Document:

exhibit10_1.htm

    EXHIBIT
      10.1

    

    RESIGNATION
      AND SEVERANCE AGREEMENT

    

    This
      Resignation and Severance
      Agreement (the “Agreement”) is entered into by and between Donald J.
      Landers, Jr. (“Executive”), and Peoples Bancorp Inc., an Ohio corporation, and
      Peoples Bank, National Association, a national banking association
      (collectively, the “Employer”).

    

    Background
      Information

    

    A.           The
      purpose of this Agreement is to set forth certain understandings that have
      been
      reached between Executive and Employer concerning Executive’s resignation from
      employment with Employer.

    

    B.           Executive
      has been employed by Employer since June 30, 2003, serving as Employer’s Chief
      Financial Officer and Treasurer from August 1, 2006 until April 9,
      2007.

    

    C.           Executive
      desires to resign employment, and the parties desire to end the employment
      relationship with as little disruption as possible.

    

    Agreement

    

    In
      consideration of the promises,
      covenants, and agreements herein and for other valuable consideration, the
      receipt and sufficiency of which is hereby acknowledged by the parties, the
      parties hereto, intending to be legally bound, agree as follows:

    

    1.           Resignation.  Executive
      is resigning from employment with Employer and all of its related subsidiaries
      and affiliates, per Attachment A.

    

    2.           Severance
      Payments and Benefits to Executive.  After the seventh
      day from Executive’s execution of this Agreement, Executive shall receive the
      following severance pay and benefits:  (a) severance pay equivalent to
      six (6) months of his base salary in effect immediately prior to April 9, 2007,
      in one lump-sum (less applicable withholdings and taxes); and (b) if Executive
      elects to continue healthcare and dental coverage under Employer’s plan pursuant
      to COBRA, Employer will pay Executive’s COBRA healthcare premiums for coverage
      through April 30, 2008.  After April 30, 2008, Executive will be
      responsible for paying the COBRA premiums to continue such coverage.

    

    3.           Release.  Executive,
      for himself, his family, his heirs, and assigns, hereby forever releases and
      discharges, Employer, its affiliates, officers, directors, employees, agents
      and
      assigns (collectively, the “Released Parties”) from any and all charges, claims,
      demands, judgments, causes of action, damages, expenses, costs, attorneys’ fees,
      and liabilities of any kind whatsoever that may be lawfully released and
      discharged.  Executive acknowledges that the claims released by this
      section include all rights and claims relating to his employment and the
      termination of his employment, including without limitation any claims he may
      have under:

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    
      	
              (a)

            	
              Title
                VII of the Civil Rights Act of 1964, as amended;

            
	
              (b)

            	
              The
                Americans with Disabilities Act;

            
	
              (c)

            	
              The
                Employee Retirement Income Security Act;

            
	
              (d)

            	
              The
                Age Discrimination in Employment Act (as amended by the Older Workers
                Benefit Protection Act); and

            
	
              (e)

            	
              Any
                other federal, state or local laws or regulations governing employment
                relationships.

            

    

    

    This
      Release specifically includes a release of any claims for employment
      discrimination under federal, state and local laws.  This Release
      extends to all claims of every nature and kind, whether known or unknown,
      suspected or unsuspected, presently existing or resulting from or attributable
      to any act or omission of the Released Parties occurring before the signing
      of
      this Agreement.  This release does not extend to:  (a)
      rights or claims arising after the execution of this Agreement; (b) the
      enforcement of Executive’s rights under this Agreement;  (c) any
      vested rights of Executive under Employer’s retirement savings plan, stock
      option plans,  or other benefits plans; or (d) any rights under Ohio’s
      workers’ compensation or unemployment compensation laws.

    

    4.           Rights
      to Counsel and Revocation.  Executive has been advised
      that he:  (a) should consult with an attorney before signing this
      Agreement; (b) has twenty-one (21) days within which to consider signing this
      Agreement; (c) may revoke this Agreement at any time before the expiration
      of
      seven days after he signs it by providing written notice to Employer; and (d)
      will not receive any payment provided herein until after expiration of such
      seven-day revocation period.

    

    5.           Confidential
      Information.  Executive shall treat as confidential all
      Confidential Information belonging to Employer which has been disclosed to
      Executive, which Executive may have acquired or developed or which Executive
      observed in the course of Executive’s performance of services for Employer and
      which at the time of disclosure was not previously known by Executive and not
      known or used by others in the financial services business.  Executive
      shall not disclose, publish or otherwise use, any such Confidential Information
      without Employer’s prior written consent.  As used in this Agreement,
“Confidential Information” means any information concerning the organization,
      business or finances of Employer (or of any third party which Employer is under
      an obligation to keep confidential) that is maintained by Employer as
      confidential.  Such Confidential Information shall include, but is not
      limited to, trade secrets or confidential information respecting finances,
      financial planning, marketing, business plans or strategies.

     

         
6.   Cooperation
      with Financial Matters.  Executive agrees that he shall,
      upon reasonable notice, be available to provide Employer information as may
      be
      reasonably required by Employer concerning any of Employer’s financial
      matters.

     

    7.           Return
      of Employer Property.  Executive shall
      return all of Employer’s property in his possession, custody, or control,
      including, without limitation, any documents concerning Employer, any electronic
      documents of Employer, credit cards, and keys.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    8.           Statement
      and Non-disparagement.  Employer agrees
      to respond to any inquiry from third-parties concerning Executive’s employment
      and resignation from employment with the information contained in the statement
      attached as Attachment B.  Both Employer and Executive agree not to
      disparage, defame, or denigrate the other, and Executive agrees that he shall
      not disparage, defame, or denigrate Employer’s officers, directors or
      employees.

    

    9.           Non-solicitation
      of Employees.  For a period of twelve (12) full calendar
      months, Executive will not, on his own behalf or on behalf of any other person,
      partnership, association, employer or other entity, solicit or in any manner
      attempt to influence or induce any employee of Employer to leave Employer’s
      employment nor will he use or disclose to any person, partnership, association,
      employer or other entity any information obtained while employed by Employer
      concerning the names and addresses of Employer’s employees.

    

    10.           Termination
      of Disputes.  Executive and Employer agree that each
      party intends to avoid litigation and controversy.  This Agreement is
      not to be construed as an admission of liability for any wrongful conduct on
      the
      part of either Executive or Employer.

    

    11.           Governing
      Law.  This Agreement shall be governed by and construed
      in accordance with the internal substantive laws of the State of Ohio, without
      regard to conflicts of law principles.  Each party
      hereby:  (a) designates the Court of Common Pleas of Washington
      County, Ohio, and, if federal court jurisdiction permits, the United States
      District Court for the Southern District of Ohio in Columbus, Ohio, and any
      appellate court from which decisions of said court may be appealed, as the
      sole
      and exclusive forum and court of proper jurisdiction and venue of and for any
      and all lawsuits or other legal proceedings relating to this Agreement, the
      parties’ relationship, or other matters arising between the parties; (b)
      irrevocably consents to such designation, jurisdiction, and venue; and (c)
      waives any objections or defenses relating to jurisdiction or venue with respect
      to any lawsuit or other legal proceeding relating to this Agreement initiated
      in
      or transferred to such court, including, but not limited to, the defense of
      an
      inconvenient forum and the defense of lack of
      jurisdiction.  Additionally, Executive and Employer each hereby waive
      the right to a trial by jury, if any dispute arises under this Agreement. The
      parties agree that the prevailing party shall be entitled to recover its costs
      and attorneys’ fees incurred in the enforcement of this Agreement.

    

    12.           Execution
      in Parts.  This Agreement may be executed in multiple
      counterparts, each of which shall constitute an original, and all of which
      shall
      constitute a single agreement.

    

    13.           Integration
      Clause.  This Agreement sets forth the entire agreement
      between Executive and Employer with respect to its subject matter and supersedes
      and replaces any and all prior or contemporaneous representations or agreements,
      whether oral or written.  The parties also agree that the Change in
      Control Agreement, adopted August 1, 2006, is now null and void.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

          
      14.           Enforceability.  This
      Agreement shall be construed and interpreted so as to be enforceable to the
      fullest extent permitted by law and to the extent that any provision shall
      bedeemed unenforceable or invalid in any jurisdiction, such invalidity and
      unenforceability shall not affect its validity or enforceability in any other
      jurisdiction, nor shall it affect the enforceability or validity of any other
      provision hereof.   The parties agree and acknowledge that each
      party has carefully reviewed this Agreement and further agree that any
      ambiguities in this Agreement shall not be construed against the drafter
      thereof.

    

    15.           Amendment.  This
      Agreement may not be amended or modified, except by a written agreement executed
      by both Executive and Employer.

    

    16.           Assignment
      of Agreement.  This Agreement may be assigned or
      transferred to, and will be binding upon, any successor of Employer, in which
      case this Agreement will be interpreted and applied by substituting that
      successor for “Employer” as appropriate under the terms of this
      Agreement.  Executive may not assign this Agreement to any other
      person or entity.  However, this Agreement will inure to the benefit
      of, and be enforceable by, Executive’s personal or legal representatives,
      executors, and administrators, successors, heirs, devisees, and legatees to
      the
      extent any pay or benefits are due Executive under this Agreement.

    

    17.           Voluntary
      Acts.  Both Executive and Employer acknowledge that each
      has carefully read this Agreement and knowingly and voluntarily agree to execute
      it.

    

    IN
      WITNESS WHEREOF,
      the parties hereto have executed, or caused to be executed, this Agreement
      to be
      effective as of the date Executive executes this Agreement.

    

    
      	 	 	
              EXECUTIVE

            
	 	 	 
	
              Date:  April
                26, 2007

            	
              By:
                /s/

            	
              DONALD
                J. LANDERS, JR.

            
	 	 	
              Donald
                J. Landers, Jr.

            

    

    

    
      	 	 	
              PEOPLES
                BANCORP INC.

            
	 	 	 
	
              Date:  April
                10, 2007

            	
              By:
                /s/

            	
              MARK
                F. BRADLEY

            
	 	 	
              Mark
                F. Bradley

            
	 	 	
              Its
                President and Chief Executive
                Officer

            

    

    

    
      	 	 	
              PEOPLES
                BANK, NATIONAL ASSOCIATION

            
	 	 	 
	
              Date:  April
                10, 2007

            	
              By:
                /s/

            	
              MARK
                F. BRADLEY

            
	 	 	
              Mark
                F. Bradley

            
	 	 	
              Its
                President and Chief Executive
                Officer

            

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Attachment
      A

    Resignation
      Letters

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    April
      9,
      2007

    

    

    

    Mark
      F.
      Bradley

    Chief
      Executive Officer

    Peoples
      Bancorp Inc.

    138
      Putnam Street

    Marietta,
      Ohio  45750

    

    Dear
      Mark:

    

    It
      is
      with regret that I submit this letter of resignation, effective today, April
      9,
      2007.

    

    I
      am
      resigning from my position as Chief Financial Officer and Treasurer of Peoples
      Bancorp Inc. and Peoples Bank, National Association.

    

    I
      have
      decided to take time to evaluate the course of my current career goals and
      investigate new opportunities.

    

    I
      have
      made many lasting relationships working for Peoples during these past nearly
      four years and will miss my associations here.  I wish you and Peoples
      continued success in all your endeavors.

    

    Thank
      you
      for allowing me to serve Peoples, and again, I wish Peoples continued
      success.

    

    

    Sincerely,

    

    /s/
      Donald J. Landers

    

    

    Donald
      J.
      Landers

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    April
      9,
      2007

    

    

    

    Joseph
      H.
      Wesel

    Chairman
      of the Board

    Board
      of
      Directors

    Peoples
      Bancorp Inc.

    138
      Putnam Street

    Marietta,
      Ohio  45750

    

    Dear
      Mr.
      Wesel:

    

    It
      is
      with regret that I submit this letter of resignation, effective today, April
      9,
      2007.

    

    I
      am
      resigning from my position as Chief Financial Officer and Treasurer of Peoples
      Bancorp Inc. and Peoples Bank, National Association.

    

    I
      have
      decided to take time to evaluate the course of my current career goals and
      investigate new opportunities.

    

    I
      have
      made many lasting relationships working for Peoples during these past nearly
      four years and will miss my associations here.  I wish you and Peoples
      continued success in all your endeavors.

    

    Thank
      you
      for allowing me to serve Peoples, and again, I wish Peoples continued
      success.

    

    

    Sincerely,

    

    /s/
      Donald J. Landers

    

    Donald
      J.
      Landers

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Attachment
      B

    

    Form
      of
      Statement

    

     

     

    Donald
      J.
      Landers, Jr. worked for Peoples Bancorp from August 2003, through April 9,
      2007,
      serving as Controller and then Chief Financial Officer and Treasurer from August
      1, 2006 until April 9, 2007.

     

    
      
        
        

      

      
        13Steckman Ridge GP, LLC

    
      

      

       

        
          

        

      

      

      

      

      LIMITED
        LIABILITY COMPANY AGREEMENT

      

      

      OF

      

      

      STECKMAN
        RIDGE GP, LLC

      

      A
        Delaware Limited Liability Company

      

      

      

      

      

      March
        2, 2007

       

      

      
        
          

        

      

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

      TABLE
        OF CONTENTS

      

      
        	 	
                Page

              
	
                ARTICLE
                  1

              	
                DEFINITIONS

              	
                1

              
	 	
                1.01

              	
                Definitions

              	
                1

              
	 	
                1.02

              	
                Interpretation

              	
                7

              
	
                ARTICLE
                  2

              	
                ORGANIZATION

              	
                7

              
	 	
                2.01

              	
                Formation

              	
                7

              
	 	
                2.02

              	
                Name

              	
                7

              
	 	
                2.03

              	
                Registered
                  Office; Registered Agent; Principal Office in the United States;
                  Other
                  Offices

              	
                8

              
	 	
                2.04

              	
                Purposes

              	
                8

              
	 	
                2.05

              	
                Foreign
                  Qualification

              	
                8

              
	 	
                2.06

              	
                Formation
                  of Partnership

              	
                8

              
	 	
                2.07

              	
                Term

              	
                8

              
	
                ARTICLE
                  3

              	
                MEMBERSHIP;
                  DISPOSITIONS OF INTERESTS

              	
                8

              
	 	
                3.01

              	
                Current
                  Members

              	
                8

              
	 	
                3.02

              	
                Representations,
                  Warranties and Covenants

              	
                8

              
	 	
                3.03

              	
                Dispositions
                  and Encumbrances of Membership Interests and LP Interests

              	
                9

              
	 	
                3.04

              	
                Creation
                  of Additional Membership Interests

              	
                12

              
	 	
                3.05

              	
                Access
                  to Information

              	
                12

              
	 	
                3.06

              	
                Confidential
                  Information

              	
                13

              
	 	
                3.07

              	
                Liability
                  to Third Parties

              	
                14

              
	 	
                3.08

              	
                Use
                  of Members’ Names and Trademarks

              	
                14

              
	
                ARTICLE
                  4

              	
                CAPITAL
                  CONTRIBUTIONS

              	
                14

              
	 	
                4.01

              	
                Capital
                  Contributions

              	
                14

              
	 	
                4.02

              	
                Loans

              	
                14

              
	 	
                4.03

              	
                No
                  Other Contribution Obligations

              	
                14

              
	 	
                4.04

              	
                Return
                  of Contributions

              	
                14

              
	 	
                4.05

              	
                Capital
                  Accounts

              	
                14

              
	 	
                4.06

              	
                Failure
                  to Make a Capital Contribution

              	
                16

              
	
                ARTICLE
                  5

              	
                DISTRIBUTIONS
                  AND ALLOCATIONS

              	
                18

              
	 	
                5.01

              	
                Distributions

              	
                18

              
	 	
                5.02

              	
                Distributions
                  on Dissolution and Winding Up

              	
                18

              
	 	
                5.03

              	
                Withholding

              	
                18

              
	 	
                5.04

              	
                Allocations

              	
                18

              
	 	
                5.05

              	
                Special
                  Allocations

              	
                18

              
	 	
                5.06

              	
                Curative
                  Allocations

              	
                20

              
	 	
                5.07

              	
                Varying
                  Interests

              	
                20

              
	
                ARTICLE
                  6

              	
                MANAGEMENT

              	
                20

              
	 	
                6.01

              	
                Generally

              	
                20

              
	 	
                6.02

              	
                Management
                  Committee

              	
                20

              
	 	
                6.03

              	
                Operations
                  and Management Agreement

              	
                23

              
	 	
                6.04

              	
                Conflicts
                  of Interest

              	
                24

              
	 	
                6.05

              	
                Indemnification
                  for Breach of Agreement

              	
                24

              
	 	
                6.06

              	
                General
                  Regulatory Matters

              	
                24

              
	 	
                6.07

              	
                Initial
                  Facilities

              	
                25

              

      

       

       

      i

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                ARTICLE
                  7

              	
                TAXES

              	
                25

              
	 	
                7.01

              	
                Tax
                  Returns

              	
                25

              
	 	
                7.02

              	
                Tax
                  Elections

              	
                25

              
	 	
                7.03

              	
                Tax
                  Matters Member

              	
                25

              
	
                ARTICLE
                  8

              	
                BOOKS,
                  RECORDS, REPORTS, AND BANK ACCOUNTS

              	
                26

              
	 	
                8.01

              	
                Maintenance
                  of Books; Reports

              	
                26

              
	 	
                8.02

              	
                Bank
                  Accounts

              	
                26

              
	
                ARTICLE
                  9

              	
                WITHDRAWAL

              	
                26

              
	 	
                9.01

              	
                No
                  Right of Withdrawal

              	
                26

              
	 	
                9.02

              	
                Deemed
                  Withdrawal

              	
                27

              
	 	
                9.03

              	
                Effect
                  of Withdrawal

              	
                27

              
	
                ARTICLE
                  10

              	
                DISPUTE
                  RESOLUTION

              	
                28

              
	 	
                10.01

              	
                Disputes

              	
                28

              
	 	
                10.02

              	
                Negotiation
                  to Resolve Disputes

              	
                28

              
	 	
                10.03

              	
                Selection
                  of Arbitrator

              	
                28

              
	 	
                10.04

              	
                Conduct
                  of Arbitration

              	
                29

              
	 	
                10.05

              	
                Consolidation

              	
                29

              
	
                ARTICLE
                  11

              	
                DISSOLUTION,
                  WINDING UP AND TERMINATION

              	
                29

              
	 	
                11.01

              	
                Dissolution

              	
                29

              
	 	
                11.02

              	
                Winding
                  Up and Termination

              	
                30

              
	 	
                11.03

              	
                Deficit
                  Capital Accounts

              	
                31

              
	 	
                11.04

              	
                Certificate
                  of Cancellation

              	
                31

              
	
                ARTICLE
                  12

              	
                GENERAL
                  PROVISIONS

              	
                31

              
	 	
                12.01

              	
                Offset

              	
                31

              
	 	
                12.02

              	
                Notices

              	
                31

              
	 	
                12.03

              	
                Entire
                  Agreement; Superseding Effect

              	
                31

              
	 	
                12.04

              	
                Effect
                  of Waiver or Consent

              	
                31

              
	 	
                12.05

              	
                Amendment
                  or Restatement

              	
                31

              
	 	
                12.06

              	
                Binding
                  Effect

              	
                31

              
	 	
                12.07

              	
                Governing
                  Law; Severability

              	
                32

              
	 	
                12.08

              	
                Further
                  Assurances

              	
                32

              
	 	
                12.09

              	
                Waiver
                  of Certain Rights

              	
                32

              
	 	
                12.10

              	
                Counterparts

              	
                32

              

      

      

      

      

      

      EXHIBITS:

      

      A
        -
        Members

      B
        - Form
        of Partnership Agreement

      C
        -
        Non-Competition Area

      D
        -
        Initial Facilities Plan

      

      ii

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      LIMITED
        LIABILITY COMPANY AGREEMENT

      OF

      STECKMAN
        RIDGE GP, LLC

      A
        Delaware Limited Liability Company

       

      This
        LIMITED LIABILITY COMPANY AGREEMENT OF STECKMAN RIDGE GP, LLC (this
“Agreement”), dated as of March 2, 2007 (the “Effective Date”), is adopted,
        executed and agreed to, for good and valuable consideration, by SPECTRA ENERGY
        TRANSMISSION SERVICES, LLC, a Delaware limited liability company (“Spectra”),
        and NJR STECKMAN RIDGE STORAGE COMPANY, a Delaware corporation (“NJR”).
        Capitalized terms used in this Agreement and not defined elsewhere have the
        meanings given to them in Article 1 below.

      

      RECITALS

      

      The
        Persons executing this Agreement as of the date of this Agreement are becoming
        members of the Company and desire to enter into a written agreement pursuant
        to
        the Act governing the affairs of the Company and the conduct of its business.
        This Agreement is intended to bind all Members from time to time and the
        Company.

      

      NOW
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, the Members agree as follows:

      

      ARTICLE
        1

      DEFINITIONS

      1.01 Definitions.

      

      (a) Certain
        Definitions.
        As used
        in this Agreement, the following terms have the respective meanings set forth
        below or set forth in the Sections referred to below:

      

      AAA
        -
        Section
        10.02(c).

      

      Act
        -
        the
        Delaware Limited Liability Company Act.

      

      Additional
        Contribution
        -
        Section 4.06(a)(ii).

      

      Additional
        Contribution Member
        -
        Section 4.06(a)(ii).

      

      Adjusted
        Capital Account Deficit
        - with
        respect to any Member, the deficit balance, if any, in such Member’s Capital
        Account as of the end of the relevant Fiscal Year after giving effect to
        the
        following adjustments: (a) credit to such Capital Account any amounts that
        such
        Member is obligated to restore pursuant to the penultimate sentences of Treasury
        Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (b) debit to such
        Capital Account such Member’s share of the items described in Treasury
        Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). This definition
        of
        Adjusted Capital Account Deficit is intended to comply with the provisions
        of
        Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
        consistently therewith.

      

      Affiliate
        - with
        respect to any Person, (a) each entity that such Person Controls; (b) each
        Person that Controls such Person, including, in the case of a Member, the
        Member’s Parent; and (c) each entity that is under common Control with the
        Person, including, in the case of a Member, each entity that is Controlled
        by
        the Member’s Parent; provided, with respect to any Member, an Affiliate shall
        include (y) a limited partnership or a Person Controlled by a limited
        partnership if a general partner of the limited partnership is Controlled
        by the
        Member’s Parent, or (z) a limited liability company or a Person controlled by a
        limited liability company if the managing member of the limited liability
        company is Controlled by the Member’s Parent; provided further, for purposes of
        this Agreement the Company, the Partnership and their subsidiaries (if any)
        shall not be an Affiliate of any Member.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      Affiliate’s
        Outside Activities
        -
        Section 6.04(b).

      

      Agreement
        -
        introductory paragraph.

      

      Alternate
        Representative
        -
        Section 6.02(a)(i).

      

      Arbitration
        Notice
        -
        Section 10.02(c).

      

      Arbitrator
        -
        Section
        10.03(b).

      

      Assignee
        - any
        Person that acquires a Membership Interest or any portion of a Membership
        Interest through a Disposition; provided, however, that an Assignee shall
        have
        no right to be admitted to the Company as a Member except in accordance with
        Section 3.03(b)(ii). The Assignee of a liquidated or wound up Member is the
        shareholder, partner, member or other equity owner or owners of the liquidated
        or wound up Member to which that Member’s Membership Interest is assigned by the
        Person conducting the liquidation or winding up of such Member. The Assignee
        of
        a Bankrupt Member is (a) the Person or Persons (if any) to whom such Bankrupt
        Member’s Membership Interest is assigned by order of the bankruptcy court or
        other Governmental Authority having jurisdiction over such Bankruptcy, or
        (b) in
        the event of a general assignment for the benefit of creditors, the creditor
        to
        which such Membership Interest is assigned.

      

      Authorizations
        -
        licenses, certificates, permits, orders, approvals, determinations and
        authorizations from Governmental Authorities having valid
        jurisdiction.

      

      Available
        Cash
        - with
        respect to any Quarter ending prior to the liquidation and winding up of
        the
        Company, the excess, if any and without duplication, of:

      

      (a)  the
        sum
        of all cash and cash equivalents of the Company on hand at the end of that
        Quarter, over

      

      (b)  the
        amount of any cash reserves that are necessary or appropriate in the Sole
        Discretion of the Management Committee to (i) provide for the proper conduct
        of
        the business of the Company (including reserves for future maintenance capital
        expenditures and for anticipated future credit needs of the Company) subsequent
        to that Quarter or (ii) comply with applicable Law or any loan agreement,
        security agreement, mortgage, debt instrument or other agreement or obligation
        to which the Company is a party or by which it is bound or its assets are
        subject; provided, however, that distributions made by the Company or cash
        reserves established, increased or reduced after the end of that Quarter
        but on
        or before the date of determination of Available Cash with respect to that
        Quarter shall be deemed to have been made, established, increased or reduced,
        for purposes of determining Available Cash, within that Quarter if the
        Management Committee so determines.

      

      Notwithstanding
        the foregoing, “Available Cash” with respect to the Quarter in which a
        liquidation or winding up of the Company occurs and any subsequent Quarter
        shall
        be deemed to equal zero.

      

      Bankruptcy
        or Bankrupt -
        as
        defined in the Partnership Agreement.

      

      Breaching
        Member
        - a
        Member (a) that (i) has committed a failure or breach of the type described
        in
        the definition of “Default,” (ii) has received a notice of the type described in
        the definition of “Default,” and (iii) has not cured the failure or breach, but
        as to which the applicable cure period set forth in the definition of “Default”
has not yet expired or (b) that is, or any Affiliate of which is, a “Breaching
        Partner” as defined in the Partnership Agreement.

      

      Business
        Day
        - as
        defined in the Partnership Agreement.

      

      Buy-out
        Right
        -
        Section 3.03(b)(iv)(A).

      

      Capital
        Account
        - the
        account maintained by the Company for each Member in accordance with this
        Agreement and to be maintained by the Company for each Member from and after
        the
        Effective Date in accordance with Section 4.05.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      Capital
        Budget
        - the
        annual capital budget for the Partnership that is approved (or deemed approved)
        pursuant to Section 6.02(h)(ii)(C). 

      

      Capital
        Call
        -
        Section 4.01(a).

      

      Capital
        Contribution
        - with
        respect to any Member, the amount of money and the net agreed value of any
        property (other than money) contributed to the Company by the Member. Any
        reference in this Agreement to the Capital Contribution of a Member shall
        include a Capital Contribution of its predecessors in interest.

      

      Certificate
        -
        Section 2.01.

      

      Change
        Exercise Notice -
        Section
        3.03(b)(iv)(A).

      

      Change
        of Member Control -
        with
        respect to any Member, an event (such as a Disposition of voting securities
        or
        other equity interests) that causes such Member to cease to be Controlled
        by
        such Member’s then Parent or an event that causes an Affiliate of a Member that
        holds an LP Interest to be Controlled by another Person that is not an Affiliate
        of that Member; provided, however, that the term “Change of Member Control”
shall not include any of the following events: 

      

      (a) an
        event
        that causes that Member’s that Parent to be Controlled by another
        Person;

      

      (b) an
        event
        that involves the Disposition of voting securities or other equity interests
        of
        that Member but also involves the Disposition of other assets having a greater
        value than the larger of (i) the fair market value of such Member’s Membership
        Interest and (ii) the product of the Sharing Ratio of that Member times $1
        billion; 

      

      (c) an
        event
        that involves the Disposition of voting securities or other equity interests
        of
        a Person that Controls that Member if that Person also owns assets (other
        than
        the voting securities or other equity interests of such Member) that have
        a
        greater value than the larger of (i) the fair market value of that Member’s
        Membership Interest and (ii) the product of the Sharing Ratio of that Member
        times $1 billion; or

      

      (d) in
        the
        case of a Member that is a publicly traded partnership or is Controlled by
        a
        publicly traded partnership, any Disposition of or issuance of new units
        representing limited partner interests by such publicly traded partnership,
        whether to an Affiliate or an unrelated party and whether or not such units
        or
        interests are listed on a national securities exchange or quotation
        service.

      

      Change
        Purchasing Member
        -
        Section 3.03(b)(iv)(A).

      

      Change
        Unexercised Portion
        -
        Section 3.03(b)(iv)(A).

      

      Changing
        Member
        -
        Section 3.03(b)(iv)(A).

      

      Claim
        - any
        and all judgments, claims, causes of action, demands, lawsuits, suits,
        proceedings, Governmental investigations or audits, losses, assessments,
        fines,
        penalties, administrative orders, obligations, costs, expenses, liabilities
        and
        damages (whether actual, consequential or punitive), including interest,
        penalties, reasonable attorney’s fees, disbursements and costs of
        investigations, deficiencies, levies, duties, imposts, remediation and cleanup
        costs, and natural resources damages.

      

      Code
        -
        as
        defined in the Partnership Agreement.

      

      Company
        -
        Steckman Ridge GP, LLC, a Delaware limited liability company.

      

      Company
        Minimum Gain
        -
“partnership minimum gain” set forth in Treasury Regulation Sections
        1.704-2(b)(2) and 1.704-2(d).

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      Confidential
        Information
        -
        information and data (including all copies) that is furnished or submitted
        by
        any of the Members, their Affiliates, or the Operator, whether oral, written,
        or
        electronic, to the other Members, their Affiliates, or the Operator in
        connection with the Facilities and the resulting information and data obtained
        from those studies, including market evaluations, market proposals, service
        designs and pricing, pipeline system design and routing, cost estimating,
        rate
        studies, identification of permits, strategic plans, legal documents,
        environmental studies and requirements, public and governmental relations
        planning, identification of regulatory issues and development of related
        strategies, legal analysis and documentation, financial planning, gas reserves
        and deliverability data, studies of the natural gas supplies for the Facilities,
        and other studies and activities to determine the potential viability of
        the
        Facilities and their design characteristics, and identification of key issues.
        Notwithstanding the foregoing, the term “Confidential Information” shall not
        include any information that:

      

      (a) is
        in the
        public domain at the time of its disclosure or thereafter, other than as
        a
        result of a disclosure directly or indirectly by a Member or its Affiliates
        or
        the Operator in contravention of this Agreement;

      

      (b) as
        to any
        Member or its Affiliates or the Operator, was in the possession of such Member
        or its Affiliates or the Operator prior to the execution of any confidentiality
        agreements related to the Facilities or this Agreement; or 

      

      (c) has
        been
        independently acquired or developed by a Member or its Affiliates or the
        Operator without violating any of the obligations of that Member or its
        Affiliates or the Operator under any applicable agreement.

      

      Contributing
        Member
        -
        Section 4.06(a).

      

      Control
        -
        as
        defined in the Partnership Agreement.

      

      Control
        Notice
        -
        Section 3.03(b)(iv)(A).

      

      Customer
        -
        the
        Person (other than the Company) that has entered into a Storage
        Agreement.

      

      Day
        -
        a
        calendar day; provided, however, that, if any period of Days referred to
        in this
        Agreement shall end on a Day that is not a Business Day, then the expiration
        of
        that period shall be automatically extended until the end of the first
        succeeding Business Day.

      

      Default
        - with
        respect to any Member, 

      

      (a) the
        failure of that Member to contribute, on or before the 10th Day after the
        date
        required, all or any portion of a Capital Contribution that Member is required
        to make as provided in this Agreement, or

      

      (b) the
        failure of a Member to comply in any material respect with any of its other
        agreements, covenants or obligations under this Agreement, or the failure
        of any
        representation or warranty made by a Member in this Agreement to have been
        true
        and correct in all material respects at the time it was made, in each case
        if
        the breach is not cured by the applicable Member on or before the 30th Day
        after
        its receiving notice of such breach from any other Member (or, if such breach
        is
        not capable of being cured within such 30-Day period, if such Member fails
        to
        promptly commence substantial efforts to cure such breach or to prosecute
        such
        curative efforts to completion with continuity and diligence). The Management
        Committee may, but shall have no obligation to, extend the foregoing 10-Day
        and
        30-Day periods.

      

      Default
        Rate
        - a rate
        per annum equal to the lesser of (a) a varying rate per annum equal to the
        sum
        of (i) the prime rate as published in The Wall Street Journal, with adjustments
        in that varying rate to be made on the same date as any change in that rate
        is
        so published, plus (ii) 2% per annum, and (b) the maximum rate permitted
        by
        Law.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      Dispose,
        Disposing or Disposition
        - with
        respect to any asset (including a Membership Interest, an LP Interest or
        any
        portion of a Membership Interest or LP Interest), a sale, assignment, transfer,
        conveyance, gift, exchange or other disposition of such asset, whether such
        disposition be voluntary, involuntary or by operation of Law, including the
        following: (a) in the case of an asset owned by a natural person, a transfer
        of
        such asset upon the death of its owner, whether by will, intestate succession
        or
        otherwise; (b) in the case of an asset owned by an entity, (i) a merger or
        consolidation of such entity (other than where such entity is the survivor
        thereof), (ii) a conversion of such entity into another type of entity, or
        (iii)
        a distribution of such asset, including in connection with the dissolution,
        liquidation, winding up or termination of such entity (unless, in the case
        of
        dissolution, such entity’s business is continued without the commencement of
        liquidation or winding up); and (c) a disposition in connection with, or
        in lieu
        of, a foreclosure of an Encumbrance; but such terms shall not include the
        creation of an Encumbrance.

      

      Disposing
        Member
        -
        Section 3.03(a).

      

      Dispute
        - Section
        10.01.

      

      Dispute
        Notice -
        Section
        10.02.

      

      Disputing
        Member -
        Section
        10.01.

      

      Dissolution
        Event
        -
        Section 11.01.

      

      Effective
        Date -
        introductory paragraph.

      

      Encumber,
        Encumbering, or Encumbrance
        - the
        creation of a security interest, lien, pledge, mortgage or other encumbrance,
        whether such encumbrance be voluntary, involuntary or by operation of
        Law.

      

      Facilities
        - as
        defined in the Partnership Agreement.

      

      FERC
        -
        as
        defined in the Partnership Agreement.

      

      Governmental
        Authority
        (or
Governmental)
        - as
        defined in the Partnership Agreement.

      

      including
        -
        including, without limitation.

      

      Initial
        Facilities
        - as
        defined in the Partnership Agreement.

      

      Initial
        Facilities Plan
        -
        Section 6.07(a).

      

      Law
        -
        as
        defined in the Partnership Agreement.

      

      Limited
        Partner
        - as
        defined in the Partnership Agreement.

      

      LP
        Interest
        - as
        defined in the Partnership Agreement.

      

      Majority
        Interest
        -
        Section 6.02(e)(i).

      

      Management
        Committee
        -
        Section 6.01.

      

      Member
        - any
        Person executing this Agreement as of the date of this Agreement as a member
        or
        subsequently admitted to the Company as a member as provided in this Agreement,
        but such term does not include any Person that has ceased to be a member
        in the
        Company.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      Membership
        Interest
        - with
        respect to any Member, (a) that Member’s status as a Member; (b) that Member’s
        share of the income, gain, loss, deduction and credits of, and the right
        to
        receive distributions from, the Company; (c) any Priority Interest to which
        that
        Member is entitled pursuant to Section 4.06(b); (d) all other rights, benefits
        and privileges enjoyed by that Member (under the Act, this Agreement or
        otherwise) in its capacity as a Member, including that Member’s rights to vote,
        consent and approve and otherwise to participate in the management of the
        Company, including through the Management Committee; and (e) all obligations,
        duties and liabilities imposed on that Member (under the Act, this Agreement
        or
        otherwise) in its capacity as a Member, including any obligations to make
        Capital Contributions.

      

      Member
        Minimum Gain
        -
“partner nonrecourse debt minimum gain” as determined under Treasury Regulation
        Section 1.704-2(i)(2).

      

      Member
        Nonrecourse Debt
        -
“partner nonrecourse debt” as set forth in Treasury Regulation Section
        1.704-2(b)(4).

      

      Member
        Nonrecourse Deductions
        -
“partner nonrecourse deductions,” and the amount thereof shall be, as set forth
        in Treasury Regulation Section 1.704-2(i).

      

      NJR
        -
        introductory paragraph.

      

      Non-Contributing
        Member
        -
        Section 4.06(a).

      

      Nonrecourse
        Debt
        - the
        meaning set forth in Treasury Regulation Section 1.704-2(b)(3).

      Nonrecourse
        Deductions
        - the
        meaning, and the amount thereof shall be, as set forth in Treasury Regulation
        Sections 1.704-2(b) and 1.704-2(c).

      

      O&M
        Agreement
        - as
        defined in the Partnership Agreement.

      

      Officer
        -
        any
        Person designated as an officer of the Company as provided in Section 6.02(j),
        but that term does not include any Person who has ceased to be an officer
        of the
        Company.

      

      Operating
        Budget
        - the
        annual operating budget for the Partnership that is approved (or deemed
        approved) pursuant to Section 6.02(h)(ii)(C). 

      

      Operator
        - as
        defined in the Partnership Agreement.

      

      Parent
        - any
        Person that Controls a Member and that is not itself Controlled by any other
        Person.

      

      Partnership
        - as
        defined in the Partnership Agreement.

      

      Partnership
        Agreement
        -
        Section 2.06.

      

      Person
        - the
        meaning assigned that term in Section 18-101(11) of the Act and also includes
        a
        Governmental Authority and any other entity.

      

      Priority
        Interest
        - the
        special distribution rights under Section 4.06(b) received by each Additional
        Contribution Member, which rights include the right to receive the return
        described in Section 4.06(b)(i) and which form part of the Additional
        Contribution Member’s Membership Interest.

      

      Priority
        Interest Sharing Ratio
        -
        Section 4.06(b)(i).

      

      PSA
        - as
        defined in the Partnership Agreement.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      Quarter
        - unless
        the context requires otherwise, a fiscal quarter of the Company.

      

      Regulatory
        Allocations -
        Section
        5.06.

      

      Representative
        -
        Section
        6.02(a)(i).

      

      Securities
        Act
        - the
        Securities Act of 1933.

      

      Sharing
        Ratio
        -
        subject in each case to adjustments in accordance with this Agreement or
        in
        connection with Dispositions of Membership Interests, (a) in the case of
        a
        Member executing this Agreement as of the date of this Agreement or a Person
        acquiring that Member’s Membership Interest, the percentage specified for that
        Member as its Sharing Ratio on Exhibit A, and (b) in the case of Membership
        Interests issued under Section 3.04, the Sharing Ratio established in Section
        3.04; provided, however, that the total of all Sharing Ratios shall always
        equal
        100%.

      

      Sole
        Discretion
        - (a) in
        the applicable Person’s sole and absolute discretion, (b) with or without cause,
        (c) subject to such conditions as it may deem appropriate, and (d) without
        taking into account the interests of, and without incurring liability to,
        the
        Company, the Partnership, any Limited Partner, any other Member or
        Representative, or any Officer or employee of the Company, the Partnership
        or
        any Limited Partner.

      

      Spectra
        -
        introductory paragraph.

      

      Storage
        Agreement
        - as
        defined in the Partnership Agreement.

      

      Tax
        Matters Member
        -
        Section 7.03(a).

      

      Term
        -
        Section 2.07.

      

      Treasury
        Regulations
        - as
        defined in the Partnership Agreement.

      

      Withdraw,
        Withdrawing or Withdrawal
        - the
        withdrawal, resignation or retirement of a Member from the Company as a member.
        Such terms shall not include any Dispositions of Membership Interests (which
        are
        governed by Sections 3.03(a) and (b)), even though the Member making a
        Disposition may cease to be a Member as a result of the
        Disposition.

      

      Withdrawn
        Member -
        Section
        9.03.

      

      (b) Other
        Terms.
        Terms
        defined elsewhere in this Agreement have the meanings so given
        them.

       

      1.02 Interpretation.
        Unless
        the context requires otherwise: (a) the gender (or lack of gender) of all
        words
        used in this Agreement includes the masculine, feminine and neuter; (b)
        references to Articles and Sections refer to Articles and Sections of this
        Agreement; (c) references to Exhibits refer to the Exhibits attached to this
        Agreement, each of which is made a part hereof for all purposes; (d) references
        to Laws refer to such Laws as they may be amended from time to time, and
        references to particular provisions of a Law include any corresponding
        provisions of any succeeding Law; and (e) references to money refer to legal
        currency of the United States of America.

       

      ARTICLE
        2

      ORGANIZATION

      

      2.01 Formation.
        The
        Company has been formed as a Delaware limited liability company by the filing
        of
        a Certificate of Formation (the “Certificate”) on February 7, 2007.

      

      2.02 Name.
        The
        name
        of the Company is “Steckman Ridge GP, LLC” and all Company business must be
        conducted in that name or such other names that comply with Law as the
        Management Committee may select.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      2.03 Registered
        Office; Registered Agent; Principal Office in the United States; Other Offices.
        The
        registered office of the Company required by the Act to be maintained in
        the
        State of Delaware shall be the office of the initial registered agent named
        in
        the Certificate or such other office (which need not be a place of business
        of
        the Company) as the Management Committee may designate in the manner provided
        by
        Law. The registered agent of the Company in the State of Delaware shall be
        the
        initial registered agent named in the Certificate or such other Person or
        Persons as the Management Committee may designate in the manner provided
        by Law.
        The principal office of the Company in the United States shall be at such
        place
        as the Management Committee may designate, which need not be in the State
        of
        Delaware, and the Company shall maintain records there or such other place
        as
        the Management Committee shall designate and shall keep the street address
        of
        such principal office at the registered office of the Company in the State
        of
        Delaware. The Company may have such other offices as the Management Committee
        may designate.

      

      2.04 Purposes.
        The
        purpose of the Company is to act as the general partner of the Partnership,
        to
        hold the general partner interests in the Partnership and to engage in any
        activities directly or indirectly relating to the foregoing.

      

      2.05 Foreign
        Qualification.
        Prior to
        the Company’s conducting business in any jurisdiction other than Delaware, the
        Management Committee shall cause the Company to comply, to the extent procedures
        are available and those matters are reasonably within the control of the
        Management Committee, with all requirements necessary to qualify the Company
        as
        a foreign limited liability company in that jurisdiction. At the request
        of the
        Management Committee, each Member shall execute, acknowledge, swear to and
        deliver all certificates and other instruments conforming with this Agreement
        that are necessary or appropriate to qualify, continue and terminate the
        Company
        as a foreign limited liability company in all such jurisdictions in which
        the
        Company may conduct business.

      

      2.06 Formation
        of Partnership.
        Promptly
        after the execution and delivery of this Agreement, the Company as general
        partner and each Member signing this Agreement (or its Affiliate) shall enter
        into the Limited Partnership Agreement of Steckman Ridge, LP, in the form
        of
        Exhibit B to this Agreement (the “Partnership Agreement,” as amended from time
        to time).

      

      2.07 Term.
        The
        period of existence of the Company (the “Term”) commenced with the acceptance
        for filing of the Certificate by the Secretary of State of the State of Delaware
        and shall end at such time as a certificate of cancellation is filed with
        the
        Secretary of State of the State of Delaware in accordance with Section
        11.04.

      ARTICLE
        3

      MEMBERSHIP;
        DISPOSITIONS OF INTERESTS

      

      3.01 Current
        Members.
        As of
        the Effective Date, Spectra and NJR are the only Members of the Company,
        each of
        which is admitted to the Company as a member.

       

      3.02 Representations,
        Warranties and Covenants.
        Each
        Member hereby represents, warrants and covenants to the Company and each
        other
        Member that the following statements are true and correct as of the Effective
        Date and shall be true and correct at all times that such Member is a
        Member:

      

      (a) that
        Member is duly incorporated, organized or formed (as applicable), validly
        existing, and (if applicable) in good standing under the Law of the jurisdiction
        of its incorporation, organization or formation; if required by applicable
        Law,
        that Member is duly qualified and in good standing in the jurisdiction of
        its
        principal place of business, if different from its jurisdiction of
        incorporation, organization or formation; and that Member has full power
        and
        authority to execute and deliver this Agreement and to perform its obligations
        hereunder, and all necessary actions by the board of directors, shareholders,
        managers, members, partners, trustees, beneficiaries, or other applicable
        Persons necessary for the due authorization, execution, delivery and performance
        of this Agreement by that Member have been duly taken;

      

      (b) that
        Member has duly executed and delivered this Agreement and the other documents
        contemplated herein, and they constitute the legal, valid and binding obligation
        of that Member enforceable against it in accordance with their terms (except
        as
        may be limited by bankruptcy, insolvency or similar Laws of general application
        and by the effect of general principles of equity, regardless of whether
        considered at law or in equity);

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (c) that
        Member’s authorization, execution, delivery, and performance of this Agreement
        does not and will not (i) conflict with, or result in a breach, default or
        violation of, (A) the organizational documents of that Member, (B) any contract
        or agreement to which that Member is a party or is otherwise subject, or
        (C) any
        Law, order, judgment, decree, writ, injunction or arbitral award to which
        that
        Member is subject; or (ii) require any consent, approval or authorization
        from,
        filing or registration with, or notice to, any Governmental Authority or
        other
        Person, unless such requirement has already been satisfied;

      

      (d) that
        Member’s Parent is the Person identified as such on Exhibit A;

      

      (e) that
        Member is acquiring its Membership Interest solely for investment for its
        own
        account and not for distribution or sale to others in connection with any
        distribution or public offering;

      

      (f) that
        Member understands that there will not be any public market for the Membership
        Interests and that it must bear the economic risk of an investment in the
        Company for an indefinite period of time because (i) its Membership Interest
        has
        not been registered under the Securities Act or any applicable state securities
        laws and (ii) it may Dispose or Encumber, in whole or in part, its Membership
        Interest only in accordance with this Agreement and then only if its Membership
        Interest is subsequently registered in accordance with the provisions of
        the
        Securities Act and applicable state securities laws, unless registration
        is not
        required;

      

      (g) that
        Member understands that the Company is not obligated to register the Membership
        Interests for resale under the Securities Act or any applicable state securities
        laws;

      

      (h) that
        Member is a “qualified institutional buyer” within the meaning of rule 144A of
        the Securities and Exchange Commission or an “accredited investor” within the
        meaning of Regulation D of the Securities and Exchange Commission and is
        able to
        bear the economic risk of such an investment in the Company for an indefinite
        period of time, and it has no need for liquidity of this investment and it
        could
        bear a complete loss of this investment; if it is either a “qualified purchaser”
within the meaning of the Investment Company Act of 1940 or is an entity
        formed
        and is being utilized primarily for the purpose of making an investment in
        the
        Company, each of the shareholders, partners, members or other holders of
        equity
        or beneficial interests in that Member is such a qualified purchaser;
        and

      

      (i) that
        Member has the knowledge and sophistication to evaluate the risks of investing
        in the Company; it has conducted its own investigation and due diligence
        into
        the Company and is satisfied that its investment in the Company is appropriate;
        it understands and agrees that none of the other Members or their Affiliates,
        or
        the Company, has made nor will make any representation or warranty with respect
        to the worthiness, terms, value, or any other aspect of the Company or the
        Membership Interests, and it explicitly disclaims any warranty, express or
        implied, with respect to such matters; and it specifically acknowledges,
        represents, and warrants that it is not relying on any other Member or its
        Affiliates (i) for its investigation or due diligence concerning, or evaluation
        of, the Company or any related transaction or (ii) with respect to tax and
        other
        economic considerations involved in an investment in the Company.

       

      3.03 Dispositions
        and Encumbrances of Membership Interests and LP
        Interests.

      

      (a) General
        Restriction.
        A Member
        (the “Disposing Member”) may not Dispose of or Encumber all or any portion of
        its Membership Interest or LP Interest (or permit any of its Affiliates to
        Dispose of or Encumber all or any portion of its LP Interest) except in strict
        accordance with this Section 3.03. References in this Section 3.03 to
        Dispositions or Encumbrances of a “Membership Interest” or of an “LP Interest”
shall also refer to Dispositions or Encumbrances of a portion of a Membership
        Interest or of an LP Interest, respectively. Any attempted Disposition or
        Encumbrance of a Membership Interest or an LP Interest, other than in strict
        accordance with this Section 3.03, shall be, and is hereby declared, null
        and
        void ab initio. The rights and obligations constituting a Membership Interest
        or
        an LP Interest may not be separated, divided or split from the other attributes
        of a Membership Interest or an LP Interest except as contemplated by the
        express
        provisions of this Agreement. The Members agree that a breach of the provisions
        of this Section 3.03 may cause irreparable injury to the Company and to the
        other Members for which monetary damages (or other remedy at law) are inadequate
        in view of (i) the complexities and 

      
        
          
          

        

        
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      uncertainties
        in measuring the actual damages that would be sustained by reason of the
        failure
        of a Member to comply with such provision and (ii) the uniqueness of the
        Company
        and Partnership business and the relationship among the Members. Accordingly,
        the Members agree that the provisions of this Section 3.03 may be enforced
        by
        specific performance in accordance with Section 10.04(b).

      

      (b) Dispositions
        of Membership Interests and LP Interests.

      

      (i) General
        Restriction.
        A Member
        may Dispose of its Membership Interest or LP Interest (and will permit any
        of
        its Affiliates to Dispose of its LP Interest) only (A) to an Affiliate of
        the
        Member making, or whose Affiliate is making, the Disposition or (B) with
        the
        written consent of all other Members, which consent may be granted or withheld
        in the Sole Discretion of each Member. Any such Disposition must comply with
        the
        requirements of Section 3.03(b)(iii) and, if the Assignee is to be admitted
        as a
        Member, Section 3.03(b)(ii) and with the applicable provisions of the
        Partnership Agreement. If the Member is Disposing of all or any portion of
        its
        Membership Interest, it must also transfer a pro rata portion of its and
        its
        Affiliates’ LP Interest and vice versa.

      

      (ii) Admission
        of Assignee as a Member.
        If, but
        only if, a Disposition is effected in strict compliance with Sections 3.03(a)
        and (b), the Assignee of a Membership Interest shall be admitted to the Company
        as a Member, with the Membership Interest (and attendant Sharing Ratio) so
        transferred to such Assignee and the Company shall consent to the Disposition
        of
        an LP Interest and the admission of the Assignee as a Limited Partner of
        the
        Partnership.

      

      (iii) Requirements
        Applicable to All Dispositions and Admissions.
        In
        addition to the requirements set forth in Sections 3.03(b)(i), any Disposition
        of a Membership Interest and LP Interest and any admission of an Assignee
        as a
        Member shall also be subject to the following requirements, and such Disposition
        (and admission, if applicable) shall not be effective unless such requirements
        are complied with; provided, however, that the Management Committee, in its
        Sole
        Discretion, may waive any of the following requirements:

      

      (A) Disposition
        Documents.
        The
        following documents must be delivered to the Management Committee and must
        be
        satisfactory, in form and substance, to the Management Committee:

      

      (I)
          Disposition
        Instrument.
        A copy
        of the instrument pursuant to which the Disposition is effected.

      

      (II)  Ratification
        of this Agreement.
        An
        instrument, executed by the Disposing Member and its Assignee, containing
        the
        following information and agreements, to the extent they are not contained
        in
        the instrument described in Section 3.03(b)(iii)(A)(I): (aa) the notice address
        of the Assignee; (bb) the Parent of the Assignee or a statement that it has
        no
        Parent; (cc) the Sharing Ratios after the Disposition of the Disposing Member
        and its Assignee (which together must total the Sharing Ratio of the Disposing
        Member before the Disposition); (dd) the Assignee’s ratification of this
        Agreement and agreement to be bound by it, and its confirmation that the
        representations and warranties in Section 3.02 are true and correct with
        respect
        to it; and (ee) representations and warranties by the Disposing Member and
        its
        Assignee (AA) that the Disposition and admission is being made in accordance
        with all applicable Laws, (BB) that the matters set forth in Section
        3.03(b)(iii)(A)(III) are true and correct, and (CC) that the Disposition
        and
        admission do not violate any agreement to which the Company or the Partnership
        is a party; together with a similar instrument executed by the Disposing
        Member
        and/or its Affiliate owning the LP Interest and the Assignee (as defined
        in the
        Partnership Agreement) of the LP Interest.

      

      (III)  Securities
        Law Opinion.
        Unless
        the Membership Interest subject to the Disposition is registered under the
        Securities Act and any applicable state securities Law, a favorable opinion
        of
        the Company’s legal counsel, or of other legal counsel acceptable to the
        Management Committee, to the effect that the Disposition and admission is
        being
        made pursuant to a valid exemption from registration under those Laws and
        in
        accordance with those Laws; provided, however, that no such opinion shall
        be
        required in the case of a Disposition by a Member to an
        Affiliate.

      
        
          
          

        

        
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      (B) Payment
        of Expenses.
        The
        Disposing Member and its Assignee shall pay, or reimburse the Company for,
        all
        reasonable costs and expenses incurred by the Company in connection with
        the
        Disposition and admission, including the legal fees incurred in connection
        with
        the legal opinion referred to in Section 3.03(b)(iii)(A)(III), on or before
        the
        10th Day after the receipt by that Person of the Company’s invoice for the
        amount due. The Company will provide an invoice as soon as practicable after
        the
        amount due is determined but in no event later than the 90th Day thereafter.
        If
        payment is not made by the date due, the Person owing that amount shall pay
        interest on the unpaid amount from the date due until paid at a rate per
        annum
        equal to the Default Rate.

      

      (C) No
        Release. No
        Disposition of a Membership Interest shall effect a release of the Disposing
        Member from any liabilities to the Company or the other Members arising from
        events occurring prior to the Disposition.

      

      (D) Indebtedness
        of Company. Any
        Disposition of a Membership Interest or LP Interest shall also include all
        of
        the indebtedness owed by the Company or the Partnership to the Disposing
        Member
        or its Affiliates (or, if only a portion of a Membership Interest or LP Interest
        is being Disposed, a proportionate share of that indebtedness). As long as
        this
        Agreement shall remain in effect, all evidence of indebtedness of the Company
        or
        the Partnership owed to any of the Members or its Affiliates shall bear an
        appropriate legend to indicate that it is held subject to, and may be Disposed
        of only in accordance with, the terms and conditions of this Agreement, and
        that
        such Disposition may be made only in conjunction with the Disposition of
        a
        proportionate part of such Member’s Membership Interest.

      

      (iv) Change
        of Member Control.

      

      (A) Procedure.
        In the
        event of a Change of Member Control, then the Member with respect to which
        the
        Change of Member Control has occurred (the “Changing Member”) shall promptly
        (and in all events within five Business Days after the Change in Member Control)
        notify (the “Control Notice”) the Company and the other Members. If the Control
        Notice is not given by the Changing Member as provided above and any other
        Member becomes aware of that Change of Member Control, the other Member shall
        have the right to give the Control Notice to the Changing Member, the Company
        and the other Members. The other Members shall have the right (the “Buy-out
        Right”) to acquire the Membership Interest of the Changing Member and its and
        its Affiliates’ LP Interest for the sum of (x) the positive balance of the
        Changing Member’s Capital Account and (y) the positive balance(s) of the
        Changing Member and/or its Affiliates’ capital accounts under the Partnership
        Agreement. Each Member (excluding the Changing Member) shall have the right
        (but
        not the obligation) to acquire a portion of the applicable Membership Interest
        and its and its Affiliates’ LP Interest that is equal to (I) the Sharing Ratio
        represented by the Membership Interest times (II) a fraction, the numerator
        of
        which is the Member’s Sharing Ratio and the denominator of which is the total
        Sharing Ratios of all Members other than the Changing Member. Each Member
        (other
        than the Changing Member) shall have through the 30th Day following the
        determination of the value of such Membership Interest and its and its
        Affiliates’ LP Interest in which to notify the other Members (including the
        Changing Member) whether the Member desires to exercise its Buy-out Right.
        A
        notice in which a Member exercises the Buy-out Right is referred to as a
“Change
        Exercise Notice,” and a Member that delivers a Change Exercise Notice is
        referred to as a “Change Purchasing Member.” If the Change Purchasing Members
        constitute fewer than all of the Members (other than the Changing Member)
        and,
        consequently, there is a portion of the Membership Interest and LP Interest
        for
        which the Buy-out Right has not been exercised (a “Change Unexercised Portion”),
        then each Change Purchasing Member shall have through the 20th Day following
        the
        end of that period in which to notify the other Change Purchasing Members
        and
        the Changing Member whether it desires to acquire the portion of the Change
        Unexercised Portion that is equal to (aa) the Sharing Ratio represented by
        the
        Change Unexercised Portion times (bb) a fraction, the numerator of which
        is the
        Change Purchasing Member’s Sharing Ratio and the denominator of which is the
        total Sharing Ratios of all Change Purchasing Members. If, at the end of
        this
        20-Day period, there remains a Change Unexercised Portion, then the Change
        Purchasing Members shall have an additional 10-Day period in which to negotiate
        among themselves for a mutually agreeable method of sharing the acquisition
        of
        the remaining Change Unexercised Portion. If the Change Purchasing Members
        reach
such
        agreement during this 10-Day period, then the Buy-out Right shall be deemed
        exercised, and the Changing Member and, if applicable, its Affiliates and
        the
        Change Purchasing Members shall close the acquisition of the Membership Interest
        and LP Interest in accordance with Section 3.03(b)(iv)(B). If, however, the
        Change Purchasing Members do not reach such agreement during this 10-Day
        period,
        then the Buy-out Right shall be deemed to have been waived. A Member that
        fails
        to exercise a right during any applicable period set forth in this Section
        3.03(b)(iv)(A) shall be deemed to have waived such right for the subject
        Change
        of Member Control, but not any right for future Changes of Member
        Control.

      
        
          
          

        

        
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      (B) Closing.
        If the
        Buy-out Right is deemed exercised in accordance with Section 3.03(b)(iv)(A),
        the
        closing of the purchase of the Membership Interest and LP Interest shall
        occur
        at the principal place of business of the Company no later than the 60th
        Day
        after the expiration of the last applicable period referred to in such Section
        3.03(b)(iv)(A) (or, if later, the fifth Business Day after the receipt of
        all
        applicable Authorizations to the purchase), unless the Changing Member and,
        if
        applicable, its Affiliate and the Change Purchasing Members agree upon a
        different place or date. A Change Purchasing Member may assign its right
        to
        receive any Membership Interest or LP Interest to one or more Affiliates.
        At the
        closing, (I) the Changing Member shall execute and deliver to the Change
        Purchasing Members and/or their Affiliates, as applicable, (aa) an assignment
        of
        the Membership Interest and LP Interest, in form and substance reasonably
        acceptable to the Change Purchasing Members, containing a general warranty
        of
        title as to the Membership Interest and the LP Interest (including that the
        Membership Interest and the LP Interest are free and clear of all Encumbrances,
        other than those permitted under Section 3.03(c)(ii)) and (bb) any other
        instruments reasonably requested by the Change Purchasing Members to give
        effect
        to the purchase; and (II) the Change Purchasing Members shall deliver to
        the
        Changing Member and, if applicable, its Affiliate(s) in immediately available
        funds the purchase price provided for in Section 3.03(b)(iv)(A). The Sharing
        Ratios and Capital Accounts of the Members shall be deemed adjusted to reflect
        the effect of the purchase and Exhibit A shall be amended accordingly and
        to
        reflect any new Parent.

      

      (v) Tax
        Termination.
        Notwithstanding anything to the contrary in this Agreement, a direct or indirect
        Disposition of a Membership Interest shall be made only with the consent
        of all
        Members if the Disposition would (a) cause a termination of the Company under
        Section 708 of the Code or (b) adversely affect the tax consequences of the
        Company or any Member.

      

      (c) Encumbrances
        of Membership Interest or LP Interest.
        A Member
        may Encumber its Membership Interest or any LP Interest, or permit any of
        its
        Affiliates to Encumber any LP Interest, only if (i) the Member receives the
        consent of a Majority Interest of the non-Encumbering Members (calculated
        without reference to the Sharing Ratio of the Encumbering Member), which
        consent
        (as contemplated by Section 6.02(e)(ii)) may be granted or withheld in the
        Sole
        Discretion of each such other Member; and (ii) the instrument creating the
        Encumbrance must provide that any foreclosure of such Encumbrance (or
        Disposition in lieu of such foreclosure) must comply with the requirements
        of
        Section 3.03(a) and (b).

       

      3.04 Creation
        of Additional Membership Interests.
        Additional Membership Interests may be created and issued to existing Members
        or
        to other Persons, and such other Persons may be admitted to the Company as
        Members, with the consent of a Majority Interest, on such terms and conditions
        as a Majority Interest may determine at the time of admission. The terms
        of
        admission or issuance must specify the applicable Sharing Ratios and may
        provide
        for the creation of different classes or groups of Members having different
        rights, powers and duties. Any such admission is effective only after the
        new
        Member has executed and delivered to the Members an instrument containing
        the
        notice address of the new Member, the Assignee’s ratification of this Agreement
        and agreement to be bound by it, and its confirmation that the representations
        and warranties in Section 3.02 are true and correct with respect to it. The
        provisions of this Section 3.04 shall not apply to Dispositions of Membership
        Interests and LP Interests or admissions of Assignees in connection therewith,
        such matters being governed by Section 3.03(a) and (b).

       

      3.05 Access
        to Information.
        Each
        Member shall be entitled to receive any information that it may request
        concerning the Company and the Partnership; provided, however, that this
        Section
        3.05 shall not obligate the Company, the Management Committee, or the Operator
        to create any information that does not already exist at the time of such
        request (other than to convert existing information from one medium to another,
        such as providing a printout of information that is stored in a computer
        database). Each Member shall also have the right, upon reasonable notice,
        and at
        all reasonable times during usual business hours to inspect the properties
        of
        the Company and the Partnership and to audit, examine and make copies of
        the
        books of account and other records of the Company and the Partnership. This
        right may be exercised through any agent or employee of a Member designated
        in
        writing by it or by an independent public accountant, engineer, attorney
        or
        other consultant so designated. The Member making the request shall bear
        all
        costs and expenses incurred in any inspection, examination or audit made
        

      on
        that
        Member’s behalf. The Members agree to cooperate reasonably, and to cause their
        respective independent public accountants, engineers, attorneys or other
        consultants to cooperate reasonably, in connection with any such request.
        Confidential Information obtained under this Section 3.05 shall be subject
        to
        the provisions of Section 3.06.

      
        
          
          

        

        
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      3.06 Confidential
        Information.

      

      (a) Except
        as
        permitted by Section 3.06(b), (i) each Member shall, and shall cause its
        Affiliates to, keep confidential all Confidential Information and shall not
        disclose any Confidential Information to any Person, including any of its
        Affiliates, and (ii) each Member shall use the Confidential Information only
        in
        connection with the Facilities, the Company and the Partnership.

      

      (b) Notwithstanding
        Section 3.06(a), but subject to the other provisions of this Section 3.06,
        a
        Member or, where applicable, its Affiliates, may make the following disclosures
        and uses of Confidential Information:

      

      (i) disclosures
        to another Member, the Operator or any other Person retained by the Company
        or
        the Partnership in connection with the Company or the Partnership;

      

      (ii) disclosures
        and uses that are approved by the Management Committee;

      

      (iii) disclosures
        that may be required from time to time to obtain requisite Authorizations
        or
        financing for the Facilities, if the disclosures are approved by the Management
        Committee;

      

      (iv) disclosures
        to an Affiliate of that Member, including the directors, officers, employees,
        agents and advisors of that Affiliate, provided the Member shall cause that
        Affiliate to abide by the terms of this Section 3.06, and special care shall
        be
        taken to restrict such disclosures in any case where that Affiliate is or
        may
        become a customer under a Storage Agreement or an “Marketing Affiliate” (as
        defined in the FERC’s Standards of Conduct for Transmission Providers, 18 C.F.R.
        Part 358, Section 358.3(k));

      

      (v) disclosures
        to the Parent of that Member, including the directors, officers, employees,
        agents and advisors of that Parent, but that Parent shall be subject to the
        terms of this Section 3.06;

      

      (vi) disclosures
        to a Person that is not a Member or an Affiliate of a Member, if that Person
        has
        been retained by a Member or an Affiliate of a Member to provide services
        in
        connection with the Company or the Partnership and has agreed to abide by
        the
        terms of this Section 3.06;

      

      (vii) disclosures
        to a bona-fide potential direct or indirect purchaser of that Member’s
        Membership Interest, if that potential purchaser has agreed to abide by the
        terms of this Section 3.06;

      

      (viii) disclosures
        required, with respect to a Member or an Affiliate of a Member, pursuant
        to (A)
        the Securities Act and the rules and regulations promulgated thereunder,
        (B) the
        Securities Exchange Act of 1934, as amended, and the rules and regulations
        promulgated thereunder, (C) any state securities Laws or (D) any national
        securities exchange or automated quotation system; and

      

      (ix) disclosures
        that a Member is legally compelled to make by deposition, interrogatory,
        request
        for documents, subpoena, civil investigative demand, order of a court of
        competent jurisdiction or similar process or otherwise by Law; provided,
        however, that, prior to any such disclosure, such Member shall, to the extent
        legally permissible:

      

      (A) provide
        the Management Committee with prompt notice of such requirements so that
        one or
        more of the Members may seek a protective order or other appropriate remedy
        or
        waive compliance with the terms of this Section 3.06(b)(ix);

      

      (B) consult
        with the Management Committee on the advisability of taking steps to resist
        or
        narrow such disclosure; and

      
        
          
          

        

        
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      (C) cooperate
        with the Management Committee and with the other Members in any attempt one
        or
        more of them may make to obtain a protective order or other appropriate remedy
        or assurance that confidential treatment will be afforded the Confidential
        Information; and in the event such protective order or other remedy is not
        obtained, or the other Members waive compliance with the provisions of this
        Agreement, that Member agrees (I) to furnish only that portion of the
        Confidential Information that, in the opinion of the Member’s counsel, the
        Member is legally required to disclose, and (II) to exercise all reasonable
        efforts to obtain assurance that confidential treatment will be accorded
        the
        Confidential Information.

      

      (c) Each
        Member shall take, and shall cause its Affiliates to take, such precautionary
        measures as may be required to ensure (and such Member shall be responsible
        for)
        compliance with this Section 3.06 by any of its Affiliates, and its and their
        directors, officers, employees and agents, and other Persons to which it
        may
        disclose Confidential Information in accordance with this Section
        3.06.

      

      (d) Promptly
        after its Withdrawal, a Withdrawn Member shall destroy (and provide a
        certificate of destruction to the Company with respect to), or return to
        the
        Company, all Confidential Information in its possession. Notwithstanding
        the
        immediately preceding sentence, but subject to the other provisions of this
        Section 3.06, a Withdrawn Member may retain for a stated period, but not
        disclose to any other Person, Confidential Information for the limited purposes
        of (i) explaining that Member’s corporate decisions with respect to the
        Facilities or (ii) preparing such Member’s tax returns and defending audits,
        investigations and proceedings relating thereto; provided, however, that
        the
        Withdrawn Member must notify the Management Committee in advance of such
        retention and specify in such notice the stated period of such
        retention.

      

      (e) The
        Members agree that no adequate remedy at law exists for a breach or threatened
        breach of any of the provisions of this Section 3.06, the continuation of
        which
        unremedied will cause the Company, the Partnership and the other Members
        to
        suffer irreparable harm. Accordingly, the Members agree that the Company
        and the
        other Members shall be entitled, in addition to other remedies that may be
        available to them, to immediate injunctive relief from any breach of any
        of the
        provisions of this Section 3.06 and to specific performance of their rights
        hereunder, as well as to any other remedies available at law or in equity,
        pursuant to Section 10.04.

      

      (f) The
        obligations of the Members under this Section 3.06 (including the obligations
        of
        any Withdrawn Member) shall continue to bind any Person that has ceased to
        be a
        Member and shall terminate on the second anniversary of the end of the
        Term.

       

      3.07 Liability
        to Third Parties.
        No
        Member or its Affiliates shall be liable for the debts, obligations or
        liabilities of the Company.

       

      3.08 Use
        of Members’ Names and Trademarks.
        The
        Company, the Members, their Affiliates and the Partnership shall not use
        the
        name or trademark of any Member or its Affiliates in connection with public
        announcements regarding the Company and the Partnership, or marketing or
        financing activities of the Company and the Partnership, without the prior
        consent of such Member or Affiliate, which shall not be unreasonably
        withheld.

      

      ARTICLE
        4

      CAPITAL
        CONTRIBUTIONS

      4.01 Capital
        Contributions.

      

      (a) On
        the
        Effective Date, each of Spectra and NJR will make a Capital Contribution
        (i) in
        cash equal to its Sharing Ratio times $1,040,000 and (ii) of its Sharing
        Ratio
        of a 1% interest in all of the rights and obligations set forth for Spectra
        Energy Transmission, LLC under the PSA, which shall be used to meet the
        Company’s obligations to contribute to the Partnership’s capital under the first
        sentence of Section 4.01(a) of the Partnership Agreement. After that time,
        the
        Management Committee whenever it determines appropriate, or the Operator
        whenever it determines funds are required in accordance with the Initial
        Facilities Plan or the Capital Budget or the Operating Budget (if any) then
        in
        effect, shall cause the Company, as general partner of the Partnership, to
        issue
        a “Capital Call” under Section 4.01(a) of the Partnership Agreement or require
        loans under Section 4.02(a) of the 

      
        
          
          

        

        
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      Partnership
        Agreement; provided, however, that after the time the Company, as general
        partner of the Partnership, becomes obligated to seek third-party debt under
        Section 6.07(b), the Company may not issue a “Capital Call” under Section
        4.01(a) of the Partnership Agreement or require loans under Section 4.02(a)
        of
        the Partnership Agreement to the extent that would cause the aggregate of
        the
“Capital Contributions” under Section 4.01(a)(i) of the Partnership Agreement
        plus all such “Capital Calls” and loans under the Partnership Agreement to
        exceed $140,000,000. Whenever a “Capital Call” is issued under Section 4.01(a)
        of the Partnership Agreement, the Management Committee or the Operator shall
        issue a notice to each Member for the making of Capital Contributions (a
        “Capital Call”) in an aggregate amount equal to the Company’s obligation for the
“Capital Call” under Section 4.01(a) of the Partnership Agreement. The
        Management Committee also may issue a Capital Call whenever it determines
        the
        Company needs additional funds. The aggregate of the Capital Contributions
        under
        Section 4.01(a)(i) plus all Capital Calls may not exceed $2,500,000. All
        amounts
        timely received by the Company under this Section 4.01 shall be credited
        to the
        respective Member’s Capital Account as of the specified date. Each of Spectra
        and NJR is entitled to a credit to its Capital Account equal to its Sharing
        Ratio times $50,000 on account of its contribution under Section
        4.01(a)(ii).

      

      (b) Each
        Capital Call shall contain the following information:

      

      (i) The
        total
        amount of Capital Contributions required from all Members;

      

      (ii) The
        amount of Capital Contribution required from the Member to which the notice
        is
        addressed, which amount must equal that Member’s Sharing Ratio of the total
        Capital Call;

      

      (iii) The
        purpose for which the funds are to be applied in such reasonable detail as
        the
        Management Committee (or if applicable, the Operator) shall direct;
        and

      

      (iv) The
        date
        on which payments of the Capital Contribution shall be made (which date shall
        not be sooner than the 30th Day following the date the Capital Call is given,
        unless a sooner date is approved by the Management Committee) (or if applicable,
        the Operator) and the method of payment, provided that the date and the method
        shall be the same for each of the Members.

      

      (c) Each
        Member agrees that it shall make payments of its respective Capital
        Contributions in accordance with Capital Calls issued as provided in Section
        4.01(a).

       

      4.02 Loans.
        Rather
        than causing the Company, as general partner of the Partnership, to make
        “Capital Calls” under Section 4.01(a) of the Partnership Agreement, the
        Management Committee may cause the Company, as the general partner of the
        Partnership, to require loans from the Limited Partners as provided in Section
        4.02(a) of the Partnership Agreement.

       

      4.03 No
        Other Contribution Obligations.
        No
        Member shall be required or permitted to make any Capital Contributions to
        the
        Company except as provided in this Article 4.

       

      4.04 Return
        of Contributions.
        Except
        as
        expressly provided in this Agreement, a Member is not entitled to the return
        of
        any part of its Capital Contributions or to be paid interest in respect of
        either its Capital Account or its Capital Contributions. An unrepaid Capital
        Contribution is not a liability of the Company or of any Member. A Member
        is not
        required to contribute or to lend any cash or property to the Company to
        enable
        the Company to return any Member’s Capital Contributions.

       

      4.05 Capital
        Accounts. 

      

      (a) Each
        Member’s Capital Account shall be increased by (i) the amount of money
        contributed by that Member to the Company, (ii) the fair market value of
        property contributed by that Member to the Company (net of liabilities secured
        by such contributed property that the Company is considered to assume or
        take
        subject to under Section 752 of the Code), and (iii) allocations to that
        Member
        of Company income and gain (or items thereof), including income and gain
        exempt
        from tax and income and gain described in Treasury Regulation §
1.704-1(b)(2)(iv)(g), but excluding income and gain described in Treasury
        Regulation § 1.704-1(b)(4)(i), and shall be decreased by (iv) the amount of
        money distributed to that Member by the Company, (v) the fair market value
        of

      
        
          
          

        

        
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      property
        distributed to that Member by the Company (net of liabilities secured by
        such
        distributed property that such Member is considered to assume or take subject
        to
        under Section 752 of the Code), (vi) allocations to that Member of expenditures
        of the Company described (or treated as described) in Section 705(a)(2)(B)
        of
        the Code, and (vii) allocations of Company loss and deduction (or items
        thereof), including loss and deduction described in Treasury Regulation §
1.704-1(b)(2)(iv)(g), but excluding items described in (vi) above and loss
        or
        deduction described in Treasury Regulation § 1.704-1(b)(4)(i) or
        1.704-1(b)(4)(iii). The Members’ Capital Accounts shall also be maintained and
        adjusted as permitted by the provisions of Treasury Regulation §
1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treasury
        Regulation §§ 1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments to
        reflect the allocations to the Members of depreciation, depletion, amortization,
        and gain or loss as computed for book purposes rather than the allocation
        of the
        corresponding items as computed for tax purposes, as required by Treasury
        Regulation § 1.704-1(b)(2)(iv)(g). Thus, the Members’ Capital Accounts shall be
        increased or decreased to reflect a revaluation of the Company’s property on its
        books based on the fair market value of the Company’s property on the date of
        adjustment (as determined pursuant to Section 4.05(b)), immediately prior
        to (A)
        the contribution of money or other property to the Company by a new or existing
        Member as consideration for a Membership Interest or an increased Sharing
        Ratio
        (including any contribution under Section 4.06(c)), (B) the distribution
        of
        money or other property by the Company to a Member as consideration for a
        Membership Interest, or (C) the liquidation of the Company. A Member who
        has
        more than one Membership Interest shall have a single Capital Account that
        reflects all such Membership Interests, regardless of the class of Membership
        Interests owned by such Member and regardless of the time or manner in which
        such Membership Interests were acquired. Upon the Disposition of all or a
        portion of a Membership Interest, the Capital Account of the Disposing Member
        that is attributable to that Membership Interest shall carry over to the
        Assignee in accordance with the provisions of Treasury Regulation §
1.704-1(b)(2)(iv)(l). The Capital Accounts shall not be deemed to be, nor
        have
        the same meaning as, the capital account of the Company under the Natural
        Gas
        Act.

      

      (b) Whenever
        the fair market value of the Company’s property is required to be determined
        pursuant to the third and fourth sentences of Section 4.05(a), the Operator
        shall propose such a fair market value in a notice to the Members. If any
        Member
        wishes to disagree with the determination, that Member shall notify the Members
        of such disagreement on or before the 10th Business Day after receiving such
        notice. If that Dispute is not resolved on or before the fifth Business Day
        after that notice, any Member may submit that Dispute to binding arbitration
        by
        delivering an Arbitration Notice. All of the provisions of Article 11 shall
        apply to such arbitration, with the following exceptions: (i) the Arbitrator
        shall be an appraiser or investment banking firm having expertise in the
        valuation of natural gas storage facilities; (ii) the 20-Day period in Section
        11.03(b) shall be a five-Business Day period; and (iii) the 90-Day period
        in
        Section 11.04 shall be a 20-Day period.

       

      4.06 Failure
        to Make a Capital Contribution.

      

      (a) General.
        If any
        Member fails to make a Capital Contribution when required in a Capital Call
        under Section 4.01 of this Agreement (each such Member being a “Non-Contributing
        Member”), then, provided the failure has not been cured, the Members that have
        contributed their Capital Contributions and that are not, and none of whose
        Affiliates are, Non-Contributing Partners under the Partnership Agreement
        (each,
        a “Contributing Member”) may (without limitation as to other remedies that may
        be available) at any time after the 10th Day after the date the Capital
        Contribution was due elect to:

      

      (i) treat
        the
        Non-Contributing Member’s failure to contribute as a Default by giving notice to
        the Non-Contributing Member, in which event the provisions of this Agreement
        regarding the commission of a Default by a Member shall apply; or

      

      (ii) pay
        the
        portion of the Capital Contribution owed and unpaid by the Non-Contributing
        Member (the “Additional Contribution”), in which event the Contributing Members
        that elect to fund the Non-Contributing Members’ share (the “Additional
        Contribution Members”) may treat the contribution as one of: (A) a Capital
        Contribution resulting in the Additional Contribution Members receiving a
        Priority Interest under Section 4.06(b), or (B) a permanent capital contribution
        that results in an adjustment of Membership Interests under Section 4.06(c),
        as
        determined by the Additional Contribution Members as set forth
        below.

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      No
        Contributing Member shall be obligated to elect either (i) or (ii) above.
        The
        decision of the Contributing Members to elect (i) or (ii) above shall be
        made by
        the determination of the Contributing Members holding the majority of the
        Sharing Ratios of all Contributing Members. The decision of the Additional
        Contribution Members to elect (ii)(A) or (ii)(B) above shall be made by the
        determination of the Additional Contribution Members holding the majority
        of the
        Sharing Ratios of all Additional Contribution Members. If the election has
        not
        been made on or before the 30th Day after the date the funds were paid by
        the
        Non-Contributing Member(s), payment of the Additional Contribution shall
        be
        treated as a Priority Interest under Section 4.06(a)(ii)(A). 

      

      (b) Priority
        Interest.
        If the
        Additional Contribution Members elect to treat the payment of Additional
        Contribution as a contribution for which the Additional Contribution Members
        receive a Priority Interest, then the following shall apply:

      

      (i) Each
        Additional Contribution Member shall receive a Priority Interest in the
        distributions from the Company that would otherwise be due and payable to
        the
        Non-Contributing Member(s). The Priority Interest received by each Additional
        Contribution Member shall be in the proportion that the amount of the Additional
        Contribution paid by that Additional Contribution Member bears to the amount
        of
        the Additional Contributions made by all Additional Contribution Members
        (each
        Additional Contribution Member’s percentage share of the Priority Interests
        shall be its “Priority Interest Sharing Ratio”). All distributions from the
        Company that would otherwise be due and payable to the Non-Contributing
        Member(s) instead shall be paid to the Additional Contribution Members in
        accordance with their respective Priority Interest Sharing Ratio and no
        distribution shall be made from the Company to any Non-Contributing Member
        until
        all Priority Interests have terminated. The Priority Interest shall terminate
        with respect to an Additional Contribution Member when that Additional
        Contribution Member has received either through the distributions it receives
        under its Priority Interest or through payment(s) to it by the Non-Contributing
        Member(s) (which payment(s) may be made by the Non-Contributing Member(s)
        at any
        time) of an amount equal to the Additional Contribution made by such Member,
        plus a return thereon of fourteen percent (14%) per annum (compounded monthly
        on
        the outstanding balance). For the purpose of making this calculation, all
        amounts received by an Additional Contribution Member shall be deemed to
        be
        applied first against a return on, and then to the amount of, the Additional
        Contribution. For purposes of maintaining Capital Accounts, any amount paid
        by a
        Non-Contributing Member to a Contributing Member to reduce and/or terminate
        a
        Priority Interest shall be treated as though such amount were contributed
        by the
        Non-Contributing Member to the Company and thereafter distributed by the
        Company
        to the Contributing Member with respect to its Priority Interest.

      

      (ii) The
        Priority Interests shall not alter the Sharing Ratios, nor shall the Priority
        Interests alter any distributions to the Contributing Members (in their capacity
        as Contributing Members, as opposed to their capacity as Additional Contribution
        Members) in accordance with their respective Sharing Ratios. Notwithstanding
        any
        provision in this Agreement to the contrary, a Member may not dispose of
        all or
        a portion of its Priority Interest except to a Person to which it Disposes
        all
        or the applicable pro rata portion of its Membership Interest and its or
        its
        Affiliates’ LP Interest after compliance with the requirements of this Agreement
        for the Disposition.

      

      (iii) For
        so
        long as any Additional Contribution Member holds a Priority Interest (or
        it or
        any of its Affiliates that is an “Additional Contribution Partner” holds a
“Priority Interest,” as those terms are defined in the Partnership Agreement),
        neither any Non-Contributing Member nor its Representative (except for a
        Non-Contributing Member that has paid to the Additional Contribution Member(s)
        all of the amount of the Additional Contribution attributable to such
        Non-Contributing Member in accordance with Section 4.06(b)(i)) shall have
        the
        right to vote its Membership Interest (or Sharing Ratio) under the Agreement
        with respect to any decision regarding distributions from the Company, and
        any
        distribution to which such Non-Contributing Member is entitled shall be paid
        to
        the Additional Contribution Members in respect of the Priority
        Interest.

      

      (iv) No
        Member
        that is a Non-Contributing Member may Dispose of its Membership Interest
        unless,
        at the closing of the Disposition, either the Non-Contributing Member or
        the
        proposed Assignee pays the amount necessary to terminate the Priority Interest
        arising from such Non-Contributing Member’s failure to contribute. No Assignee
        shall be admitted to the Company as a Member until compliance with this Section
        4.06(b)(iv) has occurred.

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      (c) Permanent
        Contribution.
        Subject
        to Section 4.06(a), if the Additional Contribution Members elect under Section
        4.06(a) to have the Additional Contribution treated as a permanent capital
        contribution, then each Additional Contribution Member that funds a portion
        of
        the Additional Contribution shall have its capital account increased accordingly
        and the Members’ Membership Interests and Sharing Ratios will be automatically
        adjusted to equal each Member’s total Capital Contributions when expressed as a
        percentage of all Members’ Capital Contributions.

      

      (d) Further
        Assurance.
        In
        connection with this Section 4.06, each Member shall execute and deliver
        any
        additional documents and instruments and perform any additional acts that
        may be
        necessary or appropriate to effectuate and perform the provisions of this
        Section 4.06.

      

      ARTICLE
        5

      DISTRIBUTIONS
        AND ALLOCATIONS

       

      5.01 Distributions.
        On or
        before the 30th Day following the end of each Quarter, the Management Committee
        shall review and determine the amount of Available Cash with respect to that
        Quarter and shall direct that the Company distribute an amount equal to 100%
        of
        Available Cash with respect to that Quarter. That amount shall, subject to
        Section 18-607 of the Act, be distributed in accordance with this Article
        5 to
        the Members (other than a Breaching Member) in proportion to their respective
        Sharing Ratios (at the time the distributions are made).

       

      5.02 Distributions
        on Dissolution and Winding Up.
        Upon the
        winding up of the Company, after adjusting the Capital Accounts for all
        distributions made under Section 5.01 and all allocations under Article 5,
        all
        available proceeds distributable to the Members as determined under Section
        11.02 shall be distributed to all of the Members (other than a Breaching
        Member)
        pro rata in accordance with the Members’ positive Capital Account
        balances.

       

      5.03 Withholding.
        The
        Company is authorized to withhold from distributions to a Member and to pay
        over
        to a federal, state, local or non-United States government, any amounts required
        to be withheld pursuant to the Code, or any provisions of any other federal,
        state, local or non-United States law. Any amounts so withheld shall be treated
        as having been distributed to the applicable Member for all purposes of this
        Agreement and shall be offset against the current or next amounts otherwise
        distributable to the applicable Member.

      

      5.04 Allocations.

      

      (a) After
        giving effect to the special allocations set forth in Sections 5.05 and 5.06,
        for purposes of maintaining the Capital Accounts pursuant to Section 4.05
        and
        for income tax purposes, except as provided in Section 5.03(b) and (c), each
        item of income, gain, loss, deduction and credit of the Company shall be
        allocated to the Members in accordance with their respective Sharing
        Ratios.

      

      (b) With
        respect to each period during which a Priority Interest is outstanding, each
        Additional Contribution Member shall be allocated items of income and gain
        in an
        amount equal to the return that accrues with respect to that Additional
        Contribution Member’s Additional Contribution pursuant to Section 4.06(b)(i),
        and items of income and gain that would otherwise be allocable to the
        Non-Contributing Member(s) shall be correspondingly reduced.

      

      (c) For
        income tax purposes, income, gain, loss, and deduction with respect to property
        contributed to the Company by a Member or revalued pursuant to Treasury
        Regulation Section 1.704-1(b)(2)(iv)(f) shall be allocated among the Members
        in
        a manner that takes into account the variation between the adjusted tax basis
        of
        such property and its book value, as required by Section 704(c) of the Code
        and
        Treasury Regulation Section 1.704-1(b)(4)(i). These allocations shall be
        made in
        such manner and utilizing such permissible tax election as are determined
        by the
        Tax Matters Member.

       

      5.05 Special
        Allocations.
        The
        following special allocations shall be made in the following
        order:

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      (a) Company
        Minimum Gain Chargeback.
        Except
        as otherwise provided in Treasury Regulation Section 1.704-2(f), notwithstanding
        any other provision of this Article 5, if there is a net decrease in Company
        Minimum Gain during any fiscal year, each Member shall be specially allocated
        items of Company income and gain for such fiscal year (and, if necessary,
        subsequent fiscal years) in an amount equal to such Member’s share of the net
        decrease in Company Minimum Gain, determined in accordance with Treasury
        Regulation Section 1.704-2(g). Allocations pursuant to the previous sentence
        shall be made in proportion to the respective amounts required to be allocated
        to each Member pursuant thereto. The items to be so allocated shall be
        determined in accordance with Treasury Regulation Sections 1.704-2(f)(6)
        and
        1.704-2(j)(2). This Section 5.05(a) is intended to comply with the partnership
        minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f)
        and shall be interpreted and applied consistently therewith.

      

      (b) Member
        Minimum Gain Chargeback.
        Except
        as otherwise provided in Treasury Regulation Section 1.704-2(i)(4),
        notwithstanding any other provision of this Article 5, if there is a net
        decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt
        during
        any fiscal year, any Member with a share of that Member Minimum Gain
        attributable to such a Member Nonrecourse Debt (as determined under Treasury
        Regulation Section 1.704-2(i)(5)) as of the beginning of the year shall be
        allocated items of Company income and gain for such fiscal year (and, if
        necessary, subsequent fiscal years) in an amount equal to such Member’s share of
        the net decrease in Member Minimum Gain, determined in accordance with Treasury
        Regulation Section 1.704-2(i)(4). Allocations pursuant to the previous sentence
        shall be made in proportion to the respective amounts required to be allocated
        to each Member pursuant thereto. The items to be so allocated shall be
        determined in accordance with Treasury Regulation Sections 1.704-2(f)(6)
        and
        1.704-2(j)(2). This Section 5.05(b) is intended to comply with the partner
        minimum gain chargeback requirements in the Treasury Regulations and shall
        be
        interpreted and applied consistently therewith.

      

      (c) Qualified
        Income Offset.
        In the
        event any Member unexpectedly receives any adjustments, allocations, or
        distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
        (5), or (6), items of Company income and gain shall be specially allocated
        to
        such Member in an amount and manner sufficient to eliminate, to the extent
        required by the Treasury Regulations, the Adjusted Capital Account Deficit
        as
        quickly as possible; provided, however, that an allocation pursuant to this
        Section 5.05(c) shall be made only if and to the extent that such Member
        would
        have an Adjusted Capital Account Deficit after all other allocations provided
        in
        this Article 5 have been tentatively made as if this Section 5.05(c) were
        not in
        this Agreement. This Section 5.05(c) is intended to comply with the qualified
        income offset provision in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)
        and
        shall be interpreted and applied consistently therewith.

      

      (d) Gross
        Income Allocation.
        In the
        event any Member has a deficit Capital Account at the end of any fiscal year
        that is in excess of the amount that such Member is deemed to be obligated
        to
        restore pursuant to the penultimate sentences of Treasury Regulation Sections
        1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated
        items of Company income and gain in an amount and manner sufficient to eliminate
        such deficit as quickly as possible; provided, however, that an allocation
        pursuant to this Section 5.05(d) shall be made only if and to the extent
        that
        such Member would have a deficit Capital Account in excess of such sum after
        all
        other allocations provided in this Article 5 have been tentatively made as
        if
        Section 5.05(c) and this Section 5.05(d) were not in this
        Agreement.

      

      (e) Nonrecourse
        Deductions.
        Nonrecourse Deductions for any fiscal year shall be specially allocated to
        the
        Members in the manner determined by the Tax Matters Partner and each Member’s
        share of excess Nonrecourse Debt shall be in the same manner.

      

      (f) Member
        Nonrecourse Deductions.
        Member
        Nonrecourse Deductions for any fiscal year shall be specially allocated to
        the
        Member who bears the economic risk of loss with respect to the Member
        Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable
        in
        accordance with Treasury Regulation Section 1.752-2. If more than one Member
        bears the economic risk of loss for a Member Nonrecourse Debt, any Member
        Nonrecourse Deductions attributable to that Member Nonrecourse Debt shall
        be
        allocated among the Members according to the ratio in which they bear the
        economic risk of loss.

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      5.06 Curative
        Allocations.
        The
        allocations set forth in Section 5.05 (the “Regulatory Allocations”) are
        intended to comply with certain requirements of the Treasury Regulations.
        It is
        the intent of the Members that, to the extent possible, all Regulatory
        Allocations shall be offset either with other Regulatory Allocations or with
        special allocations of other items of Company income, gain, loss or deduction
        pursuant to this Section 5.06. Therefore, notwithstanding any other provision
        of
        this Agreement, the Regulatory Allocations shall be taken into account in
        allocating items of Company income, gain, loss and deduction among the Members
        so that, to the extent possible, the net amount of such allocations of other
        items and the Regulatory Allocations to each Member shall be equal to the
        net
        amount that would have been allocated to each such Member pursuant to Section
        5.01 if the Regulatory Allocations had not occurred.

       

      5.07 Varying
        Interests.
        All
        items of income, gain, loss, deduction or credit shall be allocated, and
        all
        distributions shall be made, to the Persons shown on the records of the Company
        to have been Members as of the last calendar day of the period for which
        the
        allocation or distribution is to be made. Notwithstanding the foregoing,
        if
        during any taxable year there is a change in any Member’s Sharing Ratio, the
        Members agree that their allocable shares of items for the taxable year shall
        be
        determined on any method determined by the Management Committee to be
        permissible under Code Section 706 and the related Treasury Regulations to
        take
        account of the Members’ varying Sharing Ratios.

      

      ARTICLE
        6

      MANAGEMENT

      

      

      6.01 Generally.
        The
        management of the Company is fully vested in the Members. To facilitate the
        orderly and efficient management of the Company, the Members shall act (a)
        collectively as a the “Management Committee” as provided in Section 6.02, and
        (b) through the delegation of certain duties and authority to the Operator
        and
        the Officers. Subject to the express provisions of this Agreement, each Member
        agrees that it will not exercise its authority under the Act to bind or commit
        the Company or the Partnership to agreements, transactions or other
        arrangements, or to hold itself out as an agent of the Company or the
        Partnership.

       

      6.02 Management
        Committee.
        Decisions
        or actions taken by the Management Committee in accordance with the provisions
        of this Agreement shall constitute decisions or actions by the Company and
        shall
        be binding on each Member, Representative, Officer and employee of the Company.
        The Management Committee shall conduct its affairs in accordance with the
        following provisions and the other provisions of this Agreement:

      

      (a) Representatives.

      

      (i) Designation.
        To
        facilitate the orderly and efficient conduct of Management Committee meetings,
        each Member shall notify the other Members, from time to time, of the identity
        of (A) one of its officers, employees or agents who will represent it at
        meetings (a “Representative”), and (B) one of its officers, employees or agents
        who will represent it at any meeting that the Member’s Representative is unable
        to attend (“Alternate Representative”). (The term “Representative” shall also
        refer to any Alternate Representative that is actually performing the duties
        of
        the applicable Representative.). The initial Representative and Alternate
        Representative of each Member are set forth in Exhibit A. A Member may designate
        a different Representative or Alternate Representative for any meeting of
        the
        Management Committee by notifying each of the other Members on or before
        the
        third Business Day prior to the scheduled date for that meeting; provided,
        however, that if giving that advance notice is not feasible, then the new
        Representative or Alternate Representative shall present written evidence
        of his
        or her authority at the commencement of such meeting.

      

      (ii) Authority.
        Each
        Representative shall have the full authority to act on behalf of the Member
        that
        designated that Representative; the action of a Representative at a meeting
        (or
        through a written consent) of the Management Committee shall bind the Member
        that designated that Representative; and the other Members shall be entitled
        to
        rely upon such action without further inquiry or investigation as to the
        actual
        authority (or lack thereof) of that Representative. In addition, the act
        of an
        Alternate Representative shall be deemed the act of the Representative for
        which
        that Alternate Representative is acting, without the need to produce evidence
        of
        the absence or unavailability of such Representative.

      
        
          
          

        

        
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      (iii) DISCLAIMER
        OF DUTIES; INDEMNIFICATION.
        EACH
        REPRESENTATIVE SHALL REPRESENT, AND OWE DUTIES TO, ONLY THE MEMBER THAT
        DESIGNATED THE REPRESENTATIVE (THE NATURE AND EXTENT OF SUCH DUTIES BEING
        AN
        INTERNAL AFFAIR OF THE MEMBER), AND NOT TO THE COMPANY, THE PARTNERSHIP,
        ANY
        OTHER MEMBER OR REPRESENTATIVE OR ANY OFFICER OR EMPLOYEE OF THE COMPANY
        OR THE
        PARTNERSHIP. THE PROVISIONS OF SECTION 6.02(e)(iii) SHALL ALSO INURE TO THE
        BENEFIT OF EACH MEMBER’S REPRESENTATIVE. THE COMPANY SHALL INDEMNIFY, PROTECT,
        DEFEND, RELEASE AND HOLD HARMLESS EACH REPRESENTATIVE FROM AND AGAINST ANY
        CLAIMS ASSERTED BY OR ON BEHALF OF ANY PERSON (INCLUDING ANOTHER MEMBER),
        OTHER
        THAN THE MEMBER THAT DESIGNATED THE REPRESENTATIVE, THAT ARISE OUT OF, RELATE
        TO
        OR ARE OTHERWISE ATTRIBUTABLE TO, DIRECTLY OR INDIRECTLY, THE REPRESENTATIVE’S
        SERVICE ON THE MANAGEMENT COMMITTEE.

      

      (iv) Attendance.
        Each
        Member shall use all reasonable efforts to cause its Representative or Alternate
        Representative to attend each meeting of the Management Committee, unless
        its
        Representative is unable to do so because of a “force majeure” event or other
        event beyond his reasonable control, in which event that Member shall use
        all
        reasonable efforts to cause its Representative or Alternate Representative
        to
        participate in the meeting by telephone pursuant to Section
        6.02(g).

      

      (b) Procedures.
        The
        Management Committee shall maintain written minutes of each of its meetings,
        which shall be submitted for approval within 10 Days after each meeting.
        The
        Management Committee may adopt whatever rules and procedures relating to
        its
        activities as it may deem appropriate, provided that such rules and procedures
        shall not be inconsistent with or violate the provisions of this
        Agreement.

      

      (c) Time
        and Place of Meetings.
        The
        Management Committee shall meet quarterly, subject to more or less frequent
        meetings upon approval of the Management Committee, at such times and places
        as
        the Representatives may agree. Special meetings of the Management Committee
        may
        be called at such times, and in such manner, as any Member deems necessary.
        Any
        Member calling for any such special meeting shall notify all other Members
        of
        the date and agenda for such meeting on or before the fifth Day prior to
        the
        date of such meeting. This five-Day period may be shortened by unanimous
        vote of
        the Management Committee. All meetings of the Management Committee shall
        be held
        at Spectra’s address as provided on Exhibit A or such other location as the
        Members may agree. Attendance of a Member’s Representative at a meeting of the
        Management Committee shall constitute a waiver of notice of that meeting,
        except
        where the Representative attends the meeting for the express purpose of
        objecting to the transaction of any business on the ground that the meeting
        is
        not lawfully called or convened.

      

      (d) Quorum.
        The
        presence of a Majority Interest shall constitute a quorum for the transaction
        of
        business at any meeting of the Management Committee.

      

      (e) Voting.

      

      (i) Voting
        by Sharing Ratios; Voting Thresholds. Except
        as
        provided otherwise in this Agreement, voting shall be according to the Members’
respective Sharing Ratios. Except as otherwise provided in this Agreement,
        the
        vote of one or more Members holding among them at least a majority of the
        Sharing Ratios (a “Majority Interest”) shall constitute the action of the
        Management Committee.

      

      (ii) DISCLAIMER
        OF DUTIES.
        WITH
        RESPECT TO ANY VOTE, CONSENT OR APPROVAL AT ANY MEETING OF THE MANAGEMENT
        COMMITTEE OR OTHERWISE UNDER THIS AGREEMENT, EACH MEMBER OR ITS REPRESENTATIVE
        MAY GRANT OR WITHHOLD ITS VOTE, CONSENT OR APPROVAL IN ITS SOLE DISCRETION.
        THE
        PROVISIONS OF THIS SECTION 6.02(e)(ii) SHALL APPLY NOTWITHSTANDING THE
        NEGLIGENCE, GROSS NEGLIGENCE, WILLFUL MISCONDUCT, STRICT LIABILITY OR OTHER
        FAULT OR RESPONSIBILITY OF A MEMBER OR ITS REPRESENTATIVE.

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      (iii) Exclusion
        of Certain Members and Their Sharing Ratios.
        With
        respect to any vote, consent or approval, any Breaching Member or Withdrawn
        Member shall be excluded from such decision (as contemplated by Section
        9.03(c)), and the Sharing Ratio of such Breaching Member or Withdrawn Member
        shall be disregarded in calculating the voting thresholds in Section 6.02(e)(i).
        In addition, if any other provision of this Agreement provides that a Majority
        Interest is to be calculated without reference to the Sharing Ratio of a
        particular Member, then the applicable voting threshold, including the number
        of
        Members required, in Section 6.02(e)(i) shall be deemed adjusted
        accordingly.

      

      (f) Action
        by Written Consent.
        Any
        action required or permitted to be taken at a meeting of the Management
        Committee may be taken without a meeting, without prior notice, and without
        a
        vote if a consent or consents in writing, setting forth the action so taken,
        is
        signed by all Members.

      

      (g) Meetings
        by Telephone.
        Members
        may participate in and hold any meeting by means of conference telephone,
        videoconference or similar communications equipment by means of which all
        persons participating in the meeting can hear each other. Participation in
        a
        meeting shall constitute presence in person at the meeting, except where
        a
        Member participates in the meeting for the express purpose of objecting to
        the
        transaction of any business on the ground that the meeting is not lawfully
        called or convened.

      

      (h) Matters
        Requiring Management Committee Approval.
        Except
        as expressly provided elsewhere in this Agreement, none of the following
        actions
        may be taken by, or on behalf of, the Company, for itself or on behalf of
        the
        Partnership, without first obtaining the vote of the Management Committee
        described below:

      

      (i) 90%
        Interest.
        The
        following actions shall require the approval of Members whose sharing Ratios
        total at least 90%:

      

      (A) causing
        or permitting the Company or the Partnership to become Bankrupt (but this
        provision shall not be construed to require any Member to ensure the
        profitability or solvency of the Company or the Partnership);

      

      (B) conducting,
        or authorizing the Partnership to conduct, any activity or business that
        may
        generate income for federal income tax purposes that may not be “qualifying
        income” (as such term is defined pursuant to Section 7704 of the Code);

      

      (C) any
        other
        action that, pursuant to an express provision of this Agreement, requires
        the
        approval of a 90% Interest; 

      

      (D) authorizing
        the Partnership to enter into any contracts with an Affiliate of any Member
        if
        the contract (other than a Storage Agreement conforming with any applicable
        tariff) is for a nominal value in excess of $250,000, or otherwise on terms
        that
        are not arm’s length;

      

      (E) the
        Disposition or abandonment of all or substantially all of the assets of the
        Company or the Partnership; or

      

      (F) causing
        or permitting the Company or the Partnership to merge with, or consolidate
        or
        convert into, any other entity.

      

      (ii) Majority
        Interest.
        A
        Majority Interest shall be required to approve: 

      

      (A) causing
        the Company to take any action as general partner of the Partnership, including
        any right or power of the Company under the Partnership Agreement; 

      

      (B) the
        amount of Available Cash with respect to each Quarter; 

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      (C) approving
        or amending the annual Capital Budget and Operating Budget for the Partnership
        (with it being understood that the latest approved Capital Budget or Operating
        Budget shall be used, and deemed approved, for any subsequent period until
        the
        new Capital Budget or Operating Budget (as applicable) for that period is
        so
        approved), including the parameters under which the Operator and the Officers
        are authorized to expend Partnership funds without further Management Committee
        approval; provided, however, that the Initial Facilities Plan shall serve
        as the
        Capital Budget until a Capital Budget is adopted;

      

      (D) any
        Capital Call under Section 4.01 or loan under Section 4.02; 

      

      (E) any
        additions to or expansion of the Facilities;

      

      (F) engaging
        any engineer, auditor, attorney or other consultant or adviser; or 

      

      (G) modifying
        the Initial Facilities Plan.

      

      (i) Subcommittees.
        The
        Management Committee may create such subcommittees, and delegate to such
        subcommittees such authority and responsibility, and rescind any such
        delegations, as it may deem appropriate.

      

      (j) Officers.
        The
        Management Committee may designate one or more Persons to be officers of
        the
        Company or cause the Company, as general partner of the Partnership, to
        designate one or more Persons as officers of the Partnership (each an
“Officer”). Any Officers so designated shall have such titles and, subject to
        the other provisions of this Agreement, have such authority and perform such
        duties as the Management Committee may delegate to them and shall serve at
        the
        pleasure of the Management Committee and report to the Management Committee.
        

      

      (k) Initial
        Actions. 
        Notwithstanding the foregoing, the Members authorize Spectra, on behalf of
        the
        Company (for itself or as general partner of the Partnership), to take the
        following actions, including the execution and delivery of all appropriate
        documents and instruments to effect the following actions: 

      

      (i) file
        or
        cause to be filed the certificate of limited partnership of the
        Partnership;

      

      (ii) qualify
        the Company as a foreign limited liability company and the Partnership as a
        foreign limited partnership in the Commonwealth of Pennsylvania and any other
        jurisdiction where that qualification is necessary or appropriate;

      

      (iii) obtain
        a
        taxpayer identification number of each of the Company and the
        Partnership;

      

      (iv) open
        the
        initial bank accounts of the Company and the Partnership;

      

      (v) take
        all
        actions and execute and deliver all documents necessary or appropriate to
        effect
        the contributions described in Section 4.01(a)(ii) of this Agreement and
        Section
        4.01(a)(ii) of the Partnership Agreement; and

      

      (vi) take
        all
        actions and execute and deliver all documents, certificates and other
        instruments necessary or appropriate in connection with the Closing under
        the
        PSA.

       

      6.03 Operations
        and Management Agreement.
        The
        Management Committee shall cause the Company to enter into the O&M Agreement
        with the Operator and the Partnership at the same time as the Partnership
        enters
        into it. From the Effective Date until the O&M Agreement is executed and
        delivered as provided in this Section 6.03, the Members authorize the Operator
        to take all actions this Agreement contemplates the Operator will
        perform.

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      6.04 Conflicts
        of Interest.

      

      (a) Until
        the
        end of the Term, the Members shall not, and shall cause their Affiliates
        not to,
        develop, construct, own, acquire or operate natural gas storage facilities
        or
        oil or gas exploration or production within the area identified on Exhibit
        C to
        this Agreement. The provisions of this Section 6.04(a) shall continue to
        bind a
        Withdrawn Member and its Affiliates until the third anniversary of such
        Withdrawal, but not thereafter. The Members agree that the provisions of
        this
        Section 6.04(a) are necessary (A) to further the purposes, business and
        activities of the Partnership, and (B) to protect confidential and proprietary
        information regarding the Partnership, to which the Members will have access
        pursuant to this Agreement. The Members agree that no adequate remedy at
        law
        exists for a breach or threatened breach of any of the provisions of this
        Section 6.04(a), the continuation of which unremedied will cause the Partnership
        and the other Members to suffer irreparable harm. Accordingly, the Members
        agree
        that the Partnership and the other Members shall be entitled, in addition
        to
        other remedies that may be available to them, to immediate injunctive relief
        from any breach of any of the provisions of this Section 6.04(a) and to specific
        performance of their rights hereunder, as well as to any other remedies
        available at law or in equity, pursuant to Section 10.04.

      

      (b) Subject
        to Section 6.04(a), a Member or an Affiliate of a Member may engage in and
        possess interests in other business ventures of any and every type and
        description, independently or with others, including ones in competition
        with
        the Partnership or the Company and specifically including natural gas storage
        and oil and gas exploration and production, with no obligation to offer to
        the
        Partnership, the Company, any other Member or any Affiliate of another Member
        the right to participate therein. Subject to Sections 6.04(a), the Partnership
        or the Company may transact business with any Member or Affiliate of a Member,
        provided the terms of those transactions are approved by the Management
        Committee or expressly contemplated by this Agreement or the O&M Agreement.
        Without limiting the generality of the foregoing, the Members recognize and
        agree that their respective Affiliates currently, or in the future may, engage
        in various activities involving natural gas and electricity marketing and
        trading (including futures, options, swaps, exchanges of future positions
        for
        physical deliveries and commodity trading), gathering, processing, storage,
        transportation and distribution, electric generation, development and ownership,
        as well as other commercial activities related to natural gas and that these
        and
        other activities by Members’ Affiliates may be based on natural gas that is
        stored in the Facilities or otherwise made possible or more profitable by
        reason
        of the Partnership’s activities (herein referred to as “Affiliate’s Outside
        Activities”). Subject to Sections 6.04(a), (i) no Affiliate of a Member shall be
        restricted in its right to conduct, individually or jointly with others,
        for its
        own account any Affiliate’s Outside Activities, and (ii) no Member or its
        Affiliates shall have any duty or obligation, express or implied, fiduciary
        or
        otherwise, to account to, or to share the results or profits of such Affiliate’s
        Outside Activities with, the Partnership, the Company, any other Member or
        any
        Affiliate of any other Member, by reason of such Affiliate’s Outside Activities.
        The provisions of this Section 6.04(b) constitute an agreement to modify
        or
        eliminate fiduciary duties pursuant to the provisions of Section 18-1101
        of the
        Act. 

       

      6.05 Indemnification
        for Breach of Agreement.
        Each
        Member shall indemnify, protect, defend, release and hold harmless each other
        Member, its Representative, its Affiliates, and its and their respective
        directors, officers, trustees, employees and agents from and against any
        Claims
        asserted by or on behalf of any Person (including another Member) that result
        from a breach by the indemnifying Member of this Agreement or the Partnership
        Agreement; provided, however, that this Section 6.05 shall not (a) apply
        to any
        Claim or other matter for which a Member (or its Representative) has no
        liability or duty, or is indemnified or released, pursuant to Section
        6.02(a)(iii), 6.02(e)(ii) or 6.04 or pursuant to the terms of any Storage
        Agreements or (b) hold the indemnified Person harmless from special,
        consequential or exemplary damages, except in the case where the indemnified
        Person is legally obligated to pay such damages to another Person.

       

      6.06 General
        Regulatory Matters.
        Each
        Member shall:

      

      (a) cooperate
        fully with the Company, the Partnership, the Management Committee and the
        Operator in securing appropriate Authorizations for the development,
        construction and operation of the Facilities, including supporting all
        applications to the Governmental Authorities, and in connection with any
        reports
        prescribed by any other Governmental Authority having jurisdiction over the
        Company or the Partnership; 

      

      (b) join
        in
        any eminent domain takings by the Partnership, to the extent, if any, required
        by Law; 

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      (c) devote
        such efforts as shall be reasonable and necessary to develop and promote
        the
        Facilities for the benefit of the Partnership, taking into account the Member’s
        Sharing Ratio, resources and expertise; and 

      

      (d) cooperate
        fully with the Company, the Partnership, the Management Committee and the
        Operator to ensure compliance with FERC Standards of Conduct, if
        applicable.

       

      6.07 Initial
        Facilities.
        

      

      (a) The
        Company, as general partner of the Partnership, shall cause the Partnership
        to
        develop and construct the Initial Facilities in accordance with the plan
        on
        Exhibit D, subject to such changes as the Management Committee may adopt
        from
        time to time (the “Initial Facilities Plan”).

      

      (b) The
        Company, as general partner of the Partnership, shall seek third-party
        debt for the Partnership to complete the Initial Facilities after
        receipt of appropriate FERC or state Authorizations and the execution and
        delivery of Storage Agreements for firm storage of at least 70% of the storage
        capacity of the Initial Facilities for an average period of at least 10 years
        or
        other appropriate financing. The Company, as general partner of the Partnership,
        shall cause the Partnership to enter into any such financing on such terms
        as
        the Management Committee may approve.

      

      ARTICLE
        7

      TAXES

      

      7.01 Tax
        Returns.
        In
        accordance with the O&M Agreement, the Operator is to prepare and timely
        file (on behalf of the Company) all federal, state and local tax returns
        required to be filed by the Company. Each Member shall furnish to the Operator
        all pertinent information in its possession relating to the Company and the
        Partnership’s operations that is necessary to enable the Company’s tax returns
        to be timely prepared and filed. The Company shall bear the costs of the
        preparation and filing of its returns.

       

      7.02 Tax
        Elections.
        The
        Company shall make the following elections on the appropriate tax
        returns:

      

      (a) to
        adopt
        as the Company’s fiscal year the calendar year;

      

      (b) to
        adopt
        the accrual method of accounting;

      

      (c) if
        a
        distribution of the Company’s property as described in Code Section 734 occurs
        or upon a transfer of a Membership Interest as described in Code Section
        743
        occurs, on request by notice from any Member, to elect, pursuant to Code
        Section
        754, to adjust the basis of the Company’s properties;

      

      (d) to
        elect
        to amortize the organizational expenses of the Company ratably over a period
        of
        60 months as permitted by Section 709(b) of the Code; 

      

      (e) to
        elect
        to depreciate or amortize the assets of the Company using the most rapid
        means
        available; and

      

      (f) any
        other
        election the Management Committee may deem appropriate.

      Neither
        the Company nor any Member shall make an election for the Company to be excluded
        from the application of the provisions of subchapter K of chapter 1 of subtitle
        A of the Code or any similar provisions of applicable state law and no provision
        of this Agreement shall be construed to sanction or approve such an
        election.

       

      7.03 Tax
        Matters Member.

      

      
         

        
          25

          
            

          

        

        
          
          

        

      

      
        (a) Spectra
          or such other Member as the Management Committee may designate shall serve
          as
          the “tax matters partner” of the Company pursuant to Section 6231(a)(7) of the
          Code (the “Tax Matters Member”). The Tax Matters Member shall take such action
          as may be necessary to cause to the extent possible each other Member to
          become
          a “notice partner” within the meaning of Section 6223 of the Code. The Tax
          Matters Member shall inform
          each other Member of all significant matters that may come to its attention
          in
          its capacity as Tax Matters Member by giving notice thereof on or before
          the
          fifth Business Day after becoming aware thereof and, within that time,
          shall
          forward to each other Member copies of all significant written communications
          it
          may receive in that capacity.

      

      

      (b) The
        Tax
        Matters Member shall provide any Member, upon request, access to accounting
        and
        tax information and schedules as shall be necessary for the preparation by
        such
        Member of its income tax returns and such Member’s tax information reporting
        requirements.

      

      (c) The
        Tax
        Matters Member shall take no action without the authorization of the Management
        Committee, other than such action as may be required by Law. Any cost or
        expense
        incurred by the Tax Matters Member in connection with its duties, including
        the
        preparation for or pursuance of administrative or judicial proceedings, shall
        be
        paid by the Company.

      

      (d) The
        Tax
        Matters Member shall not enter into any extension of the period of limitations
        for making assessments on behalf of the Members without first obtaining the
        consent of the Management Committee. The Tax Matters Member shall not bind
        any
        Member to a settlement agreement without obtaining the consent of such Member.
        Any Member that enters into a settlement agreement with respect to any Company
        item (as described in Code Section 6231(a)(3)) shall notify the other Members
        of
        the settlement agreement and its terms on or before the 90th Day after the
        date
        of the settlement.

      

      (e) No
        Member
        shall file a request pursuant to Code Section 6227 for an administrative
        adjustment of Company items for any taxable year without first notifying
        the
        other Members. If the Management Committee consents to the requested adjustment,
        the Tax Matters Member shall file the request for the administrative adjustment
        on behalf of the Members. If this consent is not obtained on or before the
        30th
        Day after the notice, or within the period required to timely file the request
        for administrative adjustment, if shorter, any Member, including the Tax
        Matters
        Member, may file a request for administrative adjustment on its own behalf.
        Any
        Member intending to file a petition under Code Sections 6226, 6228 or other
        Code
        Section with respect to any item involving the Company shall notify the other
        Members of that intention and the nature of the contemplated proceeding.
        In the
        case where the Tax Matters Member is the Member intending to file such petition
        on behalf of the Company, such notice shall be given within a reasonable
        period
        of time to allow the other Members to participate in the choosing of the
        forum
        in which such petition will be filed.

      

      (f) If
        any
        Member intends to file a notice of inconsistent treatment under Code Section
        6222(b), that Member shall give reasonable notice under the circumstances
        to the
        other Members of that intent and the manner in which the Member’s intended
        treatment of an item is (or may be) inconsistent with the treatment of that
        item
        by the other Members.

      

      ARTICLE
        8

      BOOKS,
        RECORDS, REPORTS, AND BANK ACCOUNTS

       

      8.01 Maintenance
        of Books; Reports.
        The
        Members acknowledge that the O&M Agreement will include provisions for the
        maintenance of the Company’s books and records and the preparation of various
        reports.

       

      8.02 Bank
        Accounts.
        Funds of
        the Company shall be deposited in such banks or other depositories as shall
        be
        designated from time to time by the Management Committee. All withdrawals
        from
        any such depository shall be made only as authorized by the Management Committee
        and shall be made only by check, wire transfer, debit memorandum or other
        written instruction.

      

      ARTICLE
        9

      WITHDRAWAL

       

      9.01 No
        Right of Withdrawal.
        A
        Member has no power or right voluntarily to Withdraw from the
        Company.

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      9.02 Deemed
        Withdrawal.
        A Member
        is deemed to have Withdrawn from the Company upon the occurrence of any of
        the
        following events:

      

      (a) there
        occurs an event that makes it unlawful for the Member to continue to be a
        Member;

      

      (b) the
        Member becomes Bankrupt;

      

      (c) the
        Member commences liquidation or winding up;

      

      (d) notice
        from a Majority Interest (determined excluding the Member) if the Member
        commits
        a Default and the Default has not been cured; or

      

      (e) the
        Member and/or any of its Affiliates has withdrawn as a Limited Partner under
        the
        Partnership Agreement.

      

      9.03 Effect
        of Withdrawal.
        A Member
        that is deemed to have Withdrawn under Section 9.02 (a “Withdrawn Member”), must
        comply with the following requirements in connection with its
        Withdrawal:

      

      (a) The
        Withdrawn Member ceases to be a Member immediately upon the occurrence of
        the
        applicable Withdrawal event.

      

      (b) The
        Withdrawn Member shall not be entitled to receive any distributions from
        the
        Company except as set forth in Section 9.03(e), and neither it nor its
        Representative shall be entitled to exercise any voting or consent rights,
        or to
        appoint any Representative or Alternative Representative to the Management
        Committee (and the Representative (and the Alternative Representative) appointed
        by such Member shall be deemed to have resigned) or to receive any further
        information (or access to information) from the Company. The Sharing Ratio
        of
        that Member shall not be taken into account in calculating the Sharing Ratios
        of
        the Members for any purposes. This Section 9.03(b) shall also apply to a
        Breaching Member; but if a Breaching Member cures its breach during the
        applicable cure period, then any distributions that were withheld from that
        Member shall be paid to it, without interest.

      

      (c) The
        Withdrawn Member must pay to the Company all amounts it owes to the
        Company.

      

      (d) The
        Withdrawn Member shall remain obligated for all liabilities it may have under
        this Agreement or otherwise with respect to the Company that accrue prior
        to the
        Withdrawal.

      

      (e) From
        the
        date of the Withdrawal to the date of the payment, the former Capital Account
        balance of the Withdrawn Member shall be recorded as a contingent obligation
        of
        the Company, and not as a Capital Account, until payment is made. The rights
        of
        a Withdrawn Member under this Section 9.03(e) shall (i) be subordinate to
        the
        rights of any other creditor of the Company, (ii) not include any right on
        the
        part of the Withdrawn Member to receive any interest (except as may otherwise
        be
        provided in the evidence of any indebtedness of the Company owed to such
        Withdrawn Member) or other amounts with respect thereto; (iii) not require
        the
        Company to make any distribution (the Withdrawing Member’s rights under this
        Section 9.03(e) being limited to receiving such portion of distributions
        as the
        Management Committee may, in its Sole Discretion, decide to cause the Company
        to
        make); (iv) not require any Member to make a Capital Contribution or a loan
        to
        permit the Company to make a distribution or otherwise to pay the Withdrawing
        Member; and (v) be treated as a liability of the Company for purposes of
        Section
        11.02. Subject to the foregoing, payment to the Withdrawn Member of its Capital
        Account balance shall be made upon the earliest of: (A) such time as the
        Management Committee determines in its Sole Discretion to make such payment,
        (B)
        the later of (I) two years from the date of Withdrawal, and (II) ten years
        from
        the date that the Initial Facilities are placed into commercial operation,
        and
        (C) the dissolution of the Company. Except as set forth in this Section 9.03(e),
        a Withdrawn Member shall not be entitled to receive any return of its Capital
        Contributions or other payment from the Company in respect of its Membership
        Interest.

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      (f) The
        Sharing Ratio of the Withdrawn Member shall be allocated among the remaining
        Members in the proportion that each Member’s Sharing Ratio bears to the total
        Sharing Ratio of all remaining Members, or in such other proportion as the
        Members may unanimously agree.

      

      

      ARTICLE
        10

      DISPUTE
        RESOLUTION

       

      10.01 Disputes.
        This
        Article 10 shall apply to any dispute arising under or related to this Agreement
        (whether arising in contract, tort or otherwise, and whether arising at law
        or
        in equity), including (a) any dispute regarding the construction,
        interpretation, performance, validity or enforceability of any provision
        of this
        Agreement or whether any Person is in compliance with, or breach of, any
        provisions of this Agreement, and (b) the applicability of this Article 10
        to a
        particular dispute. Notwithstanding the foregoing, this Article 10 shall
        not
        apply to any matters that, pursuant to the provisions of this Agreement,
        are to
        be resolved by a vote of the Members (including through the Management
        Committee); provided, however, that (i) any matter that is expressly stated
        herein to be determinable by arbitration may be so determined pursuant to
        this
        Article 10 and (ii) if a vote, approval, consent, determination or other
        decision must, under the terms of this Agreement, be made (or withheld) in
        accordance with a standard other than Sole Discretion (such as a reasonableness
        standard), then the issue of whether such standard has been satisfied may
        be a
        dispute to which this Article 10 applies. Any dispute to which this Article
        10
        applies is referred to herein as a “Dispute.” With respect to a particular
        Dispute, each Member that is a party to such Dispute is referred to herein
        as a
“Disputing Member.” The provisions of this Article 10 shall be the exclusive
        method of resolving Disputes. 

       

      10.02 Negotiation
        to Resolve Disputes.
        If
        a
        Dispute arises, any Disputing Member may initiate the dispute resolution
        procedure under this Article 10 by notifying the other Disputing Members
        (a
“Dispute Notice”), after which the Disputing Members shall attempt to resolve
        such Dispute through the following procedure:

      

      (a) first,
        within 7 Days after receipt of the Dispute Notice, the Representatives of
        the
        Disputing Members shall meet (whether by phone or in person) in a good faith
        attempt to resolve the Dispute;

      

      (b) second,
        if the Dispute is still unresolved, then after the 20th Day following the
        commencement of the negotiations described in Section 10.02(a) but in no
        event
        later than the 30th Day after receipt of the Dispute Notice, the chief executive
        officer (or his designee) of the Parent of each Disputing Member shall meet
        (whether by phone or in person) in a good faith attempt to resolve the Dispute;
        and

      

      (c) third,
        if
        the Dispute is still unresolved, then after the 10th Day following the
        commencement of the negotiations described in Section 10.02(b), any Disputing
        Party may submit the Dispute for resolution under the Federal Arbitration
        Act by
        binding arbitration following the Commercial Arbitration Rules of the American
        Arbitration Association (or, if that Association has ceased to exist, its
        principal successor) (the “AAA”) then in effect, including its evidentiary and
        procedural rules (excluding rules governing the payment of arbitration,
        administrative or other fees or expenses to the Arbitrator(s) or the AAA),
        to
        the extent that such rules do not conflict with the terms of this Agreement,
        by
        notifying the other Disputing Members (an “Arbitration Notice”) within the
        applicable limitation period provided by law. 

       

      10.03 Selection
        of Arbitrator.

      

      (a) For
        any
        case in which any claim, or combination of claims, is less than or equal
        to
        $2,000,000, the arbitration shall be heard by a sole Arbitrator. Any case
        in
        which any claim, or combination of claims, exceeds $2,000,000 will be subject
        to
        the AAA’s Large, Complex Case Procedures and decided by the majority of a panel
        of three neutral Arbitrators. The Arbitrator(s) shall be selected in accordance
        with this Section 10.03. 

      

      (b) For
        arbitrations conducted by a single Arbitrator, the Disputing Member that
        submits
        a Dispute to arbitration shall designate a proposed neutral sole Arbitrator
        in
        its Arbitration Notice. If any other Disputing Member objects to a proposed
        sole
        Arbitrator, it may, on or before the tenth Day following delivery of the
        Arbitration Notice, notify all of the other Disputing Members of its objection.
        All of the Disputing Members shall 

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      attempt
        to agree upon a mutually acceptable sole Arbitrator. If they have not done
        so,
        then after the 20th Day following delivery of the notice described in the
        immediately preceding sentence, any Disputing Member may request the AAA
        to
        designate the sole Arbitrator. For arbitrations conducted by a panel of three
        Arbitrators, the Disputing Member initiating arbitration shall nominate one
        Arbitrator at the time it initiates arbitration. The other Disputing Member(s)
        shall collectively nominate one Arbitrator on or before the 10th Day after
        receiving the Arbitration Notice. The two Arbitrators shall appoint a third,
        neutral Arbitrator. All arbitrators shall be competent and experienced in
        matters involving the gas storage business in the United States, with at
        least
        ten years of legal, engineering, or business experience in the gas industry,
        and
        shall be impartial and independent of the Members (and the other arbitrators,
        in
        the case of arbitrations conducted by a panel of three arbitrators, except
        for
        prior arbitrations) (each an “Arbitrator”). Each Disputing Member shall pay for
        the expenses incurred by the Arbitrator it appoints, if applicable, and the
        costs of the sole Arbitrator or the third Arbitrator shall be divided equally
        among the Disputing Members. If any Arbitrator so chosen shall die, resign
        or
        otherwise fail or becomes unable to serve as Arbitrator, a replacement
        Arbitrator shall be chosen in accordance with this Section 10.03.

       

      10.04 Conduct
        of Arbitration.
        The
        Arbitrator(s) shall expeditiously (and, if possible, on or before the 90th
        Day
        after the Arbitrator(s)’s selection) hear and decide all matters concerning the
        Dispute. Any arbitration hearing shall be held in Wilmington, Delaware. Except
        as expressly provided to the contrary in this Agreement, the Arbitrator(s)
        shall
        have the power (a) to gather such materials, information, testimony and evidence
        as it deems relevant to the dispute before it (and each Member will provide
        such
        materials, information, testimony and evidence requested by the Arbitrator(s),
        except to the extent any information so requested is proprietary, subject
        to a
        third-party confidentiality restriction or to an attorney-client or other
        privilege) and (b) to grant injunctive relief and enforce specific performance.
        If they deem necessary, the Arbitrator(s) may propose to the Disputing Members
        that one or more other experts be retained to assist it in resolving the
        Dispute. The retention of such other experts shall require the unanimous
        consent
        of the Disputing Members, which shall not be unreasonably withheld. Each
        Disputing Member, the Arbitrator(s) and any proposed expert shall disclose
        to
        the other Disputing Members any business, personal or other relationship
        or
        affiliation that may exist or may have existed between the Disputing Member
        (or
        the Arbitrator(s)) and the proposed expert; and any Disputing Member may
        disapprove of the proposed expert on the basis of that relationship or
        affiliation. The decision of the Arbitrator(s) (which shall be rendered in
        writing) shall be final, nonappealable and binding upon the Disputing Members
        and may be enforced in any court of competent jurisdiction; provided, however,
        that the Members agree that the Arbitrator(s) and any court enforcing the
        award
        of the Arbitrator(s) shall not have the right or authority to award punitive,
        special, consequential, indirect, exemplary or similar damages to any Disputing
        Member. The responsibility for paying the costs and expenses of the arbitration,
        including compensation to any experts retained by the Arbitrator(s), shall
        be
        divided equally among the Disputing Members. Each Disputing Member shall
        be
        responsible for the fees and expenses of its respective counsel, consultants
        and
        witnesses, unless the Arbitrator(s) determines that compelling reasons exist
        for
        allocating all or a portion of those costs and expenses to one or more other
        Disputing Members.

       

      10.05 Consolidation.
        While
        any matter is before the Arbitrator under this Article 10, if any of the
        Disputing Members party to the arbitration, or, if applicable, their Affiliates
        desire to bring a matter before an arbitrator under the Partnership Agreement,
        the matter shall be consolidated with the matter under this Agreement if,
        but
        only if, the Disputing Members under this Agreement and the Persons bringing
        the
        matter before an arbitrator under the Partnership Agreement are the same
        Persons
        or Affiliates of those Persons.

      

      

      ARTICLE
        11

      DISSOLUTION,
        WINDING UP AND TERMINATION

       

      11.01 Dissolution.
        The
        Company shall dissolve and its affairs shall be wound up on the first to
        occur
        of the following events (each a “Dissolution Event”):

      

      (a) the
        unanimous consent of the Management Committee to dissolve the Company and/or
        the
        Partnership;

      

      (b) entry
        of
        a decree of judicial dissolution of the Company under Section 18-802 of the
        Act;

      

      (c) the
        Disposition or abandonment of all or substantially all of the Company’s and/or
        the Partnership’s business and assets; or

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      (d) an
        event
        that makes it unlawful for the business of the Company or the Partnership
        to be
        carried on.

       

      11.02 Winding
        Up and Termination.

      

      (a) On
        the
        occurrence of a Dissolution Event, the Operator shall serve as liquidator
        under
        the supervision of the Management Committee. The liquidator shall proceed
        diligently to wind up the affairs of the Company and make final distributions
        as
        provided herein and in the Act. The costs of winding up shall be borne as
        a
        Company expense. Until final distribution, the liquidator shall continue
        to
        operate the Company properties with all of the power and authority of the
        Members. The steps to be accomplished by the liquidator are as
        follows:

      

      (i) as
        promptly as possible after dissolution and again after final winding up,
        the
        liquidator shall cause a proper accounting to be made by a recognized firm
        of
        certified public accountants of the Company’s assets, liabilities and operations
        through the last calendar day of the month in which the dissolution occurs
        or
        the final winding up is completed, as applicable;

      

      (ii) the
        liquidator shall discharge from Company funds all of the indebtedness of
        the
        Company and other debts, liabilities and obligations of the Company (including
        all expenses incurred in winding up and any loans described in Section 4.02)
        or
        otherwise make adequate provision for payment and discharge thereof (including
        the establishment of a cash escrow fund for contingent liabilities in such
        amount and for such term as the liquidator may reasonably determine);
        and

      

      (iii) all
        remaining assets of the Company shall be distributed to the Members as
        follows:

      

      (A) the
        liquidator may sell any or all Company property, including to Members, and
        any
        resulting gain or loss from each sale shall be computed and allocated to
        the
        Capital Accounts of the Members in accordance with the provisions of Article
        5;

      

      (B) with
        respect to all Company property that has not been sold, the fair market value
        of
        that property shall be determined and the Capital Accounts of the Members
        shall
        be adjusted to reflect the manner in which the unrealized income, gain, loss,
        and deduction inherent in property that has not been reflected in the Capital
        Accounts previously would be allocated among the Members if there were a
        taxable
        disposition of that property for the fair market value of that property on
        the
        date of distribution; and

      

      (C) Company
        property (including cash) shall be distributed among the Members in accordance
        with Section 5.02; and those distributions shall be made by the end of the
        taxable year of the Company during which the liquidation of the Company occurs
        (or, if later, the 90th Day after the date of the liquidation).

      

      (b) The
        distribution of cash or property to a Member in accordance with the provisions
        of this Section 11.02 constitutes a complete return to the Member of its
        Capital
        Contributions and a complete distribution to the Member of its Membership
        Interest and all the Company’s property and constitutes a compromise to which
        all Members have consented pursuant to Section 18-502(b) of the Act. To the
        extent that a Member returns funds to the Company, it has no claim against
        any
        other Member for those funds.

      

      (c) No
        dissolution or termination of the Company shall relieve a Member from any
        obligation to the extent such obligation has accrued as of the date of such
        dissolution or termination. Upon such termination, any books and records
        of the
        Company that there is a reasonable basis for believing will ever be needed again
        shall be furnished to the liquidator, which shall keep such books and records
        (subject to review by any Person that was a Member at the time of dissolution)
        for a period at least three years. At such time as the liquidator no longer
        agrees to keep such books and records, it shall offer the Persons who were
        Members at the time of dissolution the opportunity to take over such custody,
        shall deliver such books and records to such Persons if they elect to take
        over
        such custody and may destroy such books and records if they do not so elect.
        Any
        such custody by such Persons shall be on such terms as they may agree upon
        among
        themselves.

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      11.03 Deficit
        Capital Accounts.
        No
        Member will be required to pay to the Company, to any other Member or to
        any
        third party any deficit balance that may exist from time to time in another
        Member’s Capital Account.

       

      11.04 Certificate
        of Cancellation.
        On
        completion of the distribution of Company assets as provided herein, the
        Members
        (or such other Person or Persons as the Act may require or permit) shall
        file a
        certificate of cancellation with the Secretary of State of the State of
        Delaware, cancel any other filings made pursuant to Section 2.05, and take
        such
        other actions as may be necessary to terminate the existence of the Company.
        Upon the filing of such certificate of cancellation, the existence of the
        Company shall terminate (and the Term shall end), except as may be otherwise
        provided by the Act or other applicable Law.

      

      ARTICLE
        12

      GENERAL
        PROVISIONS

       

      12.01 Offset.
        Whenever
        the Company is to pay any sum to any Member, any amounts that Member owes
        the
        Company may be deducted from that sum before payment.

       

      12.02 Notices.
        Except
        as expressly set forth to the contrary in this Agreement, all notices, requests
        or consents provided for or permitted to be given under this Agreement must
        be
        in writing and must be delivered to the recipient in person, by courier or
        mail
        or by facsimile or other electronic transmission. A notice, request or consent
        given under this Agreement is effective on receipt by the Member to receive
        it;
        provided, however, that a facsimile or other electronic transmission that
        is
        transmitted after the normal business hours of the recipient shall be deemed
        effective on the next Business Day. All notices, requests and consents to
        be
        sent to a Member must be sent to or made at the addresses given for that
        Member
        on Exhibit A or in the instrument described in Section 3.03(b)(iii)(A)(II)
        or
        3.04, or such other address as that Member may specify by notice to the other
        Members. Any notice, request or consent to the Company must be given to all
        of
        the Members. Whenever any notice is required to be given by Law, the Certificate
        or this Agreement, a written waiver thereof, signed by the Person entitled
        to
        notice, whether before or after the time stated therein, shall be deemed
        equivalent to the giving of such notice.

       

      12.03 Entire
        Agreement; Superseding Effect.
        This
        Agreement, the Partnership Agreement, and the O&M Agreement constitute the
        entire agreement of the Members and their Affiliates relating to the Company
        and
        the transactions contemplated hereby and supersede all provisions and concepts
        contained in all prior agreements.

      

      12.04 Effect
        of Waiver or Consent.
        Except
        as otherwise provided in this Agreement, a waiver or consent, express or
        implied, to or of any breach or default by any Member in the performance
        by that
        Member of its obligations with respect to the Company is not a consent or
        waiver
        to or of any other breach or default in the performance by that Member of
        the
        same or any other obligations of that Member with respect to the Company.
        Except
        as otherwise provided in this Agreement, failure on the part of a Member
        to
        complain of any act of any Member or to declare any Member in default with
        respect to the Company, irrespective of how long that failure continues,
        does
        not constitute a waiver by that Member of its rights with respect to that
        default until the applicable statute-of-limitations period has run.

       

      12.05 Amendment
        or Restatement.
        This
        Agreement or the Certificate may be amended or restated only by a written
        instrument executed (or, in the case of the Certificate, approved) by all
        Members.

       

      12.06 Binding
        Effect.
        Subject
        to the restrictions on Dispositions set forth in this Agreement, this Agreement
        is binding on and shall inure to the benefit of the Members and their respective
        successors and permitted assigns.

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      12.07 Governing
        Law; Severability. THIS
        AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW
        OF
        THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT
        MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW
        OF
        ANOTHER JURISDICTION. WITHOUT LIMITING THE PROVISIONS OF ARTICLE 10, A MEMBER
        MAY BRING AN ACTION ARISING UNDER OR RELATING TO THIS AGREEMENT, IF AT ALL,
        ONLY
        IN COURTS OF THE STATE OF DELAWARE OR (IF IT HAS JURISDICTION) THE UNITED
        STATES
        DISTRICT COURT FOR THE DISTRICT OF DELAWARE. In
        the
        event of a direct conflict between the provisions of this Agreement and any
        mandatory, non-waivable provision of the Act, such provision of the Act shall
        control. If any provision of the Act provides that it may be varied or
        superseded in a limited liability company agreement (or otherwise by agreement
        of the members or managers of a limited liability company), that provision
        shall
        be deemed superseded and waived in its entirety if this Agreement contains
        a
        provision addressing the same issue or subject matter. If any provision of
        this
        Agreement or the application thereof to any Member or circumstance is held
        invalid or unenforceable to any extent, (a) the remainder of this Agreement
        and
        the application of that provision to other Members or circumstances is not
        affected thereby, and (b) the Members shall negotiate in good faith to replace
        that provision with a new provision that is valid and enforceable and that
        puts
        the Members in substantially the same economic, business and legal position
        as
        they would have been in if the original provision had been valid and
        enforceable.

       

      12.08 Further
        Assurances.
        In
        connection with this Agreement and the transactions it contemplates, each
        Member
        shall execute and deliver any additional documents and instruments and perform
        any additional acts that may be necessary or appropriate to effectuate and
        perform the provisions of this Agreement and those transactions; provided,
        however, that this Section 12.08 shall not obligate a Member to furnish
        guarantees or other credit supports by such Member’s Parent or other
        Affiliates.

       

      12.09 Waiver
        of Certain Rights.
        Each
        Member irrevocably waives any right it may have to maintain any action for
        dissolution of the Company or for partition of the property of the
        Company.

       

      12.10 Counterparts.
        This
        Agreement may be executed in any number of counterparts with the same effect
        as
        if all signing parties had signed the same document. All counterparts shall
        be
        construed together and constitute the same instrument.

      

      

      

      [Remainder
        of page intentionally left blank. Signature page follows.]

      

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Members have executed this Agreement as of the date
        first
        set forth above.

      

      

      MEMBERS:

      

      

      SPECTRA
        ENERGY TRANSMISSION SERVICES, LLC

      

      By:   /s/
        Mark
        Fiedorek
Name:   
        Mark Fiedorek
Title:     
        Vice President

      

      

      NJR
        STECKMAN RIDGE STORAGE COMPANY

      

      By:
        /s/ Glenn C. Lockwood

      Name: 
        Glenn C. lockwood  

      Title:    
        Senior Vice President and

                   
        Chief Financial Officer

      

      

      

      

      

      

      

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        A

      MEMBERS

      

      

      
        	
                Name
                  and Address

              	
                Sharing
                  Ratio

              	
                Parent

              	
                Representative
                  and Alternate Representatives

              
	
                Spectra
                  Energy Transmission Services, LLC

                5400
                  Westheimer Court

                Houston,
                  Texas 77056-5310

                Attn:
                  Christine M. Pallenik

                Fax:
                  (713) 386-4694

              	
                50%

              	
                Spectra
                  Energy Corp

              	
                R.
                  Mark Fiedorek

                Alternate:

                 

                Gregory
                  P. Bilinski

              
	
                NJR
                  Steckman Ridge Storage Company

                1415
                  Wyckoff Road

                Wall,
                  New Jersey 07719

                Attn:
                  William P. Scharfenberg

                Fax:
                  (732) 938-1226

              	
                50%

              	
                New
                  Jersey Resources Corporation

              	
                Richard
                  R. Gardner 

                Alternate:
                  

                 

                Jeffrey
                  S. Davidson

              

      

      

      

      

      

      

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        B

      PARTNERSHIP
        AGREEMENT

      

      

      

      [Attached]

      

      

      

      

      

      

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        C

      NON-COMPETITION
        AREA

      

      

      The
        following areas, from the surface to all depths:

      

      	·  	
              The
                area inside the brown line on Exhibit F to the
                PSA

            

      

      	·  	
              Any
                shaded tracts on Exhibit F to the PSA

            

      

      	·  	
              Any
                other leases conveyed to the Partnership at the Closing under the
                PSA

            

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

      EXHIBIT
        D

      INITIAL
        FACILITIES PLAN

      

      

      
        	
                Acquisition

              	 	
                $105,000,000

              

      

      

      
        	
                Development:

              	 	 
	
                Wells

              	
                -
                  15 new wells

                -
                  5
                  existing well conversions

              	
                $54,382,198

              
	
                Gathering
                  System

              	
                -
                  6.625 in. pipe

                -
                  8.625 in. pipe

                -
                  16 in. pipe

              	
                $31,679,713

              
	
                Station

              	
                -
                  Compressor

                -
                  Cooler

                -
                  Heater

                -
                  Dehydration

                -
                  Slug Catcher

                -
                  Measurement & Regulation

              	
                $36,239,008

              
	
                Pad
                  Gas

              	
                -
                  Gas required to maintain minimum reservoir pressure

              	
                $19,390,352

              
	
                 

                Development
                  Total

              	 	
                $141,691,271

              

      

      

      
        	
                Total

              	 	
                $246,691,271

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