Keyspan LNG, LP (Alng)

Third Revised Volume No. 1

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Effective Date: 01/27/2003, Docket: RP03-241-000, Status: Effective

Original Sheet No. 39 Original Sheet No. 39 : Effective

 

Joseph A. Vaszily, Vice President

 

GENERAL TERMS AND CONDITIONS

(continued)

 

 

3. CREDIT EVALUATION

 

3.1 Standards Used in Appraising Credit. KLNG shall apply, on a non-

discriminatory basis, consistent financial evaluation standards to

determine the acceptability of Customer's overall financial condition.

Such credit appraisal and any further or ongoing credit appraisal as may

be necessary shall be based upon the following information and criteria:

 

(a) Customer shall provide current financial statements, annual

reports, 10-K reports or other filings with regulatory agencies

which discuss Customer's financial status; a list of all corporate

affiliates, parent companies and subsidiaries; and any reports

from credit reporting and bond rating agencies which are

available. KLNG shall determine the acceptability of the

Customer's overall financial condition.

 

(b) Customer shall provide a bank reference and at least two trade

references. The results of reference checks and any credit

reports submitted in (a) above must show that Customer's

obligations are being paid on a reasonably prompt basis.

 

(c) Customer shall confirm in writing that Customer is not operating

under any chapter of the bankruptcy laws and is not subject to

liquidation or debt reduction procedures under state laws, such as

an assignment for the benefit of creditors, or any informal

creditors' committee agreement. An exception can be made for a

Customer who is a debtor in possession operating under Chapter 11

of the Federal Bankruptcy Act but only with adequate assurance

that the service billing will be paid promptly as a cost of

administration under the federal court's jurisdiction.

 

(d) Customer shall confirm in writing that Customer is not aware of

any change in business conditions which would cause a substantial

deterioration in its financial condition, a condition of

insolvency, or the inability to exist as an ongoing business

entity.