Texas Gas Transmission, LLC
Third Revised Volume No. 1
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Effective Date: 09/15/2008, Docket: RP08-392-000, Status: Effective
Original Sheet No. 1701 Original Sheet No. 1701 GENERAL TERMS AND CONDITIONS Section 5 (Cont'd) (i) Verification that no significant collection lawsuits or judgments are outstanding which would seriously reflect upon the Customer's ability to remain solvent. 5.2 Credit Evaluation (a) Texas Gas shall periodically, at its discretion or whenever it is not reasonably satisfied with Customer's creditworthiness or ability to pay based on information available to Texas Gas at that time, apply consistent credit evaluation practices to determine the acceptability of the Customer's overall financial condition. (b) Texas Gas' standard objective financial criteria shall include all of the following: (i) Acceptable overall financial condition, working capital and profitability trends. (ii) Acceptable bank and trade references. (iii) If Customer has an on-going business relationship with Texas Gas, no delinquent balances should be consistently outstanding for services provided previously by Texas Gas and Customer must have paid its prior accounts according to the established terms and not have made deductions or withheld payment for claims not authorized by contract. 5.3 Security Requirements (a) If the Customer fails to meet Texas Gas' standard objective credit criteria (described in 5.2(b) above), Texas Gas will require Customer to provide security, in one of the forms described below, in order for service to commence or continue. (i) Prepayment in advance of an amount equal to up to three (3) months service at 100% load factor or the duration of the contract, whichever is shorter, including an amount to cover any cash-out costs that would be reasonably estimated to incur during this prepayment period. When such prepayment option is required of a Replacement Customer pursuant to Section 16 herein, such prepayment will not be collected by Texas Gas on behalf of the Releasing Customer and will not be paid to that Releasing Customer in the event of default, but will be applied by Texas Gas to the Replacement Customer's account, with the appropriate credits applied to the Releasing Customer's account as provided in Section 16.6 herein.