Exhibit 10.1

Execution Version

CONTRIBUTION AND SALE AGREEMENT

dated as of April 1, 2014

by and between

TALLGRASS ENERGY PARTNERS, LP

and

TALLGRASS OPERATIONS, LLC

and for certain limited purposes,

TALLGRASS DEVELOPMENT, LP

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS      1                Section 1.1    Definitions.      1
               Section 1.2    Construction.      7    ARTICLE II CONVEYANCE AND
CLOSING      7                Section 2.1    Conveyance.      7   
            Section 2.2    Transaction Proceeds.      8                Section
2.3    Closing.      8                Section 2.4    FERC Settlement.      8   
ARTICLE III REPRESENTATIONS AND WARRANTIES OF DEVELOPMENT AND OPERATIONS      9
               Section 3.1    Organization.      9                Section 3.2   
Authority and Approval.      9                Section 3.3    No Conflict;
Consents.      10                Section 3.4    Capitalization; Title to Subject
Interest.      11                Section 3.5    Financial Information;
Undisclosed Liabilities.      11                Section 3.6    Internal
Controls.      12                Section 3.7    Title to Properties.      12   
            Section 3.8    Litigation; Laws and Regulations.      13   
            Section 3.9    No Adverse Changes.      13   
            Section 3.10    Taxes.      13                Section 3.11   
Environmental Matters.      14                Section 3.12    Licenses; Permits.
     15                Section 3.13    Contracts.      15                Section
3.14    Employees.      17                Section 3.15    Transactions with
Affiliates.      17                Section 3.16    Insurance.      17   
            Section 3.17    Intellectual Property Rights.      17   
            Section 3.18    Brokerage Arrangements.      18   
            Section 3.19    Books and Records.      18                Section
3.20    Regulatory Matters.      18                Section 3.21    Management
Projections and Budget.      18                Section 3.22    Investment
Intent.      18    ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
     19                Section 4.1    Organization and Existence.      19   
            Section 4.2    Authority and Approval.      19   
            Section 4.3    Common Units.      20                Section 4.4   
No Conflict; Consents.      20                Section 4.5    Periodic Reports.
     21                Section 4.6    Brokerage Arrangements.      21   
            Section 4.7    No Registration.      21                Section 4.8
   Litigation.      22                Section 4.9    Investment Intent.      22
  

 

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Table of Contents

(Continued)

 

ARTICLE V TAX MATTERS      22                Section 5.1    Liability for Taxes.
     22                Section 5.2    Tax Returns.      23   
            Section 5.3    Transfer Taxes.      24                Section 5.4   
Allocation of Cash Amount.      24                Section 5.5    Tax Treatment
and Related Covenants.      24                Section 5.6    Conflict.      25
   ARTICLE VI INDEMNIFICATION      25                Section 6.1   
Indemnification of the Partnership.      25                Section 6.2   
Indemnification of Development.      25                Section 6.3    Tax
Indemnification.      26                Section 6.4    Corrosion Costs
Indemnification.      26                Section 6.5    Survival.      26   
            Section 6.6    Demands.      27                Section 6.7    Right
to Contest and Defend.      27                Section 6.8    Cooperation.     
28                Section 6.9    Right to Participate.      28   
            Section 6.10    Payment of Damages and Corrosion Costs.      29   
            Section 6.11    Direct Claim.      29                Section 6.12   
Limitations on Indemnification.      29                Section 6.13    Sole
Remedy.      30    ARTICLE VII MISCELLANEOUS      30                Section 7.1
   Acknowledgements.      30                Section 7.2    Cooperation; Further
Assurances.      30                Section 7.3    Expenses.      31   
            Section 7.4    Notices.      31                Section 7.5   
Governing Law.      33                Section 7.6    Public Statements.      33
               Section 7.7    Entire Agreement; Amendments and Waivers.      33
               Section 7.8    Conflicting Provisions.      34   
            Section 7.9    Binding Effect and Assignment.      34   
            Section 7.10    Severability.      34                Section 7.11   
Interpretation.      34                Section 7.12    Headings and Disclosure
Schedules.      35                Section 7.13    Multiple Counterparts.      35
               Section 7.14    Action by the Partnership.      35   

 

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Table of Contents

(Continued)

 

DISCLOSURE SCHEDULES

 

Disclosure Schedule 3.3   -      Consents Disclosure Schedule 3.7(a)   -     
Real Property Disclosure Schedule 3.7(b)   -      Personal Property Disclosure
Schedule 3.8   -      Litigation Disclosure Schedule 3.9   -      Adverse
Changes Disclosure Schedule 3.11   -      Environmental Matters Disclosure
Schedule 3.12   -      Licenses and Permits Disclosure Schedule 3.13(a)   -     
Contracts Disclosure Schedule 3.13(b)   -      Contracts Disclosure Schedule
3.16   -      Insurance Disclosure Schedule 3.21   -      Management Projections
and Budget EXHIBITS Exhibit A   -      Form of Assignment Agreement APPENDICES
Appendix A   -      The Partnership and Operations Designated Personnel

 

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CONTRIBUTION AND SALE AGREEMENT

This Contribution and Sale Agreement (this “Agreement”) is made and effective as
of April 1, 2014, by and between Tallgrass Operations, LLC, a Delaware limited
liability company (“Operations”), and Tallgrass Energy Partners, LP, a Delaware
limited partnership (the “Partnership”). In addition, Tallgrass Development, LP,
a Delaware limited partnership (“Development”), is a party to this Agreement for
the limited purposes set forth in Articles III, VI and VII.

RECITALS

WHEREAS, Operations desires to contribute and sell 100% of the issued and
outstanding membership interests in Trailblazer Pipeline Company LLC, a Delaware
limited liability company (the “Company”) (such 100% membership interest in the
Company being referred to herein as the “Subject Interest”), to the Partnership
pursuant to the terms of this Agreement and the Assignment Agreement, and the
Partnership desires to accept and acquire the Subject Interest in accordance
with the terms of this Agreement and the Assignment Agreement; and

WHEREAS, the Conflicts Committee has previously (i) received an opinion of
Robert W. Baird & Co. Incorporated, the financial advisor to the Conflicts
Committee (the “Financial Advisor”), that the amount to be distributed and paid
by the Partnership pursuant to the Transaction is fair, from a financial point
of view, to the holders of Common Units of the Partnership (other than
Operations and its Affiliates) and (ii) found the Transaction to be fair and
reasonable to the Partnership and holders of its Common Units (other than
Operations and its Affiliates) and recommended that the board of directors (the
“Board of Directors”) of Tallgrass MLP GP, LLC, the general partner of the
Partnership (the “General Partner”), approve the Transaction and, subsequently,
the Board of Directors has approved the Transaction.

NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

The respective terms defined in this Section 1.1 shall, when used in this
Agreement, have the respective meanings specified herein, with each such
definition equally applicable to both singular and plural forms of the terms so
defined:

“Affiliate,” when used with respect to a Person, means any other Person that
directly or indirectly Controls, is Controlled by or is under common Control
with such first Person; provided, however, that (i) with respect to Operations,
the term “Affiliate” shall exclude the Partnership, the General Partner and the
Partnership’s subsidiaries, (ii) with respect to the Partnership, the term
“Affiliate” shall exclude Operations, Operations’ subsidiaries (other than the
Partnership and its subsidiaries), Development, its general partner and
Tallgrass GP Holdings, LLC, and (iii) the Company shall be deemed to be an
“Affiliate” (x) prior to the

 

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Closing, of Operations and (y) on and after the Closing, of the Partnership. No
Person shall be deemed an Affiliate of any Person solely by reason of the
exercise or existence of rights, interests or remedies under this Agreement.

“Agreement” has the meaning ascribed to such term in the preamble.

“Annual Corrosion Indemnification Deductible Amount” has the meaning ascribed to
such term in Section 6.12(b).

“Annual Period” has the meaning ascribed to such term in Section 6.12(b).

“Applicable Law” has the meaning ascribed to such term in Section 3.3(a).

“Assignment Agreement” means the Assignment Agreement substantially in the form
of Exhibit A attached hereto.

“Balance Sheet” has the meaning ascribed to such term in Section 3.5(a).

“Board of Directors” has the meaning ascribed to such term in the recitals.

“Cash Amount” means $150,000,000.

“Ceiling Amount” has the meaning ascribed to such term in Section 6.12(a).

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act.

“Closing” has the meaning ascribed to such term in Section 2.3.

“Closing Date” has the meaning ascribed to such term in Section 2.3.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commission” means the Securities and Exchange Commission.

“Common Units” has the meaning given to such term in the Partnership Agreement.

“Common Unit Quantity” means 385,140 Common Units.

“Company” has the meaning ascribed to such term in the recitals.

“Company Assets” means the assets owned on the Closing Date by the Company,
including the Trailblazer Pipeline.

“Company Material Adverse Effect” means a material adverse effect on or material
adverse change in (i) the assets, liabilities, financial condition or results of
operations of the Company, other than any effect or change (a) in the natural
gas transportation industry generally (including any change in the prices of
natural gas or other hydrocarbon products, industry margins or any regulatory
changes or changes in Applicable Law or GAAP), (b) in United States

 

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or global political or economic conditions or financial markets in general, or
(c) resulting from the announcement of the transactions contemplated by this
Agreement and the Assignment Agreement and the taking of any actions
contemplated by this Agreement or the Assignment Agreement, provided, that in
the case of clauses (a) and (b), the impact on the Company is not materially
disproportionate to the impact on similarly situated parties in the natural gas
transportation industry, or (ii) the ability of Operations to perform its
obligations under this Agreement or to consummate the transactions contemplated
by this Agreement.

“Conflicts Committee” means the conflicts committee of the Board of Directors.

“Control” and its derivatives mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

“Corrosion Costs” has the meaning ascribed to such term in Section 6.4.

“Damages” means liabilities and obligations, including all losses, deficiencies,
costs, expenses, fines, interest, expenditures, claims, suits, proceedings,
judgments, damages, and reasonable attorneys’ fees and reasonable expenses of
investigating, defending and prosecuting litigation; provided, however, that
Damages specifically excludes Corrosion Costs and any conditions, facts or
circumstances that relate to or result in Corrosion Costs.

“Deductible Amount” has the meaning ascribed to such term in Section 6.12(a).

“Delaware LLC Act” means the Delaware Limited Liability Company Act, as amended.

“Development” has the meaning ascribed to such term in the recitals.

“Development Indemnified Parties” has the meaning ascribed to such term in
Section 6.2.

“Direct Claim” has the meaning ascribed to such term in Section 6.11.

“Disclosure Schedules” has the meaning ascribed to such term in Article III.

“DRULPA” mean the Delaware Revised Uniform Limited Partnership Act.

“Easements” has the meaning ascribed to such term in Section 3.7(a).

“Environmental Laws” means, without limitation, the following laws, in effect as
of the Closing Date, as such law may be amended after the Closing Date: (i) the
Resource Conservation and Recovery Act; (ii) the Clean Air Act; (iii) CERCLA;
(iv) the Federal Water Pollution Control Act; (v) the Safe Drinking Water Act;
(vi) the Toxic Substances Control Act; (vii) the Emergency Planning and
Community Right-to Know Act; (viii) the National Environmental Policy Act;
(ix) the Pollution Prevention Act of 1990; (x) the Oil Pollution Act of 1990;
(xi) the Hazardous Materials Transportation Act; (xii) the Federal Insecticide,
Fungicide and Rodenticide Act; (xiii) all laws, statutes, rules, regulations,
orders, judgments, decrees promulgated or issued

 

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with respect to the foregoing Environmental Laws by Governmental Authorities
with jurisdiction in the premises, and (xiv) any other federal, state or local
statutes, laws, common laws, ordinances, rules, regulations, orders, codes,
decisions, injunctions or decrees that regulate or otherwise pertain to the
protection of the environment, including, but not limited to, the management,
control, discharge, emission, exposure, treatment, containment, handling,
removal, use, generation, permitting, migration, storage, release,
transportation, disposal, remediation, manufacture, processing or distribution
of Hazardous Materials that are or may present a threat to human health or the
environment.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“FERC” means the United States Federal Energy Regulatory Commission.

“Final Resolution” has the meaning ascribed to such term in Section 2.4.

“Financial Advisor” has the meaning ascribed to such term in the recitals.

“GAAP” means generally accepted accounting principles in the United States of
America.

“General Partner” has the meaning ascribed to such term in the recitals.

“Governmental Authority” means any federal, state, municipal or other
government, governmental court, department, commission, board, bureau, agency or
instrumentality.

“Hazardous Materials” means any substance, whether solid, liquid or gaseous:
(i) which is listed, defined or regulated as a “hazardous material,” “hazardous
waste,” “solid waste,” “hazardous substance,” “toxic substance,” “pollutant” or
“contaminant,” or words of similar meaning or import found in any applicable
Environmental Law; or (ii) which is or contains asbestos, polychlorinated
biphenyls, radon, urea formaldehyde foam insulation, explosives, or radioactive
materials; or (iii) any petroleum, petroleum hydrocarbons, petroleum substances,
petroleum or petrochemical products, natural gas, crude oil and any components,
fractions, or derivatives thereof, any oil or gas exploration or production
waste, and any natural gas, synthetic gas and any mixtures thereof; or
(iv) radioactive material, waste and pollutants, radiation, radionuclides and
their progeny, or nuclear waste including used nuclear fuel; or (v) which causes
or poses a threat to cause contamination or nuisance on any properties, or any
adjacent property or a hazard to the environment or to the health or safety of
persons on or about any properties.

“Indebtedness for Borrowed Money” means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services or
any other similar obligation upon which interest charges are customarily paid
(excluding trade accounts payable incurred in the ordinary course of business),
(e) all Indebtedness for Borrowed Money of others secured by (or for which the
holder of such Indebtedness for Borrowed Money has an existing

 

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right, contingent or otherwise, to be secured by) any encumbrance on property
owned or acquired by such Person, whether or not the Indebtedness for Borrowed
Money secured thereby has been assumed, (f) all assurances by such Person of
Indebtedness for Borrowed Money of others, (g) all capital lease obligations of
such Person, (h) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and
(i) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances.

“Intellectual Property” means all intellectual or industrial property and rights
therein, however denominated, throughout the world, whether or not registered,
including all patent applications, patents, trademarks, service marks, trade
styles or dress, mask works, copyrights (including copyrights in computer
programs, software, computer code, documentation, drawings, specifications and
data), works of authorship, moral rights of authorship, rights in designs, trade
secrets, technology, inventions, invention disclosures, discoveries,
improvements, know-how, proprietary rights, formulae, processes, methods,
technical and business information, and confidential and proprietary
information, and all other intellectual and industrial property rights, whether
or not subject to statutory registration or protection and, with respect to each
of the foregoing, all registrations and applications for registration, renewals,
extensions, continuations, reexaminations, reissues, divisionals, improvements,
modifications, derivative works, goodwill, and common law rights, and causes of
action relating to any of the foregoing.

“Knowledge,” as used in this Agreement with respect to a party hereof, means the
actual knowledge of that party’s designated personnel. The designated personnel
for Development, Operations and the Partnership are set forth on Appendix A.

“Lien” means any mortgage, deed of trust, lien, security interest, pledge,
conditional sales contract, charge or encumbrance.

“Material Contract” has the meaning ascribed to such term in Section 3.13(a).

“Minimum Claim Amount” has the meaning ascribed to such term in Section 6.12(a).

“Notice” has the meaning ascribed to such term in Section 7.4.

“Operations” has the meaning ascribed to such term in the preamble.

“Partnership” has the meaning ascribed to such term in the preamble.

“Partnership Agreement” means that certain Amended and Restated Agreement of
Limited Partnership of the Partnership, dated May 17, 2013.

“Partnership Indemnified Parties” has the meaning ascribed to such term in
Section 6.1.

“Pending Settlement” means the agreement between the Company and its shippers in
the Company’s FERC tariff rate case filed on July 1, 2013 (Docket Number
RP13-1031), which agreement has received certification from the presiding
administrative law judge and is awaiting final approval from the FERC.

 

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“Permits” has the meaning ascribed to such term in Section 3.12(a).

“Permitted Liens” means all: (i) mechanics’, materialmen’s, repairmen’s,
employees’ contractors’ operators’, carriers’, workmen’s or other like Liens or
charges arising by operation of law, in the ordinary course of business or
incident to the construction or improvement of any of the Company Assets, in
each case, for amounts not yet delinquent (including any amounts being withheld
as provided by law); (ii) Liens arising under original purchase price
conditional sales contracts and equipment leases with third parties entered into
in the ordinary course of business; (iii) immaterial defects and irregularities
in title, encumbrances, exceptions and other matters that, singularly or in the
aggregate, will not materially interfere with the ownership, use, value,
operation or maintenance of the Company Assets to which they pertain or
Operations’ ability to perform its obligations hereunder; (iv) Liens for Taxes
that are not yet due and payable; (v) pipeline, utility and similar easements
and other rights in respect of surface operations; (vi) Liens supporting surety
bonds, performance bonds and similar obligations issued in connection with the
Company’s business; and (vii) all rights to consent, by required notices to,
filings with, or other actions by Governmental Authorities or third parties in
connection with the sale or conveyance of easements, rights of way, licenses,
facilities or interests therein if they are customarily obtained subsequent to
the sale or conveyance.

“Person” means an individual or entity, including any partnership, corporation,
association, trust, limited liability company, joint venture, unincorporated
organization or other entity.

“Redetermined Cash Amount” has the meaning ascribed to such term in Section 2.4.

“SEC Documents” has the meaning ascribed to such term in Section 4.5.

“Securities Act” means the Securities Act of 1933, as amended.

“Subject Interest” has the meaning ascribed to such term in the recitals.

“Tax” means any and all U.S. federal, state, local or foreign net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, capital
stock, profits, license, license fee, environmental, customs duty, unclaimed
property or escheat payments, alternative fuels, mercantile, lease, service,
withholding, payroll, employment, unemployment, social security, disability,
excise, severance, registration, stamp, occupation, premium, property (real or
personal), windfall profits, fuel, value added, alternative or add on minimum,
estimated or other similar taxes, duties, levies, customs, tariffs, imposts or
assessments (including public utility commission property tax assessments)
imposed by any Governmental Authority, together with any interest, penalties or
additions thereto payable to any Governmental Authority in respect thereof.

“Tax Return” means any return, declaration, report, statement, election, claim
for refund or other written document, together with all attachments, amendments
and supplements thereto, filed with or provided to, or required to be filed with
or provided to, a Governmental Authority in respect of Taxes.

 

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“Taxing Authority” means, with respect to any Tax, the Governmental Authority
that imposes such Tax, and the agency (if any) charged with the collection of
such Tax for such entity or subdivision, including any governmental or
quasi-governmental entity or agency that imposes, or is charged with collecting,
social security or similar charges or premiums.

“Third Party Indemnity Claim” has the meaning ascribed to such term in Section
6.6.

“Trailblazer LLC Agreement” means the First Amended and Restated Limited
Liability Company Agreement of the Company, dated November 13, 2012.

“Trailblazer Pipeline” means the natural gas pipeline system owned by the
Company that extends from the Cheyenne Hub near Rockport, Colorado to Beatrice,
Nebraska.

“Transaction” means the contribution of the Subject Interest and the delivery of
the Transaction Proceeds.

“Transaction Proceeds” means the issuance by the Partnership of the Common Unit
Quantity and the payment by the Partnership of the Cash Amount

“Transfer Taxes” has the meaning ascribed to such term in Section 5.3.

Section 1.2 Construction.

In constructing this Agreement: (a) the word “includes” and its derivatives
means “includes, without limitation” and corresponding derivative expressions;
(b) the currency amounts referred to herein, unless otherwise specified, are in
United States dollars; (c) whenever this Agreement refers to a number of days,
such number shall refer to calendar days unless business days are specified;
(d) unless otherwise specified, all references in this Agreement to “Article,”
“Section,” “Disclosure Schedule,” “Exhibit,” “preamble” or “recitals” shall be
references to an Article, Section, Disclosure Schedule, Exhibit, preamble or
recitals hereto; and (e) whenever the context requires, the words used in this
Agreement shall include the masculine, feminine and neuter and singular and the
plural.

ARTICLE II

CONVEYANCE AND CLOSING

Section 2.1 Conveyance.

Upon the terms and subject to the conditions set forth in this Agreement and in
the Assignment Agreement, on the Closing Date, Operations shall transfer,
assign, contribute, sell and convey the Subject Interest to the Partnership,
free and clear of all Liens (other than restrictions under applicable federal
and state securities laws), and the Partnership shall accept and purchase the
Subject Interest from Operations.

 

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Section 2.2 Transaction Proceeds.

The aggregate amount to be issued and paid by the Partnership to Operations
shall be the Transaction Proceeds. At the Closing, the Partnership shall deliver
the Transaction Proceeds as follows:

 

  (a) A wire transfer of the Cash Amount in immediately available funds paid to
Operations or its designee(s); and

 

  (b) The issuance to Operations of a number of Common Units equal to the Common
Unit Quantity.

Section 2.3 Closing.

The closing (the “Closing”) of the contribution and purchase of the Subject
Interest and the delivery of the Transaction Proceeds pursuant to this Agreement
and the Assignment Agreement will be held on the date hereof (the “Closing
Date”) at the offices of Development at 6640 W. 143rd Street, Suite 200,
Overland Park, Kansas 66223. At the Closing, (i) Operations shall deliver to the
Partnership, or cause to be delivered to the Partnership, the Assignment
Agreement duly executed by Operations, (ii) the Partnership shall deliver to
Operations, or cause to be delivered to Operations, the Transaction Proceeds and
the Assignment Agreement duly executed by the Partnership, and (iii) Operations
shall deliver to the Partnership, or cause to be delivered to the Partnership, a
certificate demonstrating non-foreign status of Development meeting the
requirements of Section 1445 of the Code.

Section 2.4 FERC Settlement.

In the event the Pending Settlement, as presented to the presiding
administrative law judge, is rejected or modified by the FERC, the parties agree
to work together in good faith to redetermine the Cash Amount (the “Redetermined
Cash Amount”) within thirty (30) days following final resolution of the
Company’s rate case, whether by a settlement approved by the FERC or otherwise
(the “Final Resolution”). The Redetermined Cash Amount shall be based on the
performance metrics and other models and assumptions used by the parties in
originally determining the Cash Amount, as modified to take into consideration
the terms of the Final Resolution. Within five (5) business days after the
parties have established the Redetermined Cash Amount, Operations shall remit to
the Partnership, by wire transfer in immediately available funds, the amount, if
any, by which the Cash Amount exceeds the Redetermined Cash Amount.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF DEVELOPMENT AND OPERATIONS

Development and Operations, jointly and severally, hereby represent and warrant
to the Partnership that, except as disclosed in the disclosure schedules
delivered to the Partnership on the date of this Agreement (“Disclosure
Schedules”) (it being understood that any information set forth on any
Disclosure Schedule shall be deemed to apply to and qualify only the section or
subsection of this Agreement to which it corresponds in number , unless it is
reasonably apparent on its face that such information is relevant to other
sections or subsections of this Agreement):

Section 3.1 Organization.

 

  (a) Operations is a limited liability company duly formed, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite limited liability company power and authority to own, operate and
lease its properties and assets and to carry on its business as now conducted.

 

  (b) Development is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
limited partnership power and authority to own, operate and lease its properties
and assets and to carry on its business as now conducted.

 

  (c) The Company is a limited liability company duly formed, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite limited liability company power and authority to own, operate and
lease its properties and assets and to carry on its business as now conducted.
The Company is duly licensed or qualified to do business and is in good standing
in the states in which the character of the properties and assets owned or held
by it or the nature of the business conducted by it requires it to be so
licensed or qualified, except where the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. Operations has made available to the
Partnership true and complete copies of the Company’s certificate of formation
and the Trailblazer LLC Agreement in effect as of the date of this Agreement.

Section 3.2 Authority and Approval.

 

  (a) Each of Development and Operations has full limited partnership or limited
liability company, as applicable, power and authority to execute and deliver
this Agreement and the Assignment Agreement, to consummate the transactions
contemplated hereby and thereby and to perform all of the obligations hereof and
thereof to be performed by it. The execution and delivery by each of Development
and Operations of this Agreement and the Assignment Agreement, the consummation
of the transactions contemplated hereby and thereby and the performance of all
of the obligations hereof and thereof to be performed by Development and
Operations have been duly authorized and approved by all requisite limited
partnership or limited liability company, as applicable, action on the part of
Development and Operations.

 

  (b)

This Agreement has been duly executed and delivered by Development and
Operations and constitutes the valid and legally binding obligation of each of
Development and Operations, enforceable against it in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors’ rights and remedies

 

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  generally and by general principles of equity (whether applied in a proceeding
at law or in equity). When executed and delivered by each of the parties party
thereto, the Assignment Agreement will constitute a valid and legally binding
obligation of Operations enforceable against Operations in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors’ rights and remedies generally and
by general principles of equity (whether applied in a proceeding at law or in
equity).

Section 3.3 No Conflict; Consents.

Except as set forth on Disclosure Schedule 3.3:

 

  (a) the execution, delivery and performance of this Agreement by Development
and Operations does not, and the execution, delivery and performance of the
Assignment Agreement by Operations will not, and the fulfillment and compliance
with the terms and conditions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not, (i) violate, conflict
with, result in any breach of, or require the consent of any Person under, any
of the terms, conditions or provisions of the certificate of formation, limited
partnership agreement, limited liability company agreement or equivalent
governing instruments of Development, Operations or the Company; (ii) conflict
with or violate any provision of any law or administrative rule or regulation or
any judicial, administrative or arbitration order, award, judgment, writ,
injunction or decree applicable to Development, Operations or the Company
(“Applicable Law”); (iii) conflict with, result in a breach of, constitute a
default under (whether with notice or the lapse of time or both), or accelerate
or permit the acceleration of the performance required by, or require any
consent, authorization or approval under, or result in the suspension,
termination or cancellation of, or in a right of suspension, termination or
cancellation of, any indenture, mortgage, agreement, contract, commitment,
license, concession, permit, lease, joint venture or other instrument to which
Development, Operations or the Company is a party or by which any of them or any
of the Company Assets are bound; or (iv) result in the creation of any Lien
(other than Permitted Liens) on any of the Company Assets under any such
indenture, mortgage, agreement, contract, commitment, license, concession,
permit, lease, joint venture or other instrument, except in the case of clauses
(ii), (iii) and (iv) for those items which, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect; and

 

  (b)

no consent, approval, license, permit, order or authorization of any
Governmental Authority or other Person is required to be obtained or made by
Operations or the Company with respect to the Subject Interest in connection
with the execution, delivery and performance of this Agreement and the
Assignment Agreement or the consummation of the transactions

 

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  contemplated hereby or thereby, except (i) as have been waived or obtained or
with respect to which the time for asserting such right has expired or (ii) for
those which individually or in the aggregate would not reasonably be expected to
have a Company Material Adverse Effect (including such consents, approvals,
licenses, permits, orders or authorizations that are not customarily obtained
prior to the Closing and are reasonably expected to be obtained in the ordinary
course of business following the Closing).

Section 3.4 Capitalization; Title to Subject Interest.

 

  (a) Operations owns, beneficially and of record, all of the authorized, issued
and outstanding membership interests of the Company and will convey good title,
free and clear of all Liens, to the Subject Interest to the Partnership. The
Subject Interest is not subject to any agreements or understandings with respect
to the voting or transfer of any of the Subject Interest (except the
contribution of the Subject Interest contemplated by this Agreement and
restrictions under applicable federal and state securities laws). The Subject
Interest has been duly authorized and is validly issued, fully paid (to the
extent required under the Trailblazer LLC Agreement) and nonassessable (except
as such nonassessability may be affected by Sections 18-607 and 18-804 of the
Delaware LLC Act).

 

  (b) There are (i) no authorized or outstanding subscriptions, warrants,
options, convertible securities or other rights (contingent or otherwise) to
purchase or otherwise acquire from the Company any equity interests of or in the
Company, (ii) no commitments on the part of the Company to issue membership
interests, subscriptions, warrants, options, convertible securities or other
similar rights, and (iii) no equity securities of the Company reserved for
issuance for any such purpose. The Company has no obligation (contingent or
other) to purchase, redeem or otherwise acquire any of its equity securities.
Except for this Agreement and the Trailblazer LLC Agreement, there is no voting
trust or agreement, stockholders agreement, pledge agreement, buy-sell
agreement, right of first refusal, preemptive right or proxy relating to any
equity securities of the Company. The Company does not own any equity interests
in any other Person.

Section 3.5 Financial Information; Undisclosed Liabilities.

 

  (a)

Operations has provided to the Partnership a true and complete copy of the
unaudited balance sheet as of December 31, 2013 for the Company (the “Balance
Sheet”). The Balance Sheet presents fairly in all material respects the
financial position of the Company as of the date thereof. There are no
off-balance sheet arrangements that have or are reasonably likely to have a
Company Material Adverse Effect. The Balance Sheet has been prepared in
accordance with GAAP consistently applied throughout the periods presented,
except that the Balance Sheet does not include any notes. Except as required by
GAAP, there were no changes in the method of application of

 

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  the Company’s accounting policies or changes in the method of applying the
Company’s use of estimates in the preparation of the Balance Sheet as compared
with past practice.

 

  (b) There are no liabilities or obligations of the Company of any nature
(whether known or unknown and whether accrued, absolute, contingent or
otherwise) and there are no facts or circumstances that would reasonably be
expected to result in any such liabilities or obligations, whether arising in
the context of federal, state or local judicial, regulatory, administrative or
permitting agency proceedings, other than (i) liabilities or obligations
reflected or reserved against in the Balance Sheet, (ii) current liabilities
incurred in the ordinary course of business since December 31, 2013, and
(iii) liabilities or obligations (whether known or unknown and whether accrued,
absolute, contingent or otherwise) that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.

Section 3.6 Internal Controls.

The system of internal controls over financial reporting to which the Company is
subject is sufficient to provide reasonable assurance (a) that transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP consistently applied, (b) that transactions are executed
only in accordance with the authorization of management, and (c) regarding the
prevention or timely detection of the unauthorized acquisition, use or
disposition of the Company Assets.

Section 3.7 Title to Properties.

 

  (a) Disclosure Schedule 3.7(a) lists all of the material items of real
property (excluding Easements (as defined below)) used or held for use by the
Company for the conduct of the Company’s business. As of the date hereof, the
Company has (1) good and marketable fee simple title to the owned real property
included on Disclosure Schedule 3.7(a), free and clear of any Liens (other than
Permitted Liens) and (2) a valid, binding and enforceable leasehold interest in
each of the leased properties, as applicable, free and clear of any Liens (other
than Permitted Liens). For purposes of this Section 3.7, “Easements” means any
easements, rights of way, memorandum of easements, permits, servitudes,
licenses, any instruments creating an interest in real property, and similar
rights related to real property used in connection with the Company’s business.

 

  (b) The tangible personal property listed on Disclosure Schedule 3.7(b)
includes all material tangible personal property owned by the Company that is
necessary for the Company to conduct its operations in substantially the same
manner as currently being conducted. The Company has good and defensible title
to its material tangible personal property, free and clear of any Liens (other
than Permitted Liens).

 

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Section 3.8 Litigation; Laws and Regulations.

Except as set forth on Disclosure Schedule 3.8:

 

  (a) There are no (i) civil, criminal or administrative actions, suits, claims,
hearings, arbitrations or proceedings pending or, to Development’s and
Operations’ Knowledge, threatened against the Company, (ii) judgments, orders,
decrees or injunctions of any Governmental Authority, whether at law or in
equity, against the Company or (iii) to Development’s and Operations’ Knowledge,
pending or threatened investigations by any Governmental Authority against the
Company, except in each case, for those items that would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

  (b) None of Operations or the Company is in violation of or in default under
any Applicable Law, except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.

Section 3.9 No Adverse Changes.

Except as set forth on Disclosure Schedule 3.9, since December 31, 2013:

 

  (a) there has not been a Company Material Adverse Effect;

 

  (b) the Company Assets and the Company’s business have been operated and
maintained, in all material respects, consistent with past practice in the
ordinary course of business;

 

  (c) there has not been any damage, destruction or loss to any material portion
of the Company Assets, whether or not covered by insurance, in excess of
$100,000;

 

  (d) there has been no delay in, or postponement of, the payment of any
liabilities related to the Company, the Company Assets or the Company’s
business, individually or in the aggregate, in excess of $100,000; and

 

  (e) there is no contract, commitment or agreement to do any of the foregoing.

Section 3.10 Taxes.

 

  (a)

To the Knowledge of Development and Operations, except as would not reasonably
be expected to have a Company Material Adverse Effect, (i) all Tax Returns
required to be filed by or with respect to the Company, the Company Assets or
the operations of the Company have been filed on a timely basis (taking into
account all extensions of due dates); (ii) all Taxes owed by the Company or any
of its Affiliates with respect to the Company, the Company Assets or the
operations of the Company which are or have become due, have been timely paid in
full, other than Taxes the amount or

 

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  validity of which is being contested in good faith by appropriate proceedings
for which an adequate reserve has been established therefor; (iii) there are no
Liens on any of the Company Assets that arose in connection with any failure (or
alleged failure) to pay any Tax on the Company or its assets, other than Liens
for Taxes not yet due and payable or the amount or validity of which is being
contested in good faith by appropriate proceedings for which an adequate reserve
has been established therefor; and (iv) there is no pending action, proceeding
or investigation for assessment or collection of Taxes and no Tax assessment,
deficiency or adjustment has been asserted or proposed with respect to the
Company, the Company Assets or the operations of the Company.

 

  (b) Since Operations’ acquisition of the Company, the Company and Operations
have each been treated, and as of Closing the Company and Operations will each
be treated, as disregarded as an entity separate from its owner for federal
income tax purposes pursuant to Treasury Regulation Section 301.7701-2(c)(2)(i).

 

  (c) In the twelve (12) month period ended December 31, 2013 and throughout the
period in 2014 ending on the Closing Date, more than ninety percent (90%) of the
gross income (as determined for federal income tax purposes) of the business
operations conducted with the Company Assets was qualifying income, within the
meaning of Section 7704(d) of the Code.

Section 3.11 Environmental Matters.

Except as disclosed in Disclosure Schedule 3.11, or as would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect:

 

  (a) the Company and the Company Assets, operations and business are in
compliance with applicable Environmental Laws;

 

  (b) no circumstances exist with respect to the Company or its assets,
operations and business that give rise to an obligation by the Company or
Operations to investigate or remediate the presence, on-site or offsite, of
Hazardous Materials under any applicable Environmental Laws;

 

  (c) the Company has not received any written communication from a Governmental
Authority that remains unresolved alleging that the Company may be in violation
of any Environmental Law or any Permit issued pursuant to Environmental Law;

 

  (d) the Company and the Company Assets, operations and business are not
subject to any pending or, to the Knowledge of Development and Operations,
threatened, claim, action, suit, investigation, inquiry or proceeding under any
Environmental Law (including designation as a potentially responsible party
under CERCLA or any similar local or state law);

 

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  (e) all notices, permits, permit exemptions, licenses or similar
authorizations, if any, required to be obtained or filed by the Company under
any Environmental Law in connection with its assets, operations and business
have been duly obtained or filed, are valid and currently in effect, and the
Company and Company Assets are in compliance with such authorizations; and

 

  (f) there has been no release of any Hazardous Material into the environment
by the Company, the Company Assets, operations and business, or to the Knowledge
of Development and Operations, by a third party except in compliance with
applicable Environmental Law.

Section 3.12 Licenses; Permits.

 

  (a) As of the date of this Agreement, except as set forth in Disclosure
Schedule 3.12, the Company has all licenses, permits and authorizations issued
or granted or waived by Governmental Authorities that are necessary for the
conduct of its business as now being conducted (collectively, “Permits”),
except, in each case, for such items for which the failure to obtain or have
waived would not result in a Company Material Adverse Effect.

 

  (b) All Permits are validly held by the Company and are in full force and
effect, except as would not reasonably be expected to have a Company Material
Adverse Effect.

 

  (c) The Company has complied with all terms and conditions of the Permits,
except as would not reasonably be expected to have a Company Material Adverse
Effect.

 

  (d) There is no outstanding written notice, nor to Development’s and
Operations’ Knowledge, any other notice of revocation, cancellation or
termination of any Permit, except, in each case, as would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.

 

  (e) No proceeding is pending or, to Development’s and Operations’ Knowledge,
threatened with respect to any alleged failure by the Company to have any
material Permit necessary for the operation of any of the Company Assets or the
conduct of the Company’s business or to be in compliance therewith.

Section 3.13 Contracts.

 

  (a) Disclosure Schedule 3.13(a) contains a true and complete listing of the
following contracts and other agreements to which the Company is, or immediately
after the Closing will be, a party (each such contract or agreement being
referred to herein as a “Material Contract”):

 

  (i) contracts, agreements and instruments representing Indebtedness for
Borrowed Money and all guarantees thereof;

 

15

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  (ii) contracts containing covenants limiting the freedom of the Company to
engage in any line of business or compete with any Person or operate at any
location;

 

  (iii) price swaps, hedges, futures or similar instruments;

 

  (iv) contracts to which the Company, on the one hand, and an Affiliate of
Operations, on the other hand, is a party or is otherwise bound;

 

  (v) contracts containing any preferential rights to purchase or similar rights
relating to any Company Assets;

 

  (vi) joint venture or partnership agreements, including any agreement or
commitment to make any loan or capital contribution to any joint venture or
partnership;

 

  (vii) contracts relating to the acquisition or disposition by the Company of
any business (whether by acquisition or disposition of equity interests or
assets) pursuant to which the Company has or will have any remaining material
obligation or liability or benefit;

 

  (viii) contracts or agreements which, individually, require or entitle the
Company to make or receive payments of at least $1,000,000 annually, provided
that the calculation of the aggregate payments for any such agreement or
contract shall not include payments attributable to any renewal periods or
extensions for which the Company may exercise a renewal or extension option in
its sole discretion; and

 

  (ix) licenses relating to Intellectual Property (whether as licensee or
licensor) other than licenses with respect to software used or accessed by any
Company under a “shrink wrap,” “click wrap,” or “off the shelf” software license
that is generally commercially available on standard terms.

 

  (b) Operations has made available to the Partnership a correct and complete
copy of each Material Contract listed in Disclosure Schedule 3.13(a).

 

  (c)

Except as would not reasonably be expected to result in a Company Material
Adverse Effect or as disclosed in Disclosure Schedule 3.13(b), with respect to
the Company: (i) each Material Contract is legal, valid and binding on and
enforceable against the Company and in full force and effect; (ii) each Material
Contract will continue to be legal, valid and binding on and enforceable against
the Company, and in full force and effect on identical terms following the
consummation of the transactions contemplated by this Agreement; (iii) the
Company is not in breach or default, and no event has occurred which with notice
or lapse of time would constitute a breach or default by the Company, or permit
termination, modification or acceleration,

 

16

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  under any Material Contract; and (iv) to Development’s and Operations’
Knowledge, no other party to any Material Contract is in breach or default, and
no event has occurred which with notice or lapse of time would constitute a
breach or default by such other party, or permit termination, modification or
acceleration, under any Material Contract other than in accordance with its
terms, nor has any other party repudiated any provision of any Material
Contract.

Section 3.14 Employees.

The Company has no employees.

Section 3.15 Transactions with Affiliates.

Except as otherwise contemplated in this Agreement, the Company is not a party
to, and immediately after Closing will not be party to, any agreement, contract
or arrangement between the Company, on the one hand, and any of its Affiliates
prior to the Closing, on the other hand, other than those disclosed on
Disclosure Schedule 3.13(a), each of which was entered into in the ordinary
course of business, relating to the provision of natural gas transportation or
storage service, the interconnection of the pipeline systems of the Company and
its Affiliates (prior to the Closing), the provision of construction, operating
and management services to the Company, or the purchase or sale of natural gas
for fuel or system requirements.

Section 3.16 Insurance.

Disclosure Schedule 3.16 sets forth a list of the material insurance policies
that the Company holds or of which the Company is the beneficiary. Such policies
are in full force and effect, and the Company has received no written notice of
any pending or threatened termination of such policies.

Section 3.17 Intellectual Property Rights.

The Company owns or has the right to use all Intellectual Property necessary for
or used in the conduct of the Company’s business as currently conducted by it,
and, to Development’s and Operations’ Knowledge, its products and services do
not infringe upon, misappropriate or otherwise violate any Intellectual Property
of any third party. All Intellectual Property owned by the Company, if any, is
free and clear of any Liens (other than Permitted Liens). Neither the execution
and delivery of this Agreement, nor the consummation of the transactions
contemplated hereby will, with or without notice or lapse of time, result in, or
give any other Person the right or option to cause or declare, a breach or
termination of, or cancellation or reduction in, rights of the Company under any
contract providing for the license of any Intellectual Property to the Company,
except for any such terminations, cancellations or reductions that, individually
or in the aggregate, would not have a Company Material Adverse Effect. There is
no Intellectual Property-related action, suit, proceeding, hearing,
investigation, notice or complaint pending or, to Development’s and Operations’
Knowledge, threatened by any third party before any court or tribunal
(including, without limitation, the United States Patent and Trademark Office or
equivalent authority anywhere in the world) relating to the

 

17

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Company or its operations, nor has any claim or demand been made by any third
party that alleges any infringement, misappropriation or violation of any
Intellectual Property of any third party, or unfair competition or trade
practices by the Company. Except as would not result in a Company Material
Adverse Effect, the Company has taken reasonable measures to protect the
confidentiality of all material trade secrets.

Section 3.18 Brokerage Arrangements.

Operations has not entered (directly or indirectly) into any agreement with any
Person that would obligate Operations or any of its Affiliates to pay any
commission, brokerage or “finder’s fee” or other similar fee in connection with
this Agreement, the Assignment Agreement or the transactions contemplated hereby
or thereby.

Section 3.19 Books and Records.

Accurate copies of the respective books of account, minute books and stock or
other equity record books of the Company have been made available for inspection
to the Partnership.

Section 3.20 Regulatory Matters.

Since November 13, 2012, the Company (and its business, operations and assets)
has been in material compliance with (a) the applicable provisions of the
Natural Gas Act of 1938, as amended, and (b) all applicable rules, regulations,
orders, certificates and tariffs of the FERC and any state public utility
commission having jurisdiction over any of the Company’s business, operations or
assets. The Company has duly filed all forms and reports required to be filed by
or with respect to the Company (and its business, operations and assets) with
the FERC and any state public utility commission having jurisdiction over any of
the Company’s business, operations or assets, and such forms and reports have
been prepared in accordance with Applicable Law, except to the extent that any
noncompliance, either individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.

Section 3.21 Management Projections and Budget.

The projections and budgets identified on Disclosure Schedule 3.21, which were
provided to the Partnership (including those provided to the Financial Advisor)
by Development and its Affiliates as part of the Partnership’s review in
connection with this Agreement, have a reasonable basis and were consistent with
Development’s management’s expectations at the time they were prepared.

Section 3.22 Investment Intent.

Operations is receiving the Common Unit Quantity for its own account with the
present intention of holding such Common Units for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution
thereof in violation of the Securities Act or state securities laws. Operations
does not presently have any contract, undertaking, agreement or arrangement with
any Person to sell, transfer or grant participations to such Person or to any
third Person, with respect to such Common Units. Operations has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risk of

 

18

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an investment in such Common Units. Operations acknowledges that such Common
Units are not currently registered under the Securities Act or any applicable
state securities law and may not be registered in the future, and that such
Common Units may not be transferred or sold except pursuant to the registration
provisions of the Securities Act or pursuant to an applicable exemption
therefrom and pursuant to state securities laws and regulations as applicable.
Operations acknowledges that the Partnership has no obligation to register or
qualify such Common Units for resale and further acknowledges that if an
exemption from registration or qualification is available, it may be conditioned
on various requirements, including, but not limited to, the time and manner of
sale, the holding period for such Common Units, and on requirements relating to
the Partnership that are outside of the control of Operations, and that the
Partnership is under no obligation and may not be able to satisfy.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

The Partnership hereby represents and warrants to Operations as follows:

Section 4.1 Organization and Existence.

The Partnership is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
limited partnership power and authority to own, operate and lease its properties
and assets and to carry on its business as now conducted.

Section 4.2 Authority and Approval.

 

  (a) The Partnership has full limited partnership power and authority to
execute and deliver this Agreement and the Assignment Agreement, to consummate
the transactions contemplated hereby and thereby and to perform all of the
obligations hereof and thereof to be performed by it. The execution and delivery
of this Agreement and the Assignment Agreement, the consummation of the
transactions contemplated hereby and thereby and the performance of all of the
obligations hereof and thereof to be performed by the Partnership have been duly
authorized and approved by all requisite limited partnership action of the
Partnership.

 

  (b)

This Agreement has been duly executed and delivered by or on behalf of the
Partnership and constitutes the valid and legally binding obligation of the
Partnership, enforceable against the Partnership in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors’ rights and remedies generally and by
general principles of equity (whether applied in a proceeding at law or in
equity). When executed and delivered by each of the parties party thereto, the
Assignment Agreement will constitute a valid and legally binding obligation of
the Partnership, enforceable against the Partnership in accordance with its
terms, except as such enforcement may be

 

19

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  limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors’ rights and remedies generally and by general principles of equity
(whether applied in a proceeding at law or in equity).

Section 4.3 Common Units.

 

  (a) The issuance by the Partnership of the Common Unit Quantity pursuant to
this Agreement and the limited partner interests represented thereby: (i) has
been duly authorized by or on behalf of the Partnership pursuant to the
Partnership Agreement; (ii) when issued and delivered in accordance with the
terms of this Agreement and the Partnership Agreement, will be validly issued,
fully paid (to the extent required by the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Sections
17-303, 17-607 and 17-804 of the DRULPA); and (iii) will be free of any and all
Liens and restrictions on transfer, other than restrictions on transfer under
the Partnership Agreement, the DRULPA, and applicable state and federal
securities laws.

 

  (b) The Partnership’s Common Units are listed on the New York Stock Exchange,
and the Partnership has not received any notice of delisting.

 

  (c) On the Closing Date, the Common Unit Quantity will have those rights,
preferences, privileges and restrictions governing the Common Units as set forth
in the Partnership Agreement.

Section 4.4 No Conflict; Consents.

 

  (a) The execution, delivery and performance of this Agreement by the
Partnership does not, and the execution, delivery and performance of the
Assignment Agreement by the Partnership will not, and the fulfillment and
compliance with the terms and conditions hereof and the consummation of the
transactions contemplated hereby and thereby will not, (i) violate, conflict
with, result in any breach of, or require the consent of any Person under, any
of the terms, conditions or provisions of the certificate of limited partnership
or limited partnership agreement of the Partnership; (ii) conflict with or
violate any provision of any law or administrative rule or regulation or any
judicial, administrative or arbitration order, award, judgment, writ, injunction
or decree applicable to the Partnership or any property or asset of the
Partnership; (iii) conflict with, result in a breach of, constitute a default
under (whether with notice or the lapse of time or both), or accelerate or
permit the acceleration of the performance required by, or require any consent,
authorization or approval under, any indenture, mortgage, agreement, contract,
commitment, license, concession, permit, lease, joint venture or other
instrument to which the Partnership is a party or by which it is bound or to
which any of its property is subject; and

 

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  (b) No consent, approval, license, permit, order or authorization of any
Governmental Authority or other Person is required to be obtained or made by or
with respect to the Partnership in connection with the execution, delivery, and
performance of this Agreement or the Assignment Agreement or the consummation of
the transactions contemplated hereby and thereby, except as have been waived or
obtained or with respect to which the time for asserting such right has expired.

Section 4.5 Periodic Reports.

The Partnership’s forms, registration statements, reports, schedules and
statements required to be filed by it under the Exchange Act or the Securities
Act (all such documents filed prior to the date hereof, collectively the “SEC
Documents”) have been filed with the Commission on a timely basis. The SEC
Documents, including, without limitation, any audited or unaudited financial
statements and any notes thereto or schedules included therein, at the time
filed (or in the case of registration statements, solely on the dates of
effectiveness) (except to the extent corrected by a subsequent SEC Document)
(a) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be,
(c) complied as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto, (d) were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q
of the Commission), and (e) fairly present (subject in the case of unaudited
statements to normal and recurring audit adjustments) in all material respects
the consolidated financial position of the Partnership and its consolidated
subsidiaries as of the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended. PricewaterhouseCoopers LLP
is an independent registered public accounting firm with respect to the
Partnership and has not resigned or been dismissed as independent registered
public accountants of the Partnership as a result of or in connection with any
disagreement with the Partnership on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedures.

Section 4.6 Brokerage Arrangements.

The Partnership has not entered (directly or indirectly) into any agreement with
any Person that would obligate the Partnership or any of its Affiliates to pay
any commission, brokerage or “finder’s fee” or other similar fee in connection
with this Agreement, the Assignment Agreement or the transactions contemplated
hereby or thereby.

Section 4.7 No Registration.

Assuming the accuracy of the representations and warranties of Operations
contained in Section 3.22, the issuance of the Common Unit Quantity pursuant to
this Agreement is exempt from registration requirements of the Securities Act,
and neither the Partnership nor, to the Knowledge of the Partnership, any
authorized representative acting on its behalf has taken or

 

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will take any action hereafter that would cause the loss of such exemption.
Neither the Partnership nor any of its subsidiaries have, directly or indirectly
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any “security” (as defined in the Securities Act) that
is or will be integrated with the issuance of the Common Unit Quantity in a
manner that would require registration under the Securities Act.

Section 4.8 Litigation.

There are no civil, criminal or administrative actions, suits, claims, hearings,
arbitrations, investigations or proceedings pending or, or to the Partnership’s
Knowledge, threatened that (a) question or involve the validity or
enforceability of any of the Partnership’s obligations under this Agreement or
the Assignment Agreement or (b) seek (or reasonably might be expected to seek)
(i) to prevent or delay the consummation by the Partnership of the transactions
contemplated by this Agreement or the Assignment Agreement or (ii) damages in
connection with any such consummation.

Section 4.9 Investment Intent.

The Partnership is accepting the Subject Interest for its own account with the
present intention of holding the Subject Interest for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution
thereof in violation of the Securities Act or state securities laws. The
Partnership acknowledges that the Subject Interest will not be registered under
the Securities Act or any applicable state securities law, and that such Subject
Interest may not be transferred or sold except pursuant to the registration
provisions of the Securities Act or pursuant to an applicable exemption
therefrom and pursuant to state securities laws and regulations as applicable.

ARTICLE V

TAX MATTERS

Section 5.1 Liability for Taxes.

 

  (a) Operations shall be liable for, and shall indemnify, defend and hold
harmless the Partnership and its respective subsidiaries from any Taxes imposed
on or incurred by or with respect to the Company or the Company Assets with
respect to any taxable period or portion thereof ending on or prior to the
Closing Date.

 

  (b) The Partnership shall be liable for, and shall indemnify and hold
Operations and its Affiliates (other than the Partnership and its subsidiaries)
harmless from, any Taxes imposed on or incurred by or with respect to Company or
the Company Assets with respect to any taxable period or portion thereof
beginning after the Closing Date.

 

  (c)

Whenever it is necessary for purposes of this Article V to determine the amount
of any Taxes imposed on or incurred by or with respect to the Company or the
Company Assets for a taxable period beginning before and

 

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  ending after the Closing Date which is allocable to the period ending on or
prior to the Closing Date, the determination shall be made, in the case of
property or ad valorem taxes or franchise taxes (which are measured by, or based
solely upon capital, debt or a combination of capital and debt), by pro rating
such Taxes ratably on a per diem basis and, in the case of other Taxes, by
assuming that such taxable period ending on or prior to the Closing Date
constitutes a separate taxable period applicable to the Company and by taking
into account the actual taxable events occurring during such period (except that
exemptions, allowances and deductions for a taxable period beginning before and
ending after the Closing Date that are calculated on an annual or periodic
basis, such as the deduction for depreciation, shall be apportioned to the
period prior to and including the Closing Date ratably on a per diem basis).
Notwithstanding anything to the contrary herein, any franchise tax paid or
payable with respect to the Company or the Company Assets shall be allocated to
the taxable period during which the income, operations, assets or capital
comprising the base of such tax is measured, regardless of whether the right to
do business for another taxable period is obtained by the payment of such
franchise tax.

 

  (d) If the Partnership or its Affiliates receives a refund of any Taxes that
Operations is responsible for hereunder, or if Operations or its Affiliates
receive a refund of any Taxes that the Partnership is responsible for hereunder,
the party receiving such refund shall, within ninety (90) days after receipt of
such refund, remit it to the party who has responsibility for such Taxes
hereunder. The parties shall cooperate in order to take all necessary and
reasonable steps to claim any such refund.

Section 5.2 Tax Returns.

 

  (a) With respect to any Tax Return attributable to a taxable period ending on
or before the Closing Date that is required to be filed either before or after
the Closing Date with respect to the Company or the Company Assets, Operations
shall cause such Tax Return to be prepared, cause to be included in such Tax
Return all items of income, gain, loss, deduction and credit required to be
included therein, cause such Tax Return to be filed timely with the appropriate
Taxing Authority, and be responsible for the timely payment (and entitled to any
refund) of all Taxes due with respect to the period covered by such Tax Return.

 

  (b)

With respect to any Tax Return attributable to a taxable period beginning on or
before the Closing Date and ending after the Closing Date that is required to be
filed after the Closing Date with respect to the Company or the Company Assets,
the Partnership shall cause such Tax Return to be prepared, cause to be included
in such Tax Return all items of income, gain, loss, deduction and credit
required to be included therein, furnish a copy of such Tax Return to
Operations, cause such Tax Return to be filed timely with the appropriate Taxing
Authority, and the Partnership shall be responsible for the

 

23

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  timely payment of all Taxes due with respect to the period covered by such Tax
Return (but shall have a right to recover from Operations the amount of Taxes
attributable to the portion of the taxable period ending on or prior to the
Closing Date pursuant to Section 5.1(a)).

 

  (c) With regard to any Tax Return not yet filed for any taxable period that
begins before the Closing Date with respect to the Company or the Company
Assets, the parties shall cause each such Tax Return to be prepared in
accordance with past Tax accounting practices used with respect to the Tax
Returns in question (unless such past practices are no longer permissible under
the Applicable Law), and to the extent any items are not covered by past
practices, in accordance with reasonable tax accounting practices selected by
the filing party with respect to such Tax Return under this Agreement with the
consent (not to be unreasonably withheld or delayed) of the non-filing party.

Section 5.3 Transfer Taxes.

All transfer, documentary, sales, use, stamp, registration and other similar
Taxes and fees arising out of or in connection with the transactions effected
pursuant to this Agreement (the “Transfer Taxes”) shall be borne 50% by
Operations and 50% by the Partnership. Operations shall file all necessary Tax
Returns and other documentation with respect to such Transfer Taxes. If required
by Applicable Law, the Partnership shall, and shall cause its Affiliates to,
join in the execution of any such Tax Returns and other documentation.

Section 5.4 Allocation of Cash Amount.

The Partnership and Operations will use commercially reasonable efforts to agree
upon an allocation of the entire Cash Amount among the Company Assets that are
treated as sold by Operations to the Partnership for U.S. federal income tax
purposes in compliance with the principles of Section 1060 of the Code, and the
Treasury Regulations thereunder. If Operations and the Partnership agree to such
allocation, Operations and the Partnership agree (a) that such allocation shall
be used by Operations and the Partnership as the basis for reporting asset
values and other items for purposes of all federal, state, and local Tax
Returns, including without limitation Internal Revenue Service Form 8594, and
(b) that neither Operations nor the Partnership or any of their respective
Affiliates will take a position on any Tax Return, or before any Governmental
Authority in connection with the examination of a Tax Return or in any Tax
Proceeding that is in any manner inconsistent with such allocation, except as
required by Applicable Law or with the written consent of the other party.

Section 5.5 Tax Treatment and Related Covenants.

 

  (a)

The parties acknowledge that (A) the contribution of a portion of the Subject
Interest in exchange for the Common Unit Quantity is properly characterized as a
transaction described in Section 721(a) of the Code and (B) the conveyance of
the remaining portion of the Subject Interest in exchange for the Cash Amount is
properly characterized as a sale by Operations of

 

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  Company Assets to the Partnership for U.S. federal income tax purposes and, in
each case (A) and B), agree to file all Tax Returns in a manner consistent with
such treatment.

 

  (b) The parties acknowledge that the Company and Operations are disregarded
for federal income tax purposes as entities apart from Development; accordingly,
references to Operations or the Company in this Article V include Development as
the context requires.

Section 5.6 Conflict.

In the event of a conflict between the provisions of this Article V and any
other provisions of this Agreement, the provisions of this Article V shall
control.

ARTICLE VI

INDEMNIFICATION

Section 6.1 Indemnification of the Partnership.

Subject to the limitations set forth in this Agreement, Development and
Operations, from and after the Closing Date, shall, jointly and severally,
indemnify, defend and hold the Partnership, its subsidiaries and their
respective securityholders, directors, officers, and employees, and the
officers, directors and employees of the General Partner, but otherwise
excluding Development and its Affiliates (the “Partnership Indemnified Parties”)
harmless from and against any and all Damages suffered or incurred by any
Partnership Indemnified Party as a result of or arising out of (i) any breach or
inaccuracy of a representation or warranty of Development or Operations in this
Agreement or the Assignment Agreement, or (ii) any breach of any agreement or
covenant on the part of Development or Operations made under this Agreement or
the Assignment Agreement or in connection with the transactions contemplated
hereby or thereby. For purposes of this Section 6.1, whether Development or
Operations has breached any of its representations and warranties herein shall
be determined without giving effect to any qualification as to “materiality”
(including the words “material” or “Company Material Adverse Effect”).

Section 6.2 Indemnification of Development.

Subject to the limitations set forth in this Agreement, the Partnership shall
indemnify, defend and hold Development, its Affiliates (other than any of the
Partnership Indemnified Parties) and their respective securityholders,
directors, officers, and employees (the “Development Indemnified Parties”)
harmless from and against any and all Damages suffered or incurred by the
Development Indemnified Parties as a result of or arising out of (i) any breach
or inaccuracy of a representation or warranty of the Partnership in this
Agreement or the Assignment Agreement, or (ii) any breach of any agreement or
covenant on the part of the Partnership made under this Agreement or the
Assignment Agreement or in connection with the

 

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transactions contemplated hereby or thereby. For purposes of this Section 6.2,
whether the Partnership has breached any of its representations and warranties
herein shall be determined without giving effect to any qualification as to
“materiality” (including the word “material”).

Section 6.3 Tax Indemnification.

With the exception of a breach or inaccuracy of the representations and
warranties of Development and Operations contained in Section 3.10, nothing in
this Article VI, other than Sections 6.7 through 6.9, shall apply to liability
with respect to Taxes, the liability with respect to which shall be as set forth
in Article V.

Section 6.4 Corrosion Costs Indemnification.

Subject to the limitations set forth in Section 6.12(b), Development and
Operations shall, jointly and severally, indemnify the Partnership for any and
all out of pocket costs incurred by the Partnership during the three-year period
following the Closing Date to repair, replace or remediate any part of the
Trailblazer Pipeline to the extent such repair, replacement or remediation is
necessitated by external corrosion of the pipeline due to disbonded Hi-Melt CTE
coating (the “Corrosion Costs”). Costs of running ILI tools (i.e., pigs) to
detect corrosion and other routine maintenance or repair expenditures not
specifically necessitated by external corrosion of the pipeline due to disbonded
Hi-Melt CTE coating will not be considered Corrosion Costs and will not be
indemnified by Development or Operations.

Section 6.5 Survival.

All the provisions of this Agreement shall survive the Closing, notwithstanding
any investigation at any time made by or on behalf of any party hereto, provided
that the representations and warranties set forth in Article III and Article IV
shall terminate and expire on the date that is fifteen (15) months following the
Closing Date, except (a) the representations and warranties of Development and
Operations set forth in Section 3.10 (Taxes) shall survive until the date that
is ninety (90) days after the expiration of the applicable statutes of
limitations (including all periods of extension and tolling), (b) the
representations and warranties of Development and Operations set forth in
Section 3.11 (Environmental Matters) shall terminate and expire on the third
(3rd) anniversary of the Closing Date, (c) the representations and warranties of
Development and Operations set forth in Section 3.1 (Organization), Section 3.2
(Authority and Approval), Section 3.4(a) (Ownership) and Section 3.18 (Broker
Fees) shall survive forever and (d) the representations and warranties of the
Partnership set forth in Section 4.1 (Organization and Existence), Section 4.2
(Authority and Approval) and Section 4.5 (Broker Fees) shall survive forever.
After a representation and warranty has terminated and expired, no
indemnification shall or may be sought pursuant to this Article VI on the basis
of that representation and warranty by any Person who would have been entitled
pursuant to this Article VI to indemnification on the basis of that
representation and warranty prior to its termination and expiration, provided
that in the case of each representation and warranty that shall terminate and
expire as provided in this Section 6.5, no claim presented in writing for
indemnification pursuant to this Article VI on the basis of that representation
and warranty prior to its termination and expiration shall be affected in any
way by that termination and expiration. The indemnification obligations under
this Article VI or elsewhere in this Agreement shall apply regardless of

 

26

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whether any suit or action results solely or in part from the active, passive or
concurrent negligence or strict liability of the indemnified party. The
covenants and agreements entered into pursuant to this Agreement to be performed
after the Closing shall survive the Closing.

Section 6.6 Demands.

 

  (a) Each indemnified party hereunder agrees that promptly upon its discovery
of facts giving rise to a claim for indemnity under the provisions of this
Agreement, including receipt by it of notice of any demand, assertion, claim,
action or proceeding, judicial or otherwise, by any third party (such claims for
indemnity involving third-party claims being collectively referred to herein as
the “Third Party Indemnity Claim”), with respect to any matter as to which it
claims to be entitled to indemnity under the provisions of this Agreement, it
will give prompt notice thereof in writing to the indemnifying party, together
with a statement of such information respecting any of the foregoing as it shall
have. Such notice shall include a formal demand for indemnification under this
Agreement.

 

  (b) Notwithstanding the foregoing, if the indemnified party fails to notify
the indemnifying party thereof in accordance with the provisions of this
Agreement in sufficient time to permit the indemnifying party or its counsel to
defend against a Third Party Indemnity Claim and to make a timely response
thereto, the indemnifying party’s indemnity obligation relating to such Third
Party Indemnity Claim shall not be relieved except in the event and only to the
extent that the indemnifying party is prejudiced or damaged by such failure.

Section 6.7 Right to Contest and Defend.

 

  (a) The indemnifying party shall be entitled, at its cost and expense, to
contest and defend by all appropriate legal proceedings any Third Party
Indemnity Claim for which it is called upon to indemnify the indemnified party
under the provisions of this Agreement; provided, that notice of the intention
to so contest shall be delivered by the indemnifying party to the indemnified
party within thirty (30) days from the date of receipt by the indemnifying party
of notice by the indemnified party of the assertion of the Third Party Indemnity
Claim. Any such contest may be conducted in the name and on behalf of the
indemnifying party or the indemnified party as may be appropriate. Such contest
shall be conducted by reputable counsel employed by the indemnifying party and
not reasonably objected to by the indemnified party, but the indemnified party
shall have the right but not the obligation to participate in such proceedings
and to be represented by counsel of its own choosing at its sole cost and
expense.

 

  (b)

The indemnifying party shall have full authority to determine all action to be
taken with respect thereto; provided, however, that the indemnifying party will
not have the authority to subject the indemnified party to any obligation

 

27

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  whatsoever, other than the performance of purely ministerial tasks or
obligations not involving material expense or injunctive relief. If the
indemnifying party does not elect to contest any such Third Party Indemnity
Claim, the indemnifying party shall be bound by the result obtained with respect
thereto by the indemnified party. If the indemnifying party assumes the defense
of a Third Party Indemnity Claim, the indemnified party shall agree to any
settlement, compromise or discharge of a Third Party Indemnity Claim that the
indemnifying party may recommend and that by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Indemnity Claim, which releases the indemnified party
completely in connection with such Third Party Indemnity Claim and which would
not otherwise adversely affect the indemnified party as determined by the
indemnified party in its sole discretion.

 

  (c) Notwithstanding the foregoing, the indemnifying party shall not be
entitled to assume the defense of any Third Party Indemnity Claim (and shall be
liable for the reasonable fees and expenses of counsel incurred by the
indemnified party in defending such Third Party Indemnity Claim) if the Third
Party Indemnity Claim seeks an order, injunction or other equitable relief or
relief for other than money damages against the indemnified party which the
indemnified party reasonably determines, after conferring with its outside
counsel, cannot be separated from any related claim for money damages. If such
equitable relief or other relief portion of the Third Party Indemnity Claim can
be so separated from that for money damages, the indemnifying party shall be
entitled to assume the defense of the portion relating to money damages.

Section 6.8 Cooperation.

If requested by the indemnifying party, the indemnified party agrees to
cooperate with the indemnifying party and its counsel in contesting any Third
Party Indemnity Claim that the indemnifying party elects to contest or, if
appropriate, in making any counterclaim against the person asserting the Third
Party Indemnity Claim, or any cross-complaint against any person, and the
indemnifying party will reimburse the indemnified party for any expenses
incurred by it in so cooperating. At no cost or expense to the indemnified
party, the indemnifying party shall cooperate with the indemnified party and its
counsel in contesting any Third Party Indemnity Claim.

Section 6.9 Right to Participate.

The indemnified party agrees to afford the indemnifying party and its counsel
the opportunity to be present at, and to participate in, conferences with all
Persons, including Governmental Authorities, asserting any Third Party Indemnity
Claim against the indemnified party or conferences with representatives of or
counsel for such Persons.

 

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Section 6.10 Payment of Damages and Corrosion Costs.

The indemnification required hereunder shall be made by periodic payments of the
amount of Damages or Corrosion Costs in connection therewith, as applicable,
within ten (10) days as and when reasonably specific bills are received by, or
Damages or Corrosion Costs, as applicable, are incurred and reasonable evidence
thereof is delivered to, the indemnifying party. In calculating any amount to be
paid by an indemnifying party by reason of the provisions of this Agreement, the
amount shall be reduced by all insurance proceeds and any indemnification
reimbursement proceeds received from third parties credited to or received by
the indemnified party related to the Damages or Corrosion Costs, as applicable.

Section 6.11 Direct Claim.

Any claim by an indemnified party with respect to any Damages which do not
result from a Third Party Indemnity Claim (a “Direct Claim”) will be asserted by
giving the indemnifying party reasonably prompt written notice thereof, stating
the nature of such claim in reasonable detail and indicating the estimated
amount, if practicable. The indemnifying party will have a period of ninety
(90) days from receipt of such Direct Claim within which to respond to such
Direct Claim. If the indemnifying party does not respond within such ninety
(90) day period, the indemnifying party will be deemed to have accepted such
Direct Claim. If the indemnifying party rejects such Direct Claim, the
indemnified party will be free to seek enforcement of its rights to
indemnification under this Agreement.

Section 6.12 Limitations on Indemnification.

 

  (a) To the extent that the Partnership Indemnified Parties would otherwise be
entitled to indemnification for Damages pursuant to Section 6.1(i), Development
and Operations shall be liable only if (i) the Damages with respect to any
individual claim exceed $25,000 (the “Minimum Claim Amount”) and (ii) the
Damages for all claims that exceed the Minimum Claim Amount exceed, in the
aggregate, $1,600,000 (the “Deductible Amount”), and then Development and
Operations shall be liable only for Damages to the extent of any excess over the
Deductible Amount. In no event shall Development’s and Operations’ aggregate
liability to the Partnership Indemnified Parties under Section 6.1 exceed
$16,000,000 (the “Ceiling Amount”). Notwithstanding the foregoing, the
Deductible Amount and the Ceiling Amount shall not apply to breaches or
inaccuracies of representations and warranties contained in Section 3.1, Section
3.2, Section 3.4(a), Section 3.18 and Section 3.19.

 

  (b)

To the extent that the Partnership would otherwise be entitled to
indemnification for Corrosion Costs pursuant to Section 6.4, Development and
Operations shall be liable only if the Corrosion Costs exceed, in the aggregate,
$1,500,000 (the “Annual Corrosion Indemnification Deductible Amount”) during any
annual period commencing on the Closing Date or any anniversary thereof (each,
an “Annual Period”), and then Development and Operations shall be liable only
for Corrosion Costs incurred during any

 

29

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  Annual Period to the extent of any excess over the Annual Corrosion
Indemnification Deductible Amount. In no event shall Development’s and
Operations’ aggregate liability to the Partnership under Section 6.4 exceed
$20,000,000.

 

  (c) Additionally, neither the Partnership, on the one hand, nor Development
and Operations, on the other hand, will be liable as an indemnitor under this
Agreement for any consequential, incidental, special, indirect or exemplary
damages suffered or incurred by the indemnified party or parties except to the
extent resulting pursuant to Third Party Indemnity Claims.

Section 6.13 Sole Remedy.

No party shall have liability under this Agreement, the Assignment Agreement or
the transactions contemplated hereby or thereby except as is provided in Article
V or this Article VI (other than claims or causes of action arising from fraud).

ARTICLE VII

MISCELLANEOUS

Section 7.1 Acknowledgements.

Each party acknowledges that it has relied on the representations and warranties
of the other party expressly and specifically set forth in this Agreement,
including, in the case of the Partnership, the Disclosure Schedules attached
hereto. Such representations and warranties constitute the sole and exclusive
representations and warranties of the parties hereto in connection with the
transactions contemplated hereby, and the parties hereto understand, acknowledge
and agree that all other representations and warranties of any kind or nature,
whether expressed, implied or statutory, oral or written, past or present, are
specifically disclaimed.

Section 7.2 Cooperation; Further Assurances.

 

  (a) Operations shall cooperate with the Partnership to assist in identifying
all licenses, authorizations or permits necessary to conduct the Company’s
business and own and operate its assets from and after the Closing Date and,
where permissible and necessary in connection with the transfer of the Subject
Interest contemplated hereby, transfer existing licenses, authorizations and
permits to the Partnership and, where not permissible, assist the Partnership in
obtaining new licenses, authorizations or permits at no cost, fee or liability
to the Partnership.

 

  (b)

Operations and the Partnership shall use their respective commercially
reasonable efforts to obtain all approvals and consents required by or necessary
for the transactions contemplated by this Agreement and the Assignment
Agreement. Each of the parties acknowledges that certain actions may be
necessary with respect to the matters and actions contemplated by this Agreement
and the Assignment Agreement such as

 

30

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  making notifications and obtaining consents or approvals or other clearances
that are material to the consummation of the transactions contemplated hereby,
and each agrees to take all appropriate action and to do all things necessary,
proper or advisable under Applicable Laws and regulations to make effective the
transactions contemplated by this Agreement and the Assignment Agreement;
provided, however, that nothing in this Agreement will require any party hereto
to hold separate or make any divestiture not expressly contemplated herein of
any asset or otherwise agree to any restriction on its operations or other
burdensome condition which would in any such case be material to its assets,
liabilities or business in order to obtain any consent or approval or other
clearance required by this Agreement or the Assignment Agreement.

Section 7.3 Expenses.

Except as otherwise provided herein and regardless of whether the transactions
contemplated hereby are consummated, each party shall pay its own expenses
incident to this Agreement and all action taken in preparation for carrying this
Agreement into effect.

Section 7.4 Notices.

Any notice, request, instruction, correspondence or other document to be given
hereunder by any party hereto to another party hereto (herein collectively
called “Notice”) shall be in writing and delivered in person, by courier service
requiring acknowledgment of receipt of delivery or by fax, as follows:

If to Development, addressed to:

Tallgrass Development, LP

6640 W. 143rd Street, Suite 200

Overland Park, Kansas 66223

Attention: General Counsel

Tel: (913) 928-6010

Fax: (913) 928-6011

with copies (which shall not constitute notice) to:

Baker Botts L.L.P.

98 San Jacinto Blvd., Suite 1500

Austin, Texas 78701

Attention: Mollie Duckworth

Tel: (512) 322-2551

Fax: (512) 322-8362

 

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If to Operations, addressed to:

Tallgrass Operations, LLC

c/o Tallgrass Development, LP

6640 W. 143rd Street, Suite 200

Overland Park, Kansas 66223

Attention: General Counsel

Tel: (913) 928-6010

Fax: (913) 928-6011

with copies (which shall not constitute notice) to:

Baker Botts L.L.P.

98 San Jacinto Blvd., Suite 1500

Austin, Texas 78701

Attention: Mollie Duckworth

Tel: (512) 322-2551

Fax: (512) 322-8362

If to the Partnership, addressed to:

Tallgrass Energy Partners, LP

6640 W. 143rd Street, Suite 200

Overland Park, Kansas 66223

Attention: General Counsel

Tel: (913) 928-6010

Fax: (913) 928-6011

with copies (which shall not constitute notice) to:

Tallgrass Energy Partners, LP

6640 W. 143rd Street, Suite 200

Overland Park, Kansas 66223

Attention: Conflicts Committee Chair

Tel: (913) 928-6010

Fax: (913) 928-6011

Bracewell & Giuliani LLP

711 Louisiana, Suite 2300

Houston, Texas 77002

Attention: Gary W. Orloff

Tel: (713) 221-1306

Fax: (713) 221-2166

Notice given by personal delivery or courier service shall be effective upon
actual receipt. Notice given by fax shall be confirmed by appropriate answer
back and shall be effective upon

 

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actual receipt if received during the recipient’s normal business hours, or at
the beginning of the recipient’s next business day after receipt if not received
during the recipient’s normal business hours. Any party may change any address
to which Notice is to be given to it by giving Notice as provided above of such
change of address.

Section 7.5 Governing Law.

 

  (a) This Agreement shall be subject to and governed by the laws of the State
of Delaware. Each Party hereby submits to the exclusive jurisdiction of the
state and federal courts in the State of Kansas and to venue in the state courts
in Johnson County, Kansas and in the federal courts of Wyandotte County, Kansas.

 

  (b) Each of the parties to this Agreement irrevocably waives any and all right
to trial by jury in any legal proceeding between the parties arising out of or
relating to this Agreement or the transactions contemplated by this Agreement.

 

  (c) Each party to this Agreement waives, to the fullest extent permitted by
Applicable Law, any right it may have to receive damages from any other party
based on any theory of liability for any special, indirect, consequential
(including lost profits), exemplary or punitive damages (except to the extent
that any such damages are included in indemnifiable losses resulting from a
third party claim in accordance with Article VI).

Section 7.6 Public Statements.

The parties hereto shall consult with each other and no party shall issue any
public announcement or statement with respect to this Agreement or the
transactions contemplated hereby without the consent of the other party, unless
the party desiring to make such announcement or statement, after seeking such
consent from the other parties, obtains advice from legal counsel that a public
announcement or statement is required by Applicable Law or stock exchange
regulations.

Section 7.7 Entire Agreement; Amendments and Waivers.

 

  (a) This Agreement and the Assignment Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof. Each party to this
Agreement agrees that no other party to this Agreement (including its agents and
representatives) has made any representation, warranty, covenant or agreement to
or with such party relating to this Agreement or the transactions contemplated
hereby, other than those expressly set forth herein and in the Assignment
Agreement.

 

  (b)

No supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by each party to be bound thereby. No waiver of

 

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  any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (regardless of whether similar), nor shall
any such waiver constitute a continuing waiver unless otherwise expressly
provided.

Section 7.8 Conflicting Provisions.

This Agreement and the Assignment Agreement, read as a whole, set forth the
parties’ rights, responsibilities and liabilities with respect to the
transactions contemplated by this Agreement. In this Agreement and the
Assignment Agreement, and as between them, specific provisions prevail over
general provisions. In the event of a conflict between this Agreement and the
Assignment Agreement, this Agreement shall control.

Section 7.9 Binding Effect and Assignment.

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns, but neither this
Agreement nor any of the rights, benefits or obligations hereunder shall be
assigned or transferred, by operation of law or otherwise, by any party hereto
without the prior written consent of each other party. Nothing in this
Agreement, express or implied, is intended to confer upon any person or entity
other than the parties hereto and their respective permitted successors and
assigns, any rights, benefits or obligations hereunder, except for express
language with respect to the Partnership Indemnified Parties and the Development
Indemnified Parties contained in the indemnification provisions of Article VI.

Section 7.10 Severability.

If any provision of the Agreement is rendered or declared illegal or
unenforceable by reason of any existing or subsequently enacted legislation or
by decree of a court of last resort, the Partnership, Development and Operations
shall promptly meet and negotiate substitute provisions for those rendered or
declared illegal or unenforceable, but all of the remaining provisions of this
Agreement shall remain in full force and effect.

Section 7.11 Interpretation.

It is expressly agreed by the parties that neither this Agreement nor the
Assignment Agreement shall be construed against any party, and no consideration
shall be given or presumption made, on the basis of who drafted this Agreement,
the Assignment Agreement or any provision hereof or thereof or who supplied the
form of this Agreement or the Assignment Agreement. Each party agrees that this
Agreement has been purposefully drawn and correctly reflects its understanding
of the transactions contemplated by this Agreement and, therefore, waives the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.

 

34

--------------------------------------------------------------------------------

Section 7.12 Headings and Disclosure Schedules.

The headings of the several Articles and Sections herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement. The Disclosure Schedules and
the Exhibits referred to herein are attached hereto and incorporated herein by
this reference, and unless the context expressly requires otherwise, the
Disclosure Schedules and such Exhibits are incorporated in the definition of
“Agreement.”

Section 7.13 Multiple Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

Section 7.14 Action by the Partnership.

With respect to any action, notice, consent, approval or waiver that is required
to be taken or given or that may be taken or given by the Partnership with
respect to the transactions contemplated hereby, such action, notice, consent,
approval or waiver shall be taken or given by the Conflicts Committee on behalf
of the Partnership.

*     *     *     *     *

 

35

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

OPERATIONS:

TALLGRASS OPERATIONS, LLC By:  

    /s/ David G. Dehaemers, Jr.

  David G. Dehaemers, Jr.   President and Chief Executive Officer THE
PARTNERSHIP: TALLGRASS ENERGY PARTNERS, LP By:   Tallgrass MLP GP, LLC,   its
general partner By:  

    /s/ David G. Dehaemers, Jr.

  David G. Dehaemers, Jr.   President and Chief Executive Officer

 

Signature Page to Contribution and Sale Agreement

--------------------------------------------------------------------------------

Executed by Tallgrass Development, LP,

solely for purposes of its obligations and rights under

Article III, Article VI and Article VII of this Agreement

 

DEVELOPMENT:

TALLGRASS DEVELOPMENT, LP By:   Tallgrass Development GP, LLC,   its general
partner By:  

/s/ David G. Dehaemers, Jr.

  David G. Dehaemers, Jr.   President and Chief Executive Officer

 

Signature Page to Contribution and Sale Agreement

--------------------------------------------------------------------------------

Exhibit A

Form of Assignment Agreement

--------------------------------------------------------------------------------

ASSIGNMENT AGREEMENT

This ASSIGNMENT AGREEMENT (this “Assignment”), dated as of April 1, 2014, is
entered into by and among Tallgrass Operations, LLC, a Delaware limited
liability company (“Assignor”), Tallgrass Energy Partners, LP, a Delaware
limited partnership (the “Partnership”) and Tallgrass MLP Operations, LLC, a
Delaware limited liability company (“Assignee”). Assignor, the Partnership, and
Assignee may be referred to individually as a “Party” or collectively as the
“Parties.”

RECITALS

A. Pursuant to the terms of a Contribution and Sale Agreement (the “Contribution
Agreement”, with capitalized terms used but not defined herein having the
respective meanings set forth in the Contribution Agreement), dated as of the
date hereof, among Assignor, the Partnership, and Tallgrass Development, LP, a
Delaware limited partnership, Assignor will transfer to Assignee (a wholly-owned
subsidiary of the Partnership) 100% of the issued and outstanding membership
interests in Trailblazer Pipeline Company LLC, a Delaware limited liability
company (the “Subject Interest”).

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

AGREEMENT

1.1. Assignment of the Subject Interest. Assignor hereby grants, contributes,
bargains, conveys, assigns, transfers, sets over and delivers the Subject
Interest to Assignee, and Assignee hereby accepts the Subject Interest.

1.2. Contribution Agreement. This Assignment is subject to, in all respects, the
terms and conditions of the Contribution Agreement, and nothing contained herein
is meant to enlarge, diminish or otherwise alter the terms and conditions of the
Contribution Agreement or the Parties’ duties and obligations contained therein.
To the extent there is a conflict between this Assignment and the Contribution
Agreement, the terms of the Contribution Agreement will control, provided,
however, that the Parties acknowledge that the Partnership has directed that
Assignee receive the Subject Interest.

1.3. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of the Parties and their respective heirs, successors and assigns.

1.4. Governing Law. This Assignment and the transactions contemplated hereby
will be governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to principles of conflicts of laws.

1.5. Further Assurances. The Parties agree to execute all instruments and to
take all actions that are reasonably necessary to effect the transactions
contemplated hereby.

1.6. Counterparts. This Assignment may be signed in any number of counterparts,
each of which will be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

[Signature Page Follows]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have executed this Assignment as of the date
first written above.

 

ASSIGNOR:

 

TALLGRASS OPERATIONS, LLC

By:  

 

  David G. Dehaemers, Jr.   President and Chief Executive Officer PARTNERSHIP:
TALLGRASS ENERGY PARTNERS, LP By:   Tallgrass MLP GP, LLC, its general partner
By:  

 

  David G. Dehaemers, Jr.   President and Chief Executive Officer ASSIGNEE:
TALLGRASS MLP OPERATIONS, LLC By:  

 

  David G. Dehaemers, Jr.   President and Chief Executive Officer

Signature Page to Assignment Agreement

--------------------------------------------------------------------------------

Appendix A

The Partnership, Development and Operations Designated Personnel

Development and Operations Designated Personnel:

 

  •   David G. Dehaemers, Jr.

 

  •   William R. Moler

 

  •   George E. Rider

 

  •   Gary J. Brauchle

 

  •   Richard L. Bullock

Partnership Designated Personnel:

 

  •   David G. Dehaemers, Jr.

 

  •   William R. Moler

 

  •   George E. Rider

 

  •   Gary J. Brauchle

 

  •   Richard L. Bullock

--------------------------------------------------------------------------------

Final Schedules

DISCLOSURE SCHEDULES

These Disclosure Schedules are provided in connection with that certain
Contribution and Sale Agreement, dated as of April 1, 2014 (the “Agreement”), by
and among Tallgrass Energy Partners, LP, a Delaware limited partnership (the
“Partnership”), Tallgrass Operations, LLC, a Delaware limited liability company
(“Operations”), and, for certain limited purposes, Tallgrass Development, LP, a
Delaware limited partnership (“Development”). Capitalized terms used but not
defined herein shall have the respective meanings set forth in the Agreement.

The information disclosed in these Disclosure Schedules is intended to qualify
the representations and warranties contained in the Agreement and shall not be
deemed to expand in any way the scope or effect of any of such representations
and warranties on the part of Operations and Development. Nothing in these
Disclosure Schedules constitutes an admission of any liability or obligation of
Operations or Development to any third person, or an admission to any third
person against the interest of Operations or Development. Descriptions or
references of particular contracts, agreements, notices or similar documents
herein are qualified in their entirety by reference to such documents. The
disclosure of any item or information in these Disclosure Schedules shall not be
construed as an admission that such item or information is material to
Operations or Development, and any inclusion in these Disclosure Schedules shall
not be used in any dispute or controversy between the parties to the Agreement
to determine whether any obligation, item or matter (whether or not included in
these Disclosure Schedules or described in the Agreement) is or is not material
for purposes of the Agreement. In disclosing the information in these Disclosure
Schedules, Operations and Development do not waive any attorney-client privilege
associated with any such information or any protection afforded by the “work
product doctrine” with respect to any of the matters disclosed or discussed
herein.

Operations and Development disclose the following items (each item is numbered
to correspond with the relevant Section of the Agreement); provided that the
disclosures in any section or subsection of these Disclosure Schedules shall
qualify the disclosure in other sections and subsections only to the extent it
is readily apparent from a reading of the disclosure that such disclosure is
applicable to such other sections and subsections. The headings contained in
these Disclosure Schedules are for convenience of reference only and shall not
be deemed to modify or affect the interpretation of the information contained in
these Disclosure Schedules.

* * *

--------------------------------------------------------------------------------

Schedule 3.3

Consents

In order to contribute the Company to the Partnership, Operations will be
required to submit certain notifications and certifications prior to Closing
pursuant to that certain Credit Agreement dated as of November 13, 2012, among
Operations, Development, the Lenders and any other parties party thereto, and
Barclays Bank PLC (“Barclays”), as administrative agent and collateral agent, as
amended by (i) that certain Consent and Amendment No. 1, dated as of May 17,
2013, among Operations, Development, the other loan parties party thereto, the
financial institutions listed on the signature pages thereof, and Barclays, as
Administrative Agent and Collateral Agent, and (ii) Amendment No. 2 to Credit
Agreement, dated as of November 27, 2013, among Tallgrass GP Holdings, LLC, the
Borrower, the other Loan Parties party thereto, the Lenders party thereto, the
New Term Lenders referred to therein, and Barclays, as Swing Line Lender,
Administrative Agent and Collateral Agent (as amended, the “Credit Agreement”).

The Company is currently, and upon Closing will be removed as, a party to that
certain Amended and Restated Guaranty and Collateral Agreement dated
November 13, 2012, and amended on May 17, 2013 (as amended, the “Collateral
Agreement”). In addition, Operations has pledged all of the Company’s
outstanding membership interests to the lender pursuant to the Collateral
Agreement. Such pledge will be removed upon Closing.

--------------------------------------------------------------------------------

Schedule 3.4(a)

See disclosures regarding Credit Agreement and Collateral Agreement in Schedule
3.3.

--------------------------------------------------------------------------------

Schedule 3.7(a)

Real Property

 

File Number

   County Name    Book
Number      Page
Number      Reception
Number    Township    Range    Section      QQ
Call CO-000004    LOGAN             12N    49W      29       SWNE CO-000055   
SEDGWICK      172         358          11N    45W      33       NWNW CO-000056
   LOGAN      761         834          12N    49W      29       W2NE NE-000276
   LINCOLN      591         613       107656    10N    30W      21       N2NW
NE-000281    KEARNEY      103         853          7N    13W      24       E2SW
NE-000288    GAGE      223         413          4N    5E      9       SE
NE-000289    PERKINS      45         147          10N    35W      27       NE
NE-000290    LINCOLN      347         654          12N    31W      1       SW
NE-000291    PHELPS      58         738          7N    17W      21       SWSW
NE-000292    CLAY      104         601          6N    5W      4       NW
NE-000293    KIMBALL      55         168          12N    56W      2       SWSW
NE-000294    PERKINS      45         218          10N    40W      24       SE

--------------------------------------------------------------------------------

File Number

   County Name    Book
Number      Page
Number      Reception
Number    Township    Range    Section      QQ
Call NE-000295    GOSPER      28         447          7N    22W      9       E2
NE-000297    LINCOLN      325         501          9N    26W      34       SW
NE-000298    SALINE      216         219          6N    1E      4       SW
NE-000299    LINCOLN      310         253          10N    30W      21       W2NW
NE-000300    KEARNEY      103         853          7N    13W      24       E2SW
WY-000057    LARAMIE      1211         885          13N    64W      14       NW
WY-000058    LARAMIE      1196         105       737172    13N    60W      10   
   SESE

--------------------------------------------------------------------------------

Schedule 3.7(b)

Material Personal Property

 

Asset ID

    

PROD9X_AMASSETDESCRIPTION

  

ASSET TYPE

403-1375143      1-42IN PIG RECVR NGPL MTR SITE    MAIN LINES 403-1374894     
CONSTRUCTION DAMAGES ADD COST4    MAIN LINES 403-1374601      36 IN .562 5LX65
   MAIN LINES 403-1375226      36IN .600 5LX60    MAIN LINES 403-1375161      36
IN .600 5LX60    MAIN LINES 403-1374654      LINE PACK    MAIN LINES 403-1375150
     36IN .600 5LX60    MAIN LINES 403-1374602      36 IN .600 5LX60    MAIN
LINES 403-1374600      36 IN .462 5LX65    MAIN LINES 403-1374880      LINE PACK
   MAIN LINES 403-1374604      HYDROSTATIC TEST 1631371 FT 48    MAIN LINES
403-1374603      CONSTRUCTION DAMAGES 4    MAIN LINES 403-1374598      436 MILES
363232 TRLBLZR P/L    MAIN LINES 403-1374599      436 MILES 363232 TRLBLZR P/L
   MAIN LINES 403-1374590      36 IN .358 5LX70    MAIN LINES 403-1374854     
MEAS. STA. & GAS QUALITY EQUIP    MAIN LINES 403-1374546      36 IN .600 5LX60
   MAIN LINES 403-1375287      36IN .600 5LX60    MAIN LINES 403-1374545      36
IN .462 K6X65    MAIN LINES 403-1374549      HYDROSTATIC TEST 600075 FT 48   
MAIN LINES 403-1374548      CONSTRUCTION DAMAGES 4    MAIN LINES 403-1374544
     36 IN .358 5LX70    MAIN LINES 403-1374520      36IN .358 5LX70    MAIN
LINES 403-1375131      42IN PULSATION DAMPENER 110FT    METER EQUIPMENT
403-1375088      42IN PULSATION DAMPENER 111FT    METER EQUIPMENT

--------------------------------------------------------------------------------

Asset ID

    

PROD9X_AMASSETDESCRIPTION

  

ASSET TYPE

403-1375123      30IN 600LB BALL GRV    METER EQUIPMENT 403-1375125      30IN
600LB BALL GRV    METER EQUIPMENT 403-1375082      36IN .600 5LX60    METER
EQUIPMENT 403-1375089      5X15 HORIZ FLTR SEP KING TOOL    METER EQUIPMENT
403-1375091      20IN DANIEL MK602-C1-1 MTR RUN    METER EQUIPMENT 403-1375085
     1-42IN HEADER WITH 5-20 IN BRA    METER EQUIPMENT 403-1375084      1-42 IN
HEADER WITH 5-20IN BRA    METER EQUIPMENT 403-1375092      18IN 600LB BALL
ROCKWELL    METER EQUIPMENT 403-1374956      20IN .438 5LX52    MAIN LINES
403-1375054      16IN 600LB BALL ROCKWELL    METER EQUIPMENT 403-1374941     
16IN DANIEL MK 600-C4-1 METER    METER EQUIPMENT 403-1374944      20IN .438
5LX52    METER EQUIPMENT 403-1374943      2-30 IN HEADERS W/4-16IN BRANC   
METER EQUIPMENT 403-1375075      5X15 HORIZ FLTR SEP KING TOOL    METER
EQUIPMENT 403-1374859      3RD PARTY LABOR @ CS601   
COMPRESSOR STATION EQUIPMENT 403-1375419      ZERO OVHAUL COMPRESS SOLAR MAR   
COMPRESSOR STATION EQUIPMENT 403-1374862      20,000 HP COMPRESSION @ CS601   
COMPRESSOR STATION EQUIPMENT 403-1374891      OPERATION EXPENSES FOR (2)COMP   
COMPRESSOR STATION EQUIPMENT 403-1374885      INST.(2) 10,000HP COMPR. UNITS.   
COMPRESSOR STATION EQUIPMENT 403-1375410      TB 601 UNIT 2 EXCHG SOLAR   
COMPRESSOR STATION EQUIPMENT 403-1375455      TB601 UNIT ZERO OVERHL   
COMPRESSOR STATION EQUIPMENT 403-1375486         COMPRESSOR STATION EQUIPMENT
403-1374888      (2) 10,000HP GAS-FIREDCOMPR.    COMPRESSOR STATION EQUIPMENT
403-1375460      STATION 602 MOTOR REWIND    COMPRESSOR STATION EQUIPMENT
403-1374641      COMPRESSION STATION 602    COMPRESSOR STATION EQUIPMENT
403-1374763      TRANSFORMER, 300KVA    COMPRESSOR STATION EQUIPMENT 403-1374648
     COMPRESSOR STATION 602    COMPRESSOR STATION EQUIPMENT 403-1374783     
ZERO HR OVERHAUL #C202    COMPRESSOR STATION EQUIPMENT

--------------------------------------------------------------------------------

Asset ID

    

PROD9X_AMASSETDESCRIPTION

  

ASSET TYPE

403-1375487         COMPRESSOR STATION EQUIPMENT 403-1374846      OPERATION EXP.
FOR CS602 COMP    COMPRESSOR STATION EQUIPMENT 403-1374870      DRAIN PIPING AND
FUEL GAS PIPE    COMPRESSOR STATION EQUIPMENT 403-1374867      3RD PARTY LABOR @
CS601    COMPRESSOR STATION EQUIPMENT 403-1374892      EXP.FROM 5,200 TO 10,000
HP    COMPRESSOR STATION EQUIPMENT 403-1374843      (1) NEW10,000HP ELECT.
COMPR.    COMPRESSOR STATION EQUIPMENT 403-1374640      COMPRESSION STATION 602
   COMPRESSOR STATION EQUIPMENT 403-1375230      RGD FRAME GARAGE/WELD SHOP 30X
   STRUCTURE 403-1375381      SOLAR SEAL GAS BOOSTER SYS    COMPRESSOR STATION
EQUIPMENT 403-1374789      C-301 ZERO HOUR OVERHAUL    COMPRESSOR STATION
EQUIPMENT 403-1374840      3RD PARTY LABOR @ CS 603    COMPRESSOR STATION
EQUIPMENT 403-1374768      [2[ NEW 10,000HP ELECT COMP’S    COMPRESSOR STATION
EQUIPMENT 403-1374853      OPERATION EXP. FOR (2)NEW COMP    COMPRESSOR STATION
EQUIPMENT 403-1374847      INST.(2) 10,000HP COMP.- CS603    COMPRESSOR STATION
EQUIPMENT 403-1374850      (2)NEW 10,000HP ELECT.COMP.’S    COMPRESSOR STATION
EQUIPMENT 403-1375167      C S 603 N/A    LAND 403-1375483         MAIN LINES
403-1374646      FARMLAND INDUSTRIES INTERCONN    MAIN LINES

--------------------------------------------------------------------------------

Schedule 3.8

Litigation

None other than the Company’s pending tariff rate case, which has been resolved
subject to final FERC approval of the Pending Settlement.

--------------------------------------------------------------------------------

Schedule 3.9

Adverse Changes

None.

--------------------------------------------------------------------------------

Schedule 3.11

Environmental Matters

None.

--------------------------------------------------------------------------------

Schedule 3.12

Licenses and Permits

None.

--------------------------------------------------------------------------------

Schedule 3.13(a)

Contracts

Prior to Closing, the Company is a party to the Credit Agreement and the
Collateral Agreement. Upon Closing, the Company will be released as a party to
those agreements.

The Company is party to an ISDA Master Agreement dated August 21, 2013 with
Barclays Bank PLC.

The Company is party to the following additional contracts:

 

Counterparty

 

CONTRACT #

 

Eff. Date

 

End Date

 

Agreement Type

 

Comments

*TALLGRASS INTERSTATE GT, LLC   901362   10/27/1989   12/31/2017   Firm
Transport   5,000 dth/d *TALLGRASS INTERSTATE GT, LLC   904471   1/1/2014  
Evergreen   Operational Balancing Agreement   Logan *TALLGRASS INTERSTATE GT,
LLC   904481   2/1/1992   Evergreen   Operational Balancing Agreement   Clay
*TALLGRASS INTERSTATE GT, LLC   904492   2/1/1992   Evergreen   Operational
Balancing Agreement   Adams *TALLGRASS INTERSTATE GT, LLC   937712   4/1/2010  
Evergreen   Interruptible Transport   *TALLGRASS INTERSTATE GT, LLC   937859  
4/9/2010   Evergreen   Master Capacity Release   *TALLGRASS INTERSTATE GT, LLC  
946513   12/22/2013   12/21/2014   Firm Transport   105,500 dth/d ROCKIES
EXPRESS PIPELINE LLC   933828   1/1/2007   Evergreen  
Operational Balancing Agreement   Lone Tree *TALLGRASS INTERSTATE GT, LLC    
2/4/1991   Evergreen   Facilities Interconnect   Clay *TALLGRASS INTERSTATE GT,
LLC     10/8/1990   Evergreen   Facilities Interconnect   Adams
*TALLGRASS INTERSTATE GT, LLC     12/21/1989   Evergreen   Facilities
Interconnect   Logan ROCKIES EXPRESS PIPELINE LLC   933876   12/13/2006  
Evergreen   Facilities Interconnect   Lone Tree *TALLGRASS INTERSTATE GT, LLC  
  In progress   Evergreen   Facilities Interconnect   Beacon Camp

 

* Development and Operations have chosen to disclose these contracts with
Tallgrass Interstate Gas Transmission, LLC, an affiliate of the Partnership, for
informational purposes even though such contracts may not be required to be
disclosed pursuant to Section 3.13(a) of the Agreement.

--------------------------------------------------------------------------------

Schedule 3.13(b)

Contracts

None.

--------------------------------------------------------------------------------

Schedule 3.16

Insurance

The Company’s material insurance policies are:

 

  •   Property

 

  •   Commercial General Liability

 

  •   Excess Liability

 

  •   Automobile

 

  •   Worker’s Compensation

 

  •   Employer’s Liability

--------------------------------------------------------------------------------

Schedule 3.21

Projections and Budgets Provided to the Partnership

The following forecasts provided to the Financial Adviser pursuant to letter
dated February 25, 2014 from Gary Brauchle, Executive Vice President, Chief
Financial Officer and Treasurer of the General Partner: (1) stand-alone
financial forecast for the Company for calendar years 2014 through 2023; and
(2) stand-alone financial forecast for the Partnership for calendar years 2014
through 2019.