Tres Palacios Gas Storage LLC

Original Volume No. 1

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Effective Date: 08/01/2008, Docket: RP08-424-000, Status: Effective

Original Sheet No. 108 Original Sheet No. 108

GENERAL TERMS AND CONDITIONS

(Continued)

as defined in Section 31 of these General Terms and Conditions, or

if the prospective Customer satisfies TRES PALACIOS' credit

appraisal criteria based on an evaluation of the material provided

by prospective Customer pursuant to this Section. If TRES

PALACIOS concludes that a prospective Customer is not

creditworthy, TRES PALACIOS shall provide written notice to the

prospective Customer within ten (10) days after that determination

is made. If requested by the prospective Customer, TRES PALACIOS

will provide a written explanation of the basis for its

determination within five (5) days of such request. A prospective

Customer may challenge TRES PALACIOS' determination by providing a

written rebuttal in accordance with Section 3.3(j)(6) of these

General Terms and Conditions. TRES PALACIOS shall respond to such

a rebuttal in writing within five (5) business days in accordance

with Section 3.3(j)(7). Any reevaluation of credit by TRES

PALACIOS in response to such a rebuttal by a prospective Customer

shall be based on the creditworthiness criteria set forth in this

Section.

(1) Prospective Customer shall provide current audited financial

statements, annual reports, 10-K reports, interim financial

statements with attestation by the Chief Financial Officer (or

equivalent) that such statements are a true, correct and fair

representation of financial condition prepared in accordance with

Generally Accepted Accounting Principles and other filings with

regulatory agencies which discuss the prospective 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;

(2) Prospective Customer shall provide a bank reference and at

least two trade references. The results of reference checks and

any credit reports must show that the prospective Customer's

obligations are being paid on a reasonably prompt basis;

(3) Prospective Customer shall confirm in writing that it 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 prospective Customer that is a debtor in possession

operating under Chapter XI of the U.S. Bankruptcy Code but only

with adequate assurance that the service billing will be paid

promptly as a cost of administration under the bankruptcy court's

jurisdiction;

(4) Prospective Customer shall confirm in writing that it 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;