Columbia Gulf Transmission Company

Second Revised Volume No. 1

Effective Date: 07/01/1996, Docket: RP96-261-000, Status: Effective

First Revised Sheet No. 401 First Revised Sheet No. 401 : Effective

Superseding: Original Sheet No. 401

OPERATIONAL BALANCING AGREEMENT (Cont'd)

ARTICLE IV

OTHER AGREEMENTS

4.1 In the event that any provision of this Agreement conflicts with any provision of the

Parties' respective FERC Gas Tariffs or transportation agreements, the applicable provision of the Parties'

FERC Gas Tariffs or transportation agreements shall take precedence over the conflicting provisions of this

Agreement; provided, however, that no Party or Daily or Monthly Operational Imbalance, estimated or actual,

shall be subject to (i) a cash-in or cash-out, or (ii) an operational flow order, unless specifically provided

for in this Agreement.

ARTICLE V

NO THIRD PARTY BENEFICIARIES

5.1 This Agreement shall not create any rights in third parties, and no provision of this

Agreement shall be construed as creating any obligations for the benefit of, or rights in favor of, any person

or entity other than the Parties.

ARTICLE VI

STANDARD OF PERFORMANCE

6.1 The Parties understand and agree that performance under this Agreement shall occur only on

a good faith basis. In the event of nonperformance or noncompliance by either Party with respect to one or

more of the conditions set forth herein, such Party shall not be liable in any manner to the other Party or

to any third parties for such nonperformance or noncompliance; except that, the Parties shall be legally

obligated to reconcile any outstanding actual Operational Imbalance under this Agreement and which may exist

upon termination of this Agreement consistent with the relevant terms and conditions set forth in this

Agreement.

ARTICLE VII

GOVERNING LAW

7.1 The construction and interpretation of this Agreement shall be governed by the laws of the

State of Texas, excluding any conflict of law rule which would refer any matter to the laws of a jurisdiction

other than the State of Texas.