Exhibit 10.A


     

    EXHIBIT
      10.A

     

    [EXECUTION
      COPY]

    


    


    


    
      
        

      



    


    


    


    


    


    


    FIRST
      TIER

    RECEIVABLES
      SALE
      AGREEMENT

    


    


    dated
      as of
      November 3, 2006

    


    


    between

    


    


    COLORADO
      INTERSTATE
      GAS COMPANY,

    as
      Originator

    


    


    and

    


    


    CIG
      FINANCE
      COMPANY, L.L.C.,

    as
      Buyer

    


    


    


    


    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



    
 

    Table
      of
      Contents
       

      
      


      
        	 	 	
                Page

              
	 	 	 
	
                ARTICLE
                  I

              	
                AMOUNTS
                  AND
                  TERMS 

              	
                 1

              
	 	
                Section
                  1.1.
                  

              	
                Purchase
                  of
                  Receivables

              	
                 1

              
	 	
                Section
                  1.2.

              	
                Payment
                  for
                  the Purchases

              	
                 2

              
	 	
                Section
                  1.3.
                  

              	
                Purchase
                  Price Credits and other Adjustments

              	
                 4

              
	 	
                Section
                  1.4.
                  

              	
                Payments
                  and
                  Computations, Etc.

              	
                 5

              
	 	
                Section
                  1.5.
                  

              	
                Transfer
                  of
                  Records

              	
                 5

              
	 	
                Section
                  1.6.
                  

              	
                Rights
                  under
                  Lock-Boxes and Blocked Accounts 

              	
                 6

              
	 	
                Section
                  1.7.
                  

              	
                Characterization

              	
                 6

              
	
                 

              	 	 
	
                ARTICLE
                  II

              	
                REPRESENTATIONS
                  AND WARRANTIES 

              	
                 6

              
	 	
                Section
                  2.1.
                  

              	
                Representations
                  and Warranties of Originator

              	
                 6

              
	
                 

              	 	
                 

              
	
                ARTICLE
                  III

              	
                CONDITIONS
                  OF
                  PURCHASE 

              	
                 11

              
	 	
                Section
                  3.1.
                  

              	
                Condition
                  Precedent to Purchases

              	
                 11

              
	 	Section
                3.2. 	Conditions
                Precedent ro Subsequent Purchases	
                 11

              
	
                 

              	 	
                 

              
	
                ARTICLE
                  IV

              	
                COVENANTS 

              	
                 11

              
	 	
                Section
                  4.1.
                  

              	
                Affirmative
                  Covenants of Originator

              	
                 11

              
	 	
                Section
                  4.2.
                  

              	
                Negative
                  Covenants of Originator

              	
                 17

              
	
                 

              	 	
                 

              
	
                ARTICLE
                  V

              	
                TERMINATION
                  EVENTS 

              	
                 19

              
	 	
                Section
                  5.1.
                  

              	
                Termination
                  Events

              	
                 19

              
	 	
                Section
                  5.2.
                  

              	
                Remedies

              	
                 21

              
	
                 

              	 	
                 

              
	
                ARTICLE
                  VI

              	
                INDEMNIFICATION 

              	
                 21

              
	 	
                Section
                  6.1.
                  

              	
                Indemnities
                  by Originator

              	
                 21

              
	 	
                Section
                  6.2.
                  

              	
                Other
                  Costs
                  and Expenses 

              	
                 23

              
	
                 

              	 	
                 

              
	
                ARTICLE
                  VII

              	
                MISCELLANEOUS 

              	
                 23

              
	 	
                Section
                  7.1.
                  

              	
                Waivers
                  and
                  Amendments

              	
                 23

              
	 	
                Section
                  7.2.
                  

              	
                Notices 

              	
                 24

              
	 	
                Section
                  7.3.
                  

              	
                Protection
                  of
                  Ownership Interests of Buyer 

              	
                 24

              
	 	
                Section
                  7.4.
                  

              	
                Confidentiality 

              	
                 24

              
	 	
                Section
                  7.5.
                  

              	
                Bankruptcy
                  Petition 

              	
                 26

              
	 	
                Section
                  7.6.
                  

              	
                CHOICE
                  OF
                  LAW 

              	
                 26

              
	 	
                Section
                  7.7.
                  

              	
                CONSENT
                  TO
                  JURISDICTION 

              	
                 26

              
	 	
                Section
                  7.8.
                  

              	
                WAIVER
                  OF
                  JURY TRIAL 

              	
                 27

              
	 	
                Section
                  7.9.
                  

              	
                Integration;
                  Binding Effect; Survival of Terms 

              	
                 27

              
	 	
                Section
                  7.10.
                  

              	
                Counterparts;
                  Severability; Section References 

              	
                 27

              


      




     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    COLORADO
      INTERSTATE
      GAS COMPANY

    


    FIRST
      TIER

    RECEIVABLES
      SALE
      AGREEMENT

    


    


    THIS
      FIRST TIER
      RECEIVABLES SALE AGREEMENT, dated as of November 3, 2006, is by and between
      COLORADO INTERSTATE GAS COMPANY, a Delaware corporation (“Originator”),
      and CIG FINANCE
      COMPANY, L.L.C., a Delaware limited liability company (“Buyer”).
      Unless defined
      elsewhere herein, capitalized terms used in this Agreement shall have the
      meanings assigned to such terms in, or as otherwise provided in, Exhibit I.

     

    PRELIMINARY
      STATEMENTS

    


    Originator
      now
      owns, and from time to time hereafter will own, Receivables. Originator wishes
      to sell and assign to Buyer, and Buyer wishes to purchase from Originator,
      all
      of Originator’s right, title and interest in and to such Receivables, together
      with the Related Security and Collections with respect thereto. Originator
      and
      Buyer intend the transactions contemplated hereby to be true sales of the
      Receivables from Originator to Buyer, providing Buyer with the full benefits
      of
      ownership of the Receivables, and Originator and Buyer do not intend these
      transactions to be, or for any purpose to be characterized as, loans from Buyer
      to Originator. Immediately following the purchase of Receivables from
      Originator, (a) Buyer will sell and assign such Receivables, together with
      the
      Related Security and Collections with respect thereto, to CIG Funding Company,
      L.L.C., a Delaware limited liability company (“Funding
      LLC”)
      pursuant to that
      certain Second Tier Receivables Purchase Agreement dated as of November 3,
      2006
      (as the same may from time to time hereafter be amended, supplemented, restated
      or otherwise modified, the “Second
      Tier
      Sale Agreement”)
      between Buyer
      and Funding LLC, and (b) Funding LLC will (i) issue undivided interests
      (intended to constitute senior beneficial interests) in such Receivables and
      the
      associated Related Security and Collections pursuant to that certain Receivables
      Purchase Agreement dated as of November 3, 2006 (as the same may from time
      to
      time hereafter be amended, supplemented, restated or otherwise modified, the
      “Purchase
      Agreement”)
      among Funding
      LLC, Colorado Interstate Gas Company, as Servicer, the “Investors” and “Managing
      Agents” from time to time party thereto and BNP Paribas, New York Branch, as
      Program Agent (in such capacity, and including any successor agent appointed
      pursuant to the terms of the Purchase Agreement, the “Program
      Agent”),
      and (ii) issue
      an undivided interest (intended to constitute a junior beneficial interest)
      in
      such Receivables and the associated Related Security and Collections to
      Buyer.

     

    ARTICLE
      I

     

    AMOUNTS
      AND
      TERMS

     

    Section
      1.1.  Purchase
      of
      Receivables.

     

    (a)  Upon
      the terms and
      subject to the conditions hereof, Buyer hereby agrees to purchase, and
      Originator hereby agrees to sell, all of Originator’s right, title and interest
      in and to all of the Receivables (each such transaction, a “Purchase”).
      On the date of
      the initial Purchase from Originator, Buyer shall purchase, and Originator
      shall
      sell, transfer and convey, all of Originator’s right, title and interest in and
      to all Receivables then outstanding, together with all Related Security relating
      thereto and all Collections thereof. On each Business Day thereafter until
      the
      Termination Date, Buyer shall purchase, and Originator shall sell, transfer
      and
      convey, all of Originator’s right, title and interest in and to all Receivables
      which were not previously purchased by Buyer hereunder, together in each case
      with all Related Security relating thereto and all Collections thereof. Prior
      to
      making the initial Purchase hereunder, Buyer may request of Originator, and
      Originator shall deliver, such approvals, opinions, information, reports or
      documents as Buyer may reasonably request.

     

    (b)  It
      is the intention
      of the parties hereto that each Purchase of Receivables made hereunder shall
      constitute a “sale of accounts” (as such term is used in Article 9 of the
      UCC), which sales are absolute and irrevocable and shall provide Buyer with
      the
      full benefits of ownership of the Receivables. Except for the Purchase Price
      Credits, Repurchase Prices and Special Adjustment Credits owed pursuant to
      Section 1.3,
      each sale of
      Receivables hereunder is made without recourse to Originator; provided
      that (i)
      Originator shall be liable to Buyer for all representations, warranties and
      covenants made by Originator pursuant to the terms of the Transaction Documents
      to which Originator is a party, and (ii) such sale does not constitute and
      is
      not intended to result in an assumption by Buyer or any assignee thereof of
      any
      obligation of Originator or any other Person arising in connection with the
      Receivables, the related Contracts, the Related Security or any other
      obligations of Originator. In view of the intention of the parties hereto that
      the Purchases of Receivables made hereunder shall constitute sales of such
      Receivables rather than loans secured thereby, Originator agrees, on or prior
      to
      the Initial Cutoff Date and in accordance with Section 4.1(f)(ii),
      to mark its
      master data processing records relating to the Receivables with a legend
      acceptable to Buyer and to the Program Agent (as Buyer’s assignee), evidencing
      that Buyer has purchased such Receivables as provided in this Agreement and
      to
      note in its financial statements that the Receivables have been sold to Buyer.
      Upon the request of Buyer or the Program Agent (as Buyer’s assignee), Originator
      will execute and file such financing or continuation statements, or amendments
      thereto or assignments thereof, and such other instruments or notices, as may
      be
      necessary or appropriate to perfect and maintain the perfection of Buyer’s
      ownership interest in the Receivables and the Related Security and Collections
      with respect thereto, or as Buyer or the Program Agent (as Buyer’s assignee) may
      reasonably request.

     

    Section
      1.2.  Payment
      for the
      Purchases.

     

    (a)  The
      Purchase Price
      for each Purchase of Receivables in existence on the close of business on the
      Initial Cutoff Date shall be payable in full by Buyer to Originator on the
      Initial Sale Date, and shall be paid to Originator in the following
      manner:

     

    (i)  by
      delivery of
      immediately available funds, to the extent of funds made available to Buyer
      in
      connection with its subsequent sale of such Receivables to Funding LLC under
      the
      Second Tier Sale Agreement after the payment of its operating costs and any
      amounts payable under the Second Tier Sale Agreement; and 

     

    (ii)  the
      balance, by
      accepting a contribution to Buyer’s capital of Receivables having an aggregate
      Purchase Price equal to the unpaid balance of the aggregate Purchase Prices
      for
      all Receivables in existence on the close of business on the Initial Cutoff
      Date.

     

    The
      Purchase Price
      for each Receivable coming into existence after the Initial Cutoff Date shall
      be
      due and owing in full by Buyer to Originator or its designee on the date each
      such Receivable came into existence (except that Buyer may, with respect to
      any
      such Purchase Price, offset against such Purchase Price any amounts owed by
      Originator to Buyer hereunder and which have become due but remain unpaid)
      and
      shall be paid to Originator in the manner provided in the following
      paragraphs (b) and (c).

     

    (b)  With
      respect to any
      Receivables coming into existence after the Initial Cutoff Date, Buyer shall
      pay
      the Purchase Price therefor in the following manner: 

     

    (i)  first,
      by delivery of
      immediately available funds on the Business Day on which purchase occurs to
      the
      extent of funds available to Buyer from its subsequent sale of the Receivables
      to Funding LLC under the Second Tier Sale Agreement or other cash on
      hand;

     

    (ii)  second,
      on a deferred
      basis in the manner provided in the following paragraph (c);
      and 

     

    (iii)  third,
      to the extent not
      paid pursuant to clause (i) or (ii) above and unless Buyer has declared the
      Termination Date to have occurred pursuant to Section 5.2,
      by accepting a
      contribution to its capital of Receivables having a Purchase Price equal to
      the
      remaining unpaid balance of such Purchase Price.

     

    (c)  Although
      the
      Purchase Price for each Receivable purchased by Buyer pursuant to this Agreement
      after the Initial Purchase Date shall be due and payable in full by Buyer to
      Originator on the date such Receivable was so purchased, settlement of the
      cash
      portion of the Purchase Price between Buyer and Originator for purchases
      occurring during any Monthly Period shall be deferred, to the extent Buyer
      does
      not have funds available from its subsequent sale of the Receivables to Funding
      LLC under the Second Tier Sale Agreement or other cash on hand on such Business
      Day and settled, with respect to all Receivables purchased by Buyer during
      such
      Monthly Period, on each subsequent Business Day on or prior to the next
      following Monthly Settlement Date to the extent of funds available to Buyer
      on
      such Business Day from its subsequent sale of the Receivables to Funding LLC
      under the Second Tier Sale Agreement, subject to any related Special Adjustment
      Payments, or other cash on hand. Although settlement of the cash portion of
      the
      Purchase Price for Receivables shall be effected on a deferred basis as provided
      herein, any capital contribution to Buyer pursuant to clause (iii)
      of Section 1.2(b)
      in connection with
      the purchase thereof by Buyer shall be deemed to have occurred and shall be
      effective as of the Business Day on which such purchase occurred.

     

    (d)  From
      and after the
      Termination Date, Originator shall not be obligated to (but may, at Originator’s
      option) sell Receivables to Buyer or contribute Receivables to Buyer’s capital
      pursuant to clause (iii)
      of Section 1.2(b).

     

    Section
      1.3.  Purchase
      Price
      Credits and other Adjustments.

     

    (a)  If
      on any
      day:

     

    (i)  the
      Net Outstanding
      Balance of a Receivable (other than the portion thereof constituting an
      Additional Amount) is:

     

    (A) reduced
      as a result
      of any defective or rejected goods or services, any discount or any adjustment
      (including as a result of billing errors or rate adjustments) or otherwise
      by
      Originator (other than cash Collections on account of the Receivables),
      or

    


    (B) reduced
      or canceled
      as a result of a setoff in respect of any claim by any Person (whether such
      claim arises out of the same or a related transaction or an unrelated
      transaction), or

    


    (ii)  any
      of the
      representations and warranties set forth in Article II
      are no longer true
      with respect to any Receivable (unless such untrue representation or warranty
      affects only any portion thereof constituting an Additional
      Amount),

     

    then,
      in such
      event, (x) unless Originator elects to repurchase such Receivable from Buyer
      pursuant to clause (y) below and Buyer shall have reacquired such Receivable
      from Funding LLC pursuant to Section 1.3(a)
      of the Second Tier
      Sale Agreement, Buyer shall be entitled to a credit (each, a “Purchase
      Price
      Credit”)
      equal to (A) in
      the case of clause (i) above, the amount of such reduction or cancellation,
      or
      (B) in the case of clause (ii) above, the Net Outstanding Balance of such
      Receivable, or (y) if Originator elects to repurchase such Receivable from
      Buyer
      by delivering notice of such election to Buyer and its assigns, and Buyer shall
      have reacquired such Receivable from Funding LLC pursuant to Section 1.3(a)
      of the Second Tier
      Sale Agreement, Originator shall repurchase such Receivable from Buyer, without
      recourse, representation or warranty, for a repurchase price (each, a
“Repurchase
      Price”)
      equal to the Net
      Outstanding Balance of such Receivable (without giving effect to any related
      adjustment to such Net Outstanding Balance described in clause (i) above).
      The
      aggregate Purchase Price Credits and Repurchase Prices payable with respect
      to
      any day shall be due and payable within two Business Days after such day and
      shall first
      be applied as a
      credit against the Purchase Price for the Receivables to be purchased by Buyer
      on the date of the payment thereof up to the amount of the cash portion thereof
      otherwise available to be paid to Originator in cash pursuant to clause (i)
      or (ii)
      of Section 1.2(b),
      and second,
      to the extent of
      the balance thereof, paid in cash by Originator to Buyer on such
      date.

     

    (b)  On
      each day on
      which there is a Special Adjustment Amount payable under the Purchase Agreement,
      Buyer shall be entitled to a purchase price adjustment credit (each, a
“Special
      Adjustment Credit”)
      equal to the
      amount of such Special Adjustment Amount, which shall be due and payable on
      such
      day and shall (i) first be applied as a credit against the Purchase Price for
      the Receivables to be purchased by Buyer on the date of the payment thereof
      up
      to the amount of the cash portion thereof otherwise available to be paid to
      Originator in cash pursuant to clause (i)
      or (ii)
      of Section 1.2(b),
      after giving
      effect to any reductions therein pursuant to Section 1.3(a)(i),
      and (ii) second,
      to the extent of the balance thereof, paid in cash by Originator to Buyer on
      such date.

     

    Section
      1.4.  Payments
      and
      Computations, Etc.
      All amounts to be
      paid or deposited by Buyer to Originator hereunder shall be paid or deposited
      in
      accordance with the terms hereof on the day when due in immediately available
      funds to the account of Originator as is designated from time to time by
      Originator or as otherwise directed by Originator. All amounts to be paid by
      Originator to Buyer hereunder shall be paid in accordance with the terms hereof
      on the day when due in immediately available funds for the account of Buyer
      and
      its assigns to the Collection Account maintained under the Purchase Agreement
      or
      as otherwise directed by Buyer with the consent of the Program Agent. In the
      event that any payment owed by any Person hereunder becomes due on a day that
      is
      not a Business Day, then such payment shall be made on the next succeeding
      Business Day. If any Person fails to pay any amount hereunder when due, such
      Person agrees to pay, on demand, the Default Fee in respect thereof until paid
      in full; provided
      that such Default
      Fee shall not at any time exceed the maximum rate permitted by applicable law.
      All computations of interest payable hereunder shall be made on the basis of
      a
      year of 360 days for the actual number of days (including the first but
      excluding the last day) elapsed. 

     

    Section
      1.5.  Transfer
      of
      Records. 

     

    (a)  In
      connection with
      the Purchase of Receivables hereunder, Originator hereby sells, transfers,
      assigns and otherwise conveys to Buyer all of Originator’s right and title to
      and interest in the Records (to the extent assignable) relating to all
      Receivables sold hereunder, without the need for any further documentation
      in
      connection with the Purchase. In connection with such transfer, Originator
      hereby grants to each of Buyer, Funding LLC, the Program Agent and the Servicer
      an irrevocable, nonexclusive license to use, without royalty or payment of
      any
      kind, all software used by Originator to account for the Receivables, to the
      extent necessary to administer the Receivables, whether such software is owned
      by Originator or is owned by others and used by Originator under license
      agreements with respect thereto; provided
      that should the
      consent of any licensor of Originator to such grant of the license described
      herein be required, Originator hereby agrees that upon the request of Buyer,
      Funding LLC, the Program Agent or the Servicer, such license is subject to
      obtaining such consent and at the reasonable request of Buyer or its assignees
      (including the Program Agent) Originator will request the consent of such
      third-party licensor and use commercially reasonable efforts to cooperate with
      Buyer or its assignees (including the Program Agent) in obtaining such consent
      (it being understood that Originator shall not be responsible for payment of
      any
      fee payable in connection with obtaining such consent). The license granted
      hereby shall be irrevocable, and shall terminate on the date this Agreement,
      the
      Second Tier Sale Agreement and the Purchase Agreement terminate in accordance
      with their terms.

     

    (b)  Originator
      (i)
      shall take such action reasonably requested by Buyer or the Program Agent (as
      Buyer’s assignee), from time to time hereafter, that may be necessary or
      appropriate to ensure that Buyer and its assigns under the Purchase Agreement
      have an enforceable ownership interest in the Records (to the extent assignable)
      relating to the Receivables purchased from Originator hereunder, and (ii) shall
      use its reasonable efforts to ensure that the Program Agent and the Servicer
      each has an enforceable right (whether by license or sublicense or otherwise)
      to
      use all of the computer software used to account for the Receivables and/or
      to
      recreate such Records.

     

    Section
      1.6.  Rights
      under
      Lock-Boxes and Blocked Accounts.
      In consideration
      of Buyer’s purchase of Receivables hereunder, Originator hereby sells and
      assigns to Buyer (and its assigns), all of Originator’s rights under, in and to
      (but none of its obligations under) each Lock-Box and Blocked Account and all
      agreements relating thereto.

     

    Section
      1.7.  Characterization.
      If,
      notwithstanding the intention of the parties expressed in Section 1.1(b),
      any sale or
      contribution by Originator to Buyer of Receivables hereunder shall be
      characterized as a secured loan and not a sale or such sale shall for any reason
      be ineffective or unenforceable, then this Agreement shall be deemed to
      constitute a security agreement under the UCC and other applicable law. For
      this
      purpose and without being in derogation of the parties’ intention that each sale
      of Receivables hereunder shall constitute a true sale thereof, Originator hereby
      grants to Buyer a duly perfected security interest in all of Originator’s right,
      title and interest in, to and under all of the Receivables purchased or intended
      to be purchased by Buyer hereunder now existing and hereafter arising, all
      Collections, Related Security and (to the extent assignable) Records with
      respect thereto, each Lock-Box and Blocked Account and all agreements related
      thereto and all proceeds of the foregoing, which security interest shall be
      prior to all other Adverse Claims thereto. After the occurrence of a Termination
      Event, Buyer and its assigns shall have, in addition to the rights and remedies
      which they may have under this Agreement, all other rights and remedies provided
      to a secured creditor after default under the UCC and other applicable law,
      which rights and remedies shall be cumulative.

     

    ARTICLE
      II 

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      2.1.  Representations
      and Warranties of Originator.
      Originator hereby
      represents and warrants to Buyer that:

     

    (a)  Corporate
      Existence and Power.
      It is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of its state of organization, and is duly qualified to do business and is in
      good standing as a foreign entity, and has and holds all corporate power, and
      all governmental licenses, authorizations, consents and approvals required
      to
      carry on its business in each jurisdiction in which its business is conducted
      except where the failure to so qualify or so hold could not reasonably be
      expected to have a Material Adverse Effect.

     

    (b)  Power
      and
      Authority; Due Authorization; Execution and Delivery.
      The execution and
      delivery by it of this Agreement and each other Transaction Document to which
      it
      is a party, the performance of its obligations hereunder and thereunder and
      its
      use of the proceeds of the Purchases made hereunder, are within its powers
      and
      authority, corporate or otherwise, and have been duly authorized by all
      necessary action, corporate or otherwise, on its part. This Agreement and each
      other Transaction Document to which it is a party have been duly executed and
      delivered by it.

     

    (c)  No
      Conflict.
      The execution and
      delivery by it of this Agreement and each other Transaction Document to which
      it
      is a party, and the performance of its obligations hereunder and thereunder
      do
      not contravene or violate (i) its certificate of incorporation or bylaws,
      (ii) any law, rule or regulation applicable to it, including the Natural
      Gas Act, as amended, and the rules and regulations of FERC thereunder,
      (iii) any restrictions under any agreement, contract or instrument to which
      it is a party or by which it or any of its property is bound, or (iv) any
      order, writ, judgment, award, injunction or decree binding on or affecting
      it or
      its property, and do not result in the creation or imposition of any Adverse
      Claim on assets of it or its Subsidiaries (except as created hereunder) except,
      in any case, where such contravention or violation could not reasonably be
      expected to have a Material Adverse Effect; and no transaction contemplated
      hereby requires compliance with any bulk sales act or similar law. 

     

    (d)  Governmental
      Authorization.
      No authorization
      or approval or other action by, and no notice to or filing with (except as
      have
      been given, made or obtained), any governmental authority or regulatory body
      (including FERC) is required for the due execution and delivery by it of this
      Agreement and each other Transaction Document to which it is a party and the
      performance of its obligations hereunder and thereunder, except for the filing
      of the financing statements required hereunder, which filings have been duly
      made. Buyer does not, and will not during the term of this Agreement, engage
      in
      the transportation of natural gas in interstate commerce, or the sale in
      interstate commerce of such gas for resale. No authorization or approval or
      other action by, and no notice to or filing with FERC is required for the due
      execution and delivery by Buyer of this Agreement and each other Transaction
      Document to which it is a party and the performance of its obligations hereunder
      and thereunder.

     

    (e)  Actions,
      Suits.
      There is no
      litigation, action, suit or other legal or governmental proceeding pending,
      or
      to the best of its knowledge, threatened, against or affecting it, or any of
      its
      properties, in equity, or before or by any court, arbitrator or governmental
      authority relating to the transactions under this Agreement which, in any such
      case, could reasonably be expected to have a Material Adverse Effect, except
      for
      the proceedings described in Originator’s annual report on Form 10-K for the
      year ended December 31, 2005 (“2005
      Form
      10-K”)
      or its quarterly
      report on Form 10-Q for the fiscal quarter ended June 30, 2006 (the
“2nd
      Quarter 2006
      10-Q”)
      as filed with
      the Securities and Exchange Commission.

     

    (f)  Binding
      Effect.
      This Agreement
      and each other Transaction Document to which it is a party constitute its legal,
      valid and binding obligations, enforceable against it in accordance with their
      respective terms, except as such enforcement may be limited by applicable
      bankruptcy, insolvency, reorganization or other similar laws relating to or
      limiting creditors’ rights generally and by general principles of equity
      (regardless of whether enforcement is sought in a proceeding in equity or at
      law).

     

    (g)  Accuracy
      of
      Information.
      All written
      information heretofore furnished by it or any of its Affiliates to Buyer (or
      its
      assigns) (i) pursuant to any requirement of this Agreement or any of the other
      Transaction Documents or (ii) listed or described on Schedule B hereto, is
      or, when furnished will be, true and accurate in all material respects on the
      date such information is stated or certified and does not and will not, when
      furnished, contain any material misstatement of fact or omit to state a material
      fact or any fact necessary to make the statements contained therein, when taken
      as a whole, not misleading (it being recognized that any projections or
      forecasts provided to Buyer or its assigns are based on estimates and
      assumptions believed in good faith by Originator on the date hereof or (if
      later) the date of delivery to be reasonable as of their date, and that actual
      results during the periods covered by such projections or forecasts may differ
      from projected or forecasted results). 

     

    (h)  Use
      of
      Proceeds.
      No proceeds of
      the Purchases hereunder will be used (i) for a purpose that violates, or
      would be inconsistent with, Regulation T, U or X promulgated by the Board of
      Governors of the Federal Reserve System from time to time or (ii) to
      acquire any security in any transaction which is subject to Section 12, 13
      or 14 of the Securities Exchange Act of 1934, as amended.

     

    (i)  Good
      Title.
      As of the time
      each Receivable created by it came into existence, it shall be the legal and
      beneficial owner of each such Receivable and Related Security and Collections
      with respect thereto, free and clear of any Adverse Claim, except as created
      by
      the Transaction Documents. There have been duly filed all financing statements
      or other similar instruments or documents, if any, necessary under the UCC
      of
      all appropriate jurisdictions to perfect its ownership interest in each
      Receivable, its Collections and the Related Security.

     

    (j)  Perfection.
      This Agreement,
      together with the filing of the financing statements contemplated hereby, is
      effective to transfer to Buyer (and Buyer shall acquire from it) legal and
      equitable title to, with the right to sell and encumber each Receivable existing
      or hereafter arising, together with the Related Security and Collections with
      respect thereto, free and clear of any Adverse Claim, except as created by
      the
      Transaction Documents. There have been duly filed all financing statements
      or
      other similar instruments or documents necessary under the UCC (or any
      comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership
      interest in the Receivables, the Related Security and the
      Collections.

     

    (k)  Places
      of
      Business etc.
      Its principal
      places of business, chief executive office, jurisdiction of incorporation or
      formation and the principal offices where it keeps its Records are located
      at
      the address(es) and in the jurisdictions listed on Exhibit II
      or such other
      locations of which Buyer has been notified in accordance with Section 4.2(a)
      in jurisdictions
      where all action required by Section 4.2(a)
      has been taken and
      completed. Its Federal Employer Identification Number and the organizational
      identification number from its jurisdiction of incorporation are correctly
      set
      forth on Exhibit II.
      In the past five
      years, it has not used any corporate names, trade names or assumed names other
      than as listed on Exhibit II.

     

    (l)  Collections.
      The names and
      addresses of all Collection Banks in existence on the Closing Date, together
      with the account numbers of the Blocked Accounts at each Collection Bank and
      the
      post office box number of each Lock-Box, are listed on Exhibit III.

     

    (m)  Financial
      Statements; Material Adverse Effect.
      (i) The
      consolidated balance sheet of Originator and its consolidated subsidiaries
      as at
      December 31, 2005, and the related consolidated statements of income, changes
      in
      shareholders equity and cash flows for the fiscal year then ended, reported
      on
      by PricewaterhouseCoopers LLP, independent public accountants, copies of which
      have been furnished to Buyer prior to the date hereof, present fairly, in all
      material respects, the consolidated financial condition of Originator and its
      consolidated subsidiaries as at such date and the consolidated results of the
      operations of Originator and its consolidated subsidiaries for the period ended
      on such date, all in accordance with GAAP. (ii) The consolidated balance
      sheet of Originator and its consolidated subsidiaries as at June 30, 2006
      and the related consolidated statements of income, changes in shareholders
      equity and cash flows for the fiscal periods then ended, copies of which have
      been furnished to Buyer on or prior to the date hereof, present fairly, in
      all
      material respects, the consolidated financial condition of Originator and its
      consolidated subsidiaries as at such date and the consolidated results of the
      operations of Originator and its consolidated subsidiaries for the periods
      ended
      on such date, all in accordance with GAAP, subject in the case of such unaudited
      statements to normal year-end audit adjustments and reduced footnote disclosure.
      (iii) Since June 30, 2006 no event has occurred that would reasonably
      be expected to have a Material Adverse Effect.

     

    (n)  Ownership
      of
      Buyer.
      Originator owns,
      directly or indirectly, 100% of the issued and outstanding equity interests
      of
      Buyer, free and clear of any Adverse Claim. Such equity interests are validly
      issued, fully paid and nonassessable, and there are no outstanding options,
      warrants or other rights to acquire equity interests or securities of
      Buyer.

     

    (o)  Not
      an
      Investment Company.
      It is not an
“investment company” within the meaning of the Investment Company Act of 1940,
      as amended, or any successor statute.

     

    (p)  Compliance
      with
      Law.
      It and its
      Subsidiaries have complied in all respects with all applicable laws, rules,
      regulations, orders, writs, judgments, injunctions, decrees or awards to which
      it or they may be subject, except where the failure to so comply could not
      reasonably be expected to have a Material Adverse Effect. Each Receivable,
      together with the Contract related thereto, does not contravene any laws, rules
      or regulations applicable thereto (including the Natural Gas Act, the rules
      and
      regulations of FERC thereunder and laws, rules and regulations relating to
      truth
      in lending, fair credit billing, fair credit reporting, equal credit
      opportunity, fair debt collection practices and privacy), and no part of such
      Contract is in violation of any such law, rule or regulation, in each case
      except where such contravention or violation could not reasonably be expected
      to
      have a material adverse effect on the collectibility of such Receivable (other
      than Additional Amounts) or a Material Adverse Effect.

     

    (q)  Taxes.
      It and its
      Subsidiaries have duly filed all tax returns required to be filed by it, and
      has
      duly paid and discharged all taxes, assessments and governmental charges upon
      it
      or against its properties now due and payable, the failure to file or pay which,
      as applicable, would have a Material Adverse Effect, unless and to the extent
      only that the same are being contested in good faith and by appropriate
      proceedings by it or such Subsidiary.

     

    (r)  ERISA.
      No Plan
      Termination Event has occurred or is reasonably expected to occur with respect
      to any Plan which, with the giving of notice or lapse of time, or both, would
      constitute a Termination Event. Each Plan has complied with the applicable
      provisions of ERISA and the Internal Revenue Code of 1986 where the failure
      to
      so comply would reasonably be expected to result in a Material Adverse Effect.
      Neither Originator nor any ERISA Affiliate has incurred, or is reasonably
      expected to incur, any withdrawal liability (within the meaning given to such
      term under Part 1 of Subtitle E of Title IV of ERISA) to any Multiemployer
      Plan
      which, when aggregated with all other amounts required to be paid to
      Multiemployer Plans in connection with such withdrawal liability (as of the
      date
      of determination), would have a Material Adverse Effect. Neither Originator
      nor
      any ERISA Affiliate has received any notification that any Multiemployer Plan
      is
      in reorganization, insolvent or has been terminated, within the meaning of
      Title
      IV of ERISA, and no Multiemployer Plan is reasonably expected to be in
      reorganization, to be insolvent or to be terminated within the meaning of Title
      IV of ERISA the effect of which reorganization, insolvency or termination would
      be the occurrence of a Termination Event.

     

    (s)  Environmental
      Matters.
      Except for
      matters described in the 2005 Form 10-K or the 2nd
      Quarter 2006 10-Q
      and such other matters that, in the aggregate, could not reasonably be expected
      to result in a Material Adverse Effect, neither it nor any of its Subsidiaries
      has failed to comply with any Environmental Law or to obtain, maintain or comply
      with any permit, license or other approval required under any Environmental
      Law,
      is subject to any Environmental Liability, has received notice of any claim
      with
      respect to any Environmental Liability or knows of any basis for any
      Environmental Liability.

     

    (t)  Insurance.
      It has adequate
      insurance for itself and its Subsidiaries and its and their properties from
      financially sound and reputable insurance companies that are not affiliates
      of
      Originator in such amounts and covering such risks (with such types and amounts
      of retained risk) as available on commercially reasonable economic terms and
      are
      customarily carried by companies engaged in similar businesses and owning
      similar properties in localities where Originator and its Subsidiaries
      operate.

     

    (u)  Compliance
      with
      Tariff and Credit and Collection Policy.
      It has complied
      in all material respects with the applicable Tariff and the applicable Credit
      and Collection Policy with regard to each Receivable (excluding any Additional
      Amounts, as to which no representation is made) originated by it and the related
      Contract, and has not made any change to such Credit and Collection Policy
      other
      than as permitted under Section 4.2(c)
      and in compliance
      with the notification requirements in Section 4.1(b)(iii).

     

    (v)  Payments
      to
      Originator.
      With respect to
      each of the Receivables originated by it and transferred to Buyer hereunder,
      the
      Purchase Price received by it constitutes reasonably equivalent value in
      consideration therefor and such transfer was not made for or on account of
      an
      antecedent debt. No transfer by it of any Receivable hereunder is or may be
      voidable under any section of the Federal Bankruptcy Code or other statutory
      provisions or common law or equitable action by any Person.

     

    (w)  Enforceability
      of Contracts.
      Each Contract
      with respect to each Receivable originated by it is effective to create, and
      has
      created, a legal, valid and binding obligation of the related Obligor to pay
      the
      Outstanding Balance of the Receivable created thereunder and any accrued
      interest thereon, enforceable against such Obligor in accordance with its terms,
      except as such enforcement may be limited by applicable bankruptcy, insolvency,
      reorganization or other similar laws relating to or limiting creditors’ rights
      generally and by general principles of equity (regardless of whether enforcement
      is sought in a proceeding in equity or at law); provided
      that no
      representation is made in this paragraph regarding Additional
      Amounts.

     

    (x)  Eligible
      Receivables.
      Each Receivable
      included in the Net Receivables Pool Balance as an Eligible Receivable on the
      date it came into existence was an Eligible Receivable on such
      date.

     

    (y)  Compliance
      with
      Representations.
      On and as of the
      date of each Purchase and on and as of each subsequent date each Receivable
      created by it came into existence, it hereby represents and warrants that all
      of
      the other representations and warranties set forth in this Article II
      are true and
      correct on and as of each such date (and after giving effect to all Receivables
      in existence on each such date) as though made on and as of each such
      date.

     

    ARTICLE
      III 

     

    CONDITIONS
      OF
      PURCHASE

     

    Section
      3.1.  Conditions
      Precedent to Initial Purchase.
      The initial
      Purchase under this Agreement is subject to the conditions precedent that
      (a) Buyer shall have received on or before the date of such purchase those
      documents listed on Schedule A
      and (b) all
      of the conditions to the initial purchase under the Second Tier Sale Agreement
      and the Purchase Agreement shall have been satisfied or waived in accordance
      with the terms thereof.

     

    Section
      3.2.  Conditions
      Precedent to Subsequent Purchases.
      Buyer’s
      obligation to Purchase Receivables coming into existence after the Initial
      Cutoff Date shall be subject to the further conditions precedent that
      (a) the Amortization Date shall not have occurred; and (b) Buyer (or
      its assigns) shall have received such other approvals, opinions or documents
      as
      it may reasonably request.

     

    ARTICLE
      IV

     

    COVENANTS

     

    Section
      4.1.  Affirmative
      Covenants of Originator.
      Until the date on
      which this Agreement terminates in accordance with its terms, Originator hereby
      covenants, as to itself, as set forth below:

     

    (a)  Financial
      Reporting.
      It will maintain,
      for itself and each of its Subsidiaries, a system of accounting established
      and
      administered in accordance with GAAP, and furnish to Buyer (and its
      assigns):

     

    (i)  Annual
      Reporting.
      Within 120 days
      after the close of each of Originator’s fiscal years (or, if earlier, the date
      on which Originator is required to file its Annual Report on Form 10-K with
      the
      Securities and Exchange Commission with respect to such fiscal year), the
      audited consolidated balance sheet of Originator and its consolidated
      subsidiaries as at the end of such fiscal year and the related audited
      consolidated statements of income and cash flows for such fiscal year, certified
      by Ernst & Young LLP, independent public accountants, or another firm
      of independent public accountants acceptable to Buyer and the Program Agent,
      as
      fairly presenting, in all material respects, the financial condition of
      Originator and its consolidated subsidiaries as at such date and the
      consolidated results of the operations of Originator and its consolidated
      subsidiaries for the fiscal year ended on such date, all in accordance with
      GAAP.

     

    (ii)  Quarterly
      Reporting.
      Within 60 days
      after the close of the first three (3) fiscal quarters of each of Originator’s
      fiscal years (or, if earlier, the date on which Originator is required to file
      its Quarterly Report on Form 10-Q with the Securities and Exchange Commission
      with respect to such quarter), the consolidated balance sheet of Originator
      and
      its consolidated subsidiaries as at the end of such fiscal quarter and the
      related audited consolidated statements of income and cash flows for such fiscal
      year, certified by a Responsible Officer of Originator as fairly presenting,
      in
      all material respects, the financial condition of Originator and its
      consolidated subsidiaries as at such date and the consolidated results of the
      operations of Originator and its consolidated subsidiaries for the period and
      portion of the fiscal year ended on such date, all in accordance with GAAP,
      subject to normal year-end audit adjustments and reduced footnote
      disclosure.

     

    (iii)  Compliance
      Certificate.
      Together with the
      financial statements with respect to Originator required hereunder, a compliance
      certificate in substantially the form of Exhibit IV
      signed by
      Originator’s Responsible Officer and dated the date of such annual financial
      statement or such quarterly financial statement, as the case may
      be.

     

    The
      electronic
      posting of any financial statements, reports or other items required to be
      furnished pursuant to the foregoing clauses (i)
      or (ii)
      of this
Section
      4.1(a)
      or clause
(i)
      of Section 4.1(b)
      at www.elpaso.com
      or another website
      identified by notice to Buyer and the Program Agent and accessible by the public
      shall constitute delivery for all purposes of this Section 4.1.

     

    (b)  Notices.
      It will notify
      Buyer (and its assigns) in writing of or, if applicable, provide Buyer (and
      its
      assigns) copies of the following:

     

    (i)  Certain
      Governmental Filings.
      (A) Promptly
      after the sending or filing thereof, all publicly available reports that
      Originator sends to any of its security holders and copies of all publicly
      available reports and registration statements that Originator files with the
      Securities and Exchange Commission or any national securities exchange other
      than registration statements relating to employee benefit plans and to
      registrations of securities for selling security holders, and (B) within 10
      days
      after sending or filing thereof, FERC Form No. 2: Annual Report of Major Natural
      Gas Companies, sent or filed by Originator with FERC with respect to each of
      its
      fiscal years.

     

    (ii)  Change
      in
      Tariffs.
      Promptly and in
      any event at least thirty (30) days prior to the effectiveness thereof, (A)
      any
      order of FERC which provides for a material change in, or the suspension of,
      the
      rates or services of Originator (including any order which permits rates to
      go
      or continue in effect subject to refund), and (B) in the event of any other
      material change in or material amendment to any Tariff affecting a material
      portion of the Receivables, the applicable amended or changed portion of the
      Tariff and a notice indicating such change or amendment.

     

    (iii)  Change
      in Credit
      and Collection Policy.
      At least thirty
      (30) days prior to the effectiveness of any material change in or material
      amendment to the Credit and Collection Policy, a copy of the Credit and
      Collection Policy then in effect and a notice (A) indicating such change or
      amendment, and (B) if such proposed change or amendment would be reasonably
      likely to materially adversely affect the collectibility of the Receivables
      (other than any portion thereof constituting an Additional Amount) originated
      by
      it or materially decrease the credit quality of any newly created Receivables
      (other than Additional Amounts), requesting Buyer to obtain any consent thereto
      required under the terms of the Second Tier Sale Agreement.

     

    (iv)  Copies
      of
      Notices.
      Promptly upon its
      receipt of any notice, request for consent, financial statements, certification,
      report or other communication under or in connection with any Transaction
      Document from any Person other than Buyer or the Program Agent, copies of the
      same.

     

    (v)  Other
      Information.
      Promptly, from
      time to time, such other information, documents, records or reports relating
      to
      the Receivables or its ability to perform its obligations under this Agreement
      as Buyer (or its assigns) may from time to time reasonably request in order
      to
      protect the interests of Buyer (and its assigns) under or as contemplated by
      this Agreement.

     

    (c)  It
      will notify
      Buyer (and its assigns) in writing of any of the following describing the same
      and, if applicable, the steps being taken with respect thereto:

     

    (i)  Termination
      Events or Potential Termination Events.
      Promptly (and in
      any case within two Business Days) upon a Responsible Officer’s actual knowledge
      of each Termination Event and each Potential Termination Event, by a statement
      of one of its Responsible Officers.

     

    (ii)  Litigation
      and
      Proceedings.
      Promptly, notice
      of all litigation and of all proceedings before any governmental authority
      against or involving Originator or any of its Subsidiaries, except any
      litigation or proceeding that in the reasonable judgment of Originator (taking
      into account the availability of appeals) is not likely to have a Material
      Adverse Effect.

     

    (iii)  Certain
      ERISA
      Events.
      (A) Promptly and
      in any event (x) within 30 days after Originator or any ERISA Affiliate knows
      or
      has reason to know that any Plan Termination Event described in clause (a)
      of the definition of Plan Termination Event with respect to any Plan has
      occurred that could reasonably be expected to have a Material Adverse Effect,
      and (y) within 10 days after Originator or any ERISA Affiliate knows or has
      reason to know that any other Plan Termination Event with respect to any Plan
      has occurred, a statement of a Responsible Officer describing such Termination
      Event and the action, if any, that Originator or such ERISA Affiliate proposes
      to take with respect thereto; (B) promptly and in any event within five Business
      Days after receipt thereof by Originator or any ERISA Affiliate, copies of
      each
      notice received by Originator or any ERISA Affiliate from the PBGC stating
      its
      intention to terminate any Plan or to have a trustee appointed to administer
      any
      Plan which termination could reasonably be expected to have a Material Adverse
      Effect; (C) promptly and in any event within five Business Days after receipt
      thereof by Originator or any ERISA Affiliate from the sponsor of a Multiemployer
      Plan, a copy of each notice received by Originator or any ERISA Affiliate
      concerning (w) the imposition of withdrawal liability (within the meaning given
      to such term under Part 1 of Subtitle E of Title IV of ERISA) by a Multiemployer
      Plan, (x) the determination that a Multiemployer Plan is, or is expected to
      be,
      in reorganization or insolvent within the meaning of Title IV of ERISA, (y)
      the
      termination of a Multiemployer Plan within the meaning of Title IV of ERISA,
      or
      (z) the amount of liability incurred, or expected to be incurred, by Originator
      or any ERISA Affiliate in connection with any event described in clause (A),
      (B), or (C) above, in each case if such event could reasonably be expected
      to
      have a Material Adverse Effect.

     

    (iv)  Material
      Adverse
      Effect.
      The occurrence of
      any event or condition that has, or could reasonably be expected to have, a
      Material Adverse Effect.

     

    (v)  Defaults
      Under
      Other Agreements.
      If any
      Indebtedness of Originator or any of its Subsidiaries in excess of $25,000,000
      shall have become due prior to its stated maturity, or any such Indebtedness
      of
      Originator or any of its Subsidiaries shall be declared to be due and payable
      or
      required to be prepaid, repurchased, redeemed or defeased (other than by a
      regularly scheduled payment or a prepayment upon the sale of assets otherwise
      permitted thereunder), prior to the date of maturity thereof, by reason of
      a
      payment default by Originator or any of its Subsidiaries or a default by
      Originator or any of its Subsidiaries in the performance of any term, provision
      or condition contained in any agreement under which any such Indebtedness was
      created or is governed.

     

    (d)  Compliance
      with
      Laws and Preservation of Corporate Existence.
      It will comply in
      all respects with all applicable laws, rules, regulations, orders, writs,
      judgments, injunctions, decrees or awards to which it may be subject, and will
      obtain and maintain all applicable authorizations or approvals from governmental
      authorities or regulatory bodies (including FERC), except where the failure
      to
      so comply or to obtain or maintain such authorization or approval could not
      reasonably be expected to have a Material Adverse Effect. It will preserve
      and
      maintain its corporate existence, rights, franchises and privileges in the
      jurisdiction of its organization, and qualify and remain qualified in good
      standing as a foreign entity in each jurisdiction where its business is
      conducted, except where the failure to so preserve and maintain or qualify
      could
      not reasonably be expected to have a Material Adverse Effect.

     

    (e)  Audits.
      It will furnish
      to Buyer and the Program Agent (as Buyer’s assignee) and their respective
      representatives at all times, upon reasonable prior notice, reasonable full
      access during regular business hours to all of its offices and Records
      (wheresoever located, including any repository used to store any such Records),
      as appropriate to verify its compliance with this Agreement, and permit Buyer
      and the Program Agent (as Buyer’s assignee) and their representatives to examine
      and audit the same, and make photocopies and/or computer tape or other digital
      media replicas thereof, and it agrees to render to Buyer and the Program Agent
      (as Buyer’s assignee) and their representatives, at its sole cost and expense,
      such clerical and other assistance as may be reasonably requested with regard
      thereto. Buyer and the Program Agent (as Buyer’s assignee) and their respective
      representatives shall also have the right to discuss its affairs with its
      officers and to verify under appropriate procedures the validity, amount,
      quality, quantity, value and condition of, or any other matter relating to,
      the
      Receivables and the Related Security. Prior to the occurrence of a Termination
      Event, the number and frequency of any such audits by the Program Agent (as
      Buyer’s assignee) shall be limited to such number and frequency as shall be
      reasonable in the exercise of the Program Agent’s reasonable commercial
      judgment, but shall in no event exceed one such audit per year. Each such audit
      shall be at the sole expense of Originator.

     

    (f)  Keeping
      and
      Marking of Records and Books.

     

    (i)  It
      will maintain
      and implement administrative and operating procedures (including an ability
      to
      recreate records evidencing Receivables in the event of the destruction of
      the
      originals thereof), and keep and maintain all documents, books, records and
      other information reasonably necessary or advisable for the collection of all
      Receivables (including records adequate to permit the immediate identification
      of each new Receivable and all Collections of and adjustments to each existing
      Receivable). It will give Buyer (or its assigns) notice of any material change
      in the administrative and operating procedures referred to in the previous
      sentence. 

     

    (ii)  It
      will at all
      times maintain an account in its master records indicating the aggregate amount
      of Receivables (A) sold by it to the Buyer hereunder, (B) sold by the Buyer
      to
      Funding LLC under the Second Tier Sale Agreement, and (C) in which Funding
      LLC
      has issued undivided interests to or pledged to the Program Agent under the
      Purchase Agreement.

     

    (g)  Compliance
      with
      Contracts and Credit and Collection Policy.
      It will timely
      and fully (i) perform and comply in all material respects with all
      provisions, covenants and other promises required to be observed by it under
      the
      Contracts related to the Receivables to the extent a failure to comply would
      adversely affect the collectibility of such Receivables, and (ii) comply in
      all material respects with the Credit and Collection Policy in regard to each
      Receivable and the related Contract. It will pay when due any taxes payable
      in
      connection with the Receivables, exclusive of taxes on or measured by income
      or
      gross receipts of Buyer and its assigns, unless and to the extent only that
      the
      same are being contested in good faith and by appropriate proceedings by
      Originator.

     

    (h)  Ownership.
      It will take all
      necessary action to establish and maintain, irrevocably in Buyer, legal and
      equitable title to the Receivables originated by it, and to the Related Security
      and the Collections with respect to such Receivables, free and clear of any
      Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns)
      (including the filing of all financing statements or other similar instruments
      or documents necessary under the UCC of all appropriate jurisdictions to perfect
      Buyer’s interest in such Receivables, Related Security and Collections and such
      other action to perfect, protect or more fully evidence the interest of Buyer
      as
      Buyer (or its assigns) may reasonably request).

     

    (i)  Investors’
      Reliance.
      It acknowledges
      that the Program Agent and the Investors are entering into the transactions
      contemplated by the Purchase Agreement in reliance upon the identity of each
      of
      Buyer and Funding LLC as a legal entity that is separate from Originator and
      any
      of its other Affiliates. Therefore, from and after the date of execution and
      delivery of this Agreement, it will take all reasonable steps including all
      steps that Buyer, Funding LLC or any assignee of Buyer or Funding LLC may from
      time to time reasonably request to maintain the identity of each of Buyer and
      Funding LLC as a separate legal entity and to make it manifest to third parties
      that each of Buyer and Funding LLC is an entity with assets and liabilities
      distinct from those of Originator and any of its other Affiliates and not just
      a
      division of Originator or any such Affiliate. Without limiting the generality
      of
      the foregoing and in addition to the other covenants set forth herein, it (i)
      will not hold itself out to third parties as liable for the debts of Buyer
      or
      Funding LLC nor purport to own the Receivables and other assets acquired by
      Buyer or Funding LLC, (ii) will take all other actions necessary on its part
      to
      ensure that each of Buyer and Funding LLC is at all times in compliance with
      the
      covenants set forth in Section 4.1(j)
      of the Second Tier
      Sale Agreement or Section 7.1(j)
      of the Purchase
      Agreement, as applicable, and (iii) will cause all tax liabilities arising
      in
      connection with the transactions contemplated herein or otherwise to be
      allocated between it, on the one hand, and each of Buyer and Funding LLC, on
      the
      other, on an arm’s-length basis and in a manner consistent with the procedures
      set forth in U.S. Treasury Regulations §§1.1502-33(d) and 1.1552-1.

     

    (j)  Collections.
      It will:


     

    (i)  (A)
      At any time
      that neither an Amortization Event nor a Collection Notice Event exists, direct
      all Obligors to remit all Collections, and use reasonable commercial efforts
      to
      cause all Collections to be remitted by the applicable Obligor, directly to
      either a Lock-Box or Blocked Account and (B) at any time either an Amortization
      Event or a Collection Notice Event exists, direct Obligors to remit all
      Collections, and use reasonable commercial efforts to cause all Collections
      to
      be remitted by the applicable Obligor, directly to either a Lock-Box or a
      Blocked Account, and, at Buyer’s or Program Agent’s (as assignee of Buyer)
      request, transfer the Collections processing function to a third-party
      Collections processing company,

     

    (ii)  direct
      the entity
      holding each Lock-Box and otherwise use commercially reasonable efforts to,
      and,
      to the extent within its control cause, all proceeds from all Lock-Boxes to
      be
      deposited into a Blocked Account, and

     

    (iii)  cause
      each Blocked
      Account to be subject at all times to a control agreement or Blocked Account
      Agreement that is in full force and effect. In the event any payments relating
      to Receivables are remitted directly to it or any of its Affiliates, it will
      use
      commercially reasonable efforts to identify such payment as soon as practical
      and will remit (or will cause all such payments to be remitted) directly to
      a
      Collection Bank and deposited into a Blocked Account within the earlier to
      occur
      of (A) ten days following receipt thereof and (B) two Business Days following
      the identification thereof, and, at all times prior to such remittance, it
      will
      itself hold or, if applicable, will cause such payments to be held in trust
      for
      the exclusive benefit of Buyer and its assigns. It will transfer exclusive
      ownership, dominion and control of each Lock-Box and Blocked Account to Buyer
      (and its assigns) and, will not grant the right to take dominion and control
      of
      any Lock-Box or Blocked Account at a future time or upon the occurrence of
      a
      future event to any Person, except to Buyer (or its assigns) as contemplated
      by
      this Agreement, the Second Tier Sale Agreement and the Purchase
      Agreement.

     

    (k)  Taxes.
      It will file all
      tax returns and reports required by law to be filed by it and promptly pay
      all
      taxes and governmental charges at any time owing, except any such taxes which
      are not yet delinquent or are being diligently contested in good faith by
      appropriate proceedings and for which adequate reserves in accordance with
      GAAP
      (if any) shall have been set aside on its books or where the failure to so
      file
      or pay could not reasonably be expected to have a Material Adverse
      Effect.

     

    (l)  Insurance.
      It will maintain
      in effect, or cause to be maintained in effect, insurance for itself and its
      Subsidiaries and its and their properties from financially sound and reputable
      insurance companies in such amounts and covering such risks (with such types
      and
      amounts of retained risk) as are customarily carried by companies engaged in
      similar businesses and owning similar properties in the same general areas
      in
      which Originator and its Subsidiaries operate and which is available on
      commercially reasonable terms. It will pay or cause to be paid the premiums
      therefor.

     

    (m)  Operation
      of
      Pipelines.
      It will (i)
      remain an open access transporter, to retain its blanket certificate under
      Part
      284 of Title 18 of the Code of Federal Regulations, and (ii) operate its
      currently constituted transmission pipelines, as they may be expanded from
      time
      to time, in an efficient and business-like manner or to maintain all necessary
      FERC and other governmental authorizations and approvals necessary to operate
      its currently constituted transmission pipeline business, as it may be expanded
      from time to time.

     

    Section
      4.2.  Negative
      Covenants of Originator.
      Until the date on
      which this Agreement terminates in accordance with its terms, Originator hereby
      covenants that: 

     

    (a)  Name
      Change,
      Offices and Records.
      It will not (i)
      change its name, identity or corporate structure (within the meaning of the
      applicable enactment of the UCC) or relocate its chief executive office or
      any
      office where Records are kept unless it shall have: (A) given Buyer (or its
      assigns) at least forty-five (45) days’ prior written notice thereof and
      (B) delivered to Buyer (or its assigns) all financing statements,
      instruments, legal opinions and other documents requested by Buyer (or its
      assigns) in connection with such change or relocation, or (ii) change its
      jurisdiction of incorporation or formation (within the meaning of the applicable
      enactment of the UCC) unless Buyer (and its assigns) shall have received from
      Originator, prior to such change, (A) those items described in clause (i)
      hereof, and (B) if Buyer (or its assigns) shall so request, an opinion of
      counsel, in form and substance reasonably satisfactory to such Person, as to
      Originator’s valid existence and good standing and the perfection and priority
      of Buyer’s ownership or security interest in the Receivables, the Related
      Security and Collections. In accordance with Section 7.9(b),
      the provisions of
      this Agreement shall apply to any successors or assigns.

     

    (b)  Change
      in
      Payment Instructions to Obligors.
      It will not add
      or terminate any bank as a Collection Bank, or make any change in the
      instructions to Obligors regarding payments to be made to any Lock-Box or
      Blocked Account, unless Buyer (or its assigns) shall have received, at least
      ten
      days before the proposed effective date therefor, (i) written notice of
      such addition, termination or change and (ii) with respect to the addition
      of a Collection Bank or a Blocked Account or Lock-Box, an executed Blocked
      Account Agreement with respect to the new Blocked Account or Lock-Box;
provided
      that it may make
      changes in instructions to Obligors regarding payments if such new instructions
      require such Obligor to make payments to another existing Blocked
      Account.

     

    (c)  Modifications
      to
      Contracts and Credit and Collection Policy.
      It will not make
      any change to the Credit and Collection Policy that could reasonably be expected
      to materially adversely affect the collectibility of the Receivables (other
      than
      any portion thereof constituting an Additional Amount) or materially decrease
      the credit quality of any newly created Receivables (other than Additional
      Amounts). Except as otherwise permitted in its capacity as Servicer pursuant
      to
Article VIII
      of the Purchase
      Agreement, it will not extend, amend or otherwise modify the terms of any
      Receivable (other than any portion thereof constituting an Additional Amount)
      or
      any Contract related thereto other than in accordance with the Credit and
      Collection Policy.

     

    (d)  Sales,
      Liens.
      It will not sell,
      assign (by operation of law or otherwise) or otherwise dispose of, or grant
      any
      option with respect to, or create or suffer to exist any Adverse Claim
      (including the filing of any financing statement) upon or with respect to,
      any
      Receivable, Related Security or Collections, or upon or with respect to any
      Contract under which any Receivable arises, or any Lock-Box or Blocked Account,
      or assign any right to receive income with respect thereto (other than, in
      each
      case, the creation of the interests therein in favor of Buyer provided for
      herein), and it will defend the right, title and interest of Buyer in, to and
      under any of the foregoing property, against all claims of third parties
      claiming through or under it.

     

    (e)  Accounting
      for
      Purchase.
      It will not, and
      will not permit any Affiliate to, account for or treat (whether in financial
      statements or otherwise) the transactions contemplated hereby in any manner
      other than the sale of the Receivables and the Related Security by it to Buyer
      or in any other respect account for or treat the transactions contemplated
      hereby in any manner other than as a sale of the Receivables and the Related
      Security by it to Buyer except to the extent that such transactions are not
      recognized on account of consolidated financial reporting in accordance with
      GAAP.

     

    (f)  Mergers,
      Acquisitions etc.

     

    (i)  Without
      the prior
      written consent of the Program Agent, as assignee of Buyer, not to be
      unreasonably withheld, Originator will not merge into or consolidate with any
      other Person if Originator would not be the surviving entity of such merger
      or
      consolidation.

     

    (ii)  Any
      receivable
      acquired by Originator in connection with a merger or consolidation or the
      purchase, leasing or other acquisition (in one transaction or a series of
      transactions) of all or substantially all of the assets of any other Person
      (whether directly by purchase, lease or other acquisition of all or
      substantially all of the assets of such Person or indirectly by purchase or
      other acquisition of all or substantially all of the capital stock of such
      other
      Person) (any such transaction, a “Business
      Combination”)
      shall be
      Excluded Receivables except as otherwise provided in the definition of “Excluded
      Receivable” contained in Exhibit I
      hereto.

     

    ARTICLE
      V 

     

    TERMINATION
      EVENTS

     

    Section
      5.1.  Termination
      Events.
      The occurrence of
      any one or more of the following events shall constitute a Termination
      Event:

     

    (a)  Originator
      shall
      fail (i) to make any payment or deposit required hereunder when due and
      such failure continues for two Business Days, (ii) to perform or observe
      any term, covenant or agreement contained in Section 4.1(b),
4.1(c)
      or 4.1(h)-(j),
Section 4.2
      (other than as
      referred to in clause (i) of this subsection (a)
      or Section 5.1(d)),
      and such failure
      shall continue for five consecutive Business Days after the earlier of receipt
      of written notice thereof from Buyer (or its assignees) or Originator’s
      Responsible Officer’s or other corporate officer’s actual knowledge thereof or
      (iii) to perform or observe any term, covenant or agreement hereunder
      (other than as referred to in clause (i) or (ii) of this subsection (a)
      or Section 5.1(d))
      and such failure
      shall continue for twenty consecutive days after the earlier of receipt of
      written notice thereof from Buyer (or its assignees) or Originator’s Responsible
      Officer’s or other corporate officer’s actual knowledge thereof.

     

    (b)  Any
      representation,
      warranty, certification or statement made by Originator in this Agreement,
      any
      other Transaction Document or in any other document delivered pursuant hereto
      or
      thereto shall prove to have been (i) with respect to any representations
      warranties, certifications or statements which contain a materiality qualifier,
      incorrect in any respect when made or deemed made and (ii) with respect to
      any representations, warranties, certifications or statements which do not
      contain a materiality qualifier, incorrect in any material respect when made
      or
      deemed made; provided
      that a Termination
      Event shall be deemed not to have occurred under this clause (b) with
      respect to a breach of a representation or warranty made or deemed made in
      this
      Agreement with respect to a Receivable if (x) Originator has accepted
      reassignment of such Receivable and paid or credited the applicable Repurchase
      Price in accordance with and by the date required by Section
      1.3(a)
      of this Agreement
      or with respect to a breach of a representation or warranty made or deemed
      made
      in this Agreement with respect to a Receivable which breach affects only
      Additional Amounts or (y) such representation is no longer incorrect, or
      incorrect in any material respect, as the case may be, 30 days following receipt
      by Originator of notice of such incorrect representation.

     

    (c)  (i)
      Failure of
      Originator or any of its Subsidiaries to pay any Indebtedness when due (after
      giving effect to any grace period applicable thereto) in excess of $25,000,000;
or the default by Originator or any of its Subsidiaries in the performance
      of
      any term, provision or condition contained in any agreement under which any
      such
      Indebtedness was created or is governed, the effect of which is to cause, or
      to
      permit the holder or holders of such Indebtedness to cause, such Indebtedness
      to
      become due prior to its stated maturity; or any such Indebtedness of Originator
      or any of its Subsidiaries shall be declared to be due and payable or required
      to be prepaid, repurchased, redeemed or defeased (other than by a regularly
      scheduled payment, a prepayment upon the sale of assets otherwise permitted
      thereunder, a repayment required as a result of an issuance of debt or equity
      otherwise permitted thereunder, or a repayment required as a result of any
      failure to maintain a minimum collateral value), prior to the date of maturity
      thereof, or (ii) any event of default shall occur under any agreement or
      instrument relating to or evidencing any Indebtedness now or hereafter existing
      of Originator or any of its Subsidiaries or any such Indebtedness shall be
      declared to be due and payable or required to be prepaid, repurchased, redeemed
      or defeased as the result of any change in control of Originator, if the effect
      of such declaration, prepayment, repurchase, redemption or defeasance has or
      could reasonably be expected to have a Material Adverse Effect.

     

    (d)  (i) Originator
      or any of its Subsidiaries shall generally not pay its debts as such debts
      become due or shall admit in writing its inability to pay its debts generally
      or
      shall make a general assignment for the benefit of creditors; or (ii) any
      proceeding shall be instituted by or against Originator or any of its
      Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
      liquidation, winding up, reorganization, arrangement, adjustment, protection,
      relief or composition of it or its debts under any law relating to bankruptcy,
      insolvency or reorganization or relief of debtors, or seeking the entry of
      an
      order for relief or the appointment of a receiver, trustee or other similar
      official for it or any substantial part of its property, and such proceeding
      is
      not dismissed within 45 days, or (iii) Originator or its Subsidiaries shall
      take any corporate action to authorize any of the actions set forth in the
      foregoing clause (ii) of this Section 5.1(d).

     

    (e)  A
      Change of Control
      shall occur.

     

    (f)  One
      or more
      judgments, decrees, arbitration or binding mediation award(s) and/or
      settlement(s) for the payment of money shall have been entered against
      Originator or any of its Subsidiaries that could reasonably be expected to
      have
      a Material Adverse Effect, and either (i) within sixty (60) days from the
      later of (A) the entry of any such judgment or decree or the date of any such
      award or settlement (as applicable) and (B) the date any payment is
      required to be made on or with respect to any such judgment, decree award or
      settlement pursuant to the terms thereof, the same shall not have been paid,
      discharged or vacated, or in the case of a judgment, decree or award, stayed
      pending appeal, or shall not have been discharged or vacated within sixty (60)
      days from the entry of a final order of affirmance on appeal or
      (ii) enforcement proceedings shall be commenced by any creditor on any such
      judgment, decree, award or settlement.

     

    (g)  (i)
      Any Plan
      Termination Event with respect to a Plan shall have occurred and, 30 days after
      notice thereof shall have been given to Originator by Buyer or the Program
      Agent
      and its assignee, such Plan Termination Event shall still exist; or (ii)
      Originator or any ERISA Affiliate shall have been notified by the sponsor of
      a
      Multiemployer Plan that it has incurred withdrawal liability (within the meaning
      given to such term under Part 1 of Subtitle E of Title IV of ERISA) to such
      Multiemployer Plan; or (iii) Originator or any ERISA Affiliate shall have been
      notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan
      is
      in reorganization, or is insolvent or is being terminated, within the meaning
      of
      Title IV of ERISA; or (iv) any Person shall engage in a “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue
      Code
      of 1986) involving any Plan; and in each case in clauses (i) through (iv) above,
      such event or condition, together with all other such events or conditions,
      if
      any, (x) has not been cured with 30 days following receipt of notice of such
      event by Originator and (y) would result in an aggregate liability of Originator
      or any ERISA Affiliate that would have a Material Adverse Effect.

     

    Section
      5.2.  Remedies.
      Upon the
      occurrence and during the continuation of a Termination Event, Buyer may take
      any of the following actions: (i) declare the Termination Date to have
      occurred, whereupon the Termination Date shall forthwith occur, without demand,
      protest or further notice of any kind, all of which are hereby expressly waived
      by Originator; provided
      that upon the
      occurrence of a Termination Event described in Section 5.1(d),
      or of an actual
      or deemed entry of an order for relief with respect to Originator under the
      Federal Bankruptcy Code, the Termination Date shall automatically occur, without
      demand, protest or any notice of any kind, all of which are hereby expressly
      waived by Originator and (ii) to the fullest extent permitted by applicable
      law, declare that the Default Fee shall accrue with respect to any amounts
      then
      due and owing by Originator to Buyer (or is assigns). The aforementioned rights
      and remedies shall be in addition to all other rights and remedies of Buyer
      and
      its assigns available under this Agreement or the other Transaction Documents,
      by operation of law, at equity or otherwise, all of which are hereby expressly
      preserved, including all rights and remedies provided under the UCC, all of
      which rights shall be cumulative.

     

    ARTICLE
      VI 

     

    INDEMNIFICATION

     

    Section
      6.1.  Indemnities
      by
      Originator.
      Without limiting
      any other rights that Buyer may have hereunder or under applicable law,
      Originator hereby agrees to indemnify Buyer and its assigns and the officers,
      directors, agents and employees of Buyer and its assigns (each an “Indemnified
      Party”)
      from and against
      any and all damages, losses, claims, taxes, liabilities, costs, expenses and
      for
      all other amounts payable, including reasonable attorneys’ fees and
      disbursements (all of the foregoing being collectively referred to as
“Indemnified
      Amounts”)
      awarded against
      or incurred by any of them arising out of or as a result of this Agreement
      or
      the acquisition, either directly or indirectly, by Buyer or its assigns of
      an
      interest in the Receivables, excluding, however: 

     

    (i)  Indemnified
      Amounts
      to the extent that such Indemnified Amounts resulted from gross negligence
      or
      willful misconduct on the part of the Indemnified Party seeking indemnification,
      it being the intention of Originator to indemnify such Indemnified Party against
      the consequences of its own negligence; 

     

    (ii)  Indemnified
      Amounts
      to the extent the same includes losses in respect of Receivables that are solely
      due to the credit risk of the Obligor and for which reimbursement would
      constitute recourse to Originator for uncollectible Receivables;

     

    (iii)  taxes
      imposed by
      the jurisdiction in which such Indemnified Party’s principal executive office is
      located, on or measured by the overall net income of such Indemnified Party
      to
      the extent that the computation of such taxes is consistent with the Intended
      Characterization; provided,
      however,
      that nothing
      contained in this sentence shall limit the liability of Originator or limit
      the
      recourse of Buyer or its assigns to Originator for amounts otherwise
      specifically provided to be paid by Originator under the terms of this
      Agreement; or

     

    (iv)  Indemnified
      Amounts
      relating to and affecting only Additional Amounts.

     

    Without
      limiting
      the generality of the foregoing indemnification and, in the case of the
      following clauses (D) through (M), in each case without limiting Originator’s
      obligations under the following clauses (A), (B) or (C)), Originator shall
      indemnify the Indemnified Parties for Indemnified Amounts relating to or
      resulting from: 

     

    (A)  any
      representation
      or warranty made by or on behalf of Originator (or any officers of any such
      Person) in this Agreement, any other Transaction Document or any other
      information or report delivered by such Person pursuant hereto or thereto,
      which
      shall have been false or incorrect when made or deemed made;

     

    (B)  the
      failure by
      Originator to comply with any applicable law, rule or regulation with respect
      to
      any Receivable or Contract related thereto, or the nonconformity of any
      Receivable or Contract included therein with any such applicable law, rule
      or
      regulation or any failure of Originator to keep or perform any of its
      obligations, express or implied, with respect to any Contract;

     

    (C)  any
      failure of
      Originator to perform its duties, covenants or other obligations in accordance
      with the provisions of this Agreement or any other Transaction
      Document;

     

    (D)  any
      products
      liability, environmental, personal injury or damage suit, or other similar
      claim
      arising out of or in connection with merchandise, insurance or services that
      are
      the subject of any Contract or any Receivable;

     

    (E)  any
      dispute, claim,
      offset or defense (other than discharge in bankruptcy of the Obligor) of the
      Obligor to the payment of any Receivable other than any portion thereof
      constituting an Additional Amount (including a defense based on such Receivable
      or the related Contract not being a legal, valid and binding obligation of
      such
      Obligor enforceable against it in accordance with its terms or based on such
      Obligor being immune from claims on the grounds on sovereign immunity or
      otherwise immune or not subject to legal action, suit or proceeding), or any
      other claim resulting from the sale of the merchandise or services related
      to
      such Receivable or the furnishing or failure to furnish such merchandise or
      services;

     

    (F)  the
      commingling by
      or on behalf of Originator or any of its Affiliates of Collections of
      Receivables at any time with other funds;

     

    (G)  any
      investigation,
      litigation or proceeding related to or arising from this Agreement or any other
      Transaction Document, the transactions contemplated hereby, the use of the
      proceeds of a Purchase, the ownership of the Receivables or any other
      investigation, litigation or proceeding relating to Originator in which any
      Indemnified Party becomes involved as a result of any of the transactions
      contemplated hereby;

     

    (H)  any
      Termination
      Event described in Section 5.1(d)(iii)
      with respect to
      Buyer or Funding LLC;

     

    (I)  any
      failure to vest
      in Buyer, or to transfer to Buyer, legal and equitable title to, and ownership
      of, the Receivables, the Related Security and the Collections, free and clear
      of
      any Adverse Claim (except as created by the Transaction Documents);

     

    (J)  the
      failure to have
      filed, or any delay in filing, financing statements or other similar instruments
      or documents under the UCC of any applicable jurisdiction or other applicable
      laws with respect to any Receivable, the Related Security and Collections with
      respect thereto, and the proceeds of any thereof, whether at the time of a
      Purchase or at any subsequent time;

     

    (K)  any
      action or
      omission by Originator in contravention of this Agreement or any other
      Transaction Document which reduces or impairs the rights of Buyer with respect
      to any Receivable or the value of any such Receivable (other than any portion
      thereof constituting an Additional Amount);

     

    (L)  any
      avoidance or
      attempt by Originator or any of its Affiliates to void the Purchase hereunder
      under statutory provisions or common law or equitable action, and

     

    (M)  the
      failure by
      Originator or any Affiliate to pay when due any taxes, including sales, excise
      or personal property taxes.

     

    Section
      6.2.  Other
      Costs and
      Expenses.
      Originator shall
      pay to Buyer on demand all reasonable costs and out-of-pocket expenses in
      connection with the preparation, execution and delivery of this Agreement,
      the
      transactions contemplated hereby and the other documents to be delivered
      hereunder. Originator shall pay to Buyer and its assigns on demand any and
      all
      costs and expenses of Buyer, if any, including reasonable counsel fees and
      expenses in connection with the enforcement of this Agreement and the other
      documents delivered hereunder and in connection with any restructuring or
      workout of this Agreement or such documents (including any amendments hereto
      or
      thereto).

     

    ARTICLE
      VII 

     

    MISCELLANEOUS

     

    Section
      7.1.  Waivers
      and
      Amendments.

     

    (a)  No
      failure or delay
      on the part of Buyer (or its assigns) in exercising any power, right or remedy
      under this Agreement shall operate as a waiver thereof, nor shall any single
      or
      partial exercise of any such power, right or remedy preclude any other further
      exercise thereof or the exercise of any other power, right or remedy. The rights
      and remedies herein provided shall be cumulative and nonexclusive of any rights
      or remedies provided by law. Any waiver of this Agreement shall be effective
      only in the specific instance and for the specific purpose for which
      given.

     

    (b)  No
      provision of
      this Agreement may be amended, supplemented, modified or waived except in
      writing signed by Originator and Buyer and, to the extent required under the
      Purchase Agreement, the Program Agent and the Required Committed
      Investors.

     

    Section
      7.2.  Notices.
      Except as
      provided below, all communications and notices provided for hereunder shall
      be
      in writing (including bank wire, telecopy or electronic facsimile transmission
      or similar writing) and shall be given to the other parties hereto at their
      respective addresses or telecopy numbers set forth on the signature page hereto
      or at such other address or telecopy number as such Person may hereafter specify
      for the purpose of notice to each of the other parties hereto. Each such notice
      or other communication shall be effective (i) if given by telecopy, upon
      the receipt thereof, (ii) if given by mail, three Business Days after the
      time such communication is deposited in the mail with first class postage
      prepaid or (iii) if given by any other means, when received at the address
      specified in this Section 7.2.

     

    Section
      7.3.  Protection
      of
      Ownership Interests of Buyer.

     

    (a)  Originator
      agrees
      that from time to time, at its expense, it will promptly execute and deliver
      all
      instruments and documents, and take all actions, that may be necessary or
      desirable, or that Buyer (or its assigns) may reasonably request, to perfect,
      protect or more fully evidence the Investor Interests, or to enable Buyer (or
      its assigns) to exercise and enforce their rights and remedies hereunder. At
      any
      time, Buyer (or its assigns) may, at Originator’s sole cost and expense, direct
      Originator to notify the Obligors of Receivables of the ownership interests
      of
      Buyer under this Agreement and may also direct that payments of all amounts
      due
      or that become due under any or all Receivables be made directly to Buyer or
      its
      designee.

     

    (b)  If
      Originator fails
      to perform any of its obligations hereunder and such failure shall continue
      for
      five Business Days after notice from Buyer (or its assigns) of such failure,
      Buyer (or its assigns) may (but shall not be required to) perform, or cause
      performance of, such obligation, and Buyer’s (or such assigns’) costs and
      expenses reasonably incurred in connection therewith shall be payable by
      Originator as provided in Section 6.2.
      Originator
      irrevocably authorizes Buyer (and its assigns) at any time and from time to
      time
      in the sole discretion of Buyer (or its assigns), and appoints Buyer (and its
      assigns) as its attorney(es)-in-fact, to act on its behalf (i) to file financing
      statements necessary or desirable in Buyer’s (or its assigns’) sole discretion
      to perfect and to maintain the perfection and priority of the interest of Buyer
      in the Receivables and (ii) to file a carbon, photographic or other reproduction
      of this Agreement or any financing statement with respect to the Receivables
      as
      a financing statement in such offices as Buyer (or its assigns) in their sole
      discretion deem necessary or desirable to perfect and to maintain the perfection
      and priority of Buyer’s interests in the Receivables. This appointment is
      coupled with an interest and is irrevocable.

     

    Section
      7.4.  Confidentiality.

     

    (a)  Originator
      agrees
      to exercise its best efforts to keep, and to cause any third party recipient
      of
      the information described in this Section 7.4(a)
      to keep, any
      information delivered or made available by Buyer (or its assigns) to it,
      confidential from anyone other than Persons employed or retained by such party
      who are or are expected to become engaged in evaluating, approving, structuring
      or administering the transactions contemplated hereunder, the terms, conditions
      and structure of this Agreement and the other Transaction Documents and any
      other confidential proprietary information with respect to the Program Agent,
      the Managing Agents, the Investors and their respective businesses obtained
      by
      or on behalf of Originator in connection with the structuring, negotiating
      and
      execution of the transactions contemplated herein; provided
      that nothing shall
      prevent Originator from disclosing such information (i) to any other party
      to any Transaction Document for the purpose of administering or enforcing this
      Agreement or any other Transaction Document, (ii) pursuant to subpoena or
      upon the order of any court or administrative agency, (iii) upon the
      request or demand of any governmental authority having jurisdiction over such
      Person, (iv) if such information has been publicly disclosed without the
      recipient’s violation of its confidentiality obligations, (v) to the extent
      reasonably required in connection with any litigation to which such Person
      or
      such Person’s Affiliates may be a party, (vi) to the extent reasonably
      required in connection with the exercise of any remedy hereunder, or
      (vii) to such Person’s legal counsel, independent auditors and other
      professional advisors and to such Person’s rating agencies. Unless prohibited
      from doing so by applicable law, in the event that Originator is legally
      requested or required to disclose any confidential information pursuant to
      paragraph (ii), (iii), or (v) of this Section 7.4(a),
      such Person shall
      notify Buyer and the Program Agent of such request or requirement and will
      use
      reasonable efforts to minimize the disclosure of such information.

     

    (b)  Buyer
      (and its
      assigns) agrees to exercise its best efforts to keep, and to cause any third
      party recipient of the information described in this Section 7.4(b)
      to keep, any
      information delivered or made available by Originator to it, confidential from
      anyone other than Persons employed or retained by such party who are or are
      expected to become engaged in evaluating, approving, structuring or
      administering the transactions contemplated hereunder; provided
      that nothing shall
      prevent Buyer (or its assigns) from disclosing such information (i) to any
      other party to any Transaction Document for the purpose of administering or
      enforcing this Agreement or any other Transaction Document, (ii) pursuant
      to subpoena or upon the order of any court or administrative agency,
      (iii) upon the request or demand of any governmental authority having
      jurisdiction over such Person, (iv) if such information has been publicly
      disclosed without the recipient’s violation of its confidentiality obligations,
      (v) to the extent reasonably required in connection with any litigation to
      which such Person or such Person’s Affiliates may be a party, (vi) to the
      extent reasonably required in connection with the exercise of any remedy
      hereunder, (vii) to such Person’s legal counsel, independent auditors and
      other professional advisors and to such Person’s rating agencies, or
      (viii) to any actual or proposed participant or assignee of such Person
      (each, a “Transferee”)
      that has agreed
      in writing to be bound by the provisions of this Section 7.4(b).
      Unless prohibited
      from doing so by applicable law, in the event that Buyer (or its assigns) is
      legally requested or required to disclose any confidential information pursuant
      to paragraph (ii), (iii), or (v) of this Section 7.4(b),
      such Person shall
      notify Originator of such request or requirement and will use reasonable efforts
      to minimize the disclosure of such information.

     

    (c)  Notwithstanding
      the
      foregoing, Originator and Buyer (and its assigns) may disclose to any and all
      other Persons, without limitation of any kind, the tax treatment and tax
      structure of the transactions contemplated by this Agreement and the Transaction
      Documents and all materials of any kind (including opinions or other tax
      analyses) that are provided to them relating to such tax treatment and tax
      structure.

     

    Section
      7.5.  Bankruptcy
      Petition. 

     

    (a)  Originator
      and
      Buyer each hereby covenants and agrees that, prior to the date that is one
      year
      and one day after the payment in full of all outstanding senior Indebtedness
      of
      each Conduit Investor, it will not institute against, or join any other Person
      in instituting against, such Conduit Investor any bankruptcy, reorganization,
      arrangement, insolvency or liquidation proceedings or other similar proceeding
      under the laws of the United States or any state of the United States.


     

    (b)  Originator
      hereby
      covenants and agrees that, prior to the date that is one year and one day after
      the payment in full of all outstanding Capital, Yield and all other amounts
      due
      to the Program Agent, any Managing Agent or any Investor under the Purchase
      Agreement, it will not institute against, or join any other Person in
      instituting against, Buyer any bankruptcy, reorganization, arrangement,
      insolvency or liquidation proceedings or other similar proceeding under the
      laws
      of the United States or any state of the United States.

     

    Section
      7.6.  CHOICE
      OF
      LAW.
      THE SALE,
      TRANSFER AND CONVEYANCE OF RECEIVABLES, TOGETHER WITH RELATED SECURITY AND
      COLLECTIONS, UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO CONFLICTS
      OF
      LAW PRINCIPLES), AND OTHERWISE THIS AGREEMENT SHALL BE GOVERNED BY, AND
      CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
      SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT
      OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

     

    Section
      7.7.  CONSENT
      TO
      JURISDICTION.
      EACH PARTY TO
      THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS (A) FOR ITSELF AND ITS PROPERTY
      IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER
      TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT
      OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION
      OF
      THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA
      FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
      COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
      OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
      PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
      CLAIM
      THE SAME; (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
      PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
      MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH
      PERSON AT THE ADDRESS SPECIFIED PURSUANT TO SECTION 7.2
      OR AT SUCH OTHER
      ADDRESS OF WHICH THE PARTIES HERETO SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
      PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE
      IN
      ANY OTHER JURISDICTION; AND (E) WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY
      APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION
      OR
      PROCEEDING RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS ANY
      SPECIAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

     

    Section
      7.8.  WAIVER
      OF JURY
      TRIAL.
      EACH PARTY HERETO
      HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
      OR
      INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
      ANY
      WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
      EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
      ESTABLISHED HEREUNDER OR THEREUNDER.

     

    Section
      7.9.  Integration;
      Binding Effect; Survival of Terms. 

     

    (a)  This
      Agreement and
      each Blocked Account Agreement and any other document executed in connection
      herewith represent the final agreement among the parties and may not be
      contradicted by evidence of prior, contemporaneous, or subsequent oral
      agreements of the parties. There are no unwritten oral agreements among the
      parties. 

     

    (b)  This
      Agreement
      shall be binding upon and inure to the benefit of the parties hereto and their
      respective successors and permitted assigns (including any trustee in
      bankruptcy). This Agreement shall create and constitute the continuing
      obligations of the parties hereto in accordance with its terms and shall remain
      in full force and effect until terminated in accordance with its terms;
provided,
      however,
      that the rights
      and remedies with respect to (i) any breach of any representation and warranty
      made by Originator pursuant to Article II,
      (ii) the
      indemnification and payment provisions of Article VI,
      and Section 7.5
      shall be
      continuing and shall survive any termination of this Agreement. 

     

    Section
      7.10.  Counterparts;
      Severability; Section References.
      This Agreement
      may be executed in any number of counterparts and by different parties hereto
      in
      separate counterparts, each of which when so executed shall be deemed to be
      an
      original and all of which when taken together shall constitute one and the
      same
      Agreement. Any provisions of this Agreement which are prohibited or
      unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
      to the extent of such prohibition or unenforceability without invalidating
      the
      remaining provisions hereof, and any such prohibition or unenforceability in
      any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction. Unless otherwise expressly indicated, all references herein
      to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and
      sections of, and schedules and exhibits to, this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    


    IN
      WITNESS WHEREOF,
      the parties hereto have caused this Agreement to be executed and delivered
      by
      their duly authorized officers as of the date hereof.

    

      
        	 	
                COLORADO
                  INTERSTATE GAS COMPANY

                 

                 

              
	 	
                By:

              	
                /s/John
                  J. Hopper 

              
	 	
                Name: 
                  John J. Hopper

              
	 	
                Title:    
                  Vice President

              
	 	
                Address:
                  Colorado Interstate Gas Company

              
	 	
                1001
                  Louisiana Street

              
	 	
                Houston,
                  Texas 77002

              
	 	
                Attention:
                  Treasurer

              


      

    

     

     

    
      	 	
              CIG
                FINANCE COMPANY, L.L.C.

               

               

            
	 	
              By:

            	
              /s/John
                J. Hopper 

            
	 	
              Name: 
                John J. Hopper

            
	 	
              Title:    
                Vice President

            
	 	
              Address:
                CIG
                Finance Company, L.L.C.

            
	 	
              1001
                Louisiana Street

            
	 	
              Houston,
                Texas 77002

            
	 	
              Attention:
                Treasurer

            


    

     

     

     

    

      [Signature
        Page
        to First Tier Receivables Sale Agreement]

      


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    


    EXHIBIT
      I
      TO

    FIRST
      TIER
      RECEIVABLES SALE AGREEMENT

    


    


    DEFINITIONS

    


    


    As
      used in this
      Agreement and the Exhibits, Schedules and Annexes hereto, capitalized terms
      have
      the meanings set forth in this Exhibit I
      (such meanings to
      be equally applicable to the singular and plural forms thereof). If a
      capitalized term is used in this Agreement, or in any Exhibit, Schedule or
      Annex
      hereto, and not otherwise defined therein or in this Exhibit I,
      such term shall
      have the meaning assigned thereto in Exhibit I
      to the Purchase
      Agreement.

     

    “Additional
      Amounts”
means
      all
      indebtedness and other obligations owed by Obligors to Originator (prior to
      giving effect to any transfer or conveyance under this Agreement) or to Buyer
      (after giving effect to the transfers or conveyances under this Agreement)
      arising from commodity, volumetric or usage or from transportation services
      (other than transportation reservation) or storage services (other than storage
      reservation), but excluding any such indebtedness of obligations owed to
      Originator by any of its Affiliates from time to time.

     

    “Agreement”
means
      this First
      Tier Receivables Sale Agreement, dated as of November 3, 2006, between
      Originator and Buyer, as the same may be amended, restated or otherwise
      modified.

     

    “Business
      Combination”
has
      the meaning
      set forth in Section 4.2(f).

     

    “Business
      Day”
means
      any day on
      which banks are not authorized or required to close in New York, New
      York.

     

    “Buyer”
has
      the meaning
      set forth in the preamble. 

     

    “Change
      of
      Control”
means
      (a) El
      Paso’s failure to own, directly or indirectly, 100% of the issued and
      outstanding common stock of Originator, or (b) upon completion of, and pursuant
      to, a transaction, or a series of transactions (which may include prior
      acquisitions of capital stock of El Paso in the open market or otherwise),
      involving a tender offer (i) a "person" (within the meaning of
      Section 13(d) of the Securities Exchange Act of 1934) other than El Paso or
      a Subsidiary of El Paso or any employee benefit plan maintained for employees
      of
      El Paso and/or any of its Subsidiaries or the trustee therefor, shall have
      acquired direct or indirect ownership of and paid for in excess of 50% of the
      outstanding capital stock of El Paso entitled to vote in elections for directors
      of El Paso and (ii) at any time before the later of (A) six months after the
      completion of such tender offer and (B) the next annual meeting of the
      shareholders of El Paso following the completion of such tender offer more
      than
      half of members of the Board of Directors of El Paso consists of individuals
      who
      (x) were not members of the Board of Directors of El Paso before the completion
      of such tender offer and (y) were not appointed, elected or nominated by the
      Board of Directors of El Paso in office prior to the completion of such tender
      offer (other than any such appointment, election or nomination required or
      agreed to in connection with, or as a result of, the completion of such tender
      offer).

     

    “Collections”
means,
      with
      respect to any Receivable, all cash collections in respect of such Receivable,
      including all yield, Finance Charges or other related amounts accruing in
      respect thereof and all cash proceeds of Related Security with respect to such
      Receivable. 

     

    “Credit
      and
      Collection Policy”
means
      Originator’s credit and collection policies and practices relating to Contracts
      and Receivables existing on the date hereof and summarized in Exhibit V,
      as modified from
      time to time in accordance with this Agreement.

     

    “Default
      Fee”
means
      a per annum
      rate of interest equal to the sum of (i) the Prime Rate, plus (ii) 2.0% per
      annum.

     

    “Discount
      Factor”
means
      a
      percentage (initially 0.59%) calculated to provide Buyer with a reasonable
      return on its investment in the Receivables after taking account of (i) the
      time
      value of money based upon the anticipated dates of collection of the Receivables
      and the cost to Buyer of financing its investment in the Receivables during
      such
      period and (ii) the risk of nonpayment by the Obligors. Originator and Buyer
      may
      agree from time to time to change the Discount Factor based on changes in one
      or
      more of the items affecting the calculation thereof, provided
      that any change to
      the Discount Factor shall take effect as of the commencement of a Monthly
      Period, shall apply only prospectively and shall not affect the Purchase Price
      payment in respect of a Purchase which occurred during any Monthly Period ending
      prior to the Monthly Period during which Originator and Buyer agree to make
      such
      change.

     

    “El
      Paso”
means
      El Paso
      Corporation, a Delaware corporation, together with any successor thereto in
      a
      succession not constituting a Change of Control.

     

    “Environmental
      Laws”
means
      all laws,
      rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions,
      notices or binding agreements issued, promulgated or entered into by any
      federal, state, local or foreign or other governmental authority or regulatory
      body regulating or imposing liability or standards of conduct concerning
      protection of the environment, preservation or reclamation of natural resources,
      the management, release or threatened release of any Hazardous Material or
      to
      health and safety matters.

     

    “Environmental
      Liability”
means
      any
      liability, contingent or otherwise (including any liability for damages, costs
      of environmental remediation, fines, penalties or indemnities), of Originator
      or
      any of its Subsidiaries resulting from or based upon (a) violation of any
      Environmental Law, (b) the generation, use, handling, transportation, storage,
      treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
      Materials, (d) the release or threatened release of any Hazardous Materials
      into
      the environment or (e) any contract, agreement or other consensual arrangement
      pursuant to which liability is assumed or imposed with respect to any of the
      foregoing.

     

    “ERISA”
means
      the
      Employee Retirement Income Security Act of 1974 and the regulations promulgated
      and rulings issued from time to time thereunder.

     

    “ERISA
      Affiliate”
means
      any Person
      who is a member of Originator’s controlled group within the meaning of
      Section 4001(a)(14)(A) of ERISA.

     

    “Excluded
      Receivable”
means
      any
      indebtedness and other obligations owed to Originator, to the extent such
      indebtedness and other obligations arise from the business or assets of a Person
      acquired by Originator in any Business Combination or from the business or
      assets of a Person which has acquired Originator in any Business Combination
      (other than the business and assets of such Person conducted and owned by
      Originator prior to such Business Combination), until and unless (i) Originator
      shall have provided the Buyer and the Program Agent (as Buyer’s assignee) with
      notice of such Business Combination and requested that such indebtedness and
      other obligations be eligible for inclusion as Receivables hereunder and under
      the other Transaction Documents, and (ii) Buyer and the Program Agent shall
      have
      consented to such eligibility.

     

    “Federal
      Bankruptcy Code”
means
      Title 11 of
      the United States Code entitled “Bankruptcy”, as amended and any successor
      statute thereto.

     

    “Funding
      LLC”
has
      the meaning
      set forth in the Preliminary Statements.

     

    “Hazardous
      Materials”
means
      all
      explosive or radioactive substances or wastes and all hazardous or toxic
      substances, wastes or other pollutants, including petroleum or petroleum
      distillates, asbestos or asbestos containing materials, polychlorinated
      biphenyls, radon gas, infectious or medical wastes and all other substances
      or
      wastes of any nature, in each case above to the extent regulated pursuant to
      any
      Environmental Law.

     

    “Initial
      Cutoff
      Date”
means
      October 31,
      2006.

     

    “Initial
      Sale
      Date”
means
      November 3,
      2006.

     

    “Intended
      Characterization”
means,
      for income
      tax purposes, the characterization of the acquisition by the Investors of
      Investor Interests under the Purchase Agreement as a loan or loans by the
      Investors to Funding LLC secured by the Receivables, the Related Security and
      the Collections.

     

    “Material
      Adverse Effect”
means
      a material
      adverse effect on (i) the financial condition of Originator, (ii) the ability
      of
      Originator to perform its obligations under this Agreement or any other
      Transaction Document, (iii) the legality, validity or enforceability of this
      Agreement or any other Transaction Document, (iv) Originator’s, Buyer’s, Funding
      LLC’s, the Program Agent’s or any Investor’s interest in the Receivables
      generally or in any significant portion of the Receivables, the Related Security
      or Collections with respect thereto, or (v) the collectibility of the
      Receivables generally or of any material portion of the
      Receivables.

     

    “Multiemployer
      Plan”
means
      a
“multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which
      Originator or an ERISA Affiliate is making or accruing an obligation to make
      contributions, or has within any of the preceding five plan years made or
      accrued an obligation to make contributions and in respect of which Originator
      or an ERISA Affiliate has any liability (contingent or otherwise), such plan
      being maintained pursuant to one or more collective bargaining
      agreements.

     

    “Multiple
      Employer Plan”
means
      a single
      employer plan, as defined in Section 4001(a)(15) of ERISA, which (a) is
      maintained for employees of Originator or an ERISA Affiliate and at least one
      Person other than Originator and its ERISA Affiliates, or (b) was so maintained
      and in respect of which Originator or an ERISA Affiliate could have liability
      under Section 4064 or 4069 of ERISA in the event such plan has been or were
      to be terminated.

     

    “Original
      Balance”
means,
      with
      respect to any Receivable, the Outstanding Balance of such Receivable on the
      date it was purchased by Buyer.

     

    “Originator”
has
      the meaning
      set forth in the preamble.

     

    “PBGC”
means
      the Pension
      Benefit Guaranty Corporation referred to and defined in ERISA and any successor
      entity performing similar functions.

     

    “Plan”
means
      a Single
      Employer Plan or a Multiple Employer Plan.

     

    “Plan
      Termination Event”
means
      (a) a
“reportable event,” as such term is described in Section 4043 of ERISA (other
      than a “reportable event” not subject to the provision for 30-day notice to the
      PBGC under PBGC Reg. § 4043), or an event described in Section 4062(e) of
      ERISA, or (b) the withdrawal of Originator or any ERISA Affiliate from a
      Multiple Employer Plan during a plan year in which it was a “substantial
      employer,” as such term is defined in Section 4001(a)(2) of ERISA or the
      incurrence of liability by Originator or any ERISA Affiliate under Section
      4064
      of ERISA upon the termination of a Multiple Employer Plan, or (c) the filing
      of
      a notice of intent to terminate a Plan or the treatment of a Plan amendment
      as a
      termination under Section 4041 of ERISA, or (d) the institution of proceedings
      to terminate a Plan by the PBGC under Section 4042 of ERISA, or (e) the
      conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the
      creation of a lien upon property or rights to property of Originator or any
      ERISA Affiliate for failure to make a required payment to a Plan are satisfied,
      or (f) the adoption of an amendment to a Plan requiring the provision of
      security to such Plan, pursuant to Section 307 of ERISA, or (g) the
      occurrence of any other event or the existence of any other condition which
      would reasonably be expected to result in the termination of, or the appointment
      of a trustee to administer, any Plan under Section 4042 of
      ERISA.

     

    “Potential
      Termination Event”
means
      an event
      which, with the passage of time or the giving of notice, or both, would
      constitute a Termination Event.

     

    “Prime
      Rate”
means
      a per annum
      rate equal to the higher of (i) the “prime rate” announced by the Reference Bank
      from time to time, changing when and as such rate changes or (ii) the Federal
      Funds Effective Rate plus .50%.

     

    “Program
      Agent”
has
      the meaning
      set forth in the Preliminary Statements. 

     

    “Purchase”
means
      a purchase
      under this Agreement by Buyer from Originator of the Receivables, the Related
      Security and the Collections related thereto, together with all related rights
      in connection therewith as described in Section 1.1.

     

    “Purchase
      Agreement”
has
      the meaning
      set forth in the Preliminary Statements.

     

    “Purchase
      Price”
means,
      with
      respect to any Purchase from Originator on any date, the aggregate price to
      be
      paid to Originator for such Purchase in accordance with Section 1.2
      for the
      Receivables, Related Security and Collections being sold to Buyer on such date,
      which price shall equal (i) the product of (x) the Original Balance of such
      Receivables, multiplied by (y) one minus the Discount Factor then in effect,
      minus (ii) any Purchase Price Credits, Repurchase Prices or Special Adjustment
      Credits be credited against the Purchase Price otherwise payable in accordance
      with Section 1.3.

     

    “Purchase
      Price
      Credit”
has
      the meaning
      set forth in Section 1.3(a).

     

    “Receivable”
means
      (i) all
      indebtedness and other obligations owed to Originator (at the time it arises,
      and prior to giving effect to the transfers and conveyances under this
      Agreement), including any indebtedness, obligation or interest constituting
      an
      account or payment intangible, to the extent such indebtedness and other
      obligations arise in connection with reservation charges for the daily
      transportation or storage of natural gas by Originator and without regard to
      whether the applicable Obligor shall have been invoiced therefor and (ii) the
      Additional Amounts, and includes the obligation to pay any Finance Charges
      with
      respect thereto; provided
      that
      the term
“Receivable” shall not include any such indebtedness or obligations that, prior
      to such indebtedness or obligations being transferred and conveyed to Buyer
      hereunder, (A) were owed to Originator by any of its Affiliates from time to
      time, (B) Originator shall have notified Buyer and the Program Agent in writing
      are not Eligible Receivables, or that is an Excluded Receivable. Indebtedness
      and other rights and obligations arising from any one transaction, including
      indebtedness and other rights and obligations represented by an individual
      invoice, shall constitute a Receivable separate from a Receivable consisting
      of
      the indebtedness and other rights and obligations arising from any other
      transaction; provided
      that any
      indebtedness, rights or obligations referred to in the immediately preceding
      sentence shall be a Receivable regardless of whether the account debtor or
      Originator treats such indebtedness, rights or obligations as a separate payment
      obligation.

     

    “Records”
means,
      with
      respect to any Receivable, 

     

    (i) all
      Contracts; and


     

    (ii) (in
      each case
      solely to the extent of the rights therein (if any) of the Originator or Buyer,
      as applicable) all other documents, books, records and other information
      (including computer programs, tapes, disks, punch cards, data processing
      software and related property and rights) relating to such Receivable, any
      Related Security therefor and the related Obligor.

     

    “Related
      Security”
means,
      with
      respect to any Receivable:

     

    (i)  all
      security
      interests or liens and property subject thereto from time to time, if any,
      purporting to secure payment of such Receivable, whether pursuant to the
      Contract related to such Receivable or otherwise, together with all financing
      statements and security agreements describing any collateral securing such
      Receivable,

     

    (ii)  all
      guaranties,
      letters of credit, insurance and other agreements or arrangements of whatever
      character from time to time supporting or securing payment of such Receivable
      whether pursuant to the Contract related to such Receivable or
      otherwise,

     

    (iii)  all
      Records related
      to such Receivable, and

     

    (iv)  all
      proceeds of any
      of the foregoing.

     

    “Repurchase
      Price”
has
      the meaning
      set forth in Section 1.3(a).

     

    “2nd
      Quarter 2006
      10-Q”
has
      the meaning
      set forth in Section 2.1(e).

     

    “Second
      Tier
      Sale Agreement”
has
      the meaning
      set forth in the Preliminary Statements.

     

    “Single
      Employer
      Plan”
means
      a single
      employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
      maintained for employees of Originator or an ERISA Affiliate and no Person
      other
      than Originator and its ERISA Affiliates or (b) was so maintained and in respect
      of which Originator or an ERISA Affiliate could have liability under
      Section 4069 of ERISA in the event such plan has been or were to be
      terminated.

     

    “Special
      Adjustment Credit”
has
      the meaning
      set forth in Section 1.3(b).

     

    “Subsidiary”
of
      a Person
      means, as to any Person, a corporation, partnership or other entity of which
      more than 50% of the outstanding shares of stock or other ownership interests
      having ordinary voting power (other than stock or such other ownership interests
      having such power only by reason of the happening of a contingency) to elect
      directors or other managers of such corporation, partnership or other entity
      are
      at the time owned, directly or indirectly, through one or more Subsidiaries
      of
      such Person, by such Person.

     

    “Tariff”
means
      Originator’s FERC Gas Tariff as approved by FERC and as the same may be modified
      from time to time in accordance with the rules and regulations of
      FERC.

     

    “Termination
      Date”
means
      the
      earliest to occur of (i) the Amortization Date under the Purchase
      Agreement, (ii) the Business Day immediately prior to the occurrence of a
      Termination Event set forth in Section 5.1(d),
      (iii) the
      Business Day specified in a written notice from Buyer to Originator following
      the occurrence and during the continuance of any other Termination Event, and
      (iv) the date which is five Business Days after Buyer’s receipt of written
      notice from Originator that Originator wishes to terminate the facility
      evidenced by this Agreement.

     

    “Termination
      Event”
has
      the meaning
      set forth in Section 5.1.

     

    “Transferee”
has
      the meaning
      set forth in Section 7.4.

     

    “2005
      Form
      10-K”
has
      the meaning
      set forth in Section 2.1(e).

     

    Additionally,
      unless otherwise specified herein:

     

    (a) All
      accounting
      terms not specifically defined herein shall be construed in accordance with
      GAAP. All terms used in Article 9 of the UCC in the State of New York, and
      not
      specifically defined herein, are used herein as defined in such Article
      9.

     

    (b) The
      definitions of
      terms herein shall apply equally to the singular and plural forms of the terms
      defined. Whenever the context may require, any pronoun shall include the
      corresponding masculine, feminine and neuter forms. The words “include,”
“includes”
and
“including”
shall
      be deemed
      to be followed by the phrase “without limitation.” The word “will”
shall
      be
      construed to have the same meaning and effect as the word “shall.”
Unless
      the
      context requires otherwise, (i) any definition of or reference to any agreement,
      instrument or other document shall be construed as referring to such agreement,
      instrument or other document as from time to time amended, restated,
      supplemented or otherwise modified or replaced (subject to any restrictions
      on
      such amendments, supplements or modifications set forth herein or in any other
      Transaction Document), (ii) any reference herein to any Person shall be
      construed to include such Person’s successors and assigns, (iii) the words
“herein,”
“hereof”
and
“hereunder,”
and
      words of
      similar import when used in this Agreement shall be construed to refer to this
      Agreement in its entirety and not to any particular provision thereof, (iv)
      all
      references in this Agreement to Articles, Sections, Exhibits and Schedules
      shall
      be construed to refer to Articles and Sections of, and Exhibits and Schedules
      to, this Agreement in which such references appear, (v) any reference to any
      law
      shall include all statutory and regulatory provisions consolidating, amending,
      replacing or interpreting such law and any reference to any law or regulation
      shall, unless otherwise specified, refer to such law or regulation as amended,
      modified or supplemented from time to time, and (vi) the words “asset”
and
“property”
shall
      be
      construed to have the same meaning and effect and to refer to any and all
      tangible and intangible assets and properties, including cash, securities,
      accounts and contract rights.