Document:

exhibit10_1.htm

    
      
        
          Exhibit
10.1  

        

      

      
 

       

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      AGREEMENT
OF LIMITED PARTNERSHIP

       

      OF

       

      TEPPCO
UNIT II L.P.

       

      

       

      

       

      

       

      

       

      Dated
as of

       

      November
13, 2008

       

      
        
          
             

            

          

           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

       

       

      ARTICLE I

      DEFINITIONS

       

      
        
          	
                  1.01

                	
                  Certain
      Definitions 

                	
                  1

                
	
                  1.02

                	
                  Other
      Definitions 

                	
                  5

                

        

         

        ARTICLE II

        ORGANIZATIONAL
MATTERS

         

        
          	
                  2.01

                	
                  Formation 

                	
                  5

                
	
                  2.02

                	
                  Name 

                	
                  5

                
	
                  2.03

                	
                  Registered
      Office; Registered Agent; Other Offices 

                	
                  5

                
	
                  2.04

                	
                  Purposes 

                	
                  6

                
	
                  2.05

                	
                  Certificate;
      Foreign Qualification 

                	
                  6

                
	
                  2.06

                	
                  Term 

                	
                  6

                
	
                  2.07

                	
                  Merger
      or Consolidation 

                	
                  6

                

        

         

        ARTICLE III

        PARTNERS;
DISPOSITIONS OF INTERESTS

         

        
          	
                  3.01

                	
                  Partners 

                	
                  6

                
	
                  3.02

                	
                  Representations
      and Warranties 

                	
                  7

                
	
                  3.03

                	
                  Restrictions
      on the Disposition of an Interest 

                	
                  7

                
	
                  3.04

                	
                  Additional
      Partners 

                	
                  9

                
	
                  3.05

                	
                  Interests
      in a Partner 

                	
                  9

                
	
                  3.06

                	
                  Spouses
      of Partners 

                	
                  9

                
	
                  3.07

                	
                  Vesting
      of Limited Partner 

                	
                  9

                
	
                  3.08

                	
                  Services
      Provided by the Partners 

                	
                  10

                

        

         

        ARTICLE IV 

        CAPITAL
CONTRIBUTIONS

         

        
          	
                  4.01

                	
                  Initial
      and Additional Capital Contributions 

                	
                  10

                
	
                  4.02

                	
                  Return
      of Contributions 

                	
                  10

                
	
                  4.03

                	
                  Advances
      by General Partner 

                	
                  10

                
	
                  4.04

                	
                  Capital
      Accounts 

                	
                  11

                

        

         

        ARTICLE V

        ALLOCATIONS
AND DISTRIBUTIONS

         

        
          	
                  5.01

                	
                  Allocations 

                	
                  11

                
	
                  5.02

                	
                  Income
      Tax Allocations 

                	
                  14

                
	
                  5.03

                	
                  Distributions
      of Cash flow from TPP Units 

                	
                  14

                
	
                  5.04

                	
                  Distributions
      of Proceeds from Sales of TPP Units 

                	
                  15

                
	
                  5.05

                	
                  Restrictions
      on Distributions of TPP Units 

                	
                  15

                

        

        

      
        
          
             

             

          

          i 

        

        
           

          
            

          

        

        
           

        

      

      
        ARTICLE VI

        MANAGEMENT
AND OPERATION

        

        
          	
                  6.01

                	
                  Management
      of Partnership Affairs 

                	
                  15

                
	
                  6.02

                	
                  Duties
      and Obligations of General Partner 

                	
                  16

                
	
                  6.03

                	
                  Release
      and Indemnification 

                	
                  16

                
	
                  6.04

                	
                  Power
      of Attorney 

                	
                  17

                

        

         

         

        ARTICLE VII 

        RIGHTS
OF OTHER PARTNERS

         

        
          	
                  7.01

                	
                  Information 

                	
                  18

                
	
                  7.02

                	
                  Limitations 

                	
                  18

                
	
                  7.03

                	
                  Limited
      Liability 

                	
                  19

                

        

         

        ARTICLE VIII 

        TAXES

         

        
          	
                  8.01

                	
                  Tax
      Returns 

                	
                  19

                
	
                  8.02

                	
                  Tax
      Elections 

                	
                  19

                
	
                  8.03

                	
                  Tax
      Matters Partner 

                	
                  19

                

        

         

        ARTICLE IX 

        BOOKS,
RECORDS, REPORTS, AND BANK ACCOUNTS

         

        
          	
                  9.01

                	
                  Maintenance
      of Books 

                	
                  20

                
	
                  9.02

                	
                  Financial
      Statements 

                	
                  20

                
	
                  9.03

                	
                  Bank
      Accounts 

                	
                  20

                

        

         

        ARTICLE X 

        WITHDRAWAL,
BANKRUPTCY, REMOVAL, ETC.

         

        
          	
                  10.01

                	
                  Withdrawal, Bankruptcy, Etc. of
      the General Partner

                	
                  20

                
	
                  10.02

                	
                  Conversion
      of Interest

                	
                  21

                

        

         

        ARTICLE XI 

        DISSOLUTION,
LIQUIDATION, AND TERMINATION

         

        
          	
                  11.01

                	
                  Dissolution

                	
                  21

                
	
                  11.02

                	
                  Liquidation
      and Termination

                	
                  22

                
	
                  11.03

                	
                  Cancellation
      of Certificate

                	
                  23

                

        

         

        ARTICLE XII 

        GENERAL
PROVISIONS

         

        
          	
                  12.01

                	
                  Offset

                	
                  23

                
	
                  12.02 

                	
                  Notices

                	
                  24

                
	
                  12.03

                	
                  Entire
      Agreement; Supersedure

                	
                  24

                

        

      

      
        
          
             

             

          

          ii 

        

        
           

          
            

          

        

        
           

        

      

      
        
          	
                  12.04

                	
                  Effect
      of Waiver or Consent

                	
                  24

                
	
                  12.05

                	
                  Amendment
      or Modification

                	
                  24

                
	
                  12.06

                	
                  Binding
      Effect; Joinder of Additional Parties

                	
                  24

                
	
                  12.07

                	
                  Construction

                	
                  24

                
	
                  12.08

                	
                  Further
      Assurances

                	
                  25

                
	
                  12.09

                	
                  Indemnification

                	
                  25

                
	
                  12.10

                	
                  Waiver
      of Certain Rights

                	
                  25

                
	
                  12.11

                	
                  Counterparts

                	
                  25

                
	
                  12.12

                	
                  Dispute
      Resolution

                	
                  25

                
	
                  12.13

                	
                  No
      Effect on Employment Relationship

                	
                  28

                
	
                  12.14

                	
                  Legal
      Representation

                	
                  28

                

        

        

       

      
        
          
             

             

          

          iii 

        

        
           

          
            

          

        

        
           

        

      

      AGREEMENT
OF LIMITED PARTNERSHIP

       

      OF

       

      TEPPCO
UNIT II L.P.

       

      This
Agreement of Limited Partnership (this “Agreement”) of TEPPCO
Unit II L.P., a Delaware limited partnership (the “Partnership”), is
made and entered into effective as of November 13, 2008 by and among the
Partners (as defined below).

       

      RECITALS

       

      FOR AND
IN CONSIDERATION OF the mutual covenants, rights, and obligations set forth
herein, the benefits to be derived therefrom, and other good and valuable
consideration, the receipt and sufficiency of which each Partner acknowledges
and confesses, the Partners hereby agree as follows:

       

      ARTICLE I  

                                    

      DEFINITIONS

       

      1.01 Certain
Definitions.  As used in this Agreement, the
following terms have the following respective meanings:

       

      “Act” means the
Delaware Revised Uniform Limited Partnership Act and any successor statute, as
amended from time to time.

       

      “Adjusted Capital
Account” means, with respect to any Partner, the balance in such
Partner’s Capital Account after giving effect to the following
adjustments:

       

      (a)           Credit
to such Capital Account of any amounts that such Partner is obligated or deemed
obligated to contribute pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and

       

      (b)           Debit
to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the
Regulations.

       

      The
foregoing definition of Adjusted Capital Account is intended to comply with the
provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be
interpreted consistently therewith.

       

      “Adjustment
Date” means (i) the date on
which any distributions are made pursuant to Section
5.03, but no later than the
fifth Business Day following the payment date for each distribution made by TPP
with respect to the TPP Units, and (ii) as soon as practicable following the
receipt of proceeds by the Partnership from the disposition of TPP Units, but no
later than the fifth Business Day following the receipt of any proceeds by the
Partnership from the disposition of TPP Units.

       

      “Affiliate”
means with respect to any Person any other Person that directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified.  For the purpose of this
definition, “control”
shall mean the 

      
        
          
             

             

          

           

        

        
           

          
            

          

        

        
           

        

      

       

      possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
 

      “Agreement” has the
meaning given it in the introductory paragraph hereof.

       

      “Applicable
Percentage” means with respect to a disposition of less than all the TPP
Units owned by the Partnership, the quotient (expressed as a percentage) of the
number of TPP Units held by the Partnership immediately after such disposition
divided by the number of TPP Units held by the Partnership immediately before
such disposition.

       

      “Bankrupt Partner”
means any Partner (whether a General Partner or a Limited Partner) with respect
to which an event of the type described in Section 17-402(a)(4) or (5) of the
Act (or any equivalent successor provision) shall have occurred, subject to the
lapsing of any period of time therein specified.

       

      “Business Day” means
any day other than a Saturday, Sunday, or day on which commercial banks in the
State of Texas are authorized or required to be closed for
business.

       

      “Capital Account”
means the account maintained for each Partner pursuant to Section 4.04.

       

      “Capital Contribution”
means any contribution by a Partner to the capital of the
Partnership.

       

      “Certificate” means
the Certificate of Limited Partnership of the Partnership referred to in Section 2.05, as
it may be amended or restated from time to time.

       

      “Change of Control”
means Duncan shall (i) cease to own, directly or indirectly, at least a majority
of the equity interests in the General Partner or the general partners of TPP or
(ii) shall cease to have the ability to elect, directly or indirectly, at least
a majority of the directors of the general partners of TPP.

       

      “Class A Capital Base”
means the amount of any contributions of cash or cash equivalents made by the
Class A Limited Partner to the Partnership, adjusted on each Adjustment Date as
follows:

       

      (a)           increased
by the Class A Preference Return that has accrued since the previous Adjustment
Date (or in the case of the first Adjustment Date, since the Closing Date);
and

       

      (b)           decreased
by all distributions made to the Class A Limited Partner since the previous
Adjustment Date (or in the case of the first Adjustment Date, since the Closing
Date).

       

      “Class A Limited
Partner” means Duncan Family Interests, Inc., a Delaware corporation, and
its successors and assigns.

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      “Class A Preference
Return” means the sum of the amounts determined for each day, equal to
(i) the Class A Preference Return Rate multiplied by (ii) the Class A Capital
Base plus the amount, if any, of guarantees issued by the Class A Limited
Partner or its affiliate in lieu of collateral that would otherwise be required
pursuant to margin loans or other loans made to the Partnership.

       

      “Class A Preference Return
Amount” means the aggregate Class A Preference Return minus all prior
distributions to the Class A Limited Partner pursuant to Sections 5.03(a)
and 5.04(a).

       

      “Class A Preference Return
Rate” means a percent per annum equal to 6.31%, divided by 365 or
366 days, as the case may be during such calendar year.

       

      “Class B Limited
Partner” means the Person executing (by power of attorney or otherwise)
this Agreement as of the date hereof as the Class B Limited Partner or any
Person hereafter admitted to the Partnership as a Class B Limited Partner as
herein provided, but shall not include any Person who has ceased to be a Class B
Limited Partner in the Partnership.

       

      “Class B Percentage
Interest” means with respect to any Class B Limited Partner the quotient
(expressed as a percentage) of (i) such Class B Limited Partner’s Sharing
Points, divided by (ii) the Sharing Points of all Class B Limited
Partners.  For purposes of calculating the Class B Percentage
Interest, Sharing Points attributable to interests in the Partnership that are
forfeited pursuant to Section 3.07
shall be ignored.

       

      “Closing Date” means
the date on which the Class A Limited Partner first contributes the Initial
Contribution to the Partnership.

       

      “Code” means the
Internal Revenue Code of 1986, and any successor statute, as amended from time
to time.

       

      “Default Interest
Rate” means a varying per annum rate equal at any given time to the
lesser of (a) four percentage points in excess of the General Interest Rate and
(b) the maximum rate permitted by applicable law.

       

      “Disability” means the
event whereby a Limited Partner becomes entitled to receive long-term disability
benefits under the long-term disability plan of the General Partner or any of
its Affiliates.

       

      “Dispose,” “Disposing,” or “Disposition” means a
sale, assignment, transfer, exchange, mortgage, pledge, grant of a security
interest, or other disposition or encumbrance, or the acts thereof, other than
by divorce, legal separation or other dissolution of a Partner’s
marriage.

       

      “Duncan” means,
collectively, individually or in any combination, Dan L. Duncan, his wife,
descendants, heirs and/or legatees and/or distributees of Dan L. Duncan’s
estate, and/or trusts
established for the benefit of his wife, descendants, such legatees and/or
distributees and/or their respective descendants, heirs, legatees and
distributees.

       

      “EPCO” means EPCO,
Inc., a Texas corporation.

       

      
        
          
            
               

               

            

             

          

          
            3

            
              

            

          

          
             

          

        

      

       

      “General Interest
Rate” means a varying per annum rate equal at any given time to the
lesser of (a) the interest rate publicly quoted by J.P. Morgan Chase from time
to time as its prime commercial or similar reference interest rate, and (b) the
maximum rate permitted by applicable law.

       

      “General Partner”
means EPCO or any Person hereafter admitted to the Partnership as a general
partner as herein provided, but shall not include any Person who has ceased to
be a general partner in the Partnership.

       

      “Initial Contribution”
has the meaning set forth in Section 4.01 hereof.

       

      “Limited Partner”
means the Class A Limited Partner and the Class B Limited Partner.

       

      “Net Income” and
“Net Loss”
mean, respectively, subject to Section 4.04, an
amount equal to the Partnership’s taxable income or loss determined in
accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

       

      (a)           Any
income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Net Income or Net Loss pursuant to
this definition of Net Income and Net Loss shall be added to such taxable income
or loss;

       

      (b)           Any
expenditures of the Partnership described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Section
1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise taken into account in
computing Net Income or Net Loss pursuant to this definition of Net Income and
Net Loss, shall be subtracted from such taxable income or loss;

       

      (c)           In
the event the value of any Partnership property is adjusted pursuant to Section 4.04 (i)
such adjustment shall be taken into account as gain or loss from the disposition
of such Partnership property for purposes of computing Net Income or Net Loss,
(ii) if such property is subject to depreciation, cost recovery, depletion or
amortization, any further deductions for such depreciation, cost recovery,
depletion or amortization attributable to such property shall be determined
taking into account such adjustment, and (iii) in determining the amount of any
income, gain or loss attributable to the taxable disposition of such property
such adjustment (and the related adjustments for depreciation, cost recovery,
depletion or amortization) shall be taken into account;

       

      (d)           To
the extent an adjustment to the adjusted tax basis of any Partnership Property
pursuant to Code Section 734(b) is required, pursuant to Section
1.704-1(b)(2)(iv)(m)(4) of the Regulations, to be taken into account in
determining Capital Accounts as a result of a Distribution other than in
liquidation of a Partner’s interest in the Partnership, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) from the
disposition of such Partnership Property and shall be taken into account for
purposes of computing Net Income or Net Loss; and

       

      
        
          
             

             

          

           

        

        
          4

          
            

          

        

        
           

        

      

       

      (e)           Any
items that are allocated pursuant to Section 5.01(b)
shall not be taken into account in computing Net Income or Net
Loss.

       

      “Partner” means the
General Partner, the Class A Limited Partner or the Class B Limited
Partner.

       

      “Partnership” has the
meaning given it in the introductory paragraph.

       

      “Person” has the
meaning given it in the Act.

       

      “Qualifying
Termination” means the termination of the Class B Limited Partner’s
employment with the General Partner and its Affiliates due to (i) death, (ii)
receiving long-term disability benefits under the long-term disability plan of
the General Partner or any of its Affiliates or (iii) retirement with the
approval of the General Partner on or after reaching age 60.

       

      “Regulations” means
the regulations promulgated under Section 704 of the Code.

       

      “Sharing Points”
means, with respect to the Class B Limited Partner, the number of Sharing Points
granted by the General Partner to such Class B Limited Partner (which number is
set forth on the Power of Attorney executed by the Class B Limited Partner and
delivered to the General Partner), as the same may be amended from time to time
pursuant to the terms of this Agreement.

       

      “TPP”
means TEPPCO Partners, L.P., a Delaware limited
partnership, and its successors.

       

      “TPP
Units”
means partnership units representing limited partner interests in
TPP.

       

      “Vesting Date” means
the earliest of (i) the fifth anniversary of the date of this Agreement, (ii) a
Change of Control or (iii) dissolution of the Partnership.

       

      1.02 Other
Definitions.  Other terms
defined herein have the meanings so given them.

       

      ARTICLE II 

                                     

      ORGANIZATIONAL
MATTERS

       

      2.01 Formation.  The Partnership has been
previously formed as a Delaware limited partnership for the purposes hereinafter
set forth under and pursuant to the provisions of the Act.

       

      
        2.02 Name.  The name of the
Partnership is “TEPPCO Unit II L.P.” and all Partnership business shall be
conducted in such name or such other name or names that comply with applicable
law as the General Partner may designate from time to time.

         

        2.03 Registered
Office; Registered Agent; Other Offices.  The registered
office of the Partnership in the State of Delaware shall be at such place as the
General Partner may designate from time to time.  The registered agent
for service of process on the Partnership in the State of Delaware or any other
jurisdiction shall be such Person or Persons as the General Partner

      

      
        
          
             

             

          

           

        

        
          5

          
            

          

        

        
           

        

      

       

      may designate
from time to time.  The Partnership may have such other offices as the
General Partner may designate from time to time.

       

      2.04 Purposes.  The purposes of
the Partnership are to acquire, own, sell, exchange or otherwise dispose of TPP
Units, and to enter into, make and perform all contracts and other undertakings
and to engage in any other business, activity or transaction that now or
hereafter may be necessary, incidental, proper, advisable, or convenient, as
determined by the General Partner, to accomplish the foregoing
purposes.  For purposes of clarification and without limiting the
foregoing, the General Partner may acquire any TPP Units and make any allocation
in acquiring TPP Units in its sole discretion, and may incur indebtedness in
connection with the acquisition of TPP Units in its sole
discretion.

       

      2.05 Certificate;
Foreign Qualification.  The General
Partner has previously executed and caused to be filed with the Secretary of
State of the State of Delaware a Certificate of Limited Partnership, effective
as of October 29, 2008, containing information required by the Act and such
other information as the General Partner deemed appropriate.  Prior to
conducting business in any jurisdiction other than Delaware, the General Partner
shall cause the Partnership to comply, to the extent such matters are reasonably
within the control of the General Partner, with all requirements necessary to
qualify the Partnership as a foreign limited partnership (or a partnership in
which the Limited Partners have limited liability) in such
jurisdiction.  Upon the request of the General Partner, each Partner
shall execute, acknowledge, swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary or appropriate as
determined by the General Partner to qualify, continue, and terminate the
Partnership as a limited partnership under the laws of the State of Delaware and
to qualify, continue, and terminate the Partnership as a foreign limited
partnership (or a partnership in which the Limited Partners have limited
liability) in all other jurisdictions in which the Partnership may conduct
business, and to this end the General Partner may use the power of attorney
described in Section 6.04.

       

      2.06 Term.  The term of this
Partnership shall continue in existence until the close of Partnership business
on the earliest to occur of (i) the fiftieth anniversary of the date of this
Agreement, and (ii) such earlier time as this Agreement may
specify.

       

      
        2.07 Merger or
Consolidation.  The Partnership
may merge or consolidate with or into another business entity, or enter into an
agreement to do so, with the consent of the General Partner and the Class B
Limited Partner.

         

        ARTICLE III

                                        

        PARTNERS; DISPOSITIONS OF
INTERESTS

         

        3.01 Partners.  The General
Partner, the Class A Limited Partner and the Class B Limited Partner of the
Partnership are the Persons executing (by power of attorney or otherwise) this
Agreement as of the date hereof as the General Partner, the Class A Limited
Partner and the Class B Limited Partner, respectively, each of which is admitted
to the Partnership as the General Partner, Class A Limited Partner or a Class B
Limited Partner, as the case may be, effective as of the date
hereof.

      

       

      
        
          
             

             

          

           

        

        
          6

          
            

          

        

        
           

        

      

       

      3.02 Representations
and Warranties.  Each Partner
hereby represents and warrants to the Partnership and each other Partner that
(a) if such Partner is a corporation, it is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation and
is duly qualified and in good standing as a foreign corporation in the
jurisdiction of its principal place of business (if not incorporated therein),
(b) if such Partner is a trust, estate or other entity, it is duly formed,
validly existing, and (if applicable) in good standing under the laws of the
jurisdiction of its formation, and if required by law is duly qualified to do
business and (if applicable) in good standing in the jurisdiction of its
principal place of business (if not formed therein), (c) such Partner has full
corporate, trust, or other applicable right, power and authority to enter into
this Agreement and to perform its obligations hereunder and all necessary
actions by the board of directors, trustees, beneficiaries, or other Persons
necessary for the due authorization, execution, delivery, and performance of
this Agreement by such Partner have been duly taken, and such authorization,
execution, delivery, and performance do not conflict with any other agreement or
arrangement to which such Partner is a party or by which it is bound, and (d)
such Partner is acquiring its interest in the Partnership for investment
purposes and not with a view to distribution thereof.

       

      3.03 Restrictions
on the Disposition of an Interest. 

       

      
        (a)
The Class
B Limited Partner may not Dispose of all or part of its interest in the
Partnership without the prior written consent (which may be given or withheld in
its sole discretion) of the General Partner, and then only after
Sections 3.03(c), (d) and (e) have been complied with, except that the
Class B Limited Partner may Dispose of all of its interest upon the death of the
Class B Limited Partner or upon becoming a Bankrupt Partner, but in each case
only after compliance with Sections 3.03(c), (d) and
(e).  Neither the General Partner nor the Class A Limited Partner may
Dispose of all or a part of its interest in the Partnership to a Person who is
not an Affiliate of Duncan without the prior written consent of the Class B
Limited Partner, and then only after Sections 3.03(c),
(d) and (e) have been
complied with.

         

        
          (b) Subject
to the provisions of Sections 3.03(c),
(d) and (e), a permitted
transferee of all or a part of a Partner’s interest in the Partnership shall be
admitted to the Partnership as a General Partner or a Limited Partner (as
applicable) with, in the case of the Class B Limited Partner, such Sharing
Points (no greater than the Sharing Points of the Class B Limited Partner
effecting such Disposition immediately prior thereto) as the Partner effecting
such Disposition and such permitted transferee may agree.

           

          (c) The
Partnership shall not recognize for any purpose any purported Disposition of an
interest in the Partnership or distributions therefrom unless and until the
provisions of this Section 3.03
shall have been satisfied and there shall have been delivered to the General
Partner a document (i) executed by both the Partner effecting such Disposition
and the Person to which such interest or interest in distributions are to be
Disposed, (ii) including the written acceptance by any Person to be admitted to
the Partnership of all the terms and provisions of this Agreement, such Person’s
notice address, and an agreement by such Person to perform and discharge timely
all of the obligations and liabilities in respect of the interest being
obtained, (iii) setting forth, in the case of the Class B Limited Partner, the
Sharing Points of the Class B Limited Partner effecting such Disposition and the
Person to which such interest is Disposed after such Disposition (which together
shall total the Sharing Points of the Class B 

        

      

       

      
        
          
             

             

          

           

        

        
          7

          
            

          

        

        
           

        

      

       

      Limited
Partner effecting such Disposition prior thereto), (iv) containing a
representation and warranty that such Disposition complied with all applicable
laws and regulations (including securities laws) and a representation and
warranty by such Person that the representations and warranties in Section 3.02 are
true and correct with respect to such Person.  Each such Disposition
and, if applicable, admission shall be effective as of the first day of the
calendar month immediately succeeding the month in which the General Partner
shall receive such notification of Disposition and the other requirements of
this Section 3.03
shall have been met unless the General Partner and the Partner affecting such
Disposition agree to a different effective date; provided, however, that if there shall
be only one General Partner and such Disposition or admission and, as a result
of such Disposition such General Partner would cease to be a General Partner,
such permitted transferee shall be deemed admitted as a General Partner
immediately prior to such cessation.

       

      (d) Notwithstanding
any provision of this Agreement to the contrary, the right of any Partner to
Dispose of an interest in the Partnership or distributions therefrom or of any
Person to be admitted to the Partnership in connection therewith shall not exist
or be exercised (i) unless and until the Partnership shall have received a
favorable opinion of the Partnership’s legal counsel or of other legal counsel
acceptable to the General Partner to the effect that such Disposition or
admission is not required to be registered under the Securities Act of 1933 or
any other applicable securities laws, and such Disposition or admission would
not cause the Partnership to become an “investment company” required to register
under the Investment Company Act of 1940, and (ii) unless such Disposition or
admission would not result in the Partnership being treated as an association
taxable as a corporation for federal income tax purposes or as a publicly traded
partnership as defined in Section 7704 of the Code.  The General
Partner, however, may waive the requirements of Section
3.03(d)(i).

       

      
        (e) All costs
(including, without limitation, the legal fees incurred in connection with the
obtaining of the legal opinions referred to in Section 3.03(d))
incurred by the Partnership in connection with any Disposition or admission of a
Person to the Partnership pursuant to this Section 3.03
shall be borne and paid by the Partner effecting such Disposition within 10 days
after the receipt by such Person of the Partnership’s invoice for the amount
due.

         

        (f) In the
event of a Disposition of an interest in the Partnership pursuant to the death
of a Limited Partner that would, in the opinion of the Partnership’s legal
counsel, result in the Partnership becoming an “investment company” required to
register under the Investment Company Act of 1940, the General Partner shall
have the right to purchase such interest from the estate (or beneficiaries) of
such deceased Partner for a price equal to the amount that the deceased
Partner’s estate (or beneficiaries) would receive if all of the TPP Units held
by the Partnership were sold at a price equal to the closing sale price per TPP
Unit as reported by the New York Stock Exchange (or such other applicable
trading market) on the day prior to the exercise of such right by the General
Partner and the proceeds from such sale were distributed to the Partners in
accordance with the provisions of Section 5.04.  The
determination by the General Partner of the foregoing purchase price of such
deceased Partner’s interest in the Partnership shall be conclusive and binding
on the deceased Partner’s estate and beneficiaries.

      

       

      
        
          
             

             

          

           

        

        
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      (g) Any
attempted Disposition by a Person of an interest or right, or any part thereof,
in or in respect of the Partnership other than in accordance with this Section 3.03
shall be, and is hereby declared, null and void ab initio.

       

      3.04 Additional
Partners.  Subject to the
provisions of Sections 12.05 and 3.03, additional Persons may be admitted
to the Partnership as General Partners or Limited Partners, only to the extent
that, and on such terms and conditions as, the General Partner shall consent at
the time of such admission or issuance.  Such admission or issuance
shall, in the case of a Class B Limited Partner, specify the Sharing Points
applicable thereto.  Any such admission must comply with the
provisions of Section 3.03(d) and shall not be effective until such new
Partner shall have executed and delivered to the General Partner a document
including such new Partner’s notice address, acceptance of all the terms and
provisions of this Agreement, an agreement to perform and discharge timely all
of its obligations and liabilities hereunder, and a representation and warranty
that the representations and warranties in Section 3.02 are true and
correct with respect to such new Partner.

       

      3.05 Interests
in a Partner.  No Partner that
is not a natural person shall cause or permit an interest, direct or indirect,
in itself to be Disposed of such that, on account of such Disposition, the
Partnership would become an association taxable as a corporation for federal
income tax purposes.

       

      3.06 Spouses
of Partners.  A spouse of a
Partner does not become a Partner as a result of such marital relationship or by
reason of a divorce, legal separation or other dissolution of
marriage.  If, in the event of a divorce, legal separation or other
dissolution of marriage of a Partner, a former spouse of a Partner
is awarded ownership of, or an interest in, all or part of a Partner’s interest
in the Partnership (the “Awarded Interest”),
the Awarded Interest shall automatically and immediately be forfeited and
cancelled without payment on such date.

      
         

        3.07 Vesting
of Limited Partners.  One hundred
percent (100%) of the Class B Limited Partner’s interest in the Partnership
shall vest on the Vesting Date, but only if (i) on such date the Class B Limited
Partner continues to be an active, full-time employee of the General Partner or
any of its Affiliates or (ii) prior to the Vesting Date, a Qualifying
Termination has occurred with respect to the Class B Limited
Partner.  At such time as the Class B Limited Partner ceases, for any
reason other than a Qualifying Termination, to be an active, full-time employee
of the General Partner or any of its Affiliates prior to the Vesting Date, his
unvested interest in the Partnership shall be forfeited.  If the Class
B Limited Partner ceases to be an active, full-time employee prior to the
Vesting Date, as determined by the General Partner in its sole discretion,
without regard as to how his status is treated by the General Partner or any of
its Affiliates for any of its other compensation or benefit plans or programs,
the Class B Limited Partner will be deemed to have terminated employment with
the General Partner and its Affiliates and forfeited his unvested interest in
the Partnership for purposes of this Agreement.  The Capital Account
attributable to the Class B Limited Partner’s interest in the Partnership that
is forfeited pursuant to Section 3.06, this Section 3.07 or otherwise
hereunder shall be allocated to any remaining Class B Limited Partners in
accordance with their respective Class B Participation Interests or, if there
are no remaining Class B Limited Partners, such Capital Account shall be
allocated back to the Partnership.

      

      
        
          
             

             

          

           

        

        
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      3.08 Services
Provided by the Partners.  The interests in
the Partnership held by the Partners are for the benefit of certain employees in
connection with services rendered or to be rendered by the
Partners.  EPCO shall be an express third-party beneficiary of the
services provided by the Partners.

       

      ARTICLE IV

                                      

      CAPITAL
CONTRIBUTIONS

       

      4.01 Initial
and Additional Capital Contributions.  In connection
with the formation of the Partnership, the General Partner contributed $1,000 to
the Partnership on the Closing Date and the Class A Limited Partner has agreed
to contribute to the Partnership 123,185 of TPP Units (with a value of
approximately $3,121,500, based on the closing price of the TPP Units on the New
York Stock Exchange on the day prior to the Closing Date) (the “Initial Contribution”). The Class B Limited Partner
is not obligated to make a contribution to the Partnership.  Subject
to the provisions of applicable law or except as otherwise provided for herein,
no Partner shall be liable for or obligated to make an additional Capital
Contribution to the Partnership, whether for the purpose of enabling the
Partnership to meet its obligations under Section 6.03 or
for any other purpose.  The Class A Limited Partner, in its sole
discretion and without the consent of the Class B Limited Partner or the General
Partner,
may make additional Capital Contributions in excess of the Initial Contribution,
provided that any such voluntary additional Capital Contributions will not have
the effect of changing the Sharing Points of the Class B Limited
Partner.  The initial Capital Account of the General Partner is
$1,000, the initial Capital Account of the Class A Limited Partner as of the
Closing Date is the fair
market value of the Initial Contribution, based upon the closing price of
the
TPP Units on the New York Stock Exchange on the
Closing Date, and the initial Capital Account of the Class B Limited
Partner is zero.

       

      4.02 Return of
Contributions.  No Partner shall
be entitled to the return of any part of its Capital Contributions or to be paid
interest in respect of either its Capital Account or any Capital Contribution
made by it.  No unrepaid Capital Contribution shall be deemed or
considered to be a liability of the Partnership or of any Partner.  No
Partner shall be required to contribute, advance or lend any cash or property to
the Partnership to enable the Partnership to return any Partner’s Capital
Contributions to the Partnership.  To the extent, however, any Partner
(by mistake, overpayment or otherwise) advances funds to the Partnership in
excess of the Capital Contributions called for under Section 4.01, such
excess amounts shall not be Capital Contributions and (other than advances made
by the General Partner pursuant to Section 4.03 below) shall be promptly
returned by the Partnership to the Partner so advancing such funds.

       

      4.03 Advances
by General Partner.  At any time that
the Partnership shall not have sufficient cash to pay its obligations, the
General Partner may, but shall not be obligated to, advance such funds for or on
behalf of the Partnership.  Each such advance shall constitute a loan
from the General Partner to the Partnership and shall bear interest from the
date of the advance until the date of repayment at the General Interest
Rate.  Any advances made by the General Partner pursuant to this
Section 4.03 shall not be considered to be Capital
Contributions.  All advances shall be repaid out of the next available
funds of the Partnership, including Capital Contributions received.

       

       

      
        
          
          

        

        
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      4.04 Capital
Accounts.  A Capital Account
shall be established and maintained for each Partner.  Each Partner’s
Capital Account (a) shall be increased by (i) the amount of money contributed by
that Partner to the Partnership, (ii) the fair market value of property, if any,
contributed by that Partner to the Partnership (net of liabilities secured by
such contributed property that the Partnership is considered to assume or take
subject to under Section 752 of the Code), and (iii) allocations to that Partner
of Partnership income and gain (or items thereof), including income and gain
exempt from tax and income and gain described in Regulation Section
1.704-1(b)(2)(iv)(g), but excluding income and gain described in Regulation
Section 1.704-1(b)(4)(i), and (b) shall be decreased by (i) the amount of money
distributed to that Partner by the Partnership, (ii) the fair market value of
property distributed to that Partner by the Partnership (net of liabilities
secured by such distributed property that such Partner is considered to assume
or take subject to under Section 752 of the Code), (iii) allocations to that
Partner of expenditures of the Partnership described in Section 705(a)(2)(B) of
the Code, and (iv) allocations of Partnership loss and deduction (or items
thereof), including loss and deduction described in Regulation Section
1.704-1(b)(2)(iv)(g),
but excluding items described in clause (b)(iii) above
and loss or deduction described in Regulation Section
1.704-1(b)(4)(i).  The Partners’ Capital Accounts also shall be
maintained and adjusted as permitted by the provisions of Regulation Section
1.704-1(b)(2)(iv)(f) and as required by the other provisions of Regulation
Sections 1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments to reflect
the allocations to the Partners of depreciation, 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 Regulation Section
1.704-1(b)(2)(iv)(g).  A Partner that has more than one interest in
the Partnership shall have a single Capital Account that reflects all such
interests, regardless of the class of interests owned by such Partner and
regardless of the time or manner in which such interests were acquired; provided, that Partners that
are Affiliates but nevertheless separate legal entities shall have separate
Capital Accounts.  Upon the transfer of all or part of an interest in
the Partnership, the Capital Account of the transferor that is attributable to
the transferred interest in the Partnership shall carry over to the transferee
Partner in accordance with the provisions of Regulation Section
1.704-1(b)(2)(iv)(l).

       

      ARTICLE V

                                      

      ALLOCATIONS AND
DISTRIBUTIONS

       

      5.01 Allocations.

       

      (a) Net Income and Net
Loss.  For purposes of maintaining the Capital Accounts, Net
Income or Net Loss (and all items included in the computation thereof) shall be
allocated among the Partners as follows:

       

      (i) Net
Income:

       

      (A) First, to
the Class A Limited Partner until the Class A Limited Partner’s Adjusted Capital
Account equals the Class A Capital Base; and

       

      (B) Thereafter,
to the Class B Limited Partner in accordance with its Class B Percentage
Interest.

       

       

      
        
          
          

        

        
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      (ii) Net
Loss:

       

      (A) First, to
the Class B Limited Partner in accordance with its Class B Percentage Interest
until the Adjusted Capital Accounts of the Class B Limited Partner is reduced to
zero; and

       

      (B) Thereafter,
to the Class A Limited Partner.

       

      (b) Special
Allocations.  Notwithstanding any other provision of this Section 5.01,
the following special allocations shall be made for such taxable
period:

       

          (i) Partnership
Minimum Gain Chargeback.  Notwithstanding any other provision
of this Section 5.01, if
there is a net decrease in Partnership Minimum Gain during any Partnership
taxable period, each Partner shall be allocated items of Partnership income and
gain for such period (and, if necessary, subsequent periods) in the manner and
amounts provided in Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and
1.704-2(j)(2)(i), or any successor provision.  For purposes of this
Section 5.01(b),
each Partner’s Adjusted Capital Account balance shall be determined, and the
allocation of income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 5.01(b)
with respect to such taxable period (other than an allocation pursuant to Sections 5.01(b)(vi)
and 5.01(b)(vii)).  This
Section
5.01(b)(i) is intended to comply with the Partnership Minimum Gain
chargeback requirement in Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.

       

      (ii) Chargeback
of Partner Nonrecourse Debt Minimum Gain.  Notwithstanding the
other provisions of this Section 5.01
(other than Section
5.01(b)(i)), except as provided in Regulation Section 1.704-2(i)(4), if
there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any
Partnership taxable period, any Partner with a share of Partner Nonrecourse Debt
Minimum Gain at the beginning of such taxable period shall be allocated items of
Partnership income and gain for such period (and, if necessary, subsequent
periods) in the manner and amounts provided in Regulation Sections 1.704-2(i)(4)
and 1.704-2(j)(2)(ii), or any successor provisions.  For purposes of
this Section 5.01(b),
each Partner’s Adjusted Capital Account balance shall be determined, and the
allocation of income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 5.01(b),
other than Section
5.01(b)(i) and other than an allocation pursuant to Sections 5.01(b)(vi)
and 5.01(b)(vii), with
respect to such taxable period.  This Section 5.01(b)(ii)
is intended to comply with the chargeback of items of income and gain
requirement in Regulation Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.

       

      (iii) Qualified
Income Offset.  In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6),
items of Partnership income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, the deficit balance, if any, in its Adjusted Capital Account
created by such adjustments, allocations or distributions as quickly as possible
unless such deficit balance is otherwise eliminated pursuant to Section 5.01(b)(i) or
(ii).

       

       

      
        
          
          

        

        
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      (iv) Gross
Income Allocations.  In the event any Partner has a deficit
balance in its Capital Account at the end of any Partnership taxable period in
excess of the sum of (A) the amount such Partner is required to restore pursuant
to the provisions of this Agreement and (B) the amount such Partner is deemed
obligated to restore pursuant to Regulation Sections 1.704-2(g) and
1.704-2(i)(5), such Partner shall be specially allocated items of Partnership
gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation
pursuant to this Section 5.01(b)(iv)
shall be made only if and to the extent that such Partner would have a deficit
balance in its Capital Account as adjusted after all other allocations provided
for in this Section 5.01
have been tentatively made as if this Section 5.01(b)(iv)
were not in this Agreement.

       

      (v) Nonrecourse
Deductions.  Nonrecourse Deductions for any taxable period
shall be allocated to the Partners in accordance with their respective
Percentage Interests.  If the General Partner determines that the
Partnership’s Nonrecourse Deductions should be allocated in a different ratio to
satisfy the safe harbor requirements of the Regulations promulgated under
Section 704(b) of the Code, the General Partner is authorized, upon notice to
the other Partners, to revise the prescribed ratio to the numerically closest
ratio that does satisfy such requirements.

       

      (vi) Partner
Nonrecourse Deductions.  Partner Nonrecourse Deductions for any
taxable period shall be allocated 100% to the Partner that bears the Economic
Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Regulation Section
1.704-2(i).  If more than one Partner bears the Economic Risk of Loss
with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions
attributable thereto shall be allocated between or among such Partners in
accordance with the ratios in which they share such Economic Risk of
Loss.

       

      (vii) Nonrecourse
Liabilities.  For purposes of Regulation Section 1.752-3(a)(3),
the Partners agree that Nonrecourse Liabilities of the Partnership in excess of
the sum of (A) the amount of Partnership Minimum Gain and (B) the total amount
of Nonrecourse Built-in Gain shall be allocated among the Partners in accordance
with their respective Percentage Interests.

       

      (viii) Code
Section 754 Adjustments.  To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Regulation Section 1.704-1(b)(2)(iv)(m), to
be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Regulations.

       

      (c) Allocations
Caused by Transfer of Interest.  All items of income, gain,
loss, deduction, and credit allocable to any interest in the Partnership that
may have been transferred shall be allocated between the transferor and the
transferee based upon that portion of the calendar year during which each was
recognized as owning such interest, without regard to the results of Partnership
operations during any particular portion of such calendar year and 

       

      
        
          
          

        

        
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        without
regard to distributions made to the transferor and the transferee during such
calendar year; provided, however, that such allocation
shall be made in accordance with a method permissible under Section 706 of the
Code and the regulations thereunder.

      

       

      5.02 Income Tax
Allocations.

       

      (a) Except as
provided in this Section 5.02,
each item of income, gain, loss and deduction of the Partnership for federal
income tax purposes shall be allocated among the Partners
in the same manner as such items are allocated for purposes of maintaining
Capital Account under Section 5.01.

       

      (b) For
federal and state income tax purposes, income, gain, loss, and deduction with
respect to property contributed to the Partnership by a Partner or revalued
pursuant to Regulation Section 1.704-1(b)(2)(iv)(f) shall be allocated among the
Partners 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 Regulation Section 1.704-1(b)(4)(i), using any allocation method
permitted by Regulation Section 1.704-3.

       

      (c) The
Partnership will follow the proposed Treasury Regulations that were issued on
May 24, 2005, regarding the issuance of partnership equity for services
(including Proposed Treasury Regulation Sections 1.83-3, 1.83-6, 1.704-1,
1.706-3, 1.721-1 and 1.761-1), as such regulations may be subsequently amended,
upon the issuance of equity membership interests or options issued for services
rendered or to be rendered to or for the benefit of the Partnership, until final
Treasury Regulations regarding these matters are issued.  In
furtherance of the foregoing, the definition of Capital Account and the
allocations of Net Income and Net Loss of the Partnership shall be applied in a
manner that is consistent with the proposed Treasury Regulations, including
without limitation, Proposed Treasury Regulation Section
1.704-1(b)(4)(xii).  If the provisions of the proposed Treasury
Regulations and the Proposed Revenue Procedure described in IRS Notice 2005-43,
or provisions similar thereto, are adopted as final (or temporary) rules (the
“New Rules”),
and the General Partner is authorized to make such amendments to this Agreement
(including provision for any safe harbor election authorized by the New Rules)
as the General Partner may determine to be necessary or advisable.

       

      5.03 Distributions of Cash flow
from TPP Units.  Promptly following the receipt of
any distributions with respect to TPP Units, the General Partner shall cause to
be distributed to the Partners such receipts (and any income from the temporary
investment thereof) in the manner set forth below, provided, that the General
Partner may withhold and not distribute such portion of any such receipts that
the General Partner has determined in its sole but good faith discretion should
be withheld to pay indebtedness or expenses of the
Partnership.  Distribution to the Partners pursuant to this Section 5.03
shall be made as follows:

       

      (a) First, to
the Class A Limited Partner until the Class A Limited Partner’s Class A
Preference Return Amount has been reduced to zero; and

       

      (b) Thereafter,
to the Class B Limited Partner in accordance with the Class B Percentage
Interest.

       

       

      
        
          
          

        

        
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      5.04 Distributions of Proceeds
from Sales of TPP Units.  Promptly following the receipt of
any proceeds from the sale of any TPP Units by the Partnership, the General
Partner shall cause to be distributed to the Partners such receipts in the
manner set forth below, provided that the General
Partner may withhold and not distribute such portion of any such receipts that
the General Partner has determined in its sole but good faith discretion
should be withheld to pay expenses of the Partnership.  Distribution
to the Partners pursuant to this Section 5.04
shall be made as follows:

       

      (a) First, to
the Class A Limited Partner until the Class A Preference Return Amount has been
reduced to zero;

       

      (b) Next, to
the Class A Limited Partner until the Class A Capital Base is reduced to zero;
and

       

      (c) Thereafter,
to the Class B Limited Partner in accordance with the Class B Percentage
Interest.

       

      5.05 Restrictions on
Distributions of TPP Units.  The Partners and the Partnership
hereby agree that they shall not cause the Partnership to offer for sale, sell
or otherwise transfer, distribute or dispose of the TPP Units held by the
Partnership prior to the Vesting Date; provided, the Partnership may pledge such
TPP Units as collateral for any bona fide loan to the Partnership.

       

      ARTICLE VI

                                      

      MANAGEMENT AND
OPERATION

       

      6.01 Management of Partnership
Affairs.  Except for situations in which the
approval of the Limited Partners is expressly required by this Agreement or by
non-waivable provisions of applicable law, the General Partner shall have full,
complete, and exclusive authority to manage and control the business, affairs,
and properties of the Partnership, to make all decisions regarding the same, and
to perform any and all other acts or activities customary or incident to the
management of the Partnership’s business.  The General Partner shall
receive no compensation for its services as such.  Subject to the
other express provisions hereof, the General Partner shall make or take all
decisions and actions for the Partnership not otherwise provided for herein,
including, without limitation, the following:

       

      (a) acquiring,
holding, managing, selling, Disposing of, and otherwise dealing with and
investing in (i) the Partnership’s TPP Units, or (ii) temporary investments of
Partnership capital in U.S. government securities, certificates of deposit with
maturities of less than one year, commercial paper (rated or unrated), and other
highly liquid securities;

       

      (b) entering
into, making, and performing all contracts, agreements, and other undertakings
binding the Partnership, as may be necessary, appropriate, or advisable in
furtherance of the purposes of the Partnership, including without limitation the
incurrence of indebtedness to fund the acquisition of any TPP Units, and making
all decisions and waivers thereunder;

       

       

      
        
          
          

        

        
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      (c) opening
and maintaining bank and investment accounts and drawing checks and other orders
for the payment of monies;

      (d) maintaining
the assets of the Partnership in compliance with applicable securities laws and
protecting and preserving the Partnership’s title thereto;

       

      (e) collecting
all sums due the Partnership;

       

      (f) to the
extent that funds of the Partnership are available therefor, paying as they
become due all debts and obligations of the Partnership;

       

      (g) causing
securities owned by the Partnership to be registered in the Partnership’s name
or in the name of a nominee or to be held in street name, as the General Partner
may elect;

       

      (h) selecting,
removing, and changing the authority and responsibility of lawyers, accountants,
brokers, and other advisors and consultants;

       

      (i) obtaining
insurance for the Partnership to the extent the General Partner deems
appropriate; and

       

      (j) determining
distributions of Partnership cash as provided in Sections 5.03
and 5.04.

       

      6.02 Duties and Obligations of
General Partner.  The General Partner shall endeavor
to conduct the affairs of the Partnership in the best interests of the
Partnership and the mutual best interests of the Partners, including, without
limitation, the safekeeping and use of all Partnership funds and assets and the
use thereof for the benefit of the Partnership.  The General Partner
at all times shall act in good faith in all activities relating to the conduct
of the business of the Partnership.  The General Partner shall devote
such time as it deems necessary to conduct the business and affairs of the
Partnership in an appropriate manner.

       

      6.03 Release and
Indemnification.  TO
THE FULLEST EXTENT PERMITTED BY LAW, THE PARTNERSHIP AND EACH OTHER PARTNER ON
BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS HEREBY RELEASES, ACQUITS, AND
FOREVER DISCHARGES THE GENERAL PARTNER AND THE CLASS A LIMITED PARTNER, THEIR
PARTNERS OR SHAREHOLDERS, AND THEIR DIRECTORS, OFFICERS, EMPLOYEES, PARTNERS,
REPRESENTATIVES, AND AGENTS AND EACH OTHER PERSON, IF ANY, CONTROLLING OR
EMPLOYING SUCH PERSONS OR ENTITIES (COLLECTIVELY, THE “INDEMNITEES”) FROM
ALL CLAIMS, DEMANDS, OR CAUSES OF ACTION OF ANY CHARACTER THAT SUCH PARTY MAY
HAVE, WHETHER KNOWN OR UNKNOWN, AGAINST ANY INDEMNITEE IN CONNECTION WITH THE
PARTNERSHIP AND/OR THE BUSINESS CONDUCTED BY THE PARTNERSHIP; PROVIDED, HOWEVER, THAT SUCH RELEASE
SHALL NOT APPLY TO ACTIONS CONSTITUTING WILLFUL MISCONDUCT OR BAD
FAITH.  TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTNERSHIP SHALL
INDEMNIFY AND HOLD HARMLESS EACH INDEMNITEE FROM AND AGAINST
ALL LOSSES, COSTS, CLAIMS, LIABILITIES, 

       

      
        
          
          

        

        
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        DAMAGES,
EXPENSES (INCLUDING, WITHOUT LIMITATION, COSTS OF SUIT AND ATTORNEYS’ FEES) SUCH
INDEMNITEE MAY INCUR IN CONNECTION WITH THE GENERAL PARTNER’S PERFORMING ITS
OBLIGATIONS HEREUNDER (INCLUDING WITHOUT LIMITATION LOSSES, COSTS, CLAIMS,
LIABILITIES, DAMAGES AND EXPENSES ARISING FROM, OR ALLEGED TO ARISE FROM, THE
INDEMNITEE’S ACTIVE OR PASSIVE, SOLE OR CONCURRENT, NEGLIGENCE OR GROSS
NEGLIGENCE), AND THE PARTNERSHIP SHALL ADVANCE EXPENSES ASSOCIATED WITH THE
DEFENSE OF ANY ACTION RELATED THERETO; PROVIDED, HOWEVER, THAT SUCH INDEMNITY
SHALL NOT APPLY TO ACTIONS WHICH HAVE BEEN FINALLY, WITHOUT FURTHER RIGHT TO
APPEAL, JUDICIALLY DETERMINED TO CONSTITUTE WILLFUL MISCONDUCT OR BAD
FAITH.  IF THE INDEMNIFICATION PROVIDED FOR ABOVE IS NOT PERMITTED OR
ENFORCEABLE UNDER APPLICABLE LAW OR IS OTHERWISE UNAVAILABLE OR INSUFFICIENT TO
HOLD HARMLESS THE INDEMNITEES AS CONTEMPLATED ABOVE, THEN THE PARTNERSHIP SHALL
CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY THE INDEMNITEES AS A RESULT OF SUCH
LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES AND EXPENSES REFERRED TO ABOVE IN
SUCH PROPORTION AS IS APPROPRIATE TO REFLECT THE RELATIVE BENEFITS CONTEMPLATED
TO BE RECEIVED BY THE PARTNERSHIP AND THE INDEMNITEES, RESPECTIVELY, FROM THE
ACTIONS GIVING RISE TO SUCH LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES OR
EXPENSES.

      

       

      6.04 Power of
Attorney.

       

      (a) Each
Limited Partner hereby constitutes and appoints the General Partner and, if a
liquidator (other than the General Partner) shall have been selected pursuant to
Section 11.02,
the liquidator, severally (and any successor to either thereof by merger,
transfer, assignment, election or otherwise) and each of their authorized
officers and attorneys-in-fact, as the case may be, with full power of
substitution, as his true and lawful agent and attorney-in-fact, with full power
and authority in his name, place and stead, to:

       

      (i) execute,
swear to, acknowledge, deliver, file and record in the appropriate public
offices (A) all certificates, documents and other instruments (including this
Agreement and the Certificate of Limited Partnership and all amendments or
restatements hereof or thereof) that the General Partner or the liquidator deems
necessary or appropriate to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a partnership in
which the Limited Partners have limited liability) in the State of Delaware and
in all other jurisdictions in which the Partnership may conduct business or own
property; (B) all certificates, documents and other instruments that the General
Partner or the liquidator deems necessary or appropriate to reflect, in
accordance with its terms, any amendment, change, modification or restatement of
this Agreement; (C) all certificates, documents and other instruments (including
conveyances and a certificate of cancellation) that the General Partner or the
liquidator deems necessary or appropriate to reflect the dissolution and
liquidation of the Partnership
pursuant to the terms of this Agreement; and (D) all certificates, documents and
other instruments relating to the admission, withdrawal, removal or substitution
of any Partner; and

       

       

      
        
          
          

        

        
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      (ii) execute,
swear to, acknowledge, deliver, file and record all ballots, consents,
approvals, waivers, certificates, documents and other instruments necessary or
appropriate, in the discretion of the General Partner or the liquidator, to
make, evidence, give, confirm or ratify any vote, consent, approval, agreement
or other action that is made or given by the Partners hereunder or is consistent
with the terms of this Agreement or is necessary or appropriate, in the
discretion of the General Partner or the liquidator, to effectuate the terms or
intent of this Agreement; provided, that when required
by any provision of this Agreement that establishes a percentage of the Limited
Partners required to take any action, the General Partner and the liquidator may
exercise the power of attorney made in this Section 6.04
only after the necessary vote, consent or approval of the Limited
Partners.

       

      This
Section 6.04
shall be construed as authorizing the General Partner to amend this Agreement in
any manner subject to any provision of this Agreement that establishes a
percentage of the Limited Partners required to take any action.

       

      (b) The
foregoing power of attorney is hereby declared to be irrevocable and a power
coupled with an interest, and it shall survive and, to the maximum extent
permitted by law, not be affected by the subsequent death, incompetency,
disability, incapacity, dissolution, bankruptcy or termination of any Limited
Partner and the transfer of all or any portion of such Limited Partner’s
Percentage Interest and shall extend to such Limited Partner’s heirs,
successors, assigns and personal representatives.  Each such Limited
Partner hereby agrees to be bound by any representation made by the General
Partner or the liquidator acting in good faith pursuant to such power of
attorney; and each such Limited Partner, to the maximum extent permitted by law,
hereby waives any and all defenses that may be available to contest, negate or
disaffirm the action of the General Partner or the liquidator taken in good
faith under such power of attorney.  Each Limited Partner shall
execute and deliver to the General Partner or the liquidator, within 15 days
after receipt of the request therefor, such further designation, powers of
attorney and other instruments as the General Partner or the liquidator deems
necessary to effectuate this Agreement and the purposes of the
Partnership.

       

      ARTICLE VII  

                                    

      RIGHTS OF OTHER
PARTNERS

       

      7.01 Information.  In addition to the other rights
specifically set forth herein, each Partner shall have access to all information
to which such Partner is entitled to have access pursuant to Section 17-305 of
the Act under the circumstances and subject to the conditions therein
stated.  Without limiting the provisions of Section 17-305(b) of the
Act, the Partners agree that if the General Partner from time to time enters
into on behalf of the Partnership or the General Partner contractual obligations
regarding the confidentiality of information received with respect to the
Partnership’s business or assets, it shall not be reasonable for any other
Partner or assignee or representative
thereof to examine or copy such information unless such Partner agrees to comply
with the terms of such contractual obligations including without limitation
executing a counterpart of any applicable confidentiality
agreements.

       

      7.02 Limitations.  No Limited Partner shall have the
authority or power in its capacity as such to act for or on behalf of the
Partnership or any other Partner, to do any act that would be 

       

      
        
          
          

        

        
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        binding
on the Partnership or any other Partner, or to incur any expenditures on behalf
of or with respect to the Partnership.  No Limited Partner shall have
the right or power to withdraw from the Partnership.

      

       

      7.03 Limited
Liability.  No Limited Partner shall be liable
for the losses, debts, liabilities, contracts, or other obligations of the
Partnership except to the extent required by law or otherwise set forth
herein.

       

      ARTICLE VIII 

                                     

      TAXES

       

      8.01 Tax
Returns.  The General Partner shall cause to
be prepared and filed all necessary federal and state income tax returns for the
Partnership, including making the elections described in Section 8.02.  Each
Partner shall furnish to the General Partner all pertinent information in its
possession relating to Partnership operations that is necessary to enable such
income tax returns to be prepared and filed.

       

      8.02 Tax
Elections.  The following elections shall be
made on the appropriate returns of the Partnership:

       

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

       

      (b) unless
the accrual method is required under the applicable sections of the Code, to
adopt the cash method of accounting and to keep the Partnership’s books and
records on the income-tax method;

       

      (c) if there
shall be a distribution of Partnership property as described in Section 734 of
the Code or if there shall be a transfer of a Partnership interest as described
in Section 743 of the Code, upon written request of any Partner, to elect,
pursuant to Section 754 of the Code, to adjust the basis of Partnership
properties;

       

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

       

      (e) any other
election the General Partner may deem appropriate and in the best interests of
the Partners.

       

      No
election shall be made by the Partnership or any Partner to be treated as an
association taxable as a corporation or 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 laws.

       

      8.03 Tax Matters
Partner.  The General Partner shall be the
“tax matters partner” of the Partnership pursuant to Section 6231(a)(7) of the
Code.  The General Partner shall take such action as may be necessary
to cause each other Partner to become a “notice partner” within the meaning of
Section 6223 of the Code.  The General Partner shall inform each other
Partner of all significant matters that may come to its attention in its
capacity as tax matters partner by giving notice thereof within ten Business
Days after becoming aware thereof and, within such time, 

       

      
        
          
          

        

        
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        shall
forward to each other Partner copies of all significant written communications
it may receive in such capacity.  The General Partner shall not take
any action contemplated by Sections 6222 through 6232 of the Code without the
consent of the Class B Limited Partner.  This provision is not
intended to authorize the General Partner to take any action left to the
determination of an individual Partner under Sections 6222 through 6232 of the
Code.

      

       

      ARTICLE IX

                                      

      BOOKS, RECORDS, REPORTS, AND
BANK ACCOUNTS

       

      9.01 Maintenance of
Books.  The books of account for the
Partnership shall be maintained on a cash basis in accordance with the terms of
this Agreement except that the Capital Accounts of the Partners shall be
maintained in accordance with Section 4.04.  The
calendar year shall be the accounting year of the Partnership.

       

      9.02 Financial
Statements.  Within 120 days after the end of
each fiscal year during the term of the Partnership, the General Partner shall
cause each other Partner to be furnished with an unaudited balance sheet, an
income statement, and a statement of changes in Partners’ capital of the
Partnership for, or as of the end of, such period.  All financial
statements shall be prepared in accordance with accounting principles generally
employed for cash-basis records consistently applied (except as therein
noted).

       

      9.03 Bank
Accounts.  The General Partner shall
establish and maintain one or more separate accounts for Partnership funds in
the Partnership name at such financial institutions as it may
designate.  The General Partner may not commingle the Partnership’s
funds with other funds of any Partner.

       

      ARTICLE X

       

      WITHDRAWAL,
BANKRUPTCY, REMOVAL, ETC.

       

      10.01 Withdrawal, Bankruptcy, Etc.
of the General Partner.

       

      (a) The
General Partner covenants and agrees that it will not withdraw from the
Partnership as the general partner within the meaning of Section 17-602 of the
Act.  If the General Partner shall so withdraw from the Partnership in
violation of such covenant and agreement, such withdrawal shall be effective
only upon 90 days’ prior notice to all other Partners.

       

      (b) The
General Partner shall not cease to be a general partner on the occurrence of an
event of the type described in Section 17-402(a)(4) through (10) of the Act, but
shall cease to be a general partner 90 days thereafter.  The General
Partner shall notify each other Partner that an event of the type described in
Section 17-402(a)(4) through (10) of the Act has occurred (without regard to the
lapse of any time periods therein) with respect to it within five Business Days
after such occurrence.

       

       

      
        
          
          

        

        
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      (c) Following
any notice pursuant to Section 10.01(a) that
the General Partner shall be withdrawing, or following the occurrence of an
event of the type described in Section 17-402(a)(4) through (10) of the Act with
respect to the General Partner (without regard to the lapse of any time periods
therein), and unless there shall be one other General Partner remaining, the
greater of the Class A Limited Partner plus the Class B Limited Partner or a
majority in interest as defined in Internal Revenue Service Procedure 94-46 (or
any successor thereof) by written consent may select a new General Partner,
which shall be admitted to the Partnership as a general partner effective
immediately prior to the existing General Partner’s ceasing to be a general
partner with such general partner interest as the Limited Partners making such
selection may specify, but only if such new General Partner shall have made such
Capital Contribution as such Limited Partners may specify and shall have
executed and delivered to the Partnership a document including such new General
Partner’s notice address, acceptance of all the terms and provisions of this
Agreement, an agreement to perform and discharge timely all of its obligations
and liabilities hereunder, and a representation and warranty that the
representation and warranties in Section 3.02 are
true and correct with respect to such new General
Partner.  Notwithstanding the foregoing provisions of this Section 10.01(c), the
right to select such new General Partner shall not exist or be exercised unless
the Partnership shall have received the favorable opinion of the Partnership’s
legal counsel or of other legal counsel acceptable to the Limited Partners
making such selection to the effect that such selection and admission will not
result in (i) the loss of limited liability of any Limited Partner (except to
the extent a Limited Partner has consented to become the General Partner) or
(ii) in the Partnership being treated as an association taxable as a corporation
for federal income tax purposes.  Notwithstanding the foregoing
provisions of this Section 10.01(c), no
such new General Partner shall be admitted (and the existing General Partner
shall continue as such) if the event that permitted the selection of a new
General Partner shall have been an event of the type described in Section
17-402(a)(5) of the Act that with the passage of time would cause the existing
General Partner to become a Bankrupt Partner but, due to the failure of such
situation to continue, such General Partner does not become a Bankrupt
Partner.

       

      10.02 Conversion of
Interest.  Immediately upon the General
Partner’s ceasing to be General Partner following the admission of a new General
Partner pursuant to Section 10.01(c), the
former General Partner’s interest in the Partnership as a General Partner shall
be converted into the interest of a Limited Partner in the Partnership having
the same economic rights as specified for the General Partner herein immediately
prior to its ceasing to be a General Partner, and such General Partner shall
automatically and without further action be admitted to the Partnership as a
Limited Partner.

       

      ARTICLE XI

                                      

      DISSOLUTION, LIQUIDATION,
AND TERMINATION

       

      11.01 Dissolution.  The Partnership shall be dissolved
and its affairs shall be wound up upon the first to occur of any of the
following:

       

      (a) the
written consent of the General Partner, the Class A Limited Partner and the
Class B Limited Partner;

       

       

      
        
          
          

        

        
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      (b) unless
otherwise agreed to by the General Partner, the Class A Limited Partner and the
Class B Limited Partner 30 days following the occurrence of the Vesting
Date;

       

      (c) the end
of the term of the Partnership as set forth in Section 2.06;

       

      (d) the
General Partner’s ceasing to be the General Partner as described in Section 10.01(b) with
no new General Partner having been selected and admitted as provided in Section 10.01(c);
or

       

      (e) any other
event causing dissolution as described in Section 17-801 of the Act (other than
an event described in Section 17-402(a)(4) through (10) of the Act, except as
provided in Sections
10.01(b) and 11.01(d));

       

      it being
understood that if an “event of withdrawal of a general partner” (as defined in
Section 17-101(3) of the Act) shall occur with respect to the General Partner
and at least one other General Partner shall have been or is about to be
admitted pursuant to Section 3.03(b),
10.01(c), or
10.02, the
Partnership shall not dissolve but shall continue and the remaining General
Partner shall, and hereby agrees to, carry on the business of the
Partnership.

       

      11.02 Liquidation and
Termination.  Upon dissolution of the
Partnership, unless it is continued as provided in Section 11.01,
the General Partner shall act as liquidator or may appoint one or more other
Persons as liquidator; provided, however, that if the
Partnership shall be dissolved on account of an event of the type described in
Section 17-402(a)(4) through (10) of Act with respect to the General Partner,
the liquidator shall be one or more Persons selected in writing by the Class A
Limited Partner and the Class B Limited Partner.  The liquidator shall
proceed diligently to wind up the affairs of the Partnership and make final
distributions as provided herein, and shall file any amendments to the
Certificate as may be required by applicable law.  The costs of
liquidation shall be borne as a Partnership expense.  Until final
distribution, the liquidator shall continue to manage the Partnership assets
with all of the power and authority of the General Partner.  The steps
to be accomplished by the liquidator are as follows:

       

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

       

      (b) the
liquidator shall pay all of the debts and liabilities of the Partnership
(including, without limitation, all expenses incurred in liquidation and any
advances made by the General Partner pursuant to Section 4.03) or
otherwise make adequate provision therefor (including, without limitation, the
establishment of a cash escrow fund for contingent liabilities in such amount
and for such term as the liquidator may reasonably determine); and

       

      (c) all
remaining assets of the Partnership shall be distributed to the Partners as
follows:

       

       

      
        
          
          

        

        
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      (i) the fair
market value of the property shall be determined and the capital accounts of the
Partners shall be adjusted to reflect the manner in which the unrealized income,
gain, loss, and deduction inherent in such property (that has not been reflected
in the capital accounts previously) would be allocated among the Partners if
there were a taxable disposition of such property for the fair market value of
such property on the Vesting Date; and

       

      (ii) the
Partnership property shall be distributed among the Partners in accordance with
the positive capital account balances of the Partners, as determined after
taking into account all capital account adjustments for the taxable year of the
Partnership during which the liquidation of the Partnership occurs (other than
those made by reason of this clause); and such distributions shall be made by
the end of the taxable year of the Partnership during which the liquidation of
the Partnership occurs (or, if later, within 90 days after the date of such
liquidation).  While the General Partner has the right to sell TPP
Units as noted in Section 5.04,
and subject to the restrictions set forth in Section 5.05, it
is the intent of the General Partner upon liquidation and termination of the
Partnership to distribute TPP Units to the Partners rather than sell the TPP
Units and distribute the cash proceeds of such sale to the
Partners.

       

      For
purposes of this Section 11.02(c), the
“fair market value” of each TPP Unit held by the Partnership on the Vesting Date
shall be equal to the average of the closing sale prices per applicable TPP
Unit, as the case may be, for the 20 trading days ending on the Vesting Date
(or, if no closing sale price is reported, the average of the bid and asked
prices) as reported in the composite transactions for the principal United
States securities exchange on which the applicable TPP Units are traded or if
the applicable TPP Units, as the case may be, are not listed on a national or
regional stock exchange, as reported by the OTC Bulletin Board or other
applicable quotation service.  All distributions in kind to the
Partners shall be made subject to the liability of each distributee for costs,
expenses, and liabilities theretofore incurred or for which the Partnership
shall have committed prior to the date of termination and such costs, expenses,
and liabilities shall be allocated to such distributee pursuant to this Section 11.02.  The
distribution of property to a Partner in accordance with the provisions of this
Section 11.02
shall constitute a complete return to the Partner of its Capital Contributions
and a complete distribution to the Partner of its interest in the Partnership
and all the Partnership’s property and shall constitute a compromise to which
all Partners have consented within the meaning of Section 17-502(b) of the
Act.

       

      11.03 Cancellation of
Certificate.  Upon completion of the
distribution of Partnership assets as provided herein, the Partnership shall be
terminated, and the General Partner (or, if there shall be no General Partner,
the Limited Partners) shall cause the cancellation of the Certificate and any
other filings made pursuant to Section 2.05 and
shall take such other actions as may be necessary to terminate the
Partnership.

       

      ARTICLE XII

                                                 

      GENERAL
PROVISIONS

       

      12.01 Offset.  In the event that any sum is
payable to any Partner pursuant to this Agreement, any amounts owed by such
Partner to the Partnership shall be deducted from said sum before payment to
said Partner.

       

       

      
        
          
          

        

        
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      12.02 Notices.  All notices or requests or
consents provided for or permitted to be given pursuant to this Agreement must
be in writing and must be given (a) by depositing same in the United States
mail, addressed to the Person to be notified, postpaid, and registered or
certified with return receipt requested or (b) by delivering such notice by
courier or in person to such party.  Notices given or served pursuant
hereto shall be effective two Business Days after such deposit, or upon receipt
if delivered in person to the person to be notified.  All notices to
be sent to a Partner shall be sent to or made at the address given on the Power
of Attorney executed by the Partner and delivered to the General Partner on the
date hereof or in the instrument described in Section 3.03(c),
3.04, or 10.01(c), or such
other address as such Partner may specify by notice to the General
Partner.  Any notice to the Partnership shall be given to the General
Partner.

       

      12.03 Entire Agreement;
Supersede.  This Agreement constitutes the
entire agreement of the Partners relating to the matters contained herein and
supersedes all prior contracts or agreements, whether oral or written, among the
parties hereto with respect to such matters.

       

      12.04 Effect of Waiver or
Consent.  No waiver or consent, express or
implied, by any Person with respect to any breach or default by any other Person
of its obligations hereunder shall be deemed or construed to be a consent or
waiver with respect to any other breach or default by such other Person of the
same or any other obligations of such other Person hereunder.  Failure
on the part of any Person to complain of any act or omission of any other
Person, or to declare any other Person in default, irrespective of how long such
failure continues, shall not constitute a waiver by such Person of its rights
hereunder until the applicable limitation period has run.

       

      12.05 Amendment or
Modification.  This Agreement may be amended or
modified from time to time only by a written instrument executed by the General
Partner; provided,
however, that (a) the
vesting and distribution provisions of this Agreement may be amended or modified
only by a written instrument executed by the General Partner, the Class A
Limited Partner and the Class B Limited Partner, and (b) no amendment or
modification reducing a Partner’s Sharing Points (other than to reflect changes
otherwise provided hereby) or increasing its duties or adversely affecting its
limited liability shall be effective without such Partner’s
consent.

       

      12.06 Binding Effect; Joinder of
Additional Parties.  Subject to the restrictions on
Dispositions set forth herein, this Agreement shall be binding upon and shall
inure to the benefit of the Partners, as well as the respective heirs, legal
representatives, successors, and assigns of such Partners.

       

      12.07 Construction.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUDING
ANY CONFLICTS-OF-LAW RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR
CONSTRUCTION OF THIS AGREEMENT TO THE LAWS OF ANOTHER
JURISDICTION.  The headings in this Agreement are inserted for
convenience and identification only and are not intended to describe, interpret,
define, or limit the scope, extent, or intent of this Agreement or any provision
hereof.  Whenever the context requires, the gender of all words used
in this Agreement shall include the masculine, feminine, and
neuter.  All references to Articles and Sections refer to articles and
sections of this Agreement.  All sums and 

       

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

         

        amounts
payable or to be payable pursuant to the provisions of this Agreement shall be
payable in coin or currency of the United States of America that, at the time of
payment, is legal tender for the payment of public and private debts in the
United States of America.  If any provision of this Agreement or the
application thereof to any Person or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by
law.

      

       

      12.08 Further
Assurances.  In connection with this Agreement,
as well as all transactions contemplated by this Agreement, each Partner agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry
out, and perform all of the terms, provisions, and conditions of this Agreement
and all such transactions.

       

      12.09 Indemnification.  To the fullest extent permitted by
law, each Partner shall indemnify the Partnership and each other Partner and
hold them harmless from and against all losses, costs, liabilities, damages, and
expenses (including, without limitation, costs of suit and attorney’s fees) they
may incur on account of any breach by such indemnifying Partner of this
Agreement.

       

      12.10 Waiver of Certain
Rights.  Each Partner irrevocably waives
any right it might have to maintain any action for dissolution of the
Partnership or to maintain any action for partition of the property of the
Partnership.

       

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

       

      12.12 Dispute
Resolution.

       

      (a) If the
General Partner and one or more Limited Partners are unable to resolve any
controversy, dispute, claim or other matter in question arising out of, or
relating to, this Agreement, any provision hereof, the alleged breach hereof, or
in any way relating to the subject matter of this Agreement, or the relationship
between the parties created by this Agreement, including questions concerning
the scope and applicability of this Section 12.12,
whether sounding in contract, tort or otherwise, at law or in equity, under
state or federal law, whether provided by statute or common law, for damages or
any other relief (any such controversy, dispute, claim or other matter in
question, a “Dispute”), on or
before the 30th day following the receipt by the General Partner or such Limited
Partners of written notice of such Dispute from the other party, which notice
describes in reasonable detail the nature of the Dispute and the facts and
circumstances relating thereto, the General Partner or such Limited Partners
may, by delivery of written notice to the other party, require that a
representative of the General Partner and of such Limited Partners meet at a
mutually agreeable time and place in an attempt to resolve such
Dispute.  Such meeting shall take place on or before the 15th day
following the date of the notice requiring such meeting, and if the Dispute has
not been resolved within 15 days following such meeting, the General Partner or
such Limited Partners may cause such Dispute to be resolved by binding
arbitration in Houston, Texas, by submitting such Dispute 

       

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

         

        for
arbitration within 30 days following the expiration of such 15-day
period.  This agreement to arbitrate shall be specifically enforceable
against the parties.

      

       

      (b) It is the
intention of the parties that the arbitration shall be governed by and conducted
pursuant to the Federal Arbitration Act, as such Act is modified by this Section 12.12.  If
it is determined the Federal Arbitration Act is not applicable to this Agreement
(e.g., this Agreement does not evidence a transaction involving interstate
commerce), this agreement to arbitrate shall nevertheless be enforceable
pursuant to applicable State law.  While the arbitrators may refer to
the Commercial Arbitration Rules of the American Arbitration Association (the
“Rules”) for
guidance with respect to procedural matters, the arbitration proceeding shall
not be administered by the American Arbitration Association but instead shall be
self-administered by the parties until the arbitrators are selected and then the
proceeding shall be administered by the arbitrators.

       

      (c) The
validity, construction, and interpretation of this agreement to arbitrate, and
all procedural aspects of the arbitration conducted pursuant to this agreement
to arbitrate, including but not limited to, the determination of the issues that
are subject to arbitration (i.e., arbitrability), the scope of the arbitrable
issues, allegations of “fraud in the inducement” to enter into this Agreement or
this arbitration provision, allegations of waiver, laches, delay or other
defenses to arbitrability, and the rules governing the conduct of the
arbitration (including the time for filing an answer, the time for the filing of
counterclaims, the times for amending the pleadings, the specificity of the
pleadings, the extent and scope of discovery, the issuance of subpoenas, the
times for the designation of experts, whether the arbitration is to be stayed
pending resolution of related litigation involving third parties not bound by
this arbitration agreement, the receipt of evidence, and the like), shall be
decided by the arbitrators.

       

      (d) The rules
of arbitration of the Federal Arbitration Act, as modified by this Agreement,
shall govern procedural aspects of the arbitration; to the extent the Federal
Arbitration Act as modified by this Agreement does not address a procedural
issue, the arbitrators may refer for guidance to the Commercial Arbitration
Rules then in effect with the American Arbitration Association.  The
arbitrators may refer for guidance to the Federal Rules of Civil Procedure, the
Federal Rules of Civil Evidence, and the federal law with respect to the
discovery process, applicable legal privileges, and admissible
evidence.  In deciding the substance of the parties’ Dispute, the
arbitrators shall refer to the substantive laws of the State of Delaware for
guidance (excluding Delaware’s conflict-of-law rules or principles that might
call for the application of the law of another jurisdiction); provided, however, IT IS EXPRESSLY
AGREED THAT NOTWITHSTANDING ANY OTHER PROVISION IN THIS SECTION 12.12 TO
THE CONTRARY, THE ARBITRATORS SHALL HAVE ABSOLUTELY NO AUTHORITY TO AWARD
CONSEQUENTIAL DAMAGES (SUCH AS LOSS OF PROFIT), TREBLE, EXEMPLARY OR PUNITIVE
DAMAGES OF ANY TYPE UNDER ANY CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES
MAY BE AVAILABLE UNDER DELAWARE LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW,
OR UNDER THE FEDERAL ARBITRATION ACT, OR UNDER THE COMMERCIAL ARBITRATION RULES
OF THE AMERICAN ARBITRATION ASSOCIATION.  The arbitrators shall have
the authority to assess the costs and expenses of the arbitration proceeding
(including the arbitrators’ fees and expenses) against either or both
parties.  

       

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

         

        However,
each party shall bear its own attorneys fees and the arbitrators shall have no
authority to award attorneys fees.

      

       

      (e) When a
Dispute has been submitted for arbitration, within 30 days of such submission,
the General Partner will choose an arbitrator, and such Limited Partners will
choose an arbitrator.  The two arbitrators shall select a third
arbitrator, failing agreement on which within 90 days of the original notice,
the General Partner and such Limited Partners (or either of them) shall apply to
any United States District Judge for the Southern District of Texas, who shall
appoint the third arbitrator.  While the third arbitrator shall be
neutral, the two party-appointed arbitrators are not required to be neutral and
it shall not be grounds for removal of either of the two party-appointed
arbitrators or for vacating the arbitrators’ award that either of such
arbitrators has past or present minimal relationships with the party that
appointed such arbitrator.  Evident partiality on the part of an
arbitrator exists only where the circumstances are such that a reasonable person
would have to conclude there in fact existed actual bias and a mere appearance
or impression of bias will not constitute evident partiality or otherwise
disqualify an arbitrator.  Minimal or trivial past or present
relationships between the neutral arbitrator and the party selecting such
arbitrator or any of the other arbitrators, or the failure to disclose such
minimal or trivial past or present relationships, will not by themselves
constitute evident partiality or otherwise disqualify any
arbitrator.  Upon selection of the third arbitrator, each of the three
arbitrators shall agree in writing to abide faithfully by the terms of this
agreement to arbitrate.  The three arbitrators shall make all of their
decisions by majority vote.  If one of the party-appointed arbitrators
refuses to participate in the proceedings or refuses to vote, the decision of
the other two arbitrators shall be binding.  If an arbitrator dies or
becomes physically incapacitated and is unable to fulfill his or her duties as
an arbitrator, the arbitration proceeding shall continue with a substitute
arbitrator selected as follows: if the incapacitated arbitrator is a
party-appointed arbitrator, the party shall promptly select a new arbitrator,
and if the incapacitated arbitrator is the neutral arbitrator, the two-party
appointed arbitrators shall select a substitute neutral arbitrator, failing
agreement on which the General Partner and such Limited Partners (or either of
them) shall apply to any United States District Judge for the Southern District
of Texas, who shall appoint the substitute neutral arbitrator.

       

      (f) The final
hearing shall be conducted within 120 days of the selection of the third
arbitrator.  The final hearing shall not exceed ten working days, with
each party to be granted one-half of the allocated time to present its case to
the arbitrators.  There shall be a transcript of the hearing before
the arbitrators.  The arbitrators shall render their ultimate decision
within 20 days of the completion of the final hearing completely resolving all
of the Disputes between the parties that are the subject of the arbitration
proceeding.  The arbitrators’ ultimate decision after final hearing
shall be in writing, but shall be as brief as possible, and the arbitrators
shall assign their reasons for their ultimate decision.  In the case
the arbitrators award any monetary damages in favor of either party, the
arbitrators shall certify in their award that they have not included any treble,
exemplary or punitive damages.

       

      (g) The
arbitrators’ award shall, as between the parties to this Agreement and those in
privity with them, be final and entitled to all of the protections and benefits
of a final judgment, e.g., res
judicata (claim preclusion) and collateral estoppel (issue preclusion),
as to all Disputes, including compulsory counterclaims, that were or could have
been presented to the

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

         

        arbitrators.  The
arbitrators’ award shall not be reviewable by or appealable to any court, except
to the extent permitted by the Federal Arbitration Act.

      

       

      (h) It is the
intent of the parties that the arbitration proceeding shall be conducted
expeditiously, without initial recourse to the courts and without interlocutory
appeals of the arbitrators’ decisions to the courts.  However, if a
party refuses to honor its obligations under this agreement to arbitrate, the
other party may obtain appropriate relief compelling arbitration in any court
having jurisdiction over the parties; the order compelling arbitration shall
require that the arbitration proceedings take place in Houston, Texas, as
specified above.  The parties may apply to any court for orders
requiring witnesses to obey subpoenas issued by the
arbitrators.  Moreover, any and all of the arbitrators’ orders and
decisions may be enforced if necessary by any court.  The arbitrators’
award may be confirmed in, and judgment upon the award entered by, any federal
or State court having jurisdiction over the parties.

       

      (i) To the
fullest extent permitted by law, this arbitration proceeding and the arbitrators
award shall be maintained in confidence by the parties.  However, a
violation of this covenant shall not affect the enforceability of this
arbitration agreement or of the arbitrators’ award.

       

      (j) A party’s
breach of this Agreement shall not affect this agreement to
arbitrate.  Moreover, the parties’ obligations under this arbitration
provision are enforceable even after this Agreement has
terminated.  The invalidity or unenforceability of any provision of
this arbitration agreement shall not affect the validity or enforceability of
the parties’ obligation to submit their Disputes to binding arbitration or the
other provisions of this agreement to arbitrate.

       

      12.13 No Effect on Employment
Relationship.  Nothing in this Agreement shall
confer upon any employee of the General Partner or any Affiliate thereof any
right to continued employment nor shall it interfere in any way with the right
of the General Partner or any of its Affiliates to terminate the employment of
any employee at any time.

       

      12.14 Legal
Representation.  This Agreement and related
documents have been prepared by Andrews Kurth LLP, as counsel for the General
Partner, and not as counsel for any other Partner or the
Partnership.  Each party other than the General Partner has been
advised to seek independent counsel in connection with this Agreement and the
related documents.

       

      [Signature
Pages to Follow.]

       

      
        
          
             

             

          

           

        

        
          28

          
            

          

        

        
           

        

      

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

       

      GENERAL
PARTNER:                                                                EPCO, INC.

       

      

             
By: /s/ W.
Randall
Fowler                                                               

            
W. Randall Fowler

            President
and Chief Executive Officer

      

      

      CLASS A LIMITED
PARTNER:                                               
DUNCAN FAMILY INTERESTS,
INC.

       

      

      

             
By:  /s/
Darryl E.
Smith                                                                

             
Darryl E. Smith

                     
Treasurer

      

      
        	
                CLASS B LIMITED
      PARTNER:

              	
                The
      Class B Limited Partner initially admitted as a Class B Limited Partner of
      the Partnership, pursuant to Powers of Attorney executed in favor of, and
      granted and delivered to the General
Partner

              

      

       

      
        	
                 
      

              	
                By: 
      EPCO, INC.

              

      

      
        	
                 
      

              	
                       
      (As attorney-in-fact for the Class B
Limited

              

      

      
        	
                 
      

              	
                       
      Partner pursuant to powers of
attorney)

              

      

      

      
 

      By:    /s/
W. Randall
Fowler                                                                   

      W.
Randall Fowler

      President
and Chief Executive Officer

      

       

      

       

      
        
          
             

            Signature
Page to

            Agreement
of Limited Partnership of TEPPCO Unit II L.P.

          

           

        

        
           

          
            

          

        

        
           

        

      

      Exhibit
A

       

      FORM
OF POWER OF ATTORNEY

       

      For
Executing Agreement of Limited Partnership of TEPPCO Unit II L.P.

       

      Know all
by these presents, that the undersigned hereby constitutes and appoints EPCO,
Inc. and its authorized representatives the undersigned’s true and lawful
attorney-in-fact to:

       

      
        	
                 
      

              	
                (1)

              	
                execute
      for and on behalf of the undersigned as a limited partner thereunder that
      certain Agreement of Limited Partnership of TEPPCO Unit II L.P. (the
      “Partnership
      Agreement”);

              

      

       

      
        	
                 
      

              	
                (2)

              	
                take
      any other action of any type whatsoever in connection with the foregoing
      that, in the opinion of each such attorney-in-fact, may be of benefit to,
      in the best interest of, or legally required of the undersigned, it being
      understood that the documents executed by the attorney-in-fact on behalf
      of the undersigned pursuant to this Power of Attorney shall be in such
      form and shall contain such terms and conditions as the attorney-in-fact
      may approve in the attorney-in-fact’s
  discretion.

              

      

       

      The
undersigned hereby grants to each attorney-in-fact full power and authority to
do and perform all and every act and thing whatsoever requisite, necessary or
proper to be done in the exercise of any of the rights and powers herein
granted, as fully to all intents and purposes as the undersigned might or could
do if personally present, with full power of substitution or revocation, hereby
ratifying and confirming all that the attorney-in-fact, or the attorney-in-facts
substitute or substitutes, shall lawfully do or cause to be done by virtue of
this Power of Attorney and the rights and powers herein granted.

       

      The
undersigned acknowledges and agrees by execution of this Power of Attorney that
the undersigned’s initial Sharing Points (as defined in the Partnership
Agreement) under the Partnership Agreement equal __________, which represents
___% of the total initial Sharing Points granted by the General Partner pursuant
to the Partnership Agreement.

       

      IN
WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be
executed as of the date written below.

      
 

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	_______________________________________________ 
      
	
                                            Signature

                                          
	 
      
	_______________________________________________ 
      
	
                                            Type
      or Print Name

                                          
	 
      
	_______________________________________________ 
      
	
                                            Date

                                          

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

      

      
        
          
             

            Exhibit A
– Page 1ex10_33.htm

     

    Exhibit
10.33

    EXCLUSIVE LICENSE
AGREEMENT

    

    This Exclusive License Agreement
(“Agreement”) is made and entered into as of the 15th day of August, 2008 (the
“Effective Date”), by and between Advanced Cell Technology, Inc., a Delaware
corporation with offices located at 11100 Santa Monica Blvd, Suite 850, Los
Angeles, CA 90025 (“ACT”), Embryome Sciences, Inc., a California corporation
(“LICENSEE”), with offices located at 1301 Harbor Bay Parkway, Suite 100,
Alameda, California 94502.  ACT and LICENSEE are sometimes hereinafter
referred to as the “Parties.”

     

    WITNESSETH

    

    WHEREAS, ACT owns the PATENT RIGHTS,
SUPPLEMENTAL PATENT RIGHTS, and KNOW-HOW; and

    

    WHEREAS, LICENSEE desires to obtain an
exclusive license from ACT to use the PATENT RIGHTS and KNOW-HOW upon the terms
and conditions set forth in this Agreement; and

    

    WHEREAS, ACT is willing to grant such a
license to LICENSEE upon the terms and conditions set forth in this
Agreement;

    

    NOW, THEREFORE, in consideration of the
premises and the mutual covenants contained herein, the Parties hereto agree as
follows:

     

    ARTICLE 1 -
DEFINITIONS

    

    For the purposes of this Agreement, the
following words and phrases shall have the following meanings:

    

    1.1           “AFFILIATE”
means any corporation, limited liability company, limited partnership or other
entity in control of, controlled by, or under common control with
LICENSEE.

    

    1.2           “COMBINATION
PRODUCT” means a product that contains a LICENSED PRODUCT component and at least
one other component that has independent research, diagnostic or therapeutic
utility, could reasonably be sold separately and has economic value of its
own.

    

    1.3           “CONFIDENTIAL
INFORMATION” means confidential or proprietary information of ACT or LICENSEE
relating to the PATENT RIGHTS, KNOW-HOW, LICENSED PROCESSES, LICENSED SERVICES
or LICENSED PRODUCTS.  CONFIDENTIAL INFORMATION may be in written,
graphic, oral or physical form and may include scientific knowledge, know-how,
processes, inventions, techniques, formulae, products, business operations,
customer requirements, designs, sketches, photographs, drawings, specifications,
reports, studies, findings, data, plans or other records, biological materials,
and/or software.  CONFIDENTIAL INFORMATION shall not
include:  (a) information which is, or later becomes, generally
available to the public through no fault of the recipient; (b) information which
is provided to the recipient by an independent third party having no obligation
to keep the information secret; (c) information which the recipient can
establish by written documentation was previously known to it; or (d)
information which the recipient can establish by written

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    documentation
was independently developed by it without reference to the CONFIDENTIAL
INFORMATION.

    

    1.4           “EXCLUDED FIELD” means
(a) the research,
development, manufacture and selling to third parties of human and non-human
animal cells for commercial research use, including small molecule and other
drug testing and basic research and (b) the manufacture and selling of human
cells for therapeutic and diagnostic use in the treatment of human (i) diabetes,
(ii) liver diseases and (iii) retinal diseases and retinal degenerative
diseases; but EXCLUDED FIELD shall exclude applications involving the use of
cells in the treatment of tumors where the primary use of the cells is the
destruction or reduction of tumors and does not involve regeneration of tissue
or organ function.

    

    1.5           “KIRIN
FIELD” means research, development, manufacture and sale of polyclonal
antibodies in non-human mammals, excluding (1) immunoglobulin in the blood of
Bos taurus or Bos indicus and (ii) production of biopharmaceutical agents in
milk, including but not limited to proteins, peptides and polypeptides for
pharmaceutical, nutraceutical or other use.

    

    1.6           “KNOW-HOW”
means all compositions of matter, techniques and data and other know-how and
technical information including inventions (whether or not patentable),
improvements and developments, practices, methods, concepts, trade secrets,
documents, computer data, computer slide illustrations, computer code,
apparatus, test data, analytical and quality control data, formulation,
manufacturing, patent data or descriptions, development information, drawings,
specifications, designs, plans, proposals and technical data and manuals and all
other CONFIDENTIAL INFORMATION that is owned or controlled by ACT as of the
Effective Date, and that specifically relates to the subject matter described in
or claimed by the PATENT RIGHTS.

    

    1.7           “LICENSED
PROCESS” means any process or method, the  development, use, practice,
or sale of which (1) is covered in whole or in part by, or cannot be performed
without infringing, a VALID CLAIM of the PATENT RIGHTS in the country in which
such LICENSED PROCESS is practiced or sold, or (2) otherwise utilizes the
KNOW-HOW.

    

    1.8           “LICENSED
PRODUCT” means any product, or part thereof or derived therefrom, the
development, manufacture, sale, lease, or use of which (1) is covered in whole
or in part by, or cannot be performed without infringing, a VALID CLAIM of the
PATENT RIGHTS in the country in which any such product or part thereof is
developed, made, used, sold or imported by LICENSEE or (2) otherwise utilizes
the KNOW-HOW.  By way of illustration but not limitation, the Parties
agree that LICENSED PRODUCTS include cells made utilizing the KNOW-HOW or
methods covered by VALID CLAIMS described in the patent applications and patents
included in the PATENT RIGHTS.

     

    1.9           “LICENSED
SERVICES” means any service, the development, use, performance, or sale of which
is covered in whole or in part by, or cannot be performed without infringing, a
VALID CLAIM of the PATENT RIGHTS in the country in which any such service is so
developed, used, performed, sold, offered for sale, imported or exported by
LICENSEE or otherwise utilizes the KNOW-HOW.

    

    1.10          “NET
SALES” means the invoiced amount on sales by LICENSEE or its Affiliates of
LICENSED PRODUCTS, LICENSED SERVICES or LICENSED PROCESSES less (to the
extent

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    applicable
and appropriately documented) (i) sales, tariff and import duties, use and other
taxes directly imposed with reference to particular sales, (ii) discounts,
rebates, and similar credits and chargebacks actually allowed and taken
(regardless of whether taken or paid at the time of sale or paid or credited to
the buyer at a subsequent date), and (iii) amounts allowed or credited on
returns; provided, any such allowed deductions shall be listed on the invoice
for the applicable LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE or
otherwise documented in the ordinary course of business, and (b) any SUBLICENSE
REVENUE.

    

    In the
case of Combination Products, Net Sales means the total invoice amount earned on
sales of Combination Products by LICENSEE or its Affiliates to any third person
or entity, less, to the extent applicable, the deductions set forth above,
multiplied by a proration factor that is determined as follows:

    

    (i)             
If all components of the Combination Product were sold separately during the
same or immediately preceding calendar quarter, the proration factor shall be
determined by the formula [A/(A+B)], where A is the average invoice amount
earned on the Licensed Product during such period when sold separately in
finished form, and B is the average invoice amount earned on all other active
components of the Combination Product during such period when sold separately in
finished form; or

    

    (ii)           
if all components of the Combination Product were not sold separately during the
same or immediately preceding calendar quarter, the proration factor shall be
determined by the formula [C/(C+D)], where C is the average fully absorbed cost
of the Licensed Product component during the prior quarter and D is the average
fully absorbed cost of all other active components of the Combination Product
during the prior quarter.

    

    1.11          “PATENT
RIGHTS” means the patents and patent applications identified on Exhibit A attached
hereto, and any divisional, continuation or continuation-in-part of those
applications, but only to the extent the claims in said applications are
directed to subject matter specifically described in the patents and patent
applications identified on Exhibit A, as well as
any patents issued on these patent applications, and any reissues,
reexaminations, extensions and substitutions (or the equivalent) thereof and any
foreign counterparts to those patents and patent applications.  The
parties agree that Exhibit A may be
revised from time to time after the EFFECTIVE DATE to reflect changes
thereto.

    

    1.12         
“SUBLICENSEE” means a sublicensee of the rights granted LICENSEE under this
Agreement, as further described in Article 2.

    

    1.13          “SUBLICENSE
REVENUE” means consideration that LICENSEE receives for the sublicense of rights
that are granted LICENSEE under Article 2, including
without limitation license fees, milestone payments, up front fees, success
fees, and license maintenance fees, but not capital contributions, loans, or
payments for costs incurred in research and development.

    

    1.14          “SUPPLEMENTAL
KNOW-HOW” means all compositions of matter, techniques and data and other
know-how and technical information including inventions (whether or not
patentable), improvements and developments, practices, methods, concepts, trade
secrets, documents, computer data, computer slide illustrations, computer code,
apparatus, test data, analytical and quality control data, formulation,
manufacturing, patent data or descriptions, development information, drawings,
specifications, designs, plans, proposals and technical data and manuals and all
other CONFIDENTIAL

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    INFORMATION
that is owned or controlled by ACT as of the Effective Date, and that
specifically relates to the subject matter described in or claimed by the
SUPPLEMENTAL PATENT RIGHTS.

    

    1.1.5         “SUPPLEMENTAL
PATENT RIGHTS” means the patents and patent applications identified on Exhibit B attached
hereto, and any divisional, continuation or continuation-in-part of those
applications, but only to the extent the claims in said applications are
directed to subject matter specifically described in the patents and patent
applications identified on Exhibit B, as well as
any patents issued on these patent applications, and any reissues,
reexaminations, extensions and substitutions (or the equivalent) thereof and any
foreign counterparts to those patents and patent applications.  The
parties agree that Exhibit B may be
revised from time to time after the EFFECTIVE DATE to reflect changes
thereto.

    

    1.16          “VALID
CLAIM” means (a) a claim of any issued and unexpired United States or foreign
patent included in the PATENT RIGHTS which has not lapsed or become abandoned or
been declared invalid or unenforceable by a court of competent jurisdiction or
an administrative agency from which no appeal can be or has been taken within
the time allowed for such appeal and which has not been disclaimed or admitted
to be invalid or unenforceable through reissue, disclaimer or otherwise, or (b)
to the extent rights are granted by a governmental patent authority thereunder
(i.e., to the extent that the owner would be able to enforce a right to a patent
royalty thereunder under applicable patent law), a claim of a pending patent
application included in the PATENT RIGHTS.

     

    For
purposes of this Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires:  (a) the use herein of the
plural shall include the single and vice versa and the use of the
masculine shall include the feminine; (b) unless otherwise set forth herein, the
use of the term “including” or “includes” means “including [includes] but [is]
not limited to”; and (c) the words “herein,” “hereof,” “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any
particular provision.  Additional terms may be defined throughout this
Agreement.

     

    

    ARTICLE 2 – LICENSE
GRANT

    

    2.1           
Grant of
Rights.

    

      
(a)           ACT hereby
grants to LICENSEE, and LICENSEE accepts, subject to the terms and conditions of
this Agreement, a royalty-bearing, worldwide, exclusive license,
with  the right to sublicense, to use the PATENT RIGHTS and KNOW-HOW
to (i) research, develop, make, have made, use, sell, have sold, offer for sale,
have offered for sale, import, have imported, export and have exported LICENSED
PRODUCTS, (ii) research, develop, use, practice, sell, have sold, offer for
sale, have offered for sale, import, have imported, export and have exported
LICENSED PROCESSES, and (iii) develop, use, perform, sell, have sold, offer for
sale, have offered for sale, import, have imported, export and have exported
LICENSED SERVICES.

    

      
(b)           ACT hereby
grants to LICENSEE, and LICENSEE accepts, subject to the terms and conditions of
this Agreement, a royalty-free, fully paid-up, worldwide, non-exclusive
license,  to use the SUPPLEMENTAL PATENT RIGHTS and SUPPLEMENTAL
KNOW-HOW for the purposes

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    described
in paragraph (a) of this Section and/or the purposes described in the Kirin
Sublicense Agreement (as defined below), but only in conjunction with the use of
the PATENT RIGHTS and/or the patents and patent rights described in the Kirin
License Agreement.

    

      
(c)           The license
granted under this Section 2.1 shall exclude LICENSED PRODUCTS, LICENSED
PROCESSES, and LICENSED SERVICES within the EXCLUDED FIELD so long as that
certain Exclusive License Agreement, dated May 14, 2004, as amended by a First
Amendment to Exclusive License Agreement, dated August 25, 2005; between ACT and
Lifeline Cell Technology, LLC (formerly PacGen Cellco, LLC) remains in effect
and Lifeline Cell Technology, LLC retains an exclusive license of PATENT RIGHTS
under that agreement within the EXCLUDED FIELD.

    

      
(d)           Notwithstanding
the preceding provisions of this Section, the license granted to LICENSEE shall
be non-exclusive within the KIRIN FIELD so long as that certain Non-Exclusive
License Agreement, dated May 9, 2006, between ACT and Kirin Beer Kabushiki
Kaisha, Aurox, LLC, Hematech, LLC, and Kirin SD, Inc. remains in effect and the
licensees under that agreement retain a non-exclusive license of PATENT RIGHTS
under that agreement in the KIRIN FIELD.

    

    2.2           Sublicense
Rights.  LICENSEE shall have the right to grant sublicenses of
its rights under Section 2.1 without the consent or approval of ACT; provided
however, that LICENSEE agrees to provide ACT with (a) a draft copy of any
sublicense agreement to ACT at least thirty (30) days before execution to allow
ACT to comment on the terms of the sublicense if ACT chooses to comment; and (b)
a fully executed copy of all sublicense agreements within thirty (30) days after
execution; and provided, further, that SUPPLEMENTAL PATENT RIGHTS and
SUPPLEMENTAL KNOW-HOW may be sublicensed only to LICENSEE’S SUBSIDIARIES and
AFFILIATES in conjunction with a sublicense of the PATENT RIGHTS.

    

    2.3           Knowledge
Transfer.  Within ten (10) days of the Effective Date, ACT
shall provide, deliver, and transfer to LICENSEE all information and data
relating to the PATENT RIGHTS, SUPPLEMENTAL PATENT RIGHTS, KNOW-HOW and
SUPPLEMENTAL KNOW-HOW as may be reasonably necessary to allow LICENSEE to
exploit the licenses granted hereunder. Such transfer shall be made free and
clear of all liens, security interests, encumbrances, and claims of any kind by
any third party.  ACT shall bear all costs of so delivering the
KNOW-HOW and SUPPLEMENTAL KNOW-HOW to LICENSEE.  ACT shall not retain
any copies (in any format or media) of the KNOW-HOW.

    

    ARTICLE 3 – SUBLICENSE OF
CERTAIN PATENTS AND PATENT APPLICATIONS

    

    3.1           Concurrent
with the execution and delivery of this Agreement, ACT shall execute and deliver
to LICENSEE an Exclusive Sublicense Agreement (the “Kirin Sublicense
Agreement”), in form and substance acceptable to LICENSEE, granting to LICENSEE
a royalty-bearing , exclusive, worldwide sublicense to ACT’s rights to use
certain patents and related patent rights under that certain Exclusive License
Agreement, effective as of May 9, 2006, among ACT, Kirin Beer Kabushiki Kaisha,
Aurox, LLC, Hematech, LLC, and Kirin SD, Inc (the “Kirin License
Agreement”).  LICENSEE’s obligations under this Agreement are
contingent upon ACT executing and delivering to LICENSEE the Kirin Sublicense
Agreement.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    ARTICLE 4 –
COMMERCIALIZATION OBLIGATIONS

    

    4.1           LICENSEE
intends to use, or to cause its Sublicensees to use, commercially reasonable and
diligent efforts to bring one or more LICENSED PRODUCTS, LICENSED PROCESSES and
LICENSED SERVICES to market through an active and diligent program for
exploitation of the PATENT RIGHTS and KNOW-HOW and to continue active, diligent
marketing efforts for one or more LICENSED PRODUCTS, LICENSED PROCESSES and
LICENSED SERVICES throughout the life of this Agreement.  LICENSEE
makes no representation, guaranty, or warranty that it or its Sublicensees will
be successful in developing or bringing to market any LICENSED PRODUCT, LICENSED
PROCESS or LICENSED SERVICES.

     

    ARTICLE 5 -
CONSIDERATION

    

    5.1           Initial License
Fee.  In partial consideration of the rights and licenses
granted to LICENSEE by ACT in this Agreement, LICENSEE shall pay to ACT on the
Effective Date a license fee equal to  Two Hundred Thousand Dollars
(U.S.) ($200,000) (the “License Fee”).  The License Fee is not
refundable and is not creditable against other payments due to ACT under this
Agreement.  The License Fee shall be paid within two business days
after the Effective Date.

    

    5.2           Royalties and other
Consideration.

    

    (a)           As
additional consideration of the license granted to LICENSEE from ACT in Article
2 of this Agreement, LICENSEE shall pay to ACT a royalty equal to (i) 5%
of  the Net Sales received by LICENSEE and its AFFILIATES for all
LICENSED PRODUCTS, LICENSED PROCESS or LICENSED SERVICE sold, performed, or
leased by LICENSEE or any AFFILIATE, and (ii) 20% of all SUBLICENSE REVENUE
received by LICENSEE and its AFFILIATES.  The obligation of LICENSEE
to pay royalties shall terminate (a) with respect to NET SALES and SUBLICENSE
REVENUE arising in any country concurrently with the expiration or termination
of the last applicable VALID CLAIM within the PATENT RIGHTS in such country in
which the LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE is, (as
applicable), performed, sold, leased, or manufactured, or in which the PATENT
RIGHTS are licensed, and (b) in any and all cases when royalty payments to ACT
by LICENSEE total Six Hundred Thousand Dollars (U.S.) ($600,000.00); provided,
however, that such $600,000 of royalties shall be reduced to $200,000 if
LICENSEE, at LICENSEE’S option, pays ACT $200,000 in cash within thirty (30)
days after the execution of this Agreement in addition to the License fee
payable under Section 5.1 (such that the License Fee, additional $200,000
payment, and potential future royalties will total $600,000).

    

    (b)           No
multiple royalties shall be payable on the basis that any LICENSED PRODUCT,
LICENSED PROCESS or LICENSED SERVICE, its manufacture, use, lease, sale or
performance are or shall be covered by (a) more than one patent or patent
application within the PATENT RIGHTS, or (b) any other patent or know how under
a license or sublicense from ACT.  In the case of the use of patents
or know how licensed or sublicensed by ACT under other agreements, LICENSEE and
ACT’s other licensees or sublicensees shall have the right to credit against the
royalties owing to ACT, under this Agreement and under such other license or
sublicense agreements, any royalty payments received by ACT with respect to the
sale or lease of any product or performance of any service (regardless of
whether LICENSEE or another licensee or sublicensee of ACT patents or know how
pays the royalty), such that in no event shall the total of royalty payments
that are due to ACT in any royalty

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    period
under this Agreement and under such other license or sublicense agreements
exceed the highest applicable royalty rate among this Agreement and such
other license or sublicense agreements.  By way of example only, if a
product is produced by LICENSEE (alone or with a third party) and that product
uses PATENT RIGHTS under this Agreement and patents licensed under a license or
sublicense agreement between ACT and LICENSEE (or between ACT and the third
party with whom LICENSEE is producing the product), (i) only one royalty would
be paid to ACT on sales of the product, (ii) the royalty rate would be the
higher of the royalty rate applicable under this Agreement or under ACT’s other
license or sublicense agreement with LICENSEE or the third party, and (iii) the
royalty payment (whether paid by LICENSEE or by the third party) will be
credited toward royalties payable under this Agreement and under the other ACT
license or sublicense agreement with LICENSEE or the third party for the sale of
the product.

    

                   
5.3           Payment
Method.  All payments due under this Agreement shall be paid to
ACT in  Los Angeles, California, U.S.A., and shall be made in United
States currency without deduction for taxes, assessments, exchanges, collection
or other charges of any kind. Conversion of foreign currency to U.S. dollars
shall be made at the conversion rate reported in The Wall Street Journal on the
last working day of the calendar quarter to which the payment
relates.

    

                   
5.4           Late
Fee.  LICENSEE shall pay ACT interest on any overdue amounts at
the rate of one percent (1%) per month (twelve percent (12%) per annum), from
the date when such payment should have been made.

    

     5.5           Credit and Right of
Setoff.  LICENSEE shall receive a credit toward, and shall have
a right of setoff against, the payment of royalties due under this Agreement, on
a dollar for dollar basis, for any and all payments made by LICENSEE under the
Exclusive Sublicense Agreement to cure or avoid any default by ACT under the
Kirin License Agreement.

    

    ARTICLE 6 - REPORTS AND
RECORDS

    

     6.1           LICENSEE
shall maintain complete and accurate records of LICENSED PRODUCTS, LICENSED
SERVICES and LICENSED PROCESSES that are sold, performed, or, leased by LICENSEE
or its  AFFILIATES under this Agreement, and all SUBLICENSE REVENUE
received by LICENSEE and its AFFILIATES.  LICENSEE shall keep, and
shall cause its AFFILIATES and SUBLICENSEES to keep, full, true and accurate
books of account containing all particulars that may be necessary for the
purpose of showing the amounts payable to ACT hereunder and LICENSEE’s
compliance with the terms and conditions of this Agreement.  Said
books of account shall be kept at LICENSEE’s principal place of business or at
such other location as may be agreed upon by the parties.  Said books
and the supporting data shall be open upon reasonable advance notice (and no
more frequently than once per calendar year) for three (3) years following the
end of the calendar year to which they pertain, to the inspection of ACT or its
agents for the purpose of verifying LICENSEE’s royalty statement or compliance
in other respects with this Agreement.  If any such audit determines
that the reported payments to ACT were less than ninety percent (95%) of the
actual amount due to ACT for the period in question, LICENSEE shall bear the
cost of such audit (without limiting ACT’s other remedies with respect
thereto).

    

     6.2           After
the first commercial sale of a LICENSED PRODUCT, LICENSED SERVICE
or

    
      
         

      

      
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    LICENSED
PROCESS by LICENSEE any AFFILIATE, or any  SUBLICENSEE, or LICENSEE’S
receipt of any SUBLICENSE REVENUE, LICENSEE, within forty-five (45) days after
March 31, June 30, September 30 and December 31, of each year, shall deliver to
ACT a true and accurate report of all NET SALES and SUBLICENSE REVENUE during
the preceding three-month period under this Agreement as shall be pertinent to a
royalty accounting hereunder.  Each such report shall include at least
the following:

    

    
      	
               
      

            	
              (a)

            	
              number(s)
      and type(s) of LICENSED PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES
      sold, leased, or performed by LICENSEE and/or its
    AFFILIATES;

            

    

    

    
      	
               
      

            	
              (b)

            	
              total
      billings and payments received for LICENSED PRODUCTS, LICENSED PROCESSES
      and LICENSED SERVICES performed, sold, or leased by LICENSEE and its
      AFFILIATES, and/or SUBLICENSE REVENUE received from
      its  SUBLICENSEES; and

            

    

    

    
      	
               
      

            	
              (c)

            	
              deductions
      applicable as provided in Section
1.10;

            

    

    

    6.3           With
each such report submitted, LICENSEE shall pay to ACT the royalties and other
payments due and payable under this Agreement.  If no royalties or
other payments shall be due, LICENSEE shall so report.

    

    6.4           LICENSEE’s
reporting obligations hereunder shall terminate when LICENSEE’S obligation to
pay royalties to ACT terminates.

    

    ARTICLE 7 - PATENT RIGHTS
AND SUPPLEMENTAL PATENT RIGHS

    

    7.1           Responsibility for the
PATENT RIGHTS.  Subject to the terms of this Agreement,
LICENSEE shall be primarily responsible after the Effective Date for the
preparation, filing, prosecution and maintenance of the PATENT RIGHTS listed on
Exhibit A.  The
costs of such filing, prosecution and maintenance (including without limitation
the payment of all government fees in any given country required to maintain the
PATENT RIGHTS) after the Effective Date shall be borne by
LICENSEE.  LICENSEE agrees to use reasonable commercial efforts to
prosecute U.S. patents covering the inventions disclosed in the patent
applications included in the PATENT RIGHTS.  LICENSEE shall not be
obligated to reimburse ACT for any costs or expenses incurred by ACT prior to
the Effective Date with respect to the preparation, filing, and prosecution of
any patent applications.

    

    7.2           ACT’s
Participation.  ACT’s patent counsel shall be given a
reasonable opportunity to comment, at ACT’s expense, on all proposed patent
filings and responses to patent office actions or other patent office
communications that may affect the PATENT RIGHTS, and LICENSEE will not
unreasonably refuse to accept any suggestions of ACT’s patent
counsel; provided, however, that
LICENSEE will have the final decision on the incorporation of any comments of
ACT’s patent counsel.

    

    7.3           Abandonment.  LICENSEE
will not allow any patent or patent application within the PATENT RIGHTS to
become expired or abandoned, or fail to diligently pursue patent protection for
any invention within the PATENT RIGHTS, without giving (a) written notice to ACT
at least thirty (30)

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    business
days prior to the next due date for any required communication, response to
office action, filing, or payment, failure to meet which would result in
expiration or abandonment, including but not limited to provisional abandonment,
of the patent or patent application, and (b) ACT the right to assume
responsibility for such patent or patent application.  If ACT so
elects, (i) LICENSEE will execute such documents and otherwise perform such acts
and make all filings as may be reasonably required to permit ACT or its
designees to prosecute and maintain such patent or application in such
jurisdiction(s) and transact all matters connected therewith (including, as
necessary, appointing ACT’s patent counsel as associate attorneys of record, and
changing address of the patent attorney of record with the appropriate patent
authorities), (ii) ACT will thereafter assume control thereof and all expenses
(arising thereafter) for such prosecution and maintenance by ACT, and (iii)
LICENSEE’s rights and the licenses granted to LICENSEE with respect to all such
patents and patent applications shall automatically terminate upon ACT’s
assumption of control thereof.

    

    7.4           Enforcement of the PATENT
RIGHTS.  The Parties agree to notify each other in writing of
any actual or threatened infringement by a third party of the PATENT RIGHTS or
of any third-party claim of invalidity or unenforceability of the PATENT RIGHTS,
or of any interference or other proceeding affecting the PATENT
RIGHTS.  LICENSEE shall have the first right to prosecute and defend
such claims under its sole control and at its sole expense.  If
LICENSEE does proceed with such prosecution or defense, ACT shall provide
reasonable assistance to LICENSEE at LICENSEE’s request, provided LICENSEE pays
ACT for the reasonable out-of-pockets costs incurred by ACT in providing such
assistance.  Any recovery obtained in an action under this Section 7.4
shall be distributed as follows, in this order: (i) LICENSEE shall be reimbursed
for any expenses incurred in the action; and (ii) LICENSEE shall receive the
remaining recovery, less a reasonable approximation of the royalties that
LICENSEE would have paid to ACT if LICENSEE had received the amount awarded as
ordinary damages as Net Sales of LICENSED PRODUCTS sold by LICENSEE.

    

    7.5           ACT Rights to
Enforce.  In the event that LICENSEE fails to initiate an
infringement action within a reasonable time (but no more than one hundred
eighty (180) days) after LICENSEE becomes aware of the basis for such action
(e.g., the actual or threatened infringement) or fails to answer a declaratory
judgment action or interference proceeding within a reasonable time (but no more
than ninety (90) days) after LICENSEE receives or becomes aware of such
infringement or action or proceeding, ACT shall have the right, after notifying
LICENSEE in writing, to prosecute such infringement or answer such declaratory
judgment action or interference proceeding, under its sole control and at its
sole expense.  If ACT does proceed with such prosecution or defense,
LICENSEE shall provide reasonable assistance to ACT at ACT’s request, provided
ACT pays LICENSEE for its reasonable out-of-pockets costs incurred in such
assistance.  Any recovery obtained in an action under this Section 7.5
shall be distributed as follows, in this order: (i) ACT shall be reimbursed for
any expenses it incurred in the action; (ii) as to ordinary damages, LICENSEE
shall receive an amount equal to lost profits or a reasonable royalty on the
infringing sales (whichever measure the court applied), less a reasonable
approximation of the royalties that LICENSEE would have paid to ACT if LICENSEE
had received such amount as Net Sales of LICENSED PRODUCTS sold by LICENSEE; and
(iii) as to any additional damages, 100% to ACT, unless LICENSEE joins ACT in
the prosecution at its own expense at which point the parties will share equally
in any award.

    

    7.6.           Cooperation.  ACT
and LICENSEE agree to reasonably cooperate in connection with the preparation,
filing, prosecution, and maintenance of the PATENT
RIGHTS.  Cooperation includes,

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    without
limitation, (a) promptly executing all papers and instruments or requiring
employees of ACT or LICENSEE to execute papers and instruments as reasonably
appropriate to enable LICENSEE to file, prosecute, and maintain PATENT RIGHTS in
any country; and (b) promptly informing LICENSEE of matters that may affect
preparation, filing, prosecution, or maintenance of PATENT RIGHTS (such as
becoming aware of an additional inventor who is not listed as an inventor in a
patent application).  Additionally, in the event either party
exercises its rights hereunder to proceed with any prosecution of infringement
or defense of the PATENT RIGHTS, such party shall consult with the other party
regarding the course of such proceedings and shall not enter into any
settlement, consent judgment, or other voluntary final disposition of any
infringement action that admits the invalidity or unenforceability of any PATENT
RIGHTS or that would adversely affect the rights of the other party without the
prior written consent of the other party, which consent may not be unreasonably
withheld, conditioned or delayed.  Without limiting the generality of
the provisions of this Section 7.6, concurrently with the execution and delivery
of this Agreement ACT shall execute, acknowledge, and deliver to LICENSEE the
documents attached to this Agreement as Exhibit C.

    

    7.7           New Patents, Inventions, and
Discoveries.  LICENSEE shall have the right to file and
prosecute new patent applications (and to obtain new patents) covering LICENSED
PRODUCTS, LICENSED PROCESSES, AND LICENSED SERVICES, and any other subject
matter, with respect to any KNOW-HOW and any other technology, invention, or
discovery made by LICENSEE or any of its Affiliates or Sublicensees using PATENT
RIGHTS , SUPPLEMENTAL PATENT RIGHTS (as permitted by this Agreement), KNOW-HOW,
and SUPPLEMENTAL KNOW-HOW.  ACT shall acquire no rights with respect
to such new patents, inventions, discoveries, or technology not included within
the PATENT RIGHTS, SUPPLEMENTAL PATENT RIGHTS, KNOW–HOW and SUPPLEMENTAL
KNOW-HOW licensed to LICENSEE by ACT.

    

    7.8           Responsibility for
the
SUPPLEMENTAL
PATENT RIGHTS.  Subject to the terms of this Agreement, ACT
shall be primarily responsible after the Effective Date for the preparation,
filing, prosecution and maintenance of the SUPPLEMENTAL PATENT RIGHTS listed on
Exhibit B.  The
costs of such filing, prosecution and maintenance (including without limitation
the payment of all government fees in any given country required to maintain the
SUPPLEMENTAL PATENT RIGHTS) after the Effective Date shall be borne by
ACT.  ACT agrees to use reasonable commercial efforts to prosecute
U.S. patents covering the inventions disclosed in the patent applications
included in the SUPPLEMENTAL PATENT RIGHTS.  LICENSEE shall not be
obligated to reimburse ACT for any costs or expenses incurred by ACT prior to
the Effective Date with respect to the preparation, filing, and prosecution of
any patent applications.

    

    7.9           Abandonment of SUPPLEMENTAL PATENT
RIGHTS.  ACT will not allow any patent or patent application
within the SUPPLEMENTAL PATENT RIGHTS to become expired or abandoned, or fail to
diligently pursue patent protection for any invention within the SUPPLEMENTAL
PATENT RIGHTS, without giving (a) written notice to LICENSEE at least thirty
(30) business days prior to the next due date for any required communication,
response to office action, filing, or payment, failure to meet which would
result in expiration or abandonment, including but not limited to provisional
abandonment, of the patent or patent application, and (b) LICENSEE the right to
assume responsibility for such patent or patent application.  If
LICENSEE so elects, (i) ACT will execute such documents and otherwise perform
such acts and make all filings as may be reasonably required to permit LICENSEE
or its designees to prosecute and maintain such patent or application in such
jurisdiction(s) and transact all

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    matters
connected therewith (including, as necessary, appointing LICENSEE’s patent
counsel as associate attorneys of record, and changing address of the patent
attorney of record with the appropriate patent authorities), (ii) LICENSEE will
thereafter assume control thereof and all expenses (arising thereafter) for such
prosecution and maintenance by LICENSEE, and (iii) the licenses granted to
LICENSEE with respect to all such patents and patent applications shall
automatically become exclusive licenses (except as provided in paragraphs (c)
and (d) of Section 2.1) with the right to sublicense without the limitation
under Section 2.2, for all uses upon LICENSEE’s assumption of control
thereof.  In order to facilitate LICENSEE exercising its rights under
this Section 7.9, ACT shall, promptly upon LICENSEE’s request, execute,
acknowledge, and deliver to LICENSEE the a power of attorney in the form of
Exhibit C covering the SUPPLEMENTAL PATENT RIGHTS.

    

    7.10          Enforcement of the
SUPPLEMENTAL
PATENT
RIGHTS.

    

      
(a)           The Parties
agree to notify each other in writing of any actual or threatened infringement
by a third party of the SUPPLEMENTAL PATENT RIGHTS or of any third-party claim
of invalidity or unenforceability of the SUPPLEMENTAL PATENT RIGHTS, or of any
interference or other proceeding affecting the SUPPLEMENTAL PATENT
RIGHTS.  ACT shall prosecute and defend such claims under its sole
control and at its sole discretion and expense.  If LICENSEE shall
provide reasonable assistance to ACT at ACT’s request, provided ACT pays
LICENSEE for the reasonable out-of-pockets costs incurred by LICENSEE in
providing such assistance. Any recovery obtained in an action under this Section
7.10 shall be distributed as follows, in this order: (i) LICENSEE shall be
reimbursed for any expenses it incurred in the action; and (ii) ACT shall
receive the remaining recovery.

    

      
(b)           In the
event that ACT fails to initiate an infringement action described in paragraph
(a) of this Section 7.10 within a reasonable time (but no more than one hundred
eighty (180) days) after ACT becomes aware of the basis for such action (e.g.,
the actual or threatened infringement) or fails to answer a declaratory judgment
action or interference proceeding within a reasonable time (but no more than
ninety (90) days) after ACT receives or becomes aware of such infringement or
action or proceeding, LICENSEE shall have the right, but not the obligation,
after notifying ACT in writing, to prosecute such infringement or answer such
declaratory judgment action or interference proceeding, under its sole control
and at its sole expense.  If LICENSEE does proceed with such
prosecution or defense, ACT shall provide reasonable assistance to LICENSEE at
LICENSEE’s request, provided LICENSEE pays ACT for its reasonable out-of-pockets
costs incurred in such assistance.  Any recovery obtained in an action
under this Section 7.5 shall be distributed as follows, in this order: (i) ACT
shall be reimbursed for any expenses it incurred in the action; and (ii)
LICENSEE shall receive the remaining recovery.

    

    ARTICLE 8 –
INDEMNIFICATION,

    LIMITATION OF LIABILITY AND
INSURANCE

    

    8.1           LICENSEE
shall at all times during the term of this Agreement and thereafter, indemnify,
defend and hold harmless ACT and its affiliates, successors, assigns, agents,
officers, directors, shareholders and employees (each, an “Indemnified Party”),
at LICENSEE’s sole cost and expense, against all liabilities of any kind
whatsoever, including legal expenses and reasonable attorneys’ fees, arising out
of the death of or injury to any person or persons or out of any damage to
property resulting from the production, manufacture, sale, use, lease,
performance, consumption or advertisement

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    of the
LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES or arising from any
obligation, act or omission, or from a breach of any representation or warranty
of LICENSEE hereunder, excepting only claims that result from (a) the willful
misconduct or gross negligence of ACT, (b) any material breach by ACT of its
representations and warranties under this Agreement, and (c) claims alleging
that the use of any of the PATENT RIGHTS, SUPPLEMENTAL PATENT
RIGHTS,  KNOW-HOW, or SUPPLEMENTAL KNOW-HOW infringe upon any
patent, trade secret, or moral right of any third party.  The
indemnification obligations set forth herein are subject to the following
conditions: (i) the Indemnified Party shall notify LICENSEE in writing promptly
upon learning of any claim or suit for which indemnification is sought; (ii)
LICENSEE shall have control of the defense or settlement, provided that the
Indemnified Party shall have the right (but not the obligation) to participate
in such defense or settlement with counsel at its selection and at its sole
expense; and (iii) the Indemnified Party shall reasonably cooperate with the
defense, at LICENSEE’s expense.

    

    8.2           EXCEPT
AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, ACT, ITS DIRECTORS,
OFFICERS, AGENTS, SHAREHOLDERS, EMPLOYEES, AND AFFILIATES MAKE NO
REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN THIS
AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY ACT
THAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT
INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.  IN NO EVENT SHALL ACT,
ITS DIRECTORS, OFFICERS, AGENTS, SHAREHOLDERS, EMPLOYEES AND AFFILIATES BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC
DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER ACT SHALL
BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE
POSSIBILITY OF SUCH DAMAGES.

    

    8.3           LICENSEE
agrees to maintain insurance or self-insurance that is reasonably adequate to
fulfill any potential obligation to the indemnified parties.  LICENSEE
shall continue to maintain such insurance or self-insurance during the term of
this Agreement and after the expiration or termination of this Agreement for a
period of five (5) years.

    

    ARTICLE 9 –
TERMINATION

    

    9.1           This
Agreement shall be effective on the Effective Date and shall extend twenty (20)
years or until the expiration of the last to expire of the PATENT RIGHTS and the
SUPPLEMENTAL PATENT RIGHTS, whichever is later, unless sooner terminated as
provided in this Article 9.

    

    9.2           ACT
may terminate this Agreement and the rights, privileges and license granted
hereunder by written notice upon a breach or default of this Agreement by
LICENSEE, as follows:

    

    
      	
               
      

            	
              (i)

            	
              non-payment
      of any amounts due which is not cured within thirty (30) days of receipt
      of written notice of such non-payment wherein said notice is delivered by
      registered mail; or

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (ii)

            	
              breach
      of any obligation which is not cured within thirty (30) days of a written
      request to remedy such breach wherein said request is delivered by
      registered mail, or if the breach cannot be cured within said thirty (30)
      day period, failure of LICENSEE within said thirty (30) day period to
      proceed with reasonable promptness thereafter to cure the
      breach.

            

    

    

    Such
termination shall become automatically effective unless LICENSEE shall have
cured any such material breach or default prior to the expiration of the
applicable cure period.

    

    9.3           LICENSEE
shall have the right to terminate this Agreement at any time on three (3)
months’ prior notice to ACT, and upon payment of all amounts due ACT through the
effective date of the termination.

    

    9.4           Upon
termination of this Agreement for any reason, nothing herein shall be construed
to release either party from any obligation that matured prior to the effective
date of such termination; and Sections 6.1, Article 8, Article 10, and Article
12, and any other Sections or provisions which by their nature are intended to
survive termination, shall survive any such termination.

    

    
      	
               
      

            	
              ARTICLE 10 -
      CONFIDENTIALITY

            

    

    

    10.1          During
the course of this Agreement, ACT and LICENSEE may provide each other with
CONFIDENTIAL INFORMATION.  CONFIDENTIAL INFORMATION may be disclosed
in oral, visual or written form, and includes such information that is
designated in writing as such by the discloser at the time of disclosure, orally
disclosed information that is designated in writing as confidential within 30
days after such oral disclosure, or information which, under all of the given
circumstances ought reasonably be treated as CONFIDENTIAL INFORMATION of the
disclosing party. ACT and LICENSEE each intend to maintain the confidential or
trade secret status of their CONFIDENTIAL INFORMATION.  Each shall
exercise reasonable care to protect the CONFIDENTIAL INFORMATION of the other
from disclosure to third parties; no such disclosure shall be made without the
other’s written permission.  Upon termination or expiration of this
Agreement, ACT and/or LICENSEE shall comply with the other’s written request to
return all CONFIDENTIAL INFORMATION that is in written or tangible
form.  Except as expressly provided herein, neither ACT nor LICENSEE
is granted any license to use the other’s CONFIDENTIAL
INFORMATION.  The obligations of ACT and LICENSEE under this Article
10 shall survive any expiration or termination of this Agreement.

    

    10.2         
The parties agree that the specific terms (but not the overall existence) of
this Agreement shall be considered CONFIDENTIAL INFORMATION; provided, however,
that the parties may disclose the terms of this Agreement to investors or
potential investors, potential business partners, potential Sublicensees and
assignees, potential co-developers, manufacturers, marketers, or distributors of
any LICENSED PRODUCT, LICENSED PROCESS, or LICENSED SERVICE, and in any
prospectus, offering, memorandum, or other document or filing required by
applicable securities laws or other applicable law or regulation.  The
parties may also disclose CONFIDENTIAL INFORMATION that is required to be
disclosed to comply with applicable law or court order, provided that the
recipient gives reasonable prior written notice of the required disclosure to
the discloser and reasonably cooperates with the
discloser’s efforts to prevent such disclosure.

    
      
         

      

      
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    ARTICLE 11 - PAYMENTS,
NOTICES, AND OTHER COMMUNICATIONS

    

    Any payment, notice or other
communication required to be given to any party will be deemed to have been
properly given and to be effective (a) on the date of delivery if delivered by
hand, recognized national next business day delivery service, confirmed
facsimile transmission, or confirmed electronic mail, or five (5) days after
mailing by registered or certified mail, postage prepaid, return receipt
requested, to the respective addresses given below, or to another address as it
shall designate by written notice given to the other party in the manner
provided in this Section.

    

    
      
        	              
      In the case of ACT:	Advanced Cell
      Technology, Inc.
	 	11100 Santa Monica
      Blvd, Suite 850
	 	Los Angeles, CA
      90025
	 	Attention: 
      William M. Caldwell, IV

      

    

    

    
      
        	               With
      a copy to:	Pierce Atwood
      LLP
	 	One Monument
      Square
	 	Portland, ME
      0401
	 	Attention: 
      William L. Worden, Esq.

      

                  

    

    
      
        	              
      In the case of LICENSEE	Embryome
      Sciences, Inc.
	
                 
      

              	
                1301
      Harbor Bay Parkway, Suite 100

              

      

    

    
      	
               
      

            	
              Alameda,
      California 94502

            

    

    
      	
               
      

            	
              Attention:  Michael
      D. West

            

    

    

    
      
        	
                              
      With a copy to:

              	
                Richard
      S. Soroko, Esq.

              

      

    

    
      
        	
                 
      

              	
                Lippenberger,
      Thompson, Welch, Soroko & Gilbert
LLP

              

      

    

    
      
        	
                 
      

              	
                201
      Tamal Vista Blvd.

              

      

    

    
      
        	
                 
      

              	
                Corte
      Madera, California 94925

              

      

    

    

    ARTICLE 12 - REPRESENTATIONS
AND WARRANTIES

    

    12.1          LICENSEE
represents and warrants that it has full corporate power and authority to enter
into this Agreement, that this Agreement constitutes the binding legal
obligation of LICENSEE, enforceable in accordance with its terms, and that the
execution and performance of this Agreement by LICENSEE will not violate,
contravene or conflict with any other agreement to which LICENSEE is a party or
by which it is bound or with any law, rule or regulation applicable to LICENSEE,
and that any permits, consents or approvals necessary or appropriate for
LICENSEE to enter into this Agreement have been obtained.

    

    12.2          LICENSEE
is an entity duly incorporated or otherwise organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.

    
      
         

      

      
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    12.3          ACT
represents and warrants that (a) it owns the PATENT RIGHTS, SUPPLEMENTAL PATENT
RIGHTS, KNOW-HOW, and SUPPLEMENTAL KNOW-HOW, (b) it has the full legal right and
power to grant the licenses granted hereunder, (c) that this Agreement
constitutes the binding legal obligation of ACT, enforceable in accordance with
its terms, (d) the execution, delivery, and performance of this Agreement by ACT
will not violate, contravene or conflict with any other agreement to which ACT
is a party or by which it is bound or with any law, rule or regulation
applicable to ACT, and (e) any permits, consents or approvals necessary or
appropriate for ACT to enter into this Agreement have been
obtained.

    

    12.4          ACT
represents and warrants that, to the best of its knowledge, the use of the
PATENT RIGHTS, SUPPLEMENTAL PATENT RIGHTS,  KNOW-HOW and SUPPLEMENTAL
KNOW-HOW by LICENSEE or any Sublicensee for any purposes contemplated or
permitted by this Agreement, will not infringe in any way any claim under any
patent held by any third party.

    

    12.5          ACT
represents and warrant that the use of the PATENT RIGHTS, SUPPLEMENTAL PATENT
RIGHTS,  KNOW-HOW, and SUPPLEMENTAL KNOW-HOW by LICENSEE or any
Sublicensee for any purposes contemplated or permitted by this Agreement, will
not infringe in any way any claim under any patent held by ACT or under any
patent that may issue from any ACT patent application now pending, or under any
patent that ACT may in the future obtain, or any other intellectual property
rights of ACT.

    

    12.6          ACT
further represents, warrants and agrees, that it shall not make any claim or
demand, or commence any lawsuit or other proceeding, alleging that use of the
PATENT RIGHTS, SUPPLEMENTAL PATENT RIGHTS,  KNOW-HOW, and SUPPLEMENTAL
KNOW-HOW by LICENSEE or any of LICENSEE’S AFFILIATES or any Sublicensees, or by
any third party participating with or providing services for LICENSEE or any of
LICENSEE’S AFFILIATES or Sublicensees, for any purpose contemplated or permitted
by this Agreement infringes in any way any claim under any patent held by ACT or
under any patent that may issue from any ACT patent application now pending, or
under any patent that ACT may in the future obtain, or any other intellectual
property rights of ACT.  The provisions of this Section 12.6 shall
pertain as well to all subsidiaries of ACT and all patents and patent
applications of ACT subsidiaries.  ACT and its subsidiaries shall
cause the provisions of this Section 12.6, as they pertain to refraining from
asserting claims and demands or commencing lawsuits and proceedings, to be
including in all licenses and assignments of ACT’s patents and patent
applications.

    

    12.7          ACT
represents and warrants that all of the patent applications of ACT and its
subsidiaries pertaining to the processes or technology described or related to
processes and technology identified on Exhibit A are listed
on Exhibit A, and that
all of the patent applications of ACT and its subsidiaries pertaining to
the processes or technology described or related to processes and technology
identified on Exhibit
B are listed on Exhibit
B.

    

    12.8         
This Article 12 shall survive expiration or termination of this
Agreement.

    

    ARTICLE 13 - MISCELLANEOUS
PROVISIONS

    

    13.1          Nothing
herein shall be deemed to constitute either party as the agent or representative
of the other
party.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    13.2          To
the extent commercially feasible, and consistent with prevailing business
practices, all products manufactured or sold under this Agreement will be marked
with the number of each issued patent that applies to such product.

    

    13.3          This
Agreement shall be construed, governed, interpreted and applied in accordance
with the laws of California, without regard to principles of conflicts of law
thereof, except that questions affecting the construction and effect of any
patent shall be determined by the law of the country in which the patent was
granted.

    

    13.4          The
parties hereto acknowledge that this Agreement (including the Exhibits hereto)
sets forth the entire Agreement and understanding of the parties hereto as to
the subject matter hereof, and shall not be subject to any change or
modification except by the execution of a written instrument subscribed to by
the parties hereto.

    

    13.5          The
provisions of this Agreement are severable, and in the event that any provisions
of this Agreement shall be determined to be invalid or unenforceable under any
controlling body of the law, such invalidity or unenforceability shall not in
any way affect the validity or enforceability of the remaining provisions
hereof.

    

    13.6          The
failure of either party to assert a right hereunder or to insist upon compliance
with any term or condition of this Agreement shall not constitute a waiver of
that right or excuse a similar subsequent failure to perform any such term or
condition by the other party.

    

    13.7          Licenses of Intellectual
Property; Bankruptcy Code.  The parties agree that the licenses
granted to LICENSEE to use PATENT RIGHTS, SUPPLEMENTAL PATENT
RIGHTS,  KNOW-HOW and SUPPLEMENTAL KNOW-HOW constitute licenses of
“intellectual property” as defined in the United States Bankruptcy Code (the
“Bankruptcy Code”) and as used in Section 365(n) of the Bankruptcy
Code.  The Parties agree that the KNOW-HOW includes trade
secrets.  The parties also agree that the payments of royalties on Net
Sales and SUBLICENSE REVENUE required to be paid by LICENSEE to ACT under this
Agreement constitute “royalties” under Section 365(n) of the Bankruptcy
Code.

    

    

    

    [The next
page is the signature page]

    

    

    

    

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the parties have
duly executed this Agreement as of the Effective Date set forth
above.

    

    ADVANCED
CELL TECHNOLOGY, INC.

    

    

    By:
  /s/
William M. Caldwell,
IV              

    Printed
Name:  William M. Caldwell, IV

    Title:  Chairman
& CEO

    

    

    By: /s/
William M. Caldwell,
IV                

    Printed
Name: William M. Caldwell, IV

    Title:  Secretary

    

    

    EMBRYOME
SCIENCES, INC.

    

    

    By: /s/
Michael D.
West                             

    Printed
Name: Michael D. West

    Title:
Chief Executive Officer

    

    

    By: /s/
Judith
Segall                                     

    Printed
Name: Judith Segall

    Title:
Secretary

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    EXHIBIT
A

    

    PATENT
RIGHTS

    

    

    
      	
              Application

            	
              Title

            
	 
      	 
      
	
              US
      Application # 11/025,893

               

            	
              Method
      of differentiation of morula or inner cell mass cells and method of making
      lineage-defective embryonic stem cells

               

            
	 
      	 
      
	
              PCT/US2005/000103
      Published a WO 2005/068610 A1 US #s 11/028,345, 11/211,174, 11/478,780
       

               

            	
              Novel
      culture systems for ex vivo development

            
	 
      	 
      

    

    

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    SUPPLEMENTAL PATENT
RIGHTS

    

    
      	
              Application

            	
              Title

            
	 
      	 
      
	
              PCT/US2000/018063,
      Serial No: 09/736,268

              National
      Phase filing of PCT/US2000/018063, Serial No: 10/831,599

              CON
      of 09/736,268

              Filed
      on April 23, 2004

               

            	
              Cytoplasmic
      transfer to de-differentiate recipient cells

            
	 
      	 
      
	
              WO
      01/018236 US #s 10/790,640 and 11/079,930.

            	
              Telomere
      Restoration And Extension Of Cell Life-Span In Animals Cloned From
      Senescent Somatic Cells

            
	 
      	 
      
	
              PCT/US2006/030632

            	
              Improved
      methods of reprogramming animal somatic cells

            
	 
      	 
      
	
              PCT
      Application PCT/US2006/040985 (Published as WO 2007/047894)

               

            	
              Nearly
      totipotent or pluripotent mammalian cells homozygous or hemizygous for one
      or more histocompatibility antigens

            
	 
      	 
      
	
              PCT/US02/26945  (Published
      as WO 03/018760) US# 10/227282

            	
              Screening
      assays for identifying differentiation-inducing agents and production of
      differentiated cells for cell therapy

            
	 
      	 
      
	
              20040018178,
      Serial No: 11/228,549

              CON
      of 20040018178

               

               

            	
              Stem
      cell-derived endothelial cells modified to disrupt tumor
      angiogenesis

            

    

    

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    EXHIIBIT
C

    

    POWERS OF ATTORNEY AND OTHER
AUTHTORIZATIONS RELATING TO PATENT RIGHTS

    

    

     

     

     

    20

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