Caledonia Gas And Storage

Original Volume No. 1

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Effective Date: 12/05/2007, Docket: RP08- 57-000, Status: Effective

First Revised Sheet No. 68 First Revised Sheet No. 68 : Effective

Superseding: Superseding Original Sheet No. 68

the Term of the transaction plus 120 days is greater than one (1) year,

Customer shall ensure that its obligation to Caledonia is secured

continuously, and accordingly shall provide Caledonia with a replacement

Letter of Credit no later than 120 days prior to the expiration of the

then-effective Letter of Credit.  Caledonia will return the expiring Letter of

Credit to Customer within five (5) days of the date of the Replacement Letter

of Credit becomes effective;

 

(2) For Customers other than those described in the first sentence of the

previous paragraph, each Letter of Credit shall be in effect for the lesser of

three (3) months or for the Term of the transaction. If the Term of the

transaction is greater than three (3) months, Customer shall ensure that its

obligation to Caledonia is secured continuously, and accordingly shall provide

Caledonia with a replacement Letter of Credit no later than 120 days prior to

the expiration of the then-effective Letter of Credit. Caledonia will return

the expiring Letter of Credit to Customer within five (5) days of the date of

the Replacement Letter of Credit becomes effective;

 

(3) each Letter of Credit shall be in form and substance satisfactory to

Caledonia, and shall provide for partial drawdowns and, without limiting the

generality of the foregoing, shall be (i) issued by a financial institution

acceptable to Caledonia that is rated at least BBB - by Standards and Poor’s

Corporation and Baa3 by Moody’s Investor Services, Inc.; and (ii) in the case

Rate Schedules AILS and ILS, the amount of such Letter of Credit shall not

exceed the Unsecured Collateral Limit for such financial institution as

determined using the applicable limit associated with the financial

institution’s Credit Rating as set forth in Section 24.5 above; and

 

(4) in addition to all other remedies available to Caledonia at law or in

equity, if Customer fails to provide a replacement Letter of Credit in

accordance with this Section 24.12(a), Caledonia may draw upon the expiring

Letter of Credit to the full amount thereof and apply the funds so drawn in

payment in whole or in part of the obligations of Customer under each or any

of Customer’s Service Agreements.