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. 153 Original Sheet No. 153

GENERAL TERMS AND CONDITIONS

(Continued)

28. DEFAULT AND TERMINATION

28.1 Customer shall be in default under this FERC Gas

Tariff or the Storage Service Agreement if:

(a) Customer shall fail to pay any sums due to TRES

PALACIOS hereunder and such failure continues for a period of five

(5) Business Days after written notice to Customer by TRES

PALACIOS;

(b) Customer fails to perform any of its material

covenants or obligations under this FERC Gas Tariff or the Storage

Service Agreement, other than obligations to make payments to TRES

PALACIOS., and Customer does not remedy such failure within a

period of thirty (30) days after receipt of a notice from TRES

PALACIOS;

(c) Customer or its guarantor becomes insolvent, as set

forth in Section 3.3(i); or

(d) Customer fails to provide or maintain Financial

Assurances pursuant to Section 31.

Customer shall indemnify and hold harmless TRES

PALACIOS from and against any costs or losses resulting from (a),

(b), (c), (d) above.

28.2 In the event of any Default by Customer, in

addition to all other remedies available to it pursuant to the

Storage Service Agreements or at law and in equity, TRES PALACIOS

may do any or all of the following:

(a) refuse to accept any further deliveries of Gas from

or on behalf of Customer pursuant to all or any transactions;

(b) refuse to deliver Gas to or on behalf of Customer

pursuant to all or any transactions;

(c) set off any amount owing by TRES PALACIOS to

Customer pursuant to any transaction(s) against amounts otherwise

owing by Customer to TRES PALACIOS pursuant to any other

transaction(s);

(d) suspend performance until Customer corrects the

default in full;

(e) terminate the Customer's Storage Service Agreement,

provided that TRES PALACIOS shall provide not less than thirty

(30) days notice of such termination to the Customer and to FERC;

and

(f) assert any liens or other interests, consistent

with applicable law, against any Gas Customer may have remaining

on TRES PALACIOS' system.