Caledonia Gas And Storage

Original Volume No. 1

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Effective Date: 05/01/2007, Docket: CP05- 15-003, Status: Effective

Original Sheet No. 56 Original Sheet No. 56 : Effective

16. DEFAULT, SUSPENSION AND TERMINATION

(a) Termination for Default. If (i) either Party shall fail in any material

respect to comply with, observe, perform or shall default in any material

respect upon any obligation under the Agreement, except due to causes excused

by Force Majeure or attributable to the other’s wrongful act or failure to act

(Event of Default), and (ii) after written notice thereof from the Party

claiming a right to terminate the Agreement, such failure shall continue for a

period of thirty (30) Days, then the Party claiming the right to terminate may,

by notice in writing, terminate the Agreement as of the date of the notice of

termination; provided, however, that if such failure cannot be reasonably cured

within such thirty (30) Days, the party claimed to be in default shall be

entitled to such further time as shall reasonably be required to effect such

cure, provided that such Party commences within such thirty (30) Days

substantial efforts to effect such cure and at all times thereafter proceeds

diligently to complete such cure, but in no event, shall the cure period exceed

sixty (60) Days. If such cure is satisfactorily completed within such cure

period, the non-defaulting party will not have the right to terminate the

Agreement nor will the non-defaulting party have available to it the remedy set

forth in Section 16(b).

(b) Suspension for Default. Upon occurrence of an Event of Default, the

non-defaulting Party shall have the right to suspend performance until such

default has been remedied; provided, however, that an Event of Default does not

include nonpayment of amounts owed that are disputed in good faith. A Customer

shall not be obligated to pay any reservation or demand charges for suspended

service attributable to the period when that service is suspended.

(c) Rights Following Termination. In the event the Service Agreement(s) is

(are) terminated, such termination shall be without prejudice, subject to such

rights of offset as may exist, to any rights or obligations of the Parties

accruing prior to such termination, including, but not limited to, (i)

Customer’s right to receive Gas that it has stored but has not received prior

to the time of termination (unless Customer fails to remove such Gas from the

Facility in the manner prescribed under the Service Agreement), (ii) Customer’s

right to refunds, if any, plus interest, of portions of the rate paid prior to

such termination or release, or (iii) Caledonia’s right to collect any amounts

then due it for service provided to Customer prior to the time of such

termination. Upon termination, Customer shall cause all Gas in its Gas Storage

Balance Account to be removed from the Facility in the manner specified in the

Rate Schedule.

(d) Other Rights Preserved. The availability or exercise of the right to

terminate a Service Agreement pursuant to this section shall not serve to

diminish or effect the right of the Parties to seek damages or specific

performance, for breach of the Service Agreement, as provided in such

agreement.

(e) Waiver of Default. No waiver by either Party of any one or more defaults

by the other in the performance of any provisions of the Service Agreement

shall operate or be construed as a waiver of any future default or defaults,

whether of a like or different character.