Cimarron River Pipeline, LLC

Original Volume No. 1

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Effective Date: 09/01/2008, Docket: CP08-17-001, Status: Effective

Original Sheet No. 167 Original Sheet No. 167

 

GENERAL TERMS AND CONDITIONS

 

5.5 In addition, to establish creditworthiness Shipper must confirm

in writing that Shipper 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

Shipper that is a debtor in possession operating under Chapter 11 of the

Federal Bankruptcy Act, but only with adequate assurance satisfactory to

Transporter that billings for post-petition gas deliveries will be paid

promptly as a cost of administration under the Federal Court's jurisdiction.

 

5.6 Transporter's creditworthiness provisions shall not supersede

applicable bankruptcy laws. Transporter will provide Shipper written notice

of the reasons it has been deemed non-creditworthy at the same time that

Transporter provides the notification to Shipper that it has been deemed not

creditworthy.

 

5.7 If a Shipper otherwise fails to establish or maintain

creditworthiness as provided herein, Shipper may still receive service under

the applicable Rate Schedule provided it furnishes and maintains for the

term of any TSA:

 

(a) a written guarantee in a form satisfactory to Transporter from a

third party which is creditworthy as determined above;

 

(b) an irrevocable standby letter of credit in an amount not to

exceed a rolling three months of applicable reservation charges and

commodity charges under the TSA plus an amount equal to the highest monthly

imbalance value owed by Shipper during the previous 12 months;

 

(c) a pre-payment in the amount under (b) above; or

 

(d) other security acceptable to Transporter.

 

Items (a) through (d) above are collectively "Security." If Transporter

constructs new lateral facilities to accommodate a Shipper, Transporter may

require Security in an amount up to the Shipper's proportionate share of the

facilities cost. If a Shipper defaults and its service is terminated,

Transporter shall mitigate damages from the default and reduce the Security

retained from the defaulting Shipper through methods such as netting the

difference between the highest net present value of any replacement contract

entered into for the terminated capacity and the net present value of the

remaining term of the defaulting Shipper's contract at the time of

termination.

 

5.8 For purposes of pre-payments under Section 5.7(c) above, Shipper

may deposit its prepayment funds into an interest-bearing escrow account

established by the Shipper granting Transporter access to the account for

payment of the services provided.