Hardy Storage Company, LLC

Original Volume No. 1

Effective Date: 04/01/2007, Docket: CP05-150-003, Status: Effective

Original Sheet No. 60 Original Sheet No. 60 : Effective

GENERAL TERMS AND CONDITIONS (Cont'd)

(2) If Customer intends to exercise its right of first refusal

as described at paragraph (1) above, Customer shall notify Seller

through Seller's EBB of that intent at least six months before the

termination date of its Service Agreement.

(3) In the event that Customer provides Seller with a six-month

notice of intent to exercise its right of first refusal, Seller shall

promptly post on its EBB the information described in Section 4.2 below,

Seller shall begin accepting bids from any prospective Customer, for all

or a portion of the service rights under the existing Customer's long-

term Service Agreement, at least five months prior to the termination of

such Service Agreement, and for the posting time periods set forth in

Section 4.2(a) below.

(4) If Seller receives an offer for all or a portion of the

service rights under Customer's long-term HSS Service Agreement,

Seller, within two business days after the last day for receiving

offers, shall notify Customer through the EBB of the offer having the

greatest economic value to Seller. For purposes of comparing the

respective values of offers under this Section, Seller shall evaluate

all bids in accordance with the criteria set forth at Section 4.2(c)

below. If Customer elects to match the offer, Customer shall notify

Seller of such election through the EBB within 15 days after receiving

Seller's notice and shall execute a new Service Agreement matching the

offer prior to the termination of the existing long-term Service

Agreement. The highest rate and longest term that Customer must match to

continue such service are the Recourse Rate, and fifteen years,

respectively. If Customer does not elect to match the offer within 15

days after receiving Seller’s notice, Customer’s right of first refusal

will immediately terminate.

(5) If no acceptable offers meeting Seller's minimum terms are

received, Seller will notify Customer within two business days after the

close of the capacity auction periods as set forth in Section 4.2(a)

below. Customer may, thereafter, consistent with the terms of this

Tariff, continue to receive all or a portion of its service (i) on a

month-to-month basis or for such other term and rate agreed to by Seller

and Customer, or (ii) at the applicable Recourse Rate for a term to be

specified by Customer. Customer shall execute any new HSS Service