Document:

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                                                                EXHIBIT 10 (ccc)

                                 AMENDMENT NO. 3
                                       TO
                    REVOLVING CREDIT AND TERM LOAN AGREEMENT

     THIS AMENDMENT NO. 3 TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (this
"Amendment") is made and entered into as of April 10, 2003, by and among FPIC
INSURANCE GROUP, INC., a Florida corporation (the "Borrower"), the several banks
and other financial institutions from time to time party hereto (the "LENDERS"),
and SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the
"ADMINISTRATIVE AGENT") and in its capacity as Collateral Agent for the Lenders
(the "COLLATERAL AGENT"), and is joined by certain subsidiaries of the Borrower,
as Subsidiary Guarantors (the "SUBSIDIARY GUARANTORS") pursuant to the Joinder
of Subsidiary Guarantors attached hereto.

                              W I T N E S S E T H:
                              --------------------

     WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties
to that certain Revolving Credit and Term Loan Agreement, dated as of August 31,
2001, as amended by that certain Amendment No. 1 to Revolving Credit and Term
Loan Agreement, dated as of March 25, 2002, and as further amended by that
certain Amendment No. 2 to Revolving Credit and Term Loan Agreement, dated as of
November 21, 2002 (as amended, the "Existing Credit Agreement"), pursuant to
which the Lenders have agreed to make Loans to the Borrower, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrower
(provided, subject to the terms and conditions of the Existing Credit Agreement,
such Letters of Credit may be issued on behalf of the Borrower or, if requested
by the Borrower, on behalf of any Subsidiary), all upon the terms and subject to
the conditions specified in the Existing Credit Agreement; and

     WHEREAS, the Borrower, the Lenders, the Administrative Agent and, by
joinder hereto, the Subsidiary Guarantors, have agreed to modify and amend the
Existing Credit Agreement as set forth herein.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the Borrower, the Lenders, the Administrative
Agent and, by joinder hereto, the Subsidiary Guarantors, agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.1    CERTAIN DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, the following terms as used in this Amendment,
including the preamble, the recitals and the amendments to certain definitions
set forth in Section 2.1A hereof, have the meanings set forth below:

                    "AMENDED CREDIT AGREEMENT" shall mean the Existing Credit
     Agreement, as amended hereby.

                    "AMENDMENT NO. 3 EFFECTIVE DATE" shall have the meaning
     assigned to such term in Article IV.

     SECTION 1.2    OTHER DEFINITIONS. Unless otherwise defined herein,
capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Existing Credit Agreement.
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                                   ARTICLE II

                        AMENDMENTS TO EXISTING AGREEMENT

     Effective as of the Amendment No. 3 Effective Date, the Existing Credit
Agreement is hereby amended in accordance with this Article II as follows:

     SECTION 2.1    AMENDMENT TO SECTION 1.1 - DEFINITIONS.

            A.      Section 1.1 - DEFINITIONS of "ARTICLE I - DEFINITIONS;
     CONSTRUCTION" of the Existing Credit Agreement is hereby amended to delete
     the definitions of the terms "Aggregate Revolving Commitments", "Debt
     Issuance", "Loan Documents" and "Subsidiary" in their entirety and to
     insert the following new definitions for such terms in their respective
     places:

                    "AGGREGATE REVOLVING COMMITMENTS" shall mean the sum of the
            Revolving Commitments of all Lenders at any time outstanding. On the
            Closing Date, the Aggregate Revolving Commitments equal $37,500,000;
            PROVIDED, HOWEVER, upon any prepayment, mandatory or optional, by
            the Borrower at any time on or after the Amendment No. 3 Effective
            Date of the outstanding Revolving Loans in accordance with SECTION
            2.10, the Aggregate Revolving Commitments shall be correspondingly
            permanently reduced; PROVIDED FURTHER, HOWEVER, if the aggregate
            outstanding principal amount of the Revolving Loans is equal to or
            less than $20,000,000 at any time, no such permanent reduction
            thereafter shall reduce the Aggregate Revolving Commitments to an
            amount less than the lesser of (a) the sum of (i) the outstanding
            aggregate principal amount of the Revolving Loans after application
            of such prepayment plus (ii) $5,000,000 or (b) $20,000,000.

                    "DEBT ISSUANCE" shall mean the issuance of any Indebtedness
            for borrowed money by any Loan Party (excluding (i) any Equity
            Issuance or (ii) except for the Debt Securities which, in each case,
            shall be a "DEBT ISSUANCE" for purposes hereof, any Indebtedness
            permitted to be incurred under Section 7.1).

                    "LOAN DOCUMENTS" shall mean, collectively, this Agreement,
            the Notes (if any), the LC Documents, all Notices of Borrowing, the
            Subsidiary Guarantee Agreement, the Indemnity and Contribution
            Agreement, all Stock Pledge Agreements, all Liquid Collateral Pledge
            Agreements, all Liquid Collateral Control Agreements and any and all
            other instruments, agreements, documents and writings executed in
            connection with any of the foregoing.

                    "SUBSIDIARY" shall mean, with respect to any Person (the
            "parent"), any corporation, partnership, joint venture, limited
            liability company, association or other entity the accounts of which
            would be consolidated with those of the parent in the parent's
            consolidated financial statements if such financial statements were
            prepared in accordance with GAAP as of such date, as well as any
            other corporation, partnership, joint venture, limited liability
            company, association or other entity (a) of which securities or
            other ownership interests representing more than 50% of the equity
            or more than 50% of the ordinary voting power, or in the case of a
            partnership, more than 50% of the general partnership interests are,
            as of such date, owned, Controlled or held, or (b) that is, as of
            such date, otherwise Controlled, by the parent or one or more
            subsidiaries of the parent or by the parent and one or more
            subsidiaries of the parent; PROVIDED, that unless otherwise set
            forth herein, neither FPIC Trust I nor FPIC Trust II shall be a
            "Subsidiary" for purposes of this Agreement. Unless otherwise
            indicated, all references to "Subsidiary" hereunder shall mean a
            Subsidiary of the Borrower.

            B.      Section 1.1 - DEFINITIONS of "ARTICLE I - DEFINITIONS;
     CONSTRUCTION" of the Existing Credit Agreement is hereby further amended to
     add the definitions of the terms "Debt Securities", "Declaration I",
     "Declaration II", "Declarations", "FPIC Trust I", "FPIC Trust II",
     "Indentures", "Junior Indenture I", Junior Indenture II", "Junior
     Indentures", "Junior Subordinated Debt Securities", "Junior Subordinated
     Debt Securities I", "Junior Subordinated Debt Securities II", "Senior
     Indenture", "Senior

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     Debt Securities", "Swap Unwind Fees", "U.S. Bank" and "Wilmington" in their
     proper alphabetical order as follows:

                    "DEBT SECURITIES" shall mean, collectively and individually,
            the Junior Subordinated Debt Securities and/or the Senior Debt
            Securities, as the context shall require.

                    "DECLARATION I" shall mean the Amended and Restated
            Declaration of Trust of FPIC Trust I, dated on or about the date of
            issuance of the Junior Subordinated Debt Securities I, and all
            amendments, modifications, supplements, restatements or replacements
            thereof.

                    "DECLARATION II" shall mean the Amended and Restated
            Declaration of Trust of FPIC Trust II, dated on or about the date
            of issuance of the Junior Subordinated Debt Securities II, and
            all amendments, modifications, supplements, restatements or
            replacements thereof.

                    "DECLARATIONS" shall mean Declaration I and/or Declaration
            II, as the context shall require.

                    "FPIC TRUST I" shall mean FPIC Capital Trust I, a Delaware
            business trust established pursuant to Declaration I.

                    "FPIC TRUST II" shall mean FPIC Capital Statutory Trust II,
            a Connecticut statutory trust established pursuant to Declaration
            II.

                    "INDENTURES" shall mean, collectively and individually, the
            Junior Indentures and/or the Senior Indenture, as the context shall
            require.

                    "JUNIOR INDENTURE I" shall mean the Indenture dated on or
            about the date of issuance of the Junior Subordinated Debt
            Securities I, by and between the Borrower, as Issuer, and
            Wilmington, as Trustee, relating to the Junior Subordinated Debt
            Securities I, and all amendments, modifications, supplements,
            restatements or replacements thereof.

                    "JUNIOR INDENTURE II" shall mean the Indenture dated on or
            about the date of issuance of the Junior Subordinated Debt
            Securities II, by and between the Borrower, as Issuer, and U.S.
            Bank, as Trustee, relating to the Junior Subordinated Debt
            Securities II, and all amendments, modifications, supplements,
            restatements or replacements thereof.

                    "JUNIOR INDENTURES" shall mean, collectively and
            individually, Junior Indenture I and/or Junior Indenture II, as the
            context shall require.

                    "JUNIOR SUBORDINATED DEBT SECURITIES" shall mean,
            collectively and individually, the Junior Subordinated Debt
            Securities I and/or the Junior Subordinated Debt Securities II, as
            the context shall require.

                    "JUNIOR SUBORDINATED DEBT SECURITIES I" shall mean the
            Floating Rate Junior Subordinated Debt Securities due 2033 issued by
            the Borrower under Junior Indenture I, and all renewals, extensions
            or modifications thereof; PROVIDED, that the aggregate principal
            amount outstanding at any time thereunder shall never exceed
            $10,310,000.

                    "JUNIOR SUBORDINATED DEBT SECURITIES II" shall mean the
            Floating Rate Junior Subordinated Deferrable Interest Debentures
            due 2033 issued by the Borrower under Junior Indenture II, and
            all renewals, extensions or modifications thereof; PROVIDED, that
            the aggregate principal amount outstanding at any time thereunder
            shall never exceed $20,620,000.

                    "SENIOR INDENTURE" shall mean the Indenture dated on or
            about the date of issuance of the Senior Debt Securities, by and
            between the Borrower, as Issuer, and Wilmington, as Trustee,

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            relating to the Senior Debt Securities, and all amendments,
            modifications, supplements, restatements or replacements thereof.

                    "SENIOR DEBT SECURITIES" shall mean the Floating Rate
            Senior Debt Securities due 2033 issued by the Borrower under the
            Senior Indenture, and all renewals, extensions or modifications
            thereof; PROVIDED, that the aggregate principal amount outstanding
            at any time thereunder shall never exceed $15,000,000.

                        "SWAP UNWIND FEES" shall mean any fees and/or any
            other amounts payable by the Borrower to SunTrust Bank in the
            amount of up to $2,000,000 resulting from the breakage by the
            Borrower of (a) that certain Confirmation of Interest Rate Swap
            Transaction, dated as of August 29, 2001 (relating to the Term
            Loan), and/or (b) that certain Confirmation of Interest Rate Swap
            Transaction, dated as of August 29, 2001 (relating to the Revolving
            Loans), each by and between SunTrust Bank and the Borrower, together
            with the ISDA Master Agreement and Schedule thereto, each dated as
            of June 15, 1998, referred to in each Confirmation and each entered
            into by and between SunTrust Bank and the Borrower.

                        "U.S. BANK" shall mean U.S. Bank National Association,
            a national banking association, and its successors and assigns.

                        "WILMINGTON" shall mean Wilmington Trust Company, a
            Delaware banking corporation, and its successors or assigns.

     SECTION 2.2    AMENDMENT TO SECTION 2.2 - Revolving Loans. Section 2.2
REVOLVING LOANS of "ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS" of the
Existing Credit Agreement is hereby amended to add the following sentence at the
end of such Section:

     The Revolving Credit Exposure and all other Obligations shall be secured by
the Collateral.

     SECTION 2.3    AMENDMENT TO SECTION 2.10(A) - MANDATORY PREPAYMENTS;
MANDATORY LIQUID COLLATERAL. Section 2.10 PREPAYMENTS of "ARTICLE II AMOUNT AND
TERMS OF THE COMMITMENTS" of the Existing Credit Agreement is hereby amended to
delete Section 2.10(a) - MANDATORY PREPAYMENTS; MANDATORY LIQUID COLLATERAL in
its entirety and to insert the following new Section 2.10(a) in its place:

                    (a)    MANDATORY PREPAYMENTS; MANDATORY LIQUID COLLATERAL.
     The Borrower shall be required to make mandatory principal prepayments from
     (i) 100% of the Net Cash Proceeds (including all Net Cash Proceeds received
     on any purchase money Indebtedness held by the recipient of such Net Cash
     Proceeds) from any Asset Disposition, and (ii) 100% of Net Cash Proceeds
     received from any Equity Issuance or Debt Issuance. In each such case, the
     Borrower will deliver to the Administrative Agent, concurrently with such
     prepayment, a certificate signed by a Responsible Officer, in form and
     substance satisfactory to the Administrative Agent, setting the forth the
     calculation of such Net Cash Proceeds. Additionally, unless the Borrower,
     on or prior to March 31, 2004, prepays the outstanding Revolving Loans to
     an aggregate outstanding amount equal to or less than the sum of (i) the
     amount of Liquid Collateral at the time of such prepayment plus (ii)
     $30,000,000, the Borrower shall be required (A) to make mandatory principal
     prepayments on the Revolving Loans and/or (B) to provide Liquid Collateral,
     in form and substance acceptable to the Administrative Agent, for the
     Revolving Loans in the amount of $1,312,500 on or before each of March 31,
     2004 and June 30, 2004. All mandatory prepayments shall be applied as
     follows: FIRST, to the Revolving Loans (with a corresponding permanent
     reduction in the Revolving Commitments, except as otherwise provided in the
     definition of "AGGREGATE REVOLVING CREDIT COMMITMENTS" in SECTION 1.1), and
     SECOND, after all Revolving Loans have been repaid, to a cash collateral
     account in respect of the LC Exposure. Further, if at any time after the
     Closing Date, the sum of the aggregate outstanding Revolving Credit
     Exposures of all Lenders shall exceed the aggregate Revolving Commitments
     of all Lenders, the Borrower shall immediately prepay the Revolving Loans
     in an amount sufficient to eliminate such excess. Within the parameters of
     the application set forth above, prepayments shall be applied first to Base
     Rate Loans and then to Eurodollar Loans in direct order of Interest Period
     maturities. All prepayments under this SECTION 2.10(a) shall be subject to
     SECTION 2.17 and be accompanied

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     by interest on the principal amount prepaid through the date of prepayment
     in accordance with SECTION 2.11(c).

     SECTION 2.4    AMENDMENT TO SECTION 2.10(b) - OPTIONAL PREPAYMENTS. Section
2.10 PREPAYMENTS of "ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS" of the
Existing Credit Agreement is hereby amended by adding the following sentence at
the end of such Section 2.10(b):

     The Borrower may elect (by so specifying in its notice of optional
     prepayment) to make any optional (but not any mandatory) prepayment by
     applying as an optional prepayment any or all of the Liquid Collateral held
     by the Collateral Agent at the time.

     SECTION 2.5    AMENDMENT TO SECTION 5.15 - ADDITIONAL MANDATORY PREPAYMENT;
COLLATERAL. Section 5.15 - ADDITIONAL MANDATORY PREPAYMENT; COLLATERAL of
"ARTICLE V AFFIRMATIVE COVENANTS" is hereby amended to delete the last sentence
of such Section.

     SECTION 2.6    AMENDMENT TO ARTICLE VI - FINANCIAL COVENANTS. Each
applicable financial covenant set forth in "ARTICLE VI FINANCIAL COVENANTS" of
the Existing Credit Agreement is hereby amended so that any Swap Unwind Fees
paid by the Borrower in connection with the mandatory prepayment(s) required by
SECTION 2.10(a) from the Net Cash Proceeds from the issuance of the Debt
Securities shall not be considered in the calculation of such covenant.

     SECTION 2.7    AMENDMENT TO SECTION 6.2 - CONSOLIDATED TOTAL DEBT TO CASH
FLOW AVAILABLE FOR DEBT SERVICE RATIO. Section 6.2 - CONSOLIDATED TOTAL DEBT TO
CASH FLOW AVAILABLE FOR DEBT SERVICE RATIO OF "ARTICLE VI FINANCIAL COVENANTS"
of the Existing Credit Agreement is hereby amended to delete such Section in its
entirety and to insert the following new Section 6.2 in its place:

            SECTION 6.2 CONSOLIDATED TOTAL DEBT TO CASH FLOW AVAILABLE FOR
     DEBT SERVICE RATIO. The Borrower and its Subsidiaries will have, as of the
     end of each fiscal quarter of the Borrower, commencing with the fiscal
     quarter ending March 31, 2003, a Consolidated Total Debt to Cash Flow
     Available for Debt Service Ratio of not greater than 3.0:1.0, calculated on
     a rolling four-quarter basis. For purposes of calculating the Consolidated
     Total Debt to Cash Flow Available for Debt Service Ratio, the Junior
     Subordinated Debt Securities shall be excluded from Consolidated Total
     Debt.

     SECTION 2.8    AMENDMENT TO SECTION 7.1(h) - INDEBTEDNESS. Section 7.1 -
INDEBTEDNESS of "ARTICLE VII NEGATIVE COVENANTS" of the Existing Credit
Agreement is hereby amended to strike the word "and" at the end of Section
7.1(g), to re-designate Section 7.1(h) as Section 7.1(j) and to add the
following new Section 7.1(h) and Section 7.1(i):

                    (h)   the separate Guarantees by the Borrower with
     respect to certain "Securities" to be issued by FPIC Trust I as
     contemplated by Declaration I and by FPIC Trust II as contemplated by
     Declaration II;

                    (i)   the Debt Securities; and

     SECTION 2.9    AMENDMENT TO SECTION 7.2(f) - NEGATIVE PLEDGE. Section 7.2 -
Negative Pledge of "ARTICLE VII NEGATIVE COVENANTS" of the Existing Credit
Agreement is hereby amended to strike the word "and" at the end of Section
7.2(e), to re-designate Section 7.2(f) as Section 7.2(g) and to add the
following new Section 7.2(f):

                    (f)    Liens created in favor of any Lender on the Capital
     Stock of any Subsidiary Pledgee (which Liens may be on a parity basis with
     the Liens on such Capital Stock held by the Collateral Agent at any time on
     behalf of the Lenders under the Stock Pledge Agreements) to secure any and
     all liabilities and obligations of the Borrower or any Subsidiary, monetary
     or otherwise, under any interest rate Hedging Agreement relating to the
     Obligations or any other obligations of the Borrower entered into with any
     counterparty that is a Lender (or an Affiliate thereof) at the time such
     Hedging Agreement is entered

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     into; PROVIDED, that such Liens, in the aggregate as to all such
     counterparty Lenders, shall not exceed $2,000,000 at any time outstanding;
     and

     SECTION 2.10   AMENDMENT TO SECTION 7.2(g) - NEGATIVE PLEDGE. Section 7.2 -
Negative Pledge of "ARTICLE VII NEGATIVE COVENANTS" of the Existing Credit
Agreement is hereby amended to delete newly designated Section 7.2(g) in its
entirety and to insert the following new Section 7.2(g) in its place:

                    (g)    extensions, renewals, or replacements of any Lien
     referred to in paragraphs (b) through (f) of this Section; PROVIDED, that
     the principal amount of the Indebtedness secured thereby is not increased
     and that any such extension, renewal or replacement is limited to the
     assets originally encumbered thereby.

     SECTION 2.11   AMENDMENT TO SECTION 7.4(e) - INVESTMENTS, LOANS, ETC.
Section 7.4 - INVESTMENTS, LOANS, ETC. of "ARTICLE VII NEGATIVE COVENANTS" of
the Existing Credit Agreement is hereby amended to delete Section 7.4(e) in its
entirety and to insert the following new Section 7.4(e) in its place:

                    (e)    Investments made by the Borrower in or to any
     Subsidiary and by any Subsidiary to the Borrower or in or to another
     Subsidiary; PROVIDED, that (i) any common stock held by any Loan Party
     shall be pledged pursuant to the Stock Pledge Agreement (subject, in the
     case of any Insurance Subsidiary, to any limitations under applicable law)
     and (ii) the aggregate amount of Investments by Loan Parties in or to, and
     Guarantees by Loan Parties of Indebtedness of any Subsidiary that is not a
     Subsidiary Loan Party (excluding all such Investments and Guarantees
     permitted under clause (a) of this SECTION 7.4 and, in the case of the
     Borrower's proposed Investments in First Professionals, (i) such Investment
     that is already planned as of the Closing Date and set forth on SCHEDULE
     7.4, and (ii) such Investment in the amount of up to $4,500,000 planned to
     be made by the Borrower from the proceeds of the Debt Securities in
     April/May 2003) shall not exceed $500,000 at any time outstanding;

     SECTION 2.12   AMENDMENT TO SECTION 7.4(h) - INVESTMENTS, LOANS, ETC.
Section 7.4 - Investments, Loans, Etc. of "ARTICLE VII NEGATIVE COVENANTS" of
the Existing Credit Agreement is hereby amended to delete the word "and" at the
end of Section 7.4(g), to re-designate Section 7.4(h) as Section 7.4(i) and to
add the following new Section 7.4(h):

                    (h)    Investments made by the Borrower in FPIC Trust I and
     FPIC Trust II; PROVIDED, that such Investments shall be in the form of
     Junior Subordinated Debt Securities in principal amount not exceeding, in
     the case of FPIC Trust I, $310,000 and, in the case of FPIC Trust II,
     $620,000, at any time outstanding;

     SECTION 2.13   AMENDMENT TO SECTION 7.5 - RESTRICTED PAYMENTS. Section
7.5 - RESTRICTED PAYMENTS of "ARTICLE VII NEGATIVE COVENANTS" of the Existing
Credit Agreement is hereby amended to delete such Section in its entirety and to
insert the following new Section 7.5 in its place:

            SECTION 7.5    RESTRICTED PAYMENTS. The Borrower will not, and
     will not permit its Subsidiaries to, declare or make, or agree to pay or
     make, directly or indirectly, any dividend on any class of its stock, or
     make any payment on account of, or set apart assets for a sinking or other
     analogous fund for, the purchase, redemption, retirement, defeasance or
     other acquisition of, any shares of common stock or Indebtedness
     subordinated to the Obligations of the Borrower or any options, warrants,
     or other rights to purchase such common stock or such Indebtedness, whether
     now or hereafter outstanding (each, a "RESTRICTED PAYMENT"), except for (a)
     dividends payable by the Borrower solely in shares of any class of its
     common stock, (b) Restricted Payments made by any Subsidiary to the
     Borrower or to another Subsidiary Loan Party and by any Subsidiary
     Controlled by an Insurance Subsidiary to such Insurance Subsidiary or to
     another Subsidiary Controlled by such Insurance Subsidiary, (c) cash
     repurchases of the common stock of the Borrower during fiscal year 2003;
     PROVIDED, that with respect to this clause (c), (i) the Aggregate Revolving
     Commitments have been permanently reduced at the time such repurchase is
     made to an amount equal to or less than the sum of (A) the amount of the
     Liquid Collateral at such time plus (B) $30,000,000, and (ii) the aggregate
     amount of all such cash repurchases made by the Borrower in such fiscal
     year does not exceed $2,000,000, and (d) cash dividends paid on, and cash
     repurchases of, the common stock of the

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     Borrower during fiscal year 2004 and thereafter; PROVIDED, that with
     respect to this clause (d), (i) the Aggregate Revolving Commitments have
     been permanently reduced at the time such dividend is paid or repurchase is
     made to an amount equal to or less than the sum of (A) the amount of the
     Liquid Collateral at such time plus (B) $30,000,000, (ii) the aggregate
     amount of all such Restricted Payments (including without limitation, cash
     repurchases of the common stock of the Borrower) made by the Borrower in
     any such fiscal year does not exceed 50% of Consolidated Net Income (if
     greater than $0) earned during the immediately preceding fiscal year, and
     (iii) the aggregate amount of all such cash repurchases made by the
     Borrower in such fiscal year does not exceed $2,000,000; and FURTHER
     PROVIDED, that with respect to each of clauses (a), (b), (c) and (d), no
     Default or Event of Default has occurred and is continuing at the time any
     such Restricted Payment is made. Except as otherwise permitted above in
     this SECTION 7.5, the Borrower will not repurchase any of its Capital Stock
     without the prior written consent of the Required Lenders.

     SECTION 2.14   AMENDMENT TO SECTION 7.7 - TRANSACTIONS WITH AFFILIATES.
Section 7.7 - Transactions with Affiliates of "ARTICLE VII NEGATIVE COVENANTS"
of the Existing Credit Agreement is hereby amended to delete such Section in its
entirety and to insert the following new Section 7.7 in its place:

            SECTION 7.7    TRANSACTIONS WITH AFFILIATES. The Borrower will not,
     and will not permit any of its Subsidiaries to , sell, lease or otherwise
     transfer any property or assets to, or purchase, lease or otherwise acquire
     any property or assets from, or otherwise engage in any other transactions
     with, any of its Affiliates, except (a) in the ordinary course of business
     at prices and on terms and conditions not less favorable to the Borrower or
     such Subsidiary than could be obtained on an arm's-length basis from
     unrelated third parties, (b) transactions between or among the Borrower and
     its Subsidiaries not involving any other Affiliates, (c) any Restricted
     Payment permitted by SECTION 7.5 and (d) transactions between the Borrower
     and FPIC Trust I contemplated by Declaration I and/or FPIC Trust II
     contemplated by Declaration II.

     SECTION 2.15   ADDITION OF NEW SECTION 7.14 - CERTAIN COVENANTS RELATING TO
DEBT SECURITIES. The following new Section 7.14 - Certain Covenants Relating to
Debt Securities is hereby added to the Existing Agreement:

            SECTION 7.14   CERTAIN COVENANTS RELATING TO DEBT SECURITIES. The
Borrower will not, and will not permit or cause any of its Subsidiaries to:

            (a)     make any payment, whether for principal, interest,
     compensation, fees, expenses or any other amounts whatsoever, on, in
     connection with or otherwise relating to the Debt Securities at any time
     following the occurrence and during the continuance of (i) any Event of
     Default based upon or resulting from the Borrower's failure to pay any
     principal of, or interest on, any Loan, or any of the other Obligations
     when and as the same shall become due and payable, or (ii) any other Event
     of Default if the effect thereof is to accelerate the maturity of the Loans
     or any of the other Obligations;

            (b)     redeem any of the Debt Securities, in whole or in part,
     prior to maturity, without the prior written consent of the Required
     Lenders;

            (c)     enter into incur or permit to exist any agreement, including
     without limitation, the Declarations and the Indentures, that prohibits,
     restricts or imposes any condition upon the ability of the Borrower or any
     such Subsidiary to pay and perform the Obligations as and when due;

            (d)     modify or amend the Declarations, the Junior Indentures or
     any related agreement, or permit or allow the same to be modified or
     amended, in any way that would cause the Obligations not to be included as
     "Senior Indebtedness" thereunder;

            (e)     permit or allow FPIC Trust I to own or hold any assets or
     property other than the Junior Subordinated Debt Securities I (or the
     proceeds thereof), or to engage in any business other than the sale of the
     "Securities" contemplated by Declaration I or other activities deemed
     necessary, advisable or incidental thereto; and

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            (f)     permit or allow FPIC Trust II to own or hold any assets or
     property other than the Junior Subordinated Debt Securities II (or the
     proceeds thereof), or to engage in any business other than the sale of the
     "Securities" contemplated by Declaration II or other activities deemed
     necessary, advisable or incidental thereto.

     SECTION 2.16   AMENDMENT TO SECTION 8.1(R) - EVENTS OF DEFAULT. Section
8.1 - Events of Default of "ARTICLE VIII EVENTS OF DEFAULT" of the Existing
Credit Agreement is hereby amended to re-designate Section 8.1(r) as Section
8.1(s) and to add the following new Section 8.1(r):

                    (r)    the Borrower shall default in the performance or
     observance of any term, condition or provision of the Declarations, the
     Indentures or any related document or instrument if the effect of such
     default is to accelerate, or permit the acceleration of, the maturity of
     the Indebtedness in respect of the Debt Securities, or the Indebtedness in
     respect of such Debt Securities otherwise is accelerated at any time; or

                                   ARTICLE III

                    CONSENT AND WAIVER OF COVENANT VIOLATION

     SECTION 3.1    CONSENT AND WAIVER.

            (a)     Under the terms and conditions of Section 2.10(a) -
     MANDATORY PREPAYMENTS; MANDATORY LIQUID COLLATERAL of Section 2.10
     PREPAYMENTS of "ARTICLE II - AMOUNT AND TERMS OF THE COMMITMENTS" of the
     Existing Credit Agreement, the Borrower is required to make mandatory
     principal prepayments from 100% of Net Cash Proceeds received from any
     Equity Issuance or Debt Issuance. Notwithstanding the foregoing provisions
     of Section 2.10(a) to the contrary, the Administrative Agent and the
     Lenders hereby agree that, subject to the payment in full of the
     outstanding Term Loans, the Net Cash Proceeds from the issuance of the Debt
     Securities may be used by the Borrower (i) to make an Investment of up to
     $4,500,000 in First Professionals, and (ii) to pay the Swap Unwind Fees, in
     each case, in lieu of the mandatory principal prepayment otherwise required
     by said Section 2.10(a) and, further, pursuant to Section 10.2(b) of the
     Existing Credit Agreement, hereby agree, effective as of the Amendment No.
     3 Effective Date, to waive the mandatory prepayment covenant set forth in
     Section 2.10(a) of the Existing Credit Agreement to permit the use of such
     Net Cash Proceeds to make such Investments and such payment; provided, that
     the Borrower shall be in full compliance with such mandatory prepayment
     covenant at all times after the Amendment No. 3 Effective Date.

            (b)     Further, under the terms and conditions of Section 2.10(a) -
     MANDATORY PREPAYMENTS; MANDATORY LIQUID COLLATERAL of Section 2.10
     PREPAYMENTS of "ARTICLE II - AMOUNT AND TERMS OF THE COMMITMENTS" of the
     Existing Credit Agreement, all such mandatory prepayments are required to
     be applied as follows: FIRST, to the Term Loans to the remaining
     amortization payments in inverse order of maturity, second, after all Term
     Loans have been repaid, to the Revolving Loans (with a corresponding
     permanent reduction in the Revolving Commitments), and LAST, after all
     Revolving Loans have been repaid, to a cash collateral account in respect
     of the LC Exposure. Notwithstanding the foregoing provisions of Section
     2.10(a) to the contrary, the Administrative Agent and the Lenders hereby
     agree that the Net Cash Proceeds but, in no event, less than an amount
     equal to $9,000,000 from the issuance of the Debt Securities shall be
     applied as follows: FIRST, to the Term Loans, as required by SECTION 4.3,
     to the remaining amortization payments in inverse order of maturity, and
     SECOND, after all Term Loans have been repaid, at the election of the
     Borrower, either (i) to the Revolving Loans (with a corresponding permanent
     reduction in the Revolving Commitments) or (ii) to additional Liquid
     Collateral to be pledged to the Collateral Agent pursuant to the Liquid
     Collateral Pledge Agreement(s) as security in respect of the Revolving
     Credit Exposure and, further, pursuant to Section 10.2(b) of the Existing
     Credit Agreement, hereby agree, effective as of the Amendment No. 3
     Effective Date, to waive the mandatory prepayment covenant set forth in
     Section 2.10(a) of the Existing Credit Agreement to permit such application
     of such Net Cash Proceeds; PROVIDED, that the Borrower shall be in full
     compliance with such mandatory prepayment covenant at all times after the
     Amendment No. 3 Effective Date.

                                       8
<PAGE>

            (c)     Further, under the terms and conditions of Section 2.10(a) -
     MANDATORY PREPAYMENTS; MANDATORY LIQUID COLLATERAL of Section 2.10
     PREPAYMENTS of "ARTICLE II - AMOUNT AND TERMS OF THE COMMITMENTS" of the
     Existing Credit Agreement, the Borrower is required, during fiscal year
     2003, (i) to make mandatory principal prepayments on the Term Loans and/or
     (ii) to provide Liquid Collateral, in form and substance acceptable to the
     Administrative Agent, for the Loans quarterly, in the amount of $350,000.00
     on or before each of March 31, 2003, June 30, 2003, September 30, 2003 and
     December 31, 2003. Notwithstanding the foregoing provisions of Section
     2.10(a) to the contrary, the Administrative Agent and the Lenders hereby
     agree that, subject to the payment in full of the outstanding Term Loans,
     the Borrower shall not be required to make such mandatory principal
     prepayments and/or to provide such Liquid Collateral for the Loans on such
     quarterly dates in fiscal year 2003 and, further, pursuant to Section
     10.2(b) of the Existing Credit Agreement, hereby agree, effective as of the
     Amendment No. 3 Effective Date, to waive the mandatory prepayment covenant
     set forth in Section 2.10(a) of the Existing Credit Agreement to permit the
     Borrower to forego making such mandatory prepayments or providing such
     Liquid Collateral in fiscal year 2003; PROVIDED, that the Borrower shall be
     in full compliance with such mandatory prepayment covenant at all times
     after fiscal year 2003. In addition, subject to the payment in full of the
     outstanding Term Loans, the Administrative Agent and the Lenders hereby
     agree that the Collateral Agent shall return to the Borrower the $350,000
     in Liquid Collateral that the Borrower provided to the Collateral Agent in
     March 2003.

     SECTION 3.2    NO FUTURE WAIVER. The waiver set forth in SECTION 3.1 is a
one-time waiver, applicable only to the Borrower's non-compliance with the
mandatory prepayment covenant set forth in Section 2.10(a) of the Existing
Credit Agreement prior to the Amendment No. 3 Effective Date, and shall not be
construed to be (a) a waiver as to future compliance with Section 2.10(a) of the
Amended Credit Agreement, (b) a waiver of any Default or Event of Default that
may now or hereafter exist, or (c) an amendment of or modification to the
Existing Credit Agreement. The Administrative Agent and the Lenders hereby
reserve all of their rights, powers and remedies under the Amended Credit
Agreement, after giving effect to this Amendment, and applicable law.

                                   ARTICLE IV

                           CONDITIONS TO EFFECTIVENESS

     This Amendment shall be and become effective as of the date hereof (the
"AMENDMENT NO. 3 EFFECTIVE DATE") when all of the conditions set forth in this
Article IV shall have been satisfied, as reasonably determined by the
Administrative Agent, and thereafter, this Amendment shall be known, and may be
referred to, as "AMENDMENT NO. 3":

     SECTION 4.1    APPROVAL BY REQUIRED LENDERS. The Required Lenders shall
have approved the modifications and amendments set forth in this Amendment, such
approval to be evidenced by such Required Lenders' execution of counterparts of
this Amendment as set forth in SECTION 4.2.

     SECTION 4.2    EXECUTION OF COUNTERPARTS. The Administrative Agent shall
have received (including by telecopy) counterparts of this Amendment that shall
have been duly executed on behalf of the Borrower, the Subsidiary Guarantors,
the Administrative Agent and the Required Lenders.

     SECTION 4.3    PAY-OFF OF TERM LOANS. The Borrower shall have paid off the
Term Loans in full.

     SECTION 4.4    PREPAYMENT OR ADDITIONAL LIQUID COLLATERAL; EXECUTION AND
DELIVERY OF SECURITY DOCUMENTS. The Borrower, at its election, either shall have
(a) prepaid the Revolving Loans (with a corresponding permanent reduction in the
Revolving Commitments) or (b) provided additional Liquid Collateral to the
Collateral Agent as security for the Revolving Credit Exposure, in each case, in
an amount not less than the difference between (i) $10,000,000 and (ii) the
amount required to pay the outstanding Term Loans in full, and further, in the
event the Borrower elects to provide additional Liquid Collateral under clause
(b) above, shall have executed and delivered to the Collateral Agent such Liquid
Collateral Pledge Agreements, Liquid Collateral Control Agreements and/or other

                                       9
<PAGE>

security documents as may be required by the Collateral Agent, all in form and
substance satisfactory to the Collateral Agent.

     SECTION 4.5    AMENDMENT OF COLLATERAL DOCUMENTS. The Borrower and, if
applicable, each Subsidiary Pledgor, shall have executed and delivered to the
Collateral Agent such amendments to the Stock Pledge Agreements or such
additional stock pledge agreements, each in form and substance satisfactory to
the Collateral Agent, as may reasonably be required by the Collateral Agent to
provide for any parity lien on the "Collateral" thereunder contemplated by
Section 7.2(f). Further, the Borrower shall have executed and delivered to the
Collateral Agent such amendments to the Liquid Collateral Pledge Agreements,
each in form and substance satisfactory to the Collateral Agent, as may
reasonably be required by the Collateral Agent to provide for the Liquid
Collateral to secure the Revolving Credit Exposure and all other Obligations.
Notwithstanding any provisions of such amendments, said amendments shall not be
or become effective until the Amendment No. 3 Effective Date.

     SECTION 4.6    LEGAL DETAILS, ETC. All documents executed or submitted
pursuant hereto shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel prior to or by the time of closing. Prior
to or by the time of closing, the Administrative Agent and its counsel shall
have received all information, certificates, resolutions, legal opinions and
other documents, and such counterpart originals or such certified or other
copies of such originals as the Administrative Agent or its counsel may
reasonably request, and all legal matters incident to the transactions
contemplated by this Amendment shall be reasonably satisfactory to the
Administrative Agent and its counsel.

     SECTION 4.7    PAYMENT OF WAIVER/MODIFICATION FEE. [Not Applicable]

     SECTION 4.8    PAYMENT OF OTHER FEES AND EXPENSES. The Borrower shall have
paid all out-of-pocket costs and expenses of the Administrative Agent, including
the reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the preparation, execution and delivery of this
Amendment.

                                    ARTICLE V

                                  MISCELLANEOUS

     SECTION 5.1    REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Administrative Agent and the Lenders that, after
giving effect to this Amendment, (a) no Default or Event of Default exists under
the Existing Credit Agreement or any of the other Loan Documents, (b) all
representations and warranties of each Loan Party set forth in the Loan
Documents are true and correct in all material respects on and as of the date
hereof (except for those which expressly relate to an earlier date), (c) since
the date of the most recent financial statements of the Borrower described in
Section 5.1(a) or (b) of the Existing Credit Agreement, there has been no change
which has had or could reasonably be expected to have a Material Adverse Effect,
and (d) the Loan Documents are legal, valid and binding obligations of the
respective Loan Parties and are enforceable by the Administrative Agent and the
Lenders, as applicable, against such Loan Parties in accordance with their
respective terms.

     SECTION 5.2    CROSS REFERENCES. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.

     SECTION 5.3    INSTRUMENT PURSUANT TO EXISTING CREDIT AGREEMENT. This
Amendment is a document executed pursuant to the Existing Credit Agreement and
shall (unless otherwise expressly indicated therein) be construed, administered
and applied in accordance with the terms and provisions of the Existing Credit
Agreement.

     SECTION 5.4    LOAN DOCUMENTS. The Borrower and the Subsidiary Guarantors
hereby confirm and agree that the Loan Documents are, and shall continue to be,
in full force and effect and hereby ratify and approve in all respects their
obligations thereunder, except that, upon the effectiveness of, and on and after
the date of this Amendment, all references in each Loan Document to the "Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Existing Credit Agreement shall mean the Amended Credit Agreement.

                                       10
<PAGE>

     SECTION 5.5    COUNTERPARTS, EFFECTIVENESS, ETC. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement. The parties may execute facsimile copies of this Amendment
and the facsimile signature of any such party shall be deemed an original and
fully binding on said party; provided, any party executing this Amendment by
facsimile signature agrees to promptly provide six (6) original executed copies
of this Amendment to Administrative Agent.

     SECTION 5.6    GOVERNING LAW; ETC. This Amendment shall be governed by and
construed in accordance with the applicable terms and provisions of Section 10.5
- Governing Law; Jurisdiction; Consent to Service of Process of "ARTICLE X -
MISCELLANEOUS" of the Existing Credit Agreement, which terms and provisions are
incorporated herein by reference.

     SECTION 5.7    NO OTHER MODIFICATIONS. Except as hereby amended, no other
term, condition or provision of the Existing Credit Agreement shall be deemed
modified or amended, and this Amendment shall not be considered a novation.

     SECTION 5.8    SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       11
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed [under seal in the case of the Borrower] by their respective duly
authorized officers as of the day and year first above written.

                                        FPIC INSURANCE GROUP, INC.

                                        By:      /s/ Kim D. Thorpe
                                            -------------------------------
                                            Name:  Kim D. Thorpe
                                            Title: Executive Vice President
                                                   and Chief Financial Officer

                                                              [SEAL]

                                        SUNTRUST BANK
                                        AS ADMINISTRATIVE AGENT, AS COLLATERAL
                                        AGENT, AS ISSUING BANK, AND AS A LENDER

                                        By:      /s/ Edward E. Wooten
                                            ------------------------------------
                                            Name:  Edward E. Wooten
                                            Title: Director

                                        Revolving Commitment: $19,431,818 1
                                        Term Loan Commitment: $0

--------------------------------------------------------------------------------
1 Subject to permanent reduction in accordance with such Lender's Pro Rata Share
as provided in this Amendment.

                                      S-1

<PAGE>

                                          COMPASS BANK

                                          By:   /s/ C. French Yarbrough, Jr.
                                              ----------------------------------
                                              Name: C. French Yarbrough, Jr.
                                              Title:   Senior Vice President

                                          Revolving Commitment: $6,818,182 1
                                          Term Loan Commitment: $0

--------------------------------------------------------------------------------
1 Subject to permanent reduction in accordance with such Lender's Pro Rata Share
as provided in this Amendment.

                                      S-2

<PAGE>

                                            BROWN BROTHERS HARRIMAN & CO.

                                            By:      W. Carter Sullivan
                                                ------------------------------
                                                Name:  W. Carter Sullivan
                                                Title: Partner

                                            Revolving Commitment: $4,431,818 1
                                            Term Loan Commitment: $0

--------------------------------------------------------------------------------
1 Subject to permanent reduction in accordance with such Lender's Pro Rata Share
as provided in this Amendment.

                                      S-3

<PAGE>

                                          REGIONS BANK

                                          By:  /s/ Anthony Nigro
                                             ----------------------------------
                                              Name: Anthony Nigro
                                              Title: Vice President

                                          Revolving Commitment: $3,409,091 1
                                          Term Loan Commitment: $0

--------------------------------------------------------------------------------
1 Subject to permanent reduction in accordance with such Lender's Pro Rata Share
as provided in this Amendment.

                                      S-4

<PAGE>

                                          CAROLINA FIRST BANK

                                          By:  /s/ Charles D. Chamberlain
                                              Name: Charles D. Chamberlain
                                              Title: Executive Vice President

                                          Revolving Commitment: $3,409,091 1
                                          Term Loan Commitment: $0

--------------------------------------------------------------------------------
1 Subject to permanent reduction in accordance with such Lender's Pro Rata Share
as provided in this Amendment.

                                      S-5

<PAGE>

                        JOINDER OF SUBSIDIARY GUARANTORS

     The undersigned, each being a Subsidiary Guarantor, do hereby acknowledge
and consent to, and agree to be bound by, the foregoing modifications and
amendments to the Existing Credit Agreement as set forth in this Amendment and
to each of the other terms and conditions thereof, and agree that the Subsidiary
Guaranty shall continue in full force and effect and binding upon and
enforceable against such Subsidiary Guarantors in accordance with its terms from
and after the date hereof.

     Dated as of the 10th day of April, 2003.

                                       FPIC INSURANCE AGENCY, INC.

                                       By:      /s/ Kim D. Thorpe
                                           -------------------------------
                                           Name: Kim D. Thorpe
                                           Title: Vice President and Treasurer

                                       EMPLOYERS MUTUAL, INC.

                                       By:      /s/ Kim D. Thorpe
                                           -------------------------------
                                           Name: Kim D. Thorpe
                                           Title: Vice President

                                       PROFESSIONAL STRATEGY OPTIONS, INC.

                                       By:      /s/ Kim D. Thorpe
                                           -------------------------------
                                           Name: Kim D. Thorpe
                                           Title: Vice President and Treasurer

                                       ADMINISTRATORS FOR THE PROFESSIONS, INC.

                                       By:      /s/ Kim D. Thorpe
                                           -------------------------------
                                           Name: Kim D. Thorpe
                                           Title: Vice President

                                      S-6

<PAGE>

                                       GROUP DATA CORPORATION

                                       By:      /s/ Kim D. Thorpe
                                           -------------------------------
                                           Name:  Kim D. Thorpe
                                           Title:    Vice President

                                       FPIC INTERMEDIARIES, INC.

                                       By:      /s/ Kim D. Thorpe
                                           -------------------------------
                                           Name:  Kim D. Thorpe
                                           Title:    Vice President

                                      S-7<PAGE>

Exhibit 10.11

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                                  PH GAS, L.P.

                                  JULY 16, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                ----
<S>                                                                                                             <C>
ARTICLE I.  DEFINITIONS...........................................................................................1

ARTICLE II.  ORGANIZATION.........................................................................................6

         2.1  Name................................................................................................6
         2.2  Place of Business...................................................................................6
         2.3  Registered Office...................................................................................6

ARTICLE III.  PURPOSE.............................................................................................6

         3.1  Purpose.............................................................................................6
         3.2  Powers of Partnership...............................................................................6

ARTICLE IV.  TERM.................................................................................................7

ARTICLE V.  CONTRIBUTIONS TO CAPITAL AND STATUS OF PARTNERS.......................................................7

         5.1  Capital Contributions and Loan Amounts..............................................................7
         5.2  Additional Limited Partners.........................................................................8

ARTICLE VI.  DISTRIBUTIONS; ALLOCATION OF PROFITS AND LOSSES; CAPITAL ACCOUNTS....................................8

         6.1  Cash Available for Distribution.....................................................................8
         6.2  Allocation of Profits and Losses....................................................................8
         6.3  Special Tax Allocations; Other Allocation Rules; Tax Allocations: Code Section 704(c)...............9
         6.4  Allocations in the Event of Transfer................................................................9
         6.5  Capital Accounts...................................................................................10
         6.6  Tax Distributions..................................................................................11

ARTICLE VII.  MANAGEMENT; RIGHTS, POWERS, AND OBLIGATIONS OF THE PARTNERS........................................11

         7.1  Management of the Partnership......................................................................11
         7.2  Certain Limitations of the General Partner.........................................................11
         7.3  Meetings of the Partners...........................................................................12
         7.4  Voting by the Partners.............................................................................12
         7.5  Independent Activities.............................................................................13
         7.6  Execution of Agreements and Instruments............................................................13
         7.7  Holding of Assets..................................................................................13
         7.8  Prior Expenses.....................................................................................13

ARTICLE VIII.  TRANSFER OF INTERESTS IN THE PARTNERSHIP..........................................................13

         8.1  Prohibited Transfers...............................................................................13
         8.2  General Partner....................................................................................13
</TABLE>

                                      (i)

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                             <C>
         8.3  Limited Partners...................................................................................14

ARTICLE IX.  WITHDRAWAL AND REMOVAL OF A PARTNER.................................................................16

         9.1  Withdrawal.........................................................................................16
         9.2  Removal of a Limited Partner.......................................................................16
         9.3  Death or Disability of a Limited Partner...........................................................17
         9.4  Effect of Removal..................................................................................17
         9.5  Valuation of the Interest of a Partner.............................................................17
         9.6  Payments to a Removed Limited Partner..............................................................18

ARTICLE X.  DISSOLUTION AND WINDING UP OF THE PARTNERSHIP........................................................18

         10.1  Dissolution of the Partnership....................................................................18
         10.2  Winding Up of the Partnership.....................................................................18
         10.3  Distribution In Kind..............................................................................19

ARTICLE XI.  BOOKS OF ACCOUNTS, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING AND TAX MATTERS PARTNER................19

         11.1  Accounting, Books and Records.....................................................................19
         11.2  Other Records.....................................................................................19
         11.3  Reports...........................................................................................20
         11.4  Fiscal Year.......................................................................................20
         11.5  Partnership Funds.................................................................................21
         11.6  Tax Matters Partner...............................................................................21

ARTICLE XII.  INDEMNIFICATION....................................................................................21

         12.1  Indemnification...................................................................................21

ARTICLE XIII.  MISCELLANEOUS.....................................................................................22

         13.1  Agreement for Further Execution...................................................................22
         13.2  Amendments........................................................................................22
         13.3  Notices...........................................................................................23
         13.4  Governing Law and Jurisdiction....................................................................23
         13.5  Binding Nature of Agreement.......................................................................24
         13.6  Additional Partners...............................................................................24
         13.7  Validity..........................................................................................24
         13.8  Entire Agreement..................................................................................24
         13.9  Indulgences, Etc..................................................................................24
         13.10  Execution in Counterparts........................................................................24
         13.11  Paragraph........................................................................................24
         13.12  Number of Days...................................................................................24
         13.13  Interpretation...................................................................................25
         13.14  Corporate Authority..............................................................................25
         13.15  Third Party Beneficiaries........................................................................25
</TABLE>

                                      (ii)

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                             <C>
         13.16  Appointment of Attorney-in-fact..................................................................25
</TABLE>

Exhibit A         -        Partners
Exhibit B         -        Special Allocations

                                      (iii)

<PAGE>

                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                                  PH GAS, L.P.

         THIS LIMITED PARTNERSHIP AGREEMENT is entered into effective as of July
16, 2002,  by and among PHT GAS, LLC (the  "General  Partner") and those persons
listed as Limited Partners on Exhibit A attached hereto, as amended from time to
time after the date hereof.

         Intending to be legally bound, the parties hereto agree as follows:

                            ARTICLE I. DEFINITIONS.

         Capitalized  terms used in this  Agreement  and not  defined  elsewhere
herein shall have the following meanings:

         "Act" means the Delaware  Revised Uniform Limited  Partnership  Act, as
amended from time to time.

         "Adjusted  Capital Account Deficit" means, with respect to any Partner,
the deficit balance,  if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

                (i)  credit to such  Capital  Account  any  amounts  which  such
Partner is obligated to restore or is deemed to be obligated to restore pursuant
to the  next to last  sentences  of  Regulations  Sections  1.704-(2)(g)(1)  and
1.704-2(i)(5); and

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

         The  foregoing  definition  of  Adjusted  Capital  Account  Deficit  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.

         An  "Affiliate"   (whether  or  not   capitalized)  of,  or  a  Person,
association,  partnership or corporation  "affiliated" with, a specified Person,
association,  partnership or corporation, is a Person, association,  partnership
or corporation that directly,  or indirectly through one or more intermediaries,
controls,  is  controlled  by, or is under common  control  with,  the specified
Person, association, partnership or corporation.

         "Agreement" means this limited partnership  agreement,  as the same may
be amended from time to time.

         "Appraiser"  has the  meaning  set  forth  in  Section  9.5(a)  of this
Agreement.

<PAGE>

         "Bankruptcy"   means,   with  respect  to  any  Person,   a  "Voluntary
Bankruptcy" or an "Involuntary Bankruptcy." A "Voluntary Bankruptcy" means, with
respect to any Person,  the inability of such Person  generally to pay its debts
as such debts  become  due,  or an  admission  in writing by such  Person of its
inability to pay its debts generally or a general  assignment by such Person for
the benefit of  creditors;  the filing of any  petition or answer by such Person
seeking to  adjudicate  it a bankrupt  or  insolvent,  or seeking for itself any
liquidation, winding up, reorganization,  arrangement,  adjustment,  protection,
relief,  or  composition  of such Person or its debts under any law  relating to
bankruptcy,  insolvency  or  reorganization  or relief of  debtors,  or seeking,
consenting  to,  or  acquiescing  in the  entry of an order  for  relief  or the
appointment of a receiver,  trustee,  custodian,  or other similar  official for
such Person or for any  substantial  part of its property,  or corporate  action
taken by such  Person  to  authorize  any of the  actions  set forth  above.  An
"Involuntary  Bankruptcy" means, with respect to any Person, without the consent
or acquiescence of such Person, the entering of an order for relief or approving
a petition  for  relief or  reorganization  or any other  petition  seeking  any
reorganization,    arrangement,    composition,    readjustment,    liquidation,
dissolution,  or other  similar  relief under any present or future  bankruptcy,
insolvency or similar  statute,  law, or  regulation,  or the filing of any such
petition against such Person which petition shall not be dismissed within ninety
(90) days, or, without the consent or acquiescence of such Person,  the entering
of an order  appointing a trustee,  custodian,  receiver,  or liquidator of such
Person or of all or any  substantial  part of the  property of such Person which
order shall not be dismissed within sixty (60) days.

         "Capital  Account" means,  with respect to any Partner,  such Partner's
Capital Account determined in accordance with Section 6.6.

         "Capital  Contribution"  means, with respect to any Partner, the amount
of money contributed to the Partnership by such Partner pursuant to Section 5.2.

         "Cash Available for  Distribution"  for any fiscal year or other period
means the excess of (a) the amount of gross cash  receipts of any kind  received
by the Partnership (including from any reserves previously established which the
General Partner  determines are no longer required by the Partnership)  less (b)
(i)  Operating  Expenses,  (ii) any  reserves  established  or  increased by the
General  Partner  which it deems  reasonably  necessary for the operation of the
Partnership   including,   reserves  for  working   capital  and  maturing  debt
obligations and other cash  requirements of the  Partnership,  and (iii) amounts
received by the Partnership as Capital Contributions.

         "Certificate   of   Limited   Partnership"   means  the   Partnership's
Certificate  of Limited  Partnership  filed with the  Secretary  of State of the
State of Delaware, as the same may be amended from time to time.

         "Code"  means  the  Internal  Revenue  Code of 1986,  as  amended.  All
references  herein to Code sections  shall include  corresponding  provisions of
future federal tax statutes.

         "Depreciation"  means, for each fiscal year or other period,  an amount
equal  to the  depreciation,  amortization  or  other  cost  recovery  deduction
allowable with respect to an asset for

                                       2

<PAGE>

such year or other  period,  except  that if the Gross  Asset  Value of an asset
differs from its adjusted basis for federal income tax purposes at the beginning
of such year or other  period,  Depreciation  shall be an amount which bears the
same  ratio to such  beginning  Gross  Asset  Value as the  federal  income  tax
depreciation,  amortization  or other cost  recovery  deduction for such year or
other period bears to such beginning adjusted tax basis; provided, however, that
if the federal  income tax  depreciation,  amortization  or other cost  recovery
deduction  for  such  year or  other  period  is  zero,  Depreciation  shall  be
determined  with  reference  to such  beginning  Gross  Asset  Value  using  any
reasonable method selected by the General Partner.

         "General Partner" means PHT GAS, LLC.

         "Gross  Asset  Value"  means,  with  respect to any asset,  the asset's
adjusted basis for federal income tax purposes, except as follows:

                (i)  The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such asset,
as agreed by the contributing Partner and the General Partner;

                (ii) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their  respective  gross fair market values,  as determined by
the General  Partner,  as of the  following  times:  (a) the  acquisition  of an
additional  Interest in the  Partnership  (other than  pursuant to the  original
purchase at the time of  formation  of the  Partnership)  by any new or existing
Partner in exchange  for more than a de minimis  Capital  Contribution,  (b) the
distribution by the Partnership to a Partner of more than a de minimis amount of
Partnership  Property (other than cash) as consideration  for an Interest in the
Partnership;  and (c) the liquidation of the  Partnership  within the meaning of
Regulations   Section   1.704-1(b)(2)(ii)(g):   provided,   however,   that  the
adjustments  pursuant  to  clauses  (a) and (b) above  shall be made only if the
General Partner  reasonably  determines  that such  adjustments are necessary or
appropriate  to reflect the relative  economic  interests of the Partners in the
Partnership;

                (iii)   The  Gross  Asset  Value  of  any  Partnership   asset
distributed to any Partner shall be the gross fair market value of such asset on
the date of distribution;

                (iv)  The Gross Asset  Values of  Partnership  assets shall be
increased (or  decreased) to reflect any  adjustments  to the adjusted  basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b),  but only to
the extent that such  adjustments are taken into account in determining  Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and Section 6.3(h)
hereof,  provided,  however,  that  Gross  Asset  Values  shall not be  adjusted
pursuant hereto to the extent the General Partner  determines that an adjustment
pursuant  hereto is necessary or  appropriate  in connection  with a transaction
that would otherwise result in an adjustment pursuant hereto; and

                (v)  If the Gross Asset Value of an asset has been  determined
or adjusted pursuant hereto, such Gross Asset Value shall thereafter be adjusted
by the  Depreciation  taken into account with respect to such asset for purposes
of computing Profits and Losses.

                                       3

<PAGE>

         "Indemnitee"  has the  meaning  set forth in  Section  12.1(a)  of this
Agreement.

         "Interest" means a Partner's  economic rights and other interest in the
Partnership as a Partner as provided in this Agreement.

         "Limited  Partner"  means  any  person  named as a Limited  Partner  on
Exhibit A in his,  her or its capacity as a Limited  Partner of the  Partnership
and any other person admitted to the Partnership as a Limited Partner.

         "Majority in Interest"  means with respect to any  particular  group of
Partners, those Partners whose Percentage Interests in the aggregate are greater
than  fifty  percent  (50%)  of the  Percentage  Interests  owned  by all of the
Partners within the group.

         "Nonrecourse   Deductions"   has  the  meaning  set  forth  in  Section
1.704-2(b)(1) of the Regulations.

         "Nonrecourse   Liability"   has  the   meaning  set  forth  in  Section
1.704-2(b)(3) of the Regulations.

         "Operating  Expenses" means cash  disbursements for operating  expenses
of, and proper payments by, the Partnership,  including,  but not limited to (i)
legal  representation  relating  to the  Partnership,  (ii)  accounting  and tax
preparation and (iii) amounts paid to satisfy the Partnership's obligations with
respect to working interests in oil and gas wells held by the Partnership.

         "Partner" means the General Partner or any Limited Partner.

         "Partner  Nonrecourse  Debt"  has the  meaning  set  forth  in  Section
1.704-2(b)(4) of the Regulations.

         "Partner  Minimum  Gain" means an amount,  with respect to each Partner
Nonrecourse  Debt,  equal to the  Partnership  Minimum Gain that would result if
such  Partner  Nonrecourse  Debt  were  treated  as  a  Nonrecourse   Liability,
determined in accordance with Section 1.704-2(i)(3) of the Regulations.

         "Partner Nonrecourse  Deductions" has the meaning set forth in Sections
1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.

         "Partnership" means PH Gas, L.P., a Delaware limited partnership.

         "Partnership  Minimum  Gain"  has the  meaning  set  forth in  Sections
1.704-2(b)(2) and 1.704-2(d) of the Regulations.

         "Partnership  Property"  means  all  properties  and  assets  which the
Partnership may own or have an interest in from time to time.

                                       4
<PAGE>

         "Percentage  Interest"  means the Interest of a Partner  expressed as a
percentage.  The Percentage Interest of each Partner as of the date hereof is as
set forth on Exhibit A.

         "Person"  means  any  individual,  corporation,   partnership,  limited
liability  company,  joint venture,  association,  joint-stock  company,  trust,
non-incorporated   organization   or  government  or  any  agency  or  political
subdivision thereof.

         "Prime Rate" means the interest rate published from time to time by the
Wall Street  Journal as the prime lending rate  (regardless  of how such rate is
specifically described).

         "Profit or Profits" and "Loss or Losses" means, for each fiscal year or
other period,  an amount equal to the  Partnership's  taxable income or loss for
such  year  or  period,  as  determined  by the  Partnership's  accountants,  in
accordance  with Code  ss.703(a) (for this purpose,  all items of income,  gain,
loss or deduction  required to be stated separately  pursuant to ss.703(a)(1) of
the Code shall be included in Profits or Losses),  with the adjustments required
to comply with the capital  account  maintenance  rules of Treasury  Regulations
ss.1.704-1(b)(2)(iv) and the following adjustments:

                (i)  Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing  Profits and Losses
shall be added back;

                (ii)   Any  expenditures  of  the  Partnership   described  in
ss.705(a)(2)(B) of the Code or treated as ss.705(a)(2)(B)  expenditures pursuant
to Treasury  Regulations  ss.1.704(b)(2)(iv)(i),  and not  otherwise  taken into
account in computing  Profits or Losses,  shall be subtracted  from such taxable
income or loss;

                (iii)  If the Gross  Asset Value of any  Partnership  asset is
adjusted  pursuant to this  Agreement,  the amount of such  adjustment  shall be
taken into account in the taxable year as gain or loss from the  disposition  of
such asset for purposes of computing Profits or Losses;

                (iv)   Gain  or  loss  resulting   from  any   disposition  of
Partnership  Property  with  respect  to which  gain or loss is  recognized  for
federal  income tax  purposes  shall be computed by reference to the Gross Asset
Value of the Partnership Property disposed of, notwithstanding that the adjusted
tax basis of such Property differs from its Gross Asset Value; and

                (v)  In lieu of the depreciation,  amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there  shall be taken into  account  Depreciation  for such fiscal year or other
period, computed in accordance with this Agreement.

         "Purchase  Price"  has the  meaning  set forth in  Section  9.4 of this
Agreement.

         "Regulations" means the regulations  promulgated under the Code, as the
same may be amended or supplemented from time to time.

                                       5
<PAGE>

         "Regulatory  Allocations"  has the meaning set forth in Section 1(h) of
Exhibit B of this Agreement.

         "Removal  Event"  has the  meaning  set  forth in  Section  9.2 of this
Agreement.

         "Service" has the meaning set forth in Section 11.6 of this Agreement.

         "Term" has the meaning set forth in Article IV of this Agreement.

         "Transfer," with respect to any Interest in the Partnership,  means any
sale, bequest,  assignment,  pledge,  encumbrance or gift thereof, or attempt to
deliver a security interest therein, but shall not include a voluntary pledge or
assignment  pursuant to a written  agreement  by a Partner of only the rights to
recover  proceeds as distributed by the Partnership with respect to any Interest
nor shall include a collateral  assignment of one Partner's  Interest to another
Partner.

         "Unreturned Capital Balance" with respect to any Partner means all cash
paid toward such Partner's Capital  Contribution,  reduced by distributions made
to such Partner.

         "Valuation  Date" has the meaning  set forth in Section  9.5(a) of this
Agreement.

                            ARTICLE II. ORGANIZATION

         2.1 Name. The name of the Partnership is "PH GAS, L.P."

         2.2  Place  of  Business.  The  principal  place  of  business  of  the
Partnership  shall be at such place as  determined by the General  Partner.  The
Partnership  may establish  additional  places of business within or without the
State of Delaware as and when required by the business of the Partnership.

         2.3 Registered  Office. The registered office for the Partnership shall
be located at such place as may be designated by the General Partner.

                              ARTICLE III. PURPOSE.

         3.1  Purpose.  The  purpose for which the  Partnership  is formed is to
purchase leasehold  interests in the in certain oil and gas prospects in the Phu
Horm Gas Field Project located in the Khorat and Udon Concessions in the Kingdom
of Thailand. In addition,  the Partnership may engage in any lawful activity for
which  limited  partnerships  may be  organized  under  the laws of the State of
Delaware and otherwise in accordance with the terms of this Agreement.

         3.2 Powers of Partnership.  The  Partnership  shall have all the powers
permitted  by law which are  necessary or desirable in carrying out the purposes
and business of the Partnership, including, but not limited to, the following:

                                       6
<PAGE>

             (a)  Transact  business  in  any  state  or  nation  in  which  the
Partnership   may  lawfully   act,  for  itself  or  as   principal,   agent  or
representative for any Person, respecting the business of the Partnership;

             (b) Enter into, make, perform and carry out, or cancel and rescind,
contracts  and  other  obligations  for any  lawful  purpose  pertaining  to the
business of the Partnership;

             (c) Apply for,  register,  obtain,  purchase or  otherwise  acquire
trademarks,  trade names, labels and designs relating to or useful in connection
with any business of the Partnership,  and to use, exercise, develop and license
the use of the same;

             (d) Employ on behalf of the Partnership legal counsel,  accountants
and other professional advisors with respect to any business of the Partnership;

             (e) Compromise, submit to arbitration, sue on, and defend claims in
favor of or against the Partnership; and

             (f)  Exercise  all of the  general  rights,  privileges  and powers
permitted  by the  provisions  of the Act,  as adopted or  hereafter  amended or
supplemented.
0
                                ARTICLE IV. TERM

         The  Partnership  shall  continue  in  perpetuity  from the date hereof
unless dissolved sooner pursuant to Article X of this Agreement (the "Term").

           ARTICLE V. CONTRIBUTIONS TO CAPITAL AND STATUS OF PARTNERS

         5.1 Capital Contributions and Loan Amounts.

             (a)  General  Partner.  The  General  Partner  has  made a  capital
contribution  to the  Partnership  in the  amount set forth on Exhibit A to this
Agreement.

             (b) Limited  Partners.  Each Limited  Partner shall make an initial
Capital  Contribution,  as described in Exhibit A to this  Agreement.  The name,
mailing  address,   taxpayer   identification   number,   Capital  Contribution,
Percentage Interest of each Partner is set forth in Exhibit A.

             (c)  Additional  Capital  Contributions.  The Partners shall not be
obligated to make any additional contributions to the capital of the Partnership
or to loan the Partnership any additional funds.

             (d) Withdrawal of Capital Contributions.  No Partner shall have the
right to  withdraw  or  reduce  its  Capital  Contribution,  or to  receive  any
distributions  from the Partnership,  except as otherwise  provided  herein.  No
Partner shall have the right to demand or receive any Partnership Property other
than cash from the  Partnership.  No interest or royalties  shall be paid

                                       7
<PAGE>

to any Partner on its Capital Contribution.  No Partner shall have priority over
any other Partner,  either as to the return of its Capital Contribution or as to
Profits,  Losses or  distributions,  except as may be specifically  set forth in
this Agreement.

         5.2 Additional  Limited  Partners.  Additional  Limited Partners may be
admitted to the Partnership  with the consent of the General Partner and without
the consent of the Limited  Partners.  Any dilution of the  Percentage  Interest
resulting  from the admission of additional  Limited  Partners shall be borne by
all Partners pro rata in accordance with their Percentage Interests.

 ARTICLE VI. DISTRIBUTIONS; ALLOCATION OF PROFITS AND LOSSES; CAPITAL ACCOUNTS.

         6.1 Cash Available for Distribution.

             (a)  Distributions   Prior  to  Liquidation.   Cash  Available  for
Distribution,  if any,  shall be  distributed  at times and in amounts which the
General  Partner  may,  in its  reasonable  discretion,  determine.  Amounts not
distributed in liquidation of the Partnership shall be distributed as follows:

                (i)     First, 99 percent to the Limited  Partners in proportion
                        to  and  to  the  extent  of  their  Unreturned  Capital
                        Balances  and one percent to the General  Partner  until
                        all  Unreturned  Capital  Balances  have been reduced to
                        zero;

                (ii)    Then,  90 percent to the Limited  Partners in proportion
                        to their  Percentage  Interests  and 10  percent  to the
                        General Partner.

Notwithstanding the foregoing,  the General Partner may in its sole and absolute
discretion  and at any time  make a  distribution  to the  Limited  Partners  in
proportion to their respective Unreturned Capital Account balances.

             (b) Liquidating Distributions.  Distributions in liquidation of the
Partnership and redemption of Interests shall be made in accordance with Capital
Accounts,  determined  after  taking  into  account all  allocations  under this
Article VI, including Profits or Losses with respect to property  distributed in
kind.

         6.2 Allocation of Profits and Losses.

             (a)  Allocation of Profits.  After giving effect to the  Regulatory
Allocations  set forth in Exhibit B of this  Agreement,  Profits  for any fiscal
year or other period of the Partnership will be credited to the Capital Accounts
of the Partners in the following order of priority:

                (i)     First,  to  each  Partner  in  proportion  to and to the
                        extent of the excess,  if any, of (A)  cumulative  prior
                        allocations to the Partner

                                       8
<PAGE>

                        under  subsection  (b) of  this  Section  6.2  over  (B)
                        cumulative  prior  allocations to the Partner under this
                        clause (i);

                (ii)    Then, to each Partner in proportion to and to the extent
                        of the excess,  if any, of (A) cumulative  distributions
                        to the Partner  under  Section 6.1 (a) as of the date of
                        allocation over (B) cumulative prior  allocations  under
                        this clause (ii);

                (iii)   Then, 90 percent to the Limited  Partners and 10 percent
                        to the General Partner.

             (b)  Allocation of Losses.  After giving  effect to the  Regulatory
Allocations set forth in Exhibit B of this Agreement, Losses for any fiscal year
or other period will be allocated as follows:

                (i)     First,  to  each  Partner  in  proportion  to and to the
                        extent of the excess, if any, of (A) cumulative  Profits
                        allocated  to the  Partner  for all  prior  years  under
                        subsection  (a) of this Section 6.2 over (B)  cumulative
                        prior Losses allocated during the same period under this
                        clause

                (ii)    Then, to Partners, if any, with positive Capital Account
                        balances,  in  proportion  to and to the  extent of such
                        balances;

                (iii)   Then entirely to the General Partner.

Notwithstanding the foregoing, Losses shall not be allocated to a Partner if the
allocation would cause or increase a deficit in the Partner's Capital Account at
a time when any other  Partner  has a  positive  Capital  Account  balance,  and
otherwise shall be allocated entirely to the General Partner.

         6.3 Special Tax Allocations;  Other Allocation  Rules; Tax Allocations:
Code Section 704(c).  Special tax  allocations,  other  allocation rules and tax
allocations  relating  to Code  Section  704(c)  are as set  forth on  Exhibit B
attached hereto and made a part hereof.

         6.4 Allocations in the Event of Transfer.

             (a)  If all  or  any  portion  of an  Interest  is  transferred  in
accordance  with Article VIII hereof  (other than a  hypothecation  or any other
encumbrance  which secures an  indebtedness  but is not accompanied by immediate
rights to distributions), Profits, Losses, each item thereof and all other items
attributable  to such  Interest for the period from the beginning of the year in
which the transfer is effected  through the date of transfer  shall be allocated
to the transferor,  and all items attributable for the balance of the year shall
be allocated to the transferee. The General Partner may, in its sole discretion,
determine the apportionment  between pre- and  post-transfer  allocations on the
basis of the number of days of the year in each period or by an interim  closing

                                       9
<PAGE>

of  books  as of the  end  of the  date  of  transfer,  except  that  any  items
attributable  to a  transaction  giving rise to capital gain or loss  (including
gain on the disposition of "Section 1231 property" within the meaning of Section
1231 of the  Cod)  shall be  allocated  entirely  to the  period  in  which  the
transaction giving rise to the gain or loss occurred.  The Partnership shall not
make any  adjustments  for items of income,  gain,  loss,  credit,  or deduction
realized  or  incurred  prior to  transfer  but  deferred  in whole or part to a
subsequent period.

             (b) Solely for purposes of allocating Profits, Losses and each item
thereof  as set  forth in  Sections  6.2  through  6.4,  the  Partnership  shall
recognize  the Transfer of such  Interest not later than the end of the calendar
month during  which it receives  written  notice of such  Transfer and the other
requirements  of  Article  VIII  hereof  are  satisfied,  provided  that  if the
Partnership does not receive a written notice stating the date such Interest was
transferred  and such other  information  as the General  Partner may reasonably
require  within thirty (30) days after the end of the calendar year during which
the  Transfer  occurs,  then  all of such  items  shall  be  allocated,  and all
distributions  shall be made,  to the  Person  who,  according  to the books and
records of the  Partnership,  on the last day of the  accounting  period  during
which the Transfer  occurs,  was the owner of the Interest.  The General Partner
and the  Partnership  shall  incur  no  liability  for  making  allocations  and
distributions  in accordance with the provisions of this Section 6.4, whether or
not the General  Partner or the  Partnership  has  knowledge  of any Transfer of
ownership of any Interest.

         6.5 Capital Accounts.

             (a) A Capital  Account  shall be maintained  for each Partner.  The
provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with the Regulations  promulgated under Section 704(b) of the
Code.  The Capital  Account of each  Partner  shall be increased by (a) the cash
amounts of such Partner's Capital Contribution, (b) the Gross Asset Value of any
property or services  contributed to the Partnership by the Partner as agreed to
by the contributing Partner and the Partnership,  less any indebtedness to which
such  property is subject or which is assumed by the  Partnership  in connection
with the contribution (except that any amount by which such indebtedness exceeds
such  Gross  Asset  Value of the  property  shall be  treated  as a debit to the
Partner's  Capital  Account),  and (c) such  Partner's  share of Profits and any
items in the nature of income and gain  specially  allocated to it, and shall be
decreased by (y) the amount of cash and the Gross Asset Value of other  property
actually distributed to such Partner by the Partnership less any indebtedness to
which such  property is subject or which is assumed by the Partner in connection
with the distribution (except that any amount by which such indebtedness exceeds
such  Gross  Asset  Value of the  property  shall be  treated as a credit to the
Partner's Capital Account), and (z) such Partner's share of Losses.

             (b) In the  event a Partner  Transfers  all or any  portion  of its
Interest in accordance  with the  provisions of this  Agreement,  the transferee
shall succeed to the individual  Capital Account of the transferor to the extent
such Capital Account relates to the transferred Interest.

                                       10
<PAGE>

             (c)  It is  the  intent  of  this  Agreement  that  each  Partner's
allocations and distributions shall be made in accordance with Section 704(b) of
the Code.  If the  Partnership  is advised by legal  counsel  that any matter or
matters  contained in this  Agreement  are unlikely to be effective  for federal
income tax purposes,  the General  Partner is hereby  granted the power to amend
the allocation and/or distribution  provisions of this Agreement,  on the advice
of legal counsel to the  Partnership,  to the minimum extent necessary to effect
the allocation of Profits and Losses herein.

             (d) No  Partner  shall  be  required  at any  time to make any cash
contribution  to the Partnership by reason of any deficit balance in its Capital
Account,  and no such deficit  balance  shall  increase or otherwise  affect the
liability of a Partner to third parties

6.6 Tax Distributions. Prior to any distributions pursuant to Section 6.1 hereof
(or otherwise), the Partnership shall distribute Cash Available for Distribution
to the Partners in such amounts as the General Partner, in good faith, estimates
(the  "Estimated Tax  Liability") to be sufficient to permit each Partner to pay
all federal and state  income taxes which each Partner will incur as a result of
the required inclusion of each Partner's  proportionate  share of the Profits of
the Partnership in determining  each Partner's  federal and state tax liability,
provided  that  such  distribution  shall be made no later  than the 10th day of
January of the year  following  the year in question  and such  amount  shall be
confirmed  by  the  General   Partner  as  soon   thereafter  as  is  reasonably
practicable.  Any  distribution  made  under this  Section  6.6 shall be applied
against such amounts such Partner is entitled to receive pursuant to Section 6.1
hereof.  In the event such Partner  receives an amount  pursuant to this Section
6.6 which the  General  Partner  in good faith  determines  is (i) less than the
Estimated Tax Liability,  then the  Partnership  shall  promptly  distribute any
shortfall,  or (ii) greater than the amount such Partner was entitled to receive
pursuant to Section 6.1 hereof,  such Partner  shall  immediately  return to the
Partnership  the  difference  between the amount  received  and the amount which
should have been distributed.

    ARTICLE VII. MANAGEMENT; RIGHTS, POWERS, AND OBLIGATIONS OF THE PARTNERS

         7.1 Management of the Partnership.  Subject to Section 7.2 hereof,  the
management and control of the Partnership and its business and affairs,  and the
exercise of the powers of the Partnership described in Section 3.2 hereof, shall
be vested in the General Partner.

         7.2 Certain  Limitations of the General Partner.  Without obtaining the
affirmative  vote of a Majority  in  Interest  of the Class A Limited  Partners,
voting as a separate  class,  the General  Partner shall not do or permit any of
the following acts on behalf of the Partnership  unless  otherwise  specifically
stated herein:

                 (i) Act in contravention of this Agreement;

                 (ii)  Except as  provided  in Article X, do any act which would
make it impossible to carry on the ordinary business of the Partnership;

                                       11
<PAGE>

                 (iii) Confess a judgment against the Partnership;

                 (iv) Execute or deliver any  assignment  for the benefit of the
creditors of the Partnership;

                 (v)  Impose  a  lien,  lease,   security  interest,   easement,
liability  or otherwise  encumber  Partnership  Property,  other than the Senior
Security Interest and the Class A Security Interest; or

                 (vi) sell or dispose of all or substantially  all of the assets
of the  Partnership  Property  in a  transaction  outside  of the  Partnership's
ordinary course of business, provided that the Partnership shall not be required
to obtain  such  affirmative  vote in the event  that  Mercantile  is selling or
disposing of all or  substantially  all of its assets  pursuant to the same or a
related transaction.

         7.3 Meetings of the Partners.

             (a) Meetings of Partners. Except as otherwise specifically provided
in this Agreement, special meetings of the Partners may be called by the General
Partner, by written notice to the Partners given not less than ten (10) nor more
than sixty (60) days prior to the date of such meeting.  Meetings  shall be held
at such place  within or without the State of Delaware as is  designated  in the
notice of the meeting.

             (b) Quorum.  Except as provided in other sections of this Agreement
where less than all of the Partners are entitled to vote, the Partners necessary
to  approve  any  action to be taken at such  meeting  must be  present  for the
conduct of business at any meeting of the Partners.

             (c)  Written  Consent.  Any  action  of the  Partners  may be taken
without a meeting if the  Partners  required  to  approve  such  action  consent
thereto in writing.

             (d) Meeting by  Telephone.  The meeting of the Partners may be held
by telephone conference or similar communications equipment.

             (e) Proxies. A Partner may authorize one or more Persons to act for
such  Partner by proxy,  provided the proxy is signed by such  Partner.  A proxy
shall not be valid after the expiration of one (1) year from its date.

             (f) Waiver of Notice.  Any notice required under this Agreement for
the  holding of  meetings  of the  Partners  may be waived by any  Partner by an
instrument in writing  signed by such Partner either before or after the meeting
to which such waiver relates.

         7.4 Voting by the Partners.  Unless otherwise stated in this Agreement,
an affirmative vote of a Majority in Interest of the Limited Partners, voting as
a class,  shall be required to adopt any matter subject to a vote of the Limited
Partners.

                                       12
<PAGE>

         7.5  Independent  Activities.  Subject to any other agreement among the
parties,  Partners and Affiliates of Partners may, notwithstanding the existence
of this Agreement,  engage in whatever  activities they choose without having or
incurring  any  obligation  to offer  any  interest  in such  activities  to the
Partnership  or any  Partner,  and  neither  this  Agreement  nor  any  activity
undertaken  pursuant  hereto shall  prevent the  Partners or any  Affiliate of a
Partner from engaging in any activity,  or require the Partners or any Affiliate
of a Partner to permit the Partnership or any Partner to participate therein.

         7.6  Execution  of  Agreements  and   Instruments.   Any  agreement  or
instrument may be executed on behalf of the  Partnership by the General  Partner
or as otherwise authorized by the General Partner.

         7.7 Holding of Assets. All Partnership Property, whether real, personal
or mixed, owned by the Partnership shall be held in the name of the Partnership.

         7.8 Prior  Expenses.  To the  extent  expenses  have been  incurred  in
connection  with  the  Partnership  prior  to the  date of this  Agreement,  the
Partnership  shall pay such expenses or shall  reimburse the General  Partner or
any other Person as appropriate for such expenses if already paid.

             ARTICLE VIII. TRANSFER OF INTERESTS IN THE PARTNERSHIP

         8.1 Prohibited  Transfers.  Neither the General  Partner nor any of the
Limited Partners may sell, assign,  transfer or otherwise dispose of, or pledge,
hypothecate  or  transfer  or in any  manner  encumber,  his or its  Partnership
Interest or any part thereof  except as permitted in this Article VIII,  and any
act in violation of this Article VIII shall not be binding upon or recognized b,
the  Partnership  regardless of whether the General Partner shall have knowledge
thereof.

         8.2 General Partner.

             (a) Upon the withdrawal,  retirement,  resignation, removal, death,
insanity,  dissolution  or  bankruptcy  of a General  Partner (the  "Terminating
General Partner") and the continuation of the business of the Partnership by the
remaining  General  Partner[] (or if there is no remaining  General  Partner,  a
newly  appointed  General  Partner,  appointed upon the consent of a Majority in
Interest of the Limited Partners),  the Partnership Interest of such Terminating
General Partner shall be converted to a Limited Partnership Interest;  provided,
however,  that the  distributions,  Profits and Losses to which the  Terminating
General  Partner shall be entitled  shall not be changed from those to which the
Terminating General Partner was entitled while a General Partner.

             (b) Until the dissolution and  liquidation of the  Partnership,  no
General  Partner  shall  voluntarily   withdraw,   retire  or  resign  from  the
Partnership  without the consent of the then-remaining  General Partners,  or if
there is no other  General  Partner,  of a Majority  in  Interest of the Limited
Partners. Although such withdrawal,  retirement or resignation in breach of this
Subsection  8.2(b) may not be enjoined,  such General Partner shall be liable in
damages to the

                                       13
<PAGE>

Partnership  for such  breach.  A sole  remaining  General  Partner  seeking  to
withdraw,  may do so  only  upon  obtaining  the  prior  written  approval  of a
Majority-in-Interest of the Limited Partners.

         8.3 Limited Partners.

             (a) The General Partner may (1) pursuant to this Section 8.3, admit
as a substituted  Limited Partner any successor in interest to a Limited Partner
either deceased or under legal disability,  and (2) pursuant to this Section 8.3
admit as substituted Limited Partners assignees of Limited Partners:

                 (i) A substituted  Limited  Partner is a person admitted to all
the rights of a Limited Partner;

                 (ii) An  assignee  is a person  to whom a Limited  Partner  has
assigned his Interest in the  Partnership  but who has not become a  substituted
Limited  Partner.  An assignee shall have no right to require any information or
accounting of the  Partnership's  transactions  or to inspect the  Partnership's
books but shall only be entitled to receive the share of the  distributions  and
allocations  to which his assignor  would  otherwise be entitled as set forth in
Article VI.

             (b) No assignee of the whole or any portion of a Limited  Partner's
Interest shall have the right to become a substituted  Limited  Partner in place
of his assignor or have any other rights of a Limited Partner  hereunder  unless
all of the following conditions are satisfied:

                 (i)  The  written  consent  of  the  General  Partner  to  such
substitution shall be obtained,  the granting or denial of which shall be within
the sole and absolute discretion of the General Partner;

                 (ii) A duly  executed and  acknowledged  written  instrument of
assignment has been filed with the Partnership which sets forth the intention of
the  assignor  that the assignee  become a  substituted  Limited  Partner in his
place;

                 (iii) The assignor and assignee  execute and  acknowledge  such
other  instruments  as the General  Partner may deem  necessary  or desirable to
effect such admission,  including,  without  limitation,  an opinion of counsel,
acceptable  to the General  Partner,  to the effect that the  assignment  of the
interest will not violate the applicable provision of the Securities Act of 1933
and any applicable state securities laws, the written acceptance and adoption by
the  assignee  of  the   provisions  of  this   Agreement  and  his   execution,
acknowledgment,  and delivery to the General Partner of a Power of Attorney, the
form and content of which are more fully described in Paragraph 12 hereof; and

                 (iv) A transfer fee not to exceed $300.00 per  transaction  has
been paid to the Partnership.

                                       14
<PAGE>

             (c) Any person admitted to the Partnership as a Substituted Limited
Partner  shall be  subject  to all of the  provisions  of this  Agreement  as if
originally a party to it.

             (d)  Subject  to the  provisions  of  subparagraph  8.3(j)  hereof,
compliance with the suitability standards imposed by the Partnership, applicable
"blue  sky" laws,  if any,  and the rules of any other  applicable  governmental
authority and subject to the written consent of the General Partner (except that
assignments to heirs and personal  representatives  may be made without  consent
upon the death of a Limited Partner),  a Limited Partner shall have the right to
assign all or a portion of his  Interest by a written  assignment,  the terms of
which are not in contravention of any of the provisions of this Agreement, which
assignment  has  been  duly  executed  by  the  assignor  and  received  by  the
Partnership and recorded on the books thereof.  Any assignment in  contravention
of any of the  provisions  of this  Subsection  8.3(d)  shall be of no force and
effect and shall not be  binding  upon or  recognized  by the  Partnership.  THE
INTERESTS  EVIDENCED  BY THIS  AGREEMENT  HAVE NOT  BEEN  REGISTERED  UNDER  THE
SECURITIES  ACT OF 1933, AS AMENDED,  OR THE SECURITIES  LAWS OF ANY STATE.  THE
INTERESTS  ACQUIRED BY LIMITED  PARTNERS  MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE INTERESTS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND SUCH STATE LAWS AS MAY BE APPLICABLE, OR
AN OPINION OF COUNSEL  SATISFACTORY TO THE PARTNERSHIP THAT SUCH REGISTRATION IS
NOT REQUIRED.

                 (i)  Except as  provided  in  Subsections  8.3(h),  8.3(i)  and
8.3(j), an assignee of an Interest shall be entitled to receive distributions of
cash or  other  property  from  the  Partnership  attributable  to the  Interest
acquired by reasons of such  assignment from and after the effective date of the
assignment  of an Interest to him. The  "effective  date" of an assignment of an
Interest  shall be the  last day of the  calendar  month  in which  the  written
instrument  of  assignment,  in form and substance  satisfactory  to the General
Partner, is received and approved by the General Partner.

                 (ii) Anything contained herein to the contrary notwithstanding,
both the  Partnership  and the  General  Partner  shall be entitled to treat the
assignor  of a  Partnership  Interest  as  the  absolute  owner  thereof  in all
respects,  and  shall  incur no  liability  for  distributions  of cash or other
property  made in good faith to him until such times as the  written  assignment
has  been  received  by,  and  recorded  on the  books  of the  Partnership,  in
accordance with the provisions of Subsection 8.3(d)(i).

             (e) The General  Partner may elect to treat an assignee who has not
become a substituted  Limited  Partner as a substituted  Limited  Partner in the
place of his assignor, should it deem, in its sole and absolute discretion, that
such  treatment  be in the  best  interest  of the  Partnership  for  any of its
purposes or for any of the purposes of this Agreement.

             (f) No consent of any of the Limited  Partners is required to elect
the substitution of a Limited Partner, except that a Limited Partner who assigns
his Interest  shall,

                                       15
<PAGE>

in order for the  assignee  to be  admitted as a  substituted  Limited  Partner,
evidence his intention  that the assignee be admitted as a  substituted  Limited
Partner in his place and must execute such  instruments  as the General  Partner
shall,  in its  sole and  absolute  discretion,  determine  to be  necessary  or
desirable in connection therewith.

             (g) The General  Partner shall be required to amend this  Agreement
only quarterly but may, in its sole and absolute discretion, within a reasonable
time after the date of their written consent to the  substitution of an assignee
as a substituted  Limited Partner,  amend this Agreement to reflect the addition
of said assignee as a Limited Partner.  Neither copies of this Agreement nor any
amendment  thereto  need be  delivered  to any of the Limited  Partners and such
requirement in any statute is hereby waived.  However, upon request, the General
Partner will promptly  thereafter  furnish the requesting Limited Partner with a
copy of this Agreement and any amendments thereto as of the date of request.

             (h) Upon the death or legal  incompetency of an individual  Limited
Partner,  his personal  representative shall have all of the rights of a Limited
Partner for the purpose of settling or the managing  his estate,  and such power
as the  decedent or  incompetent  possessed  to  constitute  a  successor  as an
assignee of his Interest in the  Partnership  and to join with such  assignee in
making  application to substitute such assignee as a Limited  Partner.  However,
such  personal  representative  shall not have the right to become a substituted
Limited  Partner  in the  place  of  his  predecessor  in  interest  unless  the
conditions of this Article VIII are first satisfied  (except with respect to the
requirement that the assignor execute and acknowledge instruments).

             (i) Upon the bankruptcy, dissolution or other cessation to exist as
a  legal  entity  of a  General  or  Limited  Partner,  not an  individual,  the
authorized  representative  of such  entity  shall  have all of the  rights of a
Limited  Partner for the  purpose of  effecting  the orderly  winding up and the
disposition  of the  business  of such  entity  and such  power  as such  entity
possessed  to  constitute  a successor  as an  assignee  of its  interest in the
Partnership  and to join with such assignee in making  application to substitute
such assignee as a Limited Partner.  However, such personal representative shall
not have the right to become a substituted  Limited  Partner in the place of his
predecessor  in  interest  unless the  conditions  of this  paragraph  are first
satisfied  (except with respect to the requirement that the assignor execute and
acknowledge instruments).

             (j) No assignment or transfer of an interest in the Partnership may
be made which would result in the termination of the  Partnership  under Section
708 of the Code.

                ARTICLE IX. WITHDRAWAL AND REMOVAL OF A PARTNER

         9.1 Withdrawal.  No Partner may withdraw or resign voluntarily from the
Partnership.

         9.2 Removal of a Limited  Partner.  Upon the  occurrence  of any of the
following  events (each,  a "Removal  Event"),  the  Partnership  shall have the
option (but not the obligation) to remove a Limited  Partner.  A Limited Partner
may only be removed pursuant to this Section 9.2 in the event of:

                                       16
<PAGE>

             (a) The  dissolution,  termination,  or  Bankruptcy  of the Limited
Partner;

             (b) Any  assignment  or attempted  assignment  of the Interest of a
Limited Partner or attempted  withdrawal of the Limited Partner contrary to this
Agreement; or

             (c) The material  breach of this  Agreement by the Limited  Partner
that is not cured (if such  material  breach is capable of being  cured)  within
thirty  (30) days of the  receipt  of notice  form the  General  Partner  of the
occurrence of such material breach.

         9.3 Death or Disability of a Limited Partner. In the event of the death
or Disability of an individual  Limited Partner,  the Partnership shall have the
assignable option (but not the obligation) to acquire all or any portion of such
Limited  Partner's  Interest  by  notifying  the  Limited  Partner,  the Limited
Partner's estate or the Limited  Partner's  representative,  as the case may be,
within ninety (90) days of the date of death or  determination  of Disability of
such Limited Partner of the  Partnership's  intention to acquire the Interest of
such  Limited  Partner  in the  Partnership.  The price  and  terms of  purchase
pursuant to which the  Partnership  shall be  entitled  to  exercise  the option
granted in this Section 9.3 shall be those set forth in Section 9.4 hereof.

         9.4  Effect  of  Removal.  If the  Partnership  exercises  the  options
described in Sections 9.2 or 9.3, then the Partnership  shall redeem the removed
Partner's  Interest for the purchase  price (the  "Purchase  Price")  determined
under Section 9.5 to be paid on the terms described in Section 9.6.

         9.5  Valuation  of the  Interest  of a Partner.  For  purposes  of this
Article IX, the  Purchase  Price for a removed,  deceased  or  Disabled  Limited
Partner's  Interest  shall  be the  value  of such  Limited  Partner's  Interest
determined as follows:

             (a) The General  Partner shall select an  independent,  third-party
appraiser,  experienced in appraising limited  partnership  interests similar to
the Interests (the  "Appraiser").  The Appraiser will determine the value of the
Limited  Partner's  Interest  as of the end of the  calendar  month  immediately
preceding the Removal Event based upon the value of the Partnership's assets net
of liabilities  assuming all assets were sold at such value and all  liabilities
were  satisfied by cash payments at their  present value and any resulting  deem
Profit  or Loss was  allocated  to the  Partners  pursuant  to the terms of this
Agreement. The determination of the value of a Limited Partner's Capital Account
shall  assume  the  going  concern  of the  Partnership  and shall not take into
account  minority  discounts for the Capital  Account being valued.  The date on
which the  Capital  Account is to be valued  pursuant to this  Section  shall be
referred to herein as a "Valuation  Date." The Appraiser shall within sixty (60)
days of the Removal  Event  prepare a statement  and report of the amount of the
Limited  Partner's  Capital  Account as of the  Valuation  Date.  A copy of such
statement and report will be forwarded to each Partner.

             (b) The  Partnership's  name  and  goodwill  shall,  as  among  the
Partners, be deemed to have no value and shall belong to the Partnership, and no
Partner shall have any right or claim individually to the use thereof.

                                       17
<PAGE>

         9.6  Payments to a Removed  Limited  Partner.  The Purchase  Price,  as
determined under Section 9.5, shall be paid to the removed, deceased or Disabled
Limited Partner, or its successor in interest as follows:

             (a) Ten percent (10%) in cash or immediately available funds by the
ninetieth  (90th)  day  following  the  date  of the  Removal  Event,  death  or
Disability (the "Closing Date"), and

             (b) The balance of principal  together  with interest on the unpaid
principal balance at a rate of interest equal to the Prime Rate in effect on the
business  day prior to the  Closing  Date in  twelve  (12)  equal  installments,
payable each March 31, June 30, September 30 and December 31,  commencing on the
first March 31, June 30, September 30 or December 31 following the Closing Date;
provided,  however,  that (i) the Partnership  may, at any time and from time to
time at its sole option and  election,  without  penalty or  premium,  repay the
balance,  in whole or in part, and (ii) the balance shall become immediately due
and payable (A) if any  installment of the balance shall not have been paid when
due and the  Partnership  shall have failed to cure such default within ten (10)
days after the Partnership's  receipt of a written notice of such default or (B)
if the Partnership is dissolved.

            ARTICLE X. DISSOLUTION AND WINDING UP OF THE PARTNERSHIP

         10.1 Dissolution of the Partnership. The Partnership shall be dissolved
upon the first to occur of any of the following events:

             (a) An order by a court of competent  jurisdiction decrees that the
Partnership be dissolved;

             (b) The  determination  of the General  Partners  and a Majority in
Interest of the Limited Partners to dissolve; or

             (c) The sale or other  disposition of all or  substantially  all of
the assets of the Partnership.

         The  occurrence of any Removal  Event of any Limited  Partner shall not
cause the dissolution of the Partnership.

         10.2  Winding  Up  of  the  Partnership.  Upon  a  dissolution  of  the
Partnership,  the  General  Partner or other  Person  appointed  by the  General
Partner, shall take full account of the Partnership's assets and liabilities and
the assets shall be liquidated as promptly as is consistent  with  obtaining the
fair value  thereof and as shall be necessary  to timely make the  distributions
below described,  and the proceeds therefrom, to the extent sufficient therefor,
shall be applied and distributed in the following order:

                                       18
<PAGE>

             (a) First, to the payment and discharge of all of the Partnership's
debts and liabilities  other than liabilities  owing to the Partners,  including
establishment of any necessary contingency reserves;

             (b) Then, in accordance with Section 6.1 (b).

             (b) Unreturned Capital Balance Unreturned Capital Balance

         10.3 Distribution In Kind. Any Partnership Property distributed in kind
in the  liquidation  shall be valued and treated  pursuant to Section  9.5.  The
difference between the value of any item of Partnership  Property distributed in
kind and its book value shall be treated as a gain or loss on the disposition of
Partnership  Property and shall be  allocated  among the Partners as provided in
Article VI.

    ARTICLE XI. BOOKS OF ACCOUNTS, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING
                            AND TAX MATTERS PARTNER

         11.1 Accounting,  Books and Records.  The Partnership shall maintain at
its  principal  place of  business or such other  places as the General  Partner
shall determine books of account for the Partnership which shall show a true and
accurate  record of all costs and  expenses  incurred,  all  charges  made,  all
credits made and received, and all income derived in connection with the conduct
of the  Partnership  and  the  operation  of its  business  in  accordance  with
generally accepted accounting principles consistently applied and, to the extent
inconsistent therewith in accordance with this Agreement.  The Partnership shall
use the accrual  method of accounting in  preparation  of its annual reports and
for tax purposes and shall keep its books and records accordingly.  Each Partner
or its designated  representative shall have the right, during ordinary business
hours, to have access to, inspect and copy, at its sole expense, the contents of
such books or records.

         11.2 Other Records.

             (a) The  Partnership  shall  maintain  at its  principal  place  of
business the following:

                (i) A current  list of the full  names and last  known  business
address of each Partner;

                (ii) A copy  of the  Certificate  of  Limited  Partnership,  all
amendments  thereto,  and executed copies of any powers of attorney  pursuant to
which the same have been executed;

                (iii) A copy of this  Agreement,  all  amendments  thereto,  and
executed  copies of any written  powers of  attorney  pursuant to which the same
have been executed;

                                       19
<PAGE>

                (iv) Copies of any federal,  state, and local income tax returns
and reports of the Partnership for the three most recent years; and

                (v) Copies of any financial  statements of the  Partnership  for
the three most recent years.

             (b) Except as otherwise set forth  herein,  each Partner shall have
the right,  exercisable  upon written demand,  to examine the items described in
Section  11.2(a) during ordinary  business hours and for any purpose  reasonably
related to the  Partner's  Interest in the  Partnership  (which  purpose must be
stated in the written demand),  and shall have the right, at its own expense, to
make copies of all such items.

         11.3 Reports.

             (a) The General Partner shall be responsible for the preparation of
financial  reports of the Partnership and the coordination of financial  matters
of the Partnership with the Accountant.

             (b) Within 90 days after the end of each fiscal  year,  the General
Partner  shall  transmit to each  Partner  financial  statements  based upon the
annual audit of the books and financial records of the Partnership,  prepared in
accordance with generally  accepted  accounting  principles,  and, to the extent
inconsistent  therewith,  in  accordance  with  this  Agreement,  including  the
following:

                 (i) A copy of the balance  sheet of the  Partnership  as of the
last day of such fiscal year;

                 (ii) A statement of income or loss for the Partnership for such
fiscal year;

                 (iii) A statement of the Partners' Capital Accounts and changes
therein for such fiscal year; and

                 (iv) A statement of Partnership cash flow for such fiscal year.

             (c) Within ninety (90) days after the end of each fiscal year,  the
General  Partner  shall  transmit  to each  Partner  a  report  indicating  such
Partner's share of all items of income or gain, expense, loss or other deduction
and tax credit of the  Partnership  for such fiscal  year,  and such  additional
information to enable the Partners to complete their respective tax returns.

             (d) The General Partner shall transmit to the Limited Partners such
other reports and information as the Limited Partners may reasonably request.

         11.4 Fiscal Year. The fiscal year of Partnership  shall be the calendar
year.

                                       20
<PAGE>

         11.5 Partnership Funds. All funds of the Partnership shall be deposited
in its name in a separate  bank account or accounts or in an account or accounts
of a savings and loan  association  or brokerage  firm as shall be determined by
the General Partner.

         11.6 Tax  Matters  Partner.  The  General  Partner  shall  serve as the
Partnership's  "tax matters  partner" (as such term is defined in the Code).  In
such capacity, the Tax Matters Partner is hereby authorized and empowered to act
for and  represent  the  Partnership  and each of the  Partners  before  (i) the
Internal  Revenue  Service  ("Service")  in  any  audit  or  examination  of any
Partnership tax return, and (ii) any court selected by the Partners for judicial
review of any  adjustment  assessed by the Service.  The  Partners  specifically
acknowledge,  without limiting the general  applicability of this Section,  that
the Tax Matters  Partner  shall not be liable,  responsible  or  accountable  in
damages or  otherwise  to the  Partnership  or any Partner  with  respect to any
action taken by him in his capacity as the Tax Matters Partner, provided he used
reasonable business judgment with respect to the action taken. All out-of-pocket
expenses  incurred by the Tax Matters Partner in his capacity as the Tax Matters
Partner  shall be  considered  expenses  of the  Partnership  for  which the Tax
Matters Partner shall be entitled to full reimbursement.

                          ARTICLE XII. INDEMNIFICATION

         12.1 Indemnification.

             (a) General  Provisions.  Except as otherwise set forth herein, the
Partner and their members, partners, Affiliates, directors, officers, agents and
employees and the members of the Governance  Committee (herein referred to as an
"Indemnitee"),   shall  be  indemnified,  held  harmless  and  defended  by  the
Partnership  (out of  Partnership  assets,  including  the proceeds of liability
insurance) against any claim, demand, controversy,  dispute, cost, loss, damage,
expense  (including  reasonable  attorneys'  fees),  judgment  and/or  liability
incurred by or imposed upon the Indemnitee in connection  with any action,  suit
or proceeding (including any proceeding before any administrative or legislative
body or agency) to which the Indemnitee may be a party or otherwise involved, or
with which the Indemnitee may be threatened, by reason of any action or omission
of the Indemnitee (or the Indemnitee's  employee) in connection with the conduct
of Partnership affairs.  Such  indemnification  extends to the Indemnitee in its
capacity,  at the time the  cause of  action  arose or  thereafter,  as  general
partner, member of any committee or as a member, Affiliate,  director,  officer,
partner,  employee  or  other  agent of any  other  organization  in  which  the
Partnership  owns an interest or of which the  Partnership is a creditor,  which
other  organization  the Indemnitee (or its employee) serves in such capacity at
the request of the  Partnership  (whether or not the  Indemnitee or its employee
continues to serve in such capacity at the time such action,  suit or proceeding
is brought or threatened). The indemnification set forth herein shall not extend
with respect to actions or omissions of the Indemnitee  (or its employee)  which
shall have been finally  adjudicated  (by  settlement  or otherwise) in any such
action, suit or proceeding to have constituted actual fraud,  willful misconduct
or  gross  negligence.  In the  event  of  settlement  of any  action,  suit  or
proceeding  brought  or  threatened,  such  indemnification  shall  apply to all
matters covered by the settlement.  The foregoing right of indemnification shall
be in addition to any rights to which any  Indemnitee  may otherwise be entitled
and  shall  inure to the

                                       21
<PAGE>

benefit of the executors, administrators,  personal representatives,  successors
or assigns of each such Indemnitee.

             (b) Advance  Payment of  Expenses.  The  Partnership  shall pay the
expenses incurred by an Indemnitee in defending a civil or criminal action, suit
or proceeding, or in opposing any claim arising in connection with any potential
or threatened  civil or criminal action,  suit or proceeding,  in advance of the
final  disposition  of such  action,  suit or  proceeding,  upon  receipt  of an
undertaking  by such  Indemnitee to repay such payment if he shall be determined
to be not entitled to  indemnification  therefore as provided herein;  provided,
however, that in such instance the Indemnitee is not commencing an action, suit,
or  proceeding  against  the  Partnership,  or  defending  an  action,  suit  or
proceeding  commenced  against him by the  Partnership or any Partner thereof or
opposing a claim by the Partnership or any Partner thereof arising in connection
with any such potential or threatened action, suit or proceeding.

             (c) Insurance.  The Partnership may purchase and maintain insurance
with  such  limits  or  coverages  as  the  General  Partner   reasonably  deems
appropriate,  at the expense of the Partnership and to the extent available, for
the  protection  of any  Indemnitee  against  any  liability  incurred  by  such
Indemnitee in any such capacity or arising out of his status as such, whether or
not the  Partnership  has the power to indemnify  such  Indemnitee  against such
liability.   The  Partnership  may  purchase  and  maintain  insurance  for  the
protection of any officer, director, employee,  consultant or other agent of any
other  organization  in which the  Partnership  owns an interest or of which the
Partnership  is a  creditor  against  similar  liabilities,  whether  or not the
Partnership has the power to indemnify him or it against such  liabilities.  Any
amounts payable by the  Partnership to an Indemnitee  pursuant to the provisions
of Section  12.1(a)  above  shall be  payable  first  from the  proceeds  of any
insurance  recovery  pursuant to policies  purchased by the Partnership and then
from the other assets of the Partnership; provided, that the foregoing shall not
affect the  Partnership's  obligation  to advance  expenses  pursuant to Section
12.1(b)  hereof in  circumstances  in which the  insurance  Partnership  who has
issued such policy will not advance such expenses.

                          ARTICLE XIII. MISCELLANEOUS

         13.1 Agreement for Further Execution. The Partners agree to sign, swear
or acknowledge any  certificates or filings required by the laws of the State of
Delaware or any other state,  to sign,  swear or  acknowledge  any  amendment or
cancellation  of such  certificate  or filings  whether or not such amendment or
cancellation  is  required  by law;  to sign,  swear or  acknowledge  such other
certificates,  filings,  documents or affidavits of assumed name,  trade name or
the like (and any amendments or  cancellations  thereof that may be required for
conduct  of the  Partnership's  business)  and to cause the filing of any of the
same for record wherever such filing shall be required by law. This Section 13.1
shall not  prejudice  or affect the rights of the  Partners  to approve  certain
amendments to this Agreement as herein provided.

         13.2 Amendments.

                                       22
<PAGE>

             (a) Except as otherwise provided in this Agreement,  no alteration,
modification  or amendment of this Agreement shall be made unless in writing and
signed (in  counterpart  or otherwise) by the General  Partner and a Majority in
Interest of the Limited  Partners,  except that no alteration,  modification  or
amendment of any Section hereof which would  materially and adversely affect the
economic  interests of one or more (but not all) of the Limited  Partners may be
made (except as provided  below)  without the  unanimous  consent of all Limited
Partners so adversely affected.  Notwithstanding  the foregoing,  no increase in
the amount required to be contributed to the Partnership by the Partners,  other
than as required herein or under applicable law, may be made without the consent
of all the Partners.

             (b) Any provision to the contrary contained herein notwithstanding,
the General Partner may,  without the consent or approval of any Partners,  make
such  amendments to this  Agreement  binding on the  Partners,  (i) to correct a
typographical  error,  cure any  ambiguity,  correct or supplement any provision
herein which may be inconsistent with any other provisions herein,  (ii) to make
any other  amendment if such  amendment  is not adverse to the  interests of the
Limited  Partners  as a whole or as a class or if such  amendment  benefits  the
Limited  Partners as a whole or as a class; and (iii) to reflect the addition of
Limited Partners pursuant to Section 5.2; provided,  however,  that no amendment
shall be adopted  pursuant to this Section  13.2(b) unless the adoption  thereof
does not affect the  status of the  Partnership  as a  partnership  for  federal
income tax purposes.

         13.3 Notices.

             (a) Any notice to be given  under this  Agreement  shall be made in
writing  and sent by express,  registered  or  certified  mail,  return  receipt
requested,  postage prepaid,  fax, or commercial delivery service,  addressed as
set forth below:

                (i)     If to the General Partner or the Partnership:

                        5858 Westheimer Street, Suite 708
                        Houston, Texas  77057

                (ii)    If to any  Partner,  such notice  shall be mailed to the
                        address of the Partner  appearing  on the records of the
                        Partnership.

             (b) Any  Partner  may change the  address to which  notice is to be
sent by giving notice of such change to the  Partnership in conformity with this
Section 13.3.

             (c) Any such  notice  shall be  deemed to be  delivered,  given and
received for all purposes as of the date  delivered if delivered by a commercial
delivery  service or by  confirmed  fax, or as of the date on which the same was
deposited in a regularly maintained  receptacle for the deposit of United States
mail, if sent by express, registered or certified mail.

         13.4 Governing Law and  Jurisdiction.  This Agreement shall be governed
by, and  construed  in  accordance  with,  the laws of the State of  Delaware as
interpreted  by the  courts  of

                                       23
<PAGE>

said  Commonwealth,  notwithstanding  any rules  regarding  choice of law to the
contrary.  The parties to this Agreement agree to the exclusive  jurisdiction of
the courts of New Castle County, Delaware and the Federal courts of the District
of Delaware for resolution of  controversies  arising out of or relating to this
Agreement and any related instruments, agreements or documents.

         13.5 Binding Nature of Agreement.  Except as otherwise  provided,  this
Agreement  shall be binding  upon and inure to the benefit of the  Partners  and
their personal representatives, successors and assigns.

         13.6  Additional  Partners.  Each  substitute,  additional or successor
Partner shall become a signatory  hereof by signing such number of  counterparts
of this Agreement and such other  instrument or instruments  and in such manner,
as  the  General  Partner  shall  determine.  By so  signing,  each  substitute,
additional  or  successor  Partner,  as the case may be, shall be deemed to have
adopted and to have agreed to be bound by all the provisions of this  Agreement;
provided, however, that no such counterpart shall be binding until it shall have
been signed by the Partnership.

         13.7 Validity. In the event that all or any portion of any provision of
this  Agreement  shall be held to be  invalid,  the same shall not affect in any
respect whatsoever the validity of the remainder of this Agreement.

         13.8 Entire  Agreement.  This  Agreement  and the  agreements  attached
hereto as Exhibits  constitute the entire  understanding and agreement among the
parties  hereto with respect to the subject  matter  hereof,  and supersedes all
prior  and  contemporaneous   agreements  and  understandings,   inducements  or
conditions, express or implied, oral or written, except as contained herein.

         13.9 Indulgences, Etc. Neither the failure nor any delay on the part of
any party hereto to exercise any right,  remedy,  power or privilege  under this
Agreement  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise of any right,  remedy, power or privilege preclude any other or further
exercise of the same or any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right,  remedy, power
or privilege with respect to any other occurrence.  No waiver shall be effective
unless it is in writing and signed by the party  asserted to have  granted  such
waiver.

         13.10 Execution in Counterparts.  This Agreement may be executed in any
number of  counterparts,  each of which  shall be deemed  to be an  original  as
against  any  party  whose  signature  appears  thereon,  and all of such  shall
together constitute one and the same instrument.

         13.11  Paragraph.  The  paragraph  headings in this  Agreement  are for
convenience  only,  form no part of this  Agreement,  and shall not  affect  its
interpretation.

         13.12 Number of Days.  In computing  the number of days for the purpose
of this Agreement, all days shall be counted,  including Saturdays,  Sundays and
holidays; provided,

                                       24
<PAGE>

however, that if the final day of any time period falls on a Saturday, Sunday or
holiday,  then such  final day shall be deemed to be the next day which is not a
Saturday, Sunday or holiday.

         13.13  Interpretation.   No  provision  of  this  Agreement  is  to  be
interpreted  for or against any party  because that party or that party's  legal
representative drafted such provision.

         13.14  Corporate  Authority.  Any  corporation  or trust  signing  this
Agreement  represents and warrants that the execution,  delivery and performance
of this Agreement by such  corporation or trust has been duly  authorized by all
necessary corporate or trustee action.

         13.15 Third Party Beneficiaries. Notwithstanding anything herein to the
contrary,  no provision of this Agreement is intended to benefit any party other
than the Partners hereto and their successors and assigns in the Partnership and
shall not be enforceable by any other party.

         13.16 Appointment of Attorney-in-fact.  Each Partner hereby irrevocably
constitutes   and   appoints   the   General   Partner   its  true  and   lawful
attorney-in-fact,  with full power of substitution, and with the General Partner
having  full  power  and  authority  in its name,  place  and stead to  execute,
acknowledge,  deliver,  swear to,  file and record with the  appropriate  public
offices  such  certificates,  instruments  and  documents as may be necessary or
appropriate  to carry out the  provisions of this  Agreement or  effectuate  any
action taken by or on behalf of the Partnership,  including, but not limited to,
any  amendments  to this  Agreement or the  Certificate  of Limited  Partnership
approved by the Partners as provided herein.  The appointment by the Partners of
the General  Partner as  attorney-in-fact  shall be deemed to be a power coupled
with an interest,  in  recognition  of the fact that each of the Partners  under
this Agreement  will be relying upon the power of the General  Partner to act as
contemplated  by this  Agreement  in any filing and other  action by the General
Partner on behalf of the Partnership  and, shall to the fullest extent permitted
by applicable law, survive the Bankruptcy,  death or incompetency of any Partner
hereby giving such power.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       25
<PAGE>

         IN WITNESS  WHEREOF,  the undersigned have set their hands and seals as
of the day and year first above written.

GENERAL PARTNER:

PHT GAS LLC

By:
    -----------------------------------
    Mark A. Bush, Managing Member

LIMITED PARTNERS:

Bepariko BioCom

By:
    -----------------------------------
    Cecile T. Coady

----------------------------------
Mark Tompkins

Wolver Limited

By:
    -----------------------------------

Haeuser Financial, S.A.

By:
    -----------------------------------

<PAGE>

1025 Investments, Inc.

By:
    -----------------------------------

FEQ Investments, Inc.

By:
    -----------------------------------

<PAGE>

                          PARTNERS AS OF JULY 31, 2002

<TABLE>
<CAPTION>
                                                         CAPITAL               PERCENTAGE
                                                       CONTRIBUTION             INTEREST
                                                       ------------             --------
LIMITED PARTNERS:
-----------------
<S>                                                    <C>                    <C>
Bepariko BioCom                                           $150,000               32.5%
5858 Westheimer Street, Suite 708
Houston, Texas  77057

Mark Tompkins                                             $100,000               21.7%
C/o Bodden Corporate Services
802 Grand Pavillion
West Bay Road
Box 10355 APO
Grand Caymen, Cayman Islands

Wolver Limited                                             $50,000               10.8%
Box 818
Providenciales
Turks & Caicos, BWI

Haeuser Finincial S.A.                                     $50,000               10.8%
C/o Bakers
The Mill Mall
Tortolla, BVI

1025 Investments, Inc.                                     $78,500               17.0%
711 South Carson Street, 4A
Carson City, NV  89701

FEQ Investments, Inc.                                      $28,000                6.1%
24224 Kanis Road
Little Rock, AR  72223

GENERAL PARTNER:
----------------

PHT Gas LLC                                                 $4,500                1.0%
5858 Westheimer Street, Suite 708
Houston, Texas  77057
</TABLE>

<PAGE>

                                    EXHIBIT B

                               SPECIAL ALLOCATIONS

1.      Special Tax Allocations.

        (a)  Qualified  Income  Offset.  In the event any  Partner  unexpectedly
receives any adjustments, allocations, or distributions described in Regulations
Section 1.704-1  (b)(2)(ii)(d)(4),(5),  or (6), items of Partnership  income and
gain shall be  specially  allocated to each such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of such Partner as quickly as possible, provided that an
allocation pursuant to this Section 1(a) shall be made if and only to the extent
that such Partner would have an Adjusted Capital Account Deficit after all other
allocations  provided for in Article VI hereof have been  tentatively made as if
this Section 1(a) were not in the Agreement.

        (b) Gross  Income  Allocation.  In the event any  Partner  has a deficit
Capital Account at the end of any  Partnership  fiscal year that is in excess of
the sum of (i) the amount such  Partner is  obligated  to restore,  and (ii) the
amount such Partner is deemed to be obligated to restore pursuant to the next to
last sentences of Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such  excess as  quickly  as  possible,  provided  that an  allocation
pursuant to this  Section 1(b) shall be made if and only to the extent that such
Partner  would  have a deficit  Capital  Account in excess of such sum after all
other  allocations  provided for in this Article 6 have been tentatively made as
if Section 1(a) hereof and this Section 1(b) were not in the Agreement.

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

        (d) Partner  Minimum Gain  Chargeback.  Except as otherwise  provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of
Article  VI  hereof,  if  there  is a  net  decrease  in  Partner  Minimum  Gain
attributable to a Partner  Nonrecourse Debt during any fiscal year, each Partner
who has a  share  of the  Partner  Minimum  Gain  attributable  to such  Partner
Nonrecourse  Debt,  determined in accordance with Section  1.704-2(i)(5)  of the
Regulations,  shall be specially  allocated items of Partnership income and gain
for such fiscal

<PAGE>

year (and,  if  necessary,  subsequent  fiscal years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner  Nonrecourse  Debt,  determined in accordance with  Regulations  Section
1.704-2(i)(4).  Allocations  pursuant to the previous  sentence shall be made in
proportion to the  respective  amounts  required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Section  1.704-2(i)(4) and  1.704-2(j)(2) of the Regulations.  This Section
1(d) is  intended  to comply with the minimum  gain  chargeback  requirement  in
Section  1.704-2(i)(4) of the Regulations and shall be interpreted  consistently
therewith.

        (e) Nonrecourse  Deductions.  Nonrecourse Deductions for any Fiscal year
shall be specially  allocated  among the Partners in proportion to their Limited
Partnership Interests.

        (f) Partner Nonrecourse  Deductions.  Any Partner Nonrecourse Deductions
for any Fiscal year shall be  specially  allocated  to the Partner who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner  Nonrecourse  Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(1).

        (g) Code  Section 754  Adjustment.  To the extent an  adjustment  to the
adjusted tax basis of any  Partnership  asset pursuant to Code Section 734(b) or
Code Section 743(b) is required 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  increased the basis of the asset) or loss
(if the  adjustment  decreases  such  basis)  and  such  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 1.704-1(b)(2)(iv)(m) of the Regulations.

        (h) Curative  Allocations.  The  Regulatory  Allocations  consist of the
allocations  pursuant to Sections 1(a) through 1(g) hereof.  Notwithstanding any
other provision of this  Agreement,  the Regulatory  Allocations  shall be taken
into account in allocating  items of income,  gain, loss and deduction among the
Partners so that, to the extent possible,  the net amount of such allocations of
other items and the Regulatory Allocations to each Partner shall be equal to the
net amount  that would have been  allocated  to each  Partner if the  Regulatory
Allocations had not occurred.

2.      Other Allocations Rules.

        (a) For purposes of determining the Profits,  Losses, or any other items
allocable  to any  period,  Profits,  Losses,  and any such other items shall be
determined  on a daily,  monthly or other basis,  as  determined  by the General
Partner using any permissible  method under Code Section 706 and the Regulations
thereunder.

        (b)  Except  as  otherwise  provided  in this  Agreement,  all  items of
Partnership  income,  gain,  loss,  deductions,  and any other  allocations  not
otherwise  provided  for  shall  be  divided  among  the  Partners  in the  same
proportions as they share Profits or Losses, as the case may be, for the year.

<PAGE>

        (c) The  Partners  are  aware  of the  income  tax  consequences  of the
allocations  made  by  this  Exhibit  B and  hereby  agree  to be  bound  by the
provisions of this Exhibit B in reporting their shares of Partnership income and
loss for income tax purposes.

        3. Tax Allocations: Code Section 704(c). In accordance with Code Section
704(c) and the Regulations  thereunder,  income,  gain, loss, and deduction with
respect to any property  contributed  to the capital of the  Partnership  shall,
solely for tax purposes,  be allocated  among the Partners so as to take account
of any variation  between the adjusted basis of such property to the Partnership
for federal income tax purposes and its initial Gross Asset Value.  In the event
the Gross Asset  Value of any  Partnership  asset is  adjusted  pursuant to this
Agreement,  subsequent  allocations  of income,  gain,  loss and deduction  with
respect to such asset shall take account of any  variation  between the adjusted
basis of such asset for federal income tax purposes and its Gross Asset Value in
the same manner as under Code Section 704(c) and the Regulations thereunder. Any
elections or other decisions  relating to such allocations  shall be made by the
General Partner in any manner that reasonably reflects the purpose and intention
of this Agreement.  Allocations pursuant to this Section are solely for purposes
of federal,  state, and local taxes and shall not affect, or in any way be taken
into account in computing,  any Partner's  Capital  Account or share of Profits,
Losses,  other  items,  or  distributions  pursuant  to any  provision  of  this
Agreement.

<PAGE>

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