W T G Hugoton, LP

Original Volume No. 1

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Effective Date: 08/01/2007, Docket: CP06- 90-002, Status: Effective

Original Sheet No. 257 Original Sheet No. 257 : Effective

 

GENERAL TERMS AND CONDITIONS

 

39.2 For purposes herein, the determination of Shipper's creditworthiness

shall be based upon the level of service requested by Shipper, Shipper's

estimated financial strength as defined by Dun & Bradstreet, and a composite

credit appraisal of at least "3," also as defined by Dun & Bradstreet. If

Shipper is not rated by Dun & Bradstreet, determination of a Shipper's

creditworthiness shall be based upon a credit rating, as evaluated by WTG

Hugoton, based upon the level of service requested by Shipper and financial

analysis criteria and ratios which are generally acceptable in the natural gas

industry. If WTG Hugoton determines that Shipper does not have an acceptable

rating as set forth above, Shipper may, at its own expense, obtain a private

rating from Standard & Poor's, Moody's, Fitch, Dominion or CBRS, or, as an

alternative, request that an independent certified public accountant, mutually

acceptable to Shipper and WTG Hugoton, prepare an equivalent evaluation based

on the financial analysis criteria and ratios which are generally acceptable

in the natural gas industry. 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 WTG Hugoton that the billing will be paid promptly as a cost

of administration under the Federal Court's jurisdiction. WTG Hugoton's

creditworthiness provisions shall not supersede applicable bankruptcy laws.

WTG Hugoton will provide Shipper written notice of the reasons it has been

deemed non-creditworthy.

 

39.3 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:

 

(a) any Firm Service Agreement:

 

(i) a written guarantee in a form satisfactory to WTG Hugoton from

a third party which is creditworthy as determined above;

 

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

exceed a rolling 3 months of reservation charges under the

contract plus an amount equal to the highest monthly imbalance

value owed by shipper during the previous 12 months;