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 .

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.

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.

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 “ 2 ^nd 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 2 ^nd 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.

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.

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