U-T Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 11/01/1993, Docket: RS92- 88-006, Status: Effective

Original Sheet No. 70 Original Sheet No. 70 : Superseded

GENERAL TERMS AND CONDITIONS

(Continued)

18.7 Effecting Service for the Replacement Downstream Shipper.

(a) An assignment of capacity under this Section 18 shall become effective on the later

of: (1) the effective date specified in the Assignment proposal; or (2) the date

that is one business day after U-TOS notifies the Assigning Shipper and the

Replacement Downstream Shipper that the assignment has been accepted, pursuant to

subsection 18.5(d) of this Section 18. U-TOS will not commence transportation

service under an effective assignment of capacity before the date that is at least

one business day after U-TOS receives from the Replacement Downstream Shipper or its

Nominating Agent a completed copy of the Nomination Request Form set forth on Sheet

No. 135 of this tariff.

(b) After U-TOS has made a determination that an Assignment Proposal will be accepted,

U-TOS shall execute the Transportation Agreement tendered by the Replacement

Downstream Shipper. U-TOS shall send copies of the fully-executed Transportation

Agreement to the Replacement Downstream Shipper and the Assigning Shipper.

18.8 Rights and Obligations of the Assigning Shipper and

the Replacement Downstream Shipper.

(a) General Commitment of Replacement Downstream Shipper. By acquiring assigned

capacity, a Replacement Downstream Shipper agrees that it will comply with all of the

provisions of this tariff, the terms and conditions of the executed Transportation

Agreement, and the applicable orders, rules, and regulations of the Federal Energy

Regulatory Commission.

(b) Continuing Responsibility of the Assigning Shipper. Unless the Assigning Shipper

requests and is granted a release from its obligations under its Transportation

Agreement with U-TOS, the Assigning Shipper shall be subject to the continuing

liability and responsibility for all charges associated with the assigned capacity,

as stated in subsection 18.8(e) of this Section 18. In assigning firm capacity to a

Replacement Downstream Shipper, the Assigning Shipper recognizes and agrees that such

assignment shall reduce the Assigning Shipper's firm capacity rights under its

underlying Transportation Agreement with U-TOS, beginning on the effective date of

the assignment.

(c) Release By Replacement Downstream Shipper. A release of assigned capacity by a

Replacement Downstream Shipper under the capacity release provisions of Section 17 of

this tariff shall not relieve the Assigning Shipper, or any Replacement Shipper in

the sequence of assignment and releases between the Assigning Shipper and the

Replacement Shipper holding the capacity, of their obligations under this tariff or

their respective Transportation Agreements with U-TOS.

(d) Billing.

(i) U-TOS shall bill a Replacement Downstream Shipper for all applicable rates and

charges under the Transportation Agreement between U-TOS and the Replacement

Downstream Shipper, and the Replacement Downstream Shipper shall pay the

billed amounts directly to U-TOS.

(ii) Payments received by U-TOS from a Replacement Downstream Shipper shall be

applied to amounts owed in the following order: (1) any penalty that is due;

(2) late charges: (3) interruptible overrun service charges; (4) commodity-

based charges; and (5) reservation charges.

(iii) If a Replacement Downstream Shipper fails to pay U-TOS all of the charges due

under its Transportation Agreement with U-TOS, then U-TOS shall notify the

Assigning Shipper of the amount due, including any late charges, and the

Assigning Shipper shall pay such amount to U-TOS. If U-TOS subsequently

receives any payment of the amount billed from the delinquent Replacement

Downstream Shipper, the amount of such payment shall be credited to the

Assigning Shipper.