Crossroads Pipeline Company

First Revised Volume No. 1

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Effective Date: 09/10/2007, Docket: RP07-567-000, Status: Effective

Second Revised Sheet No. 71 Second Revised Sheet No. 71 : Effective

Superseding: First Revised Sheet No. 71

GENERAL TERMS AND CONDITIONS

(Continued)

 

(b) Criteria for Creditworthiness Determination

 

(1) Acceptance of a Shipper’s request for service and the

continuance of service are contingent upon the Shipper satisfying, on

an on-going basis, a credit appraisal by Transporter.

 

(2) Transporter shall apply consistent evaluation practices to

all similarly situated Shippers to determine the Shipper’s financial

ability to satisfy the payment obligations due to Transporter over the

term of the requested Service Agreement.

 

(3) A Shipper will be deemed creditworthy if

 

(i) its long-term unsecured debt securities are rated at

least BBB by Standard & Poor’s Corporation (“S&P”) or Baa2

by Moody’s Investor Service (“Moody’s”); and

 

(ii) Shipper’s short–term and long-term outlook opinion is

Stable or Positive from S&P or Moody’s; and

 

(iii) the net present value of the sum of reservation fees,

utilization fees, and any other associated fees for the contract

term is less than 3% of Shipper’s tangible net worth. As used

herein, “tangible net worth” shall be the sum of the capital

stock, paid-in capital in excess of par or stated value, and

other free and clear equity reserve accounts less goodwill,

patents, unamortized loan costs or restructuring costs and other

intangible assets. If Shipper is rated by multiple agencies,

the lower rating applies. A Shipper that is not rated by S&P or

Moody’s may use its parent’s rating if a guarantee acceptable to

Transporter is provided. If the Shipper has multiple Service

Agreements with Transporter, then the total of all those Service

Agreements shall be considered in determining creditworthiness.

 

Transporter reserves the right to determine in its reasonable

discretion, that a Shipper who requests new service is not

creditworthy to receive that service on the basis that Shipper has

outstanding payments due on invoices rendered by Transporter on

current or past Service Agreements and Shipper has defaulted on those

payments per the terms of the General Terms and Conditions; provided,

however, this provision shall not affect amounts disputed by Shipper

in good faith. This Section shall apply solely to the Shipper that is

the contract holder.