MidContinent Express Pipeline LLC

Original Volume No. 1

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Effective Date: 04/10/2009, Docket: RP09-136-000, Status: Effective

Original Sheet No. 174 Original Sheet No. 174

 

GENERAL TERMS AND CONDITIONS

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12. EVALUATION OF CREDIT

 

12.1 In evaluating requests for service and for certain other

purposes under this Tariff, including Sections 2.8 and 12.2 of these

General Terms and Conditions, MEP will perform a credit appraisal of

Shipper.

 

(a) Acceptance of a Shipper's request for service and

the continuation of service are contingent upon the Shipper

satisfying creditworthiness requirement on an on-going basis. MEP's

credit appraisal procedures involve the establishment of dollar

credit limits on a standardized, nondiscriminatory basis. To the

extent that a Shipper's accounts with MEP do not exceed such limit,

and Shipper has met all creditworthiness requirements as determined

in periodic credit reviews by MEP, which reviews may be conducted on

at least an annual basis, new credit appraisals may be required when

an existing Agreement is amended or a request for a new Agreement is

made, subject to the provisions of Section 2.8 and 12.2 of these

General Terms and Conditions. To determine creditworthiness, a credit

appraisal shall be performed in accordance with the following

criteria:

 

(1) MEP shall apply consistent evaluation

practices to all similarly situated Shippers to determine the

Shipper's financial ability to perform the payment of obligations due

to MEP over the term of the requested or existing Agreement(s). The

creditworthiness requirements of this Section 12 shall apply to any

assignment (in whole or in part) of any Agreement or any release of

an Agreement.

 

(2) 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") and at least Baa3 by Moody's

Investor Service ("Moody's") (provided, however, that if the

Shipper's rating is at BBB- or Baa3 and the short-term or long-term

outlook is Negative, MEP may require further analysis as discussed

below); and (ii) the sum of reservation fees, commodity fees and any

other associated fees and charges for the contract term is less than

15% of Shipper's tangible net worth. In the event Shipper is rated by