i) to seek authority for LHI to enter into the Purchase Agreement, and (ii) to seek any authority necessary for LHI and National to enter into the other Proposed Transactions, from time to time, to the extent management elects to do so.
Hub Services is a Delaware corporation with an office at One O'Hare Center, 6250 Des Plaines River Road, Rosemount, Illinois 60018, and is a wholly-owned subsidiary of NGC Corporation ("Clearinghouse"). LHI and Hub Services entered into a Pre-Purchase Agreement which was effective as of June 12, 1995 (the "Pre-Purchase Agreement", attached hereto as Exhibit A-6). The Pre-Purchase Agreement is a "Preliminary Agreement" for purposes of Rule 51 [17 CFR Section 250.51], and provides at
Section 8.3(c) that "notwithstanding any other provision of this Agreement, [LHI] is not obligated to indemnify, and does not agree to indemnify, [Hub Services] or any other person against any market or investment risk in connection with [LHI]'s acquisition, retention or disposition of the subject matter of this Agreement."
The Pre-Purchase Agreement provides, upon the approval of the Securities and Exchange Commission ("SEC" or "Commission"), for LHI to purchase from Hub Services a 14.5% ownership interest in Enerchange. After selling that 14.5% ownership interest to LHI, Hub Services would retain a significant ownership interest in Enerchange. NICOR Hub Services, Inc. ("NICOR", an Illinois corporation wholly owned by NICOR, Inc.) and Pacific Enerchange ("PE", a California corporation wholly owned by Pacific Enterprises) own the remaining ownership interests in Enerchange.
B. FORMATION AND OPERATION OF ENERCHANGE
Enerchange was formed on June 13, 1995. The LLC Agreement (Exhibit A-8) states at Section 3.1 that Enerchange was formed for the following purposes:
to coordinate and participate in the development, implementation and operation of an electronic gas trading and nomination system (the "Electronic Trading System", which is described at Item 1(B)(1) below);
to manage, own and operate Enerchange's interests in the Chicago Hub, the California Energy Hub and the Ellisburg-Leidy Northeast Hub (described at Item 1(B)(2) below);
to promote and participate in transactions involving the use of the Electronic Trading System (described at Item 1(B)(3) below);
to develop and manage hubs owned by third parties (described at Item 1(B)(4) below);
to engage in Market-Making Activity (described at Item 1(B)(5) below);
engage in all other activities permitted by law if approved by a Supermajority Vote of the Executive Committee or, subject to Section 8.1(d)(5) of the LLC Agreement, a Unanimous Vote of the Executive Committee (described at Item 1(B)(6) below); and
to engage in any and all activities incidental to the foregoing.
These purposes, and the transactions which would or could result, are discussed below in more detail. Enerchange does not plan to provide any services regulated by the Federal Energy Regulatory Commission ("FERC") or by any state commission. Enerchange does not plan to have any FERC jurisdictional facilities and plans to engage exclusively in non-jurisdictional activities.
(1) Developing and Operating the Electronic Trading System.
Enerchange plans to join with a subsidiary of Energy Exchange, Inc. ("EEI"), a Canadian corporation, to form a new entity ("QuickTrade"). QuickTrade would develop and operate an electronic trading and nomination system which could be accessed via computer by buyers and sellers of natural gas to make and accept binding offers to buy or sell gas at specific locations (generally at market hubs, and especially at Enerchange's market hubs as described at Item 1(B)(2) below). Subscribers to QuickTrade's system would be able to see, on-line in real time, the price at which gas is being sold at any location listed on the system (without being able to see the names of the parties involved). Subscribers will also be able to nominate directly to interstate pipelines to transport or store the gas being sold via the system.
Entities in the gas business would subscribe to QuickTrade's on-line computer service, install in their computer(s) software developed and provided by QuickTrade, and receive training in the use of the system. Subscribers would pay to Quicktrade a flat monthly subscription fee, and would pay additional fees based on their actual usage of the system.
QuickTrade has not yet been formed, but is planned to be a Delaware member-managed limited liability company named QuickTrade, L.L.C. Enerchange would be an initial member of QuickTrade with an ownership interest of up to 50%. EEI would be another substantial initial member, and it is possible that other entities may become members of QuickTrade. Enerchange would make capital contributions and/or loans to QuickTrade to help fund the development and initial operating costs of the electronic trading and nomination system. EEI, which owns and operates a similar electronic trading and nomination system in Canada, would be responsible for most of the system development.
Profits and losses of QuickTrade would be allocated in part to Enerchange, which would in turn allocate those profits or losses to the Members of Enerchange, including LHI. The QuickTrade system would include as trading locations various points on Enerchange's three market hubs, which would generate some income to Enerchange pursuant to the Hub Agreements (see Item 1(B)(2) below). Enerchange would also be a subscriber to the QuickTrade system, and would use its access to that system to engage in buying and selling gas and engaging in market-making activities (see Item 1(B)(5) below).
The operations of QuickTrade would be limited to "cash forward contracts" which will typically be settled by actual physical delivery, as opposed to "futures contracts" which are extensively regulated by the Commodities Futures Trading Commission (the "CFTC") pursuant to the Commodity Exchange Act. QuickTrade's system operations will be generally similar to those of a rival system known as "Channel 4", a registered service mark of the New York Mercantile Exchange and EnerSoft Corporation. The CFTC staff (Off-Exchange Task Force) confirmed in an Interpretive Letter that such activities are not regulated by the CFTC, and that the Channel 4 system would not be a regulated "contract market" for purposes of the Commodities Exchange Act. CFTC Interpretive Letter No. 94-58 (Channel 4 System), CCH Commodities Futures Law Reports Paragraph 26,147, issued May 18, 1994.
Because Enerchange satisfies all the requirements of Rule 16 (see Item 1(G)(3) below), Enerchange's acquisition of an ownership interest in QuickTrade does not require the Commission's approval pursuant to Sections 9 and 10 of the Act. Information on QuickTrade and other exempt transactions is voluntarily included in this application/declaration for the purpose of fully informing the Commission about the nature of the business in which the applicants are seeking authority to acquire an interest.
(2) Operating Existing Market Hubs.
Hub Services is a party to contracts involving three natural gas market-area hubs, including the hub described in a previous application/declaration filed by LHI and National and approved by the Commission. National Fuel Gas Company et al., File No. 70-8417, Release No. 35-26093 issued July 29, 1994. Following the issuance of that order, LHI and Hub Services executed a Partnership Agreement (the "Partnership Agreement") which formed, effective September 1, 1994, a 50/50 Pennsylvania General Partnership known as Ellisburg-Leidy Northeast Hub Company (the "Partnership"). The Applicants' application/declaration in Case No. 70-8417 described the background and operation of natural gas market-area hubs in general and the Partnership in particular.
Briefly, a natural gas market area hub is a place where two or more interstate natural gas pipelines interconnect in a "market area" (as opposed to a "production area") and where customers can seek and obtain various services relating to the transportation, storage, purchase, sale, exchange and lending of natural gas in the hub area. The Partnership provides such services to such customers. National's wholly-owned subsidiary National Fuel Gas Supply Corporation ("Supply") is one of various interstate pipelines with substantial facilities in the vicinity of Ellisburg and Leidy, Pennsylvania.
FERC has stated that the creation of "market centers" or "market area hubs" is in the public interest because hubs will increase competition and efficiency and cut transaction costs. To foster the development of market area hubs, FERC's Order 636 provided, among other matters, that "[a]n interstate pipeline that offers transportation services on a firm basis . . . may not include in its tariff any provision that inhibits the development of market centers." 18 CFR Section 284.8(b)(6).
Hub Services also entered into other agreements which provide for Hub Services to perform services and receive money in connection with the operation of other market-area hubs in the vicinity of Chicago and Los Angeles. Hub Services and the public utility affiliate of NICOR executed the Chicago Hub Agreement effective May 26, 1993. Hub Services and the public utility affiliate of PE executed the California Hub Agreement effective March 15, 1994.
On June 13, 1995, Hub Services transferred to Enerchange (as Hub Services's capital contribution) all of Hub Services's interest in the Partnership, the Chicago Hub Agreement and the California Hub Agreement (collectively, the "Hub Agreements"). Hub Services transferred its interest in the Partnership to Enerchange pursuant to Section 11.6 of the Partnership Agreement, which permits either Partner to assign its interest to an affiliate. Enerchange and LHI are therefore currently the sole partners in the Partnership. Enerchange will perform all the obligations which Hub Services had under any of the Hub Agreements, and all proceeds which Hub Services would have received under any of the Hub Agreements will be paid instead to Enerchange. Enerchange's profits and losses will be allocated as provided in the LLC Agreement (Exhibit A-8), generally in accordance with the Members' relative capital accounts (referred to in the LLC Agreement as their "Allocable Shares"). All of the Hub Agreements will remain in place so that, for example, LHI will continue to receive 50% of the net profits or losses of the Partnership, with the other 50% being allocated to Enerchange. LHI will continue to have 50% voting control of the Partnership.
(3) Doing Transactions on the Electronic Trading System.
Enerchange will subscribe to the QuickTrade system and engage in transactions using that system, including the "market-making" activity described at Item 1(B)(5) below.
(4) Developing and Operating Other Hubs.
Enerchange may enter into agreements with other parties to develop and operate additional hubs (in addition to the three hubs described in the Hub Agreements). Any profit or loss incurred by Enerchange in performing such agreements would be allocated to Enerchange's Members, including LHI, pursuant to the LLC Agreement in proportion to their Allocable Shares.
(5) Engaging in Market-Making Activity
Market-making is defined in Article I, Section 35 of the LLC Agreement (Exhibit A-8) to consist of acting as an intermediary between persons desiring to sell natural gas and persons desiring to purchase natural gas and includes, without limitation, electronic solicitation of transactions between anonymous sellers and buyers, implementation and documentation of such transactions, and assuming the performance and credit risk associated with such transactions
Enerchange's natural gas market-making will differ in important respects from the heavily regulated activities of a "market maker" of a particular stock on the floor of the New York Stock Exchange. Enerchange plans to subscribe to, and be an active participant on, the QuickTrade system, frequently posting and accepting offers to buy and offers to sell gas at specified prices at various points listed on the QuickTrade system (including especially points at the three hubs covered by the Hub Agreements). However, Enerchange would not be required, for example, to accept all offers to buy gas at a specified location within a specified spread from the last reported transaction at that location. Enerchange's purpose is to enhance liquidity at the hub locations, not price stability.
Enerchange expects that its "market-making" activities will have the effect of making the hubs listed on QuickTrade's system (including the hubs in which Enerchange and LHI have an interest) into places where more natural gas is bought and sold, as more gas industry participants recognize that those hubs are places where deals can easily be made. Enerchange also expects to make money on the "market-making" transactions themselves, which are essentially purchases and sales of gas.
(6) Other and Incidental Activities.
The LLC Agreement reserves Enerchange's rights to engage in other activities not prohibited by law, and to engage in activities which are incidental to the specified purposes of Enerchange.
C. PRE-PURCHASE AGREEMENT
By way of preliminary explanation, under the Pre-Purchase Agreement (Exhibit A-6) Hub Services continues to hold the 14.5% ownership interest in Enerchange which is promised to LHI (the "Acquired Interest") until after the SEC approves LHI's acquisition of the Acquired Interest. During that time, LHI's involvement in Enerchange is structured so as not to offend the Act. Among other things, this structure requires that (i) all profits or losses of Enerchange allocated to the Acquired Interest prior to LHI's purchase of the Acquired Interest belong to Hub Services, and (ii) LHI is not obligated to indemnify Hub Services against any market or investment risk in connection with LHI's acquisition, retention or disposition of the Acquired Interest.
If the SEC grants this declaration-application without the imposition of any conditions which make it impracticable to consummate the Proposed Transactions, and if certain other conditions are satisfied, LHI will purchase the Acquired Interest at a closing (the "Closing"). At the Closing, Hub Services will convey to LHI the Acquired Interest including the portion of Hub Services's capital account sufficient to give LHI an "Allocable Share" amounting to 14.5% of the total Allocable Shares of all the Members.
The Purchase Price is set at the amount which would put both LHI and Hub Services in approximately the same after-tax economic positions as they would have been if LHI had bought the Acquired Interest from Hub Services when Enerchange was formed on June 13, 1995, for a fixed amount set out in the portions of Article I of the Pre-Purchase Agreement for which the applicant/declarants have requested confidential treatment pursuant to Rule 104(b). The Purchase Price is subject to further adjustment as described in the Purchase Agreement. The Purchase Price was negotiated based on the parties' respective beliefs as to the potential profits of Enerchange for the next three years from its Hub Agreements and its market-making activities, discounted to present value. The Purchase Price is subject to adjustment depending on events occurring between June 13, 1995 and the Closing, as described in the following paragraph.
If Enerchange were profitable during the period between June 13, 1995 and the Closing (the "Pre-Purchase Phase"), Hub Services would get the profits allocable to the Acquired Interest, and the Purchase Price would decrease in proportion (recognizing that Hub Services would have to pay taxes on that profit). If Enerchange were not profitable during the Pre-Purchase Phase, the Hub Services would get the losses allocable to the Acquired Interest, and the Purchase Price would increase (recognizing that Hub Services would get the benefit of the tax loss). If Hub Services were to make additional capital contributions to Enerchange in respect of the Acquired Interest during the Pre-Purchase Phase, the Purchase Price (and the capital account transferred to LHI at the Closing) would increase accordingly, including some interest for the time value of the extra capital contribution. In this fashion, if SEC approval is obtained, it will be as if LHI had been a Member of Enerchange from its formation on June 13, 1995, and if SEC approval is not obtained, the Acquired Interest will continue to belong to Hub Services.
Within three business days after the Commission approved this application/declaration (or a longer agreed-upon time), LHI and Hub Services would execute and perform the Purchase Agreement in substantially the form attached to the Pre-Purchase Agreement as an exhibit (the Purchase Agreement is described below).
In the Pre-Purchase Agreement, Hub Services and LHI make certain standard representations, warranties and covenants to each other, and each agrees to indemnify the other against any losses suffered because of a breach of such warranty, representation or covenant. The parties have agreed that no filing is necessary with the Commodities Futures Trading Commission, and LHI and National have agreed to file applications seeking the approval of the SEC under the Act as soon as practicable, and to use their best efforts to obtain such approval. The Closing is subject to certain conditions, including that the SEC shall have approved LHI's acquisition of the Acquired Interest, without any conditions which in the judgment of either of the parties make it impracticable to consummate the transactions contemplated by the Pre-Purchase Agreement.
During the Pre-Purchase Phase, LHI will not be a Member of Enerchange and will therefore not be entitled to appoint anyone to the Enerchange Executive Committee or to vote on matters before that Committee. Hub Services will furnish LHI with copies of all notices and material documents relating to Enerchange's business. Hub Services will afford LHI an opportunity to review and comment on all matters presented to Enerchange's Executive Committee for approval, and Hub Services agrees to take LHI's comments on all such matters into account prior to voting on matters in the Executive Committee. Hub Services agrees to use its best efforts to obtain approval for a representative of LHI to attend all meetings of the Enerchange Executive Committee as an observer.
The Pre-Partnership Agreement shall be governed, construed and enforced in accordance with the internal laws of the State of Delaware without regard to the conflicts of law principles thereof.
D. PURCHASE AGREEMENT
When and if the Commission approves this application/declaration, a Closing would be held at which LHI and Hub Services would enter into and perform the Purchase Agreement (including LHI's payment to Hub Services of the Purchase Price as described above under "Pre-Purchase Agreement"). A copy of the Purchase Agreement is filed herewith as Exhibit A-7.
The Purchase Agreement would provide at Section 6.2 for LHI to pay additional money to Hub Services as part of the Purchase Price if the Chicago Hub Agreement and/or the California Hub Agreement are extended to a date not earlier than June 11, 2000. Those two Hub Agreements would expire in 1998 if not renewed or extended; the extension(s) would bring additional money into Enerchange as its share of the proceeds from those agreements. The additional Purchase Price payment to Hub Services would be due on the date of execution of such extension, but no earlier than June 12, 1998. The amounts of these additional payments are included in the portion of 6.2 of the Purchase Agreement for which the applicant/declarants have requested confidential treatment pursuant to Rule 104(b).
In the Purchase Agreement, Hub Services and LHI would make various standard representations, warranties and covenants to each other, and each would agree to indemnify the other against any losses suffered because of a breach of such warranty, representation or covenant. Hub Services would make various representations and warranties concerning Enerchange and the Acquired Interest, including title and condition of property, absence of defaults and violations, taxes, contracts, permits, insurance policies, employee benefit plans, litigation, conflicts of interest, bank accounts, etc.
E. LIMITED LIABILITY COMPANY AGREEMENT OF ENERCHANGE, L.L.C.
Enerchange was formed under the laws of the State of Delaware as a member-managed limited liability company on June 13, 1995. The governing document is the LLC Agreement (Exhibit A-8). The owners of a limited liability company are its "Members", who have "Capital Accounts" similar to those of partners in a general partnership. The purposes of Enerchange and the various transactions it would or could make are described above at Item 1(B)(1).
By operation of the Delaware Limited Liability Company Act, and as stated at Section 6.6 of the LLC Agreement, Members are not liable for debts, obligations or liabilities of Enerchange. The principal appeal of the limited liability company form of business organization is that Members receive the benefit of this shield from liability in the same manner as the stockholders of a corporation are shielded from liability for the corporation's debts, while the limited liability company is treated for federal income tax purposes as if it were a partnership. A limited liability company thus pays no federal income taxes itself, passing its profits (and losses) through to its Members, and each Member deals with the tax effects of its share of the limited liability company's profits or losses. A limited liability company is in this sense similar to a Subchapter S Corporation, except that corporations such as LHI are ineligible to become stockholders of Subchapter S Corporations.
Enerchange's governing body is its Executive Committee, consisting of one committee member appointed by each Member, with each Member's votes weighted in accordance with that Member's "Allocable Share" (which is generally the ratio of the Member's capital account to the total of all the Members' capital accounts). Various provisions governing the Executive Committee are contained in Article VIII of the LLC Agreement, including detailed lists of the various types of items that require a simple majority, "Supermajority" (72%) or unanimous vote of the Executive Committee.
The Executive Committee is required to establish annually by Supermajority Vote an annual capital budget, operating budget and capital contributions for the Operating Fund. A Supermajority Vote is generally required to exceed the budget.
The Executive Committee also must establish (initially by unanimous vote) an Operating Policy addressing, among other areas, procedures for the execution and approval of agreements binding Enerchange (including specific authority levels for employees and officers), procedures for the execution and approval of agreements between Enerchange and Members, Affiliates, Officers, and/or Enerchange employees, tax recording and accounting procedures, and retention and audit policies which effectively monitor and control risks associated in particular with market-making agreements.
Members' capital contributions and capital accounts are addressed in Article IX of the LLC Agreement. Pursuant to Section 9.1(a) of the LLC Agreement, contemporaneously with the execution of the LLC Agreement the Members contributed to Enerchange's capital various assets which were agreed to have a certain total value as set out in the portion of Exhibit G of the LLC Agreement for which the applicant/declarants have requested confidential treatment pursuant to Rule 104(b) (the "Initial Capital Contributions"). Pursuant to Section 9.1(b) of the LLC Agreement, the Members are required to make certain additional capital contributions totalling an amount set out in the portion of
Section 9.1(b) of the LLC Agreement for which the applicant/declarants have requested confidential treatment pursuant to Rule 104(b), in proportion to the Members' respective "Allocable Shares", within ten days after the formation of QuickTrade. Enerchange intends to lend this additional capital to QuickTrade to fund the development and initial operating costs of the Electronic Trading and Nomination System (see Item 1(B)(1) above). Section 9.1(c) of the LLC Agreement also provides that the Members commit to make additional cash capital contributions during the first year in an amount set out in the portion of
Section 9.1(c) of the LLC Agreement for which the applicant/declarants have requested confidential treatment pursuant to Rule 104(b), with the amount and timing of those contributions to be determined by Supermajority Vote of the Executive Committee.
Pursuant to Section 9.1(c) of the LLC Agreement, each Member must also make additional capital contributions, according to their Allocable Shares, to the Operating Fund as determined by a Supermajority of the Executive Committee. For calendar year 1995, the amount of the Operating Fund is set out in the portion of Section 9.1(c) of the LLC Agreement for which the applicant/declarants have requested confidential treatment pursuant to Rule 104(b).
Section 9.2 of the LLC Agreement provides that, generally, the Executive Committee can require additional capital contributions by Supermajority Vote, but Section 9.1(e) of the LLC Agreement sets a limit for the first few years as set out in the portion of Section 9.1(e) of the LLC Agreement for which the applicant/declarants have requested confidential treatment pursuant to Rule 104(b). Section 9.1(e) provides that, during the initial five-year term of Enerchange, and any extension of that term, total capital contributions shall not exceed the specified amount (the "9.1(e) Limit") in the aggregate for all Members unless the Executive Committee decides otherwise by unanimous vote.
Note that the amounts LHI would pay to Hub Services for the Acquired Interest under the Purchase Agreement would generally not be capital contributions to Enerchange (except to the extent LHI reimburses Hub Services for capital contributions Hub Services makes in respect of the Acquired Interest during the Pre-Purchase Phase). LHI's total investment in the Acquired Interest, assuming the 9.1(e) Limit is not overridden by unanimous vote, would amount to a small fraction of 1% of National's assets, and of National's total capitalization, involving no money charged to the ratepayers of either of National's regulated subsidiaries (See Item 1(H) below, "Financing").
Section 9.3 of the LLC Agreement provides for a variety of things that might happen if the Executive Committee requests capital contributions in accordance with the LLC Agreement and a Member fails to pay (a "Delinquent Member"):
(i) The remaining members may make the capital contribution themselves, in proportion to their Allocable Shares (or as they otherwise agree). The effect of this would be to increase the capital accounts (and therefore the Allocable Shares) of all the Members except the Delinquent Member, whose Allocable Share would decrease.
(ii) The remaining Members can loan the missing capital to Enerchange in proportion to their Allocable Shares (or as they otherwise agree), which would give those Members interest on that money (Wall Street Journal Prime Rate plus 2 percentage points) before Enerchange's net profits are calculated, and also give those Members priority upon the dissolution of Enerchange if those loans remain outstanding at the time of dissolution. LHI needs the Commission's authorization to be able to make such loans to Enerchange, which it requests up to a maximum lending authority of $5 million.
(iii) The remaining Members may rescind the request for capital.
(iv) The remaining Members may take such other action against the Delinquent Member, including court proceedings, as they deem appropriate.
Enerchange will establish for each Member a Capital Account to which will be credited such Member's capital contributions to Enerchange, items in the nature of income or gain that are allocated to the Member partner pursuant to the LLC Agreement, and the amount of any Enerchange liabilities that are assumed by that member or secured by any property that is distributed to that Member. From each member's Capital Account will be debited the amount of distributions made to that Member, items in the nature of expenses or losses that are allocated to that Member pursuant to the LLC Agreement, and the amount of any liabilities of that Member that are assumed by Enerchange or that are secured by any property that is contributed by that Member to Enerchange.
The net profits and losses of Enerchange will be determined at the end of each fiscal year, which will end on December 31 unless otherwise agreed by the Executive Committee. Such profits and losses will be allocated annually, in proportion to the Members' Allocable Shares. The LLC Agreement contains a number of special allocation provisions intended to comply with applicable treasury regulations with minimal affect on the net amount of allocations made to each Member.
Enerchange will make distributions of cash or property to Members in aggregate amounts and at times as determined by Supermajority Vote of the Executive Committee. Except in the event of dissolution, distribution shall be made to the Members in proportion to their Allocable Shares.
Enerchange shall exist for an initial term of five years and shall be automatically continued for additional terms of three years if such extension is approved by unanimous vote of the Executive Committee.
Enerchange shall be dissolved upon the occurrence of any of the following events: (a) the expiration of the term of the Partnership; (b) the unanimous written consent of all of the Members; (c) an event which makes it unlawful for Enerchange to be continued; (e) the entry of a decree of judicial dissolution under Section 18-802 of the Delaware Limited Liability Company Act; (f) the withdrawal, bankruptcy, or dissolution of any Member, including the occurrence of any event that terminates the continued membership of any Member in Enerchange under the Delaware Limited Liability Company Act, unless the business of Enerchange is continued by unanimous vote of the Members (calculated without regard to any Member that has withdrawn, become bankrupt or been dissolved) within 90 days following the occurrence of any such event.
Upon the dissolution of the Partnership, unless it is reconstituted and continued, a Liquidating Trustee designated by the Members unanimously (or by the Executive Committee if the Members can't agree) shall wind up the affairs of Enerchange. The Liquidating Trustee shall in an orderly manner wind up the affairs of Enerchange and make an accounting of the Capital Account of each Member and of the Enerchange assets, liabilities and operations from the date of the last previous accounting to the date of dissolution. Upon winding up, Enerchange's assets shall be distributed first to creditors (including Members who are creditors), and then to the establishment of reserves which the Liquidating Trustee deems reasonably necessary for any contingent or unforeseen liabilities of Enerchange, and then to Members, generally in proportion to their Allocable Shares.
Each Member agrees to remain a Member, and not to dispose of any portion of its interest in Enerchange, at least until June 13, 2000 unless it disposes of its interest in accordance with Article XII of the LLC Agreement. This provision may enforced by specific performance.
Article XII of the LLC Agreement provides that any Member may dispose of all or any part of its interest to the other Member(s) on a per capita basis among those Members wishing to purchase, on such terms as are agreed between or among them. If any Member receives and wants to accept a bona fide offer to purchase all or any portion of the Member's interest in Enerchange, it must allow the remaining Members to match the offer, and obtain the unanimous consent of each Member (in its sole and absolute discretion) to the sale to a third party. If more than one of the Members wishes to purchase the interest, they share it on a per capita basis.
If none of the remaining Members wish to purchase the offered interest, one or more of the Members may still refuse to consent to the sale to a third party, whereupon the selling Member can force the other Members to buy him out. Section 12.5 of the LLC Agreement contains a procedure whereby a third party appraiser would determine the fair market value of the seller's interest, and the remaining Members would purchase the offered interest at that price on a pro rata basis (in proportion to their Allocable Shares).
If a Member has to withdraw from Enerchange because of an adverse ruling by a regulatory authority, and does not present an offer from a third party, a third party appraiser is appointed. The appraiser establishes the fair market value of the withdrawing party's interest, and the remaining Members purchase the withdrawing Member's interest on a pro rata basis at a price equal to 85% of the fair market value.
As a Member of Enerchange, LHI may therefore have the opportunity and/or the obligation to purchase on short notice an additional interest in Enerchange. LHI therefore requests that the SEC authorize LHI to purchase additional interests in Enerchange from time to time pursuant to Article XII of the LLC Agreement.
Enerchange shall maintain complete and accurate books of account, on an accrual basis, and its fiscal year shall be the calendar year. The Executive Committee shall mail to each partner monthly unaudited financial statements, and within sixty days of the end of the fiscal year, financial statements audited by a national CPA firm selected by the Executive Committee by Supermajority Vote, as well as sufficient information from which each Member may prepare its own federal and state income tax returns for the preceding year. Each Member or its authorized representative shall have unrestricted access to the properties, books, records, accounts and information regarding the Enerchange, whether in possession of Enerchange or another appropriate location.
The Executive Committee is charged with the responsibility to cause to be timely prepared and filed all required Enerchange tax returns, a copy of which shall be provided to each Member.
The assets of Enerchange shall be dedicated exclusively to the benefit of Enerchange. Members and their affiliates may participate in other business activities, whether or not competitive with Enerchange, except as provided below. No officer, Executive Committee Representative or employee of Enerchange, so long as such individuals remain in that capacity, shall participate in business activities in competition with Enerchange. In the absence of approval by the Executive Committee by unanimous vote, no Member or affiliate shall engage in, own, operate, manage or invest in any person who engages as a material line of business in:
(i) the ownership and management of a Hub located in North America; or
(ii) any electronic natural gas trading system which, in either case, Enerchange does not own an interest in or does not operate or manage.
Exceptions are provided which authorize each Member to operate its own Hub, and for regulated affiliates of Members to provide services contained in their tariffs. Members are free to compete with each other except as specifically provided above.
Enerchange's suppliers may include National Fuel Gas Supply Corporation ("Supply", a wholly-owned subsidiary of National currently engaged in the interstate transportation and storage of natural gas) which would provide tariff services to Enerchange on the same terms it provides such services to anybody else. Enerchange will also utilize unaffiliated interstate pipelines. Enerchange's and QuickTrade's customers may include National Fuel Gas Distribution Corporation ("Distribution"), a New York corporation and a wholly-owned subsidiary of National which is a public utility selling natural gas and providing gas transportation services in western New York and northwestern Pennsylvania. Distribution may utilize Enerchange's and/or QuickTrade's services to help buy or sell gas. In addition, National Fuel Resources, Inc. ("NFR"), a New York corporation and a wholly-owned subsidiary of National which ships gas on Supply and buys and sells gas, including from and to Distribution, may be a customer of Enerchange and/or QuickTrade.
Clearinghouse (parent of Hub Services) is not affiliated with National or any of its subsidiaries, other than as described in this application/declaration. Clearinghouse is eligible to become a shipper under any of Supply's open access rate schedules, but is not currently a shipper. A Clearinghouse subsidiary, NGC Transportation, Inc., is a shipper on Supply. As described above, the Partnership is also a shipper on Supply. Clearinghouse formerly sold gas to Supply when Supply was in the gas merchant business, and a Clearinghouse affiliate currently sells gas to Distribution. It is anticipated that Clearinghouse or its affiliates may purchase services from, and may buy and sell gas from and to, Enerchange and/or QuickTrade.
Neither of the other two Members of Enerchange (NICOR and PE) is affiliated with the applicants, or does any business with any of the applicants' affiliates, except that PE's affiliate Southern California Gas Company from time to time purchases natural gas which is produced by National's wholly-owned subsidiary Seneca Resources Corporation. Affiliates of NICOR and/or PE, including the gas utilities serving the Chicago and Los Angeles areas, may be customers or suppliers of Enerchange and/or QuickTrade. A Supermajority Vote of the Enerchange Executive Committee is required to approve contracts between Enerchange and any affiliate of a Member, except for such contracts in the ordinary course of business as are authorized by the Operating Policy when that document is unanimously adopted.
F. PARENT GUARANTEES
National and LHI seek authorization from the Commission to allow National to act as guarantor of certain obligations of LHI, Enerchange and QuickTrade, and for LHI to act as guarantor of certain obligations of Enerchange and QuickTrade. National and its other subsidiaries have previously been granted similar authority pursuant to the provisions of application-declarations and the Orders of the SEC dated November 12, 1993, HCAR No. 25922, and dated July 29, 1994, HCAR No. 35-26093 (collectively, the "Parent Guarantee Orders").
The obligations of LHI, Enerchange and QuickTrade to be guaranteed would be incurred as a result of the activities undertaken by Enerchange and QuickTrade related to the supply of natural gas as delineated in the Gas Related Activities Act (see Item 1(G)(2) below). It is anticipated that whenever Enerchange is required to provide a guarantee, the guarantee will be provided 14.5% by National and/or LHI, and 85.5% by the other Members of Enerchange and/or their corporate parents . Such guarantees include the guarantee of obligations associated with: (1) gas transportation agreements to be entered into by Enerchange with local distribution companies ("LDCs") or pipelines such as Distribution and Supply; (2) gas purchase and sale agreements entered into by Enerchange; and (3) any and all other agreements relating to the transportation, storage, or supply (including marketing) of natural gas.
Such guarantees have become necessary under the new operating environment created by FERC Order 636. The maximum total amount of such guarantees to be outstanding at any one time by National for the benefit of LHI and Enerchange, or by LHI for the benefit of Enerchange, will not exceed $5 million (in addition to the other National guarantees authorized by the Parent Guarantee Orders). National and LHI seek authority to provide the additional guarantees described above through December 31, 2000. It is anticipated that the guarantees will in many instances be made for an indefinite period of time not to exceed four years.
Neither National nor LHI would pay any fees, expenses or penalties associated with any of the guarantees. They would, however, as guarantor assume the rights and obligations of Enerchange, QuickTrade and/or LHI upon a payment default. LHI, Enerchange and QuickTrade would be responsible to repay National for any payments National or LHI, as guarantor, must make on their behalf, plus any interest expense (at the highest incremental interest rate National must pay for borrowings on behalf of the System through the money pool) or other expenses incurred or paid by National as guarantor. It is anticipated that repayment by LHI would be made from LHI's distributions from Enerchange and repayment by Enerchange and QuickTrade would be made from revenues or from additional capital calls as permitted by their respective LLC Agreements.
FERC's Order 636 restructuring has resulted in significant changes to the gas industry. Most interstate pipelines no longer perform a merchant function, i.e., purchase gas for resale to LDCs which, in turn, ultimately re-sell such supplies to retail customers. In response to these industry changes, suppliers who previously had no ongoing relationships with the LDCs directly or with brokers and marketers have been imposing significant security requirements which gas purchasers such as Enerchange will have to meet. These security requirements are being imposed across the board, regardless of the financial strength of the purchaser, because there has been no prior relationship between the parties. For example, a number of suppliers have taken the position that any time a subsidiary contracts for gas purchases, a parent guarantee will be required.
The security requirements placed on LDCs undoubtedly will also be imposed on smaller purchasers such as Enerchange. In order to carry out its marketing efforts, Enerchange will have on-going gas purchase, transportation and storage requirements and thus will have to meet the security requirements imposed by suppliers. Again, it is anticipated that whenever Enerchange is required to provide a guarantee, it will be provided 14.5% by National and/or LHI, and the remainder by the other Members of Enerchange and/or their parents.
Suppliers of gas may also be required to provide guarantees that they will in fact deliver gas they have contracted to sell. Enerchange may from time to time be required to provide assurances of delivery of gas it sells, including a parent guarantee.
The Order 636 restructuring has also resulted in significant changes to pipeline tariffs and operating procedures which the pipelines have indicated will necessitate a more stringent application of creditworthiness criteria to each shipper which makes a request for transportation service. It is anticipated that, from time to time, Enerchange as a shipper on pipelines, including pipelines owned by National, may not, on its own, meet the creditworthiness requirements of the pipelines. Accordingly, Enerchange may be required to provide adequate security to the pipeline, such as a three month prepayment or an irrevocable letter of credit. Providing the three month prepayment could be severely detrimental to the cash flow and reputation of Enerchange, as the gas industry regards with some scorn and distrust those entities which cannot establish their creditworthiness other than by prepayment.
QuickTrade may find it necessary to issue some kind of assurance to its customers that QuickTrade will be able to perform its commitments. For example, to induce customers to enter into transactions with other subscribers on an anonymous basis, QuickTrade may have to:
commit to a buyer that the gas he buys will arrive where and when it is supposed to;
if the seller doesn't perform, QuickTrade would make the gas appear as committed; and
QuickTrade would recover its cost of performance from the seller, either from security previously posted by the seller or otherwise.
Buyers may require some evidence that QuickTrade is able to perform in such situations. LHI's indirect interest in QuickTrade would amount to no more than 7.25%, so LHI and National do not expect to have to guarantee any more than 7.25% of any QuickTrade obligation.
Enerchange and QuickTrade will not start out having sufficient unencumbered assets to obtain letters of credit. In any event, the fees associated with letters of credit could be saved if a parent guarantee was provided in lieu of such letters of credit. In the alternative, LHI, Enerchange and QuickTrade might be able to secure letters of credit or otherwise meet the pipeline creditworthiness requirements if the letters of credit were backed by National's guarantee of the obligations of LHI Enerchange and/or QuickTrade, and by the other Members' parents' guarantees of the obligations of Enerchange and QuickTrade.
The total outstanding amount of obligations which National would guarantee on behalf of LHI, Enerchange and QuickTrade (in addition to amounts authorized by the Parent Guarantee Orders) would not exceed $5 million. The applicants estimate that $5 million of guarantee authority will be sufficient to cover LHI's share of the maximum aggregate amounts of all such obligations.
G. ANALYSIS
As discussed in this filing, it is proposed that LHI will enter into the Purchase Agreement with Hub Services whereby LHI will acquire, own and control 14.5% of Enerchange, with the opportunity and/or obligation to acquire additional interests in Enerchange from time to time. Section 9(a)(1) of the Act requires that this acquisition of an interest in a business be preceded by the Commission's approval under Section 10(a)(3) of the Act.
(1) Satisfaction of Requirements of Section 10(b) and 10(c)
Section 10(b)(1) - The proposed activities of LHI and Enerchange do not involve the acquisition of "utility assets" as defined by Section 2(a)(18) of the Act. Enerchange will not be a "gas utility company" as defined in Section 2(a)(4) of the Act, in that Enerchange will not "own or operate facilities used for the distribution at retail of natural or manufactured gas for heat, light or power." Accordingly, LHI's acquisition of an interest in Enerchange cannot possibly tend "towards interlocking relations or the concentration of control of public-utility companies," the concern of Section 10(b)(1) of the Act.
Section 10(b)(2) - As discussed above, the proposed activities of LHI and Enerchange do not involve the acquisition of utility assets or an interest in a gas utility company. The Acquired Interest (a 14.5% ownership interest in Enerchange) might be thought to be "securities", in which case Section 10(b)(2) would be applicable. The Applicants submit that the total consideration (which includes no fees, commissions or other remuneration not disclosed in this application/declaration) paid directly by LHI to Hub Services and to Enerchange (no consideration being paid indirectly) in connection with this acquisition is reasonable. The Applicants further submit that the acquisition will not unduly complicate the capital structure of National (the holding company) or be detrimental to the public interest or the interest of investors or consumers or the proper functioning of National's holding company system. See Item 1(G)(2) below for additional discussion of the benefits to consumers of the Proposed Transactions.
Section 10(b)(3) - The proposed investment by LHI in Enerchange will have a de minimus effect on the capital structure of the National Fuel System. Further, as discussed at Item 1(G)(2) below, these proposed transactions will not be detrimental to the public interest or the interest of investors or consumers or the proper functioning of such holding company system.
Section 10(c)(1) - Since this filing does not involve the acquisition of utility assets or securities of a gas or electric company, Section 8 of the Act is not applicable. Also, as discussed at Item 1(g)(2) below, LHI's investment in the Partnership is not detrimental to the provisions of Section 11 of the Act.
Sections 10(c)(2) and (e) - Again, as this filing does not involve the acquisition of utility assets or securities of a public utility or holding company, these sections are not applicable.
An exemption from competitive bidding is available because no underwriting or public sale of securities is involved, and competitive bidding is not necessary or appropriate in the public interest or for the protection of investors or consumers.
(2) Applicability of the Gas Related Activities Act
National and its subsidiaries (the "National Fuel System" or the "System") are engaged principally in the exploration, production, purchasing, gathering, transmission, storage, marketing and distribution of natural gas. As a result of state and federal legislation and regulatory developments, the roles and functions of gas pipeline and distribution companies have in recent years changed drastically. The passage by Congress of the Gas Related Activities Act in 1990, Pub. L. No. 101-572
(1990) (hereinafter referred to as the "GRAA") acknowledges the changing structure of the natural gas industry. Under the Section 11(b) of the Act, all proposed investments by Public Utility Holding Companies and their subsidiaries are scrutinized by the SEC to insure that the investments are necessary or appropriate to the operation of an integrated public utility system.
Section 2(a) of the GRAA provides in effect that the investment by LHI in Enerchange and the activities of Enerchange involving the transportation and storage of natural gas are deemed, for purposes of Section 11(b)(1) of the Act, to be reasonably incidental or economically necessary or appropriate to the operation of the National Fuel System. The transportation- and storage-related services which Enerchange and QuickTrade will provide will comprise the predominance of its business. Under
Section 2(a) of the GRAA, the proposed investment by LHI in Enerchange and the transportation- and storage-related activities of Enerchange therefore automatically satisfy Section 10 of the Act.
Section 2(b) of the GRAA provides in effect that the acquisition by LHI of an interest in Enerchange and the activities of Enerchange related to the supply of natural gas, including marketing or other similar activities, are deemed, for purposes of
Section 11(b)(1) of the Act, to be reasonably incidental or economically necessary or appropriate to the operation of the National Fuel System if the Commission determines that such acquisition:
is in the interest of consumers of National's subsidiaries, including Distribution; and
will not be detrimental to the interests of consumers of National's subsidiaries (including Distribution) or to the proper functioning of the National Fuel System.
The activities of Enerchange and QuickTrade are expected to benefit utility customers, including Distribution's customers, by making the market for natural gas more efficient, more transparent and therefore more competitive. Distribution expects to be an active customer of QuickTrade utilizing this on-line system to:
discover the prices being paid for gas at various locations where Distribution buys and sells gas, and
to buy and sell gas at the best possible prices and with the maximum amount of flexibility.
LHI's investment in Enerchange and the activities of Enerchange and QuickTrade, if their efforts to develop active Hubs are successful, make it possible for Distribution (and other utilities, brokers and marketers) to buy gas more economically and efficiently. The extent to which Distribution's customers, or anybody else, will benefit from these Hubs will depend on whether the Hubs become active places where a large number of various natural gas transfers are made. The Applicants believe that their efforts to date and in the future, combined with the efforts of Enerchange and QuickTrade, can facilitate the creation and operation of such Hubs and result in Enerchange earning a reasonable profit providing the services necessary to establish and maintain such Hubs.
Distribution's customers would benefit in another way from large amounts of Hub throughput. Distribution buys gas transportation and storage services from Supply as Supply's largest firm customer, and passes the cost of those services on to Distribution's customers. Supply has established several services in its FERC-approved tariff related to the Ellisburg-Leidy Hub:
Rate Schedules W-1, P-1, P-2, IR-1 and IR-2. Roughly 90% of the revenue which Supply receives from these rate schedules is refunded to Supply's firm customers, including Distribution. As throughput under these rate schedules increases, the amount Distribution collects from its customers decreases.
(3) Enerchange's Rule 16 Exemption
Due to the fact that LHI, a wholly-owned subsidiary of National, will control 14.5% of the voting interests of Enerchange, Enerchange will be a "subsidiary" of LHI under Section 2(a)(8) of the Act, and as a subsidiary will be a part of National's "holding company system" under Section 2(a)(9), and therefore an "associate company" of National under Section 2(a)(10) of the Act. However, Enerchange and its affiliates, as defined in Section 2(a)(11) of the Act, in particular Hub Services and Clearinghouse, will be exempt from all obligations, duties and liabilities otherwise imposed upon it by the Act, as a result of Rule 16 promulgated under the Act (17 CFR Section 250.16).
Rule 16 will grant such an exemption to the Partnership and its affiliates because:
Enerchange will not be a "public utility company" as defined in Section 2(a)(5) of the Act;
Enerchange will be organized to engage primarily in arranging for storage, transportation and supply of natural gas;
since none of Hub Services, NICOR or PE or any of their affiliates is a registered holding company, no more than 50% of Enerchange's voting interests will be "owned, directly or indirectly, by one or more registered holding companies"; and
the Commission will have approved the acquisition by LHI of its interest in Enerchange pursuant to this application-declaration.
H. FINANCING
LHI plans to invest in its interest in Enerchange during the first year of operations. The applicants' current plan is to maintain LHI's debt/equity ratio at about 50/50. Unless that plan changed, approximately half of this amount would come from capital contributions to be made by National to LHI, and approximately half would come from LHI's borrowings from National's System Money Pool. As described below, neither source of funding requires additional authorization by the Commission at this time.
National would make capital contributions to LHI from time to time, when and as approved by National's Board of Directors. The amount of contributions needed in the short term would be funded from National's existing cash reserves. If National needed to issue additional securities to fund future capital contributions to LHI, National would utilize existing authorizations or file an additional application/declaration. The Commission's recent amendment of Rule 45(b)(4) [17 CFR Section 250.45(b)(4)] provides that all capital contributions by National to LHI, and all capital contributions by LHI to Enerchange, are exempt from the requirement of prior Commission approval pursuant to Section 12(b) of the Act. Exemption of Issuance and Sale of Certain Securities etc., HCAR 35-26311, File No. S7-17-92, issued June 28, 1995.
LHI presently has authority to participate in the National Fuel System Money Pool pursuant to the provisions of the Application-Declaration and the Order of the SEC dated December 29, 1993, HCAR No. 35-25964 (the "Money Pool Order"). Under the terms of the Money Pool Order, certain National Fuel System Companies are authorized to undertake certain intra-system borrowing transactions through December 31, 1995. LHI may participate in this intra-system arrangement and is authorized to make borrowings from the Money Pool of a maximum principal amount at any one time outstanding of $5 million. The Commission has reserved jurisdiction over $2.5 million of this amount pending completion of the record. As of June 30, 1995, $300,000 of this borrowing authority had been used by LHI primarily for investments unrelated to the Hub.
In order to purchase a 14.5% interest in Enerchange from Hub Services and to meet its anticipated calls for capital in the first year of Enerchange's operation, LHI would expect to borrow out of its existing unused authority to borrow $2.2 million over which the Commission has not reserved jurisdiction. National, LHI and their affiliates will file an application/declaration to set new borrowing limits from the National Fuel System Money Pool for a period beginning January 1996, in time for new limits to be approved before December 31, 1995. If the applicants believe that LHI needs to borrow more than $2.2 million before December 31, 1995, they will make a filing seeking to increase LHI's borrowing limit. LHI and National will continue to be bound by the terms and conditions of the Money Pool Order as amended from time to time.
LHI proposes to use the proceeds from Enerchange-related capital contributions from National, and Enerchange-related borrowings from the Money Pool, for:
payment to Hub Services of the purchase price,
LHI's initial capital contributions to Enerchange,
possible future capital contributions to Enerchange, and
for LHI's own working capital.
Under the LLC Agreement, LHI may be required by the Executive Committee to contribute further capital to Enerchange (see Item 1(E) above). LHI's working capital requirements may arise because it may incur de minimis operating expenses which exceed its distributions from Enerchange.
Item 2. Fees, Commissions and Expenses.
It is estimated that the expenses to be incurred by National and LHI in connection with the herein proposed transaction are as follows:

Filing Fee                                        $  2,000
Fees and Expenses of Counsel (a)                  $  2,000
 - Estimated	

(a) Stryker, Tams & Dill
Item 3. Applicable Statutory Provisions.
Sections 9(a), 10, 11(b), 12(b), 13(b) of the Act and Rules 16, 23, 24, 45 and 51, and the Gas Related Activities Act of 1990 are all considered applicable to the proposed transactions.
The applicability of each of the sections and rules to each of the proposed transactions are set out as follows:

Proposed Transaction          Applicable Provisions of the Act

LHI's acquisition of          Section 9(a), 10, 11(b) and the
an interest in                Gas Related Activities Act
Enerchange                    Rules 23, 24, 51

LHI's possible loan(s) to     Section 12(b)
Enerchange                    Rules 23, 24 and 45

Guarantee by National and     Section 12(b)
LHI of Obligations of LHI,    Rules 23, 24 and 45
Enerchange and QuickTrade

Operations of Enerchange      Section 13(b), Rule 16 and the
                              Gas Related Activities Act	

To the extent that any Proposed Transaction is considered by the Commission to require authorization, approval or exemption under any section of the Act or provision of the rules or regulations other than those specifically referred to herein, request for such authorization, approval or exemption is hereby made.
Item 4. Regulatory Approval.
No federal regulatory authority, other than the Securities and Exchange Commission, has jurisdiction over the proposed transactions.
No state regulatory authority has jurisdiction over the proposed transactions.
Item 5. Procedure.
Pursuant to the provisions of Rule 62, the Commission is requested to issue an Order permitting the Declaration to become effective as soon as possible with respect to consummation of the transactions described herein.
Pursuant to Rule 24, Applicant-Declarants will provide on a quarterly basis an income statement and balance sheet reflecting the activities of LHI, bearing both the File Number of this proceeding and File No. 70-08417 regarding LHI and the Partnership. Those Rule 24 filings will display separately LHI's allocated share of the profits/losses of the Partnership and LHI's allocated share of the profits/losses of Enerchange. If LHI's income statement reflects a net loss for a consecutive twelve (12) month period, at the request of the SEC, a more detailed income statement and balance sheet would be provided in the form as mutually agreed by LHI and the Staff of the SEC.
Applicant-Declarants request permission to file such information within 45 days after the end of each quarter. LHI asks (partly at the request of other Members of Enerchange) that the Commission not require the Applicant-Declarants to provide income statements and balance sheets for Enerchange because (i) Enerchange does not otherwise intend to make its financial statements publicly available, (ii) Enerchange is in a highly competitive business in which information such as that displayed on Enerchange's financial statements will have commercial value, and (iii) LHI would be only a small minority owner of Enerchange without any actual control over the persons who will generate Enerchange's financial statements.
Within six months of the effective date of the order, LHI shall file with the SEC, in accordance with Section 15 of the Act and pursuant to Rule 24, a copy of the accounting system maintained by LHI and Enerchange as well as any cost allocation methodology, work order procedures and cost accounting procedures needed to collect and account for the income and expenses of the activities of LHI and Enerchange. This is to include the allocation of Enerchange profits to LHI and the other Members.
Applicant-Declarants respectfully request that the Commission's Order herein be entered pursuant to the provisions of Rule 23. If a hearing be ordered, Applicant-Declarants waive a recommended decision by a Hearing Officer, or any other responsible officer of the Commission, agree that the Division of Investment Management may assist in the preparation of the Commission's decision and request that there be no waiting period between the issuance of the Commission's Order and the date on which it becomes effective.
The Applicants hereby request that certain information contained in the Exhibits hereto, as indicated in the index to Exhibits (the "Information") be kept confidential pursuant to Rule
104(b) [17 CFR Section 250.104(b)].
Public disclosure of the Information is not necessary or appropriate in the public interest or for the protection of investors or consumers. The Information describes the purchase price of the Acquired Interest and other financial information relating to Enerchange, L.L.C., and the financial effect of the proposed transactions on Leidy Hub, Inc. and on the National Fuel Gas Company holding company system.
The amounts involved are orders of magnitude too small to be material to either investors or consumers. Leidy Hub, Inc. expects to invest a fraction of 1% of its capitalization in its interest in Enerchange during the first year of operation.
The people who would be most interested in the Information would be the marketers, hub operators and computer service providers who would be in competition with Enerchange and QuickTrade. These people typically operate with a minimal capital investment and very tight margins in a highly competitive environment. In this environment, information on a competitor's costs, margins, plans and projections is a valuable trade secret, and is treated by all the competitors as confidential, proprietary information.
These competitors can not obtain the Information anywhere else. The Applicants cannot obtain similar information about their competitors. The Applicants firmly believe that the investing and consuming public would be best served by allowing the Information to remain confidential, thereby permitting Enerchange and QuickTrade to compete on an equal basis with their competitors.
Item 6. Exhibits and Financial Statements.
The following exhibits and financial statements are made a part of this Application-Declaration:
(a) Exhibits
A-1 Restated Certificate of Incorporation of National Fuel Gas Company, dated March 15, 1985 (Incorporated by Reference to Exhibit A- 4 in File No. 70-6667).
A-2 Certificate of Amendment of Restated Certificate of Incorporation of National Fuel Gas Company, dated March 9, 1987 (Incorporated by Reference to Exhibit A-3 in File No. 70-7334).
A-3 Certificate of Amendment of Restated Certificate of Incorporation of National Fuel Gas Company, dated February 22, 1988 (Incorporated by Reference to Exhibit B-5 in File No. 70-7478).
A-4 Certificate of Amendment of Restated Certificate of Incorporation, dated March 17, 1992. (Incorporated by Reference to Exhibit A-4 in File No. 70-8109).
A-5 Bylaws of National Fuel Gas Company, as amended. (Incorporated by Reference to Exhibit A-5 in File No. 70-8109).
A-6 Pre-Purchase Agreement (Designated as Exhibit EX-2 for EDGAR purposes). (Note that Exhibit A to the Pre-Purchase Agreement is included as Exhibit A-7). A PORTION OF THIS AGREEMENT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
A-7 Form of Purchase Agreement (Designated as Exhibit EX-2 for EDGAR purposes). A PORTION OF THIS AGREEMENT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
A-8 Limited Liability Company Agreement of Enerchange, L.L.C. (Designated as Exhibit EX-3 for EDGAR purposes). A PORTION OF THIS AGREEMENT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
F-1 Opinion of Stryker Tams and Dill (Designated as Exhibit EX-5 for EDGAR purposes).
F-2 Opinion of James R. Peterson (Designated as Exhibit EX-5 for EDGAR purposes).
G-1 Financial Data Schedules
THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
H-1 Proposed form of public notice (Designated as Exhibit EX-99 for EDGAR purposes).
(b) Financial Statements
S-1 Pro Forma Consolidated Statement of Income and Earnings Reinvested in the Business for the twelve months ended March 31, 1995, Pro Forma Consolidated Balance Sheet at March 31, 1995 and Pro Forma Adjusting 
Entries. THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
S-2 National Fuel Gas Company Pro Forma Statement of Income and Earnings Reinvested in the Business for the twelve months ended March 31, 1995, Pro Forma Balance Sheet at March 31, 1995 and Pro Forma Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
S-3 Leidy Hub, Inc. Pro Forma Statement of Income and Earnings Reinvested in the Business for the twelve months ended March 31, 1995, Pro Forma Balance Sheet at March 31, 1995 and Pro Forma Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-4 Notes to Financial Statements. THIS EXHIBIT 
IS SUBJECT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 104(b).
S-5 Enerchange, L.L.C. Condensed Balance Sheet at June 12, 1995. This financial statement, as agreed to by the parties to the formation of Enerchange, L.L.C., (and not prepared by representatives of the Applicant-Declarants) is incorporated in Exhibit A-8 (the Limited Liability Company Agreement of Enerchange, L.L.C.) as Exhibit G thereto.
There have been no material changes not in the ordinary course of business since March 31, 1995.
Item 7. Information as to Environmental Effects.
The proposed transactions outlined herein involve no major action which will significantly effect the quality of the human environment.
No federal agency has prepared or is preparing an environmental impact statement with respect to the transactions proposed in this Declaration.
SIGNATURES
Pursuant to the requirements of the Public Holding Utility Company Act of 1935, the undersigned company has duly caused this Statement to be signed on its behalf by the undersigned thereunto duly authorized.
NATIONAL FUEL GAS COMPANY

By /s/ R. M. DiValerio_______
  R. M. DiValerio
  Secretary	

LEIDY HUB, INC.

                              By /s/ Walter E. DeForest____
                                Walter E. DeForest
                                President
Dated:  July 7, 1995	

EXHIBIT INDEX
(a) Exhibits
A-1 Restated Certificate of Incorporation of National Fuel Gas Company, dated March 15, 1985 (Incorporated by Reference to Exhibit A- 4 in File No. 70-6667).
A-2 Certificate of Amendment of Restated Certificate of Incorporation of National Fuel Gas Company, dated March 9, 1987 (Incorporated by Reference to Exhibit A-3 in File No. 70-7334).
A-3 Certificate of Amendment of Restated Certificate of Incorporation of National Fuel Gas Company, dated February 22, 1988 (Incorporated by Reference to Exhibit B-5 in File No. 70-7478).
A-4 Certificate of Amendment of Restated Certificate of Incorporation, dated March 17, 1992. (Incorporated by Reference to Exhibit A-4 in File No. 70-8109).
A-5 Bylaws of National Fuel Gas Company, as amended. (Incorporated by Reference to Exhibit A-5 in File No. 70-8109).
A-6 Pre-Purchase Agreement (Designated as Exhibit EX-2 for EDGAR purposes). (Note that Exhibit A to the Pre-Purchase Agreement is included as Exhibit A-7). A PORTION OF THIS AGREEMENT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
A-7 Form of Purchase Agreement (Designated as Exhibit EX-2 for EDGAR purposes). A PORTION OF THIS AGREEMENT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
A-8 Limited Liability Company Agreement of Enerchange, L.L.C. (Designated as Exhibit EX-3 for EDGAR purposes). A PORTION OF THIS AGREEMENT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
F-1 Opinion of Stryker Tams and Dill (Designated as Exhibit EX-5 for EDGAR purposes).
F-2 Opinion of James R. Peterson (Designated as Exhibit EX-5 for EDGAR purposes).
G-1 Financial Data Schedules
THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
H-1 Proposed form of public notice (Designated as Exhibit EX-99 for EDGAR purposes).
(b) Financial Statements
S-1 Pro Forma Consolidated Statement of Income and Earnings Reinvested in the Business for the twelve months ended March 31, 1995, Pro Forma Consolidated Balance Sheet at March 31, 1995 and Pro Forma Adjusting 
Entries. THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
S-2 National Fuel Gas Company Pro Forma Statement of Income and Earnings Reinvested in the Business for the twelve months ended March 31, 1995, Pro Forma Balance Sheet at March 31, 1995 and Pro Forma Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER
RULE 104(b).
S-3 Leidy Hub, Inc. Pro Forma Statement of Income and Earnings Reinvested in the Business for the twelve months ended March 31, 1995, Pro Forma Balance Sheet at March 31, 1995 and Pro Forma Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-4 Notes to Financial Statements. THIS EXHIBIT 
IS SUBJECT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 104(b).
S-5 Enerchange, L.L.C. Condensed Balance Sheet at June 12, 1995. This financial statement, as agreed to by the parties to the formation of Enerchange, L.L.C., (and not prepared by representatives of the Applicant-Declarants) is incorporated in Exhibit A-8 (the Limited Liability Company Agreement of Enerchange, L.L.C.) as Exhibit G thereto.

EXHIBIT A-6
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
PRE-PURCHASE AGREEMENT
 (Designated as Exhibit EX-2 for EDGAR purposes)
THIS PRE-PURCHASE AGREEMENT (this "Agreement"), dated as of June 12, 1995, is made by and between Hub Services Inc., a Delaware corporation ("Seller"), and Leidy Hub, Inc., a New York corporation ("Purchaser").
RECITALS
1. On the date hereof, Seller and NICOR Hub Services Inc. ("NHS") formed Enerchange, a Delaware limited liability company ("Company") for the purpose of engaging in the Business, with Seller owning a 99.0% Limited Liability Company Interest in the Company and NICOR Hub Services, Inc.("NHS") owning a 1.0% Limited Liability Company Interest in the Company.
2. The Limited Liability Company Agreement provides that Seller may sell to Purchaser a 14.5% Limited Liability Company Interest (the "Acquired Interest") and sets forth a procedure for the approval of such sale, and Seller wishes to sell to Purchaser, and Purchaser wishes to buy from Seller, the Acquired Interest.
3. Purchaser and National Fuel Gas Company ("NFG") must obtain Securities and Exchange Commission approval prior to purchasing the Acquired Interest.
4. Concurrently with the execution of this Agreement, Seller intends to sell a [ ]% Limited Liability Company Interest in the Company to NHS and a [ ]% Limited Liability Company Interest in the Company to Pacific Enerchange. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
In consideration of the mutual covenants, agreements and warranties herein contained, it is agreed that Purchaser shall acquire from Seller all of the Acquired Interest upon the terms and conditions hereinafter set forth and pursuant to a purchase agreement substantially in the form of the Purchase Agreement attached to this Agreement as Exhibit A.
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth herein for the purposes of this Agreement:
"Acquired Interest" is defined in the second recital.
"Act" means the Delaware Limited Liability Company Act, 6 Del. C. 18101, et seq., and all amendments to the Act, as in effect from time to time.
"Affiliate" means, with respect to any Person, another Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such Person.
"Business" means the business described in Section 3.1 of the Limited Liability Company Agreement.
"Closing Date" means the date on which the sale and purchase of the Acquired Interest occurs.
"Company" is defined in the first recital.
"Electronic Trading System" means the electronic gas trading and nominations system that the Company expects to develop and operate on a joint ownership basis with Energy Exchange Inc., a corporation incorporated pursuant to the laws of the Province of Alberta.
"Financial Statements" means the financial statements of Seller for the 12-month period ended December 31, 1993 and December 31, 1994 and for January, February, March, April and May 1995 (including all notes thereto), which have been previously furnished by Seller to Purchaser, consisting of the statements of earnings and cash flows for such periods.
"Governmental Authority" means the government of the United States or any state or political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
"Hub Trading Purchase Price" means the sum of $[ ] as adjusted in accordance with Section 5.4 of this Agreement, and which may be increased in accordance with Section 6.2 of the Purchase Agreement.
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
"Indemnified Person" shall mean the Person entitled to, or claiming a right to, indemnification under Article VIII.
"Indemnifying Person" shall mean the Person claimed by the Indemnified Person to be obligated to provide indemnification under Article VIII.
"Limited Liability Company Agreement" means that certain Limited Liability Company Agreement dated as of June 12, 1995, between Seller and LHI.
"Limited Liability Company Interest" has the meaning given such term in the Act.
"Losses" is defined in Section 8.2.
"Market Making Purchase Price" means $[ ]. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
"Person" means an individual, trust, Governmental Authority, estate or any incorporated or unincorporated company, corporation, limited liability company, partnership or other organization.
"Purchaser" is defined in the preamble.
"Purchase Agreement" is defined in the last paragraph of the Recitals.
"SEC Approval" means SEC approval of Purchaser's purchase of the Acquired Interest without any conditions which in the judgment of either of the parties make it impractical to consummate the transactions contemplated by this Agreement.
"Seller" is defined in the preamble.
"Total Purchase Price" is defined in Section 2.2.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of The Acquired Interest. Subject to the terms and conditions set forth in this Agreement, within three business days following SEC Approval, or such longer period acceptable to the parties, Seller and Purchaser shall execute and perform the Purchase Agreement in substantially the form attached hereto as Exhibit A.
2.2 Payment of Purchase Price. In consideration of such sale, assignment, transfer, conveyance and delivery to Purchaser by Seller of all of the Acquired Interest, Purchaser shall pay to Seller the following, which together shall comprise the "Total Purchase Price":
(a) on the Closing Date, the Hub Trading Purchase Price and the Market Making Purchase Price;
(b) the total amount due on the Closing Date shall be adjusted pursuant to Section 5.4, which adjustment could under certain circumstances have a net result of Seller paying money to Purchaser; and
(c) the additional amounts, if any, that become payable in accordance with Section 6.2 of the Purchase Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
3.1 Ownership of Acquired Interest. Seller owns beneficially and legally all right, title and interest in and to the Acquired Interest, free and clear of any security interest, lien, adverse claim or other encumbrance. The Acquired Interest in the aggregate constitutes 14.5% of the aggregate Limited Liability Company Interest of the Company. None of the Acquired Interest is subject to any restriction on transfer, other than as set forth in the Limited Liability Company Agreement.
3.2 Due Organization. To the best of Seller's knowledge, the Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. To the best of Seller's knowledge, the Company is duly qualified and in good standing as a foreign limited liability company to do business in each jurisdiction where the failure to be so qualified would, in the aggregate, have a material adverse effect on the business or operations of the Company. Schedule 3.2 is a complete and accurate list of all jurisdictions in which the Company is so qualified. The Company owns no equity or debt securities of any Person, other than a 50.0% interest in the Ellisburg-Leidy Northeast Hub Company, a Pennsylvania general partnership. True, correct and complete copies of the Company's Certificate of Formation and all other organizational documents of the Company have been delivered to Purchaser.
3.3 Due Authorization. Seller has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby, and this Agreement has been duly and validly executed and delivered by Seller, and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect which affect creditors' rights generally, and by legal and equitable limitations on the availability of specific remedies.
3.4 No Conflict. The execution, delivery and performance of this Agreement and all other instruments, agreements, certificates and documents contemplated hereby by Seller do not: (i) violate any order, decree or judgment of any Governmental Authority applicable to Seller, or the Acquired Interest or, to the best of Seller's knowledge, the Company; (ii) violate any law (or regulation or rule promulgated under any law); (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or permit cancellation of, or result in the creation of any lien or encumbrance or other contingent liability upon any of the assets of the Company or the Acquired Interest under, any of the terms, conditions, or provisions of any contract to which Seller or the Company is a party, or by which either of them or any of the assets of the Company or the Acquired Interest is bound; (iv) permit the acceleration of the maturity of any indebtedness of the Company, or any indebtedness secured by any of the assets of the Company or the Acquired Interest; or (v) violate or conflict with any provision of the charter, by-laws or other organizational documents of Seller or, to the best of Seller's knowledge, the Company.
3.4 Consents. Prior to execution of this Agreement and prior to the Closing Date, Seller will have obtained all authorizations, consents and permits required to permit the consummation of the transactions contemplated by this Agreement.
3.5 Accuracy of Statements. This Agreement does not contain any untrue statement of a material fact regarding Seller, the Company, the assets of the Company or the Acquired Interest.
3.6 Financial Statements; Undisclosed Liabilities; Other Documents. The Financial Statements have been prepared in accordance with consistently applied accounting principles and present fairly the financial position, revenues, expenses, earnings, and cash flows of Seller for the periods covered thereby. Such Financial Statements are in accordance with the books and records of Seller, do not reflect any transactions which are not bona fide transactions and do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
 Purchaser represents and warrants to Seller that:
4.1 Due Authorization. Purchaser has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby, and this Agreement has been duly and validly executed and delivered by Purchaser, and constitutes the legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect which affect creditors' rights generally, and by legal and equitable limitations on the availability of specific remedies.
4.2 No Conflict. The execution, delivery and performance of this Agreement does not: (i) violate any decree or judgment of any Governmental Authority applicable to Purchaser; (ii) violate any law (or regulation promulgated under any law); (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, any of the terms, conditions, or provisions of any contract to which Purchaser is a party, or by which Purchaser is bound; or (iv) violate or conflict with any provision of the charter, by-laws or other organizational documents of Purchaser.
4.3 Investment Intent. Purchaser is acquiring the Acquired Interest for its own account, for investment and not with a view to, or for sale or other disposition in connection with, any "distribution" thereof, within the meaning of the Securities Act of 1933, as amended, nor with any present intention of selling or otherwise disposing of the Acquired Interest.
4.4 Consents. Prior to the execution of this Agreement and prior to the Closing Date, Purchaser will have obtained all authorizations, consents and permits of others required to permit the consummation of the transactions contemplated by this Agreement except, with respect to SEC Approval, LHI and NFG will file applications for approval as soon as possible and will use their best efforts to obtain such approval.
ARTICLE V
PRE-CLOSING OPERATION OF THE COMPANY
5.1 Pre-Closing Company Operations. The parties contemplate that the Company will be created concurrently with the execution of this Agreement. The Company will conduct operations in accordance with the terms and conditions of the Company Agreement.
5.2 Purchaser's Pre-Closing Participation. Purchaser will be entitled to participate in the pre-Closing Date business affairs of the Company in accordance with the following procedures. Seller will furnish Purchaser with copies of all notices and other material documents relating to the Company's business. Seller will afford Purchaser an opportunity to review and comment on all matters presented to the Company's Executive Committee for approval and Seller agrees to take Purchaser's comments on all such matters into account prior to voting on matters in the Executive Committee. In addition, Seller agrees to use its best efforts to obtain approval for a representative of Purchaser to attend all meetings of the Executive Committee as an observer.
5.3 Periodic Reports. Seller shall at a minimum furnish Purchaser with copies of all reports and other statements that the Company is required to furnish its Members pursuant to the Company Agreement.
5.4 Purchase Price Adjustment. The intent of this Section is to place Seller and Purchaser in approximately the same after-tax economic positions as they would have been if Purchaser had purchased the Acquired Interest from Seller on the date of execution of this Agreement. Following execution of this Agreement the parties will agree on a formula to be used to implement the intent expressed in this Section and appropriate adjustments to the Total Purchase Price will be made in accordance with such formula.
5.5 Pre-Closing Competition with the Company. During the period prior to the Closing Date, Purchaser agrees that it shall be subject to those provisions of the Company Agreement limiting the extent to which Members and their Affiliates may compete with the business of the Company, including, without limitation, Article VII of the Company Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO EXECUTION OF THE
PURCHASE AGREEMENT
6.1 Conditions Precedent to Obligations of the Purchaser. The obligation of Purchaser to execute and perform the Purchase Agreement is subject to the satisfaction of the following conditions and such conditions that may be established in the Purchase Agreement:
6.1.1 Covenants, Representations and Warranties. Seller shall have performed, in all material respects, all obligations and agreements and complied with all covenants contained in this Agreement to be performed and complied with by Seller prior to the Closing Date. Each of the warranties and representations of Seller contained in this Agreement shall be accurate in all material respects, at and as of the date made and also at and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, and Seller shall have delivered to Purchaser a certificate so certifying.
6.1.2 SEC Approval. The SEC Approval shall have been obtained without any conditions which in the judgment of either party make it impractical to consummate the transactions contemplated by this Agreement.
6.2 Conditions Precedent to Obligations of Seller. The obligation of Seller to execute and perform the Purchase Agreement is subject to the satisfaction of the following conditions and such conditions that may be established in the Purchase Agreement:
6.2.1 Covenants, Representations and Warranties. Purchaser shall have performed, in all material respects, all obligations and agreements and complied with all covenants contained in this Agreement to be performed and complied with by Purchaser prior to the Closing Date. Each of the warranties and representations of Purchaser contained in this Agreement shall be accurate in all material respects, at and as of the date made and also at and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, and Purchaser shall have delivered to Seller a certificate so certifying.
ARTICLE VII
COVENANTS
7.1 Implementing This Agreement. From the date hereof to the Closing Date, each of Purchaser and Seller will take all necessary action to fulfill its respective obligations under this Agreement and shall take all commercially reasonable efforts to consummate the transactions contemplated thereby.
ARTICLE VIII
INDEMNIFICATION
8.1 Survival. The representations and warranties of the parties hereto contained herein shall survive the Closing. Such representations and warranties shall be deemed made as of the date of this Agreement and as of the Closing Date. The representations and warranties of the parties hereto contained herein shall survive the Closing.
8.2 Indemnification by Seller. Seller agrees to indemnify Purchaser against, and agrees to hold Purchaser harmless from, any and all liabilities, losses, costs, claims, damages (including without limitation consequential damages), penalties and expenses (including without limitation reasonable attorneys' fees and expenses and reasonable costs of investigation) (collectively, "Losses") incurred or suffered by Purchaser relating to or arising out of or in connection with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made by Seller in this Agreement; or
(b) any breach of or failure by Seller to perform any covenant or obligation of Seller set out or contemplated in this Agreement.
8.3 Indemnification by Purchaser. Purchaser agrees to indemnify Seller against, and agrees to hold Seller harmless from, any and all Losses incurred or suffered by Seller relating to or arising out of or in connection with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made by Purchaser in this Agreement;
(b) any breach of or failure by Purchaser to perform any covenant or obligation of Purchaser set out or contemplated in this Agreement; and
(c) notwithstanding any other provision of this Agreement, Purchaser is not obligated to indemnify, and does not agree to indemnify, Seller or any other person against any market or investment risk in connection with Purchaser's acquisition, retention or disposition of the subject matter of this Agreement.
8.4 Claims. The provisions of this Section shall be subject to Section 8.5. As soon as is reasonably practicable after becoming aware of a claim for indemnification under this Agreement the Indemnified Person shall promptly give notice to the Indemnifying Person of such claim and the amount the Indemnified Person will be entitled to receive hereunder from the Indemnifying Person; provided that the failure of the Indemnified Person to give notice shall not relieve the Indemnifying Person of its obligations under this Article VIII except to the extent (if any) that the Indemnifying Person shall have been prejudiced thereby. If the Indemnifying Person does not object in writing to such indemnification claim within 30 calendar days of receiving notice thereof, the Indemnified Person shall be entitled to recover promptly from the Indemnifying Person the amount of such claim, and no later objection by the Indemnifying Person shall be permitted. If the Indemnifying Person agrees that it has an indemnification obligation but objects on the grounds that it is obligated to pay only a lesser amount, the Indemnified Person shall nevertheless be entitled to recover promptly from the Indemnifying Person the lesser amount, without prejudice to the Indemnified Person's claim for the difference.
8.5 Notice of Third Party Claims; Assumption of Defense. The Indemnified Person shall give notice as promptly as is reasonably practicable to the Indemnifying Person of the assertion of any claim, or the commencement of any Proceeding, by any Person not a party hereto in respect of which indemnity may be sought under this Agreement; provided that the failure of the Indemnified Person to give notice shall not relieve the Indemnifying Person of its obligations under this Article VIII except to the extent (if any) that the Indemnifying Person shall have been prejudiced thereby. The Indemnifying Person may, at its own expense, (a) participate in the defense of any claim, suit, action or proceeding and (b) upon notice to the Indemnified Person and the Indemnifying Person's delivering to the Indemnified Person a written agreement that the Indemnified Person is entitled to indemnification for all Losses arising out of such claim or Proceeding and that the Indemnifying Person shall be liable for the entire amount of any Loss, at any time during the course of any such claim or Proceeding, assume the defense thereof; provided, however, that (i) the Indemnifying Person's counsel is reasonably satisfactory to the Indemnified Person, and (ii) the Indemnifying Person shall thereafter consult with the Indemnified Person upon the Indemnified Person's reasonable request for such consultation from time to time with respect to such claim or Proceeding. If the Indemnifying Person assumes such defense, the Indemnified Person shall have the right (but not the duty) to participate in the defense thereof. If the Indemnified Person reasonably determines in its judgment that representation by the Indemnifying Person's counsel of both the Indemnifying Person and the Indemnified Person would present such counsel with a conflict of interest, then such Indemnified Person may employ separate counsel to represent or defend it in any such claim or Proceeding, and the Indemnifying Person shall pay the fees and disbursements of such separate counsel. Whether or not the Indemnifying Person chooses to defend or prosecute any such claim or Proceeding, all of the parties hereto shall cooperate in the defense or prosecution thereof.
8.6 Settlement or Compromise. Any settlement or compromise made or caused to be made by the Indemnified Person or the Indemnifying Person, as the case may be, of any such claim or Proceeding of the kind referred to in Section 8.5 shall also be binding upon the Indemnifying Person or the Indemnified Person, as the case may be, in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise; provided, however, that no obligation, restriction or Loss shall be imposed on the Indemnified Person as a result of such settlement without its prior written consent.
8.7 Failure of Indemnifying Person to Act. In the event that the Indemnifying Person does not elect to assume the defense of any claim or Proceeding, then any failure of the Indemnified Person to defend or to participate in the defense of any such claim or Proceeding or to cause the same to be done, shall not relieve the Indemnifying Person of its obligations hereunder.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses. Each party hereto shall bear its own expenses with respect to this transaction.
9.2 Amendment. This Agreement may be amended, modified or supplemented, but only in writing signed by each of the parties hereto.
9.3 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed to be an original, but together shall constitute one and the same instrument.
9.4 Headings. Section and Article headings in this Agreement are for convenience of reference only, and shall not govern the interpretation of the provisions of this Agreement.
9.5 Severability. Any provisions of this Agreement that are held to be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions of this Agreement in that jurisdiction or the operation, enforceability, or validity of such provisions in any other jurisdiction.
9.6 Entire Understanding. This Agreement and the Company Agreement set forth the entire agreement and understanding of the parties hereto with respect to the transaction contemplated hereby and supersede all prior arrangements, agreements and understandings relating to the subject matter hereof. There have been no representations or statements, oral or written, that have been relied on by either party hereto, except those expressly set forth in this Agreement and the Company Agreement.
9.7 Applicable Law. This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to the conflicts of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered on the date first above written.
HUB SERVICES INC.

By:/s/ Stemphen W. Bergstrom________
Title:Executive Vice President______
Printed Name:Stephen W. Bergstrom___	

LEIDY HUB, INC.

By:/s/ Walter E. DeForest___________
Title:President_____________________
Printed Name:Walter E. DeForest_____	

EXHIBIT A
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), dated as of
- ------________, 1995, is made by and between Hub Services Inc., a Delaware corporation ("Seller"), and Leidy Hub, Inc., a New York corporation ("Purchaser").
RECITALS
1. On June 12, 1995, Seller and NICOR Hub Services Inc. ("NHS") formed Enerchange, L.L.C. a Delaware limited liability company ("Company") for the purpose of engaging in the Business, with Seller owning a 99.0% Limited Liability Company Interest in the Company and NICOR Hub Services, Inc. ("NHS") owning a 1.0% Limited Liability Company Interest in the Company. Subsequently, Seller sold an additional [ ]% Limited Liability Company Interest to NHS and a [ ]% Limited Liability Company Interest to Pacific Enerchange. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
2. The Limited Liability Company Agreement provides that Seller may sell to Purchaser a 14.5% Limited Liability Company Interest (the "Acquired Interest") and sets forth a procedure for the approval of such sale, and Seller wishes to sell to Purchaser, and Purchaser wishes to buy from Seller, the Acquired Interest.
3. The Company's Executive Committee has approved Seller's sale of the Acquired Interest to Purchaser.
In consideration of the mutual covenants, agreements and warranties herein contained, it is agreed that Purchaser shall acquire from Seller all of the Acquired Interest upon the terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth herein for the purposes of this Agreement:
"Acquired Interest" is defined in the second recital.
"Act" means the Delaware Limited Liability Company Act, 6 Del. C. 18101, et seq., and all amendments to the Act, as in effect from time to time.
"Affiliate" means, with respect to any Person, another Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such Person.
"Business" means the business described in Section 3.1 of the Limited Liability Company Agreement.
"Closing Date" means the date on which the Closing occurs or is to occur.
"Company" is defined in the first recital.
"Electronic Trading System" means the electronic gas trading and nominations system that the Company expects to develop and operate on a joint ownership basis with Energy Exchange Inc., a corporation incorporated pursuant to the laws of the Province of Alberta.
"Governmental Authority" means the government of the United States or any state or political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
"Hub Service Contract" means each of (a) that certain Chicago Hub Agreement dated as of May 26, 1993, between Northern Illinois Gas Company and Seller, (b) that certain California Hub Agreement dated as of March 15, 1994, between Southern California Gas Company and Seller, and (c) that certain Pre-Partnership Agreement dated as of September 1, 1993, and that certain Partnership Agreement dated as of September 1, 1994, each between Purchaser and Seller.
"Hub Trading Purchase Price" means the sum of $[ ] as adjusted pursuant to Section 5.4 of the Pre-Purchase Agreement. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
"Indemnified Person" shall mean the Person entitled to, or claiming a right to, indemnification under Article VIII.
"Indemnifying Person" shall mean the Person claimed by the Indemnified Person to be obligated to provide indemnification under Article VIII.
"Limited Liability Company Agreement" means that certain Limited Liability Company Agreement dated as of June 12, 1995 between Seller and NHS.
"Limited Liability Company Interest" has the meaning given such term in the Act.
"Losses" is defined in Section 8.2.
"Market Making Purchase Price" means $[ ]. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
"Person" means an individual, trust, Governmental Authority, estate or any incorporated or unincorporated company, corporation, limited liability company, partnership or other organization.
"Pre-Purchase Agreement" means that certain Pre-Purchase Agreement dated June 12, 1995, executed by Seller and Purchaser.
"Proceedings" is defined in Section 3.17.
"Purchaser" is defined in the preamble.
"Seller" is defined in the preamble.
"Taxes" means all taxes, charges, fees, duties, levies or other assessments, including (without limitation) income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, severance and employees' income withholding, unemployment and Social Security taxes, which are imposed by the United States, or any state, local or foreign government or subdivision or agency thereof, and such term shall include any interest, penalties or additions to tax attributable to such Taxes.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of The Acquired Interest. Subject to the terms and conditions set forth in this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall accept, acquire and take assignment and delivery of, all of the Acquired Interest.
2.2 Payment of Purchase Price. In consideration for such sale, assignment, transfer, conveyance and delivery to Purchaser by Seller of all of the Acquired Interest, on the Closing Date Purchaser will pay to Seller the Hub Trading Purchase Price and the Market Making Purchase Price.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
3.1 Ownership of Acquired Interest. Seller owns beneficially and legally all right, title and interest in and to the Acquired Interest, free and clear of any security interest, lien, adverse claim or other encumbrance. The Acquired Interest in the aggregate constitutes 14.5% of the aggregate Limited Liability Company Interests of the Company. None of the Acquired Interest is subject to any restriction on transfer, other than as set forth in the Limited Liability Company Agreement.
3.2 Due Organization. To the best of Seller's knowledge, the Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. To the best of Seller's knowledge, the Company is duly qualified and in good standing as a foreign limited liability company to do business in each jurisdiction where the failure to be so qualified would, in the aggregate, have a material adverse effect on the business or operations of the Company. Schedule 3.2 is a complete and accurate list of all jurisdictions in which the Company is so qualified. The Company owns no equity or debt securities of any Person, other than a 50.0% interest in the Pennsylvania general partnership formed under the contracts described in clause (c) of the definition of "Hub Services Contract." True, correct and complete copies of the Company's Certificate of Formation and all other organizational documents of the Company have been delivered to Purchaser.
3.3 Due Authorization. Seller has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby, and this Agreement has been duly and validly executed and delivered by Seller, and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect which affect creditors' rights generally, and by legal and equitable limitations on the availability of specific remedies.
3.4 No conflict. The execution, delivery and performance of this Agreement and all other instruments, agreements, certificates and documents contemplated hereby by Seller do not: (i) violate any order, decree or judgment of any Governmental Authority applicable to Seller, or the Acquired Interest or, to the best of Seller's knowledge, the Company; (ii) violate any law (or regulation or rule promulgated under any law); (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or permit cancellation of, or result in the creation of any lien or encumbrance or other contingent liability upon any of the assets of the Company or the Acquired Interest under, any of the terms, conditions, or provisions of any contract to which Seller or the Company is a party, or by which either of them or any of the assets of the Company or the Acquired Interest is bound; (iv) permit the acceleration of the maturity of any indebtedness of the Company, or any indebtedness secured by any of the assets of the Company or the Acquired Interest; or (v) violate or conflict with any provision of the charter, by-laws or other organizational documents of Seller or, to the best of Seller's knowledge, the Company.
3.5 Ownership of Interests. Prior to giving effect to Purchaser's acquisition of the Acquired Interest pursuant to this Agreement, Seller owned a [ ]% Limited Liability Company Interest in the Company. Neither Seller nor, to the best of Seller's knowledge, the Company has granted any option, warrant, or similar right to any Person to purchase or acquire any rights with respect to any Limited Liability Company Interest, or any other interest whatsoever, of the Company. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
3.6 Title to and Condition of Properties and the Company. The Company has good title to and is the lawful owner of all of the assets of the Company, free and clear of all security interests, liens, adverse claims and other encumbrances. All of the assets of the Company are listed on Schedule 3.6(a). Each of the Hub Services Contracts is in full force and effect and constitutes a legal, valid and binding agreement of each party thereto. The rights and obligations of Seller under each Hub Services Contract have been duly and validly assigned to the Company by Seller. All of the liabilities of the Company are listed on Schedule 3.6(b). The Company has no liabilities, debts, claims or obligations, whether accrued, absolute, contingent or otherwise, whether due or to become due, except as set forth on Schedule 3.6(b).
3.7 No Defaults or Violations. Except as set forth on Schedule 3.7, (a) the Company has not materially breached any provision of, nor is it in material default under the terms of, any contract (including, without limitation, any Hub Services Contract) to which it is a party or under which it has any rights or by which it is bound, and to Seller's knowledge no other party to any such contract is in default thereunder in any material respect, and (b) the Company is not in material violation of or default under or with respect to any law, governmental regulation or rule or order of any Governmental Authority that is applicable in any way to the business or operation of the Company, provided that, to the extent such representations and warranties in clauses
(a) and (b) above are made with respect to any breach, default or violation by the Company that may have arisen from and after the Company's formation, such representations and warranties are made to the best of Seller's knowledge. No party to a Hub Services Contract has notified Seller, whether orally or in writing, that Seller is in default under such Hub Services Contract, and Seller is unaware of any default, actual or threatened, or any event which with or without notice or lapse of time or both would become a default, under any Hub Services Contract by any party to any such Hub Services Contract. Except as set forth in Schedule 3.7, none of the assets of the Company is in material violation of any law, building, zoning or other ordinance, code or regulation applicable to it.
3.8 Taxes. Having been formed on the Closing Date, the Company has not previously filed any Federal, state and other tax returns and reports as of the Closing Date; the Company has not been required to file any such returns; and the Company has not been required to pay any Taxes on or prior to the Closing Date.
3.9 Condition of Assets. Except as disclosed on Schedule 3.9, all of the assets of the Company, whether real or personal, owned or leased, are in reasonably good operating condition (with the exception of normal wear and tear).
3.10 Contracts. Schedule 3.10 includes all the contracts and arrangements (including, without limitation, any employment contracts) to which the Company is a party or by which it is bound or to which any of the assets of the Company is subject. Seller has delivered to Purchaser true, correct and complete copies of each document listed on Schedule 3.10, and a written description of each oral arrangement so listed.
3.11 Permits, etc. The Company holds all of the licenses, certificates, permits, franchises and rights listed on Schedule 3.11, and, to the best of Seller's knowledge, does not require any other licenses, certificates, permits, franchises and rights to conduct the Business and its other affairs.
3.12 Insurance Policies. Schedule 3.12 contains a list of each insurance policy currently providing coverage for the assets or business of the Company and a copy of each such policy has been delivered to Purchaser.
3.13 Employee Benefit Plans. Each "employee pension benefit plan," as such term is defined in Section 3(2) of ERISA, and each "employee welfare benefit plan," as defined in Section 3(1) of ERISA, that is maintained by the Company to provide benefits for its employees is described on Schedule 3.13.
3.14 Compliance With Laws. Prior to the formation of the Company, Seller conducted the Business in full compliance in all material respects with all applicable laws and, to the best of Seller's knowledge, on and from the formation of the Company, the Company has conducted the Business and its other affairs in full compliance in all material respects with all applicable laws.
3.15 No Other Agreement. Other than the Sale Agreements, neither Seller nor any its Affiliates has any contract, agreement, arrangement or understanding with respect to the sale or other disposition of the assets of the Company or any interests in the Company.
3.16 Consents. Except as set forth on Schedule 3.16, no notice to, filing with, authorization of, exemption by, or consent of any Person is required in order for Seller to consummate the transactions contemplated hereby.
3.17 Litigation.
(a) Except as disclosed in Schedule 3.17, there are no claims, actions, suits, arbitrations, regulatory proceedings or other litigation, proceedings or governmental investigations (collectively, "Proceedings") pending, or to the best of Seller's knowledge, threatened against or affecting the Company, Seller or any of its respective officers, directors, employees, agents or stockholders thereof in their capacity as such, or any of their respective properties or businesses relating to such Persons in such capacities, and Seller is not aware of any facts or circumstances which may give rise to any of the foregoing; provided that to the extent such representations and warranties in this clause are made with respect to any Proceedings that may have arisen against the Company from and after the Company's formation, such representations and warranties are made to the best of Seller's knowledge.
(b) There are no Proceedings pending or, to the best of Seller's knowledge, threatened by or against the Company or Seller with respect to this Agreement or any Hub Services Contract, or in connection with the transactions contemplated hereby or thereby, and Seller has no reason to believe there is a valid basis for any such Proceeding; provided that to the extent such representations and warranties in this clause are made with respect to any Proceedings that may have arisen against the Company from and after the Company's formation, such representations and warranties are made to the best of Seller's knowledge.
3.18 No Conflict of Interest. Neither Seller nor any of its Affiliates has or claims to have any direct or indirect interest in any tangible or intangible property used in the Business, except Seller's interest as an owner of its Limited Liability Company Interest in the Company.
3.19 Bank Accounts. Schedule 3.19 sets forth the names and locations of each bank or other financial institution at which the Company has an account (giving the account numbers) or safe deposit box and the names of all Persons authorized to draw thereon or have access thereto, and the names of all Persons, if any, now holding powers of attorney or comparable delegation of authority from the Company and a summary statement thereof.
3.20 Accuracy of Statements. This Agreement does not contain any untrue statement of a material fact regarding Seller, the Company, the assets of the Company or the Acquired Interest.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that:
4.1 Due Authorization. Purchaser has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby, and this Agreement has been duly and validly executed and delivered by Purchaser, and constitutes the legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect which affect creditors' rights generally, and by legal and equitable limitations on the availability of specific remedies.
4.2 No Conflict. The execution, delivery and performance of this Agreement and all other instruments, agreements, certificates and documents contemplated hereby by Purchaser do not: (i) violate any decree or judgment of any Governmental Authority applicable to Purchaser; (ii) violate any law (or existing regulation promulgated under any law); (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, any of the terms, conditions, or provisions of any contract to which Purchaser is a party, or by which Purchaser is bound; or (iv) violate or conflict with any provision of the charter, by-laws or other organizational documents of Purchaser.
4.3 Investment Intent. Purchaser is acquiring the Acquired Interest for its own account, for investment and not with a view to, or for sale or other disposition in connection with, any "distribution" thereof, within the meaning of the Securities Act of 1933, as amended, nor with any present intention of selling or otherwise disposing of the Acquired Interest.
4.4 Consents. Except as set forth on Schedule 4.3, no notice to, filing with, authorization of, exemption by, or consent of any Person is required in order for Purchaser to consummate the transactions contemplated hereby.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions Precedent to Obligations of the Purchaser. The obligation of Purchaser to purchase the Acquired Interest at Closing is subject to the satisfaction of the following conditions:
5.1.1 Representations and Warranties. The representations and warranties set forth in this Agreement made by Seller shall be accurate as of the Closing Date as if made on the Closing Date, and Seller shall have delivered to Purchaser a certificate so certifying.
5.1.2 Compliance with Agreements and Covenants. Seller shall have performed and complied with all of its covenants, obligations and agreements contained in this Agreement to be performed and complied with by Seller on or prior to the Closing Date.
5.2 Conditions Precedent to Obligations of Seller. The obligation of Seller to sell the Acquired Interest at Closing is subject to the satisfaction of the following conditions:
5.2.1 Representations and Warranties. The representations and warranties set forth in this Agreement made by Purchaser shall be accurate as of the Closing Date as if made on the Closing Date, and Purchaser shall have delivered to Seller a certificate so certifying.
5.2.2 Compliance with Agreements and Covenants. Purchaser shall have performed and complied with all of its covenants, obligations and agreements contained in this Agreement to be performed and complied with by Purchaser on or prior to the Closing Date.
5.2.3 Company Approval. Seller shall have obtained the approval of the Company's Executive Committee to sell the Acquired Interest to Purchaser in form and substance satisfactory to Seller in its sole discretion.
ARTICLE VI
COVENANTS
6.1 Implementing This Agreement. From the date hereof to the Closing Date, each of Purchaser and Seller will take all necessary action to fulfill its respective obligations under this Agreement and shall take all commercially reasonable efforts to consummate the transactions contemplated thereby.
6.2 Payment to Seller for Hub Administration. Purchaser agrees that, if the termination date of the Chicago Hub Agreement is extended to a date not earlier than June 11, 2000 on substantially the same terms as those currently in effect with respect to the Chicago Hub Agreement, Purchaser shall pay to Seller, on the later of June 12, 1998 or the date of execution of such extension, an amount equal to $[ ]. In addition, Purchaser agrees that, if the termination date of the California Hub Agreement is extended to a date not earlier than June 11, 2000 on substantially the same terms as those currently in effect with respect to the California Hub Agreement, Purchaser shall pay to Seller, on the later of June 12, 1998 or the date of execution of such extension, an amount equal to $[ ]. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
6.3 Seller to Provide Expertise. Seller acknowledges that Purchaser is purchasing the Acquired Interest hereunder in reliance upon representations that Seller and Seller's Affiliates have officers and employees who possess the experience and expertise to engage successfully in Market-Making (provided that Purchaser acknowledges that Seller has in no way guaranteed the success of the Company's Market-Making). Seller agrees that it will, or will cause its Affiliates to, second or otherwise make available to the Company officers and employees (and cause the Company to engage and retain, so long as the Limited Liability Company Agreement shall remain in effect, such officers and employees) who have such experience and expertise, and Seller further agrees that such officers and employees shall be reasonably acceptable to Purchaser. Without limiting the foregoing, the parties agree that Miles Allen has such experience and expertise (provided that Purchaser agrees that, subject to the foregoing sentence, other officers and employees may replace Miles Allen).
6.4 That certain Assignment, Bill of Sale and Conveyance dated June 12, 1995 executed by Seller, as Assignor, and Enerchange, as Assignee (the "Assignment"), provides that Enerchange will reassign the assigned interest in the Ellisburg-Leidy Partnership Agreement to Seller upon Seller's election in the event that either the Chicago Hub Agreement or the California Hub Agreement, or both, are not extended to a date specified in the Assignment. Seller and Purchaser hereby agree that Seller shall not elect to require Enerchange to reassign the interest in the Ellisburg-Leidy Partnership Agreement to Seller without the prior written consent of Purchaser.
ARTICLE VII
CLOSING
7.1 Closing. The Closing shall take place on or before the third business day following the day on which Purchaser's acquisition of the Acquired Interest is approved by the SEC, or on such later date to which the parties hereto shall agree.
ARTICLE VIII
INDEMNIFICATION
8.1 Survival. The representations and warranties of the parties hereto contained herein and in this Article VIII shall survive the Closing. Such representations and warranties shall be deemed made as of the date of this Agreement and as of the Closing Date.
8.2 Indemnification by Seller. Seller agrees to indemnify Purchaser against, and agrees to hold Purchaser harmless from, any and all liabilities, losses, costs, claims, damages (including without limitation consequential damages), penalties and expenses (including without limitation reasonable attorneys' fees and expenses and reasonable costs of investigation) (collectively, "Losses") incurred or suffered by Purchaser relating to or arising out of or in connection with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made by Seller in this Agreement;
(b) any breach of or failure by Seller to perform any covenant or obligation of Seller set out or contemplated in this Agreement; or
(c) any actual and/or contingent liabilities arising from, or in connection with, or as a result of Seller's performance, act or omission prior to the Closing Date.
8.3 Indemnification by Purchaser. Purchaser agrees to indemnify Seller against, and agrees to hold Seller harmless from, any and all Losses incurred or suffered by Seller relating to or arising out of or in connection with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made by Purchaser in this Agreement ; or
(b) any breach of or failure by Purchaser to perform any covenant or obligation of Purchaser set out or contemplated in this Agreement.
8.4 Claims. The provisions of this Section shall be subject to Section 8.5. As soon as is reasonably practicable after becoming aware of a claim for indemnification under this Agreement the Indemnified Person shall promptly give notice to the Indemnifying Person of such claim and the amount the Indemnified Person will be entitled to receive hereunder from the Indemnifying Person; provided that the failure of the Indemnified Person to give notice shall not relieve the Indemnifying Person of its obligations under this Article VIII except to the extent (if any) that the Indemnifying Person shall have been prejudiced thereby. If the Indemnifying Person does not object in writing to such indemnification claim within 30 calendar days of receiving notice thereof, the Indemnified Person shall be entitled to recover promptly from the Indemnifying Person the amount of such claim, and no later objection by the Indemnifying Person shall be permitted. If the Indemnifying Person agrees that it has an indemnification obligation but objects on the grounds that it is obligated to pay only a lesser amount, the Indemnified Person shall nevertheless be entitled to recover promptly from the Indemnifying Person the lesser amount, without prejudice to the Indemnified Person's claim for the difference.
8.5 Notice of Third Party Claims; Assumption of Defense. The Indemnified Person shall give notice as promptly as is reasonably practicable to the Indemnifying Person of the assertion of any claim, or the commencement of any Proceeding, by any Person not a party hereto in respect of which indemnity may be sought under this Agreement; provided that the failure of the Indemnified Person to give notice shall not relieve the Indemnifying Person of its obligations under this Article VIII except to the extent (if any) that the Indemnifying Person shall have been prejudiced thereby. The Indemnifying Person may, at its own expense, (a) participate in the defense of any claim, suit, action or proceeding and (b) upon notice to the Indemnified Person and the Indemnifying Person's delivering to the Indemnified Person a written agreement that the Indemnified Person is entitled to indemnification for all Losses arising out of such claim or Proceeding and that the Indemnifying Person shall be liable for the entire amount of any Loss, at any time during the course of any such claim or Proceeding, assume the defense thereof; provided, however, that (i) the Indemnifying Person's counsel is reasonably satisfactory to the Indemnified Person, and (ii) the Indemnifying Person shall thereafter consult with the Indemnified Person upon the Indemnified Person's reasonable request for such consultation from time to time with respect to such claim or Proceeding. If the Indemnifying Person assumes such defense, the Indemnified Person shall have the right (but not the duty) to participate in the defense thereof. If the Indemnified Person reasonably determines in its judgment that representation by the Indemnifying Person's counsel of both the Indemnifying Person and the Indemnified Person would present such counsel with a conflict of interest, then such Indemnified Person may employ separate counsel to represent or defend it in any such claim or Proceeding, and the Indemnifying Person shall pay the fees and disbursements of such separate counsel. Whether or not the Indemnifying Person chooses to defend or prosecute any such claim or Proceeding, all of the parties hereto shall cooperate in the defense or prosecution thereof.

8.6 Settlement or Compromise. Any settlement or compromise made or caused to be made by the Indemnified Person or the Indemnifying Person, as the case may be, of any such claim or Proceeding of the kind referred to in Section 8.5 shall also be binding upon the Indemnifying Person or the Indemnified Person, as the case may be, in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise; provided, however, that no obligation, restriction or Loss shall be imposed on the Indemnified Person as a result of such settlement without its prior written consent.
8.7 Failure of Indemnifying Person to Act. In the event that the Indemnifying Person does not elect to assume the defense of any claim or Proceeding, then any failure of the Indemnified Person to defend or to participate in the defense of any such claim or Proceeding or to cause the same to be done, shall not relieve the Indemnifying Person of its obligations hereunder.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses. Each party hereto shall bear its own expenses with respect to this transaction.
9.2 Amendment. This Agreement may be amended, modified or supplemented, but only in writing signed by each of the parties hereto.
9.3 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed to be an original, but together shall constitute one and the same instrument.
9.4 Headings. Section and Article headings in this Agreement are for convenience of reference only, and shall not govern the interpretation of the provisions of this Agreement.
9.5 Severability. Any provisions of this Agreement that are held to be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions of this Agreement in that jurisdiction or the operation, enforceability, or validity of such provisions in any other jurisdiction.
9.6 Entire Understanding. This Agreement, the Pre-Purchase Agreement and the Company Agreement set forth the entire agreement and understanding of the parties hereto with respect to the transaction contemplated hereby and supersede all prior arrangements, agreements and understandings relating to the subject matter hereof. There have been no representations or statements, oral or written, that have been relied on by either party hereto, except those expressly set forth in this Agreement, the Pre-Purchase Agreement and the Company Agreement.
9.7 Applicable Law. This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to the conflicts of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered on the date first above written.
HUB SERVICES INC.
By:_________________________________
Title:______________________________
Printed Name:_______________________
LEIDY HUB, INC.
By:_________________________________
Title:______________________________
Printed Name:_______________________
SCHEDULE 3.2
JURISDICTIONS OF QUALIFICATION
1. Delaware
SCHEDULE 3.6(a)
ASSETS
1. That certain CALIFORNIA HUB AGREEMENT dated as of March 15, 1994, by and between Southern California Gas Company and Hub Services, Inc.
2. That certain HUB OPERATING AGREEMENT dated as of May 27, 1994, by and between Southern California Gas Company and Hub Services, Inc.
3. That certain CHICAGO HUB AGREEMENT dated May 26, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
4. That certain PARTNERSHIP AGREEMENT dated as of September 1, 1994, by and between Leidy Hub, Inc. and Hub Services, Inc.
5. That certain BUY-SELL CONTRACT dated November 29, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
SCHEDULE 3.6(b)
LIABILITIES
1. None.
SCHEDULE 3.7
DEFAULTS AND VIOLATIONS
1. None
SCHEDULE 3.9
CONDITION OF ASSETS
1. No disclosure is made pursuant to Section 3.9.
SCHEDULE 3.10
CONTRACTS
1. That certain CALIFORNIA HUB AGREEMENT dated as of March 15, 1994, by and between Southern California Gas Company and Hub Services, Inc.
2. That certain HUB OPERATING AGREEMENT dated as of May 27, 1994, by and between Southern California Gas Company and Hub Services, Inc.
3. That certain CHICAGO HUB AGREEMENT dated May 26, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
4. That certain PARTNERSHIP AGREEMENT dated as of September 1, 1994, by and between Leidy Hub, Inc. and Hub Services, Inc.
5. That certain BUY-SELL CONTRACT dated November 29, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
SCHEDULE 3.11
LICENSES, PERMITS, FRANCHISES AND RIGHTS
1. None
SCHEDULE 3.12
INSURANCE
1. None
SCHEDULE 3.13
EMPLOYEE BENEFIT PLANS
1. None
SCHEDULE 3.16
CONSENTS
1. In accordance with Section 12.3 of the Limited Liability Company Agreement, HSI is obligated to obtain the consent of NHS to the disposition of the Acquired Interest.
SCHEDULE 3.17
LITIGATION
1. None
SCHEDULE 3.19
BANK ACCOUNTS
1. None

EXHIBIT A-7
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
PURCHASE AGREEMENT
 (Designated as Exhibit EX-2 for EDGAR purposes)
THIS PURCHASE AGREEMENT (this "Agreement"), dated as of
- ------________, 1995, is made by and between Hub Services Inc., a Delaware corporation ("Seller"), and Leidy Hub, Inc., a New York corporation ("Purchaser").
RECITALS
1. On June 12, 1995, Seller and NICOR Hub Services Inc. ("NHS") formed Enerchange, L.L.C. a Delaware limited liability company ("Company") for the purpose of engaging in the Business, with Seller owning a 99.0% Limited Liability Company Interest in the Company and NICOR Hub Services, Inc. ("NHS") owning a 1.0% Limited Liability Company Interest in the Company. Subsequently, Seller sold an additional [ ]% Limited Liability Company Interest to NHS and a [ ]% Limited Liability Company Interest to Pacific Enerchange. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
2. The Limited Liability Company Agreement provides that Seller may sell to Purchaser a 14.5% Limited Liability Company Interest (the "Acquired Interest") and sets forth a procedure for the approval of such sale, and Seller wishes to sell to Purchaser, and Purchaser wishes to buy from Seller, the Acquired Interest.
3. The Company's Executive Committee has approved Seller's sale of the Acquired Interest to Purchaser.
In consideration of the mutual covenants, agreements and warranties herein contained, it is agreed that Purchaser shall acquire from Seller all of the Acquired Interest upon the terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth herein for the purposes of this Agreement:
"Acquired Interest" is defined in the second recital.
"Act" means the Delaware Limited Liability Company Act, 6 Del. C. 18101, et seq., and all amendments to the Act, as in effect from time to time.
"Affiliate" means, with respect to any Person, another Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such Person.
"Business" means the business described in Section 3.1 of the Limited Liability Company Agreement.
"Closing Date" means the date on which the Closing occurs or is to occur.
"Company" is defined in the first recital.
"Electronic Trading System" means the electronic gas trading and nominations system that the Company expects to develop and operate on a joint ownership basis with Energy Exchange Inc., a corporation incorporated pursuant to the laws of the Province of Alberta.
"Governmental Authority" means the government of the United States or any state or political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
"Hub Service Contract" means each of (a) that certain Chicago Hub Agreement dated as of May 26, 1993, between Northern Illinois Gas Company and Seller, (b) that certain California Hub Agreement dated as of March 15, 1994, between Southern California Gas Company and Seller, and (c) that certain Pre-Partnership Agreement dated as of September 1, 1993, and that certain Partnership Agreement dated as of September 1, 1994, each between Purchaser and Seller.
"Hub Trading Purchase Price" means the sum of $[ ] as adjusted pursuant to Section 5.4 of the Pre-Purchase Agreement. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
"Indemnified Person" shall mean the Person entitled to, or claiming a right to, indemnification under Article VIII.
"Indemnifying Person" shall mean the Person claimed by the Indemnified Person to be obligated to provide indemnification under Article VIII.
"Limited Liability Company Agreement" means that certain Limited Liability Company Agreement dated as of June 12, 1995 between Seller and NHS.
"Limited Liability Company Interest" has the meaning given such term in the Act.
"Losses" is defined in Section 8.2.
"Market Making Purchase Price" means $[ ]. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
"Person" means an individual, trust, Governmental Authority, estate or any incorporated or unincorporated company, corporation, limited liability company, partnership or other organization.
"Pre-Purchase Agreement" means that certain Pre-Purchase Agreement dated June 12, 1995, executed by Seller and Purchaser.
"Proceedings" is defined in Section 3.17.
"Purchaser" is defined in the preamble.
"Seller" is defined in the preamble.
"Taxes" means all taxes, charges, fees, duties, levies or other assessments, including (without limitation) income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, severance and employees' income withholding, unemployment and Social Security taxes, which are imposed by the United States, or any state, local or foreign government or subdivision or agency thereof, and such term shall include any interest, penalties or additions to tax attributable to such Taxes.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of The Acquired Interest. Subject to the terms and conditions set forth in this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall accept, acquire and take assignment and delivery of, all of the Acquired Interest.
2.2 Payment of Purchase Price. In consideration for such sale, assignment, transfer, conveyance and delivery to Purchaser by Seller of all of the Acquired Interest, on the Closing Date Purchaser will pay to Seller the Hub Trading Purchase Price and the Market Making Purchase Price.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
3.1 Ownership of Acquired Interest. Seller owns beneficially and legally all right, title and interest in and to the Acquired Interest, free and clear of any security interest, lien, adverse claim or other encumbrance. The Acquired Interest in the aggregate constitutes 14.5% of the aggregate Limited Liability Company Interests of the Company. None of the Acquired Interest is subject to any restriction on transfer, other than as set forth in the Limited Liability Company Agreement.
3.2 Due Organization. To the best of Seller's knowledge, the Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. To the best of Seller's knowledge, the Company is duly qualified and in good standing as a foreign limited liability company to do business in each jurisdiction where the failure to be so qualified would, in the aggregate, have a material adverse effect on the business or operations of the Company. Schedule 3.2 is a complete and accurate list of all jurisdictions in which the Company is so qualified. The Company owns no equity or debt securities of any Person, other than a 50.0% interest in the Pennsylvania general partnership formed under the contracts described in clause (c) of the definition of "Hub Services Contract." True, correct and complete copies of the Company's Certificate of Formation and all other organizational documents of the Company have been delivered to Purchaser.
3.3 Due Authorization. Seller has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby, and this Agreement has been duly and validly executed and delivered by Seller, and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect which affect creditors' rights generally, and by legal and equitable limitations on the availability of specific remedies.
3.4 No conflict. The execution, delivery and performance of this Agreement and all other instruments, agreements, certificates and documents contemplated hereby by Seller do not: (i) violate any order, decree or judgment of any Governmental Authority applicable to Seller, or the Acquired Interest or, to the best of Seller's knowledge, the Company; (ii) violate any law (or regulation or rule promulgated under any law); (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or permit cancellation of, or result in the creation of any lien or encumbrance or other contingent liability upon any of the assets of the Company or the Acquired Interest under, any of the terms, conditions, or provisions of any contract to which Seller or the Company is a party, or by which either of them or any of the assets of the Company or the Acquired Interest is bound; (iv) permit the acceleration of the maturity of any indebtedness of the Company, or any indebtedness secured by any of the assets of the Company or the Acquired Interest; or (v) violate or conflict with any provision of the charter, by-laws or other organizational documents of Seller or, to the best of Seller's knowledge, the Company.
3.5 Ownership of Interests. Prior to giving effect to Purchaser's acquisition of the Acquired Interest pursuant to this Agreement, Seller owned a [ ]% Limited Liability Company Interest in the Company. Neither Seller nor, to the best of Seller's knowledge, the Company has granted any option, warrant, or similar right to any Person to purchase or acquire any rights with respect to any Limited Liability Company Interest, or any other interest whatsoever, of the Company. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
3.6 Title to and Condition of Properties and the Company. The Company has good title to and is the lawful owner of all of the assets of the Company, free and clear of all security interests, liens, adverse claims and other encumbrances. All of the assets of the Company are listed on Schedule 3.6(a). Each of the Hub Services Contracts is in full force and effect and constitutes a legal, valid and binding agreement of each party thereto. The rights and obligations of Seller under each Hub Services Contract have been duly and validly assigned to the Company by Seller. All of the liabilities of the Company are listed on Schedule 3.6(b). The Company has no liabilities, debts, claims or obligations, whether accrued, absolute, contingent or otherwise, whether due or to become due, except as set forth on Schedule 3.6(b).
3.7 No Defaults or Violations. Except as set forth on Schedule 3.7, (a) the Company has not materially breached any provision of, nor is it in material default under the terms of, any contract (including, without limitation, any Hub Services Contract) to which it is a party or under which it has any rights or by which it is bound, and to Seller's knowledge no other party to any such contract is in default thereunder in any material respect, and (b) the Company is not in material violation of or default under or with respect to any law, governmental regulation or rule or order of any Governmental Authority that is applicable in any way to the business or operation of the Company, provided that, to the extent such representations and warranties in clauses
(a) and (b) above are made with respect to any breach, default or violation by the Company that may have arisen from and after the Company's formation, such representations and warranties are made to the best of Seller's knowledge. No party to a Hub Services Contract has notified Seller, whether orally or in writing, that Seller is in default under such Hub Services Contract, and Seller is unaware of any default, actual or threatened, or any event which with or without notice or lapse of time or both would become a default, under any Hub Services Contract by any party to any such Hub Services Contract. Except as set forth in Schedule 3.7, none of the assets of the Company is in material violation of any law, building, zoning or other ordinance, code or regulation applicable to it.
3.8 Taxes. Having been formed on the Closing Date, the Company has not previously filed any Federal, state and other tax returns and reports as of the Closing Date; the Company has not been required to file any such returns; and the Company has not been required to pay any Taxes on or prior to the Closing Date.
3.9 Condition of Assets. Except as disclosed on Schedule 3.9, all of the assets of the Company, whether real or personal, owned or leased, are in reasonably good operating condition (with the exception of normal wear and tear).
3.10 Contracts. Schedule 3.10 includes all the contracts and arrangements (including, without limitation, any employment contracts) to which the Company is a party or by which it is bound or to which any of the assets of the Company is subject. Seller has delivered to Purchaser true, correct and complete copies of each document listed on Schedule 3.10, and a written description of each oral arrangement so listed.
3.11 Permits, etc. The Company holds all of the licenses, certificates, permits, franchises and rights listed on Schedule 3.11, and, to the best of Seller's knowledge, does not require any other licenses, certificates, permits, franchises and rights to conduct the Business and its other affairs.
3.12 Insurance Policies. Schedule 3.12 contains a list of each insurance policy currently providing coverage for the assets or business of the Company and a copy of each such policy has been delivered to Purchaser.
3.13 Employee Benefit Plans. Each "employee pension benefit plan," as such term is defined in Section 3(2) of ERISA, and each "employee welfare benefit plan," as defined in Section 3(1) of ERISA, that is maintained by the Company to provide benefits for its employees is described on Schedule 3.13.
3.14 Compliance With Laws. Prior to the formation of the Company, Seller conducted the Business in full compliance in all material respects with all applicable laws and, to the best of Seller's knowledge, on and from the formation of the Company, the Company has conducted the Business and its other affairs in full compliance in all material respects with all applicable laws.
3.15 No Other Agreement. Other than the Sale Agreements, neither Seller nor any its Affiliates has any contract, agreement, arrangement or understanding with respect to the sale or other disposition of the assets of the Company or any interests in the Company.
3.16 Consents. Except as set forth on Schedule 3.16, no notice to, filing with, authorization of, exemption by, or consent of any Person is required in order for Seller to consummate the transactions contemplated hereby.
3.17 Litigation.
(a) Except as disclosed in Schedule 3.17, there are no claims, actions, suits, arbitrations, regulatory proceedings or other litigation, proceedings or governmental investigations (collectively, "Proceedings") pending, or to the best of Seller's knowledge, threatened against or affecting the Company, Seller or any of its respective officers, directors, employees, agents or stockholders thereof in their capacity as such, or any of their respective properties or businesses relating to such Persons in such capacities, and Seller is not aware of any facts or circumstances which may give rise to any of the foregoing; provided that to the extent such representations and warranties in this clause are made with respect to any Proceedings that may have arisen against the Company from and after the Company's formation, such representations and warranties are made to the best of Seller's knowledge.
(b) There are no Proceedings pending or, to the best of Seller's knowledge, threatened by or against the Company or Seller with respect to this Agreement or any Hub Services Contract, or in connection with the transactions contemplated hereby or thereby, and Seller has no reason to believe there is a valid basis for any such Proceeding; provided that to the extent such representations and warranties in this clause are made with respect to any Proceedings that may have arisen against the Company from and after the Company's formation, such representations and warranties are made to the best of Seller's knowledge.
3.18 No Conflict of Interest. Neither Seller nor any of its Affiliates has or claims to have any direct or indirect interest in any tangible or intangible property used in the Business, except Seller's interest as an owner of its Limited Liability Company Interest in the Company.
3.19 Bank Accounts. Schedule 3.19 sets forth the names and locations of each bank or other financial institution at which the Company has an account (giving the account numbers) or safe deposit box and the names of all Persons authorized to draw thereon or have access thereto, and the names of all Persons, if any, now holding powers of attorney or comparable delegation of authority from the Company and a summary statement thereof.
3.20 Accuracy of Statements. This Agreement does not contain any untrue statement of a material fact regarding Seller, the Company, the assets of the Company or the Acquired Interest.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that:
4.1 Due Authorization. Purchaser has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby, and this Agreement has been duly and validly executed and delivered by Purchaser, and constitutes the legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect which affect creditors' rights generally, and by legal and equitable limitations on the availability of specific remedies.
4.2 No Conflict. The execution, delivery and performance of this Agreement and all other instruments, agreements, certificates and documents contemplated hereby by Purchaser do not: (i) violate any decree or judgment of any Governmental Authority applicable to Purchaser; (ii) violate any law (or existing regulation promulgated under any law); (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, any of the terms, conditions, or provisions of any contract to which Purchaser is a party, or by which Purchaser is bound; or (iv) violate or conflict with any provision of the charter, by-laws or other organizational documents of Purchaser.
4.3 Investment Intent. Purchaser is acquiring the Acquired Interest for its own account, for investment and not with a view to, or for sale or other disposition in connection with, any "distribution" thereof, within the meaning of the Securities Act of 1933, as amended, nor with any present intention of selling or otherwise disposing of the Acquired Interest.
4.4 Consents. Except as set forth on Schedule 4.3, no notice to, filing with, authorization of, exemption by, or consent of any Person is required in order for Purchaser to consummate the transactions contemplated hereby.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions Precedent to Obligations of the Purchaser. The obligation of Purchaser to purchase the Acquired Interest at Closing is subject to the satisfaction of the following conditions:
5.1.1 Representations and Warranties. The representations and warranties set forth in this Agreement made by Seller shall be accurate as of the Closing Date as if made on the Closing Date, and Seller shall have delivered to Purchaser a certificate so certifying.
5.1.2 Compliance with Agreements and Covenants. Seller shall have performed and complied with all of its covenants, obligations and agreements contained in this Agreement to be performed and complied with by Seller on or prior to the Closing Date.
5.2 Conditions Precedent to Obligations of Seller. The obligation of Seller to sell the Acquired Interest at Closing is subject to the satisfaction of the following conditions:
5.2.1 Representations and Warranties. The representations and warranties set forth in this Agreement made by Purchaser shall be accurate as of the Closing Date as if made on the Closing Date, and Purchaser shall have delivered to Seller a certificate so certifying.
5.2.2 Compliance with Agreements and Covenants. Purchaser shall have performed and complied with all of its covenants, obligations and agreements contained in this Agreement to be performed and complied with by Purchaser on or prior to the Closing Date.
5.2.3 Company Approval. Seller shall have obtained the approval of the Company's Executive Committee to sell the Acquired Interest to Purchaser in form and substance satisfactory to Seller in its sole discretion.
ARTICLE VI
COVENANTS
6.1 Implementing This Agreement. From the date hereof to the Closing Date, each of Purchaser and Seller will take all necessary action to fulfill its respective obligations under this Agreement and shall take all commercially reasonable efforts to consummate the transactions contemplated thereby.
6.2 Payment to Seller for Hub Administration. Purchaser agrees that, if the termination date of the Chicago Hub Agreement is extended to a date not earlier than June 11, 2000 on substantially the same terms as those currently in effect with respect to the Chicago Hub Agreement, Purchaser shall pay to Seller, on the later of June 12, 1998 or the date of execution of such extension, an amount equal to $[ ]. In addition, Purchaser agrees that, if the termination date of the California Hub Agreement is extended to a date not earlier than June 11, 2000 on substantially the same terms as those currently in effect with respect to the California Hub Agreement, Purchaser shall pay to Seller, on the later of June 12, 1998 or the date of execution of such extension, an amount equal to $[ ]. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
6.3 Seller to Provide Expertise. Seller acknowledges that Purchaser is purchasing the Acquired Interest hereunder in reliance upon representations that Seller and Seller's Affiliates have officers and employees who possess the experience and expertise to engage successfully in Market-Making (provided that Purchaser acknowledges that Seller has in no way guaranteed the success of the Company's Market-Making). Seller agrees that it will, or will cause its Affiliates to, second or otherwise make available to the Company officers and employees (and cause the Company to engage and retain, so long as the Limited Liability Company Agreement shall remain in effect, such officers and employees) who have such experience and expertise, and Seller further agrees that such officers and employees shall be reasonably acceptable to Purchaser. Without limiting the foregoing, the parties agree that Miles Allen has such experience and expertise (provided that Purchaser agrees that, subject to the foregoing sentence, other officers and employees may replace Miles Allen).
6.4 That certain Assignment, Bill of Sale and Conveyance dated June 12, 1995 executed by Seller, as Assignor, and Enerchange, as Assignee (the "Assignment"), provides that Enerchange will reassign the assigned interest in the Ellisburg-Leidy Partnership Agreement to Seller upon Seller's election in the event that either the Chicago Hub Agreement or the California Hub Agreement, or both, are not extended to a date specified in the Assignment. Seller and Purchaser hereby agree that Seller shall not elect to require Enerchange to reassign the interest in the Ellisburg-Leidy Partnership Agreement to Seller without the prior written consent of Purchaser.
ARTICLE VII
CLOSING
7.1 Closing. The Closing shall take place on or before the third business day following the day on which Purchaser's acquisition of the Acquired Interest is approved by the SEC, or on such later date to which the parties hereto shall agree.
ARTICLE VIII
INDEMNIFICATION
8.1 Survival. The representations and warranties of the parties hereto contained herein and in this Article VIII shall survive the Closing. Such representations and warranties shall be deemed made as of the date of this Agreement and as of the Closing Date.
8.2 Indemnification by Seller. Seller agrees to indemnify Purchaser against, and agrees to hold Purchaser harmless from, any and all liabilities, losses, costs, claims, damages (including without limitation consequential damages), penalties and expenses (including without limitation reasonable attorneys' fees and expenses and reasonable costs of investigation) (collectively, "Losses") incurred or suffered by Purchaser relating to or arising out of or in connection with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made by Seller in this Agreement;
(b) any breach of or failure by Seller to perform any covenant or obligation of Seller set out or contemplated in this Agreement; or
(c) any actual and/or contingent liabilities arising from, or in connection with, or as a result of Seller's performance, act or omission prior to the Closing Date.
8.3 Indemnification by Purchaser. Purchaser agrees to indemnify Seller against, and agrees to hold Seller harmless from, any and all Losses incurred or suffered by Seller relating to or arising out of or in connection with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made by Purchaser in this Agreement ; or
(b) any breach of or failure by Purchaser to perform any covenant or obligation of Purchaser set out or contemplated in this Agreement.
8.4 Claims. The provisions of this Section shall be subject to Section 8.5. As soon as is reasonably practicable after becoming aware of a claim for indemnification under this Agreement the Indemnified Person shall promptly give notice to the Indemnifying Person of such claim and the amount the Indemnified Person will be entitled to receive hereunder from the Indemnifying Person; provided that the failure of the Indemnified Person to give notice shall not relieve the Indemnifying Person of its obligations under this Article VIII except to the extent (if any) that the Indemnifying Person shall have been prejudiced thereby. If the Indemnifying Person does not object in writing to such indemnification claim within 30 calendar days of receiving notice thereof, the Indemnified Person shall be entitled to recover promptly from the Indemnifying Person the amount of such claim, and no later objection by the Indemnifying Person shall be permitted. If the Indemnifying Person agrees that it has an indemnification obligation but objects on the grounds that it is obligated to pay only a lesser amount, the Indemnified Person shall nevertheless be entitled to recover promptly from the Indemnifying Person the lesser amount, without prejudice to the Indemnified Person's claim for the difference.
8.5 Notice of Third Party Claims; Assumption of Defense. The Indemnified Person shall give notice as promptly as is reasonably practicable to the Indemnifying Person of the assertion of any claim, or the commencement of any Proceeding, by any Person not a party hereto in respect of which indemnity may be sought under this Agreement; provided that the failure of the Indemnified Person to give notice shall not relieve the Indemnifying Person of its obligations under this Article VIII except to the extent (if any) that the Indemnifying Person shall have been prejudiced thereby. The Indemnifying Person may, at its own expense, (a) participate in the defense of any claim, suit, action or proceeding and (b) upon notice to the Indemnified Person and the Indemnifying Person's delivering to the Indemnified Person a written agreement that the Indemnified Person is entitled to indemnification for all Losses arising out of such claim or Proceeding and that the Indemnifying Person shall be liable for the entire amount of any Loss, at any time during the course of any such claim or Proceeding, assume the defense thereof; provided, however, that (i) the Indemnifying Person's counsel is reasonably satisfactory to the Indemnified Person, and (ii) the Indemnifying Person shall thereafter consult with the Indemnified Person upon the Indemnified Person's reasonable request for such consultation from time to time with respect to such claim or Proceeding. If the Indemnifying Person assumes such defense, the Indemnified Person shall have the right (but not the duty) to participate in the defense thereof. If the Indemnified Person reasonably determines in its judgment that representation by the Indemnifying Person's counsel of both the Indemnifying Person and the Indemnified Person would present such counsel with a conflict of interest, then such Indemnified Person may employ separate counsel to represent or defend it in any such claim or Proceeding, and the Indemnifying Person shall pay the fees and disbursements of such separate counsel. Whether or not the Indemnifying Person chooses to defend or prosecute any such claim or Proceeding, all of the parties hereto shall cooperate in the defense or prosecution thereof.
8.6 Settlement or Compromise. Any settlement or compromise made or caused to be made by the Indemnified Person or the Indemnifying Person, as the case may be, of any such claim or Proceeding of the kind referred to in Section 8.5 shall also be binding upon the Indemnifying Person or the Indemnified Person, as the case may be, in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise; provided, however, that no obligation, restriction or Loss shall be imposed on the Indemnified Person as a result of such settlement without its prior written consent.
8.7 Failure of Indemnifying Person to Act. In the event that the Indemnifying Person does not elect to assume the defense of any claim or Proceeding, then any failure of the Indemnified Person to defend or to participate in the defense of any such claim or Proceeding or to cause the same to be done, shall not relieve the Indemnifying Person of its obligations hereunder.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses. Each party hereto shall bear its own expenses with respect to this transaction.
9.2 Amendment. This Agreement may be amended, modified or supplemented, but only in writing signed by each of the parties hereto.
9.3 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed to be an original, but together shall constitute one and the same instrument.
9.4 Headings. Section and Article headings in this Agreement are for convenience of reference only, and shall not govern the interpretation of the provisions of this Agreement.
9.5 Severability. Any provisions of this Agreement that are held to be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions of this Agreement in that jurisdiction or the operation, enforceability, or validity of such provisions in any other jurisdiction.
9.6 Entire Understanding. This Agreement, the Pre-Purchase Agreement and the Company Agreement set forth the entire agreement and understanding of the parties hereto with respect to the transaction contemplated hereby and supersede all prior arrangements, agreements and understandings relating to the subject matter hereof. There have been no representations or statements, oral or written, that have been relied on by either party hereto, except those expressly set forth in this Agreement, the Pre-Purchase Agreement and the Company Agreement.
9.7 Applicable Law. This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to the conflicts of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered on the date first above written.
HUB SERVICES INC.
By:_________________________________
Title:______________________________
Printed Name:_______________________
LEIDY HUB, INC.
By:_________________________________
Title:______________________________
Printed Name:_______________________
SCHEDULE 3.2
JURISDICTIONS OF QUALIFICATION
1. Delaware
SCHEDULE 3.6(a)
ASSETS
1. That certain CALIFORNIA HUB AGREEMENT dated as of March 15, 1994, by and between Southern California Gas Company and Hub Services, Inc.
2. That certain HUB OPERATING AGREEMENT dated as of May 27, 1994, by and between Southern California Gas Company and Hub Services, Inc.
3. That certain CHICAGO HUB AGREEMENT dated May 26, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
4. That certain PARTNERSHIP AGREEMENT dated as of September 1, 1994, by and between Leidy Hub, Inc. and Hub Services, Inc.
5. That certain BUY-SELL CONTRACT dated November 29, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
SCHEDULE 3.6(b)
LIABILITIES
1. None.
SCHEDULE 3.7
DEFAULTS AND VIOLATIONS
1. None
SCHEDULE 3.9
CONDITION OF ASSETS
1. No disclosure is made pursuant to Section 3.9.
SCHEDULE 3.10
CONTRACTS
1. That certain CALIFORNIA HUB AGREEMENT dated as of March 15, 1994, by and between Southern California Gas Company and Hub Services, Inc.
2. That certain HUB OPERATING AGREEMENT dated as of May 27, 1994, by and between Southern California Gas Company and Hub Services, Inc.
3. That certain CHICAGO HUB AGREEMENT dated May 26, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
4. That certain PARTNERSHIP AGREEMENT dated as of September 1, 1994, by and between Leidy Hub, Inc. and Hub Services, Inc.
5. That certain BUY-SELL CONTRACT dated November 29, 1993, by and between Northern Illinois Gas Company and Hub Services, Inc.
SCHEDULE 3.11
LICENSES, PERMITS, FRANCHISES AND RIGHTS
1. None
SCHEDULE 3.12
INSURANCE
1. None
SCHEDULE 3.13
EMPLOYEE BENEFIT PLANS
1. None
SCHEDULE 3.16
CONSENTS
1. In accordance with Section 12.3 of the Limited Liability Company Agreement, HSI is obligated to obtain the consent of NHS to the disposition of the Acquired Interest.
SCHEDULE 3.17
LITIGATION
1. None
SCHEDULE 3.19
BANK ACCOUNTS
1. None

EXHIBIT A-8
 (Designated as Exhibit EX-3 for EDGAR purposes)
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
LIMITED LIABILITY COMPANY AGREEMENT
OF
ENERCHANGE, L.L.C.
 (A Delaware Limited Liability Company)

(Member Managed)

       TABLE OF CONTENTS

ARTICLE I
    Definitions. . . . . . . . . . . . . . . . . . . . . . . . .1

ARTICLE II
    Formation. . . . . . . . . . . . . . . . . . . . . . . . . .7
         2.1   Organization. . . . . . . . . . . . . . . . . . .7
         2.2   Certificate of Formation. . . . . . . . . . . . .7
         2.3   Agreement . . . . . . . . . . . . . . . . . . . .7
         2.4   Name. . . . . . . . . . . . . . . . . . . . . . .8
         2.5   Effective Date. . . . . . . . . . . . . . . . . .8
         2.6   Term. . . . . . . . . . . . . . . . . . . . . . .8
         2.7   Registered Agent and Office . . . . . . . . . . .8
         2.8   Principal Office. . . . . . . . . . . . . . . . .9
         2.9   Governmental Applications . . . . . . . . . . . .9

ARTICLE III
    Nature of Business . . . . . . . . . . . . . . . . . . . . .9
         3.1   Purpose . . . . . . . . . . . . . . . . . . . . .9

ARTICLE IV
    Accounting, Records and Reports. . . . . . . . . . . . . . 10
         4.1   Records to be Maintained. . . . . . . . . . . . 10
         4.2   Accounting. . . . . . . . . . . . . . . . . . . 10
         4.3   Financial Reports . . . . . . . . . . . . . . . 10
         4.4   Fiscal Year . . . . . . . . . . . . . . . . . . 11
         4.5   Accounts. . . . . . . . . . . . . . . . . . . . 11
         4.6   Access to Records . . . . . . . . . . . . . . . 11

ARTICLE V
    Names and Addresses of Charter Members . . . . . . . . . . 11

ARTICLE VI
    Rights and Duties of Members . . . . . . . . . . . . . . . 11
         6.1   Member Requirements . . . . . . . . . . . . . . 11
         6.2   Operating Fund. . . . . . . . . . . . . . . . . 12
         6.3   1995 Fiscal Year Operating Budget . . . . . . . 12
         6.4   Unauthorized Expenses or Contracts. . . . . . . 12
         6.5   Authority of Members to Bind the Company. . . . 12
         6.6   Limitation of Liability of Members. . . . . . . 13
         6.7   Contract to Limit Members' Liabilities. . . . . 13
         6.8   Liability of Members for Certain Acts or
               Omissions . . . . . . . . . . . . . . . . . . . 13
         6.9   Indemnification . . . . . . . . . . . . . . . . 13
         6.10  Representations and Warranties. . . . . . . . . 15
         6.11  Credit Support. . . . . . . . . . . . . . . . . 16
         6.12  Insurance . . . . . . . . . . . . . . . . . . . 16
         6.13  HSI Contributions . . . . . . . . . . . . . . . 16
         6.14  HSI Representation as to Initial Balance
                Sheet; Agreement as to Cut-Off Date. . . . . . 16

ARTICLE VII
    Competition and Conflicts of Interest. . . . . . . . . . . 17
         7.1   Company Opportunity . . . . . . . . . . . . . . 17
         7.2   Member Dealings with the Company. . . . . . . . 18
         7.3   Competition Between Members . . . . . . . . . . 19

ARTICLE VIII
    Management . . . . . . . . . . . . . . . . . . . . . . . . 19
         8.1   Executive Committee . . . . . . . . . . . . . . 19
         8.2   Composition and Term. . . . . . . . . . . . . . 25
         8.3   Annual and Regular Meetings . . . . . . . . . . 26
         8.4   Special Meetings. . . . . . . . . . . . . . . . 26
         8.5   Notice of Meetings. . . . . . . . . . . . . . . 26
         8.6   Quorum and Manner of Acting . . . . . . . . . . 26
         8.7   No Compensation . . . . . . . . . . . . . . . . 26
         8.8   Officers. . . . . . . . . . . . . . . . . . . . 26
         8.9   Expenses. . . . . . . . . . . . . . . . . . . . 29

ARTICLE IX
    Contributions and Capital Accounts . . . . . . . . . . . . 29
         9.1   Capital Contributions . . . . . . . . . . . . . 29
         9.2   Additional Capital Contributions. . . . . . . . 31
         9.3   Failure to Contribute . . . . . . . . . . . . . 31
         9.4   Maintenance of Capital Accounts . . . . . . . . 32
         9.5   Withdrawal of Capital . . . . . . . . . . . . . 33
         9.6   Capital Account, Allocations, and Distributions
               Attributable to Transferred Interest. . . . . . 33
         9.7   Compliance with Section 704(b) of the Code. . . 33

ARTICLE X
    Allocations and Distributions. . . . . . . . . . . . . . . 34	

10.1 Allocations of Net Profits and Net Losses . . . 34
10.2 Allocations of Taxable Income or Taxable Loss . 34
10.3 Tax Allocations: Section 704(c). . . . . . . . 34
10.4 Distributions . . . . . . . . . . . . . . . . . 34
ARTICLE XI

    Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
         11.1  Tax Elections . . . . . . . . . . . . . . . . . 34
         11.2  Tax Returns . . . . . . . . . . . . . . . . . . 35
         11.3  Tax Matters Member. . . . . . . . . . . . . . . 35

ARTICLE XII
    Disposition of Company Interests . . . . . . . . . . . . . 36
         12.1  Right of Disposition. . . . . . . . . . . . . . 36
         12.2  Dispositions not in Compliance with
                this Article Void. . . . . . . . . . . . . . . 36
         12.3  Initial HSI Disposition . . . . . . . . . . . . 36
         12.4  Disposition Between Members . . . . . . . . . . 36
         12.5  Third Party Disposition Procedures. . . . . . . 37
         12.6  Withdrawal from Company . . . . . . . . . . . . 38
         12.7  Involuntary Regulatory Withdrawal . . . . . . . 39

ARTICLE XIII
    Dissolution and Winding Up . . . . . . . . . . . . . . . . 39
         13.1  Dissolution . . . . . . . . . . . . . . . . . . 39
         13.2  Effect of Dissolution . . . . . . . . . . . . . 40
         13.3  Distribution of Assets on Dissolution . . . . . 40
         13.4  Winding Up and Certificate of Cancellation. . . 41
         13.5  Termination . . . . . . . . . . . . . . . . . . 41
         13.6  Use of Company Identity . . . . . . . . . . . . 41	

ARTICLE XIV
Amendment. . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XV

Miscellaneous Provisions . . . . . . . . . . . . . . . . . 42
     15.1   Entire Agreement . . . . . . . . . . . . . . . 42
     15.2   Successors and Assigns . . . . . . . . . . . . 42
     15.3   Governing Law. . . . . . . . . . . . . . . . . 42
     15.4   Notices. . . . . . . . . . . . . . . . . . . . 42
     15.5   Rights of Creditors and Third Parties under
             Company Agreement . . . . . . . . . . . . . . 42
     15.6   No Action for Partition. . . . . . . . . . . . 42
     15.7   Title to Company Property. . . . . . . . . . . 42
     15.8   Company Funds. . . . . . . . . . . . . . . . . 42
     15.9   Confidentiality. . . . . . . . . . . . . . . . 43	

15.10 Transaction Costs . . . . . . . . . . . . . . . 44
EXHIBITS

Exhibit A  Form of Certificate of Formation (Section 2.2)
Exhibit B  Addresses for Notices (Section 15.4)
Exhibit C  Names and Addresses of Charter Members
             (Article V)
Exhibit D  Initial Capital Contributions (Section 9.1)
Exhibit E  Company Interest
Exhibit F  Admission Agreement
Exhibit G  Balance Sheet
           LIMITED LIABILITY COMPANY AGREEMENT	

OF
ENERCHANGE, L.L.C.
This Limited Liability Company Agreement of Enerchange, L.L.C., a limited liability company organized pursuant to the Delaware Limited Liability Company Act, is entered into this 12th day of June, 1995, by and among Hub Services, Inc., a Delaware corporation with its principal offices at 13430 Northwest Freeway, Suite 1200, Houston, Texas 77040 ("HSI"), and NICOR Hub Services, Inc., a Delaware corporation with its principal offices at 1844 Ferry Road, Naperville, Illinois 60563 ("NHS") (referred to jointly herein as "Charter Members," and together with any Additional Members admitted pursuant to this Agreement, as the "Members").
W I T N E S S E T H
WHEREAS, HSI and NHS desire to create a limited liability company pursuant to the Delaware Limited Liability Company Act, for the purpose of developing, owning, managing, and operating interests in natural gas market hubs located in North America; coordination and participation in the development, implementation and operation of an electronic trading system; natural gas market making activities; and all other activities permitted by law;
NOW THEREFORE, in consideration of the mutual agreements, promises and undertakings hereinafter set forth, the Members agree as follows:
ARTICLE I
Definitions
The following terms, as used herein, shall have the following meanings:
1. Act means the Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq., and all amendments to the Act, as in effect from time to time.
2. Additional Member means a Person other than a Charter Member who has acquired a Company Interest from the Company or from another Member in accordance with
Section 12 of this Company Agreement pursuant to an Admission Agreement.
3. Admission Agreement means the Agreement between an Additional Member and the Company described in Section 9.1(d), substantially in the form set forth as Exhibit F hereto.
4. Affiliate means, with respect to any Person, another Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such Person. For purposes of this Company Agreement control means an interest in excess of fifty percent (50%).
5. Allocable Share means, as to any Member, that percentage which, from time to time, such Member's Capital Account then bears to the total of the Capital Accounts of all Members.
6. Bankruptcy means, with respect to a Person: (i) the commencement against such Person of proceedings for any relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangement, composition, or extension of debts, provided such proceeding shall not have been dismissed, nullified, stayed, or otherwise rendered ineffective (but only so long as such ineffectiveness shall continue in force) within ninety (90) days after the commencement of such proceedings; (ii) the commencement by such Person of proceedings for any relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangement, composition, or extension of debts; (iii) a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, or trustee or assignee in bankruptcy or insolvency of such Person or of a substantial part of such Person's property, or for the winding up or liquidation of its affairs, which decree or order remains in force undischarged and unstayed for a period of ninety (90) days; or (iv) a general assignment by such Person for the benefit of creditors or the admission by such Person in writing of its inability to pay its debts generally as they become due.
7. California Energy Hub means the natural gas market hub created and described in that certain California Hub Agreement dated March 15, 1994 executed by Southern California Gas Company and Hub Services, Inc.
8. Capital Account means the account maintained for a Member determined in accordance with Section 9.4.
9. Capital Contribution means the value of Property contributed, from time to time, to the Company by any one Member pursuant to Section 6.2, 9.1, 9.2 or 9.3; provided that such value, in the case of Property other than cash, shall be the fair market value of such Property as reasonably determined by the Member contributing such Property and the Executive Committee.
10. Certificate of Formation shall have the meaning set forth in Section 2.2.
11. Charter Members has the meaning set forth in the preamble hereof.
12. Chicago Hub means the natural gas market hub created and described in that certain Chicago Hub Agreement dated May 26, 1993 executed by Northern Illinois Gas Company and Hub Services, Inc.
13. Code means the Internal Revenue Code of 1986, as from time to time amended, or any successor thereto; any reference to a section of the Code or the Regulations shall mean such section or any successor thereto as in effect at the time or times in question.
14. Company means Enerchange, L.L.C., a limited liability company formed under the laws of Delaware.
15. Company Agreement means this Limited Liability Company Agreement, including all amendments adopted in accordance with this Company Agreement and the Act.
16. Company Interest means a Limited Liability Company Interest, defined by the Act as a Member's share of the profits and losses of the Company, and a Member's right to receive distributions (liquidating and otherwise) of the Company's assets, which Company Interests are as set forth on Exhibit E attached hereto.
17. Company Property means all Property owned of record or beneficially by the Company.
18. Delinquent Member shall have the meaning set forth in
Section 9.3.
19. Disposition (Dispose) means any sale, assignment, transfer, exchange, mortgage, pledge, grant, hypothecation, or other transfer, absolute or as security or encumbrance (including dispositions by operation of law).
20. Dissolution Event shall have the meaning set forth in
Section 13.1 hereof.
21. EEI means Energy Exchange Inc., a corporation incorporated pursuant to the laws of the Province of Alberta.
22. Effective Date shall have the meaning set forth in
Section 2.5 hereof.
23. Electronic Trading System means the electronic natural gas trading and nomination system that the Company expects to develop and operate on a joint ownership basis with EEI.
24. Ellisburg-Leidy Northeast Hub means the natural gas market hub created and described in that certain Pre- Partnership Agreement dated September 1, 1993 and Partnership Agreement dated September 1, 1994, executed by Leidy Hub, Inc. and Hub Services, Inc.
25. Executive Committee shall have the meaning set forth in
Section 8.2(a) hereof.
26. Executive Committee Representative or Representative means the representative appointed by a Member to serve on the Executive Committee.
27. Fiscal Year shall have the meaning set forth in Section 4.4 hereof.
28. Hub means natural gas transportation and interchange facilities located in the vicinity of two or more interstate or intrastate pipelines, solely to the extent such facilities are utilized in connection with a venture (the hub company) that (i) takes delivery of natural gas from a large number of suppliers and provides these suppliers with a wide variety of markets in which to sell natural gas; and/or (ii) provides hub customers with wheeling, loaning, parking and in some instances title transfer services. Wheeling refers to the simultaneous transfer of natural gas from one location on a pipeline to another, while loaning occurs when one party allows another party to borrow natural gas. Parking services allow a customer to receive natural gas from a pipeline, store natural gas in a hub for future redelivery and redeliver natural gas to a pipeline, while title transfer services allow a customer to assign title to natural gas that is in storage. Notwithstanding the foregoing, a Hub shall not include such facilities to the extent they are used to provide services that are explicitly excluded from the scope of "Hub Transactions" pursuant to the Hub Agreements relating to the California Energy Hub, Chicago Hub or Ellisburg-Leidy Northeast Hub.
29. Hub Agreement means any of the agreements described in the definitions of "California Energy Hub," "Chicago Hub" or "Ellisburg-Leidy Northeast Hub," or any similar agreement that may be entered into from time to time by a Member or Affiliate of a Member and the Company, as each such agreement may be amended or modified from time to time.
30. Initial Capital Contribution means the initial capital contribution made by the Charter Members and any Additional Members, as described in Section 9.1 and Exhibit D attached hereto.
31. LHI means Leidy Hub, Inc., a New York corporation with its principal offices at 10 Lafayette Square, Buffalo, New York 14203.
32. Liquidating Trustee means the Member or such other Person as all Members agree (or, in the absence of such agreement, the Executive Committee), charged with carrying out the winding up of the Company.
33. Majority Vote means approval by more than fifty percent (50%) of the votes of all Representatives comprising the Executive Committee.
34. Market-Making means acting as an intermediary between Persons desiring to sell natural gas and Persons desiring to purchase natural gas and includes, without limitation, electronic solicitation of transactions between anonymous sellers and buyers, implementation and documentation of such transactions, buying and selling natural gas for immediate or delayed delivery or options or other financial instruments related thereto, and assuming the performance and credit risks associated with such transactions.
35. Member shall have the meaning set forth in the preamble hereof.
36. Member Loan shall have the meaning set forth in Section 9.3 hereof.
37. Member Loan Rate means the rate of interest equal to the Prime Rate as reported in the Wall Street Journal plus two (2) percent, changing when and as such Prime Rate changes. For purposes of this Company Agreement, each change in the Member Loan Rate shall take effect on the published date of the change in the Prime Rate. If the Prime Rate is no longer published in the Wall Street Journal, for any reason, then the Member Loan Rate shall be the Prime Rate (or comparable base rate on corporate loans) as reported in a widely recognized business publication with national U.S. circulation that is selected by the Member then making the Member Loan.
38. Net Losses means the losses and deductions of the Company determined in accordance with generally accepted accounting principles consistently applied.
39. Net Profits means the income and gains of the Company determined in accordance with generally accepted accounting principles consistently applied.
40. Officer shall have the meaning set forth in Section 8.8(a).
41. Operating Budget shall have the meaning set forth in
Section 8.1(c)(4) hereof.
42. Operating Fund shall have the meaning set forth in
Section 6.2 hereof.
43. Operating Policy shall have the meaning set forth in
Section 8.1(c)(18) hereof.
44. PE means Pacific Enerchange, a California corporation with its principal offices at Los Angeles, California.
45. Person means an individual, trust, governmental authority, estate, or any incorporated or unincorporated company, corporation, limited liability company, partnership or other organization.
46. Principal Office shall have the meaning set forth in
Section 2.8 hereof.
47. Proceeding means any administrative or judicial adversary proceeding or hearing, civil, criminal or investigative, the result of which may be that a court, arbitrator, mediator or governmental agency may enter a judgment, order, decree, or other determination which, if not appealed and reversed, would be binding.
48. Property means any property, real or personal, tangible or intangible, including cash and any legal or equitable interest in such property, but excluding services and promises to perform services in the future.
49. Regulations means, except where the context indicates otherwise, the permanent and temporary regulations of the United States Department of the Treasury under the Code, including any amendments thereto.
50. Representative shall have the meaning set forth in
Section 8.2(a) hereof.
51. Selling Member shall have the meaning set forth in
Section 12.5 hereof.
52. Supermajority Vote means approval by no less than seventy-two percent (72%) of all votes of all Representatives comprising the Executive Committee.
53. Taxable Year shall mean the Fiscal Year unless changed by the Executive Committee by Supermajority Vote.
54. Tax Matters Member shall have the meaning set forth in
Section 11.3 hereof.
55. Unanimous Vote means the approval by one hundred percent (100%) of the votes of all Representatives comprising the Executive Committee.
56. Withdrawing Member has the meaning set forth in Section 12.6 hereof.
ARTICLE II
Formation
2.1 Organization. The Charter Members hereby form, and agree to jointly operate, a Delaware limited liability company pursuant to the provisions of the Act. The Charter Members intend that the Company be construed as a partnership or flow through tax organization for purposes of federal, state, and other taxes.
2.2 Certificate of Formation. Concurrently with or as soon as possible after the execution of this Company Agreement, the Members shall cause the Certificate of Formation, in the form attached hereto as Exhibit A (the "Certificate of Formation"), to be filed in the Office of the Secretary of the State of Delaware in accordance with the requirements of the Act. From time to time, the Members shall cause to be filed, and the Members agree to execute, such further certificates of formation, qualification to do business, or like filings in such jurisdictions as may be necessary or appropriate in connection with the conduct of the Company's business or to provide notification of the limitation of liability of Members.
2.3 Agreement. For and in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members hereby agree to the terms and conditions of this Company Agreement, as it may from time to time be amended according to its terms. It is the express intention of the Members that this Company Agreement, as it may be amended from time to time in accordance with its terms, shall be the sole source of agreement of the parties with respect to the subject matter thereof, and, except to the extent a provision of this Company Agreement expressly incorporates federal income tax rules by reference to sections of the Code or Regulations or is expressly prohibited or ineffective under the Act, this Company Agreement shall govern, even when inconsistent with, or different than, the provisions of the Act or any other law or rule. To the extent any provision of this Company Agreement is prohibited or ineffective under the Act, this Company Agreement shall be considered amended to the smallest degree possible in order to make this Company Agreement effective under the Act. In the event the Act is subsequently amended or interpreted in such a way to make any provision of this Company Agreement that was formerly invalid valid, such provision shall be considered to be valid from the effective date of such interpretation or amendment.
2.4 Name. The name of the Company is Enerchange, L.L.C.
2.5 Effective Date. This Company Agreement shall become effective on the date (the "Effective Date") the Certificate of Formation is accepted and the Company is duly formed as certified by the Secretary of State of the State of Delaware.
2.6 Term. The Company shall dissolve five (5) years after the Effective Date unless (i) sooner dissolved as hereinafter provided; or (ii) extended for an additional three (3) year term on one or more occasions as hereinafter provided. Not later than one hundred and twenty (120) days prior to the expiration of the then effective term, or such other date selected by the Executive Committee by Supermajority Vote, the Executive Committee shall meet for the purpose of determining whether or not the term will be extended for an additional three years. Extension of the term shall require a Unanimous Vote.
2.7 Registered Agent and Office. The registered agent for the service of process and the registered office shall be that Person and location reflected in the Certificate of Formation as filed in the Office of the Secretary of State. The Executive Committee, may, from time to time, change the registered agent or office through appropriate filings with the Secretary of State. In the event the registered agent ceases to act as such for any reason or the registered office shall change, the Executive Committee shall promptly designate a replacement registered agent or file a notice of change of address as the case may be. If the Executive Committee shall fail within thirty (30) days to designate a replacement registered agent or change of address of the registered office, any Member may designate a replacement registered agent or file a notice of change of address.
2.8 Principal Office. The principal office of the Company (the "Principal Office") shall be at such place as the Executive Committee may from time to time decide.
2.9 Governmental Applications. The Members agree to cooperate and exercise due diligence in securing any necessary regulatory approvals and such other matters as may be necessary or appropriate for purposes of effectuating the business of the Company. Notwithstanding the foregoing, in the event any Member is a regulated entity, as defined below, or has an Affiliate that is a regulated entity, nothing in this Section 2.9 shall be construed to obligate that Member to seek, or join in, any regulatory approval if that Member concludes that such action may have a material adverse impact on that Member or any Affiliate or to accept any issued approval if such issued approval contains conditions not requested by such Member and unacceptable to such Member. For purposes of this Section, a regulated entity is one whose ongoing business is subject to review, approval or oversight by a federal or state regulatory body or agency.
ARTICLE III
Nature of Business
3.1 Purpose. The Company is empowered to (a) coordinate and participate in the development, implementation and operation of the Electronic Trading System; (b) manage, own and operate the Company's interests in the Chicago Hub, the California Energy Hub and the Ellisburg-Leidy Northeast Hub and promote and participate in transactions on those Hubs; (c) promote and participate in transactions involving the use of the Electronic Trading System;
(d) develop and manage Hubs owned by third parties; (e) engage in Market-Making activity; (f) engage in all other activities permitted by law if approved by a Supermajority Vote of the Executive Committee, or, subject to Section 8.1(d)(5), a Unanimous Vote of the Executive Committee; and (g) engage in any and all activities incidental to the foregoing. The Company is empowered to take any and all action necessary, appropriate, or convenient for the accomplishment of its purposes, and for the benefit of the Company and its Property, including, but not limited to:
(1) Entering into and performing contracts of any kind;
(2) Acquiring, selling, conveying, pledging, constructing, operating, maintaining, owning, transferring, renting, or leasing any Property;
(3) Applying for and obtaining governmental authorizations and approvals; and
(4) Bringing and defending actions at law or equity.
ARTICLE IV
Accounting, Records and Reports
4.1 Records to be Maintained. The Company shall maintain the following accurate and complete records at the Principal Office or at such other locations as may be provided by the Members:
(a) a current list of the full name and last known business address of each Member;
(b) a copy of the Certificate of Formation and all amendments thereto;
(c) copies of each of the Company's Federal, state and local tax returns and reports, as filed, for the last seven taxable periods;
(d) copies of this Company Agreement, including all amendments thereto;
(e) Company audited financial statements for the last seven Fiscal Years; and
(f) books and records of the Company.
4.2 Accounting. Books and records of the Company shall be maintained on an accrual accounting basis, and the Company's net profit or net loss shall be determined on the basis of the Fiscal Year and in accordance with generally accepted accounting principles consistently applied.
4.3 Financial Reports. The Executive Committee shall cause the following financial statements to be prepared, in each case in accordance with generally accepted accounting principles consistently applied on a consolidated and consolidating (i.e., by line of business) basis, and shall cause to be delivered to each Person who was a Member during the applicable period described below:
(a) a balance sheet and statement of income, cash flow and Member's capital account as of the end of or for, as the case may be, each month, each within fifteen
(15) days after the end of each month;
(b) (i) a balance sheet as of the end of each fiscal quarter; (ii) an income statement for such quarter and year-to-date; (iii) a statement of each Member's Capital Account as of the end of such quarter; and (iv) a statement of cash flows for such quarter and year-to- date (including sufficient information to permit the Members to calculate their tax accruals), each within thirty (30) days after the end of such fiscal quarter (or more frequently if agreed by the Executive Committee);
(c) (i) a balance sheet as of the end of each Fiscal Year; (ii) an income statement for such Fiscal Year;
(iii) a statement of each Member's Capital Account as of the end of such Fiscal Year; (iv) such federal, state and local income tax returns and such other accounting tax information and schedules as shall be necessary for the preparation by each Member of its income tax return for such Fiscal Year; and (v) a statement of cash flows for such Fiscal Year, each within sixty (60) days after the end of such Fiscal Year of the Company; and
(d) audited annual financial statements prepared by a national CPA firm selected by the Executive Committee by Supermajority Vote within ten (10) days after such statements are furnished to the Company but in no event later than sixty (60) days after the end of each Fiscal Year.
4.4 Fiscal Year. The fiscal year of the Company (the "Fiscal Year") shall end on December 31.
4.5 Accounts. The Company shall maintain a record of each Member's Capital Account in accordance with Section 9.4.
4.6 Access to Records. Each Member or its authorized representative shall have unrestricted access at the Company's principal place of business and other appropriate locations, during ordinary business hours, to all properties, books, records, accounts and information regarding the Company.
ARTICLE V
Names and Addresses of Charter Members
The name and addresses of the Charter Members are as reflected on Exhibit C attached hereto.
ARTICLE VI
Rights and Duties of Members
6.1 Member Requirements. A Member must remain a Member until the date five (5) years after the Effective Date and may not Dispose of all or any portion of its Company Interest except in strict accordance with the terms and conditions of this Company Agreement (including, without limitation, Article XII). Any attempted Disposition of all or any portion of its Company Interest, other than in strict accordance with this Company Agreement, shall be, and is hereby declared, null and void ab initio. The Members agree that breach of the provisions of this
Section 6.1 may cause irreparable injury to the Company for which monetary damages (or other remedy at law) are inadequate in view of (i) the complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a Member to comply with such provisions, and (ii) the uniqueness of the Company business and the relationship among the Members. Accordingly, the Members agree that the provisions of this
Section 6.1 may be enforced by specific performance.
6.2 Operating Fund. Subject to Section 9.1(e), on or before the close of business on the first business day of each Fiscal Year, each Member will contribute, as a Capital Contribution, its Allocable Share of an amount determined by a Supermajority Vote of the Executive Committee to a fund established as the annual operating fund (the "Operating Fund") of the Company. The contribution with respect to the 1995 Fiscal Year of the Company shall be made by each Member within thirty
(30) business days of the date on which the Executive Committee determines the 1995 Fiscal Year Operating Budget, as provided in
Section 6.3 hereof (which contribution shall not be in excess of $[ ] in aggregate for all Members and shall be in addition to
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)] the Initial Capital Contribution set forth in Section 9.1(a) and the additional Capital Contributions set forth in 9.1(b) hereof).
6.3 1995 Fiscal Year Operating Budget. Within thirty (30) business days of the execution of this Company Agreement, the Executive Committee by Supermajority Vote shall determine the amount of the 1995 Fiscal Year Operating Budget and any allocation of such Operating Budget among programs or uses.
6.4 Unauthorized Expenses or Contracts. A Member may not, without the prior approval of the Executive Committee, cause the Company to enter into or make any contract, security agreement, financing statement, note or similar instrument, mortgage or guaranty, incur any obligation, or expend any money, except and unless an expenditure is required by the terms of a contract or instrument theretofore duly entered into by the Company and authorized in accordance with this Company Agreement. Should a Member breach this Section 6.4, such Member will indemnify, defend and hold the other Members harmless from all liabilities, costs, and damages resulting from such breach.
6.5 Authority of Members to Bind the Company. The Members hereby agree that no individual Member or Members can bind the Company unless such Member or Members are acting with the express authority of the Executive Committee, in either case pursuant to a resolution of the Executive Committee.
6.6 Limitation of Liability of Members. Except as provided for in Section 6.4 hereof, no Member shall be liable for the debts, obligations or liabilities of the Company, including under a judgment, decree or order of court, except as may be otherwise expressly agreed to in writing by such Member directly to the applicable third Person.
6.7 Contract to Limit Members' Liabilities. Unless approved by Unanimous Vote of the Executive Committee, no contract, lease, sublease, note, deed or other agreement or instrument shall be executed and delivered by or on behalf of the Company if there is contained therein any provision whatsoever that states or suggests that the claims of all parties thereto and other beneficiaries thereunder are not limited solely to the assets of the Company, and any contract, lease, sublease, note, deed or other agreement or instrument containing any such provision shall be null and void and shall not constitute a valid obligation of the Company.
6.8 Liability of Members for Certain Acts or Omissions. Any act or omission by a Member, the effect of which may cause or result in loss or damage to the Company, shall not subject the Member to any liability to the Company or any other Member so long as such act or omission was not done fraudulently or in bad faith or as a result of willful and wanton misconduct or gross negligence.
6.9 Indemnification.
(a) The Company shall defend, indemnify and hold harmless any Member, Executive Committee Representative (or alternate), or Company officer, employee or agent, who was or is a party to, or is threatened to be made a party to, or is involved in, any threatened, pending or completed Proceeding, by a third party (including any action by or in the right of the Company) by reason of any acts, omissions or alleged acts or omissions by such Member, Executive Committee Representative (or alternate), or Company officer, employee or agent undertaken on behalf of the Company, against and from losses, damages, claims and expenses for which such Member, Executive Committee Representative (or alternate), or Company officer, employee or agent has not otherwise been reimbursed (including (i) reasonable attorneys' fees, judgments, and fines in all cases and
(ii) amounts paid in settlement if agreed to by Supermajority Vote of the Executive Committee) actually and reasonably incurred in connection with such Proceeding, so long as such act or omission was not done fraudulently or in bad faith or as a result of willful and wanton misconduct or gross negligence or, with respect to any criminal Proceeding, such Person had no reasonable cause to believe his conduct was unlawful.
(b) Subject to limitations and conditions as provided in this Article VI, each Person who was or is a party to, or is threatened to be made a party to, or is involved in, any threatened, pending or completed Proceeding, by reason of the fact that, such Person is or was serving at the request of the Company as a member, officer, employee, or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, sole proprietorship, or other enterprise, shall be defended, indemnified and held harmless by the Company to the fullest extent permitted by the Act, against and from losses, damages, claims and expenses for which such Person has not otherwise been reimbursed (including (i) reasonable attorneys' fees, judgments, and fines in all cases and
(ii) amounts paid in settlement if agreed to by Supermajority Vote of the Executive Committee) actually and reasonably incurred in connection with such Proceeding, so long as the acts or omissions or alleged acts or omissions forming the basis for such Proceeding were not done fraudulently or in bad faith or as a result of willful and wanton misconduct or gross negligence or, with respect to any criminal Proceeding, such Person had no reasonable cause to believe his conduct was unlawful.
(c) Indemnification under this Article VI shall continue as to a Person who has ceased to serve in the capacity which initially entitled such Person to indemnity hereunder. The rights granted pursuant to this Article VI shall be deemed contract rights, and no amendment, modification or repeal of this Article VI shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings arising prior to any such amendment, modification or repeal. It is expressly acknowledged that the indemnification provided in this Article VI could involve indemnification for negligence but cannot involve indemnification for any act or omission done fraudulently or in bad faith or as a result of willful and wanton misconduct or gross negligence or, with respect to any criminal Proceeding, if such Person had reasonable cause to believe his conduct was unlawful.
(d) The right to indemnification conferred in this Article VI shall not be exclusive of any other right which a Member or other Person indemnified pursuant to this Section 6.9 may have or hereafter acquire under any law, any provision of the Certification of Formation, this Company Agreement, any agreement, any vote of Members or otherwise.
6.10 Representations and Warranties. Each Member hereby represents and warrants to the Company and each other Member that: (a) if such Member is an organization, that it is duly organized, validly existing, and in good standing under the law of its state of incorporation or organization and that it has full organizational power to execute and agree to this Company Agreement and to perform its obligations hereunder; (b) except as provided in Section 12.3, such Member is acquiring its Company Interest for such Member's own account as an investment and without an intent to distribute the interest; (c) such Member acknowledges that such interests have not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements; (d) such Member, by itself or together with its advisors, is experienced in making investments comparable to its investment in the Company and is capable of judging for itself the risks inherent in such investment; (e) such Member has the financial capacity to hold its investment in the Company for an indefinite period of time and to meet its obligations to make Capital Contributions hereunder, and acknowledges that the disposition of such investment is restricted both pursuant to federal and state securities laws and pursuant to the terms of this Company Agreement; (f) such Member acknowledges that it has received access to all information that it deems necessary in order to make its decision to invest in the Company; (g) this Company Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation, enforceable in accordance with its terms; (h) neither the execution and delivery of this Company Agreement nor the consummation of the transactions contemplated hereby nor compliance by it with any provisions hereof (1) conflicts with, or results in a breach or contravention of, or in a default or the creation of any lien under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, or other instrument or obligation to which it is a party or by which it or its properties are bound, or (2) violates any law, order, writ, injunction or decree applicable to it or any of its properties; and (i) no consent, approval or other action by any court, governmental authority or third party is required in connection with its execution, delivery and performance of this Company Agreement. The parties agree that no representations are made as to Southern California Gas Company, an Affiliate of PE. The parties agree that no representations are made as to Northern Illinois Gas Company ("NI-Gas"), an Affiliate of NHS, and acknowledge that NI-Gas expects to request the consent and approval of the Illinois Commerce Commission in connection with the assignment by HSI to the Company of its rights under the Chicago Hub Agreement referred to in the definition of Chicago Hub and that if NI-Gas fails to obtain such consent on terms satisfactory to NI-Gas and NHS, NHS may elect to dispose of its interest in the Company or NI-Gas may elect to terminate the Chicago Hub Agreement.
6.11 Credit Support. HSI acting alone or through one or more of its Affiliates, hereby agrees to exercise commercially reasonable efforts to provide credit support on acceptable terms to the extent required to support the Company's commercial operations. Such credit support may include, but is not limited to, a guaranty of the Company's performance or a letter of credit.
6.12 Insurance. To the extent not inconsistent with the Act and other laws and public policies of the State of Delaware, the Company will purchase and maintain its own policies of insurance at levels appropriate to cover potential liabilities of the Company for the benefit of the Company and any Person who is or was a Member or officer, employee or agent against any liability asserted against or expenses incurred (in connection with an asserted liability) by the Company or such Person in any such capacity or arising out of such Person's service with the Company, whether or not the Company would have the power to indemnify such Person against such liability.
6.13 HSI Contributions. HSI, acting alone or through its Affiliate, Natural Gas Clearinghouse, or one or more other Affiliates, hereby agrees to (1) second or otherwise make available to the Company officers and employees for the exclusive use of the Company (subject to change only upon agreement of each of the Members other than HSI) having the experience and expertise to develop and carry out the activities described in
Section 3.1 hereof (and cause the Company to vote its Company Interest to the extent necessary to engage such officers and employees), and (2) provide to the Company access to and use of an electronic nomination system known as the Gas Trading System, for a monthly fee not to exceed [
] and otherwise on commercially reasonable terms and conditions.
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6.14 Representation as to Initial Balance Sheet; Agreement as to Cut-Off Date.
(a) HSI represents and warrants that the balance sheet of the Company as of the Effective Date is as set forth in Exhibit G hereto, and that except as so disclosed on such balance sheet the Company has no liabilities, debts, claims or obligations, whether accrued, absolute, contingent or otherwise, whether due or to become due. HSI hereby agrees to indemnify and hold harmless the Company from and against any such liabilities, debts, claims or obligations (subject to clause (b) below).
(b) Each of the parties agree (1) that each agreement, contract, transaction or other arrangement entered into under each Hub Agreement prior to June 1, 1995 (the "Cut-Off Date") shall be for the sole benefit of and the asset of HSI and shall be the sole responsibility and liability of HSI, and that the Company shall not receive any such benefits, assets, responsibilities or liabilities notwithstanding HSI's contribution of its rights under such Hub Agreements to the Company in accordance with this Agreement and (2) that each agreement, contract, transaction or other arrangement entered into under each Hub Agreement on or after the Cut-Off Date (collectively, "Post-Cut-Off Transactions") shall be for the sole benefit of and the asset of the Company and shall be the sole responsibility and liability of the Company and that HSI shall not receive any of such benefits, assets, responsibilities or liabilities.
(c) HSI represents and warrants that the note to the balance sheet set forth in Exhibit G hereto accurately and completely sets forth all Post-Cut-Off Transactions, and that no other Post-Cut-Off Transactions have occurred or exist.
ARTICLE VII
Competition and Conflicts of Interest
7.1 Company Opportunity. The assets of the Company shall at all times be dedicated exclusively to the benefit of the Company. Subject to the foregoing and except as otherwise set forth below, any Member or Affiliate of any Member may participate in other business activities, whether or not any such activities are competitive with the business of the Company. No Officer, Executive Committee Representative or employee of the Company, so long as such individuals remain in such capacity, shall participate in business activities in competition with the business of the Company. Subject to the Supermajority Vote requirement of Section 8.1(c)(16) below, no transaction with the Company shall be voidable solely because a Member has a direct or indirect interest in the transaction if either the transaction is arms-length and fair to the Company or the disinterested Members (knowing the material facts of the transaction and the Member's interest) or their Representatives on the Executive Committee authorize, approve, or ratify the transaction.
Notwithstanding the foregoing, in the absence of the approval of the Executive Committee by Unanimous Vote, no Member or Affiliate of any Member shall engage in, or own, operate, manage or invest in any Person who engages as a material line of business in (x) the ownership and management of a Hub located in North America or (y) any electronic natural gas trading system which, in either case, the Company does not own an interest in or does not operate or manage. Nothing set forth herein shall restrict any Member or Affiliate from (i) engaging in the operation, ownership or management of the Chicago Hub, the California Energy Hub or the Ellisburg-Leidy Northeast Hub (or, before or after termination of the relevant Hub Agreement creating any such Hub, the operation, ownership or management of the assets or business constituting such Hub); (ii) contracting with third parties for services associated with any Hub or electronic natural gas trading and/or nomination system; or (iii) owning an interest in, operating, managing or engaging in any electronic natural gas nomination system including, without limitation, NHS' Affiliate's interest in "Gas Exchange" and PE's Affiliate's interest in "GasSelect." In the event any such electronic natural gas nomination system of a Member or its Affiliate installs an electronic interface with an electronic natural gas trading and nomination system that competes with the Company's system, such Member or its Affiliate will, for not more than a comparable total economic cost, attempt to provide an opportunity to install an electronic interface for the Electronic Trading System with essentially equivalent contractual terms and conditions to those applicable to the competing electronic natural gas trading and nomination system. Nothing in this Article VII shall be construed to place any limitations on any Affiliate's ability to comply with and offer services in accordance with the laws, regulations and tariffs applicable to it as an interstate natural gas pipeline or a state-regulated public utility. For example, potential Company, California Energy Hub, Chicago Hub, or Ellisburg-Leidy Hub customers will be able to make requests for services directly to a Member's Affiliate that may be in competition with the services offered by the Company, California Energy Hub, Chicago Hub or Ellisburg- Leidy Northeast Hub, respectively, and such Affiliate may perform and be paid for those services.
7.2 Member Dealings with the Company. The Members expect that Members and/or Affiliates may become customers of the Company, and otherwise engage in natural gas marketing or transportation activities which may compete with the Company. Other than the specific prohibition in Section 7.1 above, nothing in this Company Agreement is intended to prohibit or limit such competition.
7.3 Competition Between Members. Except as specifically provided in this Article VII, nothing shall limit or restrict the Members' ability to compete with each other.
ARTICLE VIII
Management
8.1 Executive Committee.
(a) Except as otherwise provided in this Company Agreement, the property, business and affairs of the Company shall be under the direction of the Executive Committee. Except for matters requiring the action of the Members under the terms of this Company Agreement, the Executive Committee shall have the power to take any action that the Members may take under law, subject to any restrictions set forth in this Company Agreement.
(b) The approval by a Majority Vote shall be required before any of the following acts involving the Company may be taken:

(1) entering into, amending, modifying, or terminating an agreement with a term in excess of one year or involving aggregate consideration (including assumed actual and contingent liabilities) or receipts, or delivery or receipt of goods or services having a value, in excess of $50,000, but not to exceed $100,000, over the term of the agreement (other than an agreement for the transportation, balancing, storage, parking, wheeling, purchase, or sale of natural gas);
(2) entering into, amending, modifying, or terminating any contract or commitment to acquire or transfer any asset, the fair market value or aggregate consideration (including assumed actual and contingent liabilities) of which exceeds $50,000, unless such fair market value or aggregate consideration exceeds $250,000, in which case any acquisition or transfer requires a Unanimous Vote;
(3) (A) filing any claim or lawsuit against any Person except where the amount claimed is for less than $50,000, or (B) settling any claim or lawsuit except where the fair market value of the settlement amount is less than $50,000; or
(4) taking action in its capacity as a shareholder, partner or member of any joint venture between the Company and EEI to the extent such action is the equivalent of an act requiring a Majority Vote under this Section 8.1 (in the case of an action to which a monetary value can be assigned, determined by reference to the impact of such action on the Company).
(c) The approval by a Supermajority Vote shall be required before any of the following acts involving the Company may be taken:
(1) entering into, or amending, modifying, or terminating, an agreement involving aggregate consideration (including assumed actual and contingent liabilities) or receipts, or delivery or receipt of goods or services having a value, in excess of $100,000 over the term of the agreement (other than an agreement for the transportation, balancing, storage, parking, wheeling, purchase, or sale of natural gas);
(2) any amendment or modification of any provision of the Operating Policy described in subsection (d)(12) below, except to the extent the Operating Policy states that such provision may be amended or modified only by Unanimous Vote;
(3) borrowing any principal amount in excess of $25,000, incurring any contingent liability whatsoever in excess of $25,000, lending or guaranteeing any third party indebtedness (including, without limitation, under any contract or arrangement referred to in this Section 8.1), it being understood that such limitation shall not be a limitation on the amount or type of trade payables that may be incurred in the ordinary course of business consistent in all respects with past practices by the Company;
(4) approving a capital budget, an operating budget (the "Operating Budget") and contributions to the Operating Fund for each Fiscal Year, which shall not be exceeded without the express consent of a Supermajority Vote of the Executive Committee (except with respect to capital expenditures of less than $25,000 as provided in subsection (5) below);
(5) making any capital expenditure in excess of $25,000 unless such expenditure is reflected in a capital budget for the current Fiscal Year that has been approved by the Executive Committee;
(6) incurring aggregate general and administrative expenses, as defined and calculated in accordance with generally accepted accounting principles, in any Fiscal Year in excess of one hundred and five percent (105%) of the general and administrative expenses reflected in the Operating Budget;
(7) the indemnification of any Officer, employee, agent or any other Person except as specifically provided herein;
(8) executing or otherwise entering into, or amending, modifying, or terminating, any employment agreement, the election or removal of any Officer or the hiring or firing of other similarly compensated person with or without cause, and the borrowing of a Member's employee(s) on a temporary basis in accordance with
Section 8.8(j) below for a period in excess of five consecutive days;
(9) setting or amending the compensation level of any Officer or other similarly compensated person;
(10) revaluing any property or asset;
(11) taking any action in its capacity as a shareholder, partner or member of any Person except any joint venture between the Company and EEI, which is addressed in the following subsection (b)(12);
(12) taking any action in its capacity as a shareholder, partner or Member of any joint venture between the Company and EEI to the extent that such action is the equivalent of an action requiring a Supermajority Vote under this
Section 8.1(c) (in the case of an action to which a monetary value can be assigned, determined by reference to the impact of such action on the Company);
(13) taking action that will result in any Company Property being burdened by a lien or other encumbrance;
(14) subject to Section 8.1(d), entering into, amending or terminating any contract or commitment to acquire or transfer any asset, the fair market value or aggregate consideration (including assumed actual and contingent liabilities) of which exceeds $250,000;
(15) approving the distribution of Company Property to Members in accordance with
Section 10.4 below;
(16) executing or otherwise entering into, or amending, modifying, or terminating, any agreement with a Member, an Officer or employee of the Company, an Affiliate of a Member, or a person related by blood or marriage to an Officer or employee of the Company, involving aggregate consideration (including assumed actual and contingent liabilities) or fair market value or actual or contingent liability in excess of $25,000, except that this subsection shall not apply to any contract or commitment for the transportation, balancing, storage, parking, wheeling, purchase, or sale of natural gas, in each case in the ordinary course of business, provided that no such contract or commitment may be executed until the Operating Policy described in subsection (d)(12) below is adopted;
(17) (A) filing any claim or lawsuit against any Person in an amount claimed in excess of $50,000, or (B) settling any claim or lawsuit where the fair market value of the settlement amount exceeds $50,000;
(18) entering into any material amendment or modification of a Hub Agreement or the extension or renewal of a Hub Agreement other than the agreements described in the definitions of "California Hub," "Chicago Hub" or Ellisburg-Leidy Hub"; or
(19) subject to Section 8.1(d)(5), any decision that the Company shall engage in any activities other than (i) activities involving the transportation or storage of natural gas, or (ii) activities related to the supply of natural gas, including exploration, development, production, marketing, manufacture or similar activities related to the supply of natural gas, or (iii) those described in clauses (a)-(e) and (g) of
Section 3.1.
(d) The approval by a Unanimous Vote shall be required before any of the following acts involving the Company may be taken:
(1) the admission of an Additional Member;
(2) transferring all or substantially all of the assets of the Company;
(3) dissolving the Company;
(4) the filing of a petition as debtor in a United States Bankruptcy Court or taking any material affirmative act that would result in the Company's Bankruptcy;
(5) making an aggregate expenditure in excess of $5,000,000 during the first five (5) years following the Effective Date for purposes of entering a business, or line of business, other than one described in clauses (a)-(e) and (g) of
Section 3.1;
(6) merging or consolidating the Company with or into any other Person;
(7) a change in the name of the Company;
(8) approving the Company's participation in any venture between the Company and EEI relating to the development and operation of the Electronic Trading System;
(9) entering into, amending, modifying or terminating any contract or commitment for the transportation, balancing, storage, parking, wheeling, purchase or sale of natural gas prior to (A) adopting the Operating Policy described in subsection (d)(12) below and (B) amending or otherwise modifying the Partnership Agreement relating to the Ellisburg-Leidy Northeast Hub, in order to reflect the substitution of the Company for HSI as a partner thereunder, in form and substance satisfactory to the Members;
(10) taking any action in its capacity as a shareholder, partner or member of any joint venture between the Company and EEI to the extent that such action is the equivalent of an action requiring a Unanimous Vote under this Section
8.1(d) (in the case of an action to which a monetary value can be assigned, determined by reference to the impact of such action on the Company);
(11) entering into any modification or amendment of this Company Agreement;
(12) approving and adopting written Company operating procedures (the "Operating Policy"), which Operating Policy shall be approved and adopted within forty-five days of the execution of this Company Agreement (the Executive Committee may, by Unanimous Vote, approve and adopt interim operating procedures to be effective until the approval and adoption of the Operating Policy), addressing, among other areas, procedures for the execution and approval of agreements binding the Company (including specific authority levels of Members, Officers, and Company employees), forms used in connection with derivatives transactions, procedures for the execution and approval of agreements between the Company and Members, Affiliates, Officers, and/or Company employees, tax recording and accounting procedures (including procedures for calculating Net Profit and Net Loss), retention and audit policies which effectively monitor and control risks associated in particular with market-making agreements, and location of business headquarters; amending or modifying any provision of the Operating Policy to the extent the Operating Policy states that such provision may be amended or modified only by Unanimous Vote (any other amendment or modification of the Operating Policy requires a Supermajority Vote); or taking any actions in contravention of the restrictions or limitations in the Operating Policy;
(13) extending or renewing any of the agreements described in the definitions of "California Energy Hub," "Chicago Hub" or "Ellisburg-Leidy Hub"; or
(14) extension of the term of the Company in accordance with Section 2.6.
(e) Any other action required or permitted by the Executive Committee under this Company Agreement and not specifically addressed in this Section 8.1 may be taken only with the approval in advance by a Supermajority Vote of the Executive Committee.
(f) The Executive Committee by a Supermajority Vote may from time to time adopt such rules, not inconsistent with the provisions hereof, as it may deem useful and appropriate to implement this Company Agreement and to manage the Company's business and affairs. The Executive Committee by a Supermajority Vote may adopt accounting and financial control procedures and policies, not inconsistent with this Company Agreement, that are appropriate for the Company with respect to such matters.
8.2 Composition and Term.
(a) The executive committee (the "Executive Committee") shall be the Member's management committee of the Company and shall be comprised of one individual representative for each Member (such Member's "Representative"). All Representatives shall be entitled to receive notices and agendas of upcoming Executive Committee meetings, attend all Executive Committee meetings and participate in all discussions, and receive minutes from previous Executive Committee meetings. A Member may bring support staff to Executive Committee meetings. Such staff shall be subject to confidentiality requirements deemed appropriate by the Executive Committee. The Representative selected by each Member shall be entitled to cast the following number of votes on matters requiring the approval of the Executive Committee: such Representative shall have one vote, or fractional part thereof, for each percentage point, or fractional part thereof, of Company Interest credited to the Member appointing such Representative. For example, a Representative appointed by a Member credited with a ten and one-half percent (10.5%) Company Interest would have ten and one-half (10-1/2) votes of a total number of one hundred (100) votes.
(b) Until replaced pursuant to the terms of this Company Agreement, NHS's Representative shall be Thomas Nardi. HSI's Representative shall be Stephen Bergstrom. Each Representative shall be entitled to hold office until death, resignation or removal. A Member may replace the Representative appointed by such Member in the event of a vacancy. Any Representative may be removed at any time, with or without cause, by the Member entitled to appoint such Representative, but not otherwise. Any Representative on the Executive Committee may appoint a proxy (including another Representative) to attend meetings and vote (including, without limitation, voting on any matter before the Executive Committee). Without limiting the generality of the foregoing, in determining if a quorum is present, all Representatives in attendance by means of a proxy shall be included in the count of a quorum.
8.3 Annual and Regular Meetings. The Executive Committee shall hold an annual meeting, and may hold regular meetings, at such time and place as the Executive Committee determines by resolution but in any event the Executive Committee shall, unless the Executive Committee otherwise agrees, hold regular meetings at the offices of the Company during the months of January, April, July and October of each year.
8.4 Special Meetings. Special meetings of the Executive Committee may be called by the Chairman, Vice Chairman, the Executive Committee or any Member, upon notice to all Representatives on the Executive Committee.
8.5 Notice of Meetings. Notice of a special meeting shall state the purpose of the meeting and notice of special, annual and regular meetings must be given in writing at least ten days in advance of such meeting. Notice of such meeting may be waived in writing by Unanimous Vote.
8.6 Quorum and Manner of Acting. The presence of all Representatives shall constitute a quorum. If a quorum is present, the action of those present, in accordance with
Section 8.1 above, shall constitute the action of the Executive Committee. No action may be taken at a meeting of the Executive Committee in the absence of a quorum. In the event a Representative receives notice of an annual, regular or special meeting and does not participate in such meeting either in person or by proxy, such Representative shall be deemed to have attended such meeting and voted not to take action submitted to the Executive Committee for approval at such meeting. Any action the Executive Committee may take may be taken without a meeting by unanimous written consent of the Representatives. Meetings of the Executive Committee may take place by telephone or any means where any persons attending can hear and speak to each other.
8.7 No Compensation. No Representative on the Executive Committee shall be entitled to compensation for his/her services, or any reimbursement of expenses incurred, as a Representative on the Executive Committee.
8.8 Officers.
(a) Generally. The Company shall have agents, referred to as "Officers" of the Company. These agents (whose authority is limited pursuant to the following sentence) shall be appointed in the manner specified below, shall have the titles and authority specified in this Section 8.8 and shall not be considered "managers" for purposes of the Act or the Code. Each Officer shall have only the authority specified below, and shall not be a general agent of the Company.
(b) Titles and Number. The Officers shall be the Chairman, Vice Chairman, President, the Secretary and the Treasurer. There shall be appointed from time to time, in accordance with subsection (c) below, such Vice Presidents, Assistant Secretaries, and Assistant Treasurers as the Executive Committee may desire. Any person may hold two or more offices, except that the offices of President and Secretary may not be held by the same person.
(c) Election and Term of Office. The Officers shall be elected by the Executive Committee at the annual meeting by Supermajority Vote in accordance with
Section 8.1(c)(8) above; provided that the following Officers are hereby installed and authorized to act until the first such annual meeting of the Executive Committee: Miles Allen (President), Stephen Bergstrom (Chairman), and Thomas Nardi (Vice Chairman). Each Officer shall hold office until the annual meeting following the date of election of such Officer. Any Officer may be removed by the Executive Committee by Supermajority Vote with or without cause. Vacancies in any office shall be filled by the Executive Committee by Supermajority Vote.
(d) Chairman and Vice Chairman of the Executive Committee. Until replaced pursuant to the terms of this Company Agreement, Stephen Bergstrom will be the Chairman, and Thomas Nardi will be the Vice Chairman of the Company. The Chairman, and in the absence of the Chairman, the Vice Chairman, shall preside at meetings of the Executive Committee, and shall exercise such powers and perform such duties as may be assigned to him/her by this Company Agreement or the Executive Committee.
(e) President. The President, subject to the general control of the Executive Committee, shall be responsible for the day-to-day operation and direction of the affairs of the Company, employees and agents, shall supervise generally the affairs of the Company, and, subject to the limitations imposed by this Company Agreement, any employment agreement, any employee plan, or any resolution of the Executive Committee, shall have full authority to execute all documents and to take all actions that the Company may legally take. The President shall attend all meetings of the Executive Committee (but shall not be entitled to vote on matters before the Executive Committee) and exercise such other powers and perform such other duties as may be assigned to him/her by this Company Agreement or the Executive Committee, including such duties and powers stated in any employment agreement.
(f) Vice Presidents. In the absence of the President, the Vice Presidents designated by the Executive Committee shall, except as hereinafter provided, have all of the powers and duties conferred upon the President. Each of the Vice Presidents shall, subject to the limitations imposed by this Company Agreement, any employment agreement, any employee plan, or any resolution of the Executive Committee, have the same power as the President to sign certificates, contracts and other instruments of the Company. Any Vice President shall perform such other duties and may exercise such other powers as may from time to time be assigned to him by this Company Agreement, the Executive Committee, the Chairman, the Vice Chairman or the President.
(g) Secretary and Assistant Secretaries. The Secretary shall attend and record or cause to be recorded in books provided for that purpose the minutes of the meetings or actions of the Members and the meetings or actions of the Executive Committee or any subcommittees thereof, shall see that all notices are duly given in accordance with the provisions of this Company Agreement and as required by law, shall be custodian of all records (other than financial), shall see that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed, and, in general, shall perform all duties incident to the office of Secretary and such other duties as may, from time to time, be assigned to him/her by the Executive Committee, the Chairman, or the Vice Chairman. The Assistant Secretaries shall exercise the powers of the Secretary during that Officer's absence or inability or refusal to act.
(h) Treasurer and Assistant Treasurers. The Treasurer shall keep or cause to be kept the books of account of the Company and shall render statements of the financial affairs of the Company in such form and as often as required by this Company Agreement, the Executive Committee, the Chairman, or the Vice Chairman. The Treasurer, subject to the order of the Executive Committee, shall have the custody of all funds and securities of the Company. The Treasurer shall perform all other duties commonly incident to his/her office and shall perform such other duties and have such other powers as the Executive Committee, the Chairman, or the Vice Chairman shall designate from time to time. The Assistant Treasurers shall exercise the power of the Treasurer during that Officer's absence or inability or refusal to act.
(i) Powers of Attorney. The Executive Committee may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the Officers.
(j) Borrowed Employees. Subject to Section 8.1(c)(8) above, the Company may borrow a Member's employees, or a Member's Affiliate's employees, with that Member or Affiliate's consent, from time to time on a temporary basis for purposes associated with the Company's business. Expenses, salaries and benefits associated with such borrowed employees shall be treated as expenses, salaries and benefits incurred by the Company, subject to the review and approval of the Executive Committee. The lending Member shall furnish all Representatives on the Executive Committee with a monthly statement of such expenses, salaries and benefits supported by invoices or other supporting documents, and shall maintain adequate records in accordance with generally accepted accounting principles supporting the allocation of expenses, salaries and benefits between the Company and the lending Member.
(k) Seconded Employees. A Member shall have the right to request that the Company accept placement of a Member's employee, or an Affiliate's employee, as a seconded employee. The Company, through a Supermajority Vote of the Executive Committee, may accept such request on written terms and conditions acceptable to the Executive Committee. A seconded employee will not be an employee of the Company and one hundred percent (100%) of the expenses, salary and benefits associated with a seconded employee shall be borne by the Member or Affiliate placing a seconded employee with the Company.
8.9 Expenses. The Company shall pay only those expenses incurred by the Officers and employees that are directly attributable to the Company's business.
ARTICLE IX
Contributions and Capital Accounts
9.1 Capital Contributions.
(a) In consideration for its respective Company Interest, each Charter Member has made, or immediately shall make, the Initial Capital Contribution to the Company. As such Initial Capital Contributions, HSI will contribute 100% of HSI's assets, all such assets being listed on Exhibit D, for a 99% Company Interest, and NHS will contribute a promissory note (the "NHS Note") in the principal amount of $[ ] for a 1% Company Interest. The initial Capital Account position of each Charter Member, after giving effect to such Capital Contributions, is set forth on Exhibit D. 
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(b) In addition to the Initial Capital Contributions, the Members agree to make subsequent Capital Contributions in cash for the purpose of developing and operating the Electronic Trading System during the year (365 days) following execution of this Company Agreement. The Company expects that the system will be developed by the Company and EEI pursuant to a jointly owned entity yet to be created. The Members' Capital Contributions pursuant to this Section will in turn be used by the Company to make a loan by the Company to the Company/EEI entity on terms and conditions acceptable to the Executive Committee by a Supermajority Vote. The additional Capital Contributions pursuant to this Section will consist of an initial cash contribution in the aggregate amount of $[ ] to be paid by the Members in accordance with their respective Allocable Shares at the time of such contribution. With respect to NHS's contribution of its Allocable Share of such contribution ("NHS's EEI Contribution"), $[ ] ( or such other amount as shall be the principal amount of the NHS Note) of NHS's Contribution shall be applied to prepay in full the NHS Note, and the Capital Account of NHS shall reflect NHS's EEI contribution in full without giving effect to application of a portion thereof to such prepayment (i.e. such Capital Account shall be increased by the amount of the NHS Note in full and NHS's EEI Contribution in full). Such contributions shall be made to the Company no later than ten (10) days following execution of the agreement creating the venture between the Company and EEI. The Members hereby commit to make additional cash Capital Contributions in one or more installments during the first year (365 days) following execution of this Company Agreement for purposes of the development and operation of the Electronic Trading System in an amount not to exceed $[ ] in aggregate, to be paid by the Members in accordance with their respective Allocable Shares at the time of such contribution. The timing and amount of such installments shall be determined by the Executive Committee by Supermajority Vote. Capital contributions for purposes of the development and operation of the Electronic Trading System in excess of the amounts designated above during the first year following execution of this Company Agreement and thereafter shall be subject to Supermajority Vote. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
(c) In addition to the amounts set forth above, each Member shall in each Fiscal Year contribute, as a Capital Contribution, its Allocable Share to the Operating Fund in accordance with
Section 6.2, as provided by Supermajority Vote of the Executive Committee.
(d) Each Additional Member shall make the Initial Capital Contribution described in such Additional Member's Admission Agreement ("Admission Agreement"). The amount of the Additional Member's Initial Capital Contributions, the time for making such contributions, and any changes in the other Members' Capital Accounts and Allocable Shares that result, shall be set forth in such Additional Member's Admission Agreement.
(e) Notwithstanding Section 6.2, this Section 9.1 or
Section 9.2 or any other provision of this Company Agreement, (i) Capital Contributions shall not exceed an amount of $10,000,000 in the aggregate for all Members during the initial five (5) year term of the Company, and any extension of such term, unless the Executive Committee decides otherwise by Unanimous Vote, and (ii) the Capital Contributions of any Member shall not exceed the limit set forth next to the name of such Member on Exhibit D hereto during the initial five (5) year term of the Company, and any extension of such term, unless such Member has so agreed.
9.2 Additional Capital Contributions. As and when the Executive Committee determines by Supermajority Vote or Unanimous Vote, as may be required by Section 8.1, that the Company needs cash from time to time, each Member agrees that it shall make (a) Capital Contributions to the Company in an amount in accordance with its respective Allocable Share for the purposes determined by the vote of the Executive Committee authorizing such Capital Contributions in accordance with Section 8.1 and (b) Capital Contributions to the Operating Fund in accordance with
Section 6.2 hereof.
9.3 Failure to Contribute. If a Member (a "Delinquent Member") does not contribute, within 10 days of the date required, all or any portion of a Capital Contribution that Member is required to make as provided in this Company Agreement:
(i) the remaining Members in proportion to their Allocable Shares or in such other percentages as they may agree may make the Capital Contribution that the Delinquent Member failed to make and the Allocable Shares of the Members, including the Delinquent Member, shall be adjusted to reflect the Delinquent Member's failure to make the Capital Contribution and the resulting increase in the Capital Accounts of the remaining Members and appropriate adjustments in the Members' Company Interests; and/or
(ii) the remaining Members in proportion to their Allocable Share or in such other percentages as they may agree (the "Lending Member," whether one or more), may advance the portion of the Delinquent Member's Capital Contribution that is in default, with the following results:
(A) the sum advanced constitutes a loan (a "Member Loan") from the Lending Member to the Company,
(B) the principal balance of the loan and all accrued unpaid interest thereon will be due and payable in accordance with terms and conditions agreed between the Member(s) advancing the Member Loan and the Executive Committee (excluding, for these purposes, the Representative of the Delinquent Member), and
(C) the principal amount of the Member Loan will bear interest at the Member Loan Rate from the day that the Member Loan is made until the date that the Member Loan, together with all interest accrued on it, is repaid to the Lending Member; or
(iii) the remaining Members may rescind the request for a Capital Contribution and forego the expense forming the basis of the Capital Contribution.
(iv) in the event the remaining Members decide not to take any one or more of the actions described in Sections 9.3(a)(i) through (iii) above, the remaining Members may take such action (including court proceedings and the exercise of any rights and remedies available at law or in equity) as the remaining Members by Unanimous Vote of their Representatives to the Executive Committee may deem appropriate to obtain payment by the Delinquent Member of the portion of the Delinquent Member's Capital Contribution that is in default, together with interest thereon at the Member Loan Rate from the date that the Capital Contribution was due until the date that it is made, all at the cost and expense of the Delinquent Member. In no event shall the remaining Members be entitled to recover punitive, exemplary or special damages from a Delinquent Member in any action or Proceeding undertaken by the Remaining Members pursuant to this Section 9.3(iv).
9.4 Maintenance of Capital Accounts. The Company, acting through the Executive Committee, shall establish and maintain Capital Account for each Member. The Capital Account of each Member shall equal: (i) the initial Capital Account of each Member, as set forth on Exhibit E (both before and after giving effect to the initial HSI Dispositions described in Section 12.3;
(ii) increased by the aggregate Capital Contributions of such Member (other than Capital Contributions reflected in the initial Capital Account in accordance with clause (i) above and subject in the case of NHS to the fifth sentence of Section 9.1(b));
(iii) increased by the Net Profit of the Company previously allocated to such Member under Section 10.1, (iv) decreased by the Net Losses, if any, of the Company previously allocated to such Member under Section 10.1; and (v) decreased by the amount of any cash and the value of any property distributed to such Member on or before such time (net of any liabilities assumed by the Member in conjunction with such distribution or to which the distributed property is subject). Upon a distribution of property other than cash to any Member, the value of such property shall be restated on the books of the Company at its fair market value immediately prior to such distribution and the Capital Account of each Member shall be restated to reflect such adjustment, determined as if the Company had sold such asset for its fair market value and the resulting gain or loss had been charged or credited to the Members' Capital Accounts as provided in this Company Agreement. Following such adjustment to the Member's books, the Capital Accounts of the Members receiving the distributions shall be adjusted to reflect the amount of the distribution.
9.5 Withdrawal of Capital. Except as otherwise provided herein, no Member shall be entitled to withdraw all or any portion of its Capital Contribution or receive interest on its contributed capital or Capital Account.
9.6 Capital Account, Allocations, and Distributions Attributable to Transferred Interest. At the close of business on any day that any interest in the Company has been transferred or purchased, the transferee Member shall succeed to the Capital Account of the transferor Member, and the Company's books shall be closed so that Net Profits, Net Losses, credits and distributions can be attributed to the Members based on their interests in the Company when items were actually received, paid or incurred.
9.7 Compliance with Section 704(b) of the Code. The provisions of this Article as they relate to the maintenance of Capital Accounts are intended, and shall be construed, and, if necessary, modified, to cause the allocations of profits, losses, income, gain and credit pursuant to Article XI to have substantial economic effect under the Regulations promulgated under Section 704(b) of the Code, in light of the distributions made pursuant to this Company Agreement. Notwithstanding anything herein to the contrary, this Company Agreement shall not be construed as creating a deficit restoration obligation or, except as otherwise specifically agreed herein, otherwise personally obligating any Member to make a Capital Contribution in excess of the Initial Capital Contribution.
ARTICLE X
Allocations and Distributions
10.1 Allocations of Net Profits and Net Losses. As of the end of each Fiscal Year (or any other, shorter period selected by the Executive Committee), the Net Profit or Net Loss of the Company shall be determined in accordance with generally accepted accounting principles, as provided in Section 4.2. The Net Profit or Net Loss of the Company for any period shall be allocated directly to each Member in accordance with such Member's respective Allocable Share.
10.2 Allocations of Taxable Income or Taxable Loss. Except as otherwise provided herein, for federal, state, and local income tax purposes, the taxable income or taxable loss (and each item of income, gain, loss, deduction, or credit) of the Company for any period shall be allocated among the Members in proportion to the Members' respective Allocable Shares and shall otherwise be kept in accordance with applicable United States treasury regulations promulgated under Section 704(b) of the Code.
10.3 Tax Allocations: Section 704(c). If any Company asset has a book value different than its adjusted tax basis to the Company for federal income tax purposes (whether by reason of the contribution of such property to the Company, the revaluation of such property hereunder or otherwise), allocations of income, gain, loss, deduction, credit and tax preference under this
Section 10 with respect to such asset shall take account of any variation between the adjusted tax basis of such asset for federal income tax purposes and its book value in the manner prescribed by Section 704(c) of the Code or the principles set forth in Section 1.704-1(b)(2)(iv)(g) of the treasury regulations, as the case may be, using the remedial allocation method.
10.4 Distributions. Subject to the provisions of Article XIII, the Company will make distributions of cash or cash equivalents or property to the Members in such aggregate amounts and at such time or times as the Executive Committee may determine, by Supermajority Vote. Except as otherwise provided in Section 13.3, all distributions shall be made to the Members in proportion to their respective Allocable Shares.
ARTICLE XI
Taxes
11.1 Tax Elections. The Tax Matters Member shall, upon the filing of the Company's first federal tax return, cause the Company to file an election under Section 754 of the Code and the treasury regulations thereunder to adjust the basis of the Company assets under Section 734(b) or 743(b) of the Code, and shall cause the Company to file a corresponding election under the applicable sections of state and local law.
11.2 Tax Returns. The Executive Committee shall cause federal, state and local tax returns for the Company to be prepared and filed with the appropriate authorities in a timely manner. In compliance with applicable regulations, the Company shall cause to be delivered to each Person who was a Member at any time during such Fiscal Year all information concerning the Company necessary for the preparation of such Person's tax returns, including a statement showing such Person's share of taxable gain or taxable loss (or items thereof) for such year for federal, state and local tax purposes.
11.3 Tax Matters Member. HSI is hereby appointed the "Tax Matters Member" of the Company for all purposes pursuant to Sections 6221 and 6231 of the Code. The Tax Matters Member shall
(i) furnish to each Member a copy of each notice or other communication received from the Internal Revenue Service or applicable state authority (except such notices or communications as are sent directly to each such Member), (ii) keep each Member informed of any administrative or judicial Proceeding, as required by Section 6223(g) of the Code, (iii) allow each Member an opportunity to participate in all administrative and judicial Proceedings involving the tax matters of the Company, and (iv) advise and consult with each Member as to proposed adjustments to the federal or state income tax returns of the Company. The Company shall not be obligated to pay any fees or other compensation to the Tax Matters Member in its capacity as such, provided that the Company shall reimburse the Tax Matters Member for any and all out-of-pocket costs and expenses (including reasonable attorneys' and other professional fees) incurred by it in its capacity as Tax Matters Member. The Company shall indemnify, defend and hold the Tax Matters Member harmless from and against any loss, liability, damage, cost or expense (including reasonable attorneys' fees) sustained or incurred as a result of any act or decision concerning Company tax matters and within the scope of such Member's responsibility as Tax Matters Member, so long as such act or decision was not done fraudulently or in bad faith or as a result of willful and wanton misconduct or gross negligence or, with respect to any criminal Proceeding against the Tax Matters Member, such Member had no reasonable cause to believe its conduct was unlawful. The Tax Matters Member shall consult with each other Member concerning the cost of legal services. The Tax Matters Member may resign upon thirty
(30) days written notice to the Company. Notwithstanding the foregoing, the Tax Matters Member is not authorized to take any action with regard to the foregoing matters which would be binding on either the Company or the Member without a Supermajority Vote of the Executive Committee.
ARTICLE XII
Disposition of Company Interests
12.1 Right of Disposition. Each Member agrees not to Dispose of its Company Interest, in whole or in part, or to withdraw from the Company, except as provided in this Article. In connection with any Disposition, each Member party to such Disposition (including any Additional Member admitted as a Member as a result of such Disposition) shall provide to the Company the information required to revise Exhibits B and D only as to such Members, and Exhibit E shall be so revised and distributed.
12.2 Dispositions not in Compliance with this Article Void. Any attempted Disposition of a Company Interest, or any part thereof, not in compliance with this Article is null and void ab initio.
12.3 Initial HSI Disposition. Following execution of the Company Agreement, HSI expects to Dispose of portions of its initial Company Interest to the following Persons in the following amounts: NHS [ ]%) of one hundred percent (100%) of all Company Interests; PE [ ]%) of one hundred percent (100%) of all Company Interests; and LHI fourteen and a half percent (14.5%) of one hundred percent (100%) of all Company Interests, subject to LHI's obtaining the prior approval of the Securities and Exchange Commission. HSI and NHS hereby agree that they, through their Representatives to the Executive Committee, will approve HSI's sale of the foregoing percentages of its Company Interest to NHS, PE and LHI. Notwithstanding anything in this Article XII to the contrary, HSI's Disposition of portions of its initial Company Interest to NHS, PE and LHI in the percentages stated above shall not be subject to the rights to match of Section 12.5 below, and HSI shall not be under any obligation to reveal the purchase price and other consideration associated with such Dispositions to the Company or the Members. Following such Disposition or Dispositions, PE and LHI shall be Additional Members for all purposes under this Company Agreement and shall be liable for any unpaid portion of any Capital Contribution provided for herein for which HSI was liable prior to such Disposition, in an amount based on, and not greater than, the Allocable Share of PE or LHI, as applicable, after giving effect to such Disposition. 
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
12.4 Disposition Between Members. Any Member may Dispose of all or any part of its Company Interest to the other Member(s), on a per capita basis among those Members wishing to obtain such Company Interest, upon such terms as may be agreed between or among them. In the case of a Disposition of all of the Company Interest of a Member, the other Members may unanimously vote to designate a third party or parties to purchase all or part of such Company Interest and continue the business of the Company without dissolution.
12.5 Third Party Disposition Procedures. A Member (the "Selling Member") may sell all or any part of its Company Interest to any third party purchaser permitted to be a member of a limited liability company under the Act, for cash or other consideration, provided that (i) the Selling Member allows the remaining Members to match the offer, and (ii) each Member, in the sole and absolute discretion of such Member, approves the sale of such Company Interest to such third party purchaser and such third party purchaser becoming an Additional Member. No such third party purchaser may become an Additional Member without execution of an Admission Agreement. To satisfy clause
(i) above, the Selling Member shall present a written offer to the remaining Members, through the Executive Committee, stating the name of the proposed purchaser and all the terms and conditions of the proposed offer, including sales price. Each of the remaining Members shall have the right for a period of thirty
(30) days from receipt of such written offer to elect to accept such written offer on the same terms and conditions applicable to such proposed purchaser. In the event that more than one of the remaining Members accepts such offer to purchase such Company Interest from the Selling Member, the remaining Members who wish to purchase such Company Interest may do so on a per capita basis, and the Members' Capital Accounts (and Allocable Shares) will be ratably adjusted. In the event none of the remaining Members elect to purchase the Company Interest from the Selling Member, one or more of the remaining Members does not approve the sale of such Company Interest to the third party purchaser (the "Original Purchaser"), and the Selling Member elects to continue its attempt to sell such Company Interest, the following procedure shall apply:
(a) The Selling Member may present a written offer from a different third party purchaser (the "Replacement Purchaser") to the remaining Members in accordance with this Section 12.5, provided that the Replacement Purchaser offer must be presented to the remaining Members on or before 5:00 p.m. Central Time on the fifth business day following the Selling Member's receipt of notice that the sale of its Company Interest to the Original Purchaser was not approved.
(b) In the event the Selling Member does not present a written offer from a Replacement Purchaser, or a sale of the Selling Member's Company Interest to the Replacement Purchaser is not approved, and the Selling Member elects to continue its attempt to sell its Company Interest, the Selling Member and the remaining Members will engage a third party accounting firm, investment banking firm, appraisal firm or other valuation expert ("Third Party Appraiser") to determine the fair market value of the Selling Member's Company Interest. If the Selling Member and the remaining Members are unable to agree on the Third Party Appraiser, the Selling Member shall designate a third party accounting firm, investment banking firm, appraisal firm or other valuation expert and the remaining Members shall designate a different such third party and such two third parties shall select the Third Party Appraiser.
(c) The Third Party Appraiser shall, to the extent commercially practicable, determine the fair market value of the Selling Member's Company Interest (the "Appraised Value") by the date no more than 30 days after engagement of the Third Party Appraiser, and the Appraised Value shall take into consideration all valuation factors that the Third Party Appraiser considers relevant in the circumstances, including any possible loss of value in such Company Interest that may occur due to cessation of the Selling Member's participation as a Member in the Company or possible cessation of participation of any Affiliate of the Selling Member as a party to any Hub Agreement.
(d) Each of the remaining Members shall purchase the Selling Member's Company Interest, in a percentage based on such remaining Member's Allocable Share, for a purchase price equal to such remaining Member's pro rata share of the lesser of (i) the fair market value determined by the Third Party Appraiser or (ii) the lowest third party written offer presented to the remaining Members by the Selling Member. Nothing in this subsection shall be construed to prevent the remaining Members from electing to purchase the Company Interest on a basis other than their Allocable Shares.
(e) The Selling Member shall bear all fees and expenses associated with each Third Party Appraiser or other valuation expert engaged.
(f) A Selling Member that (i) elects to sell its Company Interest pursuant to this Section 12.5 and presents a third party offer, and (ii) subsequently elects to attempt to discontinue its attempt to sell its Company Interest, shall not be entitled to attempt to sell its Company Interest again pursuant to this
Section 12.5 during a period beginning on the day it elects to discontinue its attempt to sell its Company Interest and ending on the 180th day following such election.
12.6 Withdrawal from Company. Upon a transfer of a Member's entire Company Interest, such Member (the "Withdrawing Member") shall be deemed to have withdrawn as a Member and shall have no further rights or obligations as a Member hereunder (including, without limitation, obligations under Section 7.1), except those obligations set forth under Section 15.9. Nothing in this
Section 12.6 shall alter a Member's obligations set forth in
Section 6.1 or shall affect a Member's rights under Section 12.7.
12.7 Involuntary Regulatory Withdrawal. A Member may withdraw from the Company in the event (a) a federal or state governmental body, including, without limitation, a legislative, regulatory or judicial body, by order, decree, statute, or judgment (i) determines that such Member's continued ownership of its Company Interest is contrary to statute, regulation or other law; or (ii) imposes any condition on such Member or an Affiliate of such Member that has a material adverse impact on the Member or its Affiliate which arises from such Member's continued participation in the Company as a Member, such Member's or Affiliate's participation as a party to an agreement with the Company, or otherwise in connection with the Company. In such an event the Withdrawing Member may sell its Company Interest to the other Members, on a per capita basis among those Members wishing to obtain such Company Interest, upon such terms as may be agreed between or among them. In the event (i) the Withdrawing Member and the remaining Members are unable to agree on terms with respect to the sale of the Withdrawing Member's Company Interest, and (ii) the Withdrawing Member does not present a third party written offer pursuant to Section 12.5 (thereby invoking the procedures set forth in Section 12.5), the procedure applicable to engagement of a Third Party Appraiser and the purchase of the Company Interest by the remaining Members established in Section 12.5(b), (c), (d) and (e) shall apply, except that the remaining Members shall purchase the Withdrawing Member's Company Interest at eighty-five percent (85%) of the Appraised Value.
ARTICLE XIII
Dissolution and Winding Up
13.1 Dissolution. The Company shall be dissolved and its affairs wound up upon the first to occur of the following events ("Dissolution Event"):
(a) the expiration of the term described in
Section 2.6;
(b) the unanimous written consent of all of the Members;
(c) an event which makes it unlawful for the Company business to be continued;
(d) the sale or disposition of all or substantially all of the Company's assets and properties;
(e) the entry of a decree of judicial dissolution under Section 18-802 of the Act; and

(f) the withdrawal, Bankruptcy or dissolution of any Member, including the occurrence of any event that terminates the continued membership of any Member in the Company under the Act, unless the business of the Company is continued by Unanimous Vote of the Members (calculated without regard to any Member that has withdrawn, become Bankrupt or been dissolved) within ninety (90) days following the occurrence of any such event.
13.2 Effect of Dissolution. Upon dissolution, the Company shall cease carrying on as distinguished from winding up the Company business; however, the Company is not terminated, but continues until the winding up of the affairs of the Company is completed and the certificate of cancellation has been issued by the Secretary of the State of Delaware. The Liquidating Trustee shall in an orderly manner wind up the affairs of the Company and make an accounting of the Capital Account of each Member and of the Company assets, liabilities and operations from the date of the last previous accounting to the date of such dissolution.
13.3 Distribution of Assets on Dissolution. Upon the winding up of the Company, the Company Property shall be distributed:
(a) to creditors, including Members who are creditors (other than by reason of the operation and effect of
Section 18-601 or Section 18-604 of the Act) to the extent otherwise permitted by law, whether as a result of any Member Loan or otherwise, in satisfaction of the Company's liabilities, including, without limitation, principal and interest attributable to any Member Loan; and then
(b) to the establishment of any reserves which the Liquidating Trustee may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company arising out of or in connection with the Company. Such reserves may be paid over by the Liquidating Trustee to an agent, as escrowee, to be held by him for the purpose of disbursing such reserves in payment of any of the aforementioned contingencies, and, at the expiration of such period as the Liquidating Trustee shall deem advisable, for distributing the balance thereafter remaining in the manner hereinafter provided; and then
(c) to Members in satisfaction of liabilities for distributions under Section 18-601 or Section 18-604 of the Act; and then
(d) thereafter, to Members to the extent of and in proportion with their respective positive Capital Account; and then
(e) the remainder, if any, to the Members in proportion to their respective Allocable Shares as in effect at the moment of the event giving rise to such dissolution.
13.4 Winding Up and Certificate of Cancellation. The winding up of the Company shall be completed when all debts, liabilities, and obligations of the Company have been paid and discharged or reasonably adequate provision therefor has been made, and all of the remaining property and assets of the Company have been distributed to the Members. Upon the completion of winding up of the Company, a certificate of cancellation shall be delivered to the Secretary of the State of Delaware for filing. The certificate of cancellation shall set forth the information required by the Act.
13.5 Termination. A reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the discharge of liabilities to creditors so as to enable the Executive Committee (or other Person winding up the Company's affairs) to minimize the normal losses attendant upon a liquidation. Each of the Members shall be furnished, by the Executive Committee, with a statement setting forth the assets and liabilities of the Company as of the date of complete liquidation. Upon compliance with the distribution plan set forth in Section 13.3 hereof (including payment over to the agent-escrowee if there are sufficient funds therefor), the Company terminates.
13.6 Use of Company Identity. Unless the Members agree otherwise in a signed written agreement approved by Unanimous Vote of the Executive Committee, no Member or Affiliate shall use the Company's telephone number, address, name (or any deceptively similar name) or logo for twelve (12) months after the termination of the Company.
ARTICLE XIV
Amendment
This Company Agreement may be amended or modified from time to time only by a written instrument (including, without limitation, any Admission Agreement) adopted by the Unanimous Vote of the Executive Committee. No Member shall have any vested rights in this Company Agreement which may not be modified through an amendment to this Company Agreement.
ARTICLE XV
Miscellaneous Provisions
15.1 Entire Agreement. This Company Agreement represents the entire agreement with respect to the subject matter hereof among all the Members and between the Members and the Company.
15.2 Successors and Assigns. Subject to the provisions on Disposition set forth herein, this Company Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
15.3 Governing Law. THIS COMPANY AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
15.4 Notices. All notices required or permitted to be given or made under this Company Agreement shall be given or made in writing. Such notices shall be delivered by hand delivery, by facsimile or similar electronic means, by nationally recognized overnight courier, or by certified or registered mail, return receipt requested, addressed as set forth in Exhibit B hereof or any amendment thereto. Any party may change its address for the purpose of this Section 15.4 by notice to the other(s) given in the manner set forth above.
15.5 Rights of Creditors and Third Parties under Company Agreement. This Company Agreement is entered into among the Company and the Members for the exclusive benefit of the Company, its Members, and their successors and permitted assignees. This Company Agreement is expressly not intended for the benefit of any creditor of the Company or any other Person (other than any Person with a right to indemnification under Section 6.9 hereof). Except and only to the extent provided by applicable statute, no such creditor or third party shall have any rights under this Company Agreement or any agreement between the Company and any Member with respect to any Capital Contribution or otherwise.
15.6 No Action for Partition. No Member shall have any right to maintain any action for partition with respect to the property of the Company.
15.7 Title to Company Property. Title to Company Property shall be held in the name of the Company or its nominee.
15.8 Company Funds. Company funds shall be deposited in one or more accounts with a bank or banks located within the United States and approved by the Executive Committee. Pending use in the business of the Company or distribution to the Members, the funds of the Company may, in the discretion of the Executive Committee, be deposited in a bank account or accounts, or invested in such interest-bearing taxable or nontaxable investments, including without limitation, checking and savings accounts, certificates of deposit and time or demand deposits in commercial banks, U.S. government securities, securities guaranteed by U.S. Government agencies, bankers' acceptances, Eurodollar deposits and notes, both fixed rate and floating securities issued by money market mutual funds, savings and loan association deposits, deposits in members of the Federal Home Loan Bank System, or commercial paper, rated A-1 or better by Standard & Poor's Corporation or Prime-1 or better by Moody's Commercial Paper Division of Moody's Investor Services, Inc., or the successor to either of them, provided that the Executive Committee shall not cause the Company to make any such deposits or Investments that have a remaining maturity of more than one year or that would require registration of the Company under the Investment Company Act of 1940. Such funds shall not be commingled with funds of any other Person.
15.9 Confidentiality. Except as hereinafter provided, the Company and each Member (a) shall treat as confidential and not disclose to any unauthorized third party (including a Member's employees or Affiliates who have no need to know) any confidential information obtained either directly or indirectly from any other Member pursuant to this Company Agreement and designated by such Member as confidential in writing prior to or at the time of delivery pursuant to this Agreement, or confidential information developed or acquired on behalf of the Company by the Executive Committee or the Company's Officers or employees (collectively "Confidential Information"), and (b) shall not use any such Confidential Information for any purpose other than in connection with the activities of the Company pursuant to this Company Agreement, or the activities of a Member or an Affiliate pursuant to the Hub Agreements. The limitations in this Section 15.9 shall not apply to the extent Confidential Information: (i) was already in the possession of the receiving Member, or its Affiliate, at the time it obtained such Confidential Information; (ii) was or is published or otherwise is or becomes generally available to the public through no fault of such receiving Member, or its Affiliate, (iii) was or is lawfully made available to such Member or its Affiliate without restriction by any Person which is not bound by an obligation of confidentiality or use with respect to the information; (iv) was or is independently developed by such Member or its Affiliate; or
(v) is required to be disclosed by operation of law or regulation, required in any Proceeding, requested by a regulatory body and the disclosing Member deems it advisable, in its discretion, to comply with the request, or deemed advisable to be disclosed in the good faith judgment of the disclosing Member in any Proceeding. In the event disclosure is required or requested, the disclosing Member shall exercise all reasonable efforts to disclose such Confidential Information pursuant to a confidentiality agreement or protective order. The Members and the Executive Committee shall establish and enforce reasonable procedures for the protection of Confidential Information and shall restrict disclosure of such Confidential Information to those of the Company's employees, Officers, agents, and Affiliates of each Member and the Company who need to know such Confidential Information in connection with their functions and the purposes of the Company as set forth herein. Each Member and the Executive Committee shall take such reasonable and prudent steps and precautionary measures as may be required to ensure compliance with this Section 15.9 by such of their or the Company's employees, Officers, agents, Affiliates and other Persons as shall be given access to such Confidential Information and shall be responsible for compliance by its employees, officers, agents and Affiliates. Nothing in this Section 15.9 shall be construed to prohibit a Member's disclosure to its attorneys, auditors, or other consultants.
15.10 Transaction Costs. Each Member shall each bear and pay its own transaction costs relating to the negotiation and execution of this Company Agreement.
HUB SERVICES, INC.

By: /s/ Stephen Bergstrom_________
Title: President _________________

NICOR HUB SERVICES, INC.

By:/s/ Thomas Nardi_______________
Title:Vice President______________	

EXHIBIT A
CERTIFICATE OF FORMATION
OF
ENERCHANGE, L.L.C.
This Certificate of Formation is being executed as of June 12, 1995, for the purpose of forming a limited liability company pursuant to the Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq. (the "Act").
The undersigned, being duly authorized to execute and file this Certificate, do hereby certify as follows:
1. Name. The name of the limited liability company is Enerchange, L.L.C. (the "Company").
2. Registered Office and Registered Agent. The Company's registered office in the State of Delaware is located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, New Castle County, Delaware 19801. The registered agent of the Company for service of process at such address is The Corporation Trust Company, Inc.
3. Dissolution. The Company does not have a specific date of dissolution.
4. Management. The business and affairs of the Company shall be managed by or under the direction of the Members.
IN WITNESS WHEREOF, the undersigned, being all the Members of the Company, have duly executed this Certificate of Formation as of the day and year first above written.
HUB SERVICES, INC.
By:_________________________________
Title:______________________________
NICOR HUB SERVICES, INC.
By:_________________________________
Title:______________________________
EXHIBIT B
ADDRESSES FOR NOTICE
HUB SERVICES, INC.
One O'Hare Centre
6250 Des Plaines River Road, Suite 5005 Rosemont, Illinois 60018
Attn: Miles Allen
Telephone: (708) 692-4770
Facsimile: (708) 692-4779
NICOR HUB SERVICES, INC.
 1844 Ferry Road
Naperville, Illinois 60563-9600
Attn: Robert Gilpin
Daron Riebe
Telephone: (708) 983-8676
Facsimile: (708) 983-5537
PACIFIC ENERCHANGE
 633 West Fifth Street
Los Angeles, California 90071
Attn: James Harrigan
Telephone: (213) 244-3840
Facsimile: (213) 244-8282
JCH\821 EXHIBIT C
NAMES AND ADDRESSES OF CHARTER MEMBERS
HUB SERVICES, INC.
One O'Hare Centre
6250 Des Plaines River Road, Suite 5005 Rosemont, Illinois 60018
Attn: Miles Allen
Telephone: (708) 692-4770
Facsimile: (708) 692-4779
NICOR HUB SERVICES, INC.
 1844 Ferry Road
Naperville, Illinois 60563-9600
Attn: Robert Gilpin
Daron Riebe
Telephone: (708) 983-8676
Facsimile: (708) 983-5537
[ ]
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
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[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]
ENERCHANGE, L.L.C.
ADMISSION AGREEMENT
This Admission Agreement is entered into this ____ day of ____, 199_, by and among Enerchange, L.L.C., a Delaware limited liability company ("the Company") and ________________________.
WITNESSETH
WHEREAS, the Company was created pursuant to that certain Limited Liability Company Agreement ("the Company Agreement") effective June 12, 1995, executed by HSI and NHS; and
WHEREAS, the Company Agreement provides for the admission of Additional Members and requires an Additional Member to execute an Admission Agreement;
NOW THEREFORE, in consideration of the mutual agreements, promises, and undertakings hereinafter set forth, the Company and _______ agree as follows:
1. Capitalized words appearing in this Admission Agreement shall carry the definitions set forth in the Company Agreement unless the text of this Admission Agreement states otherwise.
2. Upon execution of this Admission Agreement, ______ shall become a Member of the Company, shall be treated as a party to the Company Agreement for all purposes and shall be credited with a Company Interest of fourteen _________ percent (__%) of one hundred percent (100%) of all Company Interests and an initial Capital Account of $__________.
3. _____ hereby ratifies and adopts the entirety of the Company Agreement and agrees to accept all benefits granted to Members of the Company and to assume all obligations imposed on Members of the Company, including, without limitation, the obligation to make all Capital Contributions required of Members pursuant to Sections 9.1(b), 9.1(c) and 9.2 of the Company Agreement. The Company and _____ hereby acknowledge that ____ is not required to make an Initial Capital Contribution pursuant to
Section 9.1(a) of the Company Agreement [and that _____'s agreement to make all other Capital Contributions required by the Company Agreement satisfies the requirement of Section 9.1(d) of the Company Agreement.]
4. Exhibits B and E to the Company Agreement are hereby amended as to _____ [and the Member from which ____ acquired its Company Interest] and new Exhibits B and E are hereby substituted to the Company Agreement, which Exhibits are attached to this Admission Agreement, reflecting the admission of ____ as a Member of the Company (i) owning a _____ percent Company Interest and the reduction of the Capital Account of _____ as Seller to _____ percent (__%) and (ii) having a Capital Account of $________ and the reduction of the Capital Account of [seller] to $__________.
5. Except as set forth in this Admission Agreement, the original terms and conditions of the Company Agreement shall remain in full force and effect.
ENERCHANGE, L.L.C.
By:
Title:

By:
Title:

By:
Title:
JCH/ENERADM
[ ]
[CONFIDENTIAL TREATMENT OF BRACKETED MATERIAL REQUESTED PURSUANT TO RULE 104(B)]

EXHIBIT F-1
Opinion of Stryker, Tams and Dill
 (Designated as Exhibit EX-5 for EDGAR purposes)
STRYKER, TAMS & DILL
 Two Penn Plaza East
Newark, N.J. 07105
July 7, 1995
Securities and Exchange Commission
Judiciary Plaza
450 5th Street, N.W.
Washington, DC 20549
Re: National Fuel Gas Company Leidy Hub, Inc.
Ladies and Gentlemen:
This opinion relates to the joint application- declaration, filed on or about the date hereof (the "Application-Declaration"), by National Fuel Gas Company ("National") and one of its wholly-owned subsidiaries, Leidy Hub, Inc. ("LHI"), under the Public Utility Holding Company Act of 1935, as amended.
The Application-Declaration seeks authorization for the following transactions:
(i) the execution and performance of a Purchase Agreement between LHI and Hub Services, Inc., a corporation unaffiliated with National, pursuant to which LHI will acquire a 14.5% ownership interest in Enerchange, L.L.C., a Delaware member-managed limited liability company ("Enerchange");
(ii) the purchase by LHI of additional ownership interests in Enerchange, and the making of loans by LHI to Enerchange, in each case from time to time in accordance with the pertinent provisions of the Limited Liability Company Agreement of Enerchange; and
(iii) the guaranty by National (the "National Guaranties") and/or LHI (the "LHI Guaranties") of certain obligations to be incurred by LHI, Enerchange and/or QuickTrade, L.L.C., a to-be-formed Delaware member-managed, limited liability company which will be a subsidiary of Enerchange ("QuickTrade"), in connection with activities undertaken by Enerchange and/or QuickTrade relating to the storage, transmission and/or supply of natural gas, as delineated in the Gas Related Activities Act of 1990 (15 U.S.C. Section 79k).
Based upon the foregoing and subject to the qualifications and assumptions hereinafter set forth, we are of the opinion that:
1. National is a corporation duly organized and validly existing under the laws of the State of New Jersey;
2. If (i) the proposed transactions are approved by the Board of Directors of National and consummated in accordance with the order or orders of the Securities and Exchange Commission thereon, (ii) the Board of Directors of LHI approves the execution, delivery and performance by LHI of the Purchase Agreement described in the Application-Declaration, and (iii) all authorizations and approvals from appropriate governmental and regulatory authorities, if required in connection with (a) the participation by LHI in Enerchange, (b) the participation by Enerchange in QuickTrade, or (c) the activities of Enerchange or QuickTrade, are obtained, and (iv) the proposed loans by LHI to Enerchange are appropriately documented and evidenced on the respective books of LHI and Enerchange:
A. All laws of the State of New Jersey applicable to the proposed transaction will have been complied with;
B. Upon the due execution and delivery by National of appropriate instruments of guaranty, the obligations incurred by National under the National Guaranties, insofar as New Jersey law is applicable, will be duly authorized and within the power and authority of National and, to that extent, will be valid and binding obligations of National; and
C. The legal rights of the holders of any securities issued by National will not have been violated.
In rendering the opinions expressed in paragraph 2(B) and, to the extent that it relates to the National Guaranties and the LHI Guaranties, paragraph 2(C), we have relied on the advice of National that, insofar as any of the proposed transactions involve the purchase of property (including, without limitation, natural gas) by LHI, Enerchange or QuickTrade, (i) the obligation of LHI, Enerchange or QuickTrade to pay the purchase price therefor will, by contract, arise only upon the delivery of such property, (ii) payment of the purchase price of such property will be due within thirty (30) days after delivery, and (iii) those payment terms are customary within the industry.
The opinion expressed in paragraph 2(B) is also based upon the assumption that, consistent with the Application- Declaration, (i) the obligations guaranteed by National pursuant to the National Guaranties will not exceed in the aggregate $5 million and, independent of this dollar ceiling, (ii) the proportionate amount of the outstanding obligations of Enerchange or QuickTrade guaranteed by National will not exceed the direct or, in the case of QuickTrade, indirect percentage ownership interest of LHI therein.
We consent to the use of this opinion as an exhibit to the Application-Declaration.
Very truly yours,

 /s/ Stryker, Tams & Dill

STRYKER, TAMS & DILL	

EXHIBIT F-2
Opinion of James R. Peterson
 (Designated as Exhibit [EX-5] for EDGAR purposes)
July 7, 1994
Securities and Exchange Commission
Judiciary Plaza
450 5th Street, N.W.
Washington, DC 20549
Re: National Fuel Gas Company Leidy Hub, Inc.
Ladies and Gentlemen:
This opinion relates to the joint application- declaration, filed on or about the date hereof, as amended (the "Application-Declaration"), by National Fuel Gas Company ("National") and one of its wholly-owned subsidiaries, Leidy Hub, Inc. ("LHI"), under the Public Utility Holding Company Act of 1935, as amended.
The Application-Declaration seeks authorization for the following transactions:
(i) the execution and performance of a Purchase Agreement between LHI and Hub Services, Inc., a corporation unaffiliated with National, by which Purchase Agreement LHI would acquire a 14.5% ownership interest in Enerchange, L.L.C., a Delaware member-managed limited liability company ("Enerchange"); and
(ii) the purchase by LHI of additional interests in Enerchange, and the making of loans by LHI to Enerchange, in each case from time to time in accordance with the pertinent provisions of the Limited Liability Company Agreement of Enerchange; and
(iii) the guaranty by National (the "National Guaranties") and/or LHI (the "LHI Guaranties") of certain obligations to be incurred by LHI, Enerchange and/or Enerchange's subsidiary QuickTrade, L.L.C. a to-be-formed Delaware member-managed limited liability company which will be a subsidiary of Enerchange ("QuickTrade"), in connection with activities undertaken by Enerchange and/or QuickTrade relating to the storage, transmission and/or supply of natural gas, as delineated in the Gas Related Activities Act of 1990 (15 U.S.C. Section 79k).
Based upon the foregoing and subject to the qualifications and assumptions hereinafter set forth, I am of the opinion that:
1. LHI is a corporation duly organized and validly existing under the laws of the State of New York;
2. Subject to the qualification that the undersigned is not an attorney admitted to practice law in the State of Delaware, and based solely on the undersigned's review of:
(i) the original executed Limited Liability Company Agreement of Enerchange, dated June 12, 1995,
(ii) warranties and representations made by the seller Hub Services, Inc. in the Pre-Purchase Agreement executed by LHI and Hub Services, Inc. on or about of June 13, 1995,
(iii) a copy of the Certificate of Formation of Enerchange, certified by the State of Delaware Office of the Secretary of State to be a true and correct copy of the Certificate filed in that office on June 13, 1995, and
(d) a good standing certificate issued by the State of Delaware Office of the Secretary of State as of this date, stating that Enerchange is a limited liability company duly formed under the laws of the State of Delaware and is in good standing and has a legal existence so far as the records of that office show,
Enerchange appears to be a limited liability company duly organized and validly existing under the laws of the State of Delaware.
3. If (i) the proposed transactions are approved by the Board of Directors of National and consummated in accordance with the order or orders of the Securities and Exchange Commission thereon, (ii) the Board of Directors of LHI approves the execution, delivery and performance by LHI of the Purchase Agreement described in the Application- Declaration, and (iii) all authorizations and approvals from appropriate governmental and regulatory authorities, if required in connection with the participation by LHI in Enerchange or in connection with the activities of Enerchange, are obtained, and (iv) the proposed transactions are appropriately documented and evidenced on the books of LHI:
A. All laws of the State of New York applicable to the proposed transactions will have been complied with;
B. Upon the due execution and delivery by LHI of appropriate instruments of guaranty, the obligations incurred by LHI thereunder, insofar as New York law is applicable, will be duly authorized and within the power and authority of LHI and, to that extent, will be valid and binding obligations of LHI; and
C. The legal rights of the holders of any securities issued by LHI will not have been violated.
In rendering the opinions expressed in paragraph 3(B) and, to the extent that it relates to the Guaranties, paragraph 3(C), I have relied on the advice of LHI that, insofar as any of the proposed transactions involve the purchase of property (including, without limitation, natural gas) by Enerchange or QuickTrade, (i) the obligation of Enerchange or QuickTrade to pay the purchase price therefor will, by contract, arise only upon the delivery of such property, (ii) payment of the purchase price of such property will be due within thirty (30) days after delivery, and (iii) those payment terms are customary within the industry.
I consent to the use of this opinion as an exhibit to the Application-Declaration.
Very truly yours,

/s/ James R. Peterson

JAMES R. PETERSON	

EXHIBIT H-1
Proposed Form of Public Notice
 (Designated as EX-99 for EDGAR purposes)
Exhibit H-1
UNITED STATES OF AMERICA
 before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. _______
In the Matter of
NATIONAL FUEL GAS COMPANY
 10 Lafayette Square
Buffalo, NY 14203
LEIDY HUB, INC.
 10 Lafayette Square
Buffalo, NY 14203
( )
NOTICE OF PROPOSED ACQUISITION OF AN INTEREST IN A BUSINESS
National Fuel Gas Company ("National"), a registered holding company, and its wholly-owned subsidiary, Leidy Hub, Inc. ("LHI") have filed an Application-Declaration with this Commission pursuant to Sections 9(a), 10, 11(b), 12(b), 13(b) of the Public Utility Holding Company Act of 1935, as amended (the "Act"), the Gas Related Activities Act of 1990, and Rules 16, 23, 24, 45 and 51 promulgated under the Act.
National and LHI propose that LHI enter into a purchase agreement whereby LHI will acquire a 14.5% ownership interest in Enerchange, L.L.C., a Delaware member-managed limited liability company ("Enerchange"). Enerchange will engage in operating natural gas market area hubs, and otherwise providing services to customers who wish to buy, sell, transport, store or borrow gas at various natural gas market area hubs including those in the vicinity of Chicago, Los Angeles and/or Ellisburg and Leidy, Pennsylvania. National and LHI are also seeking authority for National and LHI to guarantee certain obligations of LHI, Enerchange and/or an Enerchange affiliate to be incurred in connection with Enerchange's business.
The Application-Declaration and any amendments thereto are available for public inspection through the Commission's Office of Public Reference. Interested persons wishing to comment or request a hearing should submit their views in writing to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549, and serve a copy on the applicant at the address specified above. Proof of service (by Affidavit or, in case of an attorney-at-law, by Certificate) should be filed with the request. Any request for a hearing shall identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in this matter. After said date, the Application-Declaration, as filed or as it may be amended, may be granted and/or permitted to become effective.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Jonathan G. Katz Secretary