RECEIVABLES PURCHASE AGREEMENT

This Receivables Purchase Agreement dated as of October 6, 2006   is among SNG FUNDING COMPANY, L.L.C., a Delaware limited liability company (“ Seller ”), SOUTHERN NATURAL GAS COMPANY, a Delaware corporation, as initial Servicer (the initial Servicer together with Seller, the “ Seller Parties ” and each a “ Seller Party ”), STARBIRD FUNDING CORPORATION (“ Starbird ”) and the other funding entities from time to time party hereto as Investors, BNP PARIBAS, NEW YORK BRANCH (“ Paribas ”), and the other financial institutions from time to time party hereto as Managing Agents, and BNP PARIBAS, NEW YORK BRANCH, as program agent for the Investors hereunder (together with its successors and assigns hereunder, the “ Program Agent ”). Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I .

Seller desires to transfer and assign Investor Interests to the Investors from time to time.

Upon and subject to the terms and conditions of this Agreement, (i) Conduit Investors may, in their absolute and sole discretion, purchase Investor Interests from Seller from time to time, and (ii) in the event that a Conduit Investor declines to make any purchase, the Committed Investors which are part of its Investor Group shall purchase Investor Interests from Seller from time to time.

Paribas has been requested and is willing to act as Program Agent on behalf of the Investors in accordance with the terms hereof.

Section 1.1.    Purchase Facility . Upon the terms and subject to the terms and conditions hereof, Seller hereby sells and assigns Investor Interests to the Program Agent, for the benefit of the Investors. In accordance with the terms and conditions set forth herein, Investors may or shall, as provided herein, instruct the related Managing Agent to purchase on its behalf through the Program Agent, Investor Interests from Seller from time to time in an aggregate amount not to exceed the Program Limit, and for each Investor Group in an aggregate amount not to exceed the Group Purchase Limit for such Investor Group, during the period from the date hereof to but not including the Amortization Date.

Section 1.2.    Increases .

(a)    Servicer shall provide the Program Agent and each Managing Agent with at least one Business Day’s prior notice in the form set forth as Exhibit II hereto of each Incremental Purchase (collectively, a “ Purchase Notice ”). Each Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth below, shall be irrevocable and shall specify the requested Purchase Price (which shall not be less than $1,000,000 for each Investor Group) and date of purchase, which shall be a Monthly Settlement Date (or, in the case of the initial Incremental Purchase, the date of this Agreement). Following receipt of a Purchase Notice, each Managing Agent shall notify each Investor in its Investor Group of its receipt of same.

(b)    Each Incremental Purchase to be made hereunder shall be made ratably among the Investor Groups in accordance with their Group Purchase Limits. For each Investor Group, the applicable Managing Agent shall determine whether its Conduit Investor agrees to purchase its Pro Rata Share of the Incremental Purchase, and if the applicable Conduit Investor declines to make such purchase, the Managing Agent shall notify the Committed Investors in such Investor Group of the Conduit Investor declining to make such purchase and the Committed Investors in such Investor Group each shall purchase its Pro Rata Share of the Incremental Purchase.

(c)    On the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set forth in Article VI , the applicable Investors shall make available to the related Managing Agent at its address listed beneath its signature on its signature page to this Agreement (or on the signature page to the Joinder Agreement pursuant to which it became a party hereto), for deposit to such account of Seller designated in the Purchase Notice, in immediately available funds, no later than 3:00 p.m. (New York time), an amount equal to such Investor’s Pro Rata Share of the aggregate Purchase Price of the Investor Interests then being purchased.

Section 1.3.    Payment Requirements . All amounts to be paid or deposited by any Seller Party pursuant to any provision of this Agreement shall be paid or deposited in accordance with the terms hereof no later than noon (New York time) on the day when due in immediately available funds, and if not received before noon (New York time) may, in each Managing Agent’s discretion, be deemed to be received on the next succeeding Business Day. If such amounts are payable to an Investor they shall be paid to the related Managing Agent, for the account of such Investor, at its address listed beneath its signature page to this Agreement (or on the signature page to the Joinder Agreement pursuant to which it became a party hereto) until otherwise notified by such Managing Agent. Yield shall be computed as provided in the definition thereof, and all computations of per annum fees and other per annum amounts hereunder or under the Fee Letters shall be made on the basis of a year of 360 days for the actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day.

Section 2.1.    Payments . Seller shall promptly pay on each Monthly Settlement Date and, from and after the Amortization Date, on each other Business Day when due as otherwise provided in this Agreement (a) to each Managing Agent, for the account of the related Investor or Investors in its Investor Group, (i) such fees as set forth in the Fee Letters, (ii) all amounts payable as Yield, (iii) all amounts payable pursuant to Sections 2.2 , 2.7 or 2.8 , (iv) all amounts payable pursuant to Article X , if any, (v) all Breakage Costs and (vi) all Default Fees, and (b) to Servicer, all Servicer Expenses (the obligations described in clause (a) and (b) of this sentence, collectively, the “ Obligations ”). In addition, Seller shall pay on the date of this Agreement the amounts specified to be due and payable on such date in the Fee Letters. If Seller fails to pay any of the Obligations when due, or if Servicer fails to make any deposit required to be made by it under this Agreement when due, such Person agrees to pay, on demand, the Default Fee in respect thereof until paid. In no event shall any provision of this Agreement or the Fee Letters require the payment or permit the collection of any amounts hereunder in excess of the maximum permitted by applicable law. If at any time Seller receives any Collections, Seller shall immediately pay such Collections to Servicer for application in accordance with the terms and conditions hereof and, at all times prior to such payment, such Collections shall be held in trust by Seller for the exclusive benefit of the Investors, the Managing Agents and the Program Agent.

Section 2.2.    Reinvestments and Purchase Price Adjustments .

(a)    Seller hereby requests, and the Investors hereby agree to make, on each Business Day prior to the Amortization Date, subject to (i) the conditions precedent set forth in Section 6.2 and (ii) the condition that, after giving effect thereto, the aggregate of the Investor Interests shall not exceed 100%, a reinvestment (each a “ Reinvestment ”) with that portion of the balance of each and every Collection received that is part of any Investor Interest, such that after giving effect to such Reinvestment, the amount of Aggregate Capital immediately after such receipt and corresponding Reinvestment shall be equal to the amount of Aggregate Capital immediately prior to such receipt. Payments to Seller in respect of Reinvestments during any Monthly Period shall be made as provided in clause (i) or (ii)(B) of Section 2.3 , Section 2.4(a) , Section 2.4(b) or Section 2.4(c)(iii) , subject to the following provisions of this Section 2.2 .

(b)    In the event that notwithstanding the provisions of Section 2.3 or 2.4 hereof to the contrary, Collections or other amounts are remitted to Seller in respect of Reinvestments on a day and, as a result thereof, the aggregate of the Investor Interests on such day shall exceed 100%, computed based on the Current Month Net Receivables Pool Balance for such day as reflected in a Daily Report or as otherwise determined by Servicer or the Program Agent, then within one Business Day following the date on which such Daily Report was delivered or the date of such determination, as applicable, Seller shall remit to Servicer immediately available funds in an amount equal to such excess payment for deposit into the Collection Account as a Special Adjustment Amount and to be treated as Collections under this Agreement.

(c)    In addition, the amounts remitted to Seller in respect of Reinvestments for a Monthly Period as described in Section 2.2(a) shall be subject to reconciliation on the Monthly Settlement Date for such Monthly Period (or, if earlier, on the Amortization Date) as provided in this Section 2.2(c) . If at the end of any Monthly Period (the “ Subject Monthly Period ”) prior to the Monthly Period in which the Amortization Date occurs,

(i)    the sum of the Capital of the Investor Interests at such time plus the Aggregate Reserves computed for the Subject Monthly Period exceeded

(ii)    the sum of (A) the Net Receivable Pool Balance at the end of the Subject Monthly Period, plus (B) the Collection Account Amount on the last Daily Settlement Date for the Subject Monthly Period (after giving effect to any changes therein on such Daily Settlement Date), plus (C), if determined in a report from the Servicer delivered to the Program Agent prior to the Monthly Settlement Date for the Subject Monthly Period, the aggregate Outstanding Balance of Eligible Receivables which were first included in the Current Month Net Receivables Pool Balance for the Monthly Period immediately following the Subject Monthly Period (calculated as though there were no Carryback Receivables) on any day prior to the Monthly Report Date for the Subject Monthly Period (or, if earlier, the Amortization Date),

Seller shall remit to Servicer on the Monthly Settlement Date for the Subject Monthly Period immediately available funds in an amount equal to the lesser of (x) the excess of the amount described in clause (i) above over the amount described in clause (ii) above or (y) the aggregate amounts remitted to Seller in respect of Reinvestments for the Subject Monthly Period as described in Section 2.2(a) , for deposit into the Collection Account as a Special Adjustment Amount and to be treated as Collections under this Agreement. If the Amortization Date occurs and at the close of business on the immediately preceding day the sum of the Capital of the Investor Interests plus the then applicable Aggregate Reserves exceeded the sum of the Net Receivable Pool Balance plus the Collection Account Amount, Seller shall remit to Servicer on the Amortization Date immediately available funds in an amount equal to the lesser of such excess or the aggregate amounts remitted to Seller in respect of Reinvestments for the Monthly Period in which the Amortization Date occurred as described in Section 2.2(a) , for deposit into the Collection Account as a Special Adjustment Amount and to be treated as Collections under this Agreement.

Section 2.3.    Collections. On each day Servicer shall set aside and hold in trust for the holder of each Investor Interest, all Collections received on such day, any other amounts received by or on behalf of Seller from the Originator or Finance LLC pursuant to a Sale Agreement and an additional amount of funds available to Seller for the payment of any accrued and unpaid Obligations owed by Seller and not previously paid by Seller in accordance with Section 2.1 , and shall pay and remit apply such funds as follows:

(i)    on each Business Day during a Monthly Period that is prior to both the Cash Receipt Date and the Amortization Date, remit such funds to Seller in respect of Reinvestments for such Monthly Period pursuant to Section 2.2 (and subject to the provisions of Section 2.2(c) ), so long as, on such Business Day, after giving effect to such remittance of funds, the aggregate of the Investor Interests shall not exceed 100%, and otherwise deposit such amounts into the Collection Account, and otherwise deposit the remainder of such amounts into the Collection Account;

(ii)    on each Cash Receipt Date prior to the Amortization Date and on each Business Day thereafter during a Monthly Period prior to the Amortization Date, (A) deposit such amounts into the Collection Account until the amount on deposit therein equals the Required Collection Account Amount for such Business Day, and (B) (x) at Servicer’s election, remit the balance (if any) of such funds to Seller in respect of Reinvestments for such Monthly Period pursuant to Section 2.2 (and subject to the provisions of Section 2.2(c) ), so long as, after giving effect to such remittance of funds, the aggregate of the Investor Interests shall not exceed 100%, and otherwise (y) deposit such balance of such funds, or the remainder thereof, as applicable, into the Collection Account; and

(iii)    on each Business Day from and after the Amortization Date, deposit such amounts into the Collection Account for the sole benefit of the Program Agent, the Managing Agent and the Investors.

If at any time Servicer determines that an amount deposited into the Collection Account does not constitute an amount to be deposited therein pursuant to this Section 2.3 or otherwise pursuant to this Agreement or any Transaction Document, Servicer shall withdraw such amounts from the Collection Account and pay such amounts to the Person that Servicer determines is entitled thereto.

Section 2.4.    Withdrawals from Collection Account prior to Amortization Date . Prior to the occurrence of the Amortization Date, Servicer shall withdraw from the Collection Account and pay to the persons entitled thereto the following amounts on the following dates:

(a)    at Servicer’s election, on each Daily Settlement Date other than the last Daily Settlement Date with respect to a Monthly Period, to Seller in respect of Reinvestments for such Monthly Period pursuant to Section 2.2 (and subject to the provisions of Section 2.2(c) ), an amount equal to the excess (if any) of (x) the amount on deposit in the Collection Account on such date over (y) the Required Collection Account Amount on such date (computed based on the Estimated Current Month Net Receivables Pool Balance for such Daily Settlement Date);

(b)    at Servicer’s election, on the last Daily Settlement Date with respect to a Monthly Period, to Seller, an amount equal to the excess (if any) of (x) the amount on deposit in the Collection Account on such date over (y) the Required Collection Account Amount on such date (computed based on the Current Month Net Receivables Pool Balance for the last Business Day of such Monthly Period);

(c)    on each Monthly Settlement Date:

(i)    first , in the following order or priority: (A) to Servicer the Servicer Expenses and the Servicer Fee, if Seller or one of its Affiliates is not then acting as Servicer, (B) to the Program Agent and each Managing Agent, such Person’s costs of collection and enforcement of this Agreement, (C) ratably to the Persons entitled thereto all accrued and unpaid fees under the Fee Letters and all Yield due and payable, and (D) ratably to the Persons entitled thereto, all other unpaid Obligations, except for the Servicer Fee and the Servicer Expenses if Seller or one of its Affiliates is acting as Servicer, and (E) the Servicer Fee and the Servicer Expenses, if Seller or one of its Affiliates is acting as Servicer;

(ii)    second , to the reduction of the Aggregate Capital in an amount, if any, necessary so that on such Monthly Settlement Date (A) the Aggregate Capital does not exceed the Program Limit in effect for such date and (B) the aggregate of the Investor Interests does not exceed 100%, applied ratably in accordance with the Capital Pro Rata Share of the Investors of each such Managing Agent’s Investor Group; and

(iii)    third , any balance remaining thereafter shall be remitted from Servicer to Seller on such Monthly Settlement Date in respect of Reinvestments for the preceding Monthly Period pursuant to Section 2.2 .

Section 2.5.    Application of Collections Following Amortization . On each Business Day (or, in the case of clauses (i) and (vi) below, on each Monthly Settlement Date) from and after the occurrence of the Amortization Date, Servicer shall withdraw from the Collection Account and pay to the persons entitled thereto the following amounts on the following dates:

(i)    first , to Servicer and amount equal to the Servicer Expenses and the Servicer Fee, if Seller or one of its Affiliates is not then acting as Servicer,

(ii)    second , to the Program Agent and each Managing Agent, an amount equal to such Person’s costs of collection and enforcement of this Agreement,

(iii)    third , ratably to the Persons entitled thereto, all accrued and unpaid fees under the Fee Letters and all Yield due and payable hereunder,

(iv)    fourth , to the Managing Agents, ratably in accordance with the Capital Pro Rata Share of the Investors of each such Managing Agent’s Investor Group, the amount required to reduce the Aggregate Capital to zero,

(v)    fifth , ratably to the Persons entitled thereto, an amount equal to all other unpaid Obligations, except for the Servicer Fee and the Servicer Expenses if Seller or one of its Affiliates is acting as Servicer,

(vi)    sixth , to Servicer, an amount equal to the Servicer Expenses and the Servicer Fee , if Seller or one of its Affiliates is acting as Servicer, and

(vii)    seventh , after the Aggregate Unpaids have been reduced to zero, to Seller.

Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.5 and unless otherwise provided therein, shall be shared ratably (within each priority) among the Program Agent, the Managing Agents and the Investors in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.

Section 2.6.    Collection Account . In connection with this Agreement, Servicer shall establish prior to date of the initial Incremental Purchase and thereafter maintain, in the name of Seller for the benefit of the Investors, the Managing Agents and the Program Agent, a segregated deposit account (the “ Collection Account ”) bearing a designation clearly indicating that the funds deposited therein are held for the ratable benefit of the Investors. The Collection Account shall at all times be maintained at a depository bank approved by the Program Agent and shall be subject at all times to a Blocked Account Agreement that is in full force and effect. Servicer shall make deposits into, and make withdrawals from, the Collection Account as provided in this Agreement. Any interest earnings on amounts on deposit from time to time in the Collection Account shall be applied pursuant to this Agreement as Collections. The Program Agent for the benefit of itself, the Investors and the Managing Agents shall possess all right, title and interest in all funds on deposit from time to time in the Collection and in all proceeds thereof (including all income thereon).

Section 2.7.    Payment Rescission . No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or is otherwise returned or refunded for any reason. Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to the Program Agent (for application to the Person or Persons who suffered such rescission, return or refund) the full amount thereof, plus the Default Fee from the date of any such rescission, return or refunding.

Section 2.8.    Deemed Collections and other Adjustment Payments . 

(a)    For purpose of this Agreement, Seller shall be deemed to have received a Collection of a Receivable, allocated as a reduction of Junior Interest, to the extent that (i) the Net Outstanding Balance of any such Receivable is either (x) reduced as a result of any defective or rejected goods or services, any discount or any adjustment or otherwise by Seller (other than cash Collections on account of such Receivable) or (y) 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 or warranties in Article V are no longer true with respect to such Receivable (unless such untrue representation or warranty affects only any portion thereof constituting an Additional Amount).

(b)    In the event Seller at any time receives any amounts representing Adjustment Payments, Seller shall immediately pay such amounts to Servicer for application as a Collection in accordance with the terms and conditions hereof and, at all times prior to such payment, such amounts shall be held in trust by Seller for the exclusive benefit of the Investors, the Managing Agents and the Program Agent.

Section 3.1.    Yield . Seller shall pay Yield with respect to the Capital of each Investor Interest of each Conduit Investor for each day that any Capital in respect of such Investor Interest is outstanding at the applicable CP Rate; provided that any Investor Interest of a Conduit Investor, or portion thereof, which such Conduit Investor is not then funding the proceeds of Commercial Paper shall accrue Yield pursuant to Article IV .

Section 3.2.    Payments . On each Monthly Settlement Date, Seller shall pay to the Managing Agent (for the benefit of the Conduit Investor in its Investor Group) an aggregate amount equal to all accrued and unpaid Yield in respect of the Capital of the Investor Interest of such Conduit Investor for the immediately preceding Accrual Period in accordance with Article II .

Section 3.3.    Calculation of Yield . Not later than the Business Day immediately preceding each Monthly Report Date, each Conduit Investor shall calculate the aggregate amount of Yield in respect of the Capital of the Investor Interest of such Conduit Investor for the Accrual Period ending on the next following Monthly Settlement Date and shall notify Seller and Servicer of such aggregate amount.

Section 4.1.    Committed Investor Funding Provisions . Each Investor Interest of Investors which are not Conduit Investors and each Investor Interest of Conduit Investors as to which Yield is to be determined pursuant to this Article IV , shall accrue Yield for each day during an Accrual Period at the applicable Bank Rate in accordance with the terms and conditions hereof. The initial Bank Rate for any Investor Interest funded by such Investors pursuant to the terms and conditions hereof shall be the LIBO Rate, unless (i) the availability of the LIBO Rate has been suspended pursuant to Section 4.3 below, or (ii) the applicable Managing Agent shall designate the Alternate Rate as the applicable rate of funding for such Investor Interest. If Yield on all or any portion of the Investor Interest of a Conduit Investor is first to be determined pursuant to this Article IV on a date other than the first day of an Accrual Period or if an Investor (other than a Conduit Investor) acquires all or any portion of the Investor Interest of the Conduit Investor in its Investor Group by assignment from such Conduit Investor, the initial Bank Rate for such Investor Interest (or such portion thereof) shall be determined in accordance with the preceding sentence.

Section 4.2.    Yield Payments . On each Monthly Settlement Date, Seller shall pay to the Managing Agent (for the benefit of each Investor in its Investor Group which is not Conduit Investors and the Conduit Investor in its Investor Group, if the Yield on its Investor Interest is to be determined pursuant to this Article IV ) an aggregate amount equal to all accrued and unpaid Yield in respect of the Capital of the Investor Interest of such Investors for the immediately preceding Accrual Period in accordance with Article II .

Section 4.3.    Suspension of the LIBO Rate . If any Investor notifies its related Managing Agent that it has determined in good faith that (i) the introduction of or any change in or in the interpretation or application of any law or regulation by any Governmental Authority (in each case after the date of this Agreement) makes it unlawful, or any central bank or other Governmental Authority asserts after the date of this Agreement that it is unlawful, for such Investor or its Funding Source to fund or maintain Investor Interests at the LIBO Rate, (ii) by reasons of circumstances affecting the interbank Eurodollar market either adequate and reasonable means do not exist for ascertaining the LIBO Rate for an Accrual Period, (iii) the applicable LIBO Rate will not adequately and fairly reflect the cost to such Investor or, if applicable, its Funding Source, of funding or maintaining Investor Interests, or (iv) such Investor or, if applicable, its Funding Source, is subject to restrictions on the amount of a category of Eurodollar liabilities or assets that it may hold corresponding to the Investor Interests, then (A) such Managing Agent shall notify the Program Agent and Seller and shall suspend the availability of the LIBO Rate with respect to each affected Investor until such later date on which each affected Investor shall have notified its related Managing Agent that the applicable circumstances described above in this Section 4.3 no longer exist, and (B) any affected Investor Interest then accruing Yield at such LIBO Rate shall thereupon and thereafter, until the first day of an Accrual Period on which such suspension has terminated, accrue Yield based upon the Alternate Rate.

Section 5.1.    Representations and Warranties of the Seller Parties . Each Seller Party hereby represents and warrants to the Program Agent, the Managing Agents and the Investors, as to itself, as of the date hereof and as of the date of each Incremental Purchase and the date of each Reinvestment that:

(a)    Existence and Power . Such Seller Party is (in the case of Servicer) a corporation duly organized or (in the case of Seller) a limited liability company duly formed, and in either case 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 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 such Seller Party of this Agreement, each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of Seller, Seller’s purchase of Receivables under the Second Tier Sale Agreement, its sale of Investor Interests hereunder and its use of the proceeds of such sales, are within its powers and authority and have been duly authorized by all necessary action on its part. This Agreement and each other Transaction Document to which such Seller Party is a party has been duly executed and delivered by such Seller Party.

(c)    No Conflict . The execution and delivery by such Seller Party of this Agreement, each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of Seller, its purchase of Receivables pursuant to the Second Tier Sale Agreement and its sale of Investor Interests hereunder, (i) do not contravene or violate (A) its certificate of incorporation or bylaws or its limited liability company agreement or certificate of formation, as applicable, (B) any law, rule or regulation applicable to it, including the Natural Gas Act, as amended, and the rules and regulations of FERC thereunder, (C) 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 (D) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and (ii) do not result in the creation or imposition of any Adverse Claim on assets of such Seller Party 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 such Seller Party of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder, and, in the case of Seller, its purchase of Receivables pursuant to the Second Tier Sale Agreement and its issuance of the Junior Interest and the sale of Investor Interests hereunder, except for the filing of the financing statements required hereunder, which filings have been duly made. Seller 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. Each Seller Party jointly and severally represents and warrants that 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 Seller 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 . (i) With respect to Seller, there is no litigation, action, suit or other legal or governmental proceeding pending or, to the best knowledge of either Seller Party, threatened, at law or in equity, or before or by any arbitrator or governmental authority or regulatory body relating to the transactions under this Agreement; and (ii) with respect to Servicer, there is no litigation, action, suit or other legal or governmental proceeding pending, or to the best knowledge of either Seller Party, 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 Servicer’s annual report on Form 10 K for the year ended December 31, 2005 or its quarterly report on Form 10 Q for the fiscal quarter ended June 30, 2006 as filed with the Securities and Exchange Commission.

(f)    Binding Effect . This Agreement and each other Transaction Document to which such Seller Party is a party constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party 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 such Seller Party or any of its Affiliates to the Program Agent, the Managing Agents or the Investors (i) pursuant to any requirement of this Agreement or any of the other Transaction Document, (ii) in any Daily Report, Mid-Month Report or Monthly Report, or (iii) listed or described on Schedule C hereto is, and all such information hereafter furnished by such Seller Party or any of its Affiliates to the Program Agent, the Managing Agents or the Investors 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 estimated amounts, projections or forecasts provided to the Program Agent, the Managing Agents or the Investors are based on estimates and assumptions believed in good faith by such Seller Party 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 any purchase 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 . Each purchase of Receivables by Seller or Finance LLC from Finance LLC or the Originator, as the case may be, pursuant to a Sale Agreement was made in good faith and without knowledge of any Adverse Claim against the Receivables purchased, except as contemplated by the Transaction Documents. Immediately prior to each purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as contemplated by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC of all appropriate jurisdictions to perfect Seller’s ownership interest in each Receivable, its Collections and the Related Security with respect thereto.

(j)    Perfection . This Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each purchase hereunder, transfer to the Program Agent for the benefit of the relevant Investor or Investors (and the Program Agent for the benefit of such Investor or Investors shall acquire from Seller) a valid and perfected first priority undivided percentage ownership or security interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, except as contemplated by the Transaction Documents.

(k)    Places of Business etc . The principal places of business and chief executive office of such Seller Party and the principal offices where it keeps its Records are located at the address(es) listed on Exhibit III or such other locations of which the Program Agent has been notified in accordance with Section 7.2(a) and where all action required by Section 13.4(a) has been taken and completed. Seller is organized as a limited liability company under the laws of the state of Delaware. Seller’s Federal Employer Identification Number and the organizational identification number from its jurisdiction of organization are correctly set forth on Exhibit III . In the past five years. Seller has not used any names, trade names or assumed names other than the name in which it has executed this Agreement.

(l)    Collections . The names and addresses of all Collection Banks, together with the account numbers of the Blocked Accounts of Seller at each Collection Bank, the post office box number of each Lock-Box are listed on Exhibit IV , as such exhibit may be amended from time to time in accordance with Section 7.2(b).

(m)    Material Adverse Effect . Seller represents and warrants that since the date of this Agreement, no event has occurred that would have a Material Adverse Effect.

(n)    Ownership of Seller . Finance LLC directly owns 100% of the issued and outstanding membership interests of Seller, free and clear of any Adverse Claim. There are no options, warrants or similar rights to acquire membership interests or other securities of Seller. Seller has no Subsidiaries.

(o)    Not an Investment Company . Such Seller Party 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 . Such Seller Party 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 . Such Seller Party 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)    Payments to Finance LLC, etc . With respect to each Receivable transferred to Seller under the Second Tier Sale Agreement, Seller has given reasonably equivalent value to Finance LLC in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by Finance LLC of any Receivable under the Second Tier Sale Agreement 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.

(s)    Enforceability of Contracts . Each Contract with respect to each Receivable included in the Net Receivable Pool Balance 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 the 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.

(t)    Eligible Receivables . Each Receivable included in the Net Receivable Pool Balance as at any date of determination was or will be an Eligible Receivable on such date.

(u)    Net Receivable Pool Balance . Immediately after giving effect to each purchase hereunder, the aggregate of the Investor Interests does not exceed 100%.

(v)    Purpose . Seller has determined that, from a business viewpoint, the purchases of the Receivables and related interests thereto from Finance LLC under the Second-Tier Sale Agreement, and the sales of Investor Interests to the Investors and the other transactions contemplated herein, are in the best interests of Seller. No Incremental Purchase or Reinvestment 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)    Collection of Third Party Amounts . No portion of the Collections in respect of any Receivable represents amounts such Seller Party is collecting on behalf of third parties.

(x)    Servicer Fee . The amount of the Servicer Fee represents a fair market Servicer Fee for the servicing obligations performed by Servicer hereunder.

Section 6.1.    Conditions Precedent to Initial Incremental Purchase and Restatement . The initial Incremental Purchase hereunder is subject to the conditions precedent that (a) the Program Agent shall have received on or before the date of such purchase those documents listed on Schedule B  (in sufficient copies for each Managing Agent), each (unless otherwise indicated) dated the date of the initial Incremental Purchase, in form and substance satisfactory to the Managing Agents and (b) all fees and expenses required to be paid on such date pursuant to the terms of this Agreement and the Fee Letters have been paid.

Section 6.2.    Conditions Precedent to All Purchases. Each Incremental Purchase of an Investor Interest shall be subject to the further conditions precedent that in the case of each such purchase: (a) Servicer or Computation Agent shall have delivered to the Managing Agents on or prior to the date of such purchase, in form and substance satisfactory to the Managing Agents, all Periodic Reports as and when due under Section 8.5 or Section 8.6(b) ; (b) the Amortization Date shall not have occurred; and (c) on the date of each such Incremental Purchase, the following statements shall be true (and acceptance of the proceeds of such Incremental Purchase shall be deemed a representation and warranty by Seller that such statements are then true):

(i)    the representations and warranties set forth in Section 5.1 are true and correct in all material respects on and as of the date of such Incremental Purchase as though made on and as of such date;

(ii)    no event has occurred and is continuing, or would result from such Incremental Purchase, that will constitute an Amortization Event, and no event has occurred and is continuing, or would result from such Incremental Purchase, that would constitute a Potential Amortization Event; and

(iii)    the Aggregate Capital does not exceed the Program Limit and the aggregate of the Investor Interests does not exceed 100%.

It is expressly understood that, unless otherwise directed by any Managing Agent or any Investor or unless an Amortization Event shall have occurred and be continuing, each Reinvestment shall, occur automatically on each day that Servicer shall receive any Collections without the requirement that any further action be taken on the part of any Person and notwithstanding the failure of Seller to satisfy any of the foregoing conditions precedent.

Section 7.1.    Affirmative Covenants of the Seller Parties . Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, as set forth below:

(a)    Reporting . Such Seller Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Program Agent and the Managing Agents:

(i)    Annual Reportin g. Within 120 days after the close of each of Seller’s fiscal years, unaudited financial statements (which shall include balance sheets, statements of income and changes in stockholders’ equity and a statement of cash flows) for such fiscal year, all certified by a Responsible Officer of Seller as fairly presenting in all material respects the financial condition, results of operations and cash flows of Seller in accordance with GAAP, subject to the omission of footnote disclosure

(ii)    Quarterly Reporting . Within 60 days after the close of the first three (3) quarterly periods of each of Seller’s fiscal years, unaudited balance sheets of Seller as at the close of each such period and statements of income and changes in stockholders’ equity and an unaudited statement of cash flows for Seller for the period from the beginning of such fiscal year to the end of such quarter, all certified by a Responsible Officer of Seller as fairly presenting in all material respects the financial condition, results of operations and cash flows of Seller in accordance with GAAP, subject to normal year-end adjustments and omission of footnote disclosure.

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

(b)    Notices . Such Seller Party will notify the Program Agent and the Managing Agents in writing of or, if applicable, provide the Program Agent and the Managing Agents copies of the following:

(i)    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) or materially decrease the credit quality of any newly created Receivables (other than Additional Amounts), requesting each Managing Agent’s consent thereto.

(ii)    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 the Program Agent, any Managing Agent or any Investor, copies of the same.

(iii)    Other Information . Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition, financial or otherwise, of such Seller Party as the Program Agent or any Managing Agent may from time to time reasonably request in order to protect the interests of the Program Agent, the Managing Agents, and the Investors under or as contemplated by this Agreement.

(c)    Notices . Such Seller Party will notify the Program Agent and each Managing Agent in writing of any of the following promptly (and in any case within two Business Days) upon a Responsible Officer’s actual knowledge thereof, describing the same and, if applicable, the steps being taken with respect thereto:

(i)    Amortization Events or Potential Amortization Events . The occurrence of each Amortization Event and each Potential Amortization Event, by a statement of a Responsible Officer of such Seller Party.

(ii)    Judgment and Proceedings . (A) All litigation and of all proceedings before any governmental authority against or involving Servicer or any of its Subsidiaries, except any litigation or proceeding that in the reasonable judgment of Servicer (taking into account the availability of appeals) is not likely to have a Material Adverse Effect; and (B) the entry of any judgment or decree or the institution of any litigation, arbitration proceeding or governmental proceeding against Seller.

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

(iv)    Defaults Under Other Agreements . If any Indebtedness of Servicer or any of its Subsidiaries in excess of $25,000,000 shall have been become due prior to its stated maturity, or any such Indebtedness of Servicer 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 Servicer or any of its Subsidiaries or a default by Servicer 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.

(v)    Termination Date . The occurrence of the “Termination Date” under and as defined in either Sale Agreement.

(d)    Compliance with Laws and Preservation of Corporate Existence . Such Seller Party 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 or limited liability company (as applicable) 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 . Such Seller Party will furnish to the Program Agent and its 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 the Program Agent and its 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 the Program Agent and its representatives, at its sole cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. The Program Agent and its representatives shall also have the right to discuss its affairs with such Seller Party’s 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 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 Servicer.

(f)    Keeping and Marking of Records and Books .

(i)    Servicer will (and will cause the Originator to) 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). Servicer will (and will cause the Originator to) give the Program Agent and each Managing Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence if such proposed change or amendment could be reasonably expected to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables.

(ii)    Such Seller Party will (and will exercise its rights under the Transaction Documents to cause the Originator to) at all times maintain an account in its master records indicating the aggregate amount of Receivables sold by the Originator to Finance LLC pursuant to the First Tier Sale Agreement and in turn sold by Finance LLC to Seller pursuant to the Second Tier Sale and in which Seller has issued the Senior Interest and/or a security interest to the Program Agent pursuant to this Agreement.

(g)    Compliance with Contracts and Credit and Collection Policy . Such Seller Party will (and will cause the Originator to) 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 (including by giving rise to a present right of offset by the applicable Obligor) and (ii) comply in all material respects with the Credit and Collection Policy and its collection procedures in regard to each Eligible Receivable and the related Contract.

(h)    Performance and Enforcement of Sale Agreement . Seller will perform its obligations and undertakings under and pursuant to the Second Tier Sale Agreement, will purchase Receivables thereunder in compliance with the terms thereof and will, to the extent necessary in its reasonable business judgment, enforce the rights and remedies accorded to Seller, directly or as assignee, under the Sale Agreements, provided that after the occurrence and during the continuation of an Amortization Event, Seller shall enforce its rights and remedies under the Sale Agreements at the direction of the Program Agent. Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Program Agent and the Investors as assignees of Seller) under the Sale Agreements as the Program Agent or any Managing Agent may from time to time reasonably request, including making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in either Sale Agreement.

(i)    Ownership . Seller will (or will cause the Originator to) take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections purchased under the Second Tier Sale Agreement irrevocably in Seller, free and clear of any Adverse Claims other than Adverse Claims contemplated by the Transaction Documents, and (ii) establish and maintain, in favor of the Program Agent, for the benefit of the Investors, a valid and perfected first priority undivided percentage ownership interest (and/or a valid and perfected first priority security interest) in all Receivables, Related Security and Collections to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims contemplated by the Transaction Documents; including in each case the filing of all financing statements or other similar instruments or documents necessary under the UCC of all appropriate jurisdictions to perfect the Program Agent’s (for the benefit of the Investors) interest in such Receivables, Related Security and Collections and such other action to perfect the interest of the Program Agent for the benefit of the Investors as the Program Agent or any Managing Agent may reasonably request.

(j)    Investors’ Reliance . Seller acknowledges that the Investors are entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as a legal entity that is separate from the Originator or any Affiliate thereof (each, an “ El Paso Entity ”). Therefore, from and after the date of execution and delivery of this Agreement, Seller shall take all reasonable steps, including all steps that the Program Agent, any Managing Agent or any Investor may from time to time reasonably request, to maintain Seller’s identity as a separate legal entity and to make it manifest to third parties that Seller is an entity with assets and liabilities distinct from those of any El Paso Entity thereof and not just a division of a El Paso Entity. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein,

(i)    Seller shall:

(A)    maintain books and records and bank accounts separate from those of any other Person;

(B)    maintain its assets in such a manner that it is not costly or difficult to segregate, identify or ascertain such assets;

(C)    comply with all organizational formalities necessary to maintain its separate existence;

(D)    hold itself out to creditors and the public as a legal entity separate and distinct from any other entity;

(E)    maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; except that Seller’s assets may be included in a consolidated financial statement of its Affiliate so long as appropriate notation is made on such consolidated financial statements to indicate the separateness of Seller from such Affiliate and to indicate that Seller’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person;

(F)    prepare and file its own tax returns separate from those of any Person to the extent required by applicable law, and pay any taxes required to be paid by applicable law;

(G)    allocate and charge fairly and reasonably any common employee or overhead shared with Affiliates;

(H)    not enter into any transaction with Affiliates except on an arm’s-length basis and pursuant to written, enforceable agreements;

(I)    conduct business in its own name, and use separate stationery, invoices and checks;

(J)    not commingle its assets or funds with those of any other Person;

(K)    not assume, guarantee or pay the debts or obligations of any other Person;

(L)    correct any known misunderstanding as to its separate identity;

(M)    not permit any Affiliate to guarantee or pay its obligations;

(N)    not make loans or advances to any other person;

(O)    pay its liabilities and expenses out of its own funds;

(P)    maintain a sufficient number of employees in light of its contemplated business purpose and pay the salaries of its own employees, if any, only from its own funds;

(Q)    maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided that the foregoing shall not require the member of Seller to make additional capital contributions to Seller; and

(R)    cause the managers, agents and other representatives of Seller to act at all times with respect to Seller consistently and in furtherance of the foregoing and in the best interests of Seller;

(S)    at all times have an Independent Manager and ensure that all limited liability company actions relating to (x) the selection, maintenance or replacement of the Independent Manager, (y) the dissolution or liquidation of Seller or (z) the initiation of, participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving Seller, are duly authorized by unanimous consent of Seller’s members and managers, including the Independent Manager; and

(T)    take such other actions as are reasonably necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Andrews Kurth LLP, as counsel for Seller, in connection with the closing of the Original Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times, and

(ii)    Seller shall not:

(A)    guarantee any obligation of any Person, including any Affiliate or become obligated for the debts of any other Person or hold out its credit as being available to pay the obligations of any other Person;

(B)    engage, directly or indirectly, in any business other than as required or permitted to be performed under this Agreement and the Second Tier Sale Agreement;

(C)    incur, create or assume any indebtedness or liabilities other than as expressly permitted under this Agreement and the Second Tier Sale Agreement;

(D)    make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person other than as permitted under this Agreement and the Second Tier Sale Agreement;

(E)    to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, sale or other transfer of any of its assets outside the ordinary course of Seller’s business;

(F)    buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities);

(G)    form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity, except, in each case, for the Buyer; or

(H)    own any asset or property other than the Receivables and proceeds thereof, and such other property as is contemplated by this Agreement and the Second Tier Sale Agreement.

(k)    Collections . Such Seller Party will cause (i) all Obligors to be directed to remit all Collections to a Lock-Box, a Blocked Account, (ii) all proceeds from all Lock-Boxes to be deposited into a Blocked Account, (iii) each Blocked Account to be subject at all times to a Blocked Account Agreement that is in full force and effect and (iv) each Lock-Box to be subject at all times to a Blocked Account Agreement that is in full force and effect. In the event any payments relating to Receivables are remitted directly to Seller or any Affiliate of Seller, Seller will remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Blocked Account within two (2) Business Days, and, at all times prior to such remittance, Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Program Agent, the Managing Agents and the Investors. Seller will maintain exclusive ownership, dominion and control of each Blocked Account and Lock-Box and shall not grant the right to take dominion and control of any Blocked Account or Lock-Box at a future time or upon the occurrence of a future event to any Person, in each case except that such action may be taken (i) with respect to Lock-Boxes subject to a Blocked Account Agreement signed by the Collection Bank with the right to take dominion and control of such Lock-Box and (ii) to the extent otherwise contemplated by this Agreement, a Blocked Account Agreement. Seller will not maintain any accounts or lockboxes, other than Lock-Boxes, Blocked Accounts and the Collection Account maintained in accordance with this Agreement.

(l)    Taxes . Such Seller Party will file all tax returns and reports required by law to be filed by it and will 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, for which adequate reserves in accordance with GAAP (if any) shall have been set aside on its books and where the failure to so file or pay could not reasonably be expected to have a Material Adverse Effect. Seller will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of any Conduit Investor, the Program Agent, any Managing Agent or any Committed Investor.

(m)    Insurance . Seller will maintain in effect, or cause to be maintained in effect, at Seller’s own expense, such casualty and liability insurance as Seller shall deem appropriate in its good faith business judgment. Seller will pay, or cause to be paid, the premiums therefor. The foregoing requirements shall not be construed to negate, reduce or modify, and are in addition to, Seller’s obligations hereunder.

(n)    Payment to Originator . With respect to any Receivable purchased by Seller from Finance LLC, such sale shall be effected under, and in strict compliance with the terms of, the Second Tier Sale Agreement, including the terms relating to the method of payment and amount and timing of payments to be made to Finance LLC in respect of the purchase price for such Receivable.

(o)    Operation of Pipelines . In the case of Servicer, 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 7.2.    Negative Covenants of Seller Parties . Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, that:

(a)    Name Change, Offices and Records . Seller will not (and will not permit the Originator to) (i) make any change to 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, at least forty-five (45) days prior to the effective date of any such change or relocation Seller notifies the Program Agent thereof and delivers to the Program Agent all financing statements, instruments, legal opinions and other documents reasonably requested by the Program Agent or any Managing Agent may reasonably request in connection with such change or relocation and has taken all other steps to ensure that the Program Agent, for the benefit of itself and the Investors, continues to have a first priority, perfected ownership or security interest in the Receivables, the Related Security related thereto and any Collections thereon, or (ii) change its jurisdiction of incorporation or formation (within the meaning of the applicable enactment of the UCC) unless the Program Agent shall have received from Seller, prior to such change, (A) those items described in clause (i) hereof, and (B) if the Program Agent, any Managing Agent or any Investor shall so request, an opinion of counsel, in form and substance reasonably satisfactory to such Person, as to such organization and Seller’s or the Originator’s, as applicable, valid existence and good standing and the perfection and priority of the Program Agent’s ownership or security interest in the Receivables, the Related Security and Collections. In accordance with Section 13.12(b) , the provisions of this Agreement shall apply to any successors or assigns.

(b)    Change in Payment Instructions to Obligors; Accounts . Such Seller Party 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 Blocked Account or Lock-Box, unless the Program Agent shall have received, at least ten (10) 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, a Blocked Account or Lock-Box, an executed Blocked Account Agreement with respect to the new Blocked Account or Lock-Box; provided that Servicer may make changes in instructions to Obligors regarding payments otherwise restricted above if such new instructions require such Obligor to make payments to another existing Blocked Account or Lock-Box. A revised Exhibit IV shall be delivered by Seller to the Program Agent in connection with any addition or termination of any Blocked Account or Lock-Box in accordance with the provisions of this section and Exhibit IV shall be deemed to be amended hereby upon such delivery.

(c)    Modifications to Credit and Collection Policy . Subject to Section 7.1(b)(i ), such Seller Party will not, and will not permit the Originator to, make any change to the Credit and Collection Policy that could materially adversely affect the collectibility of the Receivables (other than any portion thereof constituting an Additional Amount) or the credit quality of any newly created Receivables (other than Additional Amounts).

(d)    Sales, Liens . Seller 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 upon (including the filing of any financing statement) 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 Blocked Account or Lock-Box, or assign any right to receive income with respect thereto (other than, in each case, as contemplated by the Transaction Documents), and Seller will defend the right, title and interest of the Program Agent and the Investors in, to and under any of the foregoing property, against all claims of third parties claiming through or under Seller or the Originator.

(e)    Termination Date Determination; Modification of Sale Agreements . Seller will not (i) designate the Termination Date (as defined in the Second Tier Sale Agreement), (ii) send any written notice to Finance LLC in respect thereof, or (iii) consent to Finance LLC designating the Termination Date (as defined in the First Tier Sale Agreement) or sending any written notice to the Originator in respect thereof, in each case without the prior written consent of the Program Agent and each Managing Agent, except with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of either Sale Agreement. No Seller Party will amend or otherwise modify or terminate any Sale Agreement without the written consent of the Program Agent and each Managing Agent, except with respect to a termination upon the occurrence of a Termination Date arising pursuant to Section 5.1(d) of either Sale Agreement.

(f)    Mergers, Acquisitions etc . Seller will not merge into or consolidate with any other Person or permit any other Person to merge with or into or consolidate with it, or purchase, lease or otherwise acquire (in one transaction or a series of transactions) 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) other than acquisitions of Receivables pursuant to the Second Tier Sale Agreement.

(g)    Modification of Reporting Procedures . Seller shall not, without the prior consent of the Program Agent (such consent not to be unreasonably withheld or delayed), permit any amendment which would materially change the calculation methods used to generate the reports delivered in accordance with Section 8.5 hereof.

Section 8.1.    Designation of Servicer .

(a)    The servicing, administration and collection of the Receivables shall be conducted by such Person or Persons (the “ Servicer ” and, if multiple Persons, collectively, the “ Servicer ”) so designated from time to time in accordance with this Section 8.1 . Southern Natural Gas Company is hereby designated as, and hereby agrees to perform the duties and obligations of, Servicer pursuant to the terms of this Agreement. The Program Agent (with the consent or direction of the Required Committed Investors) may designate as Servicer any Person to succeed Southern Natural Gas Company or any successor Servicer at any time after the occurrence of an Amortization Event. Without the prior written consent of the Program Agent, Southern Natural Gas Company (nor any of its delagatees) shall not be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than El Paso Corporation pursuant to Section 8.6 hereof.

(b)    Notwithstanding any permitted delegation by Southern Natural Gas Company pursuant to Section 8.1(a) , (a) Southern Natural Gas Company shall be and remain primarily liable to the Program Agent, the Managing Agents and the Investors for the full and prompt performance of all duties and responsibilities of Servicer hereunder and (b) the Program Agent, the Managing Agents and the Investors shall be entitled to deal exclusively with Southern Natural Gas Company in matters relating to the discharge by Servicer of its duties and responsibilities hereunder. The Program Agent, the Managing Agents and the Investors shall not be required to give notice, demand or other communication to any Person other than Southern Natural Gas Company in order for communication to Servicer and any sub-servicers or other delegate with respect thereto to be accomplished. Southern Natural Gas Company at all times that it is Servicer, shall be responsible for providing any sub-servicer or other delegate of Servicer with any notice given to Servicer under this Agreement.

Section 8.2.    Duties of Servicer .

(a)    Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with its collection practices.

(b)    Servicer will instruct all Obligors to pay all Collections directly to a Lock-Box or a Blocked Account. Servicer shall effect a Blocked Account Agreement substantially in the form of Exhibit VI with each bank at which a Blocked Account or Lock-Box is held at any time and with the bank at which the Collection Account is held. In the case of any remittances received in any Lock-Box or Blocked Account that shall have been identified, to the satisfaction of Servicer, as not constituting Collections or other proceeds of the Receivables or the Related Security, Servicer shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date the Program Agent delivers to any Collection Bank a Collection Notice pursuant to Section 8.3 , the Program Agent may request that Servicer, and Servicer thereupon promptly shall instruct all Obligors with respect to the Receivables, to remit all payments thereon to a depositary account specified by the Program Agent and, at all times thereafter, Seller and Servicer shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new depositary account any cash or payment item other than Collections.

(c)    Servicer shall administer the Collections in accordance with the procedures described herein and in Article II . Servicer shall set aside and hold in trust for the account of Seller and the Investors their respective shares of the Collections in accordance with Article II . Servicer shall, upon the request of the Program Agent (with the consent or at the direction of the Required Committed Investors), segregate, in a manner acceptable to the Program Agent and the Required Committed Investors, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of Servicer or Seller prior to the remittance thereof in accordance with Article II .

(d)    Servicer may, in accordance with its collection practices, extend the maturity of any Receivable or adjust the Net Outstanding Balance of any Receivable as Servicer determines to be appropriate to maximize Collections thereof; provided that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable, Defaulted Receivable or limit the rights of the Program Agent, the Managing Agents or the Investors under this Agreement.

(e)    Servicer shall hold in trust for Seller and the Investors all Records that (i) evidence or relate to the Receivables, the related Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, if an Amortization Event exists, as soon as reasonably practicable upon demand of the Program Agent (with the consent or at the direction of the Required Committed Investors), deliver or make available to the Program Agent all such Records, at a place selected by the Program Agent. Servicer shall, as soon as practicable following receipt thereof turn over to Seller any cash collections or other cash proceeds received with respect to Indebtedness not constituting Receivables.

(f)    Any payment by an Obligor in respect of any indebtedness owed by it to the Originator or Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Program Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor.

Section 8.3.    Collection Notices . The Program Agent (acting with the consent or at the direction of the Required Committed Investors) is authorized at any time when an Amortization Event exists or a Collection Notice Event has occurred and is continuing,   to date and to deliver to the Collection Banks the Collection Notices and thereafter to make transfers and payments from Blocked Accounts and the Collection Account in lieu of Servicer in accordance with Article II of this Agreement. In making any such transfers and payments, the Program Agent shall be entitled to rely on the periodic reports provided by Servicer hereunder and upon notices from any Managing Agent and any Investor with respect to amounts payable to such Managing Agent (or members of its Investor Group) or to such Investor and upon the Program Agent’s records with respect to payments to be made to the Program Agent, any Managing Agent and any Investor and shall be fully protected in acting thereon; provided that if the Program Agent determines in good faith that it does not have sufficient information to determine amounts transferable or payable from Blocked Accounts and the Collection Account hereunder or has conflicting information with respect thereto, the Program Agent shall be entitled, but shall not be required, to transfer such amounts to, or to retain such amounts in, the Collection Account pending its receipt of further information satisfactory to it. Seller hereby transfers to the Program Agent for the benefit of the Investors, effective when the Program Agent delivers any such notice, the exclusive ownership and control of the applicable Blocked Account and control of the applicable Lock-Box. In case any authorized signatory of Seller whose signature appears on a Blocked Account Agreement shall cease to have such authority before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such authority had remained in force. Seller hereby authorizes the Program Agent, and agrees that the Program Agent shall be entitled, when an Amortization Event exists or a Collection Notice Event has occurred and is continuing, to (A) endorse Seller’s name on checks and other instruments representing Collections, (B) enforce the Receivables, the related Contracts and the Related Security and (C) take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Program Agent rather than Seller.

Section 8.4.    Responsibilities of Seller . Anything herein to the contrary notwithstanding, the exercise by the Program Agent, the Managing Agents and the Investors of their rights hereunder shall not release Servicer, the Originator or Seller from any of their duties or obligations with respect to any Receivables or under the related Contracts. None of the Program Agent, the Managing Agents or the Investors shall have any obligation or liability with respect to any Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of Seller.

Section 8.5.    Reports . Servicer shall prepare and deliver to each Managing Agent and the Program Agent (a) a Monthly Report with respect to each Monthly Period not later than 3:00 p.m. (New York time) on the related Monthly Report Date, (b) a Mid-Month Report with respect to each Monthly Period not later than 3:00 p.m. (New York time) on the related Mid-Month Report Date, (c) a Daily Report with respect to (i) the Cash Receipt Date, (ii) the first Daily Settlement Date for each Monthly Period, and (iii) each Daily Settlement Date on which funds were remitted to Seller pursuant to clause (ii)(B) of Section 2.3 , Section 2.4(a) or Section 2.4(b) and the immediately following Daily Settlement Date, in each case not later than 1:00 p.m. (New York time) on the Business Day immediately following such Daily Settlement Date or the Cash Receipt Date, as applicable, and (iv) at such times as any Managing Agent shall reasonably request, an aging of Receivables. Each Monthly Report, Mid-Month Report and Daily Report shall be certified as being true and correct in all material respects by a Responsible Officer of Servicer (or, with respect to amounts identified therein as estimates, as being estimated reasonably and based on Servicer’s records and assumptions believed in good faith by such Responsible Officer).

Section 8.6.    Computation Agent .

(a)    El Paso Corporation is hereby designated as, and, by its acceptance of this Agreement set forth below, hereby agrees to perform the duties and obligations of, the Computation Agent pursuant to the terms of this Agreement. The Program Agent (with the consent or direction of the Required Committed Investors) may designate as Computation Agent any Person to succeed El Paso Corporation or any successor at any time after the occurrence of an Amortization Event.

(b)    The Computation Agent shall aggregate and prepare certain portions of the reports to be provided by the Servicer pursuant to Section 8.5 (as more fully specified in the applicable form of report) and shall deliver such portions to each Managing Agent and the Program Agent not later than the time at which such report is due as provided in such Section.

Section 8.7.    Servicer Fees . Servicer shall be entitled to receive a fee (the “ Servicer Fee ”) equal to 1.00% per annum multiplied by the average daily aggregate Outstanding Balance of all Eligible Receivables, payable in arrears on each Monthly Settlement Date for the immediately preceding Monthly Period out of Collections available for such purpose pursuant to Article II on such Monthly Settlement Date. The Investors’ share of the Servicer Fee shall be equal to the Servicer Fee Rate multiplied by the average daily Aggregate Capital of the Investor Interests payable as provided above. Upon the appointment of a successor servicer under this Agreement which is not an Affilia