Consolidated Natural Gas Co/VA · U-1 · On 7/15/94 · EX-99

Filed On 7/15/94   ·   SEC File 70-08447   ·   Accession Number 23738-94-47

Application or Declaration   ·   Form U-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: U-1         Application or Declaration                            18     52K 
 2: EX-99       Miscellaneous Exhibit                                  3     16K 
 3: EX-99       Miscellaneous Exhibit                                 26     49K 
 4: EX-99       Miscellaneous Exhibit                                 29    103K 
 5: EX-99       Miscellaneous Exhibit                                  4     18K 
 6: EX-99       Miscellaneous Exhibit                                  5     19K 

EX-99   ·   Miscellaneous Exhibit

EX-99
1st Page of 29
TOC
Top
Previous
Next
Bottom
Just 1st
 
Sponsored Ads...


                                                           EXHIBIT B-1

(Note:  Locations of material omitted in this document under a claim for        
confidential treatment pursuant to Rule 104(b) are indicated by brackets.)      

     GENERAL PARTNERSHIP AGREEMENT

 (Effective as of June 30, 1994)

   between

      CNG MARKET CENTER SERVICES, INC.

   and

     SABINE HUB SERVICES COMPANY

    Relating

    to the

    Formation of

   CNG/SABINE CENTER

EX-99
2nd Page of 29
TOC
1st
Previous
Next
Bottom
Just 2nd

   GENERAL PARTNERSHIP AGREEMENT
   _____________________________

  General Partnership Agreement ("Agreement") effective as of the 30th day
of June, 1994 ("Effective Date"), entered into between Sabine Hub Services      
Company, a Delaware corporation, with an office at 1111 Bagby, Houston, Texas   
77002 ("Sabine HSC") and CNG Market Center Services, Inc., a Delaware           
corporation, with an office at 445 West Main Street, Clarksburg, West Virginia  
26301.                                                                          

 R E C I T A L S

WHEREAS, Sabine HSC is presently a wholly-owned subsidiary of Texaco  
Inc.;                                                                           

   WHEREAS, CNG is a wholly-owned subsidiary of CNG Energy Company, which is
a wholly-owned subsidiary of Consolidated Natural Gas Company;                  

   WHEREAS, Sabine HSC and CNG have agreed to proceed with the formation and
operation of a general partnership subject to the terms and conditions of this  
Agreement.                                                                      

NOW, THEREFORE, in consideration of the mutual covenants contained in 
this Agreement, the Partners hereby agree as follows:                           

1.   DEFINITIONS.  Capitalized terms used in this Agreement and not otherwise   
defined herein shall have the respective meanings set forth below:              

 1.1    Affiliate.  Any Person which, directly or indirectly through one
 or more intermediaries, controls or is controlled by or is under common
control with any Partner, whether by virtue of contract, ownership of 
   equity securities, or otherwise, including, but not limited to:  a Parent
of a Partner; a corporation more than fifty percent (50%) of the      
outstanding voting stock of which is owned directly or indirectly by a
Partner or a Parent of a Partner; or a corporation more than fifty    
  percent (50%) of the outstanding voting stock of which is owned directly
or indirectly by a corporation more than fifty percent (50%) of the   
outstanding voting stock of which is owned directly or indirectly by a
Partner or by a Parent of a Partner.                                  

 1.2    Agreed Value.  The fair market value of any property contributed
to the Partnership on the date of such contribution determined by     
agreement between the Partners.                                       

1.3    Annual Business Plan.  The written document to be prepared and 
 approved pursuant to Section 3.5.2(a), which shall include, among other
items, (1) a "Capital Budget" setting forth any plan of acquisition,  
   construction or improvement, including estimated development, general and
   administrative, financing and other similar costs and expenses and (2) an
"Operating Budget" setting forth an income statement which includes   
estimated revenues and expenses, including operating, general and     
  administrative, financing and other similar costs, a balance sheet and a
statement of sources and applications of funds.                       

EX-99
3rd Page of 29
TOC
1st
Previous
Next
Bottom
Just 3rd

1.4    Book Capital Account.  The capital account maintained for a    
   Partner for financial accounting purposes pursuant to Section 8.5 of this
Agreement.                                                            

 1.5    Business Day.  A day other than Saturday, Sunday, or an official
state or federal holiday, including any holiday recognized by either  
Partner.                                                              

1.6    Capital Contribution.  All cash and the Agreed Value of other  
property contributed by or on behalf of a Partner to the Partnership  
pursuant to this Agreement, on or after the Formation Date.           

1.7    Certified Public Accountants.  A firm of independent public    
accountants selected from time to time by the Management Committee.   

1.8    CNG.  CNG Market Center Services, Inc., a Delaware corporation.

1.9    Code.  The Internal Revenue Code of 1986, as amended.          

 1.10.  Defaulting Partner.  A Partner in default of any of its material
  obligations hereunder, including without limitation, its failure to make
Capital Contributions or to make available to the Partnership certain 
   facilities and personnel or to render certain services to the Partnership
as provided in this Agreement.                                        

   1.11   FERC.  The Federal Energy Regulatory Commission or any commission,
agency or other governmental body succeeding to the powers of such    
commission.                                                           

   1.12   Formation Date.  The date as of which the Partnership is formed as
provided in Section 2.1.                                              

1.13   Interest of Partner or Partnership Interest.  As to any Partner
all of the interests of that Partner in the Partnership, including    
  without limitation, its right to a distributive share of profits, losses
and cash flow and its right to participate in the management of the   
   affairs of the Partnership.  Each Partner shall have an equal Partnership
Interest in the Partnership.                                          

1.14   Management Committee.  The Management Committee provided for in
Section 3.                                                            

   1.15   Market Center Activities.  Those administrative and other services
which the Management Committee determines from time to time will be   
provided by the Partnership to customers or the Partners of the       
CNG/Sabine Center.                                                    

1.16   Offices.  Defined in Section 2.6.                              

1.17   Parent.  Any Person which owns directly or indirectly more than
fifty percent (50%) of the outstanding voting stock of a Partner.     

1.18   Partner.  Each of the Persons executing this Agreement.        

 1.19   Partnership.  The general partnership created by this Agreement.

EX-99
4th Page of 29
TOC
1st
Previous
Next
Bottom
Just 4th

1.20   Partnership Interest.  Defined in Section 1.13.                

1.21   Person.  An individual, a corporation, voluntary association,  
joint stock company, business trust, partnership or other entity.     

1.22   PUHCA.  The Public Utility Holding Company Act of 1935, as     
amended.                                                              

1.23   Regulatory Approvals.  The issuance of the following licenses, 
certificates, permits, approvals and determinations by applicable     
regulatory authorities.                                               

          1.23.1  Any approvals or actions by the SEC pursuant to the Public
Utility Holding Company Act of 1935.                    

         1.23.2  All other federal, state, local or municipal governmental
      or regulatory permits, licenses, determinations, certificates,
          waivers and other approvals as may be necessary in connection with
          formation and operation of the Partnership or the participation of
         a Partner therein, and the rendering of Market Center Activities,
        which are customarily obtained in advance of or necessary to the
rendering of such services.                             

1.24   Representative.  The individual designated by a Partner or     
Partners to serve as a member of the Management Committee.            

1.25   Required Accounting Practice.  The accounting rules and        
regulations, if any, at the time prescribed by the regulatory body or 
bodies under the jurisdiction of which the Partnership is at the time 
operating and, to the extent of matters not covered by such rules and 
regulations, generally accepted accounting principles ("GAAP") at the 
time prevailing for companies engaged in a business similar to that of
the Partnership.                                                      

  1.26   SEC.  The United States Securities and Exchange Commission or any
 commission, agency, or other governmental body succeeding to the powers
of such Commission.                                                   

1.27   Software License Agreement.  That Software License Agreement   
 attached hereto and incorporated herein as Schedules A-I and A-II under
which the Partnership is provided with and authorized by Sabine HSC or
   CNG, to use the software programs ("Software Programs") described in each
said Software License Agreement in the operation of the CNG/Sabine    
Center.                                                               

1.28   Tax Capital Account.  The capital account maintained by the    
   Partnership for a Partner for federal income purposes pursuant to Section
12 of this Agreement.                                                 

 1.29   Tax Matters Partner.  The Partner designated as such pursuant to
Section 13.2 of this Agreement.                                       

  1.30   Treasury Regulations.  The Treasury Regulations promulgated under
the Code.                                                             

  1.31   Working Capital.  As of any date, the Partnership's cash and cash
equivalents.                                                          

EX-99
5th Page of 29
TOC
1st
Previous
Next
Bottom
Just 5th

2.   FORMATION AND PURPOSE OF THE GENERAL PARTNERSHIP.                          

  2.1    Formation.  The parties hereby agree to associate themselves as a
general partnership pursuant to the Revised Uniform Partnership Act of
the State of Delaware.  Formation shall occur on the first day of the 
month following final approval or action by the SEC pursuant to the   
  Public Utility Holding Company Act of 1935, unless the Partners agree to
extend such date by mutual consent.                                   

2.2    Name.  The name of the Partnership is the CNG/Sabine Center and
the business of the Partnership shall be conducted in such name.      

2.3    Purpose.  The purpose of the Partnership is to plan, market and
provide Market Center Activities and provide such further services or 
undertake such other activities as may be authorized by the Management
 Committee from time to time.  [                                       ]

  2.4    Term of Agreement; Duration of Partnership.  This Agreement shall
  continue in effect, and the Partnership shall continue in existence from
the Formation Date, until the expiration of [         ] years from the
   Formation Date (the "Primary Term") unless terminated earlier pursuant to
 Section 17.  The Partnership shall continue after the expiration of the
Primary Term unless either Partner provides the other Partner with    
written notice of its intent not to renew the Partnership (a) not less
  than ninety (90) days prior to the end of the Primary Term or (b) at any
time after the Primary Term, on not less than ninety (90) days' prior 
   written notice.  In each such case, the Partnership shall dissolve at the
end of such ninety (90) day notice period.                            

  Notwithstanding any of the foregoing, this Agreement shall
  terminate at the option of either party upon written notice to the other
if (i) the SEC fails to grant the Regulatory Approval as provided in  
  Section 1.23.1; or (ii) the SEC in granting Regulatory Approval requests
  or requires any change materially affecting the terms of this Agreement.

2.5    Governmental Applications.  The Partners agree to cooperate in 
securing any Regulatory Approvals.                                    

 2.6    Offices.  The place of business of the Partnership shall be 1111
Bagby Street, Houston, Texas 77002, or at such place as the Management
Committee may from time to time designate.                            

3.   MANAGEMENT OF THE PARTNERSHIP                                              

   3.1    Personnel.  All personnel assigned to the Partnership shall remain
employees of the respective Partners or Affiliates of the Partners, as
appropriate, while on assignment to the Partnership.  [               
], and shall comply with all applicable rules under PUHCA.            

3.2    General Management Structure.                                  

       3.2.1   The policies and activities of the Partnership, and the
        Annual Business Plan, shall be established and authorized by the

EX-99
6th Page of 29
TOC
1st
Previous
Next
Bottom
Just 6th

        Management Committee to carry out the purpose of this Agreement.
        Except as may otherwise be expressly provided in this Agreement,
    the Management Committee shall have exclusive authority with
respect to the affairs of the Partnership.              

3.2.2   The day-to-day management of the affairs of the 
     Partnership, including maintenance of the financial and other
     records and books of account of the Partnership, shall be the
          responsibility of the persons to whom such responsibility has been
delegated, in writing, by the Management Committee.     

 3.2.3   The business of the Management Committee shall be
       conducted at regular or special meetings as provided in Section
       3.3 hereof.  The Management Committee may establish one or more
  subcommittees to serve in an advisory capacity without any
decision making authority or voting power.              

        3.2.4   Unless otherwise required in this Agreement, a unanimous
          vote of the designated Representatives of the Management Committee
       (as provided in Section 3.3.2) shall be required to approve any
action by the Management Committee.                     

      3.2.5   Any action taken by a Representative of the Management
         Committee in the manner provided in this Agreement shall, insofar
      as the other Representatives, Partners and the Partnership are
 concerned, be deemed to be duly authorized by the Partner
appointing such Representative.  Each appointment of a  
     Representative by a Partner to the Management Committee shall
        remain in effect until the Partner making such appointment shall
        notify the Partnership and the other Partner of a change in such
          appointment in writing pursuant to Section 3.3.2.  The resignation
        or removal of a Representative of the Management Committee shall
        not invalidate any act of such Representative taken prior to the
giving of written notice of such removal or resignation.

        3.2.6   Prior to the vote by the Management Committee, the Chief
Operating Officer shall provide notice thereof to the   
Representatives in accordance with Section 3.3.  If any 
        Representative abstains from voting on such proposed action or a
          Partner is not represented by a Representative when such a vote is
     taken, the proposed action will be voted on again at the next
         regular meeting of the Management Committee at which each Partner
        is represented by at least one Representative, and the unanimous
          vote of the Representatives present and voting shall be sufficient
to approve the action.                                  

3.3    Management Committee.                                          

          3.3.1   The Management Committee shall act only by the affirmative
          vote of Representatives representing one hundred percent (100%) of
the Partnership Interests of the Partners.              

EX-99
7th Page of 29
TOC
1st
Previous
Next
Bottom
Just 7th

        3.3.2   The Representatives of the Management Committee shall be
       subject to prior approval by each Partner, which approval shall
  not be unreasonably withheld, and shall consist of two (2)
       Representatives of each Partner designated from time to time by
      such Partner by written notice to the other Partner.  The most
         senior Representative representing each Partner (as designated by
         such Partner in writing) present at any meeting of the Management
     Committee shall be entitled to cast the vote on behalf of the
       Partner appointing such Representative.  Any Partner may at any
          time, by written notice to the other Partner, remove either of its
       Representatives on the Management Committee and designate a new
          Representative.  Each Representative shall serve on the Management
      Committee until a successor is duly designated or until death,
     resignation or removal by the appointing Partner.  Any action
        taken by the Partnership in compliance with the direction of the
         Management Committee pursuant to its authority hereunder shall be
binding on the Partnership and each Partner.            

        3.3.3  (a)    Meetings of the Management Committee shall be held
      at the Offices, or such other place as may be agreed to by the
 Management Committee.  Regular meetings of the Management
        Committee shall be held at least quarterly.  Special meetings of
    the Management Committee may be called by any Representative
         thereof on at least ten (10) days' advance written notice to each
       Representative thereof, which notice shall state the purpose or
purposes for such meeting.                              

                 (b)    The actions taken by the Management Committee at any
        meeting, however called and noticed, shall be as valid as though
         taken at a meeting duly held after authorized call and notice if,
       either before or after the meeting, at least one Representative
       present at such meeting appointed by each of the Partners shall
         sign a written waiver of notice or for any Partner not present at
      such meeting shall sign a consent to the actions taken at such
meeting.                                                

            (c)    A vote of the Management Committee may be taken
        either in a duly convened meeting of the Representatives thereof
          or by a writing signed by at least one Representative appointed by
each of the Partners.                                   

                 (d)    A regular meeting of the Management Committee may be
          dispensed with if at least one Representative appointed by each of
the Partners shall consent in writing thereto.          

                 (e)    A meeting of the Management Committee may be held by
         conference telephone or similar communications equipment by means
       of which all persons participating in the meeting can hear each
other.                                                  

                (f)    Minutes shall be kept reflecting the actions of the
  Management Committee and for any advisory subcommittees as
      directed by the Management Committee.  Copies of draft minutes
shall be transmitted for approval by the appropriate    

EX-99
8th Page of 29
TOC
1st
Previous
Next
Bottom
Just 8th

       Representatives or subcommittees within ten (10) days after any
      action taken to all Partners and to each Representative of the
        Management Committee or advisory subcommittee taking the action.

        3.3.4   The Management Committee shall appoint a Chief Operating
        Officer who shall have the duties and responsibilities set forth
     in Section 3.5 and shall serve as the agent of the Management
       Committee.  The Chief Operating Officer shall be responsible in
     all instances to the Management Committee in carrying out the
business of the Partnership.                            

    3.3.5   The Management Committee may adopt a business ethics
        policy and such other policies as the Management Committee deems
desirable.                                              

         3.3.6   Within thirty (30) days following the Formation Date, the
   Management Committee shall hold its initial meeting for the
       purpose of considering and acting upon the matters set forth in
        Schedule B hereto.  Such matters as applicable shall be reviewed
at least annually by the Management Committee.          

      3.3.7   The Representatives or the Chief Operating Officer may
  resign at any time by giving written notice thereof to the
        Management Committee.  Any resignation shall be effective at the
  time stated in the notice and acceptance by the Management
      Committee of any resignation shall not be necessary to make it
effective.                                              

3.4    Delegations of Authority.                                      

        3.4.1   The Chief Operating Officer shall operate the day-to-day
     business operations of the Partnership in conformity with the
       delegations provided by the Management Committee and the Annual
          Business Plan approved pursuant to Section 3.5.2(a) and shall have
          authority to carry out ordinary business functions as agent of the
        Partnership.  The Management Committee may delegate to the Chief
     Operating Officer such additional authority as the Management
          Committee deems necessary or appropriate for the proper conduct of
     the business of the Partnership.  The Chief Operating Officer
     shall periodically inform the Partners of the Chief Operating
  Officer's actions in connection with carrying out business
functions on behalf of the Partnership.                 
      The Chief Operating Officer's authority may include but not be
          limited to executing Partnership service agreements with customers
       or other third parties, promoting and marketing the Partnership
       services, directing the activities of the personnel assigned to
      the Partnership, purchasing materials and supplies, conducting
customer meetings, and paying Partnership bills.        

   3.4.2   If approved by the Management Committee, any powers
    delegated by the Management Committee to the Chief Operating
Office may be redelegated to other personnel, agents or 
subcommittees of the Partnership.                       

EX-99
9th Page of 29
TOC
1st
Previous
Next
Bottom
Just 9th

        3.4.3   The Management Committee shall from time to time furnish
the Chief Operating Officer, personnel or agents of the 
  Partnership such documents or instruments evidencing their
  authority as may be required by third parties with respect
thereto.                                                

3.5    Duties of the Chief Operating Officer                          

       3.5.1   The Chief Operating Officer shall be responsible, under
        the delegation and policy direction of the Management Committee,
      for the day-to-day operation and management of the affairs and
 property of the Partnership.  In addition to the specific
         functions and duties set forth below, the Chief Operating Officer
          shall perform such functions and responsibilities as are delegated
          to the Chief Operating Officer from time to time by the Management
          Committee.  The Chief Operating Officer shall be designated by the
 Management Committee for service during each fiscal year.

   3.5.2  (a)    The Chief Operating Officer shall prepare and
      present to the Management Committee for review and approval no
      later than September 1 of each year a proposed Annual Business
       Plan, which shall include (i) an Operating Budget and a Capital
          Budget by quarter for the ensuing fiscal year and annually for the
        following two fiscal years, and (ii) a forecast of the projected
          receipts and disbursements for the Partnership for the ensuing two
         (2) fiscal years.  The Capital Budget and/or the Operating Budget
         for the ensuing fiscal year shall include a quarterly schedule of
   additional capital contributions required, if any, from the
         Partners.  In addition, the Chief Operating Officer shall prepare
        a projection for the ensuing fiscal year of all items of taxable
       income (loss) and the tax benefits generated by the Partnership
         and the allocation thereof to each Partner's Tax Capital Account.
 The Annual Business Plan shall not become effective until
       expressly approved in whole or in part by unanimous vote of the
       Management Committee.  If the Annual Business Plan has not been
        unanimously approved by the Management Committee in its entirety
  prior to the start of the fiscal year, that portion of the
     Operating Budget for the previous year for which there is not
       agreement in the present year shall continue until such time as
the Annual Business Plan is adopted.                    

             (b)    The Chief Operating Officer shall, not less than
      quarterly, review the Annual Business Plan with the Management
         Committee at a regular or special meeting designated by the Chief
Operating Officer.                                      

      (c)    The Chief Operating Officer shall make no
       commitments that are inconsistent with the Annual Business Plan
     without the unanimous consent of the Management Committee and
   shall conduct all Partnership activities in accordance with
applicable law.                                         

EX-99
10th Page of 29
TOC
1st
Previous
Next
Bottom
Just 10th

3.5.3   The Chief Operating Officer shall present to the
Management Committee at its regular meetings a quarterly
         Operational Review and Performance Report which shall include, in
 addition to other information requested by the Management
Committee:                                              

               (a)    Financial results and analysis, including a profit
         and loss statement for the most recent quarter and fiscal year to
      date, a sources and applications of funds statement, a balance
        sheet, a statement of projected revenues and cash needs pursuant
     to Section 3.5.2(a), and such other reports as the Management
Committee may request;                                  

      (b)    Major issues confronting the Partnership;

         (c)    Expected material deviations from the Annual
Business Plan;                                          

              (d)    Major actions taken or to be taken in reliance on
delegations of authority;                               

        (e)    Major undertakings and commitments, whether
completed or proposed, including progress reports on any
significant capital investments;                        

                (f)    The purpose and scope of any proposed contacts with
banks or long-term lenders;                             

               (g)    The status of any threatened or pending litigation
     by or against the Partnership or either Partner affecting the
Partnership;                                            

           (h)    Significant governmental actions affecting the
Partnership; and                                        

(i)    Significant commercial inquiries.  

3.5.4   The Chief Operating Officer shall furnish to the
       Management Committee information regarding the operation of the
   Partnership and the exercise of the delegated powers as the
         Management Committee may from time to time request.  Any requests
    for such information by a Partner shall be made first to the
Management Committee.                                   

     3.5.5   The Chief Operating Officer of the Partnership may be
          removed at any time, with or without cause, by the written request
        of either Partner's Representative, provided that ten (10) days'
          prior written notice has been given to the Chief Operating Officer
          and the Management Committee specifically stating that the removal
        of such officer is requested and the reason(s) therefor and such
       removal shall become effective at the expiration of such notice
period.                                                 

 3.6    Deposit and Withdrawal of Funds.  Funds of the Partnership shall
 be deposited in such banks or other depositories as shall be designated
  from time to time by the Management Committee.  All withdrawals from any
such depository shall be made pursuant to the Annual Business Plan.   

EX-99
11th Page of 29
TOC
1st
Previous
Next
Bottom
Just 11th

   3.7    Restricted Activities.  No Partner may, without unanimous approval
  of both Partners, and no Representative of the Management Committee may,
   without unanimous written approval of both Partners, engage in any act or
   transaction on behalf of the other Partner or the Partnership, including,
without limitation, the following:                                    

3.7.1   Borrow money in the Partnership's name, utilize 
    Partnership property as security for any loans, obligate the
          Partnership as guarantor, endorser, surety or accommodation party,
       or otherwise pledge the credit of the Partnership in any way or
      commit the Partnership to any financial obligation whatsoever.

       3.7.2   Mortgage, lease, sell, transfer, convey or exchange, or
         agree to mortgage, lease, sell, transfer, convey or exchange, any
Partnership property or any interest therein.           

          3.7.3   Assign, transfer, pledge, compromise or release any of the
     claims of, or debts due, the Partnership except on payment in
full.                                                   

       3.7.4   Arbitrate, or consent to the arbitration of, any of the
   disputes or controversies between the Partnership and third
parties.                                                

          3.7.5   Create change, or agree to any change in, the terms of any
        mortgage, lease, pledge, security agreement or other encumbrance
affecting the assets or rights of the Partnership.      

 3.7.6   Commence, dismiss, settle or compromise any legal
       proceeding affecting the assets or rights of the Partnership or
          take, or attempt to take, any other action relating to the conduct
of such proceeding.                                     

4.   DEVELOPMENT OF THE SERVICES                                                

4.1    Each Partner shall, in its capacity as a Partner, devote such  
efforts as shall be reasonably necessary to develop and promote the   
Partnership.                                                          

4.2    Sabine HSC shall enter into the Software License Agreement     
(attached as Schedule A-I).                                           

4.3    CNG shall enter into a Software License Agreement (attached as 
Schedule A-II).                                                       

4.4    All licenses granted to the Partnership pursuant to Section 4.2
and 4.3 shall not be classified as a Capital Contribution by the      
Partners.                                                             

EX-99
12th Page of 29
TOC
1st
Previous
Next
Bottom
Just 12th

5.   BUSINESS RELATIONS BETWEEN PARTNERS AND BETWEEN PARTNERS AND THE           
PARTNERSHIP                                                           

5.1    Upon formation, Sabine HSC shall assign to the Partnership all 
contracts entered into by Sabine HSC, d.b.a. CNG/Sabine Center, during
the Pre-Formation Period.  CNG shall ratify those contracts for which 
Sabine HSC, during the Pre-Formation Period, shall have requested, and
 received, CNG's consent (or that of CNG Energy Company) to the entering
into by Sabine HSC of such contracts.  For those contracts for which  
  Sabine HSC has not received CNG's or CNG Energy Company's consent during
 the Pre-Formation Period, Sabine HSC shall assign such contracts to the
  Partnership free and clear of third party liability for all pre-existing
 liabilities for breach, non-performance or other third party liability.
 Such contracts shall not be considered a Capital Contribution by Sabine
 HSC, but if so considered for federal or other tax purposes, shall have
an Agreed Value of zero.                                              

  5.2    The Partners expressly waive and release any right to a partition
of the Partnership property.                                          

   5.3    Each Partner acknowledges that it and/or its Affiliates are now or
  may hereafter be engaged in a business or businesses which compete with,
or are related or similar to the business of the Partnership.  Each   
Partner acknowledges and accepts the fact that a Partner and/or its   
  Affiliates (a) may be a competitor, a supplier, and/or a customer of the
 Partnership, and (b) may alone or in combination with another person at
   any time or from time to time invest in and/or engage in a partnership or
 any business competing with, relating to, or similar to the business of
the Partnership.                                                      

5.4    Each Partner acknowledges and accepts the fact that the other  
Partner may act in its own right to protect or further its business   
interests in any manner that is not inconsistent with its express     
obligations under this Agreement.                                     

5.5    The Partnership may from time to time employ a Partner or an   
Affiliate of a Partner to perform or provide services on behalf of the
 Partnership.  Any Partner performing such services shall be entitled to
reasonable compensation as determined by the Management Committee.    

  5.6    Nothing contained in this Agreement shall be deemed to constitute
  a Partner as an agent or legal representative of the other Partner or to
  create any fiduciary relationship for any purpose whatsoever, apart from
such obligations between general partners in a partnership as may be  
created by law.  Except as otherwise expressly provided in this       
Agreement, a Partner shall not have any authority to act for, or to   
   assume any obligation or responsibility on behalf of the other Partner or
the Partnership.                                                      

EX-99
13th Page of 29
TOC
1st
Previous
Next
Bottom
Just 13th

6.   REPRESENTATIONS AND WARRANTIES                                             

 6.1    General Representations and Warranties.  Each Partner represents
and warrants to the other Partner that at the Formation Date:  (a) the
execution and delivery of this Agreement and the performance of each  
  Partner's obligations hereunder will not contravene or conflict with any
   provision of law or the charter or bylaws of such Partner, or contravene,
conflict with or constitute a default under, any indenture, mortgage, 
  instrument or other agreement of such Partner or any order of any court,
   commission or governmental agency applicable to such Partner, and (b) the
execution, delivery and performance of this Agreement has been duly   
authorized, and such Agreement, when executed and delivered by such   
Partner, will be valid, binding and enforceable in accordance with the
terms hereof.  Each Partner further represents, warrants and covenants
  that as of the Formation Date and during the Primary Term or any Renewal
Term of the Partnership, it will do or cause to be done all things    
necessary to continue to be, a corporation duly organized, validly    
existing and in good standing under the laws of its jurisdiction of   
incorporation.                                                        

6.2    Additional General Representations And Warranties of CNG and   
Sabine HSC.  As of the Formation Date:                                

        6.2.1   CNG represents and warrants that it is an Affiliate of a
        registered public utility holding company and that its formation
          and participation in the Partnership have been approved by the SEC
under PUHCA as of the Formation Date.                   

   6.2.2   Sabine HSC represents and warrants that it is not a
holding company, within the meaning of PUHCA.           

 6.2.3   CNG represents and warrants that it will take all
        reasonable actions necessary to ensure that the Partnership will
      not be subject to regulation, for any purpose, under PUHCA, or
         lose the benefits of the exemption under 17 C.F.R. Section 250.16
    ("Rule 16"), as a result of the ownership of its Partnership
Interest; and                                           

          6.2.4   CNG and Sabine HSC each represents and warrants that it is
          not a marketing affiliate of an interstate natural gas pipeline as
       that term is defined in FERC Order No. 497, (53 Fed. Reg. 22139
(June 14, 1988)) [                                      
].                                                      

       6.2.5   CNG and Sabine HSC each represents and warrants that it
          has no contracts or business relationships with third parties that
would prevent it from entering into this Agreement.     

7.   COSTS INCURRED BY PARTNERS PRIOR TO FORMATION OF PARTNERSHIP               

7.1    [                                                           ]  

7.2    [                                                           ]  

EX-99
14th Page of 29
TOC
1st
Previous
Next
Bottom
Just 14th

8.   CAPITAL CONTRIBUTIONS BY THE PARTNERS                                      

8.1    [                                                            ] 

  8.2    Additional Capital.  As a means of providing the Partnership with
additional capital, upon approval of the Management Committee, the    
  Partners shall make the following Capital Contributions in proportion to
their respective Partnership Interests:                               

                (a)    The amount of any Capital Contribution set forth in
the Annual Business Plan pursuant to Section 3.5.2(a).  

              (b)    The amount necessary to cause the minimum Working
        Capital to be the amount of cash needed for the next ninety (90)
       days for operating costs as determined by the Operating Budget.

               At the beginning of each quarter, the Chief
     Operating Officer will prepare for approval by the Management
          Committee a projection of the Working Capital needed (the "Working
        Capital Projection") for the next quarter on a cumulative basis.
          The Working Capital balance at the beginning of each quarter shall
      be adjusted by the addition of projected cash receipts and the
       subtraction of projected cash obligations for such quarter.  If
          Working Capital falls below the minimum required level at any time
        or if the Working Capital Projection projects Working Capital to
         fall below the minimum required level for any quarter in the next
       succeeding quarter, the Chief Operating Officer shall so notify
          the Management Committee, which may request a compensating Capital
          Contribution on the basis of each Partner's respective Partnership
   Interest, which shall be due and payable in sixty (60) days
          following such request.  The Management Committee may from time to
       time decrease or increase the above mentioned required level of
Working Capital.                                        

           (c)    Any other Capital Contribution approved by the
Management Committee.                                   

        8.2.1   The Partnership may establish at a bank a line of credit
  in any amount not to exceed [        ] under the terms and
   conditions determined by and upon unanimous approval of the
     Management Committee.  The line of credit may be increased or
      decreased upon unanimous approval of the Management Committee.
    The Management Committee may delegate to the Chief Operating
   Officer authority to utilize the line of credit to maintain
      Working Capital at the level required under Section 8.2(b), in
  lieu of requesting Capital Contributions therefor from the
Partners.                                               

   8.2.2   Except as provided in Section 8.4, neither services
   rendered to the Partnership by any Partner nor loans to the
Partnership from any Partner shall constitute Capital   
Contributions.                                          

       8.2.3   No Partner shall be required to contribute any capital,
         lend any funds to the Partnership or guarantee any obligations of
the Partnership except as provided in Section 8.        

EX-99
15th Page of 29
TOC
1st
Previous
Next
Bottom
Just 15th

  8.3    Voluntary Contributions; Interest.  No Partnership shall make any
  Capital Contributions to the Partnership except pursuant to this Section
   8.  No Partner shall be entitled to interest on its Capital Contribution.

8.4    Failure to Make Contributions.  If any Partner shall fail to   
timely make a Capital Contribution required under the provisions of   
   Section 8 (the "Non-paying Partner"), within five (5) Business Days after
  receipt of notice of such non-payment from the Management Committee, the
remaining Partner may, at its option, pay (the "Paying Partner") the  
amount of such Capital Contribution (the "Default Amount").  From the 
  date so paid, the Default Amount shall constitute a loan from the Paying
 Partner to the Partnership and a debt payable to the Partnership by the
Non-paying Partner, with interest to accrue at an annual rate which is
  two (2) percentage points above the prime lending rate as in effect from
time to time at the Chase Manhattan Bank, New York City.  In the event
 such debt, including interest thereon, is not paid in full within sixty
  (60) days from the date incurred, the principal amount remaining unpaid,
plus any accrued and unpaid interest, shall be deemed to be a Capital 
  Contribution by the Paying Partner, which increases the Paying Partner's
   Book Capital Account and Tax Capital Account and the Book Capital Account
and Tax Capital Account of the Paying Partner shall be increased      
  accordingly, and the Book Capital Account and Tax Capital Account of the
Non-paying Partner shall be reduced by the principal amount remaining 
unpaid plus the amount of the accrued interest.  If the Non-paying    
Partner shall pay the entire amount plus accrued interest within such 
 sixty (60) day period, the Partnership shall treat the principal amount
so paid as a Capital Contribution by the Non-paying Partner and credit
such principal amount to such Partner's Book Capital Account and Tax  
  Capital Account, and the Partnership shall immediately pay to the Paying
   Partner all principal and accrued interest owing and attributable to such
Default Amount.                                                       

        In addition, any Paying Partner may treat such failure to timely
   pay by a Non-paying Partner as an Event of Default under Section 17.3 and
  upon ten (10) days written notice to the Non-Paying Partner, immediately
exercise the rights of a non-Defaulting Partner under Section 17.     

   8.5    Book Capital Accounts.  Partnership transactions shall be recorded
 in individual Book Capital Accounts established and maintained for each
 Partner.  Each Partner's Book Capital Account shall include its Initial
Capital Contribution to the Partnership under Section 8.1 increased by
   (i) such Partner's additional Capital Contributions and (ii) its share of
 Partnership revenue, income, profit, gain, as allocated to the Partners
  in accordance with their respective Partnership Interests, and decreased
 by its share of (i) any Partnership losses and expenses as allocated to
 the Partners in accordance with their respective Partnership Interests,
  (ii) any distributions by the Partnership to Partners.  The Book Capital
Account may also be adjusted as provided in Section 8.4.              

EX-99
16th Page of 29
TOC
1st
Previous
Next
Bottom
Just 16th

9.   ALLOCATION OF BOOK PROFITS AND LOSSES.  All items of revenue, income,      
profit, gain, expense, loss, deduction and credit of the Partnership  
determined in accordance with Required Accounting Practices shall be  
 allocated to the Partners and credited to their respective Book Capital
  Accounts in accordance with their respective Partnership Interests as of
the date of the allocation.  Such allocations shall be made for each  
calendar quarter based upon each Partner's Partnership Interest during
such calendar quarter.                                                

10.  DISTRIBUTIONS.  Available cash of the Partnership shall be allocated and   
distributed to the Partners, at such times and in such amounts as the 
Management Committee shall determine, after due allowance for the cash
necessary for the operation of the Partnership's business, the        
 requirements of any borrowings or financing, and after consideration of
the Management Committee's expectations regarding the cash needs and  
 projected capital expenditures of the Partnership.  Except as otherwise
 provided in Section 8.4 and Section 17, all distributions shall be made
according to the relative Partnership Interests of the Partners.      

11.  ACCOUNTING AND TAXATION.                                                   

11.1   Fiscal Year.  The fiscal year of the Partnership shall be the  
calendar year or such other annual period as is selected by unanimous 
vote of the Management Committee.                                     

11.2   Location of Records.  The books of account for the Partnership 
   shall be kept and maintained at the Offices of the Partnership or at such
other place as the Partners shall determine.                          

  11.3   Books of Account.  The books of account for the Partnership shall
be:                                                                   

       11.3.1        Maintained on an accrual basis in accordance with
Required Accounting Practice; and                       

        11.3.2        Audited by the Certified Public Accountants at the
end of each fiscal year.                                

   11.4   Annual Financial Statements.  As soon as practicable following the
end of each fiscal year of the Partnership, the Management Committee  
shall cause to be prepared and delivered to each Partner a profit and 
  loss statement and a statement of changes in financial position for such
fiscal year, a balance sheet and a statement of each Partner's Capital
   Account as of the end of such fiscal year, together with a report thereon
of the Certified Public Accountants.                                  

11.5   Interim Financial Statements.  As soon as practicable after the
  ene of each calendar quarter, the Management Committee shall cause to be
prepared and delivered to each Partner:                               

    11.5.1        A profit and loss statement and a statement of
          changes in financial position for such quarter and for the portion
 of the fiscal year then ended (such statements to include
        sufficient information to permit the Partners to calculate their
tax accruals); and                                      

EX-99
17th Page of 29
TOC
1st
Previous
Next
Bottom
Just 17th

       11.5.2        A balance sheet and a statement of each Partner's
Book Capital Account as of the end of such quarter.     

   11.6   Inspection of Facilities and Records.  Each Partner shall have the
  right at all reasonable times during usual business hours and subject to
 the confidentiality provisions of Section 18 to inspect, audit, examine
and make copies of the books of account and other records of the      
 Partnership.  Such right may be exercised through any agent or employee
 of such Partner designated in writing by it or by an independent public
accountant, attorney or other consultant so designated.  The Partner  
making the request shall bear all costs and expenses incurred in any  
inspection, examination or audit made at such Partner's behest.       

12.  TAX CAPITAL ACCOUNT, ALLOCATIONS, TAX RETURNS                              

12.1   (a)     In addition to maintaining the Book Capital Accounts as
 defined in Section 8.5, the Partnership shall maintain a Federal Income
Tax Capital Account for each Partner.  The Federal Income Tax Capital 
Accounts shall be established and maintained in accordance with the   
provisions of Section 1.704-1(b) (2) (iv) of the Treasury Regulations.
In addition, the Partnership shall adjust the Partners' Federal Income
  Tax Capital Accounts in accordance with Section 1.704-1(b)(2)(iv)(f) and
 (b)(2)(iv)(g) of the Treasury Regulations to reflect any revaluation of
the Partnership's assets agreed upon by the Partners upon the         
  contribution of assets to the Partnership by a Partner.  The Partnership
shall also adjust the Partners' Federal Income Tax Capital Accounts in
accordance with said regulations to reflect any revaluation of the    
 Partnership's assets agreed to by the Partners upon the distribution of
any Partnership asset to a Partner.                                   

          (b)     Notwithstanding anything to the contrary contained herein,
the Federal Income Tax Capital Account of each Partner shall mean the 
capital account of the Partner determined in all events solely in     
accordance with the rules set forth in Treasury Regulation Section    
   1.704-1(b)(2)(iv), as the same may be amended or revised.  Subject to the
preceding sentence, "Federal Income Tax Capital Account" shall mean:  

                  (i)   The amount of the cash contributed by the Partner to
  the Partnership, including the amount of the Partnership's
liabilities that are assumed by the Partner (other than 
         liabilities secured by property distributed to the Partner by the
       Partnership or to which such property is subject and other than
          increases in the Partner's share of the Partnerhip's liabilities),
increased by                                            

             (ii)  The Agreed Value of property contributed by the
     Partner to the Partnership (net of liabilities secured by the
   property or to which the property is subject), increased by

              (iii) The amount of Federal Income Tax Capital Account
Book Income allocated to the Partner, decreased by      

EX-99
18th Page of 29
TOC
1st
Previous
Next
Bottom
Just 18th

             (iv)  The amount of money distributed to the Partner,
          including the amount of the Partner's liabilities that are assumed
      by the Partnership (other than liabilities secured by property
      contributed to the Partnership by the Partner or to which such
     property is subject and other than decreases in the Partner's
share of Partnership liabilities), decreased by         

             (v)   The Agreed Value of property distributed to the
     Partner by the Partnership (net of liabilities secured by the
   property or to which the property is subject), decreased by

        (vi)  The Partner's share of expenditures of the
 Partnership described in Section 705(a)(2)(B) of the Code
          (including, for this purpose, losses which are nondeductible under
      Section 267(a)(1) or Section 707(b) of the Code), decreased by

                (vii) The Partner's share of amounts paid or incurred by
          the Partnership to organize the Partnership or to promote the sale
        of an interest in the Partnership (except to the extent properly
amortizable for tax purposes), decreased by             

              (viii)        The amount of Federal Income Tax Capital
Account Book Loss allocated to the Partner.             

       (c)     For purposes of computing the amount of "Federal Income
 Tax Capital Account Book Income" or "Federal Income Tax Capital Account
   Book Loss" pursuant to this Section 12, the amount of any item of income,
   gain, loss or deduction to be reflected in the Federal Income Tax Capital
Accounts and the determination, recognition and classification for    
federal income tax purposes, shall be determined as follows:          

             (i)   Any deductions for depreciation, cost recovery,
         amortization, or expense in lieu of depreciation, attributable to
   a Partnership asset contributed to the Partnership shall be
         determined as if the adjusted basis of such Partnership assets on
    the date it was acquired by the Partnership was equal to the
Agreed Value of such Partnership asset;                 

           (ii)  Any income, gain, or loss attributable to the
       taxable disposition of any Partnership asset contributed to the
    Partnership shall be determined by the Partnership as if the
   adjusted basis of such Partnership asset as of such date of
     disposition was equal to the Agreed Value of such Partnership
    asset, less any depreciation, cost recovery, amortization or
  expense in lieu of depreciation attributable to such asset
pursuant to Section 12(c)(i);                           

          (iii) Immediately prior to the distribution of any
         Partnership assets (1) in kind to a Partner or (2) in liquidation
          of the Partnership pursuant to Section 17.4.4, any unrealized gain
        or unrealized loss attributable to such Partnership asset shall,
       for purposes hereof, be deemed to be gain or loss recognized by
    the Partnership and shall be allocated among the Partners in
accordance with this Section 12; and                    

EX-99
19th Page of 29
TOC
1st
Previous
Next
Bottom
Just 19th

                (iv)  The computation of all items of income, gain, loss
        and deduction shall be made without regard to any Section 754 of
the Code election that may be made by the Partnership.  

       (d)     An assumption of a Partner's unsecured liability by the
 Partnership shall be treated as a distribution of money to the Partner.
   An assumption of the Partnership's unsecured liability by a Partner shall
  be treated as a cash contribution to the Partnership.  For this purpose,
  the assumption of a secured liability in excess of the fair market value
of the security shall be treated as the assumption of an unsecured    
liability to the extent of the excess.                                

          (e)     Federal Income Tax Capital Account Book Income and Federal
  Income Tax Capital Account Book Loss of the Partnership for any calendar
year shall be allocated to the Partners in accordance with their      
respective Partnership Interests as defined in Section 1.13 except as 
  provided in Section 12(e)(i).  Except as provided in Section 12(f)(iii),
 the Partnership's taxable income or loss shall be allocated between the
Partners in the same manner as Federal Income Tax Capital Account Book
 Income or Federal Income Tax Capital Account Book Loss, as the case may
be.                                                                   

         (i)     In the event that the Internal Revenue Service upon audit
  imputes income or expense to either Partner as a result of the Partner's
   furnishing facilities, services or technology under this Agreement or any
agreement contemplated herein between the Partners, or between the    
 Partnership and a Partner, the correlative item of expense or income of
the Partnership resulting from such imputation shall be specially     
allocated to the Partner to which the income or expense is imputed.   

 (f)    (i)     Except as provided in Section 12(f)(iii), for income tax
 purposes the distributive share of a Partner of each specific deduction
  and item of income, gain, loss deduction, and credit of the Partnership,
   shall be the same as such Partner's allocable share of Federal Income Tax
Capital Account Book Income or Federal Income Tax Capital Account Book
Loss for such calendar year.                                          

         (ii)    In the event that the Partnership has taxable income that
   is characterized as ordinary income under the recapture provisions of the
  Code, each Partner's distributive share of taxable gain or loss from the
  sale or other disposition of Partnership assets (to the extent possible)
shall include a proportionate share of this recapture income equal to 
   that Partner's share of prior cumulative depreciation or other deductions
with respect to the assets that gave rise to the recapture income.    

      (iii)   In accordance with Section 704(c) of the Code, income,
  gain, loss and deduction with respect to any property contributed to the
Partnership by a Partner shall, solely for income 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 fair market value as of the date of
contribution.                                                         

EX-99
20th Page of 29
TOC
1st
Previous
Next
Bottom
Just 20th

13.  CERTAIN TAX MATTERS                                                        

   13.1   Except as required by law and as the Partners may otherwise agree,
  the Partnership shall administer matters with respect to taxes under the
  principles that (i) each Partner shall be treated equally (i.e., neither
Partner will receive preferential tax treatment to the disadvantage of
the other) and (ii) the Partnership shall administer taxes in such a  
manner as to (a) minimize taxes incurred by the Partnership and each  
subsidiary and (b) maximize benefits with respect to the taxes of the 
Partners, based upon the assumption that the Partners are full regular
income taxpaying corporations.                                        

13.2   Sabine HSC shall be designated as the Partnership's tax matters
 partner ("Tax Matters Partner") as defined in Section 6231(a)(7) of the
Code.                                                                 
 Sabine HSC shall, subject to the written instructions of the Management
 Committee, have all the powers and obligations of a Tax Matters Partner
pursuant to the Code or under this Agreement.  The Tax Matters Partner
 shall incur no liability to the Partnership or to any other Partner for
 actions taken in its capacity as Tax Matters Partner including, but not
limited to, liability for any additional taxes, interest or penalties 
owed by the other Partner due to adjustments of Partnership items of  
income, gain, loss, deductions and credit at the Partnership level.   

13.3   The Tax Matters Partner shall prepare and timely file all tax  
   returns and shall timely make or revoke all elections pursuant to Section
  14 of this Agreement, and take all tax reporting positions, necessary or
  desirable for the Partnership, so as to maximize the tax benefits to the
Partners.                                                             

   13.4   The Tax Matters Partner shall take all actions which are necessary
or appropriate in dealing with any tax authorities subject to the     
following:                                                            

  (a)     During any audit or other controversy with any tax
  authority, the Tax Matters Partner shall keep the other Partner informed
of all material facts and developments on a timely basis, and shall   
consult with the other Partner at such Partner's request.  In general,
the Tax Matters Partner shall not take any action contemplated by     
Sections 6221 through 6233 of the Code unless it has first given the  
  other Partner notice of the contemplated action and received the consent
  of the other Partner, with such consent not being unreasonably withheld.
This provision is not intended to authorize the Tax Matters Partner to
take any action which is left to the determination of an individual   
Partner under Sections 6221 through 6233 of the Code.                 

    (b)     The Tax Matters Partner shall keep the other Partner
informed of all administrative and judicial proceedings for the       
adjustment at the Partnership level of partnership items in accordance
with Section 6223(g) of the Code, and shall furnish copies of         
correspondence received pursuant to the provisions of the preceding   
sentence to the other Partner.                                        

EX-99
21st Page of 29
TOC
1st
Previous
Next
Bottom
Just 21st

          (c)     The Tax Matters Partner shall not enter into any extension
 of the period of limitations as provided under Section 6229 of the Code
without first giving reasonable notice to the other Partner of such   
   intended action and obtaining the consent of the other Partner, with such
consent not being unreasonably withheld.                              

      (d)     No partner shall file, pursuant to Section 6227 of the
   Code, a request for an administrative adjustment of partnership items for
any Partnership taxable year without the consent of the other Partner,
with such consent not being unreasonably withheld.                    

     (e)     The Tax Matters Partner shall not make any settlement
offers with respect to the tax treatment of partnership items without 
   first giving reasonable advance notice of such intended action (including
any proposal for settlement) to the other Partner.  The Tax Matters   
Partner shall not bind the other Partner to any agreement, settle any 
outstanding audit, litigate any unsettled audit issues, choose a forum
   for litigation, appeal an adverse lower court decision, make any election
   with respect to federal, state or local income tax law, or take any other
actions affecting tax matters without obtaining the prior written     
concurrence of the other Partner.                                     
The Tax Matters Partner shall inform the other Partner, on a timely   
   basis, of any tax matters, including, but not limited to, progress of any
 Internal Revenue Audit, receipt of a Revenue Agent's Report, and notice
of any Appeals conference.  No Partner shall file a notice of         
   inconsistent treatment under Code Section 6222(b) without first notifying
all other Partners within thirty (30) days of such proposed action.  A
  Partner shall furnish the Tax Matters Partner within thirty (30) days of
 receipt of the request, such information as the Tax Matters Partner may
 reasonably request to permit it to provide the Internal Revenue Service
   with sufficient information for purposes of Section 6223 and 6050K of the
Code.  Unless prohibited, either Partner who enters into a settlement 
agreement with the Internal Revenue Service or the Secretary of the   
   Treasury with respect to the treatment of any partnership items appearing
on their separate returns, shall promptly notify the other Partner of 
such settlement agreement.                                            

      (f)     The Tax Matters Partner shall have the right to engage
legal counsel, certified public accountants, or other assistance with 
respect to any Partnership level tax audit.  Any reasonable item of   
 expense with respect to such matters, including but not limited to fees
and expenses for legal counsel, certified public accountants and other
experts which the Tax Matters Partner incurs in connection with any   
Partnership level audit, assessment, litigation or other proceedings  
regarding any Partnership item shall be borne by the Partnership.     

          (g)     The Tax Matters Partner shall provide to the other Partner
   a copy of the Partnership's annual federal income tax information returns
 (Forms 1065 and the accompanying Schedules K-1), as well as any similar
   state income tax returns, at least 30 days prior to the due date for such
returns in order that the other Partner may review and comment on such
returns prior to the filing thereof.  The Tax Matters Partner shall   
consider in good faith any suggestions or comments made by the other  
Partner, but shall not be required to follow such suggestions or to   
incorporate such comments.  In addition, the Tax Matters Partner      

EX-99
22nd Page of 29
TOC
1st
Previous
Next
Bottom
Just 22nd

   shall use its best efforts to provide the other Partner at least five (5)
  days prior to each quarterly estimated tax payment date, with reasonable
  estimates as to the net taxable income or net taxable loss which accrued
  during such quarter (and all prior quarters of the year), as well as the
projected net taxable income or net taxable loss for the year.        

     (h)     The Partnership shall indemnify and reimburse the Tax
  Matters Partner for all expenses, including return preparation and legal
   and accounting fees, claims, liabilities, losses and damages borne by the
Tax Matters Partner, which were incurred in connection with any       
administrative or judicial proceeding with respect to any audit of the
Partnership's Tax Returns, except to the extent caused by the gross   
   negligence or willful misconduct of the Tax Matters Partner.  Neither the
 Tax Matters Partner nor the other Partner shall have any obligations to
provide funds for such purpose.                                       

          (i)     The Tax Matters Partner shall use reasonable discretion in
 taking any action and incurring any expense in connection with any such
   proceeding, except to the extent otherwise governed by this Section 13.4.

14.  TAX ELECTIONS.  The Partnership shall make the following elections under   
the Code and the attendant regulations thereto and under any similar  
state statutes:                                                       

14.1   Adopt the calendar year as the annual accounting period;       

14.2   Adopt the accrual method of accounting;                        

14.3   Compute the allowance for depreciation so as to maximize the   
income tax benefits of deductions for the Partners;                   

  14.4   Amortize start-up and organizational expenditures, if any, over a
sixty (60) month period in accordance with Sections 195 and 709(b)    
respectively of the Code and any similar state statutes;              

14.5   Make such elections as may be directed by the Management       
Committee;                                                            

  14.6   If requested by any Partner, make the election under Code Section
754; and                                                              

 14.7   Expense research and development expenditures under Code Section
174.                                                                  

15.  INDEMNIFICATION                                                            

15.1   (a)     Indemnification by Partnership to Partners,            
   Representatives, Managers, Directors, Affiliates, Officers, Employees and
 Agents.  The Partnership ("Indemnifying Party") shall indemnify, defend
   and hold harmless each Partner and each Representative, manager, officer,
agent, Affiliate, director and representative of such Partner and the 
Chief Operating Officer (the "Indemnified Parties") from and          

EX-99
23rd Page of 29
TOC
1st
Previous
Next
Bottom
Just 23rd

against any and all losses, claims, damages, fines, penalties,        
  liabilities, and expenses (including any court costs and attorney's fees
incurred) arising out of any activities undertaken during the term of 
  this Agreement ("Obligation") by such Indemnified Party on behalf of the
Partnership to the extent that:  (i) the activities of any such       
 Indemnified Party were within the scope of the actual authority of such
Indemnified Party as a Partner, Representative, manager, director,    
 Affiliate, officer, agent or representative while acting on behalf of a
Partner of the Partnership; (ii) such activity did not violate any    
obligation of such Indemnified Party to the Partnership or the other  
   Partner arising out of the Partnership Agreement; and (iii) such activity
did not constitute gross negligence, fraud, willful misconduct or a   
violation of applicable law on the part of such Indemnified Party.    

                 If any Obligation (within the scope of Section 15.1(a) is
imposed on or incurred by a Partner after the termination of the      
 Partnership in excess of such Partner's Partnership Interest times such
amount, the other Partner shall indemnify the Partner incurring such  
Obligation in an amount equal to the excess of each indemnifying      
  Partner's Partnership Interest times the total amount of such Obligation
  (the "Total Loss") over the amount of the Total Loss previously incurred
or paid by such Indemnifying Party.                                   

    (b)     Partner's Liability and Indemnification to the Other
  Partner.  Each Partner shall only be liable to the other Partner and its
 Affiliates for any Obligation to the extent caused by such Partner's or
   its Affiliates' gross negligence, willful misconduct, fraud, violation of
applicable law or by a Partner's intentional breach of such Partner's 
   obligations under this Agreement.  Each Partner hereby releases the other
Partner, its Affiliates, and their respective directors, officers,    
 employees and agents from Obligations claimed or asserted by such other
 Partner except to the extent caused by the Partner's or its Affiliates'
  gross negligence, willful misconduct, fraud, violation of applicable law
or by a Partner's intentional breach of any obligation under this     
Agreement.  Each Partner shall defend, indemnify and hold harmless the
  other Partner, its Affiliates, and their respective directors, officers,
  employees and agents from and against Obligations claimed or asserted by
such other Partner to the extent caused by the Partner's or its       
Affiliates' gross negligence, willful misconduct, fraud, violation of 
applicable law or by a Partner's intentional breach of any obligation 
under this Agreement.                                                 

                  It is the intention of the parties hereto that the release
by and indemnity obligations of the Partners to each other under this 
Section 15.1(b) hold the Partners harmless from and against the       
   consequences of their own ordinary negligence to the extent such ordinary
negligence is the sole, concurrent, or joint cause of the Obligations.

15.2   Promptly after the receipt by an Indemnified Party of notice of
any pending or threatened action by any third party ("Third Party     
 Action"), such Indemnified Party shall give written notice of the Third
 Party Action to the Indemnifying Party hereto, accompanied by copies of
  any written documentation with respect thereto received by the notifying

EX-99
24th Page of 29
TOC
1st
Previous
Next
Bottom
Just 24th

Indemnified Party and stating the basis upon which indemnification is 
  being sought pursuant to this Agreement.  Such notice shall constitute a
claim for indemnification hereunder (the "Claim").                    

15.3   The Indemnifying Party shall have the right, at its option, to 
compromise or defend, at its own expense and with its own counsel, any
 Third Party Action.  The Indemnified Party shall have the right, at its
option, to participate in the settlement or defense of any such Third 
Party Action, with its own counsel and at its own expense, but the    
Indemnifying Party shall have the right to control such settlement or 
   defense.  The Indemnified Party and Indemnifying Party agree to cooperate
in any such defense or settlement and to give each other reasonable   
 access to all information relevant thereto and will similarly cooperate
 in the prosecution of any claim or lawsuit against any third party.  In
the event that the Indemnifying Party fails to notify the Indemnified 
Party of its intent to take any action within fifteen (15) days after 
 receipt of a Claim, the Indemnified Party without waiving any rights to
indemnification hereunder may defend such Third Party Action and shall
have the right to enter into any good faith settlement thereof without
 the prior written consent from the Indemnifying Party.  Notwithstanding
   the foregoing, the Indemnifying Party shall not be entitled to assume and
   control the defense of any such action, suit or proceedings if and to the
extent that, in the opinion of the Indemnified Party and its counsel, 
such action, suit or proceeding involves the potential imposition of  
criminal liability on the Indemnified Party or a conflict of interest 
between the Indemnified Party and the Indemnifying Party, and in such 
event the Indemnifying Party shall pay the reasonable expenses of the 
Indemnified Party in such defense.  Notwithstanding the Indemnifying  
Party's rights hereunder to control certain actions, suits or         
proceedings, no settlement of any such action may be made by the      
Indemnifying Party without the Indemnified Party's consent; provided, 
   however, such consent shall not be necessary if the settlement results in
 an unconditional release of the Indemnified Party without the admission
 by the Indemnified Party of guilt, complicity or culpability.  Any such
   compromise or settlement shall be binding upon the Indemnifying Party for
purposes of this Section 15.                                          

15.4   The indemnities contained in this Section 15 shall survive     
termination, dissolution and liquidation of the Partnership.          

16.  NO TRANSFER OR PLEDGE OF PARTNERSHIP INTERESTS.  No Partner may transfer,  
assign, pledge or otherwise encumber its Partnership Interest.        

17.  TERMINATION, DISSOLUTION AND LIQUIDATION                                   

   17.1   Automatic Dissolution.  The Partnership shall be automatically and
without notice dissolved upon the happening of any of the following   
events:                                                               

         17.1.1        The sale by the Partnership of all or substantially
all of the Partnership's business and assets.           

    17.1.2        Any event which shall make it unlawful for the
business of the Partnership to be carried on.           

EX-99
25th Page of 29
TOC
1st
Previous
Next
Bottom
Just 25th

17.1.3        Any event which, under the Revised Uniform
        Partnership Act of the State of Delaware, requires or results in
dissolution of the Partnership.                         

       17.1.4        Any event which would:  (a) cause CNG to lose its
       authorization under PUHCA to participate in the Partnership; or
         (b) subject the Partnership to regulation under PUHCA in a manner
   which materially and adversely affects the operation of the
Partnership.                                            

17.1.5        By mutual agreement of the Partners       

         17.1.6        A Partner withdraws from the Partnership during the
     term hereof without the written consent of the other Partner.

        17.1.7        A Partner sells, transfers or assigns or offers to
      sell, transfer or assign its Partnership Interest, in whole or
part.                                                   

         17.1.8        A Partner become insolvent, makes an assignment for
      the benefit of creditors, becomes bankrupt, or enters into any
       receivership for the benefit of creditors or if any third party
         successfully petitions any judicial tribunal to effectuate any of
the foregoing against it.                               

17.2   [                                                             ]

  17.3   Event of Default.  An Event of Default shall give rise to a right
of dissolution of the Partnership in favor of the Partner that is not 
 involved or subject to any of the matters referred to in Section 17.3.1
upon the giving of Notice of Dissolution by such Partner.  An Event of
Default shall occur if a Partner (the "Defaulting Partner"):          

     17.3.1        Fails to pay a Capital Contribution pursuant to
       Section 8 and a Paying Partner treats such failure to pay as an
Event of Default under the provisions of Section 8;     

       17.3.2        Fails to or otherwise does not perform any of its
          material obligations (other than the payment of money) or fails to
       observe any material restrictions under this Agreement and such
         default continues for a period of thirty (30) Business Days after
written notice thereof from a Partner.                  

17.4   Winding Up and Liquidation.                                    

    17.4.1        [                                            ]

          17.4.2        After the Partnership shall be dissolved pursuant to
   the terms of this Agreement, the Management Committee shall
    continue to exercise its powers under this Agreement for the
 purpose of winding up the business of the Partnership and
        liquidating its assets in an orderly manner, but the Partnership
         shall engage in no new business during the period of such winding
up.                                                     

EX-99
26th Page of 29
TOC
1st
Previous
Next
Bottom
Just 26th

      17.4.3        Notwithstanding the above Section 17.4.2, if the
         Partnership is terminated for any reason prior to the termination
       of any then current contracts, the winding up of the affairs of
          the Partnership may include the completion of any work or services
       under such contracts to the extent the Management Committee may
     determine to be necessary to bring the matters in progress to
          completion so as to permit a sale or transfer of the Partnership's
interest in such contracts.                             

          17.4.4        Distributions Upon Dissolution.  Upon dissolution of
    the Partnership, the Partners shall take full account of the
       Partnership's liabilities and property of the Partnership.  The
         property of the Partnership shall be liquidated as promptly as is
         consistent with obtaining the fair value thereof, and the profits
       and losses therefrom shall be allocated between the Partners as
provided in Sections 9, 10 and 12.  In addition, upon a 
          liquidation of the Partnership or a termination of the Partnership
       for tax purposes pursuant to Section 708(b) of the Code, if any
          Partner's Federal Income Tax Capital Account has a deficit balance
    (after giving effect to all contributions, distributions and
          allocations for all taxable years, including the year during which
      such liquidation occurs), such Partner shall contribute to the
       capital of the Partnership the amount necessary to restore such
         deficit balance to zero within ninety (90) days after the date of
         such liquidation or termination to the extent necessary to comply
      with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(3).  The
         proceeds from such liquidation to the extent sufficient therefor,
shall be applied and distributed in the following order.

        (a)   To the payment and discharge of all of the
        Partnership's debts and liabilities, including the establishment
of any necessary reserves; and                          

           (b)   Distribute the balance in accordance with the
 Partner's positive Tax Capital Account balances after all
         appropriate adjustments thereto have been made for contributions,
       distributions, and allocations for all taxable years, including
the year of dissolution.                                

      17.4.5        No termination or dissolution of the Partnership
         shall relieve a Partner from any obligation to the Partnership or
 the other Partner accruing or accrued to the date of such
termination or dissolution.                             

         17.4.6        Upon the bankruptcy of a Partner, the other Partner
    shall serve as liquidator of the Partnership pursuant to the
         applicable provisions of the Delaware Revised Uniform Partnership
Act.                                                    

EX-99
27th Page of 29
TOC
1st
Previous
Next
Bottom
Just 27th

18.  CONFIDENTIALITY.  Confidentiality shall be maintained pursuant to that     
   certain Confidentiality Agreement among CNG Market Center Services, Inc.,
 Sabine Hub Services Company and CNG/Sabine Center which is incorporated
herein and attached as Schedule C ("Confidentiality Agreement").  The 
Partners agree that any proprietary information supplied to the       
  Partnership by the Partners shall be Confidential Information as defined
by the Confidentiality Agreement.  Any proprietary or commercially    
sensitive information (as defined in the Confidentiality Agreement)   
  provided to the Partnership by a customer or potential customer in order
   to receive services will be held in strict confidence by the Partners and
will not be divulged to any third parties or to any Affiliates of the 
 Partnership or the Partners, except as described in the Confidentiality
 Agreement.  Any failure by either Partner to uphold the confidentiality
 of the above Information or any breach of the Confidentiality Agreement
shall be deemed a default of a material obligation pursuant to Section
17.3.2 and, therefore, an Event of Default pursuant to Section 17.3.  

19.  NOTICES.  All notices, consents and other than routine communications      
   under this Agreement shall be in writing and shall be deemed to have been
duly given (i) when delivered by hand, (ii) when sent by telex or     
telecopier (with receipt confirmed), provided that a copy is promptly 
   thereafter mailed by first class postage prepaid, registered or certified
  mail, return receipt requested, (iii) when received by the addressee, if
sent by Express Mail, Federal Express, other express delivery service 
  (receipt requested) or by such other means as the parties may agree from
   time to time or, (iv) five (5) business days after being mailed, by first
class postage prepaid, registered or certified mail, return receipt   
requested, in each case to the appropriate addresses and telecopier   
numbers set forth below (or to such other addresses, telex numbers and
   telecopier numbers as a party may designate as to itself by notice to the
other party):                                                         

(A)     if to Sabine HSC:                               

Sabine Hub Services Company             
1111 Bagby                              
Houston, TX  77002                      
Attn:  President                        
Facsimile:  (713) 752-4667              

(B)     if to CNG:                                      

CNG Market Center Services, Inc.        
445 West Main Street                    
Clarksburg, WV  26301                   
Attn:  President                        
Facsimile:  (304)  623-8595             

EX-99
28th Page of 29
TOC
1st
Previous
Next
Bottom
Just 28th

20.  GENERAL                                                                    

20.1   Effect Of Agreement.  This Agreement together with the         
Confidentiality Agreement and the Software License Agreements reflects
the whole and entire agreement between the Partners and supersedes and
replaces all prior agreements related to the subject matter hereof.   
[                                          ]  This Agreement may be   
amended, restated or supplemented only by the written agreement of the
Partners.                                                             

20.2   Further Assurance.  Each of the Partners agrees to execute and 
   deliver all such other and additional instruments and documents and to do
 such other acts and things as may be reasonably necessary to effectuate
   this Partnership and carry on the Partnership business in accordance with
this Agreement.                                                       

20.3   APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND       
  INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.                        

20.4   Headings.  The headings contained in this Agreement are for    
reference purposes only and shall not affect the meaning or           
interpretation of this Agreement.                                     

 20.5   Waiver.  No waiver by either Partner of any default by the other
Partner in the performance of any provision, condition or requirement 
 herein shall be deemed to be a waiver of, or in any manner release said
   Partner from performance of any other provision, condition or requirement
herein; nor shall such waiver be deemed to be a waiver of, or in any  
manner a release of, said Partner from future performance of the same 
  provision, condition or requirement.  Any delay or omission of a Partner
   to exercise any right hereunder shall not impair the exercise of any such
right, or any like right, accruing to it thereafter.  The failure of a
  Partner to perform its obligations hereunder shall not release the other
Partner from the performance of its respective obligations.           

   20.6   Severability.  Should any provision of this Agreement be deemed in
contradiction with the laws of any jurisdiction in which it is to be  
   performed or unenforceable for any reason, such provision shall be deemed
null and void, but this Agreement shall remain in force in all other  
respects.  Should any provision of this Agreement be or become        
ineffective because of changes in applicable laws or interpretations  
thereof, or should this Agreement fail to include a provision that is 
   required as a matter of law, the validity of the other provisions of this
Agreement shall not be affected thereby.  If such circumstances arise,
the parties hereto shall negotiate in good faith appropriate          
modifications to this Agreement to reflect those changes that are     
required by law.                                                      

20.7   Section Numbers.  Unless otherwise indicated, references to    
section numbers are to sections of this Agreement.                    

EX-99
Last Page of 29
TOC
1st
Previous
Next
Bottom
Just 29th

20.8   Third Persons.  Except as expressly provided in this Agreement,
  nothing herein expressed or implied is intended or shall be construed to
confer upon or to give any person not a party hereto any rights or    
remedies under or by reason of this Agreement.                        

 20.9   Schedules and Appendices.  Schedules A-I, A-II, B and C attached
hereto, as may be amended or superseded from time to time, are        
   incorporated by reference and made a part hereof as amended and as if set
forth here in full.                                                   

20.10  Counterparts.  This Agreement may be executed in counterparts, 
each of which shall be deemed an original, but all of which together  
shall constitute one and the same instrument.                         

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of June 30, 1994.      

SABINE HUB SERVICES COMPANY                CNG Market Center Services, Inc.     

By:     Jagit S. Yadav                     By:     Joseph A. Curia              
Title:  President                          Title:  President                    

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This U-1 Filing		Date		First		Last			Other Filings
		6/30/94		1		29			10-Q, 11-K, U-1/A
Filed On / Filed As Of		7/15/94
Top									List All Filings